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c1219d4aada4f4e829a0411b66937814ca011cbf | OFFENCES CHARGED AND REACHING A FIRST HEARING AT MAGISTRATES’
Theft Act 1968 Lancashire
Table 3 March 2016 - March 2017
| Theft Act 1968 { 1(1) and 7 } - Shoplifting | 3,494 |
1. Offences recorded in the Management Information System Offences Universe are those which reached a hearing. There is no indication of final outcome or if the charged offence was the substantive charge at finalisation.
2. Data relates to the number of offences recorded in magistrates’ courts, in which a prosecution commenced, as recorded on the Case Management System.
3. Offences data are not held by defendant or outcome.
4. Offences recorded in the Offences Universe of the MIS are those which were charged at any time and reached at least one hearing. This offence will remain recorded whether or not that offence was proceeded with and there is no indication of final outcome or if the offence charged was the substantive offence at finalisation.
5. CPS data are available through its Case Management System (CMS) and associated Management Information System (MIS). The CPS collects data to assist in the effective management of its prosecution functions. The CPS does not collect data that constitutes official statistics as defined in the Statistics and Registration Service Act 2007.
6. These data have been drawn from the CPS’s administrative IT system, which (as with any large scale recording system) is subject to possible errors with data entry and processing. The figures are provisional and subject to change as more information is recorded by the CPS. We are committed to improving the quality of our data and from mid-June 2015 introduced a new data assurance regime which may explain some unexpected variance in some future data sets.
7. The official statistics relating to crime and policing are maintained by the Home Office (HO) and the official statistics relating to sentencing, criminal court proceedings, offenders brought to justice, the courts and the judiciary are maintained by the Ministry of Justice (MOJ).
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d75a9896d7d66852afbb0c97ed4b1ff37af699e9 | Example risk assessment for food preparation, cooking and service
This example risk assessment applies to restaurants, cafés, sandwich bars, pubs, takeaways or hotel kitchens.
The café employs five permanent staff working a variety of shifts to prepare, cook and serve food. A young person under 16 helps on a Saturday to serve food and load and unload the dishwasher. One staff member does not speak English well. The business is open from 7 am to 5.30 pm.
How was the risk assessment done?
The manager followed the advice at www.hse.gov.uk/simple-health-safety/risk/. To identify the hazards and risks, they:
- looked at the guidance on HSE’s web pages for catering and hospitality and young workers;
- walked around the kitchen, the stockroom and all other areas, noting things that might pose a risk;
- talked to staff to learn from their knowledge and experience, and to listen to their concerns and opinions;
- looked at the accident book, to understand which risks previously resulted in incidents.
The manager noted what was already being done to control the risks and recorded any further actions required.
Having put in place the actions the risk assessment identified, the manager discussed the findings with staff, displayed the assessment in a prominent place so all staff could see it and made it part of the induction process for new workers.
They told the young person’s parents about the findings and how risks to that young person will be controlled. They also made sure that the worker who had difficulty understanding English had the safety arrangements explained to her in a language she understood.
The manager will review the risk assessment whenever there are any significant changes such as new work equipment, work activities or workers.
Do not just copy this example and put your company name to it as that would not satisfy the law and would not protect your employees. You must think about the specific hazards and controls your business needs.
The HSE site has a template and other examples to help you produce your own assessment.
## Risk assessment
**Company name:** Smith’s Café\
**Assessment carried out by:** NK Simpson\
**Date assessment carried out:** 9/10/19
| What are the hazards? | Who might be harmed and how? | What are you already doing to control the risks? | What further action do you need to take to control the risks? | Who needs to carry out the action? | When is the action needed by? | Done | |-----------------------|-------------------------------|-----------------------------------------------|-------------------------------------------------------------|----------------------------------|-------------------------------|------| | Slips and trips | Kitchen/food service staff and customers may be injured if they trip over objects or slip on spillages. | • Good housekeeping – work areas kept tidy, goods stored suitably etc.\
• Kitchen equipment maintained to prevent leaks onto floor.\
• Equipment faults leading to leaks quickly reported to manager.\
• Drainage channels and drip trays provided where spills more likely.\
• Staff clean up spillages (including dry spills) immediately using suitable methods and leave the floor dry.\
• Suitable cleaning materials available.\
• Good lighting in all areas including cold storage areas.\
• No trailing cables or obstruction in walkways.\
• Steps and changes in level highlighted. | Consider whether it is appropriate to change floor surface with better surface roughness. | Manager | 31/10/19 | 31/10/19 | | | | | Remind staff to maintain good standard of housekeeping. | Manager | 11/10/19 | 11/10/19 | | | | | Repair damaged floor tiles by the dishwasher in the kitchen. | Manager | 29/11/19 | 28/11/19 | | | | | Ensure suitable footwear with good grip worn by staff. | Manager | 24/10/19 | 24/10/19 | | What are the hazards? | Who might be harmed and how? | What are you already doing to control the risks? | What further action do you need to take to control the risks? | Who needs to carry out the action? | When is the action needed by? | Done | |-----------------------|-----------------------------|-----------------------------------------------|-------------------------------------------------|---------------------------------|-------------------------------|------| | **Manual handling** | Kitchen staff and food service staff may suffer injuries such as strains or bruising from handling heavy/bulky objects. | • Ingredients bought in package sizes that are light enough for easy handling.\
• Commonly used items and heavy stock stored on shelves at waist height.\
• Suitable mobile steps provided and staff trained to use them safely.\
• Handling aids provided for movement of large/heavy items.\
• Sink at good height to avoid stooping.\
• Staff trained in how to lift safely. | Ensure team working for moving heavier items (eg pots). | Manager | From now on | | | **Contact with steam, hot water, hot oil and hot surfaces** | Kitchen staff and food service staff may suffer scalding or burns injuries. | • Staff trained in risks of hot oils and on procedure for emptying/cleaning fryers.\
• Staff trained in risks of releasing steam.\
• Water mixer taps provided.\
• All staff told to wear long sleeves.\
• Heat-resistant gloves/cloths/aprons provided. | Display ‘hot water’ signs at sinks and ‘hot surface’ signs at hot plates. | Manager | 28/10/19 | 28/10/19 | | **Knives** | Staff involved in food preparation and service could suffer cuts from contact with blades. | • Staff trained to handle knives.\
• Knives suitably stored when not in use.\
• First aid box provided and nominated first aider always on site. | Tell staff not to use knives to remove packaging – suitable cutters will be provided. | Manager and staff | 16/10/19 | 16/10/19 | | What are the hazards? | Who might be harmed and how? | What are you already doing to control the risks? | What further action do you need to take to control the risks? | Who needs to carry out the action? | When is the action needed by? | Done | |----------------------|-------------------------------|-----------------------------------------------|-------------------------------------------------|----------------------------------|-------------------------------|------| | **Food handling** | Frequent hand washing can cause skin damage. Some foods can cause some staff to develop skin allergies. | • Where possible and sensible, staff use tools (cutlery, tongs scoops etc) to handle food rather than hands.\
• Food grade, single-use, non-latex gloves are used for tasks that can cause skin problems, eg salad washing, vegetable peeling and fish filleting.\
• Where handling cannot be avoided, hands are rinsed promptly after finishing the task. | Staff reminded to thoroughly dry hands after washing. | Manager and staff | 14/10/19 | 14/10/19 | | | | | Provide non-taint, nut-oil-free cream for staff to apply regularly to replace the moisture 'stripped' by frequent washing. | Manager and staff | 30/10/19 | 29/10/19 | | | | | Remind staff to check for dry, red or itchy skin on their hands and to tell manager if this occurs. | Manager and staff | 11/10/19 | 11/10/19 | | **Contact with bleach and other cleaning chemicals** | Prolonged contact with water, particularly in combination with detergents, can cause skin damage. Staff cleaning premises risk skin irritation or eye damage from direct contact with bleach and other cleaning products. Vapour may cause breathing problems. | • Dishwasher used instead of washing up by hand.\
• All containers clearly labelled.\
• Where possible, cleaning products marked ‘irritant’ not purchased and milder alternatives bought instead.\
• Long-handled mops and brushes, and strong rubber gloves, provided and used.\
• Staff wash rubber gloves after using them and store them in a clean place. | Staff reminded to thoroughly dry hands after washing. | Manager and staff | 11/10/19 | 11/10/19 | | | | | Provide non-taint, nut-oil-free cream for staff to apply regularly to replace the moisture 'stripped' by frequent washing. | Manager and staff | 30/10/19 | 29/10/19 | | | | | Remind staff to check for dry, red or itchy skin on their hands and to tell manager if this occurs. | Manager and staff | 11/10/19 | 11/10/19 | | What are the hazards? | Who might be harmed and how? | What are you already doing to control the risks? | What further action do you need to take to control the risks? | Who needs to carry out the action? | When is the action needed by? | Done | |-----------------------|-------------------------------|-----------------------------------------------|-------------------------------------------------|---------------------------------|-------------------------------|------| | **Gas appliances** | Staff and customers could suffer serious/fatal injuries as a result of explosion/release of gas. | • Daily check of gas appliance controls.\
• Inspection, service and test carried out by Gas Safe registered engineer every 12 months.\
• Staff know where main isolation tap is and how to turn supply off in an emergency. | Contact Gas Safe registered engineer to fit suitable flame failure device on oven. | Manager | 16/10/19 | 16/10/19 | | **Electrical** | Staff could suffer serious/fatal injuries as a result of electric shock. | • Manager visually inspects the system once a year and is competent to do so.\
• System inspected and tested by an electrician every five years.\
• Staff trained to check equipment before use and to report any defective plugs, discoloured sockets or damaged cable and equipment.\
• Staff know where fuse box is and how to safely switch off electricity in an emergency.\
• Plugs, sockets etc suitable for kitchen environment.\
• Access to fuse box kept clear.\
• Residual current devices (RCDs) installed on supplies to hand-held and portable appliances. | Manager to inspect plugs, cables etc regularly. | Manager | From now on | | What are the hazards? | Who might be harmed and how? | What are you already doing to control the risks? | What further action do you need to take to control the risks? | Who needs to carry out the action? | When is the action needed by? | Done | |----------------------|-------------------------------|-----------------------------------------------|-------------------------------------------------|----------------------------------|-------------------------------|------| | Fire | Staff or customers could suffer serious/fatal injuries from burns/smoke inhalation. | Fire risk assessment done as at [www.communities.gov.uk/fire](http://www.communities.gov.uk/fire) and necessary action taken. | None | | | | | Machinery | Staff risk serious injury from contact with dangerous or moving parts of machinery. | • Staff trained in cleaning, assembly and operating procedures.\
• All dangerous parts to machinery suitably guarded.\
• Daily checks of machinery guards before use.\
• Staff trained to spot and report any defective machinery.\
• Safety-critical repairs carried out by competent person.\
• Operating instructions easy to locate. | Remind staff to always isolate (switch off from power supply) machinery before carrying out maintenance or cleaning work. | Manager | 22/10/19 | 21/10/19 |
Published by the Health and Safety Executive 11/19
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adf7006906d236fbb6ac0b19eeb6e91e21ba75fe | Food standards
\*FTEs - Important note In submitting this data local authorities are advised that the numbers of FTE posts provided should reflect the actual proportion of time spent by professional and administrative staff on food hygiene and/or food standard issues. There is, however, no prescriptive guidance given on exactly how that time should be determined and the FSA recognises that figures supplied will often be ‘educated estimates’. The FSA is aware that local authorities calculate the proportion of time using a variety of different methods which means that the validity of making direct local authority to local authority comparisons is limited and any conclusions drawn from doing so must be treated with caution. It is for this reason, that the FSA uses the data only in a generic way to compare year on year figures to look at overall trends in the number of FTEs in local authority food law enforcement services across the UK or in individual countries.
In light of the above, if you intend to use the FTE data for comparison of individual local authorities, we would advise strongly that you contact each authority directly to discuss how their estimates were derived. This will also provide an opportunity to ensure that the data you have is up-to-date.
NP - no premises given at this risk rating NR - no interventions due or reported
(1) County Councils only - see the food hygiene data for the remaining local authorities (2) Data may be under reported due to technical issues with the internal database. (3) Food hygiene and food standards written warning data may be reported together - see the food hygiene data (4) Food hygiene and food standards data reported together - see the food hygiene data (5) Food hygiene and food standards full time equivalent posts reported together - see the food hygiene data (6) Only deal with food hygiene (7) Due to internal data management issues the number of unrated premises reported is high. Many of these premises would have been rated previously when using the national trading standards rating scheme. (8) Only deal with food standards. 2017/18 Data are under reported following data cleansing from the LA’s internal database. (9) This LA’s written warnings data was amended in November 2018 (10) This LA’s FTE data was amended in November 2018
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3804a8130ad708cfcf0346bc8e831ee7f8535bec | Digital Continuity to Support Forensic Readiness Contents
1. Introduction ............................................................................................................... 4 1.1 What is the purpose of this guidance? ................................................................. 4 1.2 Who is this guidance for? .................................................................................... 5
2. What is digital continuity? ........................................................................................ 6 2.1 What does digital continuity loss look like? ......................................................... 6 2.2 The process of managing digital continuity ......................................................... 6
3. Digital continuity and forensic readiness ............................................................... 8
4. Managing the digital continuity of your evidence .................................................. 9 4.1 Plan for action ..................................................................................................... 9 4.2 Define your digital continuity requirements ....................................................... 9 4.2.1 Identify your information assets ................................................................. 10 4.2.2 Define how you need to use your information ............................................ 10 4.2.3 Map the technical dependencies of your information assets ..................... 11 4.3 Assess and manage risks to digital continuity .................................................... 11 4.4 Maintain digital continuity .................................................................................. 12
5. Further reading ....................................................................................................... 14
6. Introduction
Digital continuity is the ability to use your information in the way that you need, for as long as you need. This means managing digital information effectively through periods of change so it remains complete, available and therefore usable as required. Managing digital continuity can help to provide your organisation with assurance that you are effectively managing information to meet your forensic readiness requirements.
Digital continuity and forensic readiness are mutually supportive. If you are working through the process of managing your digital continuity, the details of your forensic readiness policy will form one of the business requirements, and the forensic evidence must be evaluated as part of your information asset identification. If on the other hand you are developing your forensic readiness policy, you must consider the risks of losing the digital continuity of your evidence assets and guard against these losses.
You will need to ensure that your information management and IT teams understand those needs, and manage your organisation’s information assets and technical environment to provide the usability you need. If your forensic readiness needs change, you need to update your information management and IT teams so that they, in turn, can update their information asset and IT management processes.
1.1 What is the purpose of this guidance?
This guidance will:
- help you understand what digital continuity is
- explain how digital continuity supports forensic readiness
- explain how you can manage the digital continuity of your forensic assets.
*Digital Continuity and Forensic Readiness* is part of a suite of guidance that The National Archives has delivered as part of a digital continuity service for government, in consultation with central government departments.
______________________________________________________________________
1 See more on the four-stage process of managing digital continuity in our guidance [nationalarchives.gov.uk/information-management/our-services/dc-step-by-step-guidance.htm](http://nationalarchives.gov.uk/information-management/our-services/dc-step-by-step-guidance.htm)
2 For more information and guidance, visit [nationalarchives.gov.uk/dc-guidance](http://nationalarchives.gov.uk/dc-guidance) This guidance assumes you are familiar with, or working through the CESG Good Practice Guide on Forensic Readiness(^3) which explains in detail your responsibilities, best practices and a template for the forensic readiness policy itself.
### 1.2 Who is this guidance for?
This guidance is targeted at the person responsible for forensic readiness in an organisation, generally the Senior Information Risk Owner (SIRO) or a delegated representative.
______________________________________________________________________
(^3) CESG, Good Practice Guide No. 18, (2009) *Forensic Readiness*, Issue No: 1.0 2. What is digital continuity?
Managing digital continuity means managing information over time and through change so that it remains complete, available and therefore usable. The digital continuity of your information is maintained when your technology and information management processes support your information assets in meeting your business requirements both now, and in the future. This is when:
- you know **what information you have**, what it is about and where it is
- you understand **how you want to use it**, now and in the future
- your **technology and information management process enables** you to use your information, and is agile enough to cope with your changing requirements.
Digital continuity is achieved when your technology supports the business use you need from your information assets.
2.1 What does digital continuity loss look like?
Digital continuity loss can manifest itself in five ways, leaving you unable to:
- **find** the information you need
- **open** the information you need
- **use** the information in the way you need (e.g. to export it or filter it)
- **understand** what your information is about
- **trust** your information is what it says it is.
Sometimes it is possible to recover your information once digital continuity is lost, but this may be expensive, time consuming or not possible at all.
2.2 The process of managing digital continuity
The SIRO is required to ensure all information risks are recognised and managed in an organisation, and this includes risks to digital continuity. However, SIROs will likely delegate the responsibility for driving forward action on digital continuity to a Senior Responsible Owner (SRO) who may, for instance, be the Head of Knowledge and Information Management (KIM). The SRO will then work alongside other members of the organisation including the IT team and the Information Asset Owners (IAOs).
The key stages in managing your digital continuity are:
- Stage 1: Plan for action
- Stage 2: Define your digital continuity requirements
- Stage 3: Assess and manage risks to digital continuity
- Stage 4: Maintain digital continuity
3. Digital continuity and forensic readiness
‘Forensic Readiness is the achievement of an appropriate level of capability by an organisation in order for it to be able to collect, preserve, protect and analyse Digital Evidence so that this evidence can be effectively used in any legal matters, in disciplinary matters, in an employment tribunal or in a court of law’
CESG, Good Practice Guide No. 18, Forensic Readiness
Digital continuity is vital to forensic readiness because once you have identified what evidence you may be required to produce, you must consider how you are going to retrieve and make use of that information when you need it.
Managing digital continuity – and including the business need for forensic readiness in that management – will ensure that you retain the usability you need from your information. The CESG Good Practice Guide on Forensic Readiness (Good Practice Guide No. 18) describes twelve significant principles that organisations should observe as part of their adoption of forensic readiness. Principles 9 and 10 are heavily related to digital continuity:
**Principle 9** – “Organisations should maintain the quality and effectiveness of their records management systems in order that specific business records can be produced as evidence in court or to address any legal or regulatory requirement.”
**Principle 10** – “Organisations should provide appropriate records retrieval processes and mechanisms in order that any requirement to disclose information can be efficiently and securely dealt with. Such disclosures MUST be handled in accordance with all relevant legislation and regulations.”
GPG 18 also states “It is important that the retrieval process is effective, efficient and secure… The technology and methods used should support the selective release of information so that the appropriate information can be retrieved and isolated for release.”
If you have lost the digital continuity of your evidence, you will not be able to retrieve it effectively and efficiently.
______________________________________________________________________
4 CESG, Good Practice Guide No. 18, (2009) Forensic Readiness, Issue No: 1.0, p 29 5 CESG, Good Practice Guide No. 18, (2009), p 30 6 CESG, Good Practice Guide No. 18, (2009), p 31 4. Managing the digital continuity of your evidence
Your organisation may already have policies and processes in place to manage digital continuity. The organisation’s SIRO or Head of KIM should be able to provide more information and make sure that your requirements and assets are included in the policies and processes if they have not already done so.
If however your organisation has not already included your requirements for digital continuity in the policies and processes, you can do it yourself. You can apply the four-stage process of managing digital continuity, described below, to just your own section of information without having to take on the responsibility of creating processes for the whole organisation.
4.1 Plan for action
You need to consider the scope of your work and your priorities. One of the most important aspects of both forensic readiness and digital continuity is the time-value of digital assets. Digital continuity is all about ensuring information is available over time and through change, so you must understand how long you need to keep information for – and set appropriate retention schedules for particular types of digital evidence.
Depending on the type of evidence you are creating, it may be that you should not keep information for any lengthy period of time, so it is possible that losing digital continuity is only a very minor risk to your forensic readiness. For example, you should not keep personal information longer than is necessary for the purpose for which it was created.
Other information needs to be subject to a similar review process – log files, for example, can be very large and difficult to search and it may not be necessary to keep them for more than 12 months.
4.2 Define your digital continuity requirements
The steps below are covered in greater detail by two pieces of guidance – Identifying Information Assets and Business Requirements which will help you identify information
7 See Identifying Information Assets and Business Requirements nationalarchives.gov.uk/documents/information-management/identify-information-assets.pdf assets and their requirements and help you assemble an Information Asset Register (IAR), and *Mapping the Technical Dependencies of Information Assets and their Business Requirements*(^8) which is aimed at your IT team and will help them to provide the information you need on the technology mapping.
### 4.2.1 Identify your information assets
As part of putting together your forensic readiness policy, you will have identified the sorts of information and evidence you need to gather and how you may need to use them. These are your information assets.(^9) You should then compile the information you have on these assets and their requirements into an IAR.
### 4.2.2 Define how you need to use your information
How you need to use your information covers everything from how you find it, through how you access it to what you do with it. You must also consider any surrounding or supporting information which is important. There are five questions you will need to answer and record in your IAR:
1. How will you **find** the information? (i.e. where is it?)
2. Who can **access** the information and how? (i.e. who owns the information, who is the key contact regarding this asset? How quickly do you need to be able to access it? How long do you need it to be accessible for?)
3. What do you need to be able to **do** with the information? (i.e. do you need to able to read it, print it, publish it, share it with others, interrogate or query it, use it to generate reports?)
4. What do you need to be able to **understand** about your information? (i.e. what level of context do you need – what metadata exists? Do you need related information assets in order to interpret it?)
5. Do you **trust** your information is what it claims to be? (i.e. what do you need from your information in order for it to be used as evidence for a forensic investigation?)
______________________________________________________________________
(^8) See *Mapping the Technical Dependencies of Information Assets*
[nationalarchives.gov.uk/documents/information-management/mapping-technical-dependencies.pdf](http://nationalarchives.gov.uk/documents/information-management/mapping-technical-dependencies.pdf)
(^9) ‘An information asset is a body of information, defined and managed as a single unit so it can be understood, shared, protected and exploited effectively.’ For more on information assets, see *Identifying Information Assets and Business Requirements*
[nationalarchives.gov.uk/documents/information-management/identify-information-assets.pdf](http://nationalarchives.gov.uk/documents/information-management/identify-information-assets.pdf) For each of these issues you must consider what the requirements are at the moment, and how they might change over time. This will encompass the retention schedules imposed on your assets.
For forensic records, the security and access regimes are also very important and so should be covered in detail here.
These questions above form the core of digital continuity – what usability you need to maintain for your information over time and through change. If you lose the ability to find, access, use, understand and trust your information in the way that you need, you have lost its digital continuity.
4.2.3 Map the technical dependencies of your information assets
The next step is to put together a comprehensive list of the technologies that are required to support each of the information assets; this will help provide better understanding of where issues could arise day-to-day and through change. This audit will cover all aspects of technology that might impact upon your evidence – storage, backups, security, software, search tools. To do this we recommend liaising with your Head of IT who will be able to provide this information.
When you have gathered this information and added it against each record in your IAR, you will have a list of all your sources of evidence, their key information, how you need to use them, and the technology that they rely on. This list will allow you to manage your digital continuity in the future.
4.3 Assess and manage risks to digital continuity
The third stage of managing your digital continuity is to do an assessment to determine whether your assets are at risk of losing their digital continuity. For the purposes of forensic readiness, you will probably have noticed potential risks as you went through the process of identifying the assets and their requirements.
Key risks are not being able to find the information you are looking for and not being able to verify that it is what it claims to be. This risk assessment should be performed alongside the preparation of the rest of your forensic readiness policy which will cover the security issues. Many of the risks to the sort of information assets you will be using for forensic readiness are technology related, so it is vital to work closely with your IT teams to perform risk assessments and take mitigating action. The risks should be documented and a follow up schedule planned.
You should assess your risks corresponding to the requirements you’ve outlined in section 4.4.2 above.
Key questions to ask yourself on the risks to your digital continuity requirements:
- Am I at risk of not being able to **find** the right information when I need to? Do I know where it’s kept, how to find or search for it? What is the back up process, how is it being managed and how do I retrieve it?
- Am I at risk of not being able to **access** the information when I need it? What technology do I need to maintain in order to access it? What access permissions are needed?
- Am I going to be able to **use** the information as I need to? What technology might I need to maintain in order to use it? Do I need to keep it in a particular format in order to use it as I need to?
- Am I at risk of not being able to **understand** the information? What contextual or related information am I dependent on to be able to interpret it correctly?
- Am I at risk of not being able to **trust** in the information? How will I be able to use it as evidence and prove its authenticity and reliability?
### 4.4 Maintain digital continuity
Once you have documented your information and what the usability requirements are to enable it to be used as evidence, you must make sure that its digital continuity is protected through time and change.
As the digital continuity guidance makes clear, the main risks to digital information are organisational and technological change. Information is most likely to be lost when systems are replaced or organisations restructured. It is important to understand how changes might
______________________________________________________________________
10 See The National Archives’ digital continuity guidance [nationalarchives.gov.uk/dc-guidance](http://nationalarchives.gov.uk/dc-guidance) impact on the usability of your forensic assets and to see whether the information assets, technology and usability requirements will still align following change. It must be clear whether assets which have a long-term forensic value can continue to be accessible.
**Principle 6** – “Organisations should closely integrate Forensic Readiness plans with incident management and other related business planning activities.
It is important that Forensic Readiness is not treated as an isolated discipline as this would lead to both inefficiencies and inevitable conflict. Consider a situation where a digital forensic investigation is launched only to find the ICT target of interest has been rebuilt to apply a software upgrade: the evidence would have been destroyed.”
The IAR you have developed should provide a clear guide to which pieces of information are linked to which pieces of technology. Maintaining good communications between the information asset owners and the corresponding owners of the technologies means any changes can be planned so that they do not compromise the value of the information.
For more information on how to take care of your information assets through change, there will be several pieces of guidance available on The National Archives’ website.
______________________________________________________________________
11 CESG, Good Practice Guide No. 18, (2009), p 26 12 For more information and guidance, visit nationalarchives.gov.uk/digitalcontinuity 5. Further reading
The following texts will help you to find out more about forensic readiness:
- CESG, Good Practice Guide No. 18, (2009) *Forensic Readiness*, Issue No: 1.0 Provides good practice that can help to define and implement an approach to the development of Forensic Readiness Policy and associated planning and practice activities. The guidance provided is generic and includes information on how it can be applied to suit the requirements of individual organisations.
- Rowlingson, R. (2004) ‘A Ten Step Process for Forensic Readiness’, *International Journal of Digital Evidence*, Volume 2, Issue 3 This paper is intended for those with responsibility for, or potential involvement in, computer investigations... The aim of this document is to present the outline of a forensic readiness planning process that an organisation can adopt and adapt to its specific requirements. You can download the paper here: [http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.65.6706&rep=rep1&type=pdf](http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.65.6706&rep=rep1&type=pdf)
You can also read more guidance on managing digital continuity online: [nationalarchives.gov.uk/information-management/our-services/dc-step-by-step-guidance.htm](http://nationalarchives.gov.uk/information-management/our-services/dc-step-by-step-guidance.htm)
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4aaa929004603a0150aa554b69e8e7edecbeeeb8 | Forestry Statistics 2014
A compendium of statistics about woodland, forestry and primary wood processing in the United Kingdom 0. Introduction
01. Woodland Areas and Planting 1.1. Woodland Area 1.1.1. Area of Woodland: 2014 1.1.2. Area of woodland: changes over time 1.1.3. Woodland area by ownership 1.2. Certified woodland area 1.3. Land use 1.4. National Forest Inventory 1.4.1. Woodland area by age: conifers 1.4.2. Woodland area by age: broadleaves 1.4.3. Woodland area by age: Summary 1.4.4. Woodland area by species: conifers 1.4.5. Woodland area by species: broadleaves 1.4.6. Woodland area by species: summary 1.4.7. Growing stock by species: conifers 1.4.8. Growing stock by species: broadleaves 1.5. Area of Farm Woodland 1.6. New planting and restocking 1.6.1. New planting and restocking by forest type 1.6.2. New planting and restocking by ownership 1.6.3. New planting and restocking: time series 1.7. Felling 1.7.1. Felling licences 1.7.2. Statutory Plant Health Notices
02. UK-Grown Timber 2.1. Wood production 2.1.1. Summary: wood production 2.1.2. Origin of private sector softwood removals 2.1.3. Origin of FC/NRW/FS removals 2.1.4. Softwood availability forecast 2.1.5. Hardwood availability forecast 2.2. Deliveries of UK-grown roundwood 2.2.1. Softwood deliveries 2.2.2. Hardwood deliveries 2.3. Sawmills - All Mills 2.3.1. Summary: consumption & production 2.3.2. Number of sawmills by size 2.3.3. Number of sawmills by country 2.3.4. Number of sawmills by type of wood sawn 2.3.5. Consumption of softwood by size of mill 2.3.6. Consumption of softwood by country 2.3.7. Production of sawn softwood by size of mill 2.3.8. Production of sawn softwood by country 2.4. Sawmills - Larger Mills 2.4.1. Softwood consumption and production 2.4.2. Source of softwood logs 2.4.3. Sawn softwood product markets 2.4.4. Other softwood products 2.4.5. Sawmill employment 2.5. Pulp & paper 2.5.1. Inputs for the integrated pulp & paper mills 2.5.2. Production of paper 2.6. Wood-based panels 2.6.1. Inputs for wood-based panel products 2.6.2. Production of wood-based panel products 2.7. Miscellaneous products 2.7.1. Softwood round fencing manufacturers 2.7.2. Roundwood purchased by softwood round fencing manufacturers 2.8. Exports 2.9. Certification 2.9.1. Volume certified 2.9.2. Chain of custody certificates 2.10. Woodfuel and pellets 2.10.1. Woodfuel supply by sawmills and round fencing manufacturers 2.10.2. Wood pellet production
03. Trade 3.1. Apparent consumption of wood in the UK 3.2. Apparent consumption of wood products in the UK 3.3. Flow of recovered paper 3.4. UK import quantities by product 3.5. UK export quantities by product 3.6. UK import values by product 3.7. UK export values by product 3.8. Origin of wood imports
04. UK Forests and Climate Change 4.1. Carbon cycle 4.2. Forest carbon stock 4.3. Carbon sequestration 4.4. Woodland Carbon Code 4.5. Public Opinion of Forestry - climate change
05. Environment 5.1. Populations of wild birds 5.2. Woodland vegetation 5.3. Public Opinion of Forestry - tree health 5.4. Woodland Fires
06. Recreation 6.1. Visits to woodland - household surveys 6.1.1. England 6.1.2. Scotland 6.1.3. Wales 6.1.4. Public Opinion of Forestry Survey - woodland visitors 6.1.5. Public Opinion of Forestry Survey - woodland visitors by age group 6.2. Visits to woodland - on-site surveys 6.2.1. Wales All Forests Survey 6.2.2. Scotland All Forests Survey 6.2.3. Quality of Experience 6.2.4. Northern Ireland Forest Service day visitors 6.3. Public access to woodland 6.3.1. Woods for People 6.3.2. Space for People
07. Employment & Businesses 7.1. Employment: Annual Business Survey (ABS) 7.2. Employment in primary wood processing 7.3. Health & safety 7.4. Establishments in the primary wood processing industries 7.5. VAT and/or PAYE registered businesses
08. Finance & Prices 8.1. Timber prices 8.2. Financial return from forestry investment 8.3. Gross value added 8.4. Government expenditure on public forests 8.5. Other government expenditure on forestry 8.6. Grant schemes
09. International Forestry 9.1. Forest cover: international comparisons 9.2. Forest area by country 9.3. Annual changes in forest area 9.4. Carbon stocks in forest biomass 9.5. Wood removals 9.6. Production of wood products 9.7. Apparent consumption of wood products 9.8. World trade in forest products
10. Glossary
11. Sources 11.1. Sources: Woodland area and planting 11.1.1. Sources: Woodland area 11.1.2. Sources: Woodland Inventories 11.1.3. Sources: New planting & restocking 11.1.4. Sources: Felling 11.2. Sources: Timber 11.2.1. Sources: Wood production 11.2.2. Sources: Private Sector Softwood Removals Survey 11.2.3. Sources: Sawmill Survey 11.2.4. Sources: Pulp & paper 11.2.5. Sources: Wood-based panels 11.2.6. Sources: Survey of Round Fencing Manufacturers 11.2.7. Sources: Other deliveries 11.2.8. Sources: Comparison of removals and deliveries of UK softwood roundwood 11.2.9. Sources: Estimation of hardwood removals from private sector woodlands 11.2.10. Sources: Woodfuel and pellets 11.2.11. Sources: Conversion factors 11.3. Sources: Trade 11.4. Sources: UK Forests and Climate Change 11.5. Sources: Environment 11.6. Sources: Public Opinion of Forestry 11.7. Sources: Recreation 11.8. Sources: Employment and businesses 11.9. Sources: Finance & prices 11.10. Sources: International Forestry Forestry Statistics is a compilation of statistics on woodland, forestry and primary wood processing in the UK.
Where possible, statistical information in this publication covers the whole of the United Kingdom, and is broken down to give figures for England, Wales, Scotland and Northern Ireland. We would like to acknowledge the contribution of Natural Resources Wales and Northern Ireland's Forest Service in providing a wide range of statistics for this publication, which has made it possible to have more comprehensive coverage of the UK. However, there are some topics for which data are currently only available for some parts of the UK, and these tables are labelled accordingly.
As a National Statistics output, this publication concentrates on topics for which the data meet National Statistics quality standards. However some topics outside the scope of National Statistics are included, to give a more rounded picture; any such tables are footnoted as "outside the scope of National Statistics". This means that they have not been subject to National Statistics quality assurance procedures, but does not necessarily imply that they are of poorer quality. The following tables and charts are not designated as National Statistics:
- Table 1.2: Woodland area in the UK (time series);
- Tables 1.6 to 1.11, figures 1.3 to 1.4b: National Forest Inventory;
- Table 1.15: Felling licences;
- Tables 1.16a and 1.16b: Statutory Plant Health Notices;
- Table 2.4a: Softwood availability forecasts;
- Table 2.4b: Hardwood availability forecasts;
- Tables 4.1 to 4.3b, Figures 4.2 to 4.4: UK forests and climate change;
- Table 5.2: Vegetation richness and condition scores;
- Figure 5.2: Tree health;
- Tables 5.3a and 5.3b: Woodland fires;
- Tables 6.1 to 6.12, Figure 6.1: Recreation;
- Table 8.2, figure 8.2: IPD UK Forestry Index;
- Tables 9.1 to 9.6, Figures 9.1 to 9.7: International forestry.
To navigate this publication, please use the links on the left-hand side of the screen to access the contents list, to use the search facility or to select a range of pages to print. The "Back to statistics" button will access the Forestry Commission's Statistics home page. Individual pages provide further links to relevant tables and sources, and you can use the "previous" and "next" links at the top of the screen to page through the publication.
The tables within each chapter (including data for charts) are available to download from the Tables for download page. In addition, longer time series (in Excel and PDF formats) are available for some tables within the Statistics by Topic pages at www.forestry.gov.uk/statistics
Selected statistics from this publication are provided in "Forestry Facts and Figures 2014", available at www.forestry.gov.uk/forestry/infd-7aqf6j
The Forestry Commission also publishes a range of other Official Statistics, available at www.forestry.gov.uk/statistics
A National Statistics publication
The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics. Designation can be broadly interpreted to mean that the statistics:
- meet identified user needs;
- are well explained and readily accessible;
- are produced according to sound methods, and
- are managed impartially and objectively in the public interest.
Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.
For more information about National Statistics and the UK Statistics Authority visit: www.statisticsauthority.gov.uk
**Forestry Commission's statistical release practices**
The Forestry Commission aims to release statistics as soon as they are available. All of our National Statistics and other Official Statistics publications are available on our website www.forestry.gov.uk/statistics. Release dates are published on our website for the year ahead. Publications are made available at 9.30 am on the day of release.
**Forestry Commission's statistical revisions policy**
Revisions to statistics can occur when further data become available or errors are corrected. The Forestry Commission will normally revise statistics when the figures next appear in any publication. However, if the revision is significant (i.e. resulting in a major change to the published figures), a note showing the revisions will be published as soon as possible on the Forestry Commission website and distributed to all known recipients. In addition, the web versions of any current publications affected will be revised. See our full revisions policy at www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf for further information.
**Quality**
Summary information on quality is available in the Sources chapter of this publication. More details are provided in quality reports for individual topics, available at www.forestry.gov.uk/forestry/infd-7zhk85
**Release date:** 25 September 2014\
**Coverage:** United Kingdom\
**Geographical breakdown:** Country (where possible)\
**Issued by:** Economics and Statistics, Forestry Commission, 231 Corstorphine Road, Edinburgh, EH12 7AT\
**Enquiries:** Jackie Watson 0300 067 5238 [email protected]\
**Statistician:** Sheila Ward 0300 067 5236\
**Website:** www.forestry.gov.uk/statistics 1 Woodland Areas and Planting
Introduction
This chapter contains statistics on:
- UK woodland area;
- certified woodland area;
- areas of new planting and restocking; and
- felling.
Estimates for England, Wales, Scotland and Northern Ireland are included in addition to UK totals. International comparisons are provided in the International Forestry chapter. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Figures on woodland area and certified woodland area at March 2014 and on new planting and restocking for the period 2013-14 were previously published in "Woodland Area, Planting and Restocking: 2013 edition", released on 12 June 2014. Some figures for the latest year previous years have been revised from those previously published. For information on these revisions, see the Woodland Areas and Planting section of the Sources chapter.
A copy of all woodland area and planting tables is available to download as an Excel spreadsheet from the Tables for Download page. Longer time series are also available for some tables. These can be accessed from our Woodland Area and Planting Statistics web page at www.forestry.gov.uk/forestry/infd-7aqknx.
Key findings
The main findings are:
- The area of woodland in the UK at 31 March 2014 is estimated to be 3.1 million hectares. This represents 13% of the total land area in the UK, 10% in England, 15% in Wales, 18% in Scotland and 8% in Northern Ireland.
- Of the total UK woodland area, 0.9 million hectares is owned or managed by the Forestry Commission (in England and Scotland), Natural Resources Wales (in Wales) or the Forest Service (in Northern Ireland).
- The total certified woodland area in the UK at 31 March 2014 is 1.4 million hectares, including all Forestry Commission/Natural Resources Wales/Forest Service woodland. Overall, 44% of the UK woodland area is certified.
- Thirteen thousand hectares of new woodland were created in the UK in 2013-14, mostly with broadleaved species.
- Sixteen thousand hectares of woodland were restocked in the UK in 2013-14, mostly with conifers.
- A total of 575 sites were served with a Statutory Plant Health Notice in 2013-14, requiring a total of 4.8 thousand hectares of woodland to be felled. 1.1 Woodland Area
Woodland is defined in UK forestry statistics as land under stands of trees with a canopy cover of at least 20% (25% in Northern Ireland), or having the potential to achieve this. The definition relates to land use, rather than land cover, so integral open space and felled areas that are awaiting restocking are included as woodland. Further information, including how this UK definition compares with the international definition of woodland, is provided in the Sources chapter.
Statistics on woodland area are used to inform government policy and resource allocation, to provide context to UK forestry and land management issues and are reported to international organisations. They are also used in the compilation of natural capital accounts.
Increases in woodland area result from the creation of new woodland. This can be achieved through new planting or by natural colonisation of trees on land near existing woodland. Further information is available in the section on New Planting.
Decreases in woodland area result from the conversion of woodland to other land uses. Regulatory approval is usually required before trees can be felled. Felling approval will normally require the area to be restocked, but there are some cases in which trees may be permanently removed, generally for environmental reasons. The permanent removal of trees may also be authorised under planning regulations, to enable development.
Most public sector woodland is owned and managed by the Forestry Commission (FC) in England and Scotland, Natural Resources Wales (NRW) in Wales and the Forest Service (FS) in Northern Ireland. Other public sector woodland (e.g. owned by local authorities) are included with privately owned woodland as “private sector” in this release.
The Natural Resources Wales woodland areas and land areas shown in this release relate to areas previously owned or managed by Forestry Commission Wales. They exclude any areas previously owned or managed by other parts of Natural Resources Wales, such as the former Environment Agency Wales and the former Countryside Council for Wales. 1.1.1 Area of Woodland: 2014
The area of woodland in the UK at 31 March 2014 is 3.1 million hectares (Table 1.1). Of this total, 1.4 million hectares (45%) is in Scotland, 1.3 million hectares (41%) is in England, 0.3 million hectares (10%) is in Wales and 0.1 million hectares (4%) is in Northern Ireland.
Conifers account for around one half (51%) of the UK woodland area, although this proportion varies from around one quarter (26%) in England to around three quarters (74%) in Scotland.
Table 1.1 Area of woodland(^1) by ownership & forest type at 31 March 2014
| Forest type and ownership | England | Wales | Scotland | Northern Ireland(^2) | UK | |---------------------------|---------|-------|----------|------------------------|----------| | | | | | | thousand hectares | | Conifers | | | | | | | FC/NRW/FS woodland | 151 | 98 | 438 | 56 | 742 | | Private sector woodland | 188 | 53 | 614 | 11 | 866 | | Total | 339 | 151 | 1 051 | 66 | 1 608 | | Broadleaves(^3) | | | | | | | FC/NRW/FS woodland | 64 | 19 | 39 | 6 | 129 | | Private sector woodland | 899 | 136 | 328 | 39 | 1 402 | | Total | 962 | 156 | 368 | 45 | 1 531 | | Total | 1 302 | 306 | 1 419 | 111 | 3 138 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, National Forest Inventory.
Notes:
1. Figures for England, Wales and Scotland are based on data obtained from the National Forest Inventory (NFI) and adjusted for new planting, but at present no adjustment is made for woodland recently converted to another land use.
2. Figures for Northern Ireland are obtained from the Northern Ireland Woodland Register.
3. Broadleaves include coppice and coppice with standards. 1.1.2 Area of woodland: changes over time
The 3.1 million hectares of woodland in the UK in 2014 represents 13% of the total land area. This comprises 10% in England, 15% in Wales, 18% in Scotland and 8% in Northern Ireland (Table 1.2).
Table 1.2 Woodland area in the United Kingdom
| Year | England | Wales | Scotland | Northern Ireland | UK | |--------|---------|-------|----------|------------------|----| | | Area (000 ha) | % | Area (000 ha) | % | Area (000 ha) | % | Area (000 ha) | % | Area (000 ha) | % | | 1086 | .. | ~15 | .. | .. | .. | .. | .. | .. | .. | .. | | c1350 | .. | ~10 | .. | .. | .. | ~4 | .. | .. | .. | .. | | 17thC | .. | ~8 | .. | .. | .. | ~4 | .. | ~1.5 | .. | .. | | 1905 | 681 | 5.2 | 88 | 4.2 | 351 | 4.5 | 15 | 1.1 | 1 140 | 4.7 | | 1924 | 660 | 5.1 | 103 | 5.0 | 435 | 5.6 | 13 | 1.0 | 1 211 | 5.0 | | 1947 | 755 | 5.8 | 128 | 6.2 | 513 | 6.6 | 23 | 1.7 | 1 419 | 5.9 | | 1965 | 886 | 6.8 | 201 | 9.7 | 656 | 8.4 | 42 | 3.1 | 1 784 | 7.4 | | 1980 | 948 | 7.3 | 241 | 11.6 | 920 | 11.8 | 67 | 4.9 | 2 175 | 9.0 | | 1995-99| 1 097 | 8.4 | 287 | 13.8 | 1 281 | 16.4 | 81 | 6.0 | 2 746 | 11.3 | | 20143,4| 1 302 | 10.0 | 306 | 14.8 | 1 419 | 18.2 | 111 | 8.2 | 3 138 | 12.9 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, Nationa Forest Inventory.
Notes:
1. Percentage of the total surface area excluding inland water. The total surface areas, excluding inland water, are taken from the UK Standard Area Measurements (published by the Office for National Statistics).
2. For Northern Ireland, 17th century figure is estimate for all Ireland, 1905 figure is estimate for Ulster 1908, 1947 figure assumes no change from 1939-40 Census.
3. Figures for England, Wales and Scotland are based on data obtained from the National Forest Inventory (NFI) and adjusted for new planting, but at present no adjustment is made for woodland recently converted to another land use.
4. Figures for Northern Ireland are obtained from the Northern Ireland Woodland Register.
.. Denotes data not available.
These figures are outside the scope of National Statistics.
Figure 1.1 shows woodland area by country since 1998. Figures for 1998 to 2009 for England, Wales and Scotland have been revised from those initially published, to produce results that are consistent with the National Forest Inventory and enable comparisons over time. The chart indicates that the UK woodland area has risen by around 220 thousand hectares since 1998, an increase of 7% over the period.
Figure 1.1 Area of woodland, 1998-2014 Source: Forestry Commission, Natural Resources Wales, Forest Service, National Forest Inventory.
These figures are outside the scope of National Statistics 1.1.3 Woodland area by ownership
The Forestry Commission, Natural Resources Wales and the Forest Service owned or managed 28% of the total woodland area in the UK in 2014 (Table 1.3). This proportion ranged from 16% of the woodland area in England to 55% in Northern Ireland.
Table 1.3 Area of woodland(^1) in the UK by ownership, 2010-2014
| Ownership | England | Wales | Scotland | Northern Ireland(^2) | UK | |-------------------------------|---------|-------|----------|------------------------|----------| | | | | | | thousand hectares | | FC/ NRW/ FS woodland | | | | | | | 2010 | 213 | 115 | 478 | 61 | 868 | | 2011 | 213 | 115 | 479 | 61 | 869 | | 2012 | 214 | 117 | 481 | 62 | 874 | | 2013 | 214 | 117 | 481 | 62 | 874 | | 2014 | 215 | 117 | 477 | 62 | 870 | | Private sector woodland | | | | | | | 2010 | 1 076 | 188 | 900 | 27 | 2 191 | | 2011 | 1 079 | 189 | 904 | 27 | 2 199 | | 2012 | 1 083 | 188 | 922 | 44 | 2 236 | | 2013 | 1 084 | 188 | 930 | 49 | 2 252 | | 2014 | 1 087 | 189 | 942 | 50 | 2 268 | | Total woodland | | | | | | | 2010 | 1 290 | 303 | 1 378 | 88 | 3 059 | | 2011 | 1 292 | 304 | 1 383 | 88 | 3 067 | | 2012 | 1 298 | 305 | 1 403 | 105 | 3 110 | | 2013 | 1 298 | 305 | 1 411 | 111 | 3 125 | | 2014 | 1 302 | 306 | 1 419 | 111 | 3 138 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, National Forest Inventory.
Notes:
1. Figures for England, Wales and Scotland are based on data obtained from the National Forest Inventory (NFI) and adjusted for new planting, but at present no adjustment is made for woodland recently converted to another land use.
2. Northern Ireland figures since 2012 are obtained from the Northern Ireland Woodland Register. 1.2 Certified woodland area
Certified woodland in the UK has been independently audited against the UK Woodland Assurance Standard. Forestry certification schemes are owned by international non-governmental organisations and exist to promote good forest practice. They offer product labels to demonstrate that wood or wood products come from well-managed forests.
Figures for certified woodland areas are often used as an indicator of sustainable forest management. However, it should be noted that woodland that is not certified may also be managed sustainably.
Most changes to the certified woodland area figures over time are a result of new areas being certified or certificates not being renewed upon expiry. Temporary changes can also occur if there is a time lag between expiry and renewal.
1.4 million hectares of woodland in the UK were certified in March 2014 (Table 1.4). This represented 44% of the total UK woodland area, 27% in England, 46% in Wales, 58% in Scotland and 58% in Northern Ireland.
Table 1.4 Woodland area certified(^1,2), March 2014
| Ownership | England | Wales | Scotland | Northern Ireland | UK | |----------------------------------|---------|-------|----------|------------------|--------| | | thousand hectares | | | | | | FC/NRW/FS woodland(^3) | 215 | 117 | 477 | 62 | 870 | | Private sector woodland | 135 | 24 | 344 | 3 | 506 | | **Total woodland area certified** | **349** | **141** | **822** | **65** | **1 377** |
Source: Forest Stewardship Council, Forestry Commission, Natural Resources Wales, Forest Service, National Forest Inventory.
Notes:
1. All certified woodland in 2014 is certified under the Forest Stewardship Council (FSC) scheme. Some of these woodlands are also certified under the Programme for the Endorsement of Forest Certification (PEFC) scheme.
2. The estimates are based on UK data published by FSC, supplemented by data from individual certificates and other sources. Where possible, figures are for the woodland area certified, rather than the land area certified.
3. All FC/NRW/FS woodland is certified. The FC/NRW/FS areas are the latest areas, as shown in Table 1.1, rather than the areas shown on the certificates.
Data: Longer time series of the above table are available from the Woodland Statistics web page.
Figure 1.2 presents certified woodland area by country since December 2001, with figures for earlier years revised for consistency with results from the National Forest Inventory. This shows an increase in certified woodland area of over 300 thousand hectares (30%) since December 2001.
**Figure 1.2 Area of certified woodland, 2001-2014** Figures showing volumes of certified timber and Chain of Custody certificates are provided in tables 2.28 and 2.29. 1.3 Land use
Not all land that is owned or managed by the Forestry Commission, Natural Resources Wales or the Forest Service in Northern Ireland is woodland; other land uses include agricultural land and mountain areas and moorland.
The Natural Resources Wales woodland areas and land areas shown relate to areas previously owned or managed by Forestry Commission Wales. They exclude any areas previously owned or managed by other parts of Natural Resources Wales, such as the former Environment Agency Wales and the former Countryside Council for Wales.
Woodland accounted for 79% of all Forestry Commission/Natural Resources Wales/Forest Service land in the UK in 2014 (Table 1.5). This proportion was highest in Wales (94%) and lowest in Scotland (74%).
Table 1.5 Land use of the FC, NRW and FS, 2010-2014
| Year (ending 31/3) | England | Wales | Scotland | Northern Ireland | UK | |-------------------|---------|-------|----------|------------------|----| | | | | | | | | Woodland | | | | | | | 2010 | 213 | 115 | 478 | 61 | 868| | 2011 | 213 | 115 | 479 | 61 | 869| | 2012 | 214 | 117 | 481 | 62 | 874| | 2013 | 214 | 117 | 481 | 62 | 874| | 2014 | 215 | 117 | 477 | 62 | 870| | Other land¹ | | | | | | | 2010 | 43 | 9 | 182 | 14 | 249| | 2011 | 40 | 9 | 175 | 14 | 239| | 2012 | 38 | 7 | 170 | 14 | 229| | 2013 | 38 | 7 | 171 | 14 | 230| | 2014 | 38 | 7 | 170 | 14 | 228| | Total FC/ NRW/ FS land area | | | | | | | 2010 | 257 | 124 | 660 | 75 | 1 116| | 2011 | 254 | 124 | 654 | 75 | 1 108| | 2012 | 253 | 124 | 651 | 75 | 1 103| | 2013 | 253 | 124 | 652 | 75 | 1 104| | 2014 | 253 | 124 | 647 | 75 | 1 099|
Source: Forestry Commission, Natural Resources Wales, Forest Service.
Notes:
1. "Other land" includes agricultural land and areas of moorland and mountain. 1.4 National Forest Inventory
This section contains interim results from the National Forest Inventory (NFI). The statistics are based on field survey data combined with information from the NFI woodland map, which is a spatial representation of woodland areas in Great Britain.
The first cycle of the NFI field survey began in 2010 and will be completed in 2015. Therefore full field survey results from the NFI are not yet available. The figures presented in this chapter are interim estimates at 31 March 2012, published in the NFI "50-year forecast of softwood timber availability" and "50-year forecast of hardwood timber availability" reports, released in April 2014. Both reports are available at www.forestry.gov.uk/inventory.
The figures presented in Tables 1.6 to 1.9 (and Figures 1.3, 1.4a and 1.4b) relate to stocked areas. These differ from the woodland areas presented in earlier tables, as stocked areas exclude felled areas and (for non-FC land) areas of integral open space.
The figures on growing stock presented in Tables 1.10 and 1.11 form the basis for the Forestry Commission's availability forecasts (see Tables 2.4a and 2.4b).
Further information on the National Forest Inventory is available at www.forestry.gov.uk/inventory 1.4.1 Woodland area by age: conifers
Table 1.6 presents the area of conifers, broken down by age class, ownership and country.
Sixty-one percent of the coniferous woodland area in Great Britain was occupied by stands of 40 years old or younger (Table 1.6). A further 9% of stands were aged over 60 years.
Table 1.6 Stocked woodland area in GB by ownership and age class: Conifers
| Age class (years) | England | Wales | Scotland | GB | |------------------|---------|-------|----------|-----| | | thousand hectares | | **FC** | | | | | | 0-20 | 33 | 24 | 76 | 134 | | 21-40 | 38 | 25 | 145 | 208 | | 41-60 | 39 | 25 | 111 | 176 | | 61-80 | 12 | 7 | 25 | 44 | | 81-100 | 4 | 1 | 6 | 11 | | 100+ | 1 | 0 | 3 | 4 | | **All age classes** | **128** | **82** | **367** | **576** | | **Private sector** | | | | | | 0-20 | 17 | 8 | 126 | 151 | | 21-40 | 54 | 22 | 231 | 306 | | 41-60 | 83 | 15 | 116 | 214 | | 61-80 | 19 | 1 | 18 | 38 | | 81-100 | 3 | 2 | 6 | 11 | | 100+ | 3 | 1 | 9 | 12 | | **All age classes** | **179** | **47** | **505** | **732** | | **Total** | | | | | | 0-20 | 51 | 32 | 202 | 285 | | 21-40 | 92 | 46 | 376 | 514 | | 41-60 | 123 | 39 | 227 | 389 | | 61-80 | 31 | 8 | 43 | 82 | | 81-100 | 7 | 2 | 12 | 22 | | 100+ | 3 | 1 | 12 | 16 | | **All age classes** | **307** | **129** | **872** | **1 308** |
Source: National Forest Inventory: 50-year forecast of softwood availability (Forestry Commission, April 2014).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012.
These figures are outside the scope of National Statistics. 1.4.2 Woodland area by age: broadleaves
Table 1.7 presents the area of broadleaves, broken down by age class, ownership and country.
Around one half (53%) of the broadleaved area was occupied by stands of 40 years old or younger (Table 1.7). More than one quarter (28%) of stands were aged over 60 years.
Table 1.7 Stocked woodland area in GB by ownership and age class: Broadleaves
| Age class (years) | England | Wales | Scotland | GB | |------------------|---------|-------|----------|-----| | | thousand hectares | | **FC** | | | | | | 0-20 | 8 | 7 | 11 | 25 | | 21-40 | 6 | 2 | 5 | 13 | | 41-60 | 13 | 2 | 4 | 19 | | 61-80 | 13 | 2 | 4 | 19 | | 81-100 | 4 | 1 | 2 | 7 | | 100+ | 10 | 3 | 5 | 18 | | **All age classes** | **54** | **16** | **32** | **102** | | **Private sector** | | | | | | 0-20 | 217 | 30 | 84 | 332 | | 21-40 | 227 | 33 | 84 | 344 | | 41-60 | 145 | 22 | 58 | 225 | | 61-80 | 117 | 15 | 22 | 154 | | 81-100 | 92 | 11 | 9 | 112 | | 100+ | 51 | 10 | 7 | 67 | | **All age classes** | **849** | **121** | **265** | **1 235** | | **Total** | | | | | | 0-20 | 225 | 37 | 95 | 357 | | 21-40 | 232 | 36 | 90 | 357 | | 41-60 | 157 | 24 | 63 | 244 | | 61-80 | 130 | 17 | 26 | 173 | | 81-100 | 97 | 12 | 11 | 119 | | 100+ | 61 | 12 | 12 | 85 | | **All age classes** | **902** | **137** | **297** | **1 337** |
Source: National Forest Inventory: 50-year forecast of hardwood availability (Forestry Commission, April 2014), (supporting data).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012.
These figures are outside the scope of National Statistics. 1.4.3 Woodland area by age: Summary
Figure 1.3 presents the age profile of woodland in Great Britain for conifers and for broadleaves. It shows that broadleaves are more evenly distributed across the age classes than conifers.
**Figure 1.3 Age profile of woodland in GB**
Source: National Forest Inventory: 50-year forecast of softwood availability (Forestry Commission, April 2014). National Forest Inventory: 50-year forecast of hardwood availability (Forestry Commission, April 2014).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012.
These figures are outside the scope of National Statistics. 1.4.4 Woodland area by species: conifers
Table 1.8 presents the area of conifers, broken down by principal species, ownership and country.
Sitka spruce accounts for around one half (51%) of the conifer area in Great Britain (Table 1.8), followed by Scots pine (17%) and Larches (10%). Sitka spruce is less dominant in England, accounting for just one quarter (26%) of the conifer area there.
Table 1.8 Stocked woodland area in GB by ownership and principal species: Conifers
| Principal species | England | Wales | Scotland | GB | |-------------------|---------|-------|----------|----| | | thousand hectares | | **FC** | | | | | | Sitka spruce | 49 | 50 | 225 | 323| | Scots pine | 17 | 2 | 45 | 64 | | Corsican pine | 27 | 2 | 2 | 30 | | Norway spruce | 7 | 5 | 11 | 23 | | Larches | 10 | 12 | 26 | 48 | | Douglas fir | 10 | 5 | 5 | 20 | | Lodgepole pine | 4 | 3 | 49 | 56 | | Other conifers | 5 | 3 | 3 | 11 | | **All conifers** | 128 | 82 | 367 | 576| | **Private sector**| | | | | | Sitka spruce | 32 | 27 | 282 | 341| | Scots pine | 45 | 1 | 109 | 154| | Corsican pine | 14 | 0 | 1 | 15 | | Norway spruce | 21 | 3 | 15 | 38 | | Larches | 30 | 8 | 39 | 78 | | Douglas fir | 15 | 3 | 7 | 25 | | Lodgepole pine | 3 | 1 | 39 | 44 | | Other conifers | 19 | 2 | 8 | 29 | | **All conifers** | 179 | 47 | 505 | 732| | **Total** | | | | | | Sitka spruce | 80 | 77 | 507 | 665| | Scots pine | 61 | 3 | 154 | 218| | Corsican pine | 40 | 2 | 3 | 46 | | Norway spruce | 27 | 8 | 25 | 61 | | Larches | 40 | 20 | 66 | 126| | Douglas fir | 25 | 9 | 12 | 46 | | Lodgepole pine | 8 | 4 | 88 | 100| | Other conifers | 24 | 5 | 11 | 40 | | **All conifers** | 307 | 129 | 872 | 1308|
Source: National Forest Inventory: 50-year forecast of softwood availability (Forestry Commission, April 2014).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012. These figures are outside the scope of National Statistics 1.4.5 Woodland area by species: broadleaves
Table 1.9 presents the area of broadleaves, broken down by principal species, ownership and country.
The most commonly occurring broadleaved species in Great Britain are Birch (accounting for 18% of broadleaf woodland), Oak (16%) and Ash (12%) (Table 1.9). Birch is more dominant in Scotland, accounting for 43% of the broadleaf area there.
Table 1.9 Stocked woodland area in GB by ownership and principal species: Broadleaves
| Principal species | England | Wales | Scotland | GB | |-------------------|---------|-------|----------|----| | | thousand hectares | | **FC** | | | | | | Oak | 16 | 3 | 3 | 21 | | Beech | 13 | 2 | 1 | 15 | | Sycamore | 1 | 0 | 0 | 2 | | Ash | 3 | 1 | 0 | 4 | | Birch | 6 | 2 | 11 | 19 | | Sweet chestnut | 1 | 0 | 0 | 1 | | Hazel | 0 | 0 | 0 | 1 | | Hawthorn | 0 | 0 | 0 | 0 | | Alder | 1 | 0 | 1 | 1 | | Willow | 0 | 0 | 0 | 0 | | Other broadleaves | 14 | 9 | 15 | 38 | | **All broadleaves** | **54** | **16** | **32** | **102** | | **Private sector** | | | | | | Oak | 151 | 23 | 23 | 198| | Beech | 59 | 5 | 15 | 78 | | Sycamore | 74 | 9 | 21 | 105| | Ash | 120 | 18 | 15 | 153| | Birch | 90 | 11 | 116 | 217| | Sweet chestnut | 28 | 0 | 0 | 28 | | Hazel | 64 | 14 | 8 | 86 | | Hawthorn | 57 | 8 | 8 | 73 | | Alder | 30 | 10 | 16 | 56 | | Willow | 41 | 11 | 13 | 65 | | Other broadleaves | 133 | 12 | 29 | 174| | **All broadleaves** | **849** | **121** | **265** | **1 235** | | **Total** | | | | | | Oak | 167 | 26 | 26 | 219| | Beech | 72 | 6 | 15 | 94 | | Sycamore | 75 | 9 | 22 | 106| | Ash | 123 | 19 | 16 | 157| | Birch | 96 | 12 | 128 | 236| | Sweet chestnut | 28 | 0 | 0 | 29 | | Hazel | 65 | 14 | 8 | 87 | | Hawthorn | 57 | 8 | 8 | 73 | | | 31 | 10 | 17 | 58 | |----------------|----|----|----|----| | Alder | 41 | 11 | 13 | 65 | | Willow | 146| 21 | 44 | 212| | Other broadleaves | 902| 137| 297| 1337|
Source: National Forest Inventory: 50-year forecast of hardwood availability (Forestry Commission, April 2014).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012.
These figures are outside the scope of National Statistics. 1.4.6 Woodland area by species: summary
Figures 1.4a and 1.4b show that, whilst the conifer area is dominated by a small number of species (Sitka spruce and Scots pine together account for around two thirds of the conifer area), broadleaves are more varied.
**Figure 1.4a Principal tree species in GB by stocked area: Conifers**
Source: National Forest Inventory: 50-year forecast of softwood availability (Forestry Commission, April 2014).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012.
These figures are outside the scope of National Statistics
**Figure 1.4b Principal tree species in GB by stocked area: Broadleaves**
Source: National Forest Inventory: 50-year forecast of hardwood availability (Forestry Commission, April 2014).
Notes:
1. Stocked area only: excludes felled areas and (for private sector land) open space.
2. Areas at 31 March 2012.
These figures are outside the scope of National Statistics 1.4.7 Growing stock by species: conifers
Growing stock is the volume of timber in living trees. It is also often referred to as the standing volume.
Table 1.10 presents the volume of coniferous growing stock, broken down by principal species, ownership and country.
The total volume of coniferous growing stock in Great Britain was 355 million m$^3$ overbark standing (Table 1.10).
Sitka spruce accounts for around one half (51%) of the conifer growing stock, followed by Scots pine (15%) and Larches (10%). This largely reflects the distribution of species by area (see Table 1.8).
Table 1.10 Growing stock in GB by ownership and principal species: Conifers
| Principal species | England | Wales | Scotland | GB | |-------------------|---------|-------|----------|----------| | | million cubic metres overbark standing | | **FC** | | | | | | Sitka spruce | 8.9 | 11.1 | 52.1 | 72.0 | | Scots pine | 4.0 | 0.5 | 8.8 | 13.3 | | Corsican pine | 5.5 | 0.6 | 0.4 | 6.4 | | Norway spruce | 1.7 | 1.5 | 3.5 | 6.7 | | Larches | 1.7 | 2.7 | 4.8 | 9.2 | | Douglas fir | 2.7 | 1.3 | 1.4 | 5.4 | | Lodgepole pine | 0.8 | 0.6 | 8.2 | 9.6 | | Other conifers | 1.5 | 1.1 | 1.0 | 3.6 | | **All conifers** | **26.8**| **19.4**| **80.2**| **126.4**| | **Private sector**| | | | | | Sitka spruce | 11.4 | 9.5 | 88.0 | 108.9 | | Scots pine | 14.7 | 0.3 | 24.5 | 39.4 | | Corsican pine | 4.7 | 0.2 | 0.3 | 5.3 | | Norway spruce | 7.1 | 1.3 | 5.9 | 14.4 | | Larches | 10.7 | 3.3 | 12.3 | 26.3 | | Douglas fir | 6.4 | 1.6 | 3.5 | 11.5 | | Lodgepole pine | 1.0 | 0.3 | 7.4 | 8.7 | | Other conifers | 7.6 | 1.1 | 3.0 | 11.7 | | **All conifers** | **63.7**| **17.9**| **146.7**| **228.4**| | **Total** | | | | | | Sitka spruce | 20.3 | 20.6 | 140.0 | 180.9 | | Scots pine | 18.6 | 0.8 | 33.3 | 52.7 | | Corsican pine | 10.2 | 0.8 | 0.7 | 11.7 | | Norway spruce | 8.8 | 2.8 | 9.4 | 21.1 | | Larches | 12.4 | 6.0 | 17.1 | 35.6 | | Douglas fir | 9.1 | 2.9 | 4.9 | 16.9 | | Lodgepole pine | 1.8 | 0.9 | 15.5 | 18.3 | | Other conifers | 9.1 | 2.2 | 4.1 | 15.4 | | **All conifers** | **90.5**| **37.4**| **226.9**| **354.7**|
Source: National Forest Inventory: 50-year forecast of softwood availability (Forestry Commission, April 2014). Notes:
1. Areas at 31 March 2012.
These figures are outside the scope of National Statistics 1.4.8 Growing stock by species: broadleaves
Table 1.11 presents the volume of broadleaved growing stock, broken down by principal species, ownership and country.
The total volume of broadleaved growing stock in Great Britain is 245 million m$^3$ overbark standing (Table 1.11).
Oak (28%), Ash (16%) and Beech (12%) accounted for the majority of the broadleaved volume. To some extent, this reflects the distribution of species by area (see Table 1.9).
Table 1.11 Growing stock in GB by ownership and principal species: Broadleaves
| Principal species | England | Wales | Scotland | GB | |-------------------|---------|-------|----------|----------| | | million cubic metres overbark standing | | **FC** | | | | | | Oak | 3.3 | 0.5 | 0.6 | 4.4 | | Beech | 2.8 | 0.4 | 0.1 | 3.4 | | Sycamore | 0.1 | 0.0 | 0.0 | 0.2 | | Ash | 0.4 | 0.1 | 0.0 | 0.5 | | Birch | 0.5 | 0.1 | 1.7 | 2.3 | | Sweet chestnut | 0.1 | 0.0 | 0.0 | 0.1 | | Hazel | 0.0 | 0.0 | 0.0 | 0.1 | | Hawthorn | 0.0 | 0.0 | 0.0 | 0.0 | | Alder | 0.1 | 0.0 | 0.1 | 0.2 | | Willow | 0.0 | 0.0 | 0.0 | 0.0 | | Other broadleaves | 1.3 | 0.8 | 1.2 | 3.3 | | **All broadleaves** | **8.7** | **1.9** | **3.9** | **14.5** | | **Private sector** | | | | | | Oak | 51.7 | 7.7 | 5.6 | 65.0 | | Beech | 19.8 | 1.6 | 5.2 | 26.6 | | Sycamore | 16.2 | 2.4 | 4.8 | 23.4 | | Ash | 30.1 | 6.9 | 2.8 | 39.8 | | Birch | 11.3 | 1.2 | 8.5 | 20.9 | | Sweet chestnut | 7.7 | 0.2 | 0.0 | 7.9 | | Hazel | 5.0 | 0.9 | 0.4 | 6.4 | | Hawthorn | 2.8 | 0.4 | 0.3 | 3.4 | | Alder | 6.8 | 2.1 | 1.9 | 10.8 | | Willow | 4.9 | 0.8 | 0.9 | 6.5 | | Other broadleaves | 16.0 | 1.1 | 2.6 | 19.6 | | **All broadleaves** | **172.3** | **25.4** | **32.9** | **230.6** | | **Total** | | | | | | Oak | 55.0 | 8.1 | 6.3 | 69.4 | | Beech | 22.6 | 2.0 | 5.3 | 29.9 | | Sycamore | 16.4 | 2.4 | 4.9 | 23.6 | | Ash | 30.5 | 7.0 | 2.8 | 40.3 | | Birch | 11.8 | 1.3 | 10.1 | 23.2 | | Sweet chestnut | 7.8 | 0.2 | 0.0 | 8.0 | | Tree Type | Area (ha) | Height (m) | Diameter (cm) | Volume (m³) | |-------------------|-----------|------------|---------------|-------------| | Hazel | 5.1 | 0.9 | 0.5 | 6.5 | | Hawthorn | 2.8 | 0.4 | 0.3 | 3.4 | | Alder | 6.9 | 2.2 | 1.9 | 11.0 | | Willow | 4.9 | 0.8 | 0.9 | 6.5 | | Other broadleaves | 17.2 | 1.8 | 3.8 | 22.9 | | **All broadleaves** | **181.0** | **27.3** | **36.8** | **245.1** |
Source: National Forest Inventory: 50-year forecast of hardwood availability (Forestry Commission, April 2014).
Notes:
1. Areas at 31 March 2012.
These figures are outside the scope of National Statistics. 1.5 Area of Farm Woodland
Agricultural Censuses run by Defra (Department for Environment, Food and Rural Affairs) and the devolved administrations collect annual information on the land-use of farms. Table 1.12 below shows the area of woodland on farms.
The area of farm woodland in the UK has increased from 563 thousand hectares in 2004 to 865 thousand hectares in 2013 (Table 1.12). Around one half (54%) of all farm woodland is in Scotland, with a further 38% in England, 7% in Wales and the remaining 1% in Northern Ireland.
Table 1.12 Area of farm woodland, 2004-2013
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|-----------------|-----| | 2004 | 274.1 | 41.7 | 239.0 | 8.2 | 563.0 | | 2005 | 291.7 | 44.9 | 238.0 | 8.6 | 583.2 | | 2006 | 296.0 | 51.3 | 249.3 | 9.6 | 606.2 | | 2007 | 305.4 | 67.9 | 279.9 | 9.9 | 663.1 | | 2008 | 318.8 | 59.2 | 317.3 | 9.9 | 705.2 | | 2009 | 303.7 | 60.8 | 350.8 | 10.3 | 725.7 | | 2010 | 295.3 | 69.1 | 399.8 | 10.2 | 774.4 | | 2011 | 304.9 | 44.2 | 426.1 | 10.8 | 785.9 | | 2012 | 308.4 | 62.6 | 445.4 | 11.0 | 827.5 | | 2013 | 324.9 | 63.4 | 466.8 | 10.3 | 865.4 |
Source: June Agricultural Census - Defra, The Scottish Government, Welsh Government, Northern Ireland Executive.
Figure 1.5 Area of farm woodland, 1981-2013
Source: June Agricultural Census - Defra, The Scottish Government, Welsh Government, Northern Ireland Executive. 1.6 New planting and restocking
New planting
New planting is the creation of new areas of woodland by planting trees on land that was not previously woodland. The statistics presented here also include new woodland that is created by natural colonisation of trees on land near existing woodland. Statistics on new planting are used to inform government policy and resource allocation, and are used in producing annual estimates of woodland area.
There are a number of factors that can affect the level of new planting in the UK. These include:
- choices by landowners reflecting their own motivation and needs;
- the costs and availability of land for conversion to woodland;
- the availability of grants for new planting, the level of grant payments available and the awareness of grants among potential recipients;
- the tax benefits available from owning woodland;
- expected future markets for wood products such as timber and woodfuel;
- income from payments for ecosystem services, particularly carbon storage;
- national and local initiatives, for example on biodiversity, green infrastructure and water management.
Restocking
Restocking is the replanting of existing areas of woodland that have been felled. The statistics presented here also include felled areas that have been restocked by natural regeneration.
As restocking takes place on woodland that has been previously harvested and it is a condition of most felling licences that the area is restocked, restocking rates are mainly driven by harvesting levels (with a time lag, usually of around 2 years, between harvesting and restocking). Figures for timber harvesting (wood production) are available in the UK-Grown Timber chapter.
Economic factors, including grant rates, may have some effect on the species choice at restocking. In addition, the precise timing of restocking may be affected by weather conditions.
Changes to grant support for restocking of conifers has changed with the introduction of Rural Development Contracts in Scotland in 2008. As a result, grant aid is no longer available for restocking with Sitka spruce in many cases. No estimates have been included for restocking of Sitka spruce in Scotland that is no longer supported by grants. It is therefore likely that conifer restocking in Scotland in recent years is under-reported in this release and other statistics. 1.6.1 New planting and restocking by forest type
The total area of new planting and restocking in the UK was around 29 thousand hectares in 2013-14 (Table 1.13). Restocking accounted for over one half (55%) of this total. Broadleaved species accounted for around four fifths (83%) of the new planting area but just one quarter (27%) of the restocking area in 2013-14.
Table 1.13 New planting & restocking by forest type
| Year (ending 31/3) | New planting | Restocking | Total | |--------------------|--------------|------------|-------| | | Conifers | Broadleaves| Total | | | thousand hectares | thousand hectares | thousand hectares | | England | | | | | 2009-10 | 0.0 | 2.3 | 2.3 | 1.5 | 1.3 | 2.8 | 1.5 | 3.6 | 5.1 | | 2010-11 | 0.0 | 2.5 | 2.5 | 2.3 | 1.7 | 4.0 | 2.3 | 4.2 | 6.5 | | 2011-12 | 0.0 | 2.6 | 2.6 | 2.0 | 1.6 | 3.6 | 2.1 | 4.2 | 6.2 | | 2012-13 | 0.0 | 2.6 | 2.6 | 2.2 | 1.8 | 4.0 | 2.2 | 4.4 | 6.6 | | 2013-14 | 0.0 | 3.3 | 3.3 | 2.6 | 1.9 | 4.5 | 2.6 | 5.2 | 7.8 | | Wales | | | | | 2009-10 | 0.0 | 0.2 | 0.2 | 1.3 | 0.8 | 2.1 | 1.3 | 1.0 | 2.3 | | 2010-11 | 0.0 | 0.3 | 0.3 | 1.3 | 0.8 | 2.1 | 1.3 | 1.1 | 2.4 | | 2011-12 | 0.1 | 0.6 | 0.8 | 1.4 | 0.6 | 2.0 | 1.5 | 1.2 | 2.7 | | 2012-13 | 0.1 | 0.8 | 0.9 | 1.4 | 0.6 | 2.0 | 1.5 | 1.4 | 2.9 | | 2013-14 | 0.1 | 0.8 | 0.9 | 1.4 | 0.8 | 2.3 | 1.6 | 1.6 | 3.2 | | Scotland | | | | | 2009-10 | 0.5 | 2.2 | 2.7 | 8.0 | 1.5 | 9.5 | 8.6 | 3.7 | 12.3 | | 2010-11 | 1.8 | 4.2 | 6.0 | 5.6 | 1.3 | 6.9 | 7.4 | 5.5 | 12.9 | | 2011-12 | 3.3 | 5.7 | 9.0 | 4.6 | 1.1 | 5.7 | 7.9 | 6.8 | 14.7 | | 2012-13 | 1.7 | 5.3 | 7.0 | 5.1 | 0.9 | 6.0 | 6.8 | 6.3 | 13.1 | | 2013-14 | 2.0 | 6.3 | 8.3 | 6.5 | 1.4 | 7.9 | 8.5 | 7.7 | 16.2 | | Northern Ireland | | | | | 2009-10 | 0.0 | 0.2 | 0.2 | 0.7 | 0.0 | 0.7 | 0.7 | 0.2 | 0.9 | | 2010-11 | 0.0 | 0.2 | 0.3 | 1.0 | 0.0 | 1.0 | 1.0 | 0.3 | 1.3 | | 2011-12 | 0.0 | 0.3 | 0.3 | 0.9 | 0.1 | 1.0 | 0.9 | 0.4 | 1.3 | | 2012-13 | 0.0 | 0.2 | 0.3 | 1.1 | 0.1 | 1.2 | 1.1 | 0.4 | 1.4 | | 2013-14 | 0.0 | 0.3 | 0.3 | 1.0 | 0.1 | 1.2 | 1.1 | 0.4 | 1.5 | | UK | | | | | 2009-10 | 0.5 | 4.9 | 5.4 | 11.5 | 3.6 | 15.1 | 12.0 | 8.5 | 20.5 | | 2010-11 | 1.8 | 7.3 | 9.1 | 10.3 | 3.8 | 14.0 | 12.1 | 11.0 | 23.1 | | 2011-12 | 3.5 | 9.2 | 12.7 | 9.0 | 3.3 | 12.3 | 12.4 | 12.6 | 25.0 | | 2012-13 | 1.9 | 8.9 | 10.8 | 9.7 | 3.4 | 13.1 | 11.6 | 12.3 | 23.9 | | 2013-14 | 2.2 | 10.7 | 12.9 | 11.6 | 4.2 | 15.8 | 13.8 | 14.9 | 28.7 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, grant schemes.
Notes:
1. Private sector figures are based on areas for which grants were paid during the year. Estimate of areas planted without grant aid are also included (where possible), although non grant aided planting may be under-represented in the figures. Figures for grant-aided planting under Rural Development Contracts in Scotland relate to calendar years.
2. The planting season lies both sides of 31 March, and the weather can cause planting to be advanced or delayed.
3. Includes natural colonisation and natural regeneration.
Data: Longer time series of the above table are available from the Woodland Statistics web page. 1.6.2 New planting and restocking by ownership
In 2013-14 most new planting (95%) took place on private sector land (Table 1.14). In contrast, more than two-thirds of restocking (69%) took place on FC/NRW/FS land.
Table 1.14 New planting & restocking by ownership
| Year (ending 31/3) | New Planting | Restocking | Total | |-------------------|--------------|------------|-------| | | FC/NRW/FS | Private sector | Total | FC/NRW/FS | Private sector | Total | | England | | | | | | | | 2009-10 | 0.0 | 2.3 | 2.3 | 1.5 | 1.3 | 2.8 | 1.5 | 3.6 | 5.1 | | 2010-11 | 0.0 | 2.5 | 2.5 | 2.5 | 1.5 | 4.0 | 2.5 | 4.0 | 6.5 | | 2011-12 | 0.0 | 2.6 | 2.6 | 2.2 | 1.5 | 3.6 | 2.2 | 4.1 | 6.2 | | 2012-13 | 0.0 | 2.6 | 2.6 | 2.2 | 1.7 | 4.0 | 2.2 | 4.3 | 6.6 | | 2013-14 | 0.0 | 3.3 | 3.3 | 2.1 | 2.4 | 4.5 | 2.1 | 5.8 | 7.8 | | Wales | | | | | | | | 2009-10 | 0.0 | 0.2 | 0.2 | 1.4 | 0.6 | 2.1 | 1.4 | 0.8 | 2.3 | | 2010-11 | 0.0 | 0.3 | 0.3 | 1.4 | 0.7 | 2.1 | 1.4 | 1.0 | 2.4 | | 2011-12 | 0.0 | 0.8 | 0.8 | 1.2 | 0.8 | 2.0 | 1.2 | 1.5 | 2.7 | | 2012-13 | 0.0 | 0.9 | 0.9 | 1.3 | 0.6 | 2.0 | 1.3 | 1.6 | 2.9 | | 2013-14 | 0.0 | 0.9 | 0.9 | 1.6 | 0.7 | 2.3 | 1.6 | 1.6 | 3.2 | | Scotland | | | | | | | | 2009-10 | 0.7 | 2.0 | 2.7 | 3.6 | 6.0 | 9.5 | 4.3 | 7.9 | 12.3 | | 2010-11 | 0.8 | 5.2 | 6.0 | 5.3 | 1.7 | 6.9 | 6.1 | 6.8 | 12.9 | | 2011-12 | 1.3 | 7.7 | 9.0 | 4.7 | 1.0 | 5.7 | 6.0 | 8.7 | 14.7 | | 2012-13 | 0.8 | 6.2 | 7.0 | 4.7 | 1.3 | 6.0 | 5.6 | 7.5 | 13.1 | | 2013-14 | 0.6 | 7.7 | 8.3 | 6.2 | 1.7 | 7.9 | 6.8 | 9.4 | 16.2 | | Northern Ireland | | | | | | | | 2009-10 | 0.0 | 0.2 | 0.2 | 0.6 | 0.1 | 0.7 | 0.6 | 0.3 | 0.9 | | 2010-11 | 0.0 | 0.3 | 0.3 | 0.9 | 0.2 | 1.0 | 0.9 | 0.5 | 1.3 | | 2011-12 | 0.0 | 0.3 | 0.3 | 0.9 | 0.1 | 1.0 | 0.9 | 0.4 | 1.3 | | 2012-13 | 0.0 | 0.3 | 0.3 | 1.1 | 0.1 | 1.2 | 1.1 | 0.4 | 1.4 | | 2013-14 | 0.0 | 0.3 | 0.3 | 1.1 | 0.1 | 1.2 | 1.1 | 0.4 | 1.5 | | UK | | | | | | | | 2009-10 | 0.7 | 4.7 | 5.4 | 7.1 | 8.0 | 15.1 | 7.9 | 12.7 | 20.5 | | 2010-11 | 0.8 | 8.3 | 9.1 | 10.0 | 4.1 | 14.0 | 10.8 | 12.3 | 23.1 | | 2011-12 | 1.3 | 11.4 | 12.7 | 8.9 | 3.3 | 12.3 | 10.3 | 14.7 | 25.0 | | 2012-13 | 0.9 | 9.9 | 10.8 | 9.3 | 3.8 | 13.1 | 10.2 | 13.8 | 23.9 | | 2013-14 | 0.6 | 12.3 | 12.9 | 10.9 | 4.9 | 15.8 | 11.5 | 17.2 | 28.7 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, grant schemes.
Notes:
1. Private sector figures are based on areas for which grants were paid during the year. Estimate of areas planted without grant aid are also included (where possible), although non grant aided planting may be under-represented in the figures. Figures for grant-aided planting under Rural Development Contracts in Scotland relate to calendar years.
2. The planting season lies both sides of 31 March, and the weather can cause planting to be advanced or delayed.
3. Includes natural colonisation and natural regeneration.
Data: Longer time series of the above table are available from the Woodland Statistics web page. 1.6.3 New planting and restocking: time series
Figure 1.6 shows areas of new planting by country since the year ending March 1976. UK new planting rates have fallen from the late 1980’s, decreasing by 82% between 1988-89 and 2009-10. This followed changes to the tax benefits from owning forestry in the UK, introduced in the 1988 Finance Act (www.legislation.gov.uk/ukpga/1988/39/contents). However, the area of new planting in the UK has more than doubled since 2009-10, largely driven by increases in Scotland following the introduction of Rural Development Contracts. For further information, see the New Planting and Restocking section of the Sources chapter.
Figure 1.6 New planting in the UK, 1976-2014
Source: Forestry Commission, Natural Resources Wales, Forest Service, grant schemes.
Notes:
1. Private sector figures are based on areas for which grants were paid during the year. Estimate of areas planted without grant aid are also included (where possible), although non grant aided planting may be under-represented in the figures. Figures for grant-aided planting under Rural Development Contracts in Scotland relate to calendar years.
2. The planting season lies both sides of 31 March, and the weather can cause planting to be advanced or delayed.
3. Includes natural colonisation.
Figure 1.7 shows areas of restocking by country since the year ending March 1976. It indicates an increase in restocking rates over most of the period. Over the same period, there has been a general increase in UK wood production (see UK-Grown Timber chapter).
The area of restocking fell by around one third between the peak of 19 thousand hectares in 2006-07 and 2011-12. There has since been some recovery, with the area of restocking increasing by 29% between 2011-12 and 2013-14.
The decline in restocking levels from 2006-07 follows changes to grant support for restocking in Scotland, that may have resulted in some non-grant aided Sitka spruce restocking being excluded from the estimates. Reliable estimates of the amount of Sitka spruce restocking undertaken without grant aid in Scotland are not available. However, results from the Forestry Commission’s Nursery Survey (an annual survey of forest nurseries in Great Britain) indicate that, despite a dip in the 2009/10 planting year, sales of Sitka spruce plants to Scotland have been relatively stable in recent years. For further information, see the New Planting and Restocking section of the Sources chapter.
Figure 1.7 Restocking in the UK, 1976-2014 Source: Forestry Commission, Natural Resources Wales, Forest Service, grant schemes.
Notes:
1. Private sector figures are based on areas for which grants were paid during the year. Estimate of areas planted without grant aid are also included (where possible), although non grant aided planting may be under-represented in the figures. Figures for grant-aided planting under Rural Development Contracts in Scotland relate to calendar years.
2. The planting season lies both sides of 31 March, and the weather can cause planting to be advanced or delayed.
3. Includes natural regeneration. 1.7 Felling
Felling
Approval for the felling (cutting down) of trees in the UK is granted through felling licences issued by the Forestry Commission, Natural Resources Wales or the Forest Service.
Felling licences may be conditional (where felling approval is granted subject to restocking) or unconditional (where tree felling is approved without the requirement to replant). Unconditional licences are routinely issued for silvicultural thinning operations and in these cases no woodland loss takes place. However, an unconditional felling licence may be issued if there are overriding environmental considerations, for example to enable the restoration of important habitats.
The permanent removal of trees might also be authorised through a Statutory Plant Health Notice (SPHN). A SPHN requires the felling of infected trees, and is issued by the Forestry Commission, Natural Resources Wales or the Forest Service to prevent the spread of pests and diseases and may include woodland owned or managed by these organisations. They are currently being issued to attempt to halt the spread of Phytophthora ramorum, first found in Japanese larch in the UK in 2009. There is no legal requirement for woodland to be restocked after felling under a Statutory Plant Health Notice.
The removal of trees may also be authorised under planning regulations, to enable development (including for windfarms). In this case, a felling licence is not required.
Further information on felling and Statutory Plant Health Notices is provided in the Sources chapter.
Woodland loss
Information on unconditional felling licences that do not relate to thinning may be seen as an indication of the level of woodland loss on land that is not owned or managed by the Forestry Commission, Natural Resources Wales or the Forest Service. However, the data relates only to felling licences issued, so does not provide information on whether the felling actually took place (or the timing of the felling). In addition, felling licences do not cover woodland loss that is authorised under planning regulations.
National Forest Inventory Woodland Area Statistics for Great Britain (Spring 2010) has reported:
- 0.5 thousand hectares of observed permanent woodland loss identified to date from work comparing the aerial photography associated with the National Inventory of Woodland and Trees (NIWT) woodland map to the NFI woodland map;
- Forestry Commission administrative based estimates from each country that sum to around 20-30 thousand hectares of woodland removal for open habitat creation or for windfarm developments across Great Britain over the past decade.
More recently, an assessment of woodland loss in Scotland has estimated that 19 thousand hectares of woodland were removed in Scotland in the 10 year period to March 2011, of which just over one half (54%) was on private sector land. 1.7.1 Felling licences
Table 1.15 shows the area covered by unconditional felling licences issued by the Forestry Commission in England and Scotland over the last six years. The figures do not include unconditional felling licences issued to permit thinning of woodlands. The table covers woodland in England and Scotland that is not owned or managed by the Forestry Commission only; it does not cover felling that is exempt from felling licence approval (such as authorisations for felling under planning regulations, felling required under a Statutory Plant Health Notice or felling that is approved on condition that the area is restocked).
A total of 0.4 thousand hectares of woodland in England and 0.1 thousand hectares of woodland in Scotland was covered by unconditional felling licences (with no requirement to restock) in the year to March 2014.
Table 1.15 Areas of Private sector woodland covered by unconditional felling licences(^1), 2007-08 to 2013-14
| Year | England | Scotland | |----------|---------|----------| | 2007-08 | 0.4 | 0.1 | | 2008-09 | 0.4 | 0.2 | | 2009-10 | 0.5 | 0.2 | | 2010-11 | 0.5 | 0.1 | | 2011-12 | 0.6 | 0.1 | | 2012-13 | 0.3 | 0.2 | | 2013-14 | 0.4 | 0.1 |
Source: Forestry Commission
Notes:
1. Felling licences issued in the period. Excludes areas exempt from felling licence approval or under Forestry Commission grant, and licences issued for thinning.
These figures are outside the scope of National Statistics 1.7.2 Statutory Plant Health Notices
Statutory Plant Health Notices, requiring the felling of infected trees, are issued by the Forestry Commission, Natural Resources Wales or the Forest Service to prevent the spread of pests and diseases. They are currently being issued to attempt to halt the spread of Phytophthora ramorum, first found in Japanese larch in the UK in 2009. Unlike the majority of felling licences, which are granted on condition that the area to be felled is restocked, there is no legal requirement for woodland to be restocked after felling under a Statutory Plant Health Notice.
Table 1.16a shows the number of sites where a Statutory Plant Health Notice has been served in the UK over the last 4 years and Table 1.16b shows the area required to be felled under these Notices. The tables cover all woodland, including sites owned or managed by the Forestry Commission, Natural Resources Wales or the Forest Service.
A total of 575 sites were served with Statutory Plant Health Notices between April 2013 and March 2014.
Table 1.16a Number of sites where a Statutory Plant Health Notice has been served(^1), 2010-11 to 2013-14
| Year | England | Wales | Scotland | Northern Ireland | UK | |----------|---------|-------|----------|-----------------|-----| | 2010-11 | 114 | 24 | 1 | 10 | 149 | | 2011-12 | 131 | 129 | 14 | 16 | 290 | | 2012-13 | 166 | 90 | 123 | 15 | 394 | | 2013-14 | 223 | 253 | 76 | 23 | 575 |
Source: Forestry Commission, Natural Resources Wales, Forest Service
Note:
1. The number of sites where infection by Phytophthora ramorum has been confirmed, or where there is sufficient suspicion of infection, and a Statutory Plant Health Notice has been served on the landowner.
These figures are outside the scope of National Statistics
Areas requiring felling under Statutory Plant Health Notices totalled 4.8 thousand hectares in 2013-14, more than double the 2012-13 total of 2.3 thousand hectares. Around two thirds of the area to be felled in 2013-14 was in Wales (67%), 16% was in England, 10% was in Northern Ireland and the remaining 6% was in Scotland.
Table 1.16b Felling areas under Statutory Plant Health Notices(^1), 2010-11 to 2013-14
| Year | England | Wales | Scotland | Northern Ireland | UK | |----------|---------|-------|----------|-----------------|-----| | 2010-11 | 1.2 | 0.9 | 0.0 | 0.3 | 2.3 | | 2011-12 | 0.5 | 0.5 | 0.1 | 0.1 | 1.2 | | 2012-13 | 0.5 | 1.3 | 0.4 | 0.2 | 2.3 | | 2013-14 | 0.8 | 3.3 | 0.3 | 0.5 | 4.8 |
Source: Forestry Commission, Natural Resources Wales, Forest Service
Note:
1. The area that is required to be felled within the Statutory Plant Health Notice. These figures are outside the scope of National Statistics.
Estimates of the volume of softwood removed in 2013 under a movement license, as required by a Statutory Plant Health Notice, can be found in the Wood Production Summary section of Chapter 2 by following the link below. Introduction
This chapter covers the production of timber from woodland and the primary processing of harvested wood to give basic wood products, for the calendar year 2013.
Estimates for England, Wales, Scotland and Northern Ireland are included, in addition to UK totals, where possible. International comparisons of timber production are available in the International Forestry chapter. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Timber originating from conifers is known as softwood and that from broadleaves is known as hardwood. Please refer to the Glossary for a definition of other terms used in this chapter.
Figures for 2013 were previously published in "UK Wood Production and Trade: 2013 Provisional Figures", released on 15 May 2014. Some figures for the latest year and previous years have been revised from those previously published. For further details on revisions, see the Timber section of the Sources chapter.
A copy of all timber tables is available to download as an Excel spreadsheet from the Tables for Download page. Longer time series are also available for some tables. These can be accessed from our Timber Statistics web page at www.forestry.gov.uk/forestry/infd-7aql5b.
Key findings
The main findings for 2013 are (with percentage changes from 2012):
Removals (harvesting) of UK roundwood:
- 11.0 million green tonnes of softwood (+8%);
- 0.5 million green tonnes of hardwood (-1%).
Deliveries of UK roundwood to wood processors and others:
- Total: 11.1 million green tonnes of roundwood (softwood and hardwood) (+7%), of which:
- Sawmills: 6.5 million green tonnes (+5%);
- Wood-based panels: 1.3 million green tonnes (-1%);
- Integrated pulp and paper mills: 0.5 million green tonnes (+1%);
- Other uses, including round fencing, woodfuel, shavings and exports of roundwood: 2.9 million green tonnes (+16%).
Production of wood products in the UK included:
- 3.6 million cubic metres of sawnwood (+5%);
- 3.0 million cubic metres of wood-based panels (+1%);
- 4.6 million tonnes of paper and paperboard (+2%). 2.1 Wood production
Wood production (also referred to as removals) refers to the harvesting of roundwood (trunk and branch wood) from coniferous (softwood) and non-coniferous (hardwood) trees. Figures are generally expressed here in green tonnes (weight when freshly felled).
Removals should not be confused with deliveries, which are the quantities of UK-grown roundwood that is delivered to processors (mills) or for other uses (such as woodfuel and exports). Deliveries statistics are presented in Tables 2.5 and 2.6. A comparison of removals and deliveries of UK softwood roundwood is provided in the Sources chapter.
The figures on removals of UK roundwood are used to monitor trends in the UK forest sector. The data is also used alongside figures for standing volume (the volume of standing trees) and increment (the growth rate of standing trees) to compile natural capital accounts for inclusion in the UK Environmental Accounts.
The data are derived from a number of sources:
- FC/NRW/FS figures are obtained from Forestry Commission, Natural Resources Wales and Forest Service administrative systems;
- Private sector softwood figures are obtained from the Private Sector Softwood Removals Survey;
- Total hardwood figures are estimated from hardwood deliveries figures, which are compiled from surveys of the UK-grown timber industry, trade associations and expert estimates. 2.1.1 Summary: wood production
It is estimated that a total of 11.5 million green tonnes of roundwood was removed from UK woodlands in 2013. This represented an 8% increase from the 2012 figure of 10.6 million green tonnes.
Softwood accounted for most (95%) removals from UK woodland and totalled 10.9 million green tonnes in 2013 (Table 2.1). This represented an 8% increase on the previous year’s figure. Hardwood removals totalled 0.5 million green tonnes in 2013, a 1% decrease from 2012.
FC/NRW/FS woodlands accounted for 46% of softwood production but only 15% of hardwood production.
Table 2.1 Wood production, 2004-2013
| Year | Softwood | | | Hardwood | |------|----------|---|---|----------| | | FC/ NRW/ FS woodland | Private sector woodland | Total softwood | FC/ NRW/ FS woodland | Private sector woodland | Total hardwood | | 2004 | 4 894 | 3 246 | 8 141 | 113 | 399 | 513 | | 2005 | 4 579 | 3 499 | 8 077 | 101 | 492 | 593 | | 2006 | 4 582 | 3 661 | 8 243 | 45 | 392 | 438 | | 2007 | 4 653 | 4 083 | 8 736 | 40 | 400 | 440 | | 2008 | 4 415 | 3 823 | 8 238 | 43 | 388 | 431 | | 2009 | 5 126 | 3 266 | 8 392 | 87 | 449 | 536 | | 2010 | 4 625 | 4 633 | 9 258 | 70 | 465 | 535 | | 2011 | 4 870 | 5 186 | 10 056 | 75 | 465 | 541 | | 2012 | 4 836 | 5 259 | 10 095 | 55 | 478 | 532 | | 2013 | 5 084 | 5 856 | 10 940 | 79 | 451 | 529 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, industry surveys, industry associations.
Notes:
1. FC: Forestry Commission (England, Scotland, and until March 2013, Wales), NRW: Natural Resources Wales (from April 2013), FS: Forest Service (Northern Ireland).
2. Private sector: removals from all other woodland (including some publicly owned woodland).
3. Most hardwood production in the UK comes from private sector woodland; the figures are estimates based on reported deliveries to wood processing industries and others.
Data: Longer time series of the above table, including estimates by country (England/Wales/Scotland/Northern Ireland) are available from the Timber Statistics web page.
Within the 11.5 million green tonnes of softwood removed from UK woodlands in 2013, approximately 350 thousand green tonnes were removed under a movement license, as required by a Statutory Plant Health Notice. This comprised around 250 thousand green tonnes from FC/NRW/FS woodland and around 100 thousand green tonnes from private sector woodland.
Softwood removals under a movement license are expected to consist mainly of Japanese larch that is suspected of being infected by Phytophthora ramorum. However a small volume of species other than larch is likely to be included in these figures.
While movement licenses have been issued for several years, 2013 is the first year for which the associated removals data has been collected and published. Statistics on the number of sites where a Statutory Plant Health Notice has been served in the UK over the last 4 years, and the area required to be felled under these Notices, can be found in the Statutory Plant Health Notices section of Chapter 1 by following the link below. 2.1.2 Origin of private sector softwood removals
It is estimated that 72% of all softwood removals from private sector woodlands were harvested in Scotland, 16% in England, 12% in Wales and the remainder in Northern Ireland in 2013 (Table 2.2).
Over the past ten years, Wales and England have shown the biggest percentage increase, with private sector removals in 2013 more than double the levels in 2004. Removals from Scotland have increased by 70% over the same period, whilst removals from Northern Ireland have fallen.
Table 2.2 Private sector softwood removals by country, 2004-2013
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|-----------------|----| | | thousand green tonnes | | | | | | 2004 | 446 | 289 | 2 481 | 30 | 3 246 | | 2005 | 534 | 266 | 2 659 | 40 | 3 499 | | 2006 | 586 | 326 | 2 729 | 21 | 3 661 | | 2007 | 612 | 382 | 3 059 | 29 | 4 083 | | 2008 | 638 | 333 | 2 827 | 25 | 3 823 | | 2009 | 533 | 321 | 2 388 | 24 | 3 266 | | 2010 | 668 | 429 | 3 479 | 57 | 4 633 | | 2011 | 738 | 501 | 3 894 | 53 | 5 186 | | 2012 | 847 | 611 | 3 761 | 40 | 5 259 | | 2013 | 927 | 695 | 4 211 | 23 | 5 856 |
Source: Private Sector Softwood Removals Survey
Data: Longer time series of the above table, including estimates for hardwood removals and for removals from FC/NRW/FS woodlands are available from the Timber Statistics web page. 2.1.3 Origin of FC/ NRW/ FS removals
Information on removals from Forestry Commission (FC), Natural Resources Wales (NRW) and Forest Service (FS) woodlands is extracted from administrative systems.
A total of 5.1 million green tonnes of softwood was removed from FC/NRW/FS woodlands in 2013, a 5% increase from the 2012 figure (Table 2.3). Over one half (55%) of FC/NRW/FS softwood removals in 2013 occurred in Scotland, 23% in England, 14% in Wales and 8% in Northern Ireland.
Table 2.3 FC/ NRW/ FS softwood removals by country, 2004-2013
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|------------------|----| | | thousand green tonnes | | | | | | 2004 | 1 204 | 783 | 2 527 | 380 | 4 894 | | 2005 | 1 165 | 673 | 2 388 | 353 | 4 579 | | 2006 | 1 152 | 612 | 2 454 | 364 | 4 582 | | 2007 | 1 211 | 584 | 2 496 | 363 | 4 653 | | 2008 | 1 100 | 556 | 2 362 | 398 | 4 415 | | 2009 | 1 213 | 717 | 2 773 | 423 | 5 126 | | 2010 | 1 142 | 644 | 2 434 | 405 | 4 625 | | 2011 | 1 185 | 689 | 2 566 | 430 | 4 870 | | 2012 | 1 154 | 663 | 2 627 | 392 | 4 836 | | 2013 | 1 188 | 693 | 2 819 | 384 | 5 084 |
Source: Forestry Commission, Natural Resources Wales, Forest Service.
Data: Longer time series of the above table, including estimates for hardwood removals and for removals from private sector woodlands are available from the Timber Statistics web page. 2.1.4 Softwood availability forecast
The National Forest Inventory "50-year forecast of softwood availability" and "50-year forecast of hardwood availability" were published in April 2014. They are forecasts of potential availability rather than production, as they do not take account of management objectives, financial factors or the state of markets, all of which will affect the level of and timing of harvesting.
More information on the forecasts and detailed breakdowns are available on the National Forest Inventory web pages at www.forestry.gov.uk/inventory.
The forecasts are outside the scope of National Statistics, but are provided here to give more context to the data on wood production.
The key assumptions underpinning the headline softwood forecast scenario include:
- Private woodland is managed in a way that maximises total production.
- The estate of the Forestry Commission and Natural Resources Wales is managed according to current management plans; note both Forestry Commission Scotland and Natural Resources Wales intend to cap production below the level set out in Table 2.4a.
Under the above scenario, softwood availability for Great Britain averages 15.2 million cubic metres a year over the 50-year period 2013 to 2061 (Table 2.4a). The majority (66%) of this softwood is projected to come from private sector woodland.
Table 2.4a Softwood availability forecasts
| Annual average in the period | England | Wales | Scotland | GB | |-----------------------------|---------|-------|----------|----| | | thousand cubic metres overbark standing | | **FC/ NRW** | | | | | | 2013 - 2016 | 1 632 | 1 082 | 4 220 | 6 933 | | 2017 - 2021 | 1 330 | 991 | 3 658 | 5 980 | | 2022 - 2026 | 1 211 | 895 | 3 516 | 5 622 | | 2027 - 2031 | 1 159 | 778 | 3 789 | 5 726 | | 2032 - 2036 | 1 066 | 934 | 3 215 | 5 216 | | 2037 - 2041 | 1 013 | 794 | 2 936 | 4 744 | | 2042 - 2046 | 1 055 | 531 | 2 730 | 4 316 | | 2047 - 2051 | 1 014 | 585 | 3 280 | 4 879 | | 2052 - 2056 | 828 | 495 | 2 886 | 4 209 | | 2057 - 2061 | 1 250 | 679 | 2 339 | 4 269 | | **Private sector** | | | | | | 2013 - 2016 | 2 945 | 901 | 5 708 | 9 554 | | 2017 - 2021 | 3 225 | 949 | 6 997 | 11 171 | | 2022 - 2026 | 2 903 | 1 087 | 7 830 | 11 820 | | 2027 - 2031 | 2 986 | 775 | 8 910 | 12 671 | | 2032 - 2036 | 2 850 | 736 | 8 847 | 12 433 | | 2037 - 2041 | 2 224 | 679 | 8 133 | 11 035 | | 2042 - 2046 | 1 848 | 490 | 6 527 | 8 865 | | 2047 - 2051 | 1 523 | 521 | 4 986 | 7 030 | | Period | 2013 - 2016 | 2017 - 2021 | 2022 - 2026 | 2027 - 2031 | 2032 - 2036 | 2037 - 2041 | 2042 - 2046 | 2047 - 2051 | 2052 - 2056 | 2057 - 2061 | |-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------| | Total softwood | 4 577 | 4 555 | 4 113 | 4 145 | 3 916 | 3 237 | 2 903 | 2 537 | 2 259 | 2 853 | | | 1 983 | 1 940 | 1 982 | 1 553 | 1 670 | 1 473 | 1 021 | 1 106 | 1 229 | 1 373 | | | 9 928 | 10 656 | 11 346 | 12 700 | 12 062 | 11 069 | 9 257 | 8 266 | 8 566 | 7 966 | | | 16 487 | 17 151 | 17 442 | 18 398 | 17 649 | 15 779 | 13 181 | 11 909 | 12 054 | 12 193 |
Source: National Forest Inventory: 50-year forecast of softwood availability (Forestry Commission, April 2014)
These figures are outside the scope of National Statistics 2.1.5 Hardwood availability forecast
The key assumptions underpinning the headline hardwood forecast scenario include:
- In private woodland, harvesting is limited to areas with evidence of recent thinning activity.
- The estate of the Forestry Commission and Natural Resources Wales is managed according to current management plans.
Under the above scenario, hardwood availability for Great Britain averages 1.6 million cubic metres a year over the 50-year period (Table 2.4b). The majority (89%) of this softwood is projected to come from private sector woodland. If these woodlands were managed to maximise total production, the forecast would be much higher, as illustrated in the full National Forest Inventory report available at www.forestry.gov.uk/inventory.
Table 2.4b Hardwood availability forecasts
| Annual average in the period | England | Wales | Scotland | GB | |-----------------------------|---------|-------|----------|----| | | thousand cubic metres overbark standing | | **FC/ NRW** | | | | | | 2013 - 2016 | 126 | 12 | 9 | 147| | 2017 - 2021 | 92 | 11 | 9 | 111| | 2022 - 2026 | 110 | 17 | 10 | 137| | 2027 - 2031 | 86 | 12 | 10 | 108| | 2032 - 2036 | 99 | 14 | 15 | 128| | 2037 - 2041 | 129 | 19 | 24 | 172| | 2042 - 2046 | 189 | 56 | 31 | 276| | 2047 - 2051 | 116 | 19 | 40 | 175| | 2052 - 2056 | 134 | 28 | 45 | 208| | 2057 - 2061 | 146 | 28 | 64 | 237| | **Private sector** | | | | | | 2013 - 2016 | 122 | 20 | 83 | 225| | 2017 - 2021 | 333 | 46 | 139 | 519| | 2022 - 2026 | 538 | 77 | 193 | 808| | 2027 - 2031 | 720 | 100 | 233 | 1 054| | 2032 - 2036 | 825 | 115 | 262 | 1 202| | 2037 - 2041 | 1 047 | 153 | 367 | 1 567| | 2042 - 2046 | 1 915 | 243 | 586 | 2 743| | 2047 - 2051 | 1 678 | 227 | 675 | 2 580| | 2052 - 2056 | 1 254 | 198 | 554 | 2 006| | 2057 - 2061 | 645 | 139 | 343 | 1 127| | **Total softwood** | | | | | | 2013 - 2016 | 249 | 32 | 92 | 373| | 2017 - 2021 | 425 | 58 | 148 | 631| | 2022 - 2026 | 648 | 94 | 203 | 945| | 2027 - 2031 | 806 | 112 | 244 | 1 162| | 2032 - 2036 | 923 | 130 | 277 | 1 330| | 2037 - 2041 | 1 176 | 171 | 391 | 1 738| | Period | 2042 - 2046 | 2047 - 2051 | 2052 - 2056 | 2057 - 2061 | |-------------|-------------|-------------|-------------|-------------| | | 2 104 | 1 795 | 1 388 | 791 | | | 299 | 246 | 227 | 167 | | | 616 | 715 | 599 | 406 | | | 3 019 | 2 755 | 2 214 | 1 364 |
Source: National Forest Inventory: 50-year forecast of hardwood availability (Forestry Commission, April 2014)
These figures are outside the scope of National Statistics 2.2 Deliveries of UK-grown roundwood
Figures for deliveries relate to the quantity of UK-grown roundwood that is delivered to processors (mills) or for other uses (such as woodfuel and exports). They are expressed in green tonnes (weight when freshly felled). Statistics on roundwood deliveries are used to monitor trends in the supply of, and demand for, UK-grown wood.
Deliveries should not be confused with removals, which are the quantities of roundwood that is harvested from UK woodland. Removals statistics are presented in Tables 2.1 to 2.3. A comparison of removals and deliveries of UK softwood roundwood is provided in the Sources chapter.
The data are derived from a number of sources, including surveys of the UK-grown timber industry, trade associations and expert estimates. 2.2.1 Softwood deliveries
In 2013, deliveries of UK roundwood (softwood and hardwood) totalled 11.1 million green tonnes, a 7% increase from the previous year (Tables 2.5 and 2.6).
Most UK roundwood deliveries (95%) were softwood and totalled 10.5 million green tonnes in 2013 (Table 2.5). 6.4 million green tonnes (61% of UK softwood deliveries) were used by sawmills, a 5% increase from the previous year. A further 1.3 million green tonnes were used to produce wood-based panels (unchanged from previous year), 0.5 million green tonnes by integrated pulp and paper mills (1% increase), and 2.4 million green tonnes for other uses (19% increase), including round fencing, woodfuel, shavings and exports of roundwood.
The increase in softwood deliveries for woodfuel in recent years reflects an increase in wood use for heating and energy production in the UK (see the Sources chapter for further information).
Table 2.5 Deliveries of UK-grown softwood, 2004-2013
| Year | Sawmills | Pulp mills | Wood-based panels | Fencing | Woodfuel¹ | Other² | Exports | Total | |------|----------|------------|-------------------|---------|-----------|--------|---------|-------| | | thousand green tonnes | | | | | | | | | 2004 | 4 953 | 483 | 1 525 | 272 | 100 | 79 | 610 | 8 021 | | 2005 | 4 924 | 500 | 1 502 | 317 | 100 | 95 | 705 | 8 143 | | 2006 | 5 210 | 481 | 1 365 | 274 | 100 | 114 | 643 | 8 187 | | 2007 | 5 565 | 472 | 1 362 | 319 | 200 | 113 | 759 | 8 790 | | 2008 | 4 933 | 515 | 1 219 | 359 | 300 | 128 | 733 | 8 187 | | 2009 | 5 133 | 511 | 1 135 | 367 | 650 | 160 | 347 | 8 304 | | 2010 | 5 616 | 428 | 1 375 | 349 | 900 | 135 | 467 | 9 269 | | 2011 | 5 859 | 453 | 1 417 | 363 | 900 | 145 | 585 | 9 722 | | 2012 | 6 073 | 461 | 1 269 | 338 | 1 000 | 154 | 535 | 9 831 | | 2013 | 6 407 | 465 | 1 263 | 332 | 1 250 | 191 | 640 | 10 548 |
Source: industry surveys, industry associations.
Notes:
1. Woodfuel reported here is derived from stemwood, and from 2007 includes estimated roundwood use for biomass energy. The figures are estimated by the Expert Group on Timber and Trade Statistics, and from 2008 made use of woodfuel data reported in the Private Sector Softwood Removals Survey.
2. Includes shavings and poles. Quantities for some uses are estimates by the Expert Group on Timber and Trade Statistics.
Figure 2.1 Deliveries of UK-grown softwood
Source: industry surveys, industry associations. 2.2.2 Hardwood deliveries
There was a total of 0.5 million green tonnes of UK hardwood deliveries in 2013 (Table 2.6). The majority of UK hardwood deliveries (76% in 2013) were used for woodfuel.
Table 2.6 Deliveries of UK-grown hardwood, 2004-2013
| Year | Sawmills | Pulp mills | Wood-based panels | Woodfuel¹ | Other² | Total | |------|----------|------------|-------------------|-----------|--------|-------| | | thousand green tonnes | | | | | | | 2004 | 92 | 214 | 2 | 150 | 55 | 513 | | 2005 | 72 | 214 | 2 | 250 | 55 | 593 | | 2006 | 64 | 54 | 1 | 250 | 70 | 438 | | 2007 | 66 | 0 | 5 | 300 | 69 | 440 | | 2008 | 66 | 0 | 2 | 300 | 63 | 431 | | 2009 | 76 | 0 | 1 | 400 | 59 | 536 | | 2010 | 75 | 0 | 1 | 400 | 59 | 535 | | 2011 | 81 | 0 | 1 | 400 | 59 | 541 | | 2012 | 75 | 0 | 2 | 400 | 55 | 532 | | 2013 | 74 | 0 | 0 | 400 | 55 | 529 |
Source: industry surveys, industry associations.
Notes:
1. Woodfuel reported here is derived from stemwood, and from 2007 includes estimated roundwood use for biomass energy. The figures are estimated by the Expert Group on Timber and Trade Statistics. The apparent increase in woodfuel from 2004 to 2005 reflects a new estimate of the level of hardwood deliveries for woodfuel and should not be interpreted as an increase in a single year. Woodfuel includes wood for charcoal; charcoal production in the UK is estimated to be about 5 thousand tonnes, with about 7 green tonnes of wood required to make one tonne of charcoal.
2. Includes round fencing and roundwood exports. Quantities for hardwood fencing and some other uses are estimates by the Expert Group on Timber and Trade Statistics.
Figure 2.2 Deliveries of UK-grown hardwood
Source: industry surveys, industry associations.
Notes:
1. Other includes round fencing and roundwood exports. 2.3 Sawmills - All Mills
Data are collected by the Forestry Commission in an annual Sawmill Survey. Summary results, covering number of mills, consumption and production are available for all mills. More detailed figures are available for larger mills only (sawmills producing at least 10 thousand m³ sawnwood).
Consumption units are given in green tonnes. For production, the units used are m³ sawnwood.
Use the links below to access data and sources on sawmills. 2.3.1 Summary: consumption & production
In 2013, sawmills in the UK consumed a total of 6.5 million green tonnes of softwood, a 5% increase from 2012 (Table 2.7). A further 0.1 million green tonnes of hardwood were consumed by UK sawmills in 2013. Most of the logs, 6.4 million green tonnes softwood and 0.1 million green tonnes hardwood, were UK grown.
A total of 3.6 million cubic metres of sawnwood was produced in the UK in 2013, a 5% increase from 2012.
For softwood, there was a significant drop in roundwood consumption and sawnwood production between 2007 and 2008, following the start of the financial crisis. Sawnwood imports also decreased at this time (see table 3.4). Since then the levels of softwood consumption and sawn softwood production in the UK have recovered and, since 2011, exceed the previous peak in 2007 (although imports remain at a lower level).
In addition to producing sawnwood, sawmills also generate other products. Further information on other products produced by larger mills are provided in Tables 2.18 and 2.18a.
Table 2.7 Consumption and production by UK sawmills, 2004-2013
| Year | Softwood | | | Hardwood | | | |------|----------|---|---|----------|---|---| | | Consumption of | Production | | Consumption of | Production | | | | UK grown | Imported | Total | UK grown | Imported | Total | | 2004 | 4 953 | 226 | 5 178 | 2 722 | 92 | 120 | 60 | | 2005 | 4 924 | 272 | 5 196 | 2 727 | 72 | 106 | 53 | | 2006 | 5 210 | 266 | 5 476 | 2 859 | 64 | 85 | 45 | | 2007 | 5 565 | 263 | 5 828 | 3 079 | 66 | 85 | 44 | | 2008 | 4 933 | 174 | 5 107 | 2 755 | 66 | 86 | 44 | | 2009 | 5 133 | 158 | 5 291 | 2 809 | 76 | 95 | 48 | | 2010 | 5 616 | 103 | 5 719 | 3 053 | 75 | 94 | 48 | | 2011 | 5 859 | 125 | 5 984 | 3 227 | 81 | 100 | 52 | | 2012 | 6 073 | 124 | 6 198 | 3 361 | 75 | 93 | 48 | | 2013 | 6 407 | 126 | 6 532 | 3 536 | 74 | 88 | 46 |
Source: Sawmill Survey 2.3.2 Number of sawmills by size
A total of 177 sawmills processed UK roundwood in 2013 (Table 2.8). Around three quarters (72%) of sawmills produced less than 10 thousand m³ sawnwood (softwood and hardwood) during the year.
Over the past ten years, there has been a reduction in the number of mills producing less than 25 thousand m³ sawnwood, while the number of larger mills has increased.
Table 2.8 Number of sawmills by size of mill, 2004-2013
| Year | < 1 | 1 - < 5 | 5 - < 10 | 10 - < 25 | 25 - < 50 | 50 + | Total | |------|-----|---------|---------|----------|----------|------|-------| | 2004 | 86 | 67 | 20 | 23 | 10 | 18 | 224 | | 2005 | 85 | 60 | 20 | 19 | 9 | 20 | 213 | | 2006 | 84 | 59 | 19 | 21 | 10 | 20 | 213 | | 2007 | 82 | 54 | 17 | 20 | 12 | 20 | 205 | | 2008 | 76 | 54 | 17 | 20 | 11 | 19 | 197 | | 2009 | 79 | 50 | 14 | 23 | 10 | 19 | 195 | | 2010 | 73 | 52 | 13 | 24 | 8 | 19 | 189 | | 2011 | 70 | 51 | 13 | 23 | 9 | 19 | 185 | | 2012 | 69 | 49 | 14 | 19 | 11 | 19 | 181 | | 2013 | 68 | 46 | 14 | 17 | 13 | 19 | 177 |
Source: Sawmill Survey
Notes:
1. Categories are based on total sawnwood production (softwood and hardwood), in thousand m³.
Data: Longer time series of the above table are available from the Timber Statistics web page. 2.3.3 Number of sawmills by country
Around one half (52%) of the 177 active sawmills in 2013 (92) were in England, around one third (61) were in Scotland, 8% (15) in Wales and 5% (9) in Northern Ireland (Table 2.9).
Table 2.9 Number of sawmills by country, 2004-2013
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|------------------|----| | 2004 | 113 | 21 | 75 | 15 | 224| | 2005 | 108 | 20 | 71 | 14 | 213| | 2006 | 108 | 21 | 71 | 13 | 213| | 2007 | 105 | 20 | 70 | 10 | 205| | 2008 | 103 | 18 | 68 | 8 | 197| | 2009 | 101 | 17 | 68 | 9 | 195| | 2010 | 98 | 17 | 65 | 9 | 189| | 2011 | 96 | 16 | 64 | 9 | 185| | 2012 | 95 | 15 | 62 | 9 | 181| | 2013 | 92 | 15 | 61 | 9 | 177|
Source: Sawmill Survey
Data: Longer time series of the above table, and for mills in England by region, are available from the Timber Statistics web page. 2.3.4 Number of sawmills by type of wood sawn
Around two thirds (67%) of the 177 active sawmills in 2013 processed softwood only (Table 2.10). A further 27% processed both softwood and hardwood, and the remaining 6% processed only hardwood.
Table 2.10 Number of sawmills by type of wood sawn, 2004-2013
| Year | Softwood only | Hardwood only | Both | Total | |------|---------------|---------------|------|-------| | 2004 | 143 | 18 | 63 | 224 | | 2005 | 142 | 16 | 55 | 213 | | 2006 | 142 | 19 | 52 | 213 | | 2007 | 134 | 16 | 55 | 205 | | 2008 | 134 | 12 | 51 | 197 | | 2009 | 130 | 10 | 55 | 195 | | 2010 | 122 | 10 | 57 | 189 | | 2011 | 120 | 10 | 55 | 185 | | 2012 | 118 | 11 | 52 | 181 | | 2013 | 118 | 11 | 48 | 177 |
Source: Sawmill Survey 2.3.5 Consumption of softwood by size of mill
Despite accounting for only around one quarter of all sawmills (see Table 2.8), those with total annual sawnwood production of 10 thousand cubic metres or more accounted for 94% of the total softwood consumed by sawmills in 2013 (Table 2.11).
Table 2.11 Consumption of softwood by size of mill, 2004-2013
| Year | < 1 | 1 - < 5 | 5 - < 10 | 10 - < 25 | 25 - < 50 | 50 + | |------|-----|---------|---------|----------|----------|------| | | | | | | | | | | | | | | | | | 2004 | 31 | 218 | 216 | 630 | 686 | 3 397| | 2005 | 29 | 230 | 232 | 518 | 579 | 3 607| | 2006 | 29 | 200 | 243 | 613 | 661 | 3 730| | 2007 | 30 | 184 | 203 | 585 | 840 | 3 985| | 2008 | 31 | 197 | 190 | 599 | 660 | 3 430| | 2009 | 35 | 183 | 163 | 664 | 577 | 3 668| | 2010 | 33 | 188 | 155 | 744 | 537 | 4 062| | 2011 | 32 | 180 | 156 | 685 | 615 | 4 316| | 2012 | 33 | 176 | 184 | 539 | 738 | 4 528| | 2013 | 36 | 177 | 177 | 476 | 804 | 4 862|
Source: Sawmill Survey
Notes:
1. Categories are based on total sawnwood production (softwood and hardwood), in thousand m³.
Data: Longer time series of the above table are available from the Timber Statistics web page. 2.3.6 Consumption of softwood by country
Mills in Scotland consumed around one half (52%) of the 6.5 million green tonnes of softwood delivered to UK sawmills in 2013 (Table 2.12). A further 29% was consumed by mills in England, 11% in Wales and 8% in Northern Ireland.
Table 2.12 Consumption of softwood by country, 2004-2013
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|------------------|----| | 2004 | 1 394 | 813 | 2 310 | 662 | 5 178 | | 2005 | 1 416 | 746 | 2 349 | 685 | 5 196 | | 2006 | 1 603 | 757 | 2 430 | 686 | 5 476 | | 2007 | 1 674 | 759 | 2 683 | 713 | 5 828 | | 2008 | 1 533 | 599 | 2 415 | 560 | 5 107 | | 2009 | 1 548 | 538 | 2 672 | 532 | 5 291 | | 2010 | 1 694 | 583 | 2 913 | 528 | 5 719 | | 2011 | 1 726 | 634 | 3 082 | 543 | 5 984 | | 2012 | 1 821 | 654 | 3 195 | 528 | 6 198 | | 2013 | 1 879 | 702 | 3 420 | 532 | 6 532 |
Source: Sawmill Survey
Data: Longer time series of the above table, and for mills in England by region, are available from the Timber Statistics web page. 2.3.7 Production of sawn softwood by size of mill
UK sawmills produced a total of 3.5 million cubic metres of sawn softwood in 2012, a 5% increase from the 2012 figure (Table 2.13).
Sawmills with total annual sawnwood production of 10 thousand cubic metres or more accounted for 94% of the total sawn softwood produced by sawmills in 2013.
Table 2.13 Production of sawn softwood by size of mill, 2004-2013
| Year | < 1 | 1 - < 5 | 5 - < 10 | 10 - < 25 | 25 - < 50 | 50 + | |------|-----|---------|----------|-----------|-----------|------| | | | | | | | | | 2004 | 17 | 126 | 119 | 331 | 368 | 1 761| | 2005 | 17 | 116 | 121 | 278 | 317 | 1 877| | 2006 | 17 | 118 | 128 | 326 | 359 | 1 911| | 2007 | 17 | 109 | 111 | 315 | 437 | 2 090| | 2008 | 18 | 116 | 104 | 315 | 369 | 1 834| | 2009 | 20 | 108 | 89 | 352 | 326 | 1 914| | 2010 | 19 | 109 | 84 | 395 | 304 | 2 143| | 2011 | 18 | 105 | 86 | 374 | 335 | 2 309| | 2012 | 18 | 103 | 95 | 314 | 393 | 2 438| | 2013 | 20 | 103 | 93 | 287 | 429 | 2 605|
Source: Sawmill Survey
Notes:
1. Categories are based on total sawnwood production (softwood and hardwood), in thousand m³.
Data: Longer time series of the above table are available from the Timber Statistics web page. 2.3.8 Production of sawn softwood by country
1.9 million cubic metres (53%) of sawn softwood was produced by sawmills in Scotland in 2013 (Table 2.14). A further 29% was produced by mills in England, 10% in Wales and the remaining 8% in Northern Ireland.
Whilst production of sawn softwood by mills in Scotland and England had recovered following the financial crisis to exceed their 2007 peak levels by 2010, production by mills in Wales and Northern Ireland continues to remain lower.
Table 2.14 Production of sawn softwood by country, 2004-2013
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|-----------------|----| | 2004 | 744 | 408 | 1 228 | 342 | 2 722 | | 2005 | 746 | 368 | 1 247 | 365 | 2 727 | | 2006 | 853 | 378 | 1 297 | 332 | 2 859 | | 2007 | 884 | 385 | 1 452 | 359 | 3 079 | | 2008 | 846 | 303 | 1 313 | 293 | 2 755 | | 2009 | 860 | 267 | 1 413 | 268 | 2 809 | | 2010 | 927 | 291 | 1 560 | 275 | 3 053 | | 2011 | 954 | 316 | 1 666 | 291 | 3 227 | | 2012 | 1 001 | 326 | 1 747 | 288 | 3 361 | | 2013 | 1 026 | 349 | 1 873 | 289 | 3 536 |
Source: Sawmill Survey
Data: Longer time series of the above table, and for mills in England by region, are available from the Timber Statistics web page. 2.4 Sawmills - Larger Mills
The following, more detailed, tables are available for larger mills (those producing at least 10 thousand m³ sawnwood annually) only. These mills are estimated to account for 94% of all sawn softwood produced in 2013 (see Table 2.13).
The tables cover the following topics:
- Source of softwood logs;
- Sawn softwood product markets;
- Other softwood products; and
- Sawmill employment. 2.4.1 Softwood consumption and production
Additional information for 2013 was collected from mills that, based on their responses to previous surveys, were believed to produce more than 10 thousand m$^3$ of sawnwood.
Total softwood consumption by all sawmills covered by the detailed sawmill survey was 6.1 million green tonnes in 2013 (Table 2.15). Sawn softwood production was 3.3 million m$^3$ and other softwood products (chips, bark, sawdust, etc) amounted to 3.2 million tonnes.
Sawmills in Scotland accounted for around one half (53%) of all softwood consumption by larger mills. A further 28% was consumed by mills in England, 11% in Wales and the remaining 8% in Northern Ireland.
Table 2.15 Larger mills$^1$, 2013: softwood consumption and production
| | England | Wales | Scotland | Northern Ireland | UK | |----------------------|---------|-------|----------|------------------|-------| | Number of mills | 17 | 5 | 24 | 3 | 49 | | Consumption | | | | | | | (thousand green tonnes) | 1 702 | 661 | 3 267 | 513 | 6 143 | | Sawnwood production | | | | | | | (thousand m$^3$) | 924 | 329 | 1 787 | 280 | 3 320 | | Other products | | | | | | | (thousand tonnes) | 782 | 376 | 1 735 | 278 | 3 170 |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m$^3$ sawnwood (softwood and hardwood). 2.4.2 Source of softwood logs
Of all softwood sawlogs consumed by larger sawmills in 2013, 58% came from Scotland, 22% from England, 13% from Wales and 5% from Northern Ireland (Tables 2.16 and 2.16a). The remaining 2% were imported from other countries. This was similar to the breakdown by source in previous years.
94% of softwood sawlogs used by Scottish mills in 2013 came from Scotland. The corresponding proportions of mills' log use coming from within the same country were 67% for England, 79% for Wales and 61% for Northern Ireland.
Table 2.16 Larger mills(^1), 2013: source of softwood logs
| Source | England | Wales | Scotland | Northern Ireland | UK | |-----------------|---------|-------|----------|------------------|----------| | | thousand green tonnes | | England | 1 143 | 42 | 177 | 0 | 1 361 | | Wales | 276 | 520 | 5 | 0 | 801 | | Scotland | 282 | 99 | 3 085 | 73 | 3 539 | | Northern Ireland| 0 | 0 | 0 | 315 | 315 | | **Total UK logs** | **1 702** | **661** | **3 267** | **387** | **6 017** | | Other countries | 0 | 0 | 0 | 126 | 126 | | **Total log consumption** | **1 702** | **661** | **3 267** | **513** | **6 143** |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m(^3) sawnwood (softwood and hardwood).
Table 2.16a Larger mills(^1), 2009-2013: source of softwood logs
| Year | Source | England | Wales | Scotland | Northern Ireland | Other countries | Total | |------|-----------------|---------|-------|----------|------------------|-----------------|-------| | | | per cent of total consumption | | 2009 | 22 | 12 | 57 | 7 | 3 | 100 | | 2010 | 19 | 13 | 60 | 6 | 2 | 100 | | 2011 | 21 | 13 | 59 | 5 | 2 | 100 | | 2012 | 22 | 13 | 57 | 5 | 2 | 100 | | 2013 | 22 | 13 | 58 | 5 | 2 | 100 |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m(^3) sawnwood (softwood and hardwood). 2.4.3 Sawn softwood product markets
In 2013, 34% of sawn softwood produced by larger sawmills was used for fencing, 32% for packaging and pallets, 29% for construction, and the remaining 5% went to all other markets (Tables 2.17 and 2.17a).
Table 2.17 Larger mills(^1), 2013: sawn softwood product markets
| Product market | England | Wales | Scotland | Northern Ireland | UK | |----------------|---------|-------|----------|-----------------|----| | Construction | 15 | 22 | 36 | 41 | 29 | | Fencing | 51 | 27 | 26 | 39 | 34 | | Packaging/ pallets | 28 | 48 | 33 | 20 | 32 | | Other | 6 | 3 | 5 | 0 | 5 | | **Total** | **100** | **100** | **100** | **100** | **100** |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m(^3) sawnwood (softwood and hardwood).
Table 2.17a Larger mills(^1), 2009-2013: sawn softwood product markets
| Year | Construction | Fencing | Packaging/ pallets | Other | Total | |------|--------------|---------|--------------------|-------|-------| | 2009 | 30 | 35 | 35 | 1 | 100 | | 2010 | 31 | 36 | 32 | 2 | 100 | | 2011 | 28 | 36 | 33 | 3 | 100 | | 2012 | 29 | 34 | 32 | 4 | 100 | | 2013 | 29 | 34 | 32 | 5 | 100 |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m(^3) sawnwood (softwood and hardwood). 2.4.4 Other softwood products
Sawmills were asked to estimate the quantity of other products (excluding sawnwood) that they generated from softwood and sold to different industries. The figures presented below are based on these estimates.
Other softwood products amounted to 3.2 million tonnes in 2013 (Table 2.15). Almost one half (46%) of other softwood products were sold to wood processing industries in the form of chips and 14% were sold to these industries in other formats (Table 2.18). A further 21% of other products were sold to bio-energy (including pellet manufacturers) and 17% were sold to others.
Table 2.18 Larger mills(^1), 2013: other softwood products
| Destination and type of product(^2) | England | Wales | Scotland | Northern Ireland | UK | |--------------------------------------|---------|-------|----------|------------------|----| | **Sold to wood processing industries** | | | | | | | Wood chips | 53 | 62 | 46 | 0 | 46 | | Bark | 0 | 0 | 0 | 0 | 0 | | Sawdust & other | 14 | 16 | 17 | 0 | 14 | | **Total** | 70 | 78 | 63 | 0 | 61 | | **Sold to bio-energy** (incl pellet manufacturers) | | | | | | | Wood chips | 10 | 3 | 16 | 49 | 16 | | Bark | 0 | 0 | 0 | 5 | 1 | | Sawdust & other | 1 | 2 | 3 | 20 | 4 | | **Total** | 11 | 5 | 20 | 73 | 21 | | **Other sales** | | | | | | | Wood chips | 3 | 0 | 2 | 15 | 3 | | Bark | 8 | 5 | 9 | 6 | 8 | | Sawdust & other | 7 | 4 | 6 | 6 | 6 | | **Total** | 18 | 10 | 16 | 27 | 17 |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m(^3) sawnwood (softwood and hardwood).
2. The table does not show internal use for heat/energy, sales of firewood and disposed of as waste, which together accounted for around 2% of other softwood products.
The proportions of other products that were sold to different industries have changed little over the last five years (Table 2.18a).
Table 2.18a Larger mills(^1), 2009-2013: other softwood products
| Year | Sold to wood processing industries | Sold to bio-energy (incl pellet manufacturers) | Other sales | Other(^2) | Total | |------|-----------------------------------|-----------------------------------------------|-------------|------------|-------| | | per cent of total other softwood products | per cent of total other softwood products | | | | | 2009 | 63 | 18 | 18 | 1 | 100 | | 2010 | 57 | 20 | 21 | 2 | 100 | | Year | Count | 20 | 19 | 1 | 100 | |------|-------|----|----|---|-----| | 2011 | 60 | 20 | 19 | 1 | 100 | | 2012 | 59 | 21 | 18 | 1 | 100 | | 2013 | 61 | 21 | 17 | 2 | 100 |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m³ sawnwood (softwood and hardwood).
2. Other includes internal use for heat/energy, sales of firewood and other products disposed of as waste. 2.4.5 Sawmill employment
There were estimated to be 3.0 thousand full-time equivalent staff employed directly by sawmills producing at least 10 thousand m³ of sawnwood in 2013 (Table 2.19). This represented a 2% decrease on the total for 2012.
Table 2.19 Larger mills¹, 2013: sawmill employment
| Employment type | England | Wales | Scotland | Northern Ireland | UK | |----------------------------------|---------|-------|----------|------------------|----------| | | | | | | full-time equivalents | | Direct | | | | | | | Line & production workers | 873 | 240 | 1 208 | 231 | 2 552 | | Managerial & administrative staff| 155 | 30 | 159 | 69 | 413 | | Haulage of logs to the mill | 29 | 1 | 19 | 4 | 53 | | **Total direct employment** | **1 057**| **271**| **1 386**| **304** | **3 018**| | Others² | | | | | | | Line & production workers | 38 | 6 | 63 | 1 | 108 | | Managerial & administrative staff| 1 | 0 | 1 | 0 | 2 | | **Total contract employment** | **39** | **6** | **64** | **1** | **110** |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m³ sawnwood (softwood and hardwood).
2. Excludes haulage employment on contract.
Table 2.19a Larger mills¹, 2009-2013: sawmill employment
| Employment | Line & production workers | Managerial & administrative staff | Haulage of logs to the mill | Total employment | |------------|---------------------------|-----------------------------------|-----------------------------|------------------| | | | | | full-time equivalents | | Direct | | | | | | 2009 | 2 189 | 419 | 56 | 2 664 | | 2010 | 2 441 | 447 | 69 | 2 957 | | 2011 | 2 486 | 435 | 71 | 2 992 | | 2012 | 2 573 | 426 | 67 | 3 065 | | 2013 | 2 552 | 413 | 53 | 3 018 | | Others² | | | | | | 2009 | 65 | 10 | .. | 75 | | 2010 | 122 | 4 | .. | 126 | | 2011 | 86 | 3 | .. | 89 | | 2012 | 69 | 1 | .. | 70 | | 2013 | 108 | 2 | .. | 110 |
Source: Sawmill Survey (detailed)
Notes:
1. Sawmills producing at least 10 thousand m³ sawnwood (softwood and hardwood).
2. Excludes haulage employment on contract. 2.5 Pulp & paper
Statistics on inputs to the pulp & paper industry only cover the integrated pulp & paper mills in the UK that use UK roundwood. There were four such mills until 2003, three from 2004 and two from spring 2006. Figures on inputs are provided by the UK Forest Products Association.
Figures on production of pulp and paper are provided by the Confederation of Paper Industries, and cover all paper production in the UK, not just from mills using UK roundwood. 2.5.1 Inputs for the integrated pulp & paper mills
The integrated pulp & paper mills in the UK consumed a total of 0.5 million tonnes of material (all softwood) in 2013, a 1% increase from the 2012 total (Table 2.20).
UK roundwood represented 85% of the inputs for the integrated pulp & paper mills in 2013, with the remaining 15% coming from sawmill products.
Table 2.20 Inputs for the integrated pulp & paper mills1, 2004-2013
| Year | UK roundwood2 | Sawmill products | Total | |------|----------------|------------------|-------| | | Softwood | Hardwood | Softwood | Hardwood | Softwood | Hardwood | | 2004 | 483 | 214 | 143 | 0 | 626 | 214 | | 2005 | 500 | 214 | 138 | 0 | 638 | 214 | | 2006 | 481 | 54 | 145 | 0 | 626 | 54 | | 2007 | 472 | 0 | 161 | 0 | 633 | 0 | | 2008 | 515 | 0 | 152 | 0 | 667 | 0 | | 2009 | 511 | 0 | 120 | 0 | 631 | 0 | | 2010 | 428 | 0 | 98 | 0 | 526 | 0 | | 2011 | 453 | 0 | 99 | 0 | 552 | 0 | | 2012 | 461 | 0 | 79 | 0 | 540 | 0 | | 2013 | 465 | 0 | 83 | 0 | 548 | 0 |
Source: UK Forest Products Association
Notes:
1. Excludes inputs of recycled paper and cardboard.
2. UK roundwood derived from stemwood.
Figure 2.3 Inputs to integrated pulp and paper mills
Source: UK Forest Products Association 2.5.2 Production of paper
Figures for the production of paper (Table 2.21) are provided by the Confederation of Paper Industries. They cover all paper production from UK mills, not just those using UK roundwood. Most UK paper production uses recovered waste paper or imported pulp.
A total of 4.6 million tonnes of paper and paperboard was produced in the UK in 2013, an increase of 2% from the previous year. Packaging materials accounted for 41% of the total UK paper production in 2013, graphic papers (including newsprint) for 36%, and sanitary and household papers for 18%.
Table 2.21 Production of paper and paperboard, 2004-2013
| Year | Graphic papers (incl newsprint) | Sanitary & household papers | Packaging materials | Other | Total paper & paperboard | |------|---------------------------------|-----------------------------|---------------------|-------|-------------------------| | | thousand tonnes | | | | | | 2004 | 2 632 | 806 | 2 230 | 572 | 6 240 | | 2005 | 2 654 | 801 | 1 989 | 595 | 6 039 | | 2006 | 2 483 | 805 | 1 999 | 301 | 5 588 | | 2007 | 2 229 | 834 | 1 852 | 313 | 5 228 | | 2008 | 2 063 | 783 | 1 838 | 299 | 4 983 | | 2009 | 1 609 | 736 | 1 702 | 246 | 4 293 | | 2010 | 1 637 | 729 | 1 640 | 294 | 4 300 | | 2011 | 1 669 | 766 | 1 600 | 307 | 4 342 | | 2012 | 1 616 | 795 | 1 798 | 271 | 4 480 | | 2013 | 1 636 | 802 | 1 851 | 272 | 4 561 |
Source: Confederation of Paper Industries 2.6 Wood-based panels
Wood-based panels include oriented strand board (OSB), wood chipboard and cement bonded particleboard (which are all types of particleboard), and medium density fibreboard (MDF) and other fibreboard (which are both types of fibreboard).
Statistics on wood-based panels are provided by the Wood Panel Industries Federation (WPIF). 2.6.1 Inputs for wood-based panel products
Table 2.22 and Figure 2.4 show the inputs to mills that produce wood-based panels in the UK. The mills used a total of 3.8 million tonnes of material in 2013, a 5% decrease from 2012. The inputs in 2013 comprised 1.3 million tonnes of roundwood (33%), 1.7 million tonnes of sawmill products (45%) and 0.9 million tonnes of recycled wood fibre (22%).
Table 2.22 Inputs to wood-based panel mills, 2004-2013
| Year | UK roundwood¹ | Sawmill products | Imports² | Total | |------|----------------|------------------|----------|-------| | | Soft wood | Hard wood | Soft wood| Hard wood | Soft wood | Hard wood | Recycled wood fibre³ | | | thousand green tonnes | thousand green tonnes | thousand green tonnes | thousand green tonnes | thousand green tonnes | thousand green tonnes | thousand green tonnes | | 2004 | 1 525 | 2 1 778 | 0 9 0 | 3 312 2 | 1 078 | | 2005 | 1 502 | 2 1 732 | 2 6 0 | 3 240 4 | 1 043 | | 2006 | 1 365 | 1 1 794 | 0 3 0 | 3 162 1 | 1 173 | | 2007 | 1 362 | 5 1 940 | 0 2 0 | 3 304 5 | 1 230 | | 2008 | 1 219 | 2 1 591 | 0 0 0 | 2 810 2 | 1 119 | | 2009 | 1 135 | 1 1 435 | 0 0 0 | 2 570 1 | 1 065 | | 2010 | 1 375 | 1 1 631 | 0 7 1 | 3 013 2 | 1 120 | | 2011 | 1 417 | 1 1 779 | 0 0 0 | 3 196 1 | 952 | | 2012 | 1 269 | 2 1 851 | 0 0 0 | 3 120 2 | 909 | | 2013 | 1 263 | 0 1 709 | 0 0 0 | 2 972 0 | 853 |
Source: Wood Panel Industries Federation
Notes:
1. UK roundwood derived from stemwood.
2. Imports include roundwood, wood products and products from imported wood.
3. Recycled wood fibre is wood fibre recovered from both pre- and post-consumer wood waste for use in wood-based panel production. Quantities are as delivered.
Figure 2.4 Inputs to wood-based panel mills
Source: Wood Panel Industries Federation 2.6.2 Production of wood-based panel products
Total production of wood-based panels in 2013 was 3.0 million cubic metres, a 1% increase from 2012 (Table 2.23). Three quarters (75%) of wood-based panel products produced in the UK in 2013 were particleboard (including oriented strand board (OSB)).
Table 2.23 Wood-based panel production, 2004-2013
| Year | Particleboard¹ | Fibreboard² | Total | |------|----------------|-------------|-------| | | thousand cubic metres | thousand cubic metres | thousand cubic metres | | 2004 | 2 653 | 880 | 3 533 | | 2005 | 2 557 | 841 | 3 398 | | 2006 | 2 626 | 872 | 3 498 | | 2007 | 2 684 | 865 | 3 549 | | 2008 | 2 431 | 709 | 3 140 | | 2009 | 2 370 | 660 | 3 030 | | 2010 | 2 594 | 776 | 3 370 | | 2011 | 2 625 | 759 | 3 384 | | 2012 | 2 215 | 788 | 3 003 | | 2013 | 2 276 | 756 | 3 032 |
Source: Wood Panel Industries Federation
Notes:
1. Includes Oriented Strand Board (OSB).
2. Includes Medium Density Fibreboard (MDF). 2.7 Miscellaneous products
Softwood
Data for softwood fencing are obtained from the Survey of Round Fencing Manufacturers. Figures for other uses are reported by manufacturers or are estimated by representatives of the wood processing industries.
Around 1.25 million green tonnes of UK softwood were estimated to have been used directly for woodfuel (including biomass energy) in 2013, an increase of 25% from the previous year (Table 2.24). A further 332 thousand green tonnes of UK softwood were consumed by round fencing manufacturers and 191 thousand green tonnes for other uses in 2013.
Table 2.24 Miscellaneous uses of UK softwood roundwood, 2004-2013
| Year | Fencing | Woodfuel(^1) | Other(^2) | Total thousand green tonnes | |------|---------|----------------|------------|---------------------------| | 2004 | 272 | 100 | 79 | 451 | | 2005 | 317 | 100 | 95 | 512 | | 2006 | 274 | 100 | 114 | 488 | | 2007 | 319 | 200 | 113 | 633 | | 2008 | 359 | 300 | 128 | 787 | | 2009 | 367 | 650 | 160 | 1 178 | | 2010 | 349 | 900 | 135 | 1 384 | | 2011 | 363 | 900 | 145 | 1 408 | | 2012 | 338 | 1 000 | 154 | 1 492 | | 2013 | 332 | 1 250 | 191 | 1 773 |
Source: Survey of Round Fencing Manufacturers, industry associations.
Notes:
1. Woodfuel reported here is derived from stemwood, and from 2007 includes estimated roundwood use for biomass energy. The figures are estimated by the Expert Group on Timber and Trade Statistics, and from 2008 made use of woodfuel data reported in the Private Sector Softwood Removals Survey.
2. Includes shavings, poles and woodwool.
Hardwood
An estimated 400 thousand green tonnes of UK hardwood were used for woodfuel (including biomass energy) in 2013. A further 30 thousand green tonnes were estimated to have been consumed by round fencing manufacturers and 25 thousand green tonnes for other uses, including exports. 2.7.1 Softwood round fencing manufacturers
There were 61 active round fencing manufacturers in 2013 (Table 2.25).
Over two thirds of round fencing manufacturers (70%) consumed less than 5 thousand green tonnes of softwood annually.
Table 2.25 Number of softwood round fencing manufacturers, 2004-2013
| Year | < 1 | 1 - < 5 | 5 - < 10 | 10 + | Total | |------|-----|---------|----------|------|-------| | 2004 | 25 | 30 | 8 | 6 | 69 | | 2005 | 24 | 25 | 8 | 8 | 65 | | 2006 | 25 | 31 | 7 | 6 | 69 | | 2007 | 29 | 28 | 10 | 8 | 75 | | 2008 | 22 | 27 | 11 | 7 | 67 | | 2009 | 22 | 26 | 13 | 7 | 68 | | 2010 | 22 | 24 | 13 | 6 | 65 | | 2011 | 22 | 24 | 10 | 8 | 64 | | 2012 | 22 | 21 | 11 | 7 | 61 | | 2013 | 21 | 22 | 11 | 7 | 61 |
Source: Survey of Round Fencing Manufacturers
Notes:
1. Categories are based on total softwood consumption, in thousand green tonnes.
Data: Longer time series of the number of softwood round fencing manufacturers, by size category and by country (England/Wales/Scotland/Northern Ireland) are available from the Timber Statistics web page. 2.7.2 Roundwood purchased by softwood round fencing manufacturers
A total of 347 thousand green tonnes of softwood (UK grown and imported) was purchased by softwood fencing manufacturers in 2013 (Table 2.26). This represents a decrease of 4% from the 2012 total of 360 thousand green tonnes.
Table 2.26 Roundwood purchased by softwood round fencing manufacturers, 2004-2013
| Year | Size category (consumption) | Total | |------|-----------------------------|-------| | | < 1 | 1 - < 5 | 5 - < 10 | 10 + | | 2004 | 8 | 73 | 59 | 154 | 293 | | 2005 | 8 | 65 | 56 | 235 | 364 | | 2006 | 9 | 83 | 52 | 156 | 301 | | 2007 | 11 | 67 | 66 | 201 | 345 | | 2008 | 8 | 68 | 70 | 239 | 385 | | 2009 | 7 | 66 | 82 | 239 | 394 | | 2010 | 7 | 63 | 86 | 213 | 369 | | 2011 | 8 | 65 | 60 | 250 | 383 | | 2012 | 8 | 57 | 69 | 226 | 360 | | 2013 | 7 | 57 | 79 | 204 | 347 |
Source: Survey of Round Fencing Manufacturers
Notes:
1. Categories are based on total softwood consumption, in thousand green tonnes.
2. This table includes purchases of both UK grown and imported softwood, whereas table 2.24 relates to UK grown softwood only.
Data: Longer time series of the number of softwood round fencing manufacturers, by size category and by country (England/Wales/Scotland/Northern Ireland) are available from the Timber Statistics web page. 2.8 Exports
UK softwood exports in 2013 consisted of 379 thousand green tonnes of industrial roundwood (excluding sawlogs) and 260 thousand green tonnes of logs, giving a total of 640 thousand green tonnes of roundwood (Table 2.27). This corresponded to a 19% increase in the quantity of softwood roundwood exports since 2012, although it remains lower than the level in the period 2005 to 2008. The increase was driven by a doubling in softwood log exports between 2012 and 2013.
The UK also exported 126 thousand tonnes of softwood chips in 2013, an 11% decrease from the previous year.
Table 2.27 Summary of softwood exports(^1), 2004-2013
| Year | Roundwood | Chips | |------|-----------|-------| | | Industrial roundwood | Logs | Total | | | thousand green tonnes | thousand green tonnes | | 2004 | 465 | 145 | 610 | 320 | | 2005 | 560 | 145 | 705 | 150 | | 2006 | 505 | 138 | 643 | 214 | | 2007 | 588 | 171 | 759 | 251 | | 2008 | 556 | 176 | 733 | 176 | | 2009 | 244 | 104 | 347 | 125 | | 2010 | 301 | 166 | 467 | 136 | | 2011 | 415 | 171 | 585 | 158 | | 2012 | 405 | 130 | 535 | 142 | | 2013 | 379 | 260 | 640 | 126 |
Source: industry associations
Notes:
1. Includes all roundwood other than sawlogs. 2.9 Certification
Forest certification assesses forest management practices against an agreed standard and awards a label to those forest products that meet the standard. In order for products to achieve certification, both forest management practices and the Chain of Custody, which tracks timber from forest to retail outlet, must be assessed.
The following tables provide information on the level of certified wood produced in the UK (Table 2.28) and the number of sawmills and round fencing manufacturers holding Chain of Custody certificates (Table 2.29). 2.9.1 Volume certified
Respondents to Forestry Commission surveys were asked to report on volumes certified. 78% of private sector softwood removals in 2013 were from certified sources, the highest percentage to date (Table 2.28). The percentage of private sector softwood removals that are certified has fluctuated over recent years, reflecting a general reduction in the level of certification amongst smaller estates and an increase in production from larger estates.
As nearly all removals from Forestry Commission, Natural Resources Wales and Forest Service woodland are certified, this equates to around 88% of all softwood removals in 2013 from certified sources.
83% of sawmills' roundwood consumption in 2013 was certified. For round fencing manufacturers, 55% of total softwood consumption was certified.
Table 2.28 Per cent of volume certified, 2004-2013
| Year | Softwood from Private sector woodland | Total softwood removals | Sawmills Consumption (softwood and hardwood) | Round fencing manufacturers Consumption (softwood) per cent certified volume | |------|--------------------------------------|-------------------------|-----------------------------------------------|--------------------------------------------------------------------------| | 2004 | 73 | 89 | 80 | 58 | | 2005 | 69 | 87 | 76 | 53 | | 2006 | 67 | 86 | 81 | 46 | | 2007 | 74 | 88 | 78 | 54 | | 2008 | 65 | 84 | 82 | 62 | | 2009 | 68 | 87 | 83 | 51 | | 2010 | 73 | 87 | 83 | 62 | | 2011 | 72 | 85 | 80 | 61 | | 2012 | 70 | 84 | 82 | 60 | | 2013 | 78 | 88 | 83 | 55 |
Source: industry surveys
Notes:
1. For nearly all removals from FC/NRW/FS woodland, the source is certified. 2.9.2 Chain of custody certificates
Sawmills and round fencing manufacturers were also asked whether they held a Chain of Custody certificate. 64% of sawmills for which the certification status was known held a Chain of Custody certificate in 2013 (Table 2.29). This proportion varied with size of mill, from 27% for mills producing less than 5 thousand m$^3$ sawnwood to 100% for those producing 25 thousand m$^3$ sawnwood or more. The majority (54%) of round fencing manufacturers for which the certification status was known held a Chain of Custody certificate.
Table 2.29 Chain of custody certificates, 2013
| Sawmills$^2$ (size of mill$^3$) | Mills holding certificate | Mills without certificate | Certification status not known | Total$^1$ | |---------------------------------|---------------------------|---------------------------|-------------------------------|-----------| | < 5 | 10 | 27 | 77 | 114 | | 5 - < 25 | 16 | 5 | 10 | 31 | | 25 + | 30 | 0 | 2 | 32 | | All sawmills | 56 | 32 | 89 | 177 | | Round fencing manufacturers | 13 | 11 | 37 | 61 |
Source: industry surveys
Notes:
1. Includes non-respondents to survey in current year.
2. For large sawmills (those producing at least 10 thousand m$^3$) that did not report whether or not they held a certificate or did not respond to the 2013 survey, the certification status was obtained from the FSC database, where possible.
3. Categories are based on total sawnwood production (softwood and hardwood), in thousand m$^3$. 2.10 Woodfuel and pellets
The following page provides data on woodfuel sales and use from the sawmill survey and survey of round fencing manufacturers.
In addition, estimates of roundwood used directly for woodfuel are provided in tables 2.5 and 2.6.
Results from a survey of woodfuel suppliers, run in Spring 2009, were provided in Forestry Statistics 2009.
Recycled wood used for woodfuel
Estimates of recycled wood used for woodfuel are produced annually by the Wood Recyclers' Association. In 2013, it is estimated that 825 thousand tonnes of recycled wood were used for woodfuel, an increase of 9% from the 2012 estimate of 759 thousand tonnes. Over the past six years, the quantity of recycled wood used for woodfuel has more than trebled.
Wood pellet production
Results from the survey of UK Pellet and Briquette Production are provided in Table 2.31. 2.10.1 Woodfuel supply by sawmills and round fencing manufacturers
An estimated 614 thousand green tonnes (mainly softwood) of woodfuel were supplied by sawmills in 2013 and a further 66 thousand green tonnes were supplied by round fencing manufacturers (Table 2.30). 89% of the total woodfuel supplied was sold to bioenergy.
Table 2.30 Woodfuel supply(^1) by sawmills and round fencing manufacturers, 2009-2013
| | Sales to bioenergy | Sales as firewood | Used internally for heat/energy | Total thousand green tonnes | |------------------|--------------------|-------------------|---------------------------------|-----------------------------| | **Sawmills** | | | | | | 2009 | 346 | 14 | 21 | 381 | | 2010 | 416 | 12 | 49 | 478 | | 2011 | 491 | 14 | 26 | 531 | | 2012 | 540 | 14 | 43 | 597 | | 2013 | 542 | 17 | 55 | 614 | | **Round fencing manufacturers** | | | | | | 2009 | 45 | 12 | 1 | 58 | | 2010 | 53 | 5 | 0 | 58 | | 2011 | 56 | 5 | 1 | 61 | | 2012 | 71 | 4 | 1 | 76 | | 2013 | 60 | 5 | 0 | 66 |
Source: Sawmill Survey, Survey of Round Fencing Manufacturers
Notes:
1. Material reported as sales/use for woodfuel, but may have been used for other purposes. 2.10.2 Wood pellet production
Wood pellets and briquettes are processed wood products that can be made from roundwood, sawmill products and/or recycled wood. Some of the wood used to make wood pellets and briquettes will be accounted for elsewhere in this release (e.g. in Table 2.30). Wood pellets and briquettes are often used for woodfuel, but pellets may also be used for other purposes (such as horse bedding or cat litter).
A total of 301 thousand tonnes of wood pellets and briquettes are estimated to have been produced in the UK in 2013. This represents an increase of 8% from the 2012 estimate of 278 thousand tonnes and continues the upward trend since 2009.
Table 2.31 Wood pellet production, 2009 - 2013
| Year | Total thousand tonnes | |------|-----------------------| | 2009 | 118 | | 2010 | 197 | | 2011 | 244 | | 2012 | 278 | | 2013 | 301 |
Source: Survey of UK Pellet and Briquette Production 3 Trade
Introduction
This chapter contains information about UK imports and exports of wood products, and about the level of apparent consumption estimated from data for UK production, imports and exports.
Information on imports and exports mainly comes from the Overseas Trade Statistics compiled by HM Revenue & Customs. Estimates are provided at a UK level only. International comparisons of apparent consumption are provided in the International Forestry chapter. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Figures for 2013 were previously published in “UK Wood Production and Trade: 2013 Provisional Figures”, released on 15 May 2014. Some figures for 2013 have been revised from those previously published. For further details on revisions, see the Trade section of the Sources chapter.
A copy of all trade tables is available to download as an Excel spreadsheet from the Tables for Download page.
Key findings
The main findings are:
UK imports:
- 5.5 million cubic metres of sawnwood in 2013, a 6% increase from the 2012 figure;
- 3.0 million cubic metres of wood-based panels in 2013, a 12% increase from 2012;
- 5.0 million cubic metres of wood pellets in 2013, a 128% increase from 2012;
- 5.9 million tonnes of paper in 2013, a 3% decrease from 2012.
- The total value of wood product imports in 2013 was £6.7 billion, of which £4.2 billion was pulp and paper.
- Sawn softwood, particleboard, fibreboard, and paper and paperboard were overwhelmingly imported from EU countries in 2013.
- Sawn hardwood and wood pulp imports originated from a range of both EU and non-EU countries in 2013.
- The vast majority of UK imports of plywood in 2013 came from countries outwith the EU.
UK exports:
- The total value of wood product exports in 2013 was £1.7 billion, of which £1.5 billion was pulp and paper. 3.1 Apparent consumption of wood in the UK
Apparent consumption is the amount of timber, measured as wood raw material equivalent (WRME) underbark, used as wood and wood products by people and industries in the United Kingdom. It is calculated as total United Kingdom production plus imports, minus exports. Apparent consumption differs from actual consumption by the extent of changes in the level of stocks. It is not practical to collect information on actual consumption.
UK production of roundwood totalled 10.8 million m$^3$ WRME underbark in 2013 (Table 3.1). A further 42.2 million m$^3$ WRME underbark of wood and wood products were imported to the UK and 6.2 million m$^3$ WRME underbark were exported, giving apparent consumption of 46.8 million m$^3$ WRME underbark. This represented an 8% increase in apparent consumption from the previous year. These figures exclude recycled wood and recovered paper (see Table 3.3 for statistics on recovered paper).
Imports accounted for 80% of all wood (production + imports) in the UK in 2013.
Table 3.1 Apparent consumption of wood$^1$ in the UK, 2004-2013
| Year | UK production$^2$ | Imports | Exports | Apparent Consumption | |------|------------------|---------|---------|----------------------| | | million m$^3$ WRME underbark | | | million m$^3$ WRME underbark | | 2004 | 8.3 | 53.2 | 7.5 | 54.0 | | 2005 | 8.5 | 51.2 | 5.8 | 54.0 | | 2006 | 8.4 | 53.6 | 5.9 | 56.1 | | 2007 | 9.0 | 54.5 | 6.8 | 56.7 | | 2008 | 8.4 | 46.3 | 5.3 | 49.4 | | 2009 | 8.6 | 39.5 | 4.2 | 44.0 | | 2010 | 9.6 | 41.6 | 5.5 | 45.8 | | 2011 | 10.0 | 40.6 | 5.2 | 45.5 | | 2012 | 10.1 | 39.6 | 6.5 | 43.2 | | 2013 | 10.8 | 42.2 | 6.2 | 46.8 |
Source: industry surveys, industry associations, UK overseas trade statistics (HM Revenue & Customs) and conversion factors to Wood Raw Material Equivalent (WRME).
Notes:
1. Excludes recovered paper.
2. UK production of roundwood is estimated from deliveries to wood processing industries and others, as in tables 2.5 and 2.6.
Figure 3.1 Apparent consumption of wood$^1$ in the UK, 1999-2013
Source: industry surveys, industry associations, UK overseas trade statistics (HM Revenue & Customs) and conversion factors to Wood Raw Material Equivalent (WRME). Notes:
1. Excludes recovered paper.
2. UK production of roundwood is estimated from deliveries to wood processing industries and others, as in tables 2.5 and 2.6. 3.2 Apparent consumption of wood products in the UK
UK production accounted for 40% of the UK sawnwood market, 55% of the UK wood-based panel market and 49% of the UK paper market in 2013 (Table 3.2).
Table 3.2 Apparent consumption of wood products(^1,2) in the UK, 2013
| Product | UK production | Imports | Exports | Apparent consumption | |--------------------------|---------------|---------|---------|----------------------| | **Sawnwood (thousand m(^3))** | | | | | | Coniferous | 3 536 | 5 101 | 146 | 8 491 | | Non-coniferous | 46 | 393 | 19 | 420 | | Total | 3 581 | 5 494 | 164 | 8 911 | | **Wood-based panels** | | | | | | (thousand m(^3)) | | | | | | Veneer sheets | 0 | 24 | 2 | 22 | | Plywood | 0 | 1 374 | 58 | 1 316 | | Particleboard | 2 276 | 790 | 229 | 2 837 | | Fibreboard | 756 | 774 | 143 | 1 388 | | Total | 3 032 | 2 963 | 432 | 5 563 | | **Paper & paperboard** | | | | | | (thousand tonnes) | | | | | | Newsprint | 1 233 | 510 | 333 | 1 410 | | Other graphic papers | 403 | 2 874 | 199 | 3 078 | | Sanitary & household papers | 802 | 370 | 13 | 1 159 | | Packaging materials | 1 851 | 2 043 | 452 | 3 442 | | Other paper & paperboard | 272 | 124 | 123 | 273 | | Total | 4 561 | 5 921 | 1 120 | 9 362 |
Source: industry surveys, industry associations, UK overseas trade statistics (HM Revenue & Customs).
Notes:
1. Excludes other wood products, e.g. fuelwood and round fencing.
2. Excludes roundwood and intermediate products (e.g. sawmill products, pulp and recovered paper) to avoid double-counting. 3.3 Flow of recovered paper
UK production of recovered paper (the amount recovered from businesses and households in the UK) totalled 7.9 million tonnes in 2013 (Table 3.3). The amount of recovered paper which is exported rose from around 3.1 million tonnes in 2004 to 4.9 million tonnes in 2008, before decreasing to 4.2 million tonnes in 2013. Exports accounted for over one half (54%) of recovered paper produced in the UK in 2013.
Table 3.3 Flow of recovered paper, 2004-2013
| Year | UK production | Imports | Exports | Apparent consumption¹ | |------|---------------|---------|---------|------------------------| | | thousand tonnes | | | thousand tonnes | | 2004 | 7 126 | 87 | 3 127 | 4 085 | | 2005 | 7 718 | 78 | 3 329 | 4 467 | | 2006 | 8 015 | 140 | 3 996 | 4 159 | | 2007 | 8 617 | 88 | 4 749 | 3 956 | | 2008 | 8 768 | 74 | 4 891 | 3 951 | | 2009 | 8 155 | 94 | 4 444 | 3 805 | | 2010 | 8 003 | 115 | 4 388 | 3 730 | | 2011 | 8 036 | 177 | 4 479 | 3 733 | | 2012 | 8 099 | 160 | 4 447 | 3 812 | | 2013 | 7 869 | 184 | 4 248 | 3 805 |
Source: Confederation of Paper Industries, UK overseas trade statistics (HM Revenue & Customs).
Notes:
1. Apparent consumption of recovered paper refers to use of recycled paper pulp in the UK. 3.4 UK import quantities by product
Wood imports to the UK in 2013 comprised 5.5 million cubic metres of sawnwood (6% increase from the previous year), 3.0 million cubic metres of wood-based panels (12% increase) and 5.0 million cubic metres of wood pellets (128% increase) (Table 3.4).
A total of 5.9 million tonnes of paper was imported into the UK in 2013, representing a 3% decrease from the 2012 figure of 6.1 million tonnes.
Table 3.4 UK import quantities, 2004-2013
| Year | Sawnwood | Wood-based panels | Wood pellets | Other wood | Paper | Pulp | Recovered paper | Total pulp & paper | |------|----------|-------------------|-------------|------------|-------|------|----------------|-------------------| | 2004 | 8 583 | 4 114 | .. | 1 048 | 7 528 | 1 636| 87 | 9 251 | | 2005 | 8 341 | 3 939 | .. | 1 325 | 7 663 | 1 694| 78 | 9 434 | | 2006 | 7 963 | 3 959 | .. | 1 133 | 7 741 | 1 452| 140 | 9 332 | | 2007 | 8 469 | 3 858 | .. | 1 621 | 7 890 | 1 427| 88 | 9 405 | | 2008 | 5 886 | 3 389 | .. | 1 921 | 7 403 | 1 344| 74 | 8 821 | | 2009 | 5 240 | 2 500 | 66 | 821 | 7 018 | 940 | 94 | 8 052 | | 2010 | 5 699 | 2 701 | 816 | 1 071 | 7 254 | 1 094| 115 | 8 462 | | 2011 | 4 936 | 2 827 | 1 502 | 985 | 6 887 | 1 009| 177 | 8 073 | | 2012 | 5 179 | 2 650 | 2 201 | 965 | 6 119 | 1 021| 160 | 7 300 | | 2013 | 5 494 | 2 963 | 5 015 | 1 234 | 5 921 | 1 100| 184 | 7 205 |
Source: UK overseas trade statistics (HM Revenue & Customs), industry associations
Notes:
1. There are reliability concerns for some of these figures, particularly for individual products (see Sources chapter).
2. Included in ‘Other wood’ before 2009.
3. Includes roundwood, wood charcoal, chips, particles and residues. Excludes wood pellets from 2009.
.. Denotes data not available. 3.5 UK export quantities by product
A total of 5.4 million tonnes of pulp and paper (including recovered paper) was exported from the UK in 2013 (table 3.5). This represented a 4% decrease from the previous year.
Table 3.5 UK export quantities, 2004-2013
| Year | Wood (thousand m³) | Pulp and paper (thousand tonnes) | |------|--------------------|----------------------------------| | | Sawnwood | Wood-based panels | Wood pellets² | Other wood³ | Paper | Pulp | Recovered paper | Total pulp & paper | | 2004 | 312 | 519 | .. | 1 294 | 1 557 | 29 | 3 127 | 4 714 | | 2005 | 358 | 520 | .. | 1 186 | 1 164 | 25 | 3 329 | 4 518 | | 2006 | 415 | 510 | .. | 1 214 | 1 002 | 24 | 3 996 | 5 022 | | 2007 | 346 | 599 | .. | 1 353 | 971 | 24 | 4 749 | 5 743 | | 2008 | 222 | 520 | .. | 1 289 | 1 031 | 10 | 4 891 | 5 932 | | 2009 | 203 | 451 | 18 | 657 | 896 | 22 | 4 444 | 5 361 | | 2010 | 195 | 509 | 89 | 1 029 | 926 | 35 | 4 388 | 5 349 | | 2011 | 162 | 546 | 56 | 1 430 | 974 | 32 | 4 479 | 5 485 | | 2012 | 141 | 597 | 79 | 1 778 | 1 143 | 36 | 4 447 | 5 626 | | 2013 | 164 | 432 | 157 | 1 279 | 1 120 | 23 | 4 248 | 5 391 |
Source: UK overseas trade statistics (HM Revenue & Customs), industry associations
Notes:
1. There are reliability concerns for some of these figures, particularly for individual products (see Sources chapter).
2. Included in 'Other wood' before 2009.
3. Includes roundwood, wood charcoal, chips, particles and residues. Excludes wood pellets from 2009.
.. Denotes data not available. 3.6 UK import values by product
Wood product imports in 2013 were valued at a total of £6.7 billion, a 5% increase from the level in 2012 (Table 3.6).
Pulp and paper (including recovered paper) comprised around three fifths of the total value of wood product imports in 2013, 18% was sawnwood, 13% wood-based panels and 6% wood pellets.
Table 3.6 UK import values, 2004-2013
| Year | Sawnwood | Wood-based panels | Wood pellets | Other wood | Paper | Pulp | Recovered paper | Total pulp & paper | |------|----------|-------------------|--------------|------------|-------|------|----------------|-------------------| | 2004 | 1 190 | 961 | .. | 95 | 3 520 | 476 | 7 | 4 003 | | 2005 | 1 120 | 918 | .. | 114 | 3 432 | 517 | 5 | 3 954 | | 2006 | 1 144 | 926 | .. | 112 | 3 599 | 548 | 9 | 4 156 | | 2007 | 1 516 | 914 | .. | 128 | 3 741 | 526 | 7 | 4 275 | | 2008 | 1 085 | 873 | .. | 158 | 3 655 | 608 | 10 | 4 273 | | 2009 | 953 | 677 | 7 | 104 | 3 635 | 425 | 11 | 4 071 | | 2010 | 1 199 | 781 | 69 | 110 | 3 997 | 593 | 17 | 4 607 | | 2011 | 1 080 | 838 | 129 | 79 | 4 049 | 613 | 34 | 4 696 | | 2012 | 1 084 | 791 | 185 | 75 | 3 727 | 519 | 21 | 4 266 | | 2013 | 1 179 | 874 | 412 | 87 | 3 644 | 500 | 21 | 4 165 |
Source: UK overseas trade statistics (HM Revenue & Customs), industry associations
Notes:
1. There are reliability concerns for some of these figures, particularly for individual products (see Sources chapter).
2. Included in ‘Other wood’ before 2009.
3. Includes roundwood, wood charcoal, chips, particles and residues. Excludes wood pellets from 2009. .. Denotes data not available. 3.7 UK export values by product
Wood product exports from the UK were valued at a total of £1.7 billion in 2013, a decrease of 5% from the 2012 total (Table 3.7). Total exports of wood products in 2013 comprised 89% pulp and paper (mainly paper), 6% wood-based panels, 2% sawnwood and 3% other wood.
Table 3.7 UK export values, 2004-2013
| Year | Sawnwood | Wood-based panels | Wood pellets² | Other wood³ | Paper | Pulp | Recovered paper | Total pulp & paper | |------|----------|-------------------|---------------|-------------|-------|------|-----------------|-------------------| | 2004 | 50 | 95 | .. | 34 | 992 | 7 | 235 | 1 234 | | 2005 | 52 | 102 | .. | 35 | 1 002 | 6 | 278 | 1 286 | | 2006 | 61 | 128 | .. | 37 | 947 | 8 | 329 | 1 284 | | 2007 | 70 | 107 | .. | 40 | 1 013 | 7 | 407 | 1 427 | | 2008 | 50 | 104 | .. | 48 | 1 114 | 3 | 472 | 1 590 | | 2009 | 41 | 104 | 2 | 20 | 1 010 | 10 | 342 | 1 362 | | 2010 | 47 | 113 | 7 | 35 | 1 068 | 18 | 524 | 1 610 | | 2011 | 41 | 128 | 3 | 50 | 1 044 | 11 | 595 | 1 650 | | 2012 | 34 | 130 | 4 | 51 | 1 048 | 10 | 531 | 1 589 | | 2013 | 36 | 109 | 5 | 46 | 1 017 | 8 | 494 | 1 519 |
Source: UK overseas trade statistics (HM Revenue & Customs), industry associations
Notes:
1. There are reliability concerns for some of these figures, particularly for individual products (see Sources chapter).
2. Included in 'Other wood' before 2009.
3. Includes roundwood, wood charcoal, chips, particles and residues. Excludes wood pellets from 2009.
.. Denotes data not available. 3.8 Origin of wood imports
Table 3.8 presents data on the source of selected wood products that have been imported into the UK in 2013.
The source of imports for these products has remained stable between 2012 and 2013, with the exception of wood pulp (the 2012 figures can be found in Forestry Statistics 2013).
Sawn softwood, particleboard, fibreboard, and paper and paperboard were overwhelmingly imported from EU countries in 2013 (Table 3.8):
- Sweden (46%), Latvia (14%) and Finland (13%) provided the majority of imports of sawn softwood to the UK.
- Most particleboard imports to the UK came from Germany (25%), France (22%) and Ireland (15%).
- Ireland (34%), Germany (24%) and Spain (11%) were the principal sources of fibreboard imports.
- Most paper and paperboard imports came from Germany (19%), Sweden (17%) and Finland (15%).
Sawn hardwood and wood pulp imports originated from a range of both EU and non-EU countries in 2013:
- The USA (22%) were the largest single source of sawn hardwood imports to the UK.
- Sweden (27%) and Brazil (26%) provided the majority of wood pulp imports to the UK. Sweden increased its share by 11 percentage points between 2013 and 2012, while the USA’s share decreased from 17% to 7%.
The vast majority of UK imports of plywood in 2013 came from countries outwith the EU, such as China (42%) and Brazil (15%), while Finland (12%) accounted for the majority of EU trade.
Table 3.8 Country of origin of wood imports to the UK, 2013
| Source | Sawn softwood | Sawn hardwood | Plywood | Particleboard | Fibreboard | Wood pulp | Paper and paperboard | |--------------|---------------|---------------|---------|---------------|------------|-----------|----------------------| | | per cent of total UK imports (volume) in each category | | Sweden | 46 | 0 | 0 | 0 | 0 | 27 | 17 | | Finland | 13 | 1 | 12 | 0 | 2 | 7 | 15 | | Germany | 5 | 7 | 0 | 25 | 24 | 1 | 19 | | France | 0 | 9 | 1 | 22 | 1 | 0 | 8 | | Italy | 0 | 10 | 1 | 1 | 0 | 1 | 4 | | Netherlands | 0 | 2 | 1 | 0 | 0 | 6 | 4 | | Ireland | 8 | 2 | 1 | 15 | 34 | 0 | 1 | | Belgium | 1 | 3 | 0 | 10 | 8 | 0 | 2 | | Spain | 0 | 0 | 1 | 3 | 11 | 3 | 2 | | Latvia | 14 | 6 | 2 | 8 | 4 | 0 | 0 | | Poland | 0 | 3 | 0 | 0 | 7 | 0 | 2 | | Portugal | 0 | 0 | 0 | 10 | 1 | 4 | 2 | | Estonia | 2 | 8 | 0 | 0 | 1 | 0 | 0 | | Other EU-27 | 2 | 3 | 2 | 4 | 3 | 4 | 5 | | Total EU-27 | 92 | 54 | 21 | 99 | 96 | 53 | 81 | | China | 0 | 1 | 42 | 0 | 3 | 0 | 3 | | USA | 0 | 22 | 0 | 0 | 0 | 7 | 4 | | Brazil | 0 | 0 | 15 | 0 | 0 | 26 | 2 | | Russia | 5 | 1 | 5 | 0 | 0 | 0 | 0 | | Malaysia | 0 | 5 | 9 | 0 | 0 | 0 | 0 | Figure 3.2 shows the main sources of imports of sawn softwood to the UK since 1962. The total level of sawn softwood imports has fluctuated over the period, between around 5 million m³ and 10 million m³. Imports from Canada have reduced since the early 1990s; those from the Baltic States have increased between 1994 and 2003, but have reduced since then. Sweden has consistently been the principal country of origin for UK sawn softwood imports over the past 20 years.
**Figure 3.2 Country of origin of sawn softwood imports to the UK, 1962-2013**
Source: FAO, UK overseas trade statistics (HM Revenue & Customs), industry associations. Introduction
This chapter contains information on:
- carbon in forests;
- the Woodland Carbon Code; and
- public attitudes to forestry and climate change.
Estimates for England, Wales, Scotland and Northern Ireland are included, where possible, in addition to UK totals. International comparisons of carbon stocks are provided in the International Forestry chapter. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
For information on revisions, see the UK Forests and Climate Change section of the Sources chapter.
A copy of all UK Forests and Climate Change tables is available to download as an Excel spreadsheet from the Tables for Download page.
In addition to the statistics presented here, information on UK forests and climate change is available from "Combating Climate Change - a role for UK forests" (The Read Report), an independent assessment of the science published in November 2009 and available at www.forestry.gov.uk/forestry/INFD-6umkar.
Key findings
The main findings are:
- The total carbon stock in UK forests has increased from 1990 to 2010 and is projected to increase further by 2015.
- The annual rate of accumulation of carbon in UK forests is forecast to peak around 2030 and is expected to fall steadily afterwards.
- A total of 201 projects were registered under the Woodland Carbon Code at 30 June 2014, covering an area of 15.4 thousand hectares of woodland and projected to sequester 5.7 million tonnes of carbon dioxide.
- 80% of the UK public agrees with the statement "trees are good because they remove carbon dioxide from the atmosphere and store it in wood". 4.1 Carbon cycle
Figure 4.1 shows a forest's contribution to the carbon cycle. Trees absorb carbon dioxide through photosynthesis and release it through respiration; the difference is new biomass. Some of this biomass is dropped to the forest floor as litter (foliage, deadwood, etc), which in due course decays and is either released back to the atmosphere or becomes part of soil carbon. The remainder accumulates as increment in the forest, mostly as stemwood, branches or roots. A proportion of this accumulated biomass is harvested, for wood products or fuelwood; the rest is a net addition to the biomass stored in the forest.
Figure 4.1 Carbon Cycle 4.2 Forest carbon stock
The total carbon in UK forests has increased from 1990 to 2010 and is projected to increase further by 2015 (Table 4.1). The carbon in forest soils accounts for most (around 75%) of total forest carbon.
Table 4.1 Forest carbon stock
| | 1990 | 2000 | 2005 | 2010 | 2015 | |--------------------------|------|------|------|------|------| | Carbon in above-ground biomass | 360 | 471 | 527 | 583 | 639 | | Carbon in below-ground biomass | 129 | 170 | 190 | 210 | 230 | | Carbon in dead wood | 9 | 10 | 10 | 10 | 10 | | Carbon in litter | 165 | 175 | 179 | 182 | 187 | | Soil carbon ¹ | 2 366| 2 533| 2 594| 2 629| 2 715| | **Total forest carbon** | **3 029** | **3 359** | **3 500** | **3 614** | **3 781** |
Source: Forestry Commission
Notes
1. Carbon in soil depth 0 to 100 cm.
2. To convert tonnes carbon dioxide equivalent (CO₂e) to tonnes carbon (C), multiply by 12/44.
These figures are outside the scope of National Statistics 4.3 Carbon sequestration
In climate change reporting, removals to forestland, also called the forest sink, measures the net annual accumulation of carbon in forests by woody biomass, soils and litter. The annual rate is projected to peak around 2030 at 20 million tonnes CO₂ in total, of which 13 million tonnes CO₂ is projected to accumulate in living biomass (Table 4.2, Figure 4.2). The rate of accumulation is expected to fall steadily after 2030.
Under the Kyoto protocol, additional woodland planted since 1990 contributes to the UK's carbon dioxide emissions target; the rate of accumulation of carbon in these new woodlands continues to increase as woodland continues to be planted.
Reported figures do not include carbon in harvested wood products.
Table 4.2 Net carbon dioxide removals attributed to UK forestry
| Year | In living biomass | Total | of which, due to land afforested since 1990 | emissions due to land deforested since 1990 | |------|------------------|-------|--------------------------------------------|------------------------------------------| | 1990 | 9.0 | 16.0 | 0.0 | -0.2 | | 1995 | 7.8 | 15.6 | 0.4 | -0.2 | | 2000 | 9.5 | 17.1 | 1.0 | -0.8 | | 2005 | 11.0 | 18.7 | 1.7 | -1.1 | | 2010 | 10.3 | 17.8 | 2.6 | -1.0 | | 2015 | 10.7 | 17.3 | 3.5 | -1.3 | | 2020 | 11.6 | 18.3 | 4.4 | -1.0 |
Source: Inventory and projections of UK emissions by sources and removal by sinks due to land use, land use change and forestry, produced by the Centre for Ecology and Hydrology for input to 2012 final UK Greenhouse Gas Emissions (Department of Energy & Climate Change, March 2014).
Notes:
1. Net annual accumulation of carbon in forests by woody biomass, soils and litter. Adjusted for losses from deforestation and forest wildfires. Excludes changes in UK harvested wood products.
2. Emissions and sequestration can be presented as tonnes carbon or tonnes carbon dioxide (CO₂). To convert from tonnes CO₂ to tonnes carbon multiply by 12/44.
3. Future predictions of carbon uptake assume that commercial conifer plantations will be replanted when felled, and that planting of new woodland will continue at the same rate as in 2012 (mid projection).
4. The figures shown above differ significantly from those published in Forestry Statistics 2013, due to changes in the data and model used by the Centre for Ecology and Hydrology. For more information, please see the Sources chapter.
These figures are outside the scope of National Statistics
Figure 4.2 Net annual change in carbon (CO₂ equivalent) ¹ in UK woodlands Source: Inventory and projections of UK emissions by sources and removal by sinks due to land use, land use change and forestry, produced by the Centre for Ecology and Hydrology for input to 2012 UK Greenhouse Gas emissions final figures (Department of Energy & Climate Change, March 2014).
Notes:
1. Net annual accumulation of carbon in forests by woody biomass, soils and litter. Adjusted for losses from deforestation and forest wildfires. Excludes changes in UK harvested wood products.
2. Emissions and sequestration can be presented as tonnes carbon or tonnes carbon dioxide (CO₂). To convert from tonnes CO₂ to tonnes carbon multiply by 12/44.
3. Future predictions of carbon uptake assume that commercial conifer plantations will be replanted when felled, and that planting of new woodland will continue at the same rate as in 2012 (mid projection).
4. The figures shown above differ significantly from those published in Forestry Statistics 2013, due to changes in the data and model used by the Centre for Ecology and Hydrology. For more information, please see the Sources chapter.
These figures are outside the scope of National Statistics 4.4 Woodland Carbon Code
The Woodland Carbon Code is a voluntary standard, initiated in July 2011, for woodland creation projects that make claims about the carbon they sequester (take out of the atmosphere).
All projects must be placed on the UK Woodland Carbon Registry. Their claims about potential carbon sequestration are validated by an independent certification body. Validated projects are then verified on a regular basis to confirm the progress of carbon sequestration.
Further information on Woodland Carbon Code projects is provided in the Sources chapter and at www.forestry.gov.uk/carboncode
Table 4.3a provides biannual data on projects registered under the Woodland Carbon Code since September 2011. The table provides information on the number of projects, area of woodland covered by the projects and the total projected carbon sequestration over the lifetime (up to 100 years) of the projects.
A total of 201 projects were registered under the Woodland Carbon Code at 30 June 2014, covering an area of 15.4 thousand hectares of woodland and projected to sequester 5.7 million tonnes of carbon dioxide.
87 projects had been validated by end June 2014, covering an area of 3.1 thousand hectares and projected to sequester 1.5 million tonnes of carbon dioxide.
Table 4.3a Woodland Carbon Code projects in the UK
| | Validated | Awaiting validation | Total | |--------------------------|-----------|---------------------|--------| | **Number of projects** | | | | | December 2011 | 3 | 36 | 39 | | June 2012 | 17 | 41 | 58 | | December 2012 | 22 | 67 | 89 | | June 2013 | 42 | 91 | 133 | | December 2013 | 63 | 129 | 192 | | June 2014 | 87 | 114 | 201 | | **Area of woodland (hectares)** | | | | | December 2011 | 319 | 1 887 | 2 206 | | June 2012 | 1 098 | 1 684 | 2 782 | | December 2012 | 1 134 | 1 877 | 3 011 | | June 2013 | 2 063 | 12 105 | 14 168 | | December 2013 | 2 503 | 12 679 | 15 183 | | June 2014 | 3 135 | 12 255 | 15 390 | | **Projected carbon sequestration** | | | | | (thousand tonnes of carbon dioxide equivalent) | | | | | December 2011 | 137 | 791 | 928 | | June 2012 | 474 | 824 | 1 298 | | December 2012 | 500 | 895 | 1 395 | | June 2013 | 951 | 4 204 | 5 154 | | December 2013 | 1 156 | 4 460 | 5 617 | | June 2014 | 1 496 | 4 181 | 5 676 |
Source: Forestry Commission Notes:
1. Figures for carbon sequestration indicate the total projected sequestration of the projects over their lifetime of up to 100 years, and include the amount claimable by a project plus the amount allocated to a shared "buffer" in case of unanticipated losses.
These figures are outside the scope of National Statistics
Most of the projects registered under the Woodland Carbon Code at 30 June 2014 were in England (112), 81 were in Scotland, seven in Wales and one in Northern Ireland (Table 4.3b).
Table 4.3b Woodland Carbon Code projects at 30 June 2014
| | England | Wales | Scotland | Northern Ireland | UK | |----------------------|---------|-------|----------|------------------|-----| | **Number of projects** | | | | | | | Validated | 38 | 3 | 46 | 0 | 87 | | Awaiting validation | 74 | 4 | 35 | 1 | 114 | | Total | 112 | 7 | 81 | 1 | 201 | | **Area of woodland (hectares)** | | | | | | | Validated | 861 | 52 | 2 222 | 0 | 3 135 | | Awaiting validation | 1 210 | 179 | 10 858 | 9 | 12 255 | | Total | 2 071 | 231 | 13 080 | 9 | 15 390 | | **Projected carbon sequestration** | | | | | | | (thousand tonnes of carbon dioxide equivalent) | | | | | | | Validated | 481 | 33 | 982 | 0 | 1 496 | | Awaiting validation | 801 | 84 | 3 292 | 3 | 4 181 | | Total | 1 283 | 116 | 4 274 | 3 | 5 676 |
Source: Forestry Commission
Notes:
1. Figures for carbon sequestration indicate the total projected sequestration of the projects over their lifetime of up to 100 years, and include the amount claimable by a project plus the amount allocated to a shared "buffer" in case of unanticipated losses.
These figures are outside the scope of National Statistics
Figure 4.3 Projected carbon sequestration of Woodland Carbon Code projects in the UK
Source: Forestry Commission
Notes:
1. Figures for carbon sequestration indicate the total projected sequestration of the projects over their lifetime of up to 100 years, and include the amount claimable by a project plus the amount allocated to a shared "buffer" in case of unanticipated losses.
These figures are outside the scope of National Statistics 4.5 Public Opinion of Forestry - climate change
The Forestry Commission has conducted similar surveys of public attitudes to forestry and forestry-related issues every two years since 1995. The most recent set of separate surveys was conducted in 2013 (in Scotland, Wales, and across the UK as a whole) and 2014 (in Northern Ireland). The full results are available on our website at www.forestry.gov.uk/forestry/infd-5zyl9w.
Questions were asked to gauge the public’s agreement on climate change issues, including on the ways in which forests and woodlands can impact on climate change. Some of the public views presented below do not reflect expert opinion.
The highest level of agreement was seen with the statement "trees are good because they remove carbon dioxide from the atmosphere and store it in wood", with 80% of the UK public agreeing (agree or strongly agree) (Figure 4.4). This compares with only 37% agreeing with the statement "using wood for fuel makes climate change worse because it releases carbon dioxide".
**Figure 4.4 Public opinion on ways in which forests and woodlands can impact on climate change**
| Statement | Percentage of respondents | |---------------------------------------------------------------------------|---------------------------| | Trees are good because they remove carbon dioxide from the atmosphere and store it in wood | 26 56 9 82 8 | | Planting more trees can help us cope with climate change by providing shade and reducing the effects of flooding | 18 63 13 5 12 8 | | The UK could offset all its greenhouse gas emissions by planting more trees | 11 44 17 12 7 13 | | Cutting down forests and woodlands makes climate change worse, even if they are replanted | 14 41 10 19 2 10 | | Using wood for fuel is better for climate change than using fuels such as coal and gas | 7 37 24 14 2 10 | | Using wood for building is better for climate change than using materials such as concrete and steel | 7 35 20 17 8 15 | | Using wood for fuel makes climate change worse because it releases carbon dioxide | 6 32 25 16 3 17 |
Source: UK Public Opinion of Forestry Survey 2013.
Base: 2,000 UK respondents.
These figures are outside the scope of National Statistics
Questions were also posed on how UK forests should be managed in response to the threat of climate change - see the survey reports for further details. 5 Environment
Introduction
This chapter presents a range of information about the woodland environment, mostly using sources that are outside the scope of National Statistics. They are included to provide additional context to the topic.
Estimates for England, Wales, Scotland and Northern Ireland are included, where possible, in addition to UK or GB totals. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Most of the statistics presented in this chapter have been previously released.
Statistics on woodland fires are included for the first time in this release.
The statistics on the populations of wild birds (Table 5.1 and Figure 5.1) have been revised since “Forestry Statistics 2013”. For further details on revisions, see the Environment section of the Sources chapter.
A copy of all environment tables is available to download as an Excel spreadsheet from the Tables for Download page.
Key findings
The main findings are:
- Since the early 1990s, the UK woodland bird index has generally been about 20 per cent below the level of the early 1970s, with the decline predominantly in woodland specialist species.
- 80% of the UK public agrees with the statement “action should be taken by authorities and woodland managers to protect trees from damaging pests and diseases”.
- There were around 2,400 woodland fires in 2012-13, burning around 400 hectares of woodland. 5.1 Populations of wild birds
Indices of wild bird populations in the UK are produced annually by the Department for Environment, Food and Rural Affairs (Defra) in conjunction with the Royal Society for the Protection of Birds (RSPB), the British Trust for Ornithology (BTO) and the Joint Nature Conservation Committee (JNCC), and cover a range of species that are native to the UK.
The index for woodland birds was expanded in 2007 to cover 38 species, of which 12 are generalists and 26 are woodland specialists (those that breed or feed mainly or solely in woodland).
Since the early 1990s, the UK woodland bird index has generally been about 20 per cent below the level of the early 1970s, with the decline predominantly in woodland specialist species (Table 5.1, Figure 5.1).
Causes for the decline in woodland birds may include a lack of diversity in habitats and food sources, loss of habitats and food sources through damage caused by increasing deer populations, and a reduction in some migratory species following pressures in other parts of the world.
Table 5.1 UK populations of wild birds
| Year | Total breeding birds | Farmland birds | Seabirds | Woodland birds | Woodland generalists | Woodland specialists | |------|----------------------|----------------|----------|----------------|---------------------|---------------------| | | index (year 2000 = 100) | | | | | | | 2003 | 98.3 | 99.1 | 98.0 | 97.9 | 97.8 | 97.8 | | 2004 | 97.2 | 98.1 | 92.2 | 94.4 | 95.8 | 93.5 | | 2005 | 99.1 | 96.9 | 94.9 | 99.4 | 102.4 | 97.8 | | 2006 | 99.8 | 96.0 | 96.6 | 94.8 | 97.0 | 93.7 | | 2007 | 98.1 | 89.8 | 95.2 | 97.8 | 104.8 | 94.5 | | 2008 | 99.8 | 91.8 | 90.0 | 100.2 | 104.5 | 98.3 | | 2009 | 94.7 | 89.2 | 93.2 | 88.2 | 97.4 | 84.1 | | 2010 | 97.5 | 86.5 | 93.7 | 99.3 | 101.4 | 98.1 | | 2011 | 95.5 | 86.1 | 87.9 | 101.3 | 98.7 | 102.4 | | 2012 | 95.4 | 86.6 | 85.7 | 101.6 | 101.8 | 101.3 |
Source: British Trust for Ornithology (BTO), Department for Environment, Food and Rural Affairs (Defra), Joint Nature Conservation Committee (JNCC), Royal Society for the Protection of Birds (RSPB).
Notes:
1. Based on data in Wild Bird Populations in the UK statistical release (Defra, October 2013).
Figure 5.1 UK populations of woodland birds
Source: British Trust for Ornithology (BTO), Department for Environment, Food and Rural Affairs (Defra), Joint Nature Conservation Committee (JNCC), Royal Society for the Protection of Birds (RSPB).
Notes:
1. Based on data in Wild Bird Populations in the UK statistical release (Defra, October 2013). 5.2 Woodland vegetation
The Countryside Survey carried out by the Centre for Ecology and Hydrology, reports for a wide range of habitats, including conifer and broadleaved woodland. Results for 2007 show some declines in species richness (Table 5.2). Data for Scotland show significant declines in species richness since 1998, in both broadleaved and conifer woodlands. No other changes in species richness since 1998 are statistically significant, but Wales and GB total show significant declines in species richness for broadleaves over the longer period since 1990.
The Ellenberg N fertility score has declined significantly over the longer period since 1990 for broadleaves in Scotland. There are no other significant changes in Ellenberg fertility and light scores.
Please refer to the Countryside Survey website (see Sources) for an explanation of the vegetation richness and condition scores.
Table 5.2 Vegetation richness and condition scores
| | England | Wales | Scotland | GB | |----------------------|---------|-------|----------|-----| | **Species richness** | | | | | | Broadleaved | | | | | | 1990 | 20.8 | 25.8 | 25.3 | 22.6| | 1998 | 18.9 | 22.8 | 26.9 | 21.3| | 2007 | 20.1 | 21.6 | 22.1 | 20.9| | Conifer | | | | | | 1990 | 16.0 | 12.2 | 14.2 | 14.5| | 1998 | 14.2 | 15.7 | 15.6 | 15.3| | 2007 | 14.9 | 13.9 | 13.7 | 14.1| | **Ellenberg light score** | | | | | | Broadleaved | | | | | | 1990 | 6.0 | 6.4 | 6.3 | 6.2 | | 1998 | 5.9 | 6.3 | 6.4 | 6.1 | | 2007 | 5.9 | 6.3 | 6.4 | 6.1 | | Conifer | | | | | | 1990 | 5.9 | 6.1 | 6.4 | 6.2 | | 1998 | 5.8 | 6.2 | 6.4 | 6.2 | | 2007 | 5.8 | 6.1 | 6.4 | 6.2 | | **Ellenberg N fertility score** | | | | | | Broadleaved | | | | | | 1990 | 5.5 | 4.5 | 4.5 | 5.1 | | 1998 | 5.5 | 4.6 | 4.3 | 5.1 | | 2007 | 5.6 | 4.6 | 4.2 | 5.1 | | Conifer | | | | | | 1990 | 4.7 | 3.6 | 3.4 | 3.8 | | 1998 | 4.7 | 3.7 | 3.4 | 3.9 | | 2007 | 4.7 | 3.8 | 3.3 | 3.8 |
Source: Countryside Survey data (C) NERC - Centre for Ecology & Hydrology.
Notes:
1. Higher scores indicate more species, and higher levels of light and fertility.
These figures are outside the scope of National Statistics. 5.3 Public Opinion of Forestry - tree health
The Forestry Commission has conducted similar surveys of public attitudes to forestry and forestry-related issues every two years since 1995. The most recent surveys were conducted in 2013 (with separate surveys in Scotland, Wales, and across the UK as a whole) and in 2014 (in Northern Ireland). The full results are available within the 2013 and 2014 Public Opinion of Forestry reports available on our website at www.forestry.gov.uk/forestry/infd-5zyl9w.
Questions were asked in the 2013 and 2014 surveys, for the first time, to gauge the public's views on tree health issues.
The highest level of agreement was seen with the statement "action should be taken by authorities and woodland managers to protect trees from damaging pests and diseases", with 80% of UK respondents in 2013 agreeing (agree or strongly agree) (Figure 5.2). This compares with only 22% agreeing with the statement "there is very little that anyone can do to prevent the spread of damaging tree pests and diseases".
**Figure 5.2 Public opinion on tree health**
Source: UK Public Opinion of Forestry Survey 2013.
Base: 2,000 UK respondents.
These figures are outside the scope of National Statistics. 5.4 Woodland Fires
The Department for Communities and Local Government produces estimates of the number and area of wildfires each year, using data recorded by Fire and Rescue Services using the Incident Reporting System. By analysing the wildfire data with the National Forest Inventory woodland map, it has been possible to produce estimates of fires that occur within woodlands in Great Britain.
Table 5.3a shows the number of woodland fires in 2010-11 to 2012-13. There has been some fluctuation in the number of woodland fires in Great Britain over this period, with a high of almost 9 thousand fires in 2011-12 and a low of around 2,400 in 2012-13. Most fires occurred in England.
The total number of woodland fires in Great Britain in 2012-13 (around 2,400) represents 2% of the total of around 119,700 outdoor fires in Great Britain in 2012-13 (Fire Statistics: Great Britain April 2012 to March 2013, Department for Communities and Local Government, May 2014).
Table 5.3a Number of woodland fires
| Financial year | England | Wales | Scotland | GB | |----------------|---------|-------|----------|----| | 2010-11 | 5 993 | 612 | 1 166 | 7 771 | | 2011-12 | 7 332 | 610 | 1 050 | 8 992 | | 2012-13 | 1 786 | 174 | 479 | 2 439 |
Source: Incident Recording System (Department for Communities and Local Government), National Forest Inventory
Table 5.3b shows the area covered by woodland fires between 2010-11 and 2012-13. There was a peak of over 8,800 hectares burnt in 2011-12, with the vast majority of this area occurring in Scotland.
Around 400 hectares of woodland in Great Britain were burnt in 2012-13.
Table 5.3b Area of woodland fires
| Financial year | England | Wales | Scotland | GB hectares | |----------------|---------|-------|----------|-------------| | 2010-11 | 980 | 166 | 127 | 1 274 | | 2011-12 | 464 | 417 | 7 966 | 8 847 | | 2012-13 | 47 | 107 | 268 | 422 |
Source: Incident Recording System (Department for Communities and Local Government), National Forest Inventory 6 Recreation
Introduction
This chapter contains statistics on:
- the number and profile of visits to all woodlands from household surveys;
- the number and profile of visits to Forestry Commission/ Natural Resources Wales/ Forest Service woodlands from on-site surveys and administrative sources; and
- public access to woodland.
Geographical coverage for recreation statistics varies. Estimates are presented at country level and, where possible, UK or GB totals are included. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Most of the statistics presented in this chapter have been previously released by other organisations. The latest year figures for day visitors to Forest Service sites in Northern Ireland and for Woods for People are published for the first time in this release. Figures for earlier years have not been revised from those previously published. For further details on revisions, see the Recreation section of the Sources chapter.
Further information on the advantages and disadvantages of household surveys and of on-site surveys is provided in the Recreation section of the Sources chapter.
A copy of all recreation tables is available to download as an Excel spreadsheet from the Tables for Download page.
Key findings
The main findings are:
- There were an estimated 357 million visits to woodland in England in 2012-13. Walking with a dog was the most commonly reported activity, undertaken on around two thirds of visits in England. (Monitor of Engagement with the Natural Environment 2012-13)
- There were an estimated 90 million visits to woodland in Scotland in 2013. 63% of the Scottish population had visited woodland in the previous 12 months. (Scotland's People and Nature Survey 2013)
- There were an estimated 86 million visits to woodland in Wales in 2011. Walking was the main activity undertaken on around two thirds of visits in Wales. (Welsh Outdoor Recreation Survey 2011)
- Around two thirds of the UK population have visited woodland in the last few years. (UK Public Opinion of Forestry Survey 2013).
- Around 4.3 million visits are made annually to Welsh Government woodlands in Wales and around 9.1 million visits are made annually to Forestry Commission Scotland woodlands. (All Forests Surveys)
- Around 364 thousand people visited Forest Service sites where a charge is made in Northern Ireland in 2013-14.
- Around one half (50%) of the UK woodland area was estimated to be publicly accessible in 2013. (Woods for People) 6.1 Visits to woodland - household surveys
The information shown below in Table 6.1 has been obtained from the following general population household surveys.
- UK Day Visits Surveys (1994, 1996, 1998)
- GB Day Visits Survey (2002/3)
- Scottish Recreation Survey (2004 to 2012)
- England Leisure Visits Survey (2005)
- Welsh Outdoor Recreation Survey (2008, 2011)
- Monitor of Engagement with the Natural Environment (England, 2009-10 onwards)
- Scotland’s People and Nature Survey (2013)
It is likely that differences in survey design and methodology have contributed to a considerable proportion of the differences in results between these surveys. The figures in Table 6.1 should not be interpreted as time trends but instead as separate results from each survey. Further information on the differences between surveys is provided in the Recreation section of the Sources chapter.
In common with all sample based surveys, the results from each survey are subject to the effects of chance, depending on the particular survey method used and the sample achieved, thus confidence limits apply to all results from these surveys.
Results from the Monitor of Engagement with the Natural Environment 2012-13 estimate a total of 357 million visits to woodlands in England (Table 6.1). This is not significantly different from the 2011-12 figure.
The Welsh Outdoor Recreation Survey 2011 estimates a total of 86 million visits to woodlands in Wales. This is a statistically significant increase from the estimated total of 64 million in 2008.
Scotland’s People and Nature Survey 2013 reports an estimated total of 90 million visits to woodlands in Scotland. This is a statistically significant increase from the 2012 estimate of 62 million visits from the Scottish Recreation Survey. This increase is partly the result of applying a new population estimate in the calculation of total visits for 2013.
Table 6.1 Number of visits to woodland
| Year | England | Wales | Scotland | GB million visits | |------|---------|-------|----------|------------------| | 1994 | 273 | 12 | 18 | 303 | | 1996 | 308 | 11 | 26 | 346 | | 1998 | 321 | 11 | 22 | 355 | | 2002 | 222 | 12 | 18 | 252 | | 2004 | .. | .. | 70 | .. | | 2005 | 170 | .. | 62 | .. | | 2006 | .. | .. | 76 | .. | | 2007 | .. | .. | 72 | .. | | 2008 | .. | 64 | 62 | .. | | 2009 | 317 | .. | 57 | .. | | 2010 | 326 | .. | 63 | .. | | 2011 | 358 | 86 | 65 | .. | | 2012 | 357 | .. | 62 | .. | | 2013 | .. | .. | 90 | .. | Sources:
1994, 1996, 1998: UK Day Visit Surveys, carried out by National Centre for Social Research (not available online);
2002: GB Day Visits Survey 2002-03, carried out by TNS Travel & Tourism;
England 2005: England Leisure Visits Survey (ELVS), carried out by Research International;
England 2009 on: Monitor of Engagement with the Natural Environment (MENE), carried out by TNS;
Wales 2008, 2011: Welsh Outdoor Recreation Survey carried out by IPSOS-MORI (2008) and by TNS (2011);
Scotland 2004 - 2012: Scottish Recreation Survey (ScRS), carried out by TNS;
Scotland 2013: Scotland's People and Nature Survey (SPANs), carried out by TNS.
Notes:
1. The UK and GB Day Visits Surveys collected data about day trips from home, for all countries of GB. The 1994, 1996 and 1998 surveys covered calendar years; the 2002-03 survey covered a 12-month period starting in March 2002.
2. ELVS and MENE covered trips taken in England, including those from holiday bases, by respondents living in England. ELVS ran for 12 months from February 2005. MENE results relate to 12 month periods from March to February.
3. The Welsh Outdoor Recreation Survey totals shown are for trips with woodland as the main destination.
4. The Scottish Recreation Survey ran from July 2003 until December 2012. It was replaced by Scotland's People and Nature Survey that ran from March 2013 to February 2014. Both surveys covered visits to the outdoors for leisure and recreation in Scotland by people living in Scotland. The total shown is for all trips that included a visit to woodland.
5. In each survey, visits to overseas destinations are excluded.
.. Denotes data not available.
These figures are outside the scope of National Statistics 6.1.1 England
Household surveys in England
In March 2009 fieldwork commenced on the Monitor of Engagement with the Natural Environment (MENE) survey, which includes collecting information on visits to the outdoors in England. The survey is now expected to run for 6 years. Further information on the survey, including copies of annual reports and online data viewers to access more detailed results, is available from the Natural England website at www.naturalengland.org.uk/ourwork/research/mene.aspx
Table 6.2 shows the main characteristics of visits to woodlands. Around two thirds of visits to woodland involved walking with a dog and around one fifth involved other walking. Walking was the main mode of transport for around two thirds of visits to woodland. Around three fifths of visits to woodland were within 2 miles.
Table 6.2 Woodland visit characteristics(^1) - England 2009-10 to 2012-13
| Activities on trip (multi response) | 2009-10 | 2010-11 | 2011-12 | 2012-13 | |------------------------------------|---------|---------|---------|---------| | Walking with a dog | 66 | 68 | 70 | 67 | | Other walking | 21 | 21 | 21 | 21 | | Wildlife watching | 6 | 5 | 5 | 5 | | Playing with children | 6 | 5 | 5 | 4 | | Eat/ drink out | 4 | 4 | 4 | 3 | | Visiting an attraction | 3 | 3 | 2 | 2 | | Off road cycling or mountain biking| 2 | 2 | 2 | 2 | | Road cycling | 2 | 2 | 2 | 3 |
| Main mode of transport | | | | | |------------------------------------|---------|---------|---------|---------| | On foot | 61 | 62 | 65 | 65 | | Car/ van | 35 | 34 | 32 | 31 | | Bicycle | 2 | 2 | 2 | 3 |
| Distance travelled (one way) | | | | | |------------------------------------|---------|---------|---------|---------| | Less than 1 mile | 38 | 36 | 30 | 31 | | 1 to 2 miles | 25 | 27 | 32 | 29 | | 3 to 5 miles | 19 | 19 | 22 | 23 | | 6 to 10 miles | 7 | 8 | 7 | 8 | | Over 10 miles | 11 | 10 | 9 | 9 |
| Duration of visit (round trip) | | | | | |------------------------------------|---------|---------|---------|---------| | Up to 1 hour | 26 | 23 | 28 | .. | | 1 - less than 2 hours | 42 | 44 | 41 | .. | | 2 - less than 3 hours | 15 | 16 | 15 | .. | | 3 hours or more | 17 | 17 | 16 | .. |
Source: Monitor of Engagement with the Natural Environment (MENE), carried out by TNS, for Natural England, Department for Environment, Food & Rural Affairs (Defra) and Forestry Commission.
Notes:
1. All trips that included a visit to woodland.
.. Denotes data not available. These figures are outside the scope of National Statistics 6.1.2 Scotland
Household surveys in Scotland
Scotland's People and Nature Survey (SPANS), which measures and collects details about the Scottish adult population's participation in outdoor recreation in Scotland, ran from March 2013 until February 2014, with 1,000 adults interviewed in their home each month. The survey, which replaced the previous Scottish Recreation Survey (ScRS), is expected to run every 3 years.
Further information on SPANS and the ScRS, including copies of annual reports and online data viewers to access more detailed results, is available from the Scottish Natural Heritage website at www.snh.gov.uk/land-and-sea/managing-recreation-and-access/increasing-participation/measuring-participation/
Table 6.3 shows the frequency of visits to woodland by the Scottish adult population in the previous 12 months.
63% of respondents had visited woodland at least once in the previous year. This compares with results from the Scotland Public Opinion of Forestry Survey (table 6.5), showing that 76% of respondents to the 2013 survey had visited woodland in the last few years.
Around one third (34%) of respondents had visited woodland at least once a month in the previous 12 months.
Table 6.3 Frequency of visits to woodland(^1) - Scotland
| Frequency | 2013-14 per cent of respondents | |----------------------------|---------------------------------| | At least once a week | 18 | | Once or twice a month | 16 | | Once every 2-3 months | 13 | | Once or twice | 16 | | Never | 37 | | **Total** | **100** |
Source: Scotland's People and Nature Survey, carried out by TNS, for Scottish Natural Heritage, Forestry Commission Scotland, National Park authorities and Greenspace Scotland.
Base: 6,042 respondents.
Note:
1. All trips that include a visit to woodland.
These figures are outside the scope of National Statistics. 6.1.3 Wales
Household surveys in Wales
Countryside Council for Wales (CCW) and Forestry Commission Wales (FCW) [both part of Natural Resources Wales from 1 April 2013] commissioned a Welsh Outdoor Recreation Survey (WORS) in 2008 and 2011. The survey provides data on Welsh residents' participation in informal outdoor activities and visits to the outdoors, including woodland. Further information on the survey, including copies of reports and data tables, is available at www.forestry.gov.uk/forestry/infd-8WAKt3
Table 6.4 shows the main characteristics of recreation visits where the main destination of visit was woodland, from the Welsh Outdoor Recreation Surveys for 2008 and 2011. Walking was reported as the main activity in around two thirds of visits to woodland. Car or van was the main mode of transport for around three fifths of visits to woodland. Around one half of visits to woodland were within 1 mile and around two fifths were for less than two hours. Respondents were accompanied by a dog in around one half of visits to woodland in 2011.
Table 6.4 Woodland visit characteristics1- Wales, 2008, 2011
| Woodland visit characteristics | 2008 | 2011 | |-------------------------------|------|------| | **Main activity during visit** | | | | Walking | 68 | 68 | | Off road cycling, mountain biking | 8 | 7 | | Horse riding | 4 | 4 | | Running | 4 | 7 | | Sightseeing or visiting an attraction | 4 | 3 | | **Main transport** | | | | Car/ van | 47 | 57 | | On foot | 43 | 37 | | Bicycle/ mountain bike | 7 | 1 | | **Distance travelled (one way)** | | | | 0 distance, up to 1 mile | 44 | 48 | | Over 1 mile, up to 5 miles | 26 | 30 | | Over 5 miles, up to 20 miles | 18 | 14 | | Over 20 miles | 12 | 8 | | **Duration of visit (round trip)** | | | | Up to 1 hour | 10 | 8 | | Over 1 hour, up to 2 hours | 29 | 34 | | Over 2 hours, up to 3 hours | 25 | 21 | | 3 hours or more | 36 | 37 | | **Accompanied by a dog** | 60 | 53 |
Source: Welsh Outdoor Recreation Survey 2008, carried out by Ipsos-MORI, and Welsh Outdoor Recreation Survey 2011, carried out by TNS, for Countryside Council for Wales (CCW) and Forestry Commission Wales.
Notes:
1. Visits where the main destination was woodland.
These figures are outside the scope of National Statistics 6.1.4 Public Opinion of Forestry Survey - woodland visitors
The Public Opinion of Forestry Survey is carried out every two years and obtains people's attitudes to forestry and forestry-related issues, including visits to woodland. Copies of reports and detailed data tables are available at www.forestry.gov.uk/forestry/infd-5zy9w
The results shown in Tables 6.5 and 6.6 and Figure 6.1 have been taken from the UK and country reports on the latest surveys in 2013 and 2014, and from surveys in earlier years. The reports also include other recreation-related results, such as whether the woodlands visited were in towns or the countryside and any reasons given by survey respondents for not visiting woodlands.
In the UK 2013 survey, around two thirds (66%) of respondents said that they had visited woodland in the last few years for walks, picnics or other recreation (Table 6.5).
Table 6.5 Woodland visitors
| Year | England | Wales | Scotland | Northern Ireland | UK | |------|---------|-------|----------|-----------------|----| | | per cent of respondents | | | | | | 2003 | 66 | 62 | 64 | 77 | 67 | | 2005 | 65 | 69 | 50 | 67 | 65 | | 2007 | 76 | 79 | 75 | 62 | 77 | | 2009 | 77 | .. | 57 | .. | 77 | | 2010 | .. | .. | .. | 72 | .. | | 2011 | 68 | 68 | 75 | .. | 67 | | 2013 | 65 | 64 | 76 | .. | 66 | | 2014 | .. | .. | .. | 75 | .. |
Source: UK/GB, Scotland, Wales and Northern Ireland Public Opinion of Forestry Surveys
Base: UK/GB = 4,000 respondents (2003, 2005, 2007), 2,000 respondents (2009, 2011, 2013); Scotland and Wales = 1,000 respondents each; Northern Ireland = 120 respondents (2003), 1,000 respondents (2005, 2007, 2010, 2014).
Notes:
1. Those stating that they had visited woodland in the last few years.
.. Denotes data not available (survey not run that year or question not asked)
These figures are outside the scope of National Statistics
Survey respondents were asked how frequently they had visited during the previous summer and winter. Figure 6.1, which presents aggregated UK results for the 2009 to 2013 surveys, shows that respondents visited much more often during the summer, with around one half of respondents (47%) visiting at least once a month in the summer compared to around one quarter (27%) in the winter.
Figure 6.1 Frequency of visits to woodlands Source: UK Public Opinion of Forestry Surveys, 2009 to 2013.
Base: Average visit frequencies from last three UK surveys: 2,000 respondents per survey.
These figures are outside the scope of National Statistics. In the UK 2013 Public Opinion of Forestry survey, around three quarters (75%) of respondents aged 35 to 54 said that they had visited woodland in the last few years for walks, picnics or other recreation (Table 6.6). This compares with around three fifths (62%) of respondents aged 16 to 34 and three fifths (60%) of respondents aged 55 or over.
Table 6.6 Woodland visitors(^1) by age group
| Year | Aged 16 to 34 | Aged 35 to 54 | Aged 55 and over | Total per cent of respondents | |------|---------------|---------------|------------------|------------------------------| | 1999 | 73 | 74 | 55 | 67 | | 2001 | 75 | 77 | 63 | 72 | | 2003 | 71 | 72 | 60 | 67 | | 2005 | 66 | 74 | 56 | 65 | | 2007 | 79 | 82 | 69 | 77 | | 2009 | 78 | 84 | 69 | 77 | | 2011 | 65 | 74 | 63 | 67 | | 2013 | 62 | 75 | 60 | 66 |
Source: UK and GB Public Opinion of Forestry Surveys, 1999 to 2013.
Base: 2,000 respondents (1999, 2001, 2009, 2011, 2013); 4,000 respondents (2003, 2005, 2007).
Notes:
1. Those stating they had visited woodland in the last few years.
These figures are outside the scope of National Statistics. 6.2 Visits to woodland - on-site surveys
The previous section provided information on visits to all woodlands (regardless of ownership), based on data from household surveys. This section provides information on visits to Forestry Commission/ Natural Resources Wales/ Forest Service woodland only, based on data from on-site surveys and administrative sources.
Until 2002, a visitor monitoring programme (not National Statistics) was carried out at selected Forestry Commission woodland sites in England, Scotland and Wales. Year-on-year changes in visitor numbers were estimated by the "Trends Index" which used data from traffic counters and other counters. Information about visitors and their views on facilities were collected by on-site visitor surveys.
In 2002 and 2003, the Forestry Commission developed new visitor monitoring systems to replace the existing national visitor monitoring programme. The "All Forests Visitor Monitoring Survey" provides more accurate estimates of the number of visits to a wider range of Forestry Commission woodland, while continuing to gather information on the profile of visitors. Further information, including reports, on the All Forests Monitoring Surveys is available at www.forestry.gov.uk/forestry/infd-5wcmr4
In addition, an on-site survey methodology to measure visitor's "Quality of Experience" at selected sites was adopted in England in 2004 and in Wales in 2006. Copies of reports from the Quality of Experience surveys undertaken are available at www.forestry.gov.uk/forestry/infd-5wwjpt
Although neither of these methods have been used in Northern Ireland, the Forest Service do collect information on the total number of paying visitors. 6.2.1 Wales All Forests Survey
On-site surveys - Wales All Forests survey
The Wales All Forests Survey was undertaken over a one year period. Surveying took place from January 2004 to January 2005 with over 1,200 hours of fieldwork undertaken during 285 days. During this period, 765 face to face interviews were conducted. The study estimated that around 4.3 million visits are made annually to Welsh Government (WG) woodland in Wales.
At a national level, the surveyed sites are representative of the range of facilities and activities available in WG woodland, but this is not always the case at a district level. Approximately one fifth of each district’s forests were included in the survey.
Table 6.7 provides a summary of the key results obtained from the Wales All Forests survey. Around four fifths of visitors to Welsh Government woodland were on a day trip from home. Walking (with or without a dog) was the main activity undertaken by around three quarters of visitors. Around four fifths travelled to the site by car or van and around one third travelled more than 15 miles to get to the site. Most visitors were on short trips, with over one half spending one hour or less in the forest. Over one half of respondents visited the site at least monthly. Around one quarter considered the forest and its facilities to be the only reason for visiting the area and a further two fifths reported that it was very important in their decision to visit. Over one third of respondents visited the site alone.
Table 6.7 Woodland visit characteristics - Wales All Forests Survey
| Woodland visit characteristics | 2004 per cent of respondents | |-------------------------------|-----------------------------| | **Type of trip** | | | Day trip | 81 | | Overnight trip | 19 | | **Main activity during visit**| | | Dog walking | 40 | | Other walking | 32 | | Cycling | 12 | | **Main transport** | | | Car / van | 81 | | Walked | 12 | | Cycled | 3 | | **Distance travelled (one-way)**| | | Less than 6 miles | 46 | | 6 to 15 miles | 22 | | 16 to 25 miles | 13 | | Over 25 miles | 19 | | **Duration of visit (time spent in forest)**| | | Up to 1 hour | 55 | | Over 1 hour, up to 2 hours | 27 | | Over 2 hours, up to 3 hours | 8 | | Over 3 hours | 10 | | **Frequency of visit to site of interview**| | | More than once a day | 6 | | Once a day | 10 | | Frequency of Visits | Count | |--------------------|-------| | 1 to 3 times per week | 23 | | 1 to 3 times per month | 16 | | 1 to 3 times per year | 19 | | Less often | 7 | | First ever visit | 19 |
**Importance of forest and facilities in decision to visit area**
| Importance Level | Count | |------------------|-------| | Only reason for coming | 26 | | Very important | 39 | | Quite important | 17 |
**Group composition**
| Group Type | Count | |------------|-------| | Alone | 37 | | Couples / groups of two | 42 | | Groups of three or more | 20 |
Source: Wales All Forests Survey 2004, carried out by TNS.
These figures are outside the scope of National Statistics. 6.2.2 Scotland All Forests Survey
On site surveys - Scotland All Forests surveys
All Forests surveying in Scotland has been undertaken on two occasions. The first All Forests Survey in Scotland was carried out across a three-year period from June 2004 to June 2007, with over 5,000 hours of fieldwork undertaken over 1,158 days, achieving almost 2,700 face to face interviews. The study estimated that around 8.2 million visits are made annually to Forestry Commission Scotland (FCS) woodland. An estimated 150-200 thousand visits to events in forests and around 300 thousand visits during the hours of darkness (when fieldwork was not undertaken) were also made, giving an overall total of around 8.7 million visits per year.
The second All Forests Survey was carried out from November 2012 to October 2013. The survey made greater use of data from automatic counters, but also achieved over 400 days of fieldwork and 1,970 face-to-face interviews.
The 2012-13 survey estimated an annual total of 9.1 million visits (including visits to events and in the hours of darkness) to Forestry Commission Scotland (FCS) woodland. This represents a 5% increase on the estimated overall total of 8.7 million visits from the 2004-2007 survey.
Table 6.8 provides a summary of the key characteristics and results obtained from the Scotland All Forests surveys and appears to show some change in visit characteristics over time, with a general trend towards longer, more distant and less frequent visits. From the 2012-13 survey, around two thirds of visitors to Forestry Commission Scotland woodlands were on a day trip from home. Walking (with or without a dog) was the main activity undertaken by around three quarters of visitors. Over four fifths travelled to the site by car or van and around one third travelled more than 15 miles to get to the site. Around one third of visitors were on short trips, spending one hour or less in the forest. Around one half of respondents visited the site at least monthly.
| Woodland visit characteristics | 2004-2007 | 2012-13 | |-------------------------------|-----------|---------| | **Type of trip** | | | | Day trip | 82 | 67 | | Overnight trip | 18 | 33 | | **Main activity during visit**| | | | Dog walking | 50 | 43 | | Other walking | 29 | 29 | | Cycling | 11 | 8 | | **Main transport** | | | | Car / van | 78 | 85 | | Walked | 18 | 11 | | Cycled | 2 | 2 | | **Distance travelled (one way)**| | | | Less than 6 miles | 58 | 43 | | 6 to 15 miles | 19 | 25 | | 16 to 25 miles | 10 | 12 | | Over 25 miles | 12 | 20 | | **Duration of visit (time spent in forest)** | | | | Up to 1 hour | 59 | 35 | | Over 1 hour, up to 2 hours | 24 | 36 | | Over 2 hours, up to 3 hours | 10 | 16 | | Frequency of visit to site of interview | 7 | 13 | |----------------------------------------|---|----| | More than once a day | 7 | 3 | | Once a day | 13| 9 | | 1 to 3 times per week | 25| 22 | | 1 to 3 times per month | 17| 14 | | 1 to 3 times per year | 17| 18 | | Less often | 5 | 7 | | First ever visit | 16| 27 |
Source: Scotland All Forests Survey 2004-2007 and All Forests Survey 2, carried out by TNS.
These figures are outside the scope of National Statistics 6.2.3 Quality of Experience
On-site surveys - Quality of Experience
An on-site survey methodology was developed early in 2003 to measure visitors' "Quality of Experience". Pilot surveys were conducted in 2003 at Afan Argoed and the New Forest, prior to adoption of the methodology in England in 2003 and in Wales in 2006, with around three to five surveys carried out per year at selected sites between 2003 and 2009 and up to 20 surveys carried out between 2010 and 2012. The current programme, running from 2013 to 2015, is covering 7 sites in England and 7 sites in Wales each year. Reports from these surveys are published on the Forestry Commission website at www.forestry.gov.uk/forestry/infd-5wwjpt when results become available.
These studies were designed to investigate what constitutes quality of experience for visitors, addressing related concepts such as motivations, expectations and the needs of different groups.
For the 2003 to 2009 surveys, visitors who used a particular site at least once a month were interviewed and asked to rate both the levels of importance of different aspects of woodland and forest visits and their satisfaction with these aspects. Respondents who visited less often were interviewed for a shorter period before being given a questionnaire to take away and return regarding their levels of satisfaction.
For the 2010 to 2013 surveys, all visitors were surveyed on site.
Table 6.9 lists the sites where Quality of Experience surveys have taken place.
| Year | England | Wales | |------|---------|-------| | 2003 | Grizedale, Westonbirt, Whiston | - | | 2004 | Dalby, Thetford | - | | 2005 | Alice Holt, Cannock Chase, Forest of Dean | - | | 2006 | Sherwood Pines, Delamere, Hamsterley | Garwnant, Nant yr Arian | | 2007 | Fineshade, Rosliston, Whinlatter | Coed y Brenin | | 2008 | Bedgebury, Thetford, Wyre | Cwmcarn | | 2009 | Kielder, Dalby, Haldon | - | | 2010 | Hamsterley, Whinlatter, Grizedale, Cannock Chase, Sherwood Pines, Salcey, Wendover, Alice Holt, Westonbirt, Beechenhurst | Coed y Brenin, Newborough, Garwnant, Gwydyr, Whitestone, Hafren, Moel Famau, Gethin, Llan Wynno, Cwm Saebran | | 2011 | Bedgebury, Delamere, Fineshade Top Lodge, High Lodge Thetford, Wyre | Cwmcarn, Nant yr arian, Alwen, Brechfa, Clocaenog, Crychan, Dyfnant | | 2012 | Dalby, Haldon, Kielder, Rosliston and Hicks Lodge | Abergynolwyn, Craig y Dinas, Cwm Rhaeadr, Forest Fawr, Gwaun Hepste, Hafod, Llangwyfan, Nercwys, Tan y Coed, The Arch, Warren | | 2013 | Alice Holt, Cannock Chase, Cardinham Woods, Grizedale, Sherwood Pines, Wendover Woods, Westonbirt | Afan, Brechfa, Cwmcarn Forest Drive¹, Gwydyr, Hafren, Moel Famau, Newborough, Whitestone |
Source: Forestry Commission/ Natural Resources Wales Quality of Experience surveys. 2003-2009 carried out by TNS Travel & Tourism, 2010-2012 carried out by BMG Research, 2013 carried out by Beaufort Research.
Notes:
1. The survey at Cwmcarn Forest Drive was carried out in addition to the main programme of 14 sites in 2013.
These figures are outside the scope of National Statistics. In addition, surveys have been conducted around community forests in Thames Chase (2004), South Yorkshire (2005), North West England (2006), South Wales (2006), South West England (2007) and North & Mid Wales (2007). These surveys examine the recreation activities undertaken by members of the local community, levels of recreational use, awareness of local open spaces, and the motivations and barriers to using Forestry Commission sites for recreation.
In 2011, 3 surveys of residents were undertaken in the areas surrounding three low usage sites, to obtain information on how greater usage of the sites could be encouraged. 6.2.4 Northern Ireland Forest Service day visitors
Day visitors to Northern Ireland Forest Service sites
Information on visitors to Forest Service sites in Northern Ireland is provided by the Forest Service and relates only to sites where an admission charge is made.
In Northern Ireland in 2013-14, 364 thousand people visited those Forest Service sites where an admission charge was made (Table 6.10). This represented a 7% increase from the previous year, but remains below the level of earlier years.
Table 6.10 Day visitors to Northern Ireland Forest Service sites
| Year | Visitors to Forest Service sites (thousands) | |----------|---------------------------------------------| | 2004-05 | 508 | | 2005-06 | 433 | | 2006-07 | 410 | | 2007-08 | 518 | | 2008-09 | 451 | | 2009-10 | 473 | | 2010-11 | 468 | | 2011-12 | 430 | | 2012-13 | 340 | | 2013-14 | 364 |
Source: Forest Service
Notes:
1. Number of people visiting sites where an admission charge was made, excluding campers.
These figures are outside the scope of National Statistics 6.3 Public access to woodland
The Woods for People project (led by the Woodland Trust) has created a UK-wide provisional inventory of accessible woodland.
As a result of the information gathered on accessible woodland, the Woodland Trust has undertaken a major analysis of woodland access provision and deficit across the UK. This project, named Space for People, has used the accessible woodland data from the Woods for People project to develop targets for increasing woodland access.
Further information on the Woodland Trust is available at www.woodlandtrust.org.uk 6.3.1 Woods for People
Woods for People
The Woods for People project has created a UK-wide provisional inventory of accessible woodland.
At present, it does not include woodlands where the only access is on public rights of way. For Scotland, the Land Reform Act gives a right of responsible access to almost all land, but the dataset only includes woods that encourage access. Table 6.11 shows the proportions of woodland with public access (permissive) as identified by the Woods for People database.
The changes between versions of the dataset (2004 to 2013) are the result of several factors, including the development of the database between versions as areas are updated by land owners; one significant change was a reduction in England and Wales as a result of a fall in the amount of Walkers Welcome data. More recently, the exclusion of areas where access is constrained in England has led to a decrease in accessible woodland in 2011.
Around one half (50%) of the UK woodland area was identified as being publicly accessible in 2013 (Table 6.11).
Table 6.11 Woods for People: Publicly accessible woodland
| Year | England | Wales | Scotland | Northern Ireland | UK per cent of all woodland area¹ | |------|---------|-------|----------|-----------------|----------------------------------| | 2004² | 37 | 49 | 57 | 66 | 49 | | 2006 | 32 | 39 | 58 | 64 | 46 | | 2007 | 34 | 40 | 58 | 64 | 47 | | 2008 | 34 | 40 | 58 | 64 | 48 | | 2009 | 37 | 42 | 59 | 64 | 49 | | 2010 | 39 | 42 | 59 | 64 | 50 | | 2011 | 35 | 42 | 58 | 65 | 48 | | 2012 | 36 | 43 | 58 | 66 | 49 | | 2013 | 38 | 43 | 58 | 66 | 50 |
Source: Woods for People (Woodland Trust)
Notes:
1. The total woodland area estimated in 2004 for the Woods for People project, not updated for later reports. For Northern Ireland, this is substantially different from the area shown elsewhere in Forestry Statistics for 2004 to 2011.
2. The 2004 data are from version 1 of the Woods for People project, re-analysed in September 2007 to count only woodland areas. The higher results originally presented in the 2004 Woodland Trust Spaces for People report were based in part on total land areas, rather than woodland areas.
3. Data for 2006 to 2013 are from versions 3 to 10 of the Woods for People dataset, based on woodland areas.
These figures are outside the scope of National Statistics 6.3.2 Space for People
Space for People
As a result of the information gathered on accessible woodland, the Woodland Trust has undertaken a major analysis of woodland access provision and deficit across the UK. This project, named "Space for People", has used the accessible woodland data from the Woods for People project to develop targets for increasing woodland access.
The Space for People analysis proposes a Woodland Access Standard for people to have access to a woodland of an adequate size near to where they live. The report estimates the proportion of the population with access to nearby woods, the extent to which this could be increased by improving access and the amount of new woodland that would have to be created to give the rest of the population this level of access. Two full reports have been published so far, giving data for 2004 and 2009; these are available at www.woodlandtrust.org.uk.
The most recent data suggests that around one sixth of the UK population live within 500 metres of a wood of 2 hectares or more and that almost two thirds live within 4 kilometres of a larger wood (of 20 hectares or more) (Table 6.12).
Table 6.12 Space for People: Publicly accessible woodland
| % of population with access to: | England | Wales | Scotland | Northern Ireland | UK per cent | |---------------------------------|---------|-------|----------|-----------------|-------------| | 2 ha or more wood within 500 metres | | | | | | | 2004 | 10.2 | 15.7 | 15.3 | 7.5 | 10.8 | | 2009 | 14.5 | 17.4 | 27.8 | 7.2 | 15.6 | | 20 ha or more wood within 4 km | | | | | | | 2004 | 55.2 | 72.3 | 54.4 | 50.3 | 55.8 | | 2009 | 63.0 | 76.7 | 83.0 | 40.2 | 64.8 |
Source: Space for People summary report (Woodland Trust, 2010).
These figures are outside the scope of National Statistics. 7 Employment & Businesses
Introduction
This chapter contains information on:
- employment in forestry and wood processing;
- health & safety; and
- numbers of businesses.
All of the statistics presented in this chapter relate to UK totals. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Most of the statistics presented in this chapter have been previously released. Some of the figures on employment (Tables 7.1 and 7.2), on health and safety (Table 7.3 and Figure 7.1) and on establishments in primary wood processing industries (Table 7.4) have been revised since Forestry Statistics 2013. For further details on revisions, see the Employment section of the Sources chapter.
A copy of all Employment & Businesses tables is available to download from the Tables for Download page.
Key findings
The main findings are:
- The Annual Business Survey reported average employment in 2012 of 15 thousand in forestry and 26 thousand in primary wood processing.
- There was estimated to be a total of 7.3 thousand full time equivalent staff employed by primary wood processors in the UK in 2013, a 1% increase on the total for 2012.
- Accident rates in forestry and wood products have tended to decline in recent years, but are still higher than the averages in agriculture and manufacturing respectively.
- There were 247 establishments in the primary wood processing industries in the UK using UK-grown roundwood in 2013. 7.1 Employment: Annual Business Survey (ABS)
The Annual Business Survey (ABS), formerly the Annual Business Inquiry (ABI), carried out by the Office for National Statistics (ONS) includes statistics on employment broken down by Standard Industrial Classification (SIC 2007). In wood processing, SIC 16 (wood products) and SIC 17 (pulp, paper and paper products) have a much wider scope than the data on employment in primary wood processing (Table 7.2), as they include primary processing of imported material and also some secondary processing.
The Annual Business Survey recorded average employment in 2012 of 15 thousand in forestry and 26 thousand in primary wood processing (sawmilling, panels and pulp & paper) (Table 7.1).
Table 7.1 Employment in forestry and wood processing², 2008-2012
| Standard Industrial Classification (SIC)¹ | 2008 | 2009 | 2010 | 2011 | 2012 | |-----------------------------------------|------|------|------|------|------| | Forestry | 12 | 14 | 14 | 14 | 15 | | Wood products | | | | | | | Sawmilling | 11 | 9 | 9 | 8 | 8 | | Panels | 5 | 4 | 5 | 4 | 5 | | Secondary products | 63 | 50 | 62 | 46 | 53 | | Total | 79 | 63 | 76 | 58 | 66 | | Pulp, paper & paper products | | | | | | | Pulp & paper | 13 | 13 | 13 | 13 | 13 | | Articles of paper & paperboard | 51 | 51 | 41 | 45 | 45 | | Total | 64 | 64 | 54 | 58 | 58 | | Total wood processing | 143 | 127 | 130 | 116 | 124 | | Total primary wood processing | 29 | 26 | 27 | 25 | 26 |
Source: Annual Business Survey - average employment in year (Office for National Statistics, June 2014)
Notes:
1. Categories are based on the UK Standard Industrial Classification (SIC 2007) categories. Further details on the SIC codes used are provided in the Sources: Employment and businesses page.
2. Excludes other wood-using industries.
3. All pulp and paper figures for 2009 and the breakdowns for 2010 to 2012 have been suppressed in the figures released by ONS. The figures shown here are estimated from 2008 figures. 7.2 Employment in primary wood processing
Information on employment in primary wood processing is obtained annually via the sources used to collect data on UK-grown timber (presented in Chapter 2).
There was estimated to be a total of 7.3 thousand full time equivalent staff employed by primary wood processors in the UK in 2013 (Table 7.2). This represents a 1% increase from the total for 2012, but remains lower than in 2010 and 2011.
Over one half (56%) of the total employment in 2013 worked in sawmills and over one quarter (29%) worked in wood-based panel mills.
Table 7.2 Employment in primary wood processing, 2009-2013
| Year | Sawmills | Pulp & paper | Wood-based panels | Fencing | Total | |------|----------|--------------|-------------------|---------|-------| | | | | | | full-time equivalents | | 2009 | 3 806 | 820 | 2 225 | 405 | 7 256 | | 2010 | 4 108 | 745 | 2 343 | 396 | 7 592 | | 2011 | 4 095 | 725 | 2 376 | 397 | 7 593 | | 2012 | 4 136 | 716 | 2 076 | 370 | 7 298 | | 2013 | 4 140 | 716 | 2 111 | 381 | 7 349 |
Source: industry surveys, industry associations.
Notes:
1. Some businesses operate sawmills and round fencing mills. Employment for such businesses may be recorded under sawmills, round fencing manufacturers or shared between the two categories. 7.3 Health & safety
From April 2012, accidents involving absence from work of at least seven days are required to be reported to the Health & Safety Executive (HSE). Prior to this time, reporting was required for absences of at least three days.
Accident rates in forestry and in wood products have tended to decline in recent years, but are still higher than the averages in agriculture and manufacturing respectively (Table 7.3 and Figure 7.1).
Table 7.3 Accidents to employees in forestry and wood processing2, 2008-09 - 2012-13
| Standard Industrial Classification (SIC)1 | Major Accidents3 | Total Reported | |-----------------------------------------|------------------|----------------| | | Number | Rate/ 1000 employees | Number | Rate/ 1000 employees | | Forestry | | | | | | 2008-09 | 47 | 3.5 | 140 | 10.5 | | 2009-10 | 48 | 4.5 | 137 | 12.9 | | 2010-11 | 43 | 3.3 | 110 | 8.3 | | 2011-12 | 48 | 5.0 | 153 | 16.0 | | 2012-13 provisional | 49 | 4.6 | 120 | 11.2 | | Wood products | | | | | | 2008-09 | 196 | 3.0 | 750 | 11.6 | | 2009-10 | 187 | 3.2 | 688 | 11.7 | | 2010-11 | 178 | 3.3 | 600 | 11.2 | | 2011-12 | 161 | 3.1 | 654 | 12.5 | | 2012-13 provisional | 141 | 2.6 | 490 | 8.9 | | Pulp, paper & paper products | | | | | | 2008-09 | 111 | 1.5 | 522 | 7.0 | | 2009-10 | 103 | 1.7 | 464 | 7.6 | | 2010-11 | 85 | 1.3 | 369 | 5.7 | | 2011-12 | 90 | 1.6 | 393 | 7.0 | | 2012-13 provisional | 75 | 1.4 | 321 | 5.9 |
Source: Health & Safety Executive.
Notes:
1. Categories are based on the UK Standard Industrial Classification (SIC 2007) categories. Further details on the SIC codes used are provided in the Sources: Employment and businesses page.
2. Excludes other wood-using industries.
3. Major accidents include fatal accidents, which averaged around 1 per year in each sector.
4. As a result of a change in reporting requirements, data for 2012-13 is not directly comparable with previous years.
Figure 7.1 Accidents to employees: Total reported accidents per 1000 employees Source: Health & Safety Executive.
Notes:
1. Categories are based on the UK Standard Industrial Classification (SIC 2007) categories. Further details on the SIC codes used are provided in the Sources: Employment and businesses page.
2. As a result of a change in reporting requirements, data for 2012-13 is not directly comparable with previous years. 7.4 Establishments in the primary wood processing industries
Table 7.4 shows the number of primary wood processors, according to the sampling frames used for Forestry Commission surveys of establishments using UK timber.
The figures in Table 7.4 do not correspond with the VAT and PAYE registration information given in Table 7.5. The figures here count establishments (sites) rather than businesses and include those that do not need to register for VAT or PAYE. They also have a different basis for classification, so some businesses that are excluded from Table 7.5 because of their VAT/PAYE classification are included in this table (typically businesses where primary wood processing is a small part of their total activity), and some businesses included in Table 7.5 are excluded here (usually because they do not use UK-grown timber).
The number of establishments in the primary wood processing industries using UK-grown roundwood has reduced from 304 in 2004 to 247 in 2013, a 19% decrease.
Table 7.4 Number of establishments in the primary wood processing industries using UK-grown roundwood
| Year | Sawmills | Pulp & paper mills | Wood-based panel mills | Round fencing manufacturers | Total¹ | |------|----------|--------------------|------------------------|-----------------------------|--------| | 2004 | 224 | 3 | 8 | 69 | 304 | | 2005 | 213 | 3 | 8 | 65 | 289 | | 2006 | 213 | 2 | 8 | 69 | 292 | | 2007 | 205 | 2 | 8 | 75 | 290 | | 2008 | 197 | 2 | 8 | 67 | 274 | | 2009 | 195 | 2 | 8 | 68 | 273 | | 2010 | 189 | 2 | 7 | 65 | 263 | | 2011 | 185 | 2 | 7 | 64 | 258 | | 2012 | 181 | 2 | 7 | 61 | 251 | | 2013 | 177 | 2 | 7 | 61 | 247 |
Source: industry surveys, industry associations
Notes:
1. A single mill may be recorded twice, as a sawmill and a round fencing manufacturer. 7.5 VAT and/or PAYE registered businesses
Table 7.5 shows the number of VAT and/or PAYE registered businesses classified under forestry and primary wood processing. The headings shown potentially include businesses not traditionally regarded as forestry or primary wood processing, and some businesses traditionally included in forestry and primary wood processing are excluded as they are classified to other headings of the Standard Industrial Classification (SIC).
A total of 3,505 forestry businesses, 560 sawmilling businesses, 130 wood-based panel businesses and 240 pulp & paper businesses were registered for VAT and/or PAYE purposes in the UK in 2013.
Table 7.5 Number(^1) of VAT and/or PAYE registered businesses by Standard Industrial Classification (SIC)(^2), 2004-2013
| Year | Forestry | Sawmilling | Panels | Pulp & paper | |------|----------|------------|--------|--------------| | 2004 | 2,585 | 795 | 135 | 280 | | 2005 | 2,580 | 760 | 140 | 280 | | 2006 | 2,585 | 735 | 130 | 275 | | 2007 | 2,645 | 700 | 115 | 260 | | 2008 | 3,020 | 730 | 140 | 310 | | 2009 | 3,100 | 685 | 130 | 270 | | 2010 | 3,095 | 640 | 135 | 255 | | 2011 | 3,170 | 605 | 135 | 250 | | 2012 | 3,375 | 585 | 135 | 255 | | 2013 | 3,505 | 560 | 130 | 240 |
Source: UK Business: Activity, Size and Location (Office for National Statistics, October 2013).
Notes:
1. All figures are rounded by the Office for National Statistics (ONS) to the nearest multiple of 5.
2. Categories are based on the UK Standard Industrial Classification (SIC) categories. 2004-2008 data are based on SIC 2003; 2009-2013 data are based on SIC 2007. Given the changes in classifications, the time series may not be fully consistent. Further details on the SIC codes used are provided in the Sources: Employment and businesses page. 8 Finance & Prices
Introduction
This chapter contains statistics on:
- timber prices;
- financial returns from forestry investment;
- gross value added (GVA);
- Government expenditure on forestry; and
- grant schemes.
Estimates for England, Wales, Scotland and Northern Ireland are included, where possible, in addition to UK or GB totals. Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
Most of the statistics presented in this chapter have been previously released. Some of the figures on prices (Tables 8.1 and 8.2, Figures 8.1 and 8.2), on gross value added (Table 8.3), on funding public forests (Table 8.4) and on grant money paid (Table 8.6, Figure 8.3) have been revised since Forestry Statistics 2013. For further details on revisions, see the Finance & Prices section of the Sources chapter.
A copy of all Finance & Prices tables is available to download as an Excel spreadsheet from the Tables for Download page.
Key findings
The main findings are:
- The Coniferous Standing Sales Price Index for Great Britain was 13.5% higher in real terms in the year to March 2014, compared with the previous year.
- The Softwood Sawlog Price Index was 16.0% higher in real terms in the 6 months to March 2014, compared with the corresponding period of the previous year.
- The Investment Property Databank (IPD) UK Forestry Index shows a total return of 22.2% per annum for the three year period 2011 to 2013, and an annual return of 15.8% for 2013.
- Gross value added (GVA) in primary wood processing (sawmilling, panels and pulp & paper) was £1.63 billion in the UK in 2012. GVA in forestry was £0.31 billion.
- Net expenditure on public forests by the Forestry Commission totalled £40 million in 2013-14. A further £126 million was spent by the Forestry Commission on other activities.
- A total of £73.5 million was paid in grants by the Forestry Commission and Natural Resources Wales in 2013-14. 8.1 Timber prices
Timber Price Indices are based on sales of softwood (conifers) by the Forestry Commission and Natural Resources Wales and are released every 6 months. They cover:
- Sales in England and Scotland by the Forestry Commission; and
- Sales in Wales by the Forestry Commission to 31 March 2013 and by Natural Resources Wales from 1 April 2013.
The Coniferous Standing Sales Price Index monitors changes in the average price received per cubic metre for timber that the Forestry Commission/ Natural Resources Wales sold standing, where the purchaser is responsible for harvesting.
The Softwood Sawlog Price Index monitors changes in the average price received per cubic metre of sawlogs (roundwood with a top diameter of 14 cm or more, destined to be sawn into planks or boards) sold at roadside by the Forestry Commission/ Natural Resources Wales.
Standing timber and sawlogs are distinct markets, and may show different price movements. The data are averages for historic periods, so may be slow to show any turning points.
These indices are used to monitor trends in timber prices and to provide information on the state of the UK timber industry. They are also used by the UK timber industry, alongside other economic indicators, in contract reviews.
There is little other information currently available on wood prices before primary processing and no price index is available for broadleaves. Prices for outputs of primary wood processing are collected by the Office for National Statistics (ONS) in the Producer Price Indices (PPIs), and these are available in the MM22 Business Monitor which gives detailed PPIs monthly.
Table 8.1 presents the coniferous standing sales and sawlog price indices for Great Britain to March 2014.
The coniferous standing sales price index for Great Britain was 13.5% higher in real terms in the year to March 2014, compared with the previous year (Table 8.1). The softwood sawlog price index was 16.0% higher in real terms in the 6 months to March 2014, compared with the corresponding period in the previous year.
Table 8.1 Coniferous standing sales and sawlog price indices(^1) for Great Britain, 2005-2014
| Period ending March | Standing sales(^2) | Sawlogs | |---------------------|---------------------|---------| | | Nominal terms(^3) | Real terms(^4) | Nominal terms(^3) | Real terms(^4) | | | index (period to September 2011 = 100) | | 2005 | 44.8 | 52.8 | 72.3 | 85.2 | | 2006 | 51.6 | 59.7 | 69.1 | 80.0 | | 2007 | 57.2 | 64.4 | 78.1 | 87.7 | | 2008 | 89.6 | 98.4 | 91.5 | 100.3 | | 2009 | 64.0 | 68.3 | 67.5 | 72.0 | | 2010 | 67.5 | 70.2 | 83.3 | 86.2 | | 2011 | 93.5 | 94.7 | 85.7 | 86.8 | | 2012 | 97.5 | 96.6 | 91.7 | 91.0 | | 2013 | 91.3 | 89.4 | 93.7 | 91.3 | | 2014 | 105.5 | 101.5 | 110.3 | 105.9 |
Source: Timber Price Indices: data to March 2014
Notes:
1. The price indices are constructed from information on sales by the Forestry Commission/ Natural Resources Wales only.
2. Until November 2008 the Laspeyres method was used to calculate the standing sales index to take account of the size mix. Since then the Fisher method with 5 year chain linking has been adopted and has superseded the Laspeyres method, following a period of transition. The figures shown here are from the Fisher chain-linked index.
3. Nominal prices are the actual prices at that point in time.
4. Real terms values are obtained by using the GDP deflator to convert to "constant prices" (in this case prices in 2011). This allows trends in timber prices to be tracked without the influence of inflation.
**Figure 8.1 Coniferous standing sales and sawlog price indices(^1,2) in real terms(^3), 1985-2014**
Source: Timber Price Indices: data to March 2014
Notes:
1. The price indices are constructed from information on sales by the Forestry Commission/ Natural Resources Wales only.
2. Until November 2008 the Laspeyres method was used to calculate the standing sales index to take account of the size mix. Since then the Fisher method with 5 year chain linking has been adopted and has superseded the Laspeyres method, following a period of transition. The figures shown here are from the Fisher chain-linked index.
3. Real terms values are obtained by using the GDP deflator to convert to "constant prices" (in this case prices in 2011). This allows trends in timber prices to be tracked without the influence of inflation. 8.2 Financial return from forestry investment
Returns to investors in forestry are made up of sales of timber (standing or felled), sales of other goods and services, increases in the value of the woodland (from annual increment or market factors), and the net income from subsidies (e.g. planting grants) less taxes. The investors' costs are made up of employment costs and other purchases.
Estimates of the overall return from commercial forestry are produced annually in the Investment Property Databank (IPD) UK Forestry Index, available at www.ipd.com/OurProducts/Indices/UnitedKingdom/UKForestry/tabid/1012/Default.aspx. The index is calculated from a sample of around 150 private sector coniferous plantations of predominantly Sitka spruce in mainland Britain. The IPD UK Forestry Index is outside the scope of National Statistics.
The index shows a total return of 22.2% per annum for the three year period 2011 to 2013, and an annual return of 15.8% for 2013 (Table 8.2).
Table 8.2 IPD UK Forestry Index: Returns from forestry, 2004-2013
| Period ending | Index (1992=100) | Annual % return | 3 year return (annual average %) | |---------------|------------------|-----------------|----------------------------------| | 2004 | 116.5 | 9.2 | 1.8 | | 2005 | 133.3 | 14.4 | 8.2 | | 2006 | 160.8 | 20.7 | 14.7 | | 2007 | 211.5 | 31.6 | 22.0 | | 2008 | 226.5 | 7.1 | 19.3 | | 2009 | 251.9 | 11.2 | 16.1 | | 2010 | 304.2 | 20.8 | 12.9 | | 2011 | 404.3 | 32.9 | 21.3 | | 2012 | 479.6 | 18.6 | 24.0 | | 2013 | 555.5 | 15.8 | 22.2 |
Source: IPD UK Forestry Index
These figures are outside the scope of National Statistics
Figure 8.2 IPD UK Forestry Index: Returns from forestry
Source: IPD UK Forestry Index
Note:
1. Data collected for the IPD UK Forestry Index started in 1992
These figures are outside the scope of National Statistics 8.3 Gross value added
Gross value added (GVA) measures the contribution to the economy of each individual producer, industry or sector in the United Kingdom. It is the difference between the value of outputs and the value of intermediate consumption, so mainly comprises employment costs and profits.
The Annual Business Survey (ABS), formerly the Annual Business Inquiry (ABI), carried out by the Office for National Statistics (ONS) includes statistics on gross value added for different industries, classified using the UK Standard Industrial Classification (SIC 2007). The ABI was extended to include forestry from 2000. Further information on the ABS (and ABI) is available from the ONS website at www.ons.gov.uk/ons/guide-method/method-quality/specific/business-and-energy/annual-business-survey/index.html
Table 8.3 shows that, in 2012, GVA in primary wood processing (sawmilling, panels and pulp & paper) was reported to be £1.63 billion and GVA in forestry was £0.31 billion.
| Standard Industrial Classification (SIC) | 2008 | 2009 | 2010 | 2011 | 2012 | |-----------------------------------------|------|------|------|------|------| | Forestry | 438 | 382 | 329 | 416 | 310 | | Wood products | | | | | | | Sawmilling | 443 | 299 | 415 | 435 | 586 | | Panels | 254 | 169 | 327 | 197 | 226 | | Secondary products | 2 114| 1 590| 1 630| 1 822| 1 886| | Total | 2 811| 2 058| 2 372| 2 454| 2 698| | Pulp, paper & paper products | | | | | | | Pulp & paper | 734 | 658 | 628 | 888 | 779 | | Articles of paper & paperboard | 2 026| 2 309| 2 912| 3 160| 3 064| | Total | 2 760| 2 968| 3 541| 4 049| 3 843| | Total wood processing | 5 571| 5 026| 5 913| 6 503| 6 541| | Total primary wood processing | 1 431| 1 126| 1 370| 1 515| 1 626|
Source: Annual Business Survey (Office for National Statistics, June 2014)
Notes:
1. Categories are based on the UK Standard Industrial Classification (SIC 2007) categories. Further details on the SIC codes used are provided in the Sources: Employment and businesses page.
2. The 2010 and 2011 figures for panels have been suppressed in the figures released by ONS, so the figures here cover both panels and the manufacture of assembled parquet floors (SIC 16.22) in 2010 and 2011. Panels accounted for 99% of the total of SIC codes 16.21 (panels) and 16.22 in 2008 and in 2009, and 98% in 2012.
3. Excludes other wood-using industries. 8.4 Government expenditure on public forests
Table 8.4 provides information on net expenditure on public forests by the Forestry Commission in Great Britain. This covers expenditure less income for land that is owned or managed by the Forestry Commission. Other expenditure by the Forestry Commission is covered in Table 8.5.
The Forestry Commission’s functions in Wales transferred to a new organisation, Natural Resources Wales (NRW), on 1 April 2013. Figures for Wales in Tables 8.4 and 8.5 relate to expenditure to 31 March 2013 that was incurred by Forestry Commission Wales. Expenditure in Wales from 1 April 2013 is excluded from the tables.
Net expenditure on public forests by the Forestry Commission in 2013-14 totalled £40 million. This comprised £26 million in Scotland and £15 million in England.
Recreation, conservation & heritage accounted for £63 million of the total expenditure in 2013-14, harvesting & haulage for £35 million and other expenditure on public forests for £90 million.
Timber sales generated a total income of £101 million in 2013-14. Recreation, conservation & heritage accounted for a further £21 million and other income from public forests for £26 million.
| Table 8.4 Funding public forests - net expenditure1,2,3, 2009-10 - 2013-14 | |-----------------|-----------------|-----------------|-----------------|-----------------|-----------------| | | 2009-10 | 2010-11 | 2011-12 | 2012-13 | 2013-14 | | **GB** | | | | | | | Harvesting & haulage | Expenditure | 41.2 | 43.6 | 43.8 | 43.5 | 35.1 | | Recreation, etc4 | Expenditure | 63.4 | 67.6 | 72.6 | 66.4 | 63.3 | | Other | Expenditure | 76.9 | 89.9 | 92.3 | 97.9 | 89.7 | | Timber | Income | -77.4 | -91.6 | -105.7 | -101.9 | -100.7 | | Recreation, etc4 | Income | -17.6 | -19.8 | -21.8 | -20.0 | -21.3 | | Other | Income | -24.4 | -27.1 | -25.2 | -29.9 | -25.8 | | **Net expenditure** | | 62.1 | 62.6 | 56.0 | 56.0 | 40.3 | | **England** | | | | | | | Harvesting & haulage | Expenditure | 12.3 | 11.7 | 12.0 | 10.4 | 10.9 | | Recreation, etc4 | Expenditure | 39.4 | 40.4 | 42.1 | 37.9 | 39.0 | | Other | Expenditure | 20.9 | 24.3 | 25.7 | 23.3 | 29.1 | | Timber | Income | -24.5 | -29.5 | -33.4 | -31.3 | -35.5 | | Recreation, etc4 | Income | -14.2 | -15.2 | -15.0 | -14.9 | -15.8 | | Other | Income | -10.5 | -12.9 | -12.2 | -11.1 | -12.9 | | **Net expenditure** | | 23.3 | 18.9 | 19.2 | 14.3 | 14.8 | | **Wales** | | | | | | | Harvesting & haulage | Expenditure | 7.0 | 11.0 | 9.5 | 9.9 | .. | | Recreation, etc4 | Expenditure | 6.6 | 3.7 | 3.7 | 4.0 | .. | | Other | Expenditure | 12.8 | 13.5 | 12.5 | 12.1 | .. | | Timber | Income | -13.2 | -14.1 | -13.4 | -13.5 | .. | | Recreation, etc4 | Income | -1.1 | -1.0 | -2.0 | -0.9 | .. | | Other | Income | -1.5 | -3.4 | -3.4 | -8.1 | .. | | **Net expenditure** | | 10.6 | 9.8 | 6.9 | 3.5 | .. | | **Scotland** | | | | | |
1. Expenditure includes expenditure on public forests by the Forestry Commission in Great Britain, excluding expenditure on land owned or managed by the Forestry Commission.
2. Income includes income from timber sales, recreation, conservation & heritage, and other income from public forests.
3. Figures for Wales in Tables 8.4 and 8.5 relate to expenditure to 31 March 2013 that was incurred by Forestry Commission Wales. Expenditure in Wales from 1 April 2013 is excluded from the tables. | | Expenditure | | | | | |--------------------------|-------------|-------|-------|-------|-------| | Harvesting & haulage | 22.0 | 21.0 | 22.3 | 23.2 | 24.2 | | Recreation, etc<sup>4</sup> | 17.4 | 23.5 | 26.8 | 24.5 | 24.3 | | Other | 43.2 | 52.0 | 54.1 | 62.5 | 60.6 | | Timber | -39.7 | -48.1 | -58.9 | -57.1 | -65.2 | | Recreation, etc<sup>4</sup> | -2.3 | -3.6 | -4.8 | -4.2 | -5.5 | | Other | -12.4 | -10.7 | -9.6 | -10.7 | -12.9 | | **Net expenditure** | **28.2** | **34.0** | **29.9** | **38.2** | **25.5** |
Source: Forestry Commission
Notes:
1. Forestry Commission expenditure only. Excludes expenditure incurred by other departments.
2. Excludes notional cost of capital and any surplus/deficit on sale of properties.
3. Excludes gain on revaluation of biological assets and value of timber felled, that were included for the first time in the 2009-10 Accounts.
4. Recreation, etc includes conservation and heritage.
.. Denotes data not available; responsibility for forestry in Wales transferred to Natural Resources Wales on 1 April 2013. 8.5 Other government expenditure on forestry
Table 8.5 provides information on other expenditure (excluding public forests) by the Forestry Commission, it includes expenditure by National Offices in England, Wales (until 2012-13) and Scotland as well as expenditure on GB level functions. Expenditure on land that is owned or managed by the Forestry Commission is covered in Table 8.4.
In addition to expenditure on public forests, the Forestry Commission spent a total of £126 million on other activities in 2013-14.
£87 million was used by the national offices in England and Scotland for grants and partnership funding and a further £12 million for policy, regulation & administration. At a GB level, £36 million was used for international & GB support services and £13 million for research.
Table 8.5 Other government expenditure on forestry1,2, 2009-10 - 2013-14
| | 2009-10 | 2010-11 | 2011-12 | 2012-13 | 2013-14 | |----------------------|---------|---------|---------|---------|---------| | GB | | | | | | | Grants and partnership funding3 | 44.0 | 65.4 | 82.3 | 83.3 | 87.2 | | Policy, regulation & administration | 30.3 | 21.8 | 25.7 | 26.6 | 11.5 | | Research - GB funded | 15.0 | 16.4 | 15.2 | 12.7 | 13.3 | | International & GB support services | 31.9 | 33.0 | 33.6 | 34.3 | 36.0 | | Less recovery of support service costs from countries | -24.0 | -24.1 | -23.9 | -22.0 | -22.4 | | Total | 97.2 | 112.5 | 132.9 | 134.9 | 125.6 | | England | | | | | | | Grants and partnership funding3 | 17.8 | 26.7 | 32.6 | 35.8 | 40.2 | | Policy, regulation & administration4 | 9.4 | 2.1 | 1.9 | 2.4 | 2.2 | | Total | 27.1 | 28.8 | 34.5 | 38.2 | 42.4 | | Wales | | | | | | | Grants and partnership funding3 | 4.9 | 4.5 | 4.9 | 5.5 | .. | | Policy, regulation & administration4 | 11.2 | 9.6 | 14.7 | 15.4 | .. | | Total | 16.1 | 14.1 | 19.6 | 20.9 | .. | | Scotland | | | | | | | Grants and partnership funding3 | 21.3 | 34.2 | 44.8 | 42.0 | 47.0 | | Policy, regulation & administration4 | 9.8 | 10.2 | 9.1 | 8.8 | 9.3 | | Total | 31.0 | 44.3 | 53.9 | 50.8 | 56.3 |
Source: Forestry Commission
Notes:
1. Forestry Commission expenditure only. Excludes expenditure incurred by other departments.
2. Excludes miscellaneous income.
3. EU co-financing not subtracted from grant expenditure. In Wales, includes “Objective 1” expenditure, starting in 2003. In addition, from 1 April 2008 the Forestry Commission ceased to hold delegated authority for the Rural Development Programme for England (RDPE) grant scheme. Authority for the RDPE grant scheme now rests with Defra.
4. Country costs for “policy, regulation & administration” include shares of GB support service costs.
.. Denotes data not available; responsibility for forestry in Wales transferred to Natural Resources Wales on 1 April 2013. 8.6 Grant schemes
Private sector woodland in Great Britain is supported by a range of grants for creating new woodland and managing existing woodland. The Woodland Grant Scheme (WGS) was introduced in 1988, at the same time as tax relief was phased out. In Scotland, WGS was replaced by the Scottish Forestry Grant Scheme (SFGS) in 2003 and, more recently, by Rural Development Contracts. The English Woodland Grant Scheme (EWGS) was launched in July 2005, Better Woodlands for Wales (BWW) was launched in December 2005 and has now been replaced by Glastir.
Because of the differences between these schemes, it is increasingly difficult to provide comparable statistics across the three countries. The following tables provide useful information relating to planting and grants:
- Table 1.14 for total areas of new planting and restocking;
- Table 8.5 for expenditure by the Forestry Commission on grants and partnership funding;
- Table 8.6 (below) for grant expenditure by the Forestry Commission (including grant expenditure managed by the Forestry Commission on behalf of Defra) and by Natural Resources Wales.
Table 8.6 presents information on grant money paid in 2004-05 to 2013-14. A total of £73.5 million was paid in grants in 2013-14, a 5% increase from the total for the previous year.
| Type of grant | England1 | Wales | Scotland2 | GB £ million | |---------------|----------|-------|-----------|--------------| | 2004-05 | 16.8 | 2.5 | 9.2 | 28.6 | | 2005-06 | 17.1 | 2.8 | 19.7 | 39.6 | | 2006-07 | 15.9 | 3.1 | 32.6 | 51.6 | | 2007-08 | 41.7 | 2.6 | 26.9 | 71.1 | | 2008-09 | 24.1 | 3.7 | 10.9 | 38.7 | | 2009-10 | 24.4 | 2.9 | 5.7 | 33.0 | | 2010-11 | 28.7 | 3.8 | 18.9 | 51.4 | | 2011-12 | 32.5 | 5.4 | 34.2 | 72.1 | | 2012-13 | 32.8 | 5.0 | 32.3 | 70.1 | | 2013-14 | 33.9 | 4.1 | 35.5 | 73.5 |
Source: Forestry Commission, Natural Resources Wales
Notes:
1. England includes grant scheme expenditure managed by the Forestry Commission on behalf of Defra.
2. Scotland includes grants paid under Rural Development Contracts and legacy schemes.
The total grant money paid in Great Britain has fluctuated over the last 10 years, with levels often dipping around the times that new grant schemes are introduced, followed by a sharp recovery.
Figure 8.3 Grant money paid, 2003-04 to 2013-14 Source: Forestry Commission, Natural Resources Wales 9 International Forestry
Introduction
This chapter contains information about world forestry, presenting global figures by region alongside data for the UK and the EU. Topics covered include woodland area, carbon stocks, wood removals, production and apparent consumption of wood products and international trade in forest products.
The data are produced by the United Nations Food and Agriculture Organisation (FAO). Further information on the data sources and methodology used to compile the figures is provided in the Sources chapter.
All of the statistics presented in this chapter have been previously released by the FAO. For further details on revisions, see the International Forestry section of the Sources chapter.
A copy of all International Forestry tables is available to download from the Tables for Download page.
Key findings
The main findings are:
- At around 12% forest cover in 2010 (now estimated to be 13%, see Table 1.2), the UK is one of the least densely forested countries in Europe. This compares with 37% for the EU as a whole and 31% worldwide.
- The global forest area reduced by around 8.3 million hectares (0.2%) per year between 1990 and 2000 and by around 5.2 million hectares (0.1%) per year between 2000 and 2010.
- Carbon stocks in forest living biomass in Europe have increased in both Europe and North & Central America between 2000 and 2010, but have decreased at a global level.
- A total of 3.5 billion m³ underbark of wood was removed from global forests in 2012, of which over half (52%) was for use as woodfuel and the remaining 48% was industrial roundwood (for use by wood processors).
- Global production of wood products in 2012 totalled 400 million m³ of sawnwood, 301 million m³ of wood-based panels and 399 million tonnes of paper & paperboard.
- Europe consumed around one quarter (26%) of all sawnwood, around one quarter (24%) of the world's wood-based panels and around one quarter (23%) of all paper and paperboard in 2012.
- The UK was the third largest net importer (imports less exports) of forest products in 2012, behind China and Japan. 9.1 Forest cover: international comparisons
The FAO Global Forest Resources Assessment (FRA) is a collation of forest data undertaken by the United Nations Food and Agriculture Organisation (FAO) at the global level every five years.
At around 12% forest cover in 2010 (now estimated to be 13%, see Table 1.2), the UK is one of the least densely forested countries in Europe (Table 9.1, Figure 9.1). This compares with 37% for the EU as a whole and 31% worldwide.
Table 9.1 Forest cover: international comparisons, 2010
| Country | Forest area (million ha) | Total land area (million ha) | Forest as % of land area | Forest area (ha) per 100 population | |------------------|--------------------------|------------------------------|--------------------------|-------------------------------------| | Europe | | | | | | United Kingdom | 3 | 24 | 12 | 5 | | Finland | 22 | 30 | 73 | 418 | | France | 16 | 55 | 29 | 26 | | Germany | 11 | 35 | 32 | 13 | | Italy | 9 | 29 | 31 | 15 | | Spain | 18 | 50 | 36 | 41 | | Sweden | 28 | 41 | 69 | 306 | | Other EU | 49 | 154 | 32 | 29 | | **Total EU-27** | **157** | **419** | **37** | **32** | | Russian Federation | 809 | 1 638 | 49 | 572 | | **Total Europe** | **1 005** | **2 215** | **45** | **137** | | Africa | 674 | 2 974 | 23 | 68 | | Asia | 593 | 3 091 | 19 | 15 | | North & Central America | 705 | 2 135 | 33 | 132 | | Oceania | 191 | 849 | 23 | 548 | | South America | 864 | 1 746 | 49 | 225 | | **World** | **4 033** | **13 011** | **31** | **60** |
Source: FAO Global Forest Resources Assessment 2010.
Notes:
1. Cyprus is included in EU-27 total but is part of FAO’s Asia region.
These figures are outside the scope of National Statistics
Figure 9.1 Forest cover: international comparisons, 2010 These figures are outside the scope of National Statistics 9.2 Forest area by country
One fifth of the world's forest area is located in the Russian Federation, with a further 13% in Brazil (Figure 9.2).
Figure 9.2 Forest area by country, 2010
Source: FAO Global Forest Resources Assessment 2010.
These figures are outside the scope of National Statistics 9.3 Annual changes in forest area
The global forest area reduced by around 8.3 million hectares (0.2%) per year between 1990 and 2000 and by around 5.2 million hectares (0.1%) per year between 2000 and 2010 (Table 9.2).
The forest area has reduced in most regions since 1990, except for Europe (where the area increased in both decades) and Asia (where the area reduced between 1990 and 2000 but has increased by more between 2000 and 2010).
Table 9.2 Annual changes in forest area by region, 1990-2010
| Region | 1990-2000 (thousand ha) | 1990-2000 (%) | 2000-2010 (thousand ha) | 2000-2010 (%) | |-------------------------|-------------------------|---------------|-------------------------|---------------| | Europe | | | | | | UK | 18 | 0.68 | 9 | 0.31 | | EU-27¹ | 732 | 0.51 | 517 | 0.34 | | Total Europe | 877 | 0.09 | 676 | 0.07 | | Africa | -4 067 | -0.56 | -3 414 | -0.49 | | Asia | -595 | -0.10 | 2 235 | 0.39 | | North and Central America | -289 | -0.04 | -10 | 0.00 | | Oceania | -36 | -0.02 | -700 | -0.36 | | South America | -4 213 | -0.45 | -3 997 | -0.45 | | World | -8 323 | -0.20 | -5 211 | -0.13 |
Source: FAO Global Forest Resources Assessment 2010.
Notes:
1. Cyprus is included in EU-27 total but is part of FAO's Asia region.
These figures are outside the scope of National Statistics
Between 2000 and 2010, the largest decrease in forest area was in Brazil (2.6 million hectares per year on average) and the largest increase was in China (3.0 million hectares per year on average) (Figure 9.3).
Figure 9.3 Countries with largest changes in forest area, 2000-2010
Source: FAO Global Forest Resources Assessment 2010.
Notes:
1. Countries with changes of at least 0.4 million hectares per year only.
These figures are outside the scope of National Statistics 9.4 Carbon stocks in forest biomass
From 1990 to 2010, carbon in forest living biomass decreased in South America and Africa, where forest areas decreased (Table 9.3, Figure 9.4). Carbon stocks in biomass also declined slightly in Asia, where carbon sequestered in new plantations is not yet able to balance out carbon losses from areas of deforestation. Carbon stocks in biomass increased in Europe and North & Central America.
Table 9.3 Carbon stocks in forest living biomass by region, 1990-2010
| Region | 1990 | 2000 | 2005 | 2010 | |-------------------------|-------|-------|-------|-------| | Europe | 42.2 | 43.2 | 44.0 | 45.0 | | Africa | 60.9 | 58.3 | 57.1 | 55.9 | | Asia | 37.2 | 36.8 | 36.6 | 35.7 | | North and Central America| 37.8 | 38.5 | 39.0 | 39.6 | | Oceania | 10.9 | 10.8 | 10.7 | 10.5 | | South America | 110.3 | 106.2 | 103.9 | 102.2 | | **World** | **299.2** | **293.8** | **291.3** | **288.8** |
Source: FAO Global Forest Resources Assessment 2010.
Notes:
1. A giga tonne is a thousand million tonnes (10^9 tonnes).
These figures are outside the scope of National Statistics
Figure 9.4 Carbon stock per hectare in forest biomass by region, 2010
Source: FAO Global Forest Resources Assessment 2010.
These figures are outside the scope of National Statistics 9.5 Wood removals
A total of 3.5 billion m$^3$ underbark of wood was removed from global forests in 2012, of which over half (52%) was for use as woodfuel and the remaining 48% was industrial roundwood (for use by wood processors) (Table 9.4).
North & Central America and Europe together accounted for around three fifths (59%) of all industrial roundwood removals in 2012. Globally, removals of industrial roundwood increased by 5% between 2010 and 2012, resulting in part from a 7% increase in Europe.
Around three quarters (74%) of woodfuel removals in 2012 took place in Asia and Africa. Globally, removals of woodfuel decreased by 1% between 2010 and 2012.
Table 9.4 Wood removals by region, 1990-2012
| Region | 1990 | 1995 | 2000 | 2005 | 2010 | 2012 | |-----------------------------|------|------|------|------|------|------| | | million m$^3$ underbark | | **Industrial roundwood** | | | | | | | | **Europe** | | | | | | | | UK | 6 | 7 | 8 | 8 | 8 | 9 | | EU-27$^1$ | 316 | 292 | 339 | 368 | 335 | 325 | | **Total Europe** | 515 | 405 | 479 | 540 | 506 | 541 | | Africa | 61 | 67 | 70 | 74 | 71 | 68 | | Asia | 268 | 276 | 269 | 292 | 341 | 355 | | North and Central America | 595 | 603 | 632 | 635 | 432 | 450 | | Oceania | 33 | 41 | 47 | 50 | 54 | 56 | | South America | 110 | 135 | 147 | 176 | 197 | 219 | | **World** | 1 582| 1 527| 1 645| 1 766| 1 602| 1 689| | **Woodfuel** | | | | | | | | **Europe** | | | | | | | | UK | 0 | 0 | 0 | 0 | 1 | 1 | | EU-27$^1$ | 67 | 66 | 69 | 75 | 88 | 92 | | **Total Europe** | 138 | 107 | 133 | 139 | 152 | 139 | | Africa | 445 | 513 | 542 | 589 | 630 | 626 | | Asia | 897 | 849 | 808 | 792 | 766 | 750 | | North and Central America | 162 | 145 | 129 | 130 | 129 | 130 | | Oceania | 9 | 11 | 13 | 11 | 11 | 11 | | South America | 162 | 173 | 185 | 193 | 198 | 203 | | **World** | 1 814| 1 798| 1 810| 1 855| 1 886| 1 859| | **Total roundwood** | | | | | | | | **Europe** | | | | | | | | UK | 6 | 8 | 8 | 9 | 10 | 10 | | EU-27$^1$ | 383 | 358 | 408 | 443 | 423 | 417 | | **Total Europe** | 653 | 512 | 612 | 679 | 658 | 680 | | Africa | 506 | 580 | 613 | 663 | 701 | 695 | | Asia | 1 166| 1 125| 1 076| 1 084| 1 108| 1 105| | North and Central America | 757 | 748 | 761 | 765 | 561 | 580 | | Oceania | 42 | 52 | 60 | 61 | 65 | 67 | | South America | 272 | 308 | 332 | 369 | 395 | 421 | |--------------|-----|-----|-----|-----|-----|-----| | World | 3396| 3325| 3455| 3622| 3488| 3548|
Source: FAO.
Notes:
1. Cyprus is included in EU-27 total but is part of FAO's Asia region.
These figures are outside the scope of National Statistics
**Figure 9.5 Wood removals by region, 2012**
Source: FAO.
These figures are outside the scope of National Statistics 9.6 Production of wood products
Global production of wood products in 2012 totalled 400 million m$^3$ of sawnwood, 301 million m$^3$ of woodbased panels and 399 million tonnes of paper & paperboard (Table 9.5).
Europe produced around one third (35%) of all sawnwood in 2012 (mainly in EU countries), with around one quarter (27%) produced in North & Central America and a further quarter (26%) in Asia. Overall, sawnwood production increased by 6% between 2010 and 2012.
Wood-based panels were more commonly produced in Asia, accounting for around one half (53%) of global production in 2012. Around one quarter (25%) were produced in Europe (mainly EU countries) and 15% in North & Central America. At a global level, wood-based panel production increased by 7% between 2010 and 2012.
Asia also accounted for over two fifths (45%) of paper and paperboard production in 2012, with around one quarter (26%) in Europe and a further quarter (23%) in North & Central America.
Table 9.5 Production of wood products by region, 1990-2012
| Region | 1990 | 1995 | 2000 | 2005 | 2010 | 2012 | |-------------------------------|------|------|------|------|------|------| | **Sawnwood (million m$^3$)** | | | | | | | | **Europe** | | | | | | | | UK | 2 | 2 | 3 | 3 | 3 | 3 | | EU-27$^1$ | 81 | 82 | 100 | 108 | 100 | 97 | | **Total Europe** | 149 | 118 | 129 | 144 | 139 | 139 | | Africa | 8 | 8 | 8 | 8 | 9 | 9 | | Asia | 105 | 96 | 61 | 78 | 87 | 105 | | North and Central America | 129 | 134 | 146 | 162 | 102 | 109 | | Oceania | 6 | 7 | 8 | 9 | 9 | 9 | | South America | 22 | 27 | 32 | 37 | 30 | 29 | | **World** | 419 | 391 | 385 | 438 | 376 | 400 | | **Wood-based panels (million m$^3$)** | | | | | | | | **Europe** | | | | | | | | UK | 2 | 3 | 3 | 3 | 3 | 3 | | EU-27$^1$ | 36 | 40 | 53 | 63 | 58 | 57 | | **Total Europe** | 48 | 46 | 61 | 75 | 73 | 75 | | Africa | 2 | 2 | 2 | 3 | 3 | 3 | | Asia | 27 | 44 | 49 | 92 | 143 | 160 | | North and Central America | 44 | 47 | 62 | 64 | 44 | 44 | | Oceania | 2 | 2 | 3 | 4 | 4 | 4 | | South America | 4 | 6 | 9 | 13 | 16 | 17 | | **World** | 126 | 147 | 186 | 251 | 281 | 301 | | **Paper & paperboard (million tonnes)** | | | | | | | | **Europe** | | | | | | | | UK | 5 | 6 | 7 | 6 | 4 | 4 | | EU-27$^1$ | 63 | 74 | 90 | 98 | 95 | 93 | | **Total Europe** | 73 | 82 | 100 | 111 | 106 | 105 | | Africa | 3 | 3 | 4 | 4 | 4 | 4 | | Asia | 57 | 77 | 95 | 124 | 170 | 181 | | Region | 92 | 108 | 111 | 108 | 96 | 90 | |----------------------|-----|-----|-----|-----|-----|-----| | North and Central America | 92 | 108 | 111 | 108 | 96 | 90 | | Oceania | 3 | 3 | 4 | 4 | 4 | 4 | | South America | 8 | 9 | 11 | 13 | 15 | 15 | | **World** | 235 | 282 | 325 | 365 | 395 | 399 |
Source: FAO.
Notes:
1. Cyprus is included in EU-27 total but is part of FAO's Asia region.
These figures are outside the scope of National Statistics. 9.7 Apparent consumption of wood products
Apparent consumption (defined as production + imports - exports) of wood products around the world totalled 394 million m³ sawnwood, 299 million m³ wood-based panels and 397 million tonnes of paper and paperboard in 2012 (Table 9.6).
Almost two fifths (37%) of all sawnwood in 2012 was consumed in Asia and around one quarter each in Europe (26%) and in North & Central America (25%). Reflecting the increased production of sawnwood in recent years (see Table 9.5), apparent consumption of sawnwood increased by 6% overall between 2010 and 2012. This was driven by a 24% increase in apparent consumption in Asia; there was a decline over the same period in Europe and in South America.
Asia consumed around one half (53%) of the world's wood-based panels in 2012, around one quarter (24%) was consumed in Europe and 17% in North & Central America. Apparent consumption of wood-based panels worldwide increased by 7% between 2010 and 2012.
Almost one half (48%) of all paper and paperboard in 2012 was consumed in Asia, around one quarter (23%) in Europe and a further one fifth (22%) in North & Central America. At a global level, apparent consumption of paper and paperboard increased by 1% between 2010 and 2012.
Table 9.6 Apparent consumption of wood products by region, 1990-2012
| Region | 1990 | 1995 | 2000 | 2005 | 2010 | 2012 | |-------------------------------|------|------|------|------|------|------| | **Sawnwood (million m³)** | | | | | | | | **Europe** | | | | | | | | UK | 13 | 8 | 10 | 11 | 9 | 8 | | EU-27¹ | 96 | 80 | 99 | 103 | 90 | 83 | | **Total Europe** | 157 | 109 | 121 | 121 | 109 | 103 | | Africa | 10 | 12 | 10 | 13 | 16 | 16 | | Asia | 112 | 112 | 77 | 97 | 117 | 145 | | North and Central America | 119 | 126 | 143 | 166 | 95 | 98 | | Oceania | 6 | 7 | 8 | 8 | 8 | 7 | | South America | 20 | 24 | 28 | 31 | 27 | 25 | | **World** | 426 | 390 | 387 | 436 | 372 | 394 | | **Wood-based panels (million m³)** | | | | | | | | **Europe** | | | | | | | | UK | 5 | 5 | 6 | 6 | 6 | 5 | | EU-27¹ | 40 | 41 | 53 | 59 | 56 | 53 | | **Total Europe** | 51 | 47 | 59 | 71 | 70 | 71 | | Africa | 1 | 2 | 2 | 3 | 4 | 4 | | Asia | 25 | 46 | 54 | 92 | 139 | 157 | | North and Central America | 44 | 47 | 65 | 73 | 50 | 50 | | Oceania | 2 | 2 | 3 | 3 | 3 | 3 | | South America | 3 | 4 | 6 | 8 | 13 | 14 | | **World** | 126 | 147 | 189 | 250 | 279 | 299 | | **Paper & paperboard (million tonnes)** | | | | | | | | **Europe** | | | | | | | | UK | 9 | 11 | 12 | 13 | 11 | 9 | | EU-27¹ | 62 | 68 | 83 | 87 | 84 | 80 | | Region | 71 | 73 | 90 | 98 | 94 | 92 | |-------------------------|----|----|----|----|----|----| | Total Europe | 235| 277| 325| 364| 393| 397| | Africa | 4 | 4 | 5 | 6 | 7 | 7 | | Asia | 62 | 85 | 103| 134| 179| 190| | North and Central America| 88 | 101| 110| 107| 92 | 86 | | Oceania | 3 | 4 | 5 | 5 | 5 | 4 | | South America | 8 | 10 | 12 | 14 | 16 | 17 |
Source: FAO.
Notes:
1. Cyprus is included in EU-27 total but is part of FAO's Asia region.
These figures are outside the scope of National Statistics. 9.8 World trade in forest products
Figures 9.6 and 9.7 show the largest net importers and exporters (by value) of forest products in 2012. This covers trade in roundwood, sawnwood, wood-based panels, wood pulp and paper and paperboard. Values are expressed in US dollars.
The UK was the third largest net importer (imports less exports) of forest products in 2012, with net imports of $7.3 billion (Figure 9.6). The largest net importers in 2012 were China ($26.1 billion) and Japan ($10.4 billion).
**Figure 9.6 Largest net importers of forest products, 2012**
Source: FAO
Notes:
1. Excludes trade in secondary wood products.
These figures are outside the scope of National Statistics
The largest net exporters (exports less imports) of forest products in 2012 were Canada (with net exports valued at $16.8 billion), Sweden ($12.5 billion) and Finland ($11.4 billion) (Figure 9.7).
**Figure 9.7 Largest net exporters of forest products, 2012**
Source: FAO Notes:
1. Excludes trade in secondary wood products.
These figures are outside the scope of National Statistics Ancient woodland Woodland which has been in continuous existence since 1600 (1750 in Scotland).
Bioenergy Energy from any fuel that is derived from biomass.
Biomass Material that is derived from living, or recently living, biological organisms.
Biosecurity A set of precautions that aim to prevent the introduction and spread of harmful organisms. These may be pests, pathogens or invasive species.
Brash Branch wood and leaf material that is generally too small in diameter to be considered part of the timber product from a harvesting site.
Briquettes Similar to wood pellets (see below) but larger, briquettes are made from compressed wood fibres and used for heating.
Broadleaves Trees that do not have needles or cones, such as oak, birch and beech. A few, such as alder, have cone-like structures for their seeds which are not true cones.
Cement bonded particleboard Sheet material manufactured under pressure, based on wood and other vegetable particles bound with hydraulic cement and possibly containing additives.
Chipboard (see Particleboard).
Clearfell areas Sites where all trees have been felled at once. In non-clearfell areas, only some trees are felled at any one time.
Clustering A sampling technique where the entire population is divided into groups, or clusters, and a random sample of these clusters are selected. All (or a selection of) observations in the selected clusters are included in the sample. Cluster sampling is often used when a random sample would produce a list of subjects so widely scattered that surveying them would prove to be far too expensive.
Confidence interval An estimated range of values that is likely to include an unknown population parameter (i.e. a fixed value for the population as a whole). The confidence interval around an estimate is derived from the sample data, and is used to indicate the reliability of the estimate.
Conifers Trees with needles and cones, such as spruce, pine and larch.
Conversion factor Numerical factor by which a quantity that is expressed in one set of units must be multiplied in order to convert it into another set of units.
Coppice Trees that are cut near ground level (or sometimes higher, in which case they are called pollards), causing them to produce many small shoots. These shoots are harvested every few years at a relatively early age for products such as staves, fencing, fuel and charcoal. "Coppice with standards" includes scattered trees that are left to grow as normal ("standards").
**Dead wood** Non-living woody biomass not contained in the litter, either standing or lying on the ground. For wood carbon reporting, the minimum was 15 cm diameter for standing and lying deadwood, and 7 cm dbh (diameter at breast height) for fallen trees.
**Defra** Department for Environment, Food and Rural Affairs.
**Deliveries** The quantities of UK-grown roundwood that are delivered to processors (mills) or for other uses (such as woodfuel and exports). Note that for sawmills and round fencing mills, the deliveries figure reported is actually the quantity of roundwood consumed by the mill, which may differ from the true deliveries figure if the levels of input stocks vary.
**Direct production** Timber that is sold after the trees have been felled by the woodland owner or their contractors.
**Establishment** The first five to ten years or formative period that ends once young trees are of sufficient size that, given adequate protection, they are likely to survive at the required stocking.
**EU** European Union. It currently comprises 28 member states: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
**Eurostat** The statistical office of the European Union, situated in Luxembourg. Its task is to provide the European Union with statistics at European level that enable comparisons between countries and regions.
**FAO** United Nations Food and Agriculture Organisation, responsible for the Forest Resources Assessment and for compiling international statistics on production and trade of wood products.
**Fibreboard** Panel material with thickness equal to or greater than 1.5mm, manufactured from lignocellulosic fibres with application of heat and/or pressure. The bond is derived either from the felting of the fibres and their inherent adhesive properties or from a synthetic binder added to the fibres.
**Forest** In the United Kingdom, there is no formal definition of "forest"; the term is often used for large woodland areas (especially conifers) or for old Royal hunting preserves such as the New Forest or the Forest of Dean.
**Forest Service (FS)** The agency of the Northern Ireland Department of Agriculture and Rural Development responsible for forestry matters in Northern Ireland.
**Forestry Commission (FC)** The government department responsible for forestry matters in England, Scotland and (until March 2013) Wales. The Forestry Commission's functions in Wales transferred to a new organisation, Natural Resources Wales, on 1 April 2013. The responsibility for forestry is devolved. FSC Forest Stewardship Council.
GDP deflator Gross Domestic Product at market prices deflator. Gross Domestic Product (GDP) is a measure of the total economic activity. Growth in GDP reflects both growth in the economy and price change (inflation). Applying a GDP deflator to time series of prices or price indices removes the effects of inflation to enable a comparison of changes in price that are not caused by inflation.
Great Britain (GB) England, Wales and Scotland.
Green tonne The weight measurement of timber freshly felled before any natural or artificial drying has occurred.
Gross Value Added (GVA) A measure of the contribution to the economy of each individual producer, industry or sector in the United Kingdom.
Growing stock The volume of timber in living trees. It is also often referred to as the standing volume.
Hardwood The wood of broadleaved trees, such as oak, birch and beech; a term sometimes used for the broadleaved trees themselves.
HM Revenue & Customs (HMRC) The United Kingdom's tax authority.
Hectare (ha) Unit of area defined as 10,000 square metres (100 m by 100 m), approximately equivalent to 2.47 acres.
High forest Trees capable of growing to be suitable for timber production (compare with coppice).
Increment The growth rate of standing trees.
Kyoto Protocol A protocol to the United Nations Framework Convention on Climate Change (UNFCCC) that set binding obligations on the industrialised countries to reduce their emissions of greenhouse gases.
Litter Non-living biomass with a diameter less than the minimum for dead wood, lying dead in various states of decomposition above the soil.
Long term contracts (LTC) Sales of roundwood, felled or standing, to customers over a period of more than one year. The second and subsequent years of a long term contract are negotiated after the sale of the first year's volume.
Medium-density fibreboard (MDF) Wood fibreboard made by a dry process in which the primary bond is derived from a bonding agent, and having a density usually exceeding 600 kg per cubic metre.
Movement Licence Any movement of Phytophthora-affected wood from a forest site (or subsequent move of affected material from a mill or processing site) requires a Movement Licence to be issued by the Forestry Commission.
Native species Species that have arrived and inhabited an area naturally, without deliberate assistance by man. For trees and shrubs in the United Kingdom usually taken to mean those present after post-glacial recolonisation and before historic times. Some species are only native in particular regions - hence locally native.
**Natural colonisation** The creation of new woodland by natural means, i.e. without sowing or planting.
**Natural regeneration** The regeneration of existing woodland by natural means, i.e. without sowing or planting.
**Natural Resources Wales (NRW)** The organisation responsible for advising the Welsh Government on the environment, created on 1 April 2013. NRW is responsible for the functions previously carried out by the Environment Agency in Wales, the Countryside Council for Wales and Forestry Commission Wales.
**New planting** Establishing woodland on ground that was not woodland in the recent past.
**NFI** National Forest Inventory.
**NI** Northern Ireland.
**NIWT** 1995-99 National Inventory of Woodland and Trees.
**Nominal terms** Refers to prices at the time of sale. See also "real terms".
**ONS** Office for National Statistics.
**Oriented strand board (OSB)** Multi-layered board made from strands of wood of a predetermined shape and thickness together with a binder. The strands in the external layers are aligned and parallel to the board length or width.
**Oven dry tonnes (ODT)** Measurement of quantity without moisture (i.e. 0% moisture content).
**Overbark** The volume of wood including the bark. Can be either standing volume or felled volume.
**Particleboard** Panel material manufactured under pressure and heat from particles of wood (wood and chipboard flakes, chips, shavings, sawdust), with the addition of an adhesive.
**PAYE** Pay-as-you-earn tax.
**Photosynthesis** Chemical process carried out by green plants in the presence of light, which combines carbon dioxide from the atmosphere with hydrogen from water in the soil to form sugars as food for the growing plant. Oxygen is a by-product of the reaction.
**Phytophthora ramorum** Fungus-like pathogen of plants that causes extensive damage and mortality to trees (including Japanese larch) and other plants.
**Plywood** Wood-based panel consisting of an assembly of layers bonded together with the direction of the grain in adjacent layers, usually at right angles (not currently made in the UK).
**Price index** A measure of the proportionate, or percentage, changes in a set of prices over time. Commonly used indices include the Laspeyres index, Paasche index and Fisher index.
**Pulp** A fibrous material produced by mechanically or chemically reducing wood into their component parts from which pulp, paper and paperboard sheets are formed after proper slushing and treatment or used for dissolving purposes (dissolving pulp or chemical cellulose) to make rayon, plastics, and other synthetic products. Sometimes called wood pulp.
**Quota sampling** A method of sampling where interviewers are each given a fixed number of subjects of specified type to interview.
**Real terms** Refers to prices at a common date. Prices in real terms are derived by applying a deflator to remove the effects of general inflation to enable a comparison of changes over time that have not resulted from inflation. See also "nominal terms".
**Recovered wood** Either industrial process by-products (e.g. offcuts or fines from a board manufacturing mill, furniture factory, joinery or construction) or from post-consumer waste wood (e.g. pallets, construction waste) after the stage of recovery or reclamation for purposes of recycling.
**Restocking** The replanting of an area after trees are removed.
**Roadside sales** Sales of timber after harvesting. The owner is responsible for getting the trees felled and extracting them to the side of the road, ready to take away.
**Roundwood** Trunk or branch wood, generally with a top diameter of 7 cm or more. Can be in the form of logs (14 cm top diameter or more) or small roundwood (7 to 14 cm).
**Sawlogs** Material of at least 14 cm top diameter that is destined to be sawn into planks or boards.
**Sawmill products** Materials including wood chips, sawdust and bark which arise during the conversion of logs to sawn timber. Most are used as inputs to other wood processing industries, sold for bioenergy or sold for other uses. Formerly called sawmill residues or co-products.
**Sawnwood** Sawn timber - timber that has been cut into planks or boards from logs.
**Scottish Government (SG)** The executive branch of the devolved government of Scotland. Previously known as the Scottish Executive.
**Scrub** Area of poorly formed trees or bushes unsuitable for conversion to timber.
**Semi-natural woodland** Woodland with natural characteristics (predominantly native species of trees, ground plants and animals) where wood production is not a primary objective; this term is used rather than natural because the woodland may have originally been planted or have been managed for wood production in the past. **Short rotation coppice (SRC)** An energy crop, usually consisting of densely planted, high yielding varieties of willow or poplar.
**Silviculture** The care and cultivation of forest trees.
**Softwood** The wood of coniferous trees, such as spruce, pine and larch; a term sometimes used for the coniferous trees themselves.
**Stand** A relatively uniform collection of trees (from either planting or natural regeneration) composed, for example, of a single species or a single age class.
**Standing sales** Sales of timber while the trees are still standing. The buyer is responsible for getting the trees felled and removed from the site.
**Standing volume** Measurement of quantity before trees are felled. Usually expressed as cubic metres overbark standing.
**Statistical significance** A statistical assessment of whether observations reflect an actual pattern rather than just chance.
**Statutory Plant Health Notice (SPHN)** Statutory Plant Health Notices, requiring the felling of infected trees, are issued by the Forestry Commission/ Natural Resources Wales/ Forest Service to prevent the spread of pests and diseases. They are currently being issued to control the movement of material infected with Phytophthora ramorum.
**Stemwood** Wood from the stem and main branches of a tree, excluding the stump and small branches.
**Stocked area** Area stocked with living trees. This differs from the woodland area (see below) in that felled areas awaiting restocking and areas of integral open space are generally excluded from the stocked area.
**Stratification** A sampling technique where the entire population is divided into groups, or strata, and a random sample is selected within each group. Stratified sampling is often used to ensure that sufficient numbers from each group are included in the overall sample, particularly where results are required for each group.
**Stump** The above-ground base part of a tree that would usually remain after felling.
**Thinning** A proportion of stems removed in order to give the best stems space and light to grow into a more valuable crop. This is usually carried out some time after canopy closure and may be repeated at intervals. It is a necessary operation in the production of quality timber. A temporary reduction in standing volume will result.
**UKFPA** United Kingdom Forest Products Association.
**UN ECE** United Nations Economic Commission for Europe, responsible for compiling international statistics on production and trade of wood products for Europe, the Russian Federation and North America.
**Underbark** The volume of wood excluding the bark. United Kingdom (UK) Great Britain and Northern Ireland.
VAT Value Added Tax.
Veneer A thin layer of wood, produced by peeling or slicing, used for decorative purposes. Veneers are usually applied to less expensive or less attractive substitutes including solid timber, wood-based sheet materials, etc.
Weighting A set of factors assigned to survey responses to ensure that the resulting weighted results are representative of the population as a whole.
Welsh Government The executive branch of the devolved government of Wales.
Wood pellets Sawdust or wood shavings compressed into uniform diameter pellets. They are often burned for heat or energy, but may also be used for other purposes (such as horse bedding or cat litter).
Woodland Land under stands of trees with a canopy cover of at least 20% (25% in Northern Ireland), or having the potential to achieve this, including integral open space, and including felled areas that are awaiting restocking.
Wood Raw Material Equivalent (WRME) The volume of trees required to produce a wood product. Can be measured underbark or overbark. This chapter provides background information on the statistics presented in this release. It covers the data sources and methodology used to produce the statistics, information on quality measures and on any revisions to historic data and links to further information.
Further details on quality are provided in quality reports for selected topics and for individual surveys, available from our Quality web page at www.forestry.gov.uk/forestry/infd-7zhk85 11.1 Sources: Woodland area and planting
Introduction
The definition of woodland in United Kingdom forestry statistics is land under stands of trees with a canopy cover of at least 20% (or having the potential to achieve this), including integral open space, and including felled areas that are awaiting restocking. There is no minimum height for trees to form a woodland at maturity, so the definition includes woodland scrub but not areas with only shrub species such as gorse or Rhododendron.
There is no minimum size for a woodland. In this report, statistics based on the National Forest Inventory (NFI), refer to woods and forests of at least 0.5 hectares, as mapped through the NFI. Previously, figures based on the 1995-99 National Inventory of Woodland and Trees included sample-based estimates for woods and forests between 0.1 hectares and 2.0 hectares in addition to mapped areas of 2.0 hectares or over.
This is a slightly different definition from that used internationally which is based on 10% canopy cover, a minimum height at maturity of 5m and minimum area of 0.5 hectares. The latest estimate of the effect of the difference in minimum canopy cover threshold, based on the 1995-99 National Inventory of Woodland and Trees, is that there are around 50 thousand hectares of land with 10-20% canopy cover in the UK (or around 2% of the total UK woodland area).
Integral open space is included in woodland area figures derived from the National Forest Inventory if the areas of open space are less than 0.5 hectares; larger areas are mapped out and excluded from the woodland area figures. This differs slightly from the approach used for the National Inventory of Woodland and Trees, where areas of open space of up to 1.0 hectare were included as woodland.
Woodland includes native and non-native trees; semi-natural and plantation areas. Woodland habitat types are not currently differentiated in these statistics.
Most public sector woodland is owned by or managed by the Forestry Commission (FC) in England and Scotland, Natural Resources Wales (NRW) in Wales, or the Forest Service (FS) in Northern Ireland. Woodland owned by local authorities, the Ministry of Defence, and other public sector bodies is included in "private sector woodland".
The Natural Resources Wales woodland areas and land areas shown in this release relate to areas previously owned or managed by Forestry Commission Wales. They exclude any areas previously owned or managed by other parts of Natural Resources Wales, such as the former Environment Agency in Wales and the former Countryside Council for Wales.
The following pages provide more detail on the data sources and methodology used to produce statistics on woodland area and planting. A quality report on Woodland Area, Planting and Restocking is available from our Quality web page. 11.1.1 Sources: Woodland area
Woodland Area
Data Sources and Methodology
Woodland Area
Data on woodland area in the UK presented in this release are derived from the following sources:
- Forestry Commission and Natural Resources Wales administrative records of FC/NRW land areas;
- National Forest Inventory (NFI) woodland map (GB);
- Statistics on new planting in Great Britain;
- Northern Ireland Woodland Register;
- Forest Service administrative records of FS woodland areas and
- Forest Service estimates of non-FS woodland area in Northern Ireland.
For Great Britain, the woodland areas at March 2014 provided in this release are based on the NFI woodland area map of Great Britain at March 2013. The map is overlaid with a map of Forestry Commission and Natural Resources Wales (ex Forestry Commission Wales only) land, to enable a breakdown by ownership type to be estimated. This also enables FC/NRW "other land" areas to be derived (Table 1.5). The woodland area figures estimated from these maps are then updated to March 2014 by adding areas of new planting in 2013-14. Initial estimates of conifer stocked area and broadleaved stocked area at March 2012, derived from NFI interim field survey results, were used to estimate the breakdown by type of woodland.
The methodology has been refined since Forestry Statistics 2011 to take account of revisions to the NFI woodland area map and the availability of initial results on stocked areas from the NFI field survey. Details of the changes and their potential impact on the figures are available in the "Methodology Note: Annual Woodland Area Estimates", available at: www.forestry.gov.uk/pdf/mnwoodarea.pdf
Further information on the methodology used by the National Forest Inventory and comparisons of results from the NFI and previous woodland area estimates is available at www.forestry.gov.uk/inventory.
Figures for Northern Ireland (Forest Service and non-Forest Service woodland) are provided by the Forest Service (www.dardni.gov.uk/forestry). Woodland areas from 2012 to 2014 provided in this release have been obtained from the NI woodland register.
The NI woodland register is based on a combined dataset derived from fourteen individual datasets from statutory bodies including Forest Service, Land and Property Services, and the Northern Ireland Environment Agency, and non statutory bodies which include Woodland Trust and National Trust. The minimum area of woodland that has been included in the register is 0.1 hectares.
The use of the NI woodland register has resulted in a step change in the non-Forest Service woodland areas reported for Northern Ireland. This should be interpreted as an improvement in the data reported, rather than an actual increase in woodland area.
Further information on administrative sources can be found at: www.forestry.gov.uk/forestry/infd-832ey5
Certified woodland area
Data on certified woodland areas are obtained from the Forest Stewardship Council (FSC), and contact with individual land owners and managers. Some of the certified woodland has dual certification, i.e. it is certified under both the FSC scheme and the Programme for the Endorsement of Forest Certification (PEFC) scheme.
The data collected from FSC are the areas that are certified for each certificate holder. Follow-up enquiries are then made with larger certificate holders to check the certified areas and to provide a country breakdown. As all FC/NRW/FS woodlands are certified, the total woodland area (as derived above, from the NFI map and FC boundaries and from Forest Service administrative records) is used, rather than the area provided on the certificates.
**Quality**
The statistics on woodland area presented here refer to woodland as a land use rather than a land cover, so felled areas and newly planted areas are included within the definition of woodland. Some statistics on woodland area as a land cover are available from other sources (e.g. Countryside Survey 2007, www.countrysidesurvey.org.uk, and associated Land Cover Map).
Detailed information on the quality of the woodland area statistics presented in this publication is available in the "Quality Report: Woodland Area, Planting and Restocking" at: www.forestry.gov.uk/pdf/qrwapr.pdf
Further quality information on FC Official Statistics is available at: www.forestry.gov.uk/forestry/infd-7zhk85
**Revisions**
Figures at March 2014 are final; provisional figures were previously released in "Woodland Area, Planting and Restocking: 2014 Edition".
The detailed woodland area breakdowns (by both ownership and forest type) have been refined since the publication of "Woodland Area, Planting and restocking: 2014 Edition".
As a result, in Table 1.1 (area of woodland by ownership & forest type):
- FC/NRW/FS broadleaves woodland area in the UK has been revised from 128 to 129 thousand hectares;
- Private sector broadleaves woodland area has been revised from 137 to 136 thousand hectares in Wales, from 330 to 328 thousand hectares in Scotland, and from 1404 to 1402 thousand hectares in the UK;
- Private sector conifers woodland area has been revised from 612 to 614 thousand hectares in Scotland and from 864 to 866 thousand hectares in the UK.
Information on revisions made since "Forestry Statistics 2013" are provided in "Woodland Area, Planting and Restocking: 2014 Edition".
Information on significant revisions to published statistics is provided in the quality report on Woodland Area, Planting and Restocking, available from our Quality web page at www.forestry.gov.uk/forestry/infd-7zhk85.
The Forestry Commission's revisions policy sets out how revisions and errors are dealt with and can be found at www.forestry.gov.uk/pdf/FCrevisions.pdf
**Further information**
Accompanying tables to this release, available at www.forestry.gov.uk/forestry/infd-7aqknx, provide longer time series data by country for certified woodland.
Figures for woodland area in the UK are provided to international organisations; the Food and Agriculture Organisation of the United Nations (FAO) for the 5-yearly "Global Forest Resources Assessment" (www.fao.org/forestry/fra/en), and Forest Europe for the 4-yearly "State of Europe's Forests" (www.foresteurope.org/reporting_SFM). Latest UK figures in international reports, submitted in May 2009 (for the Global Forest Resources Assessment 2010) and in August 2010 (for the State of Europe's Forests 2011), are based on data from the 1995-99 National Inventory of Woodland and Trees (NIWT). The UK woodland area figures presented in the International Forestry chapter are based on these earlier, NIWT-based, estimates.
Figures for woodland area are also used to compile the UK's Greenhouse Gas Inventory for the Land Use, Land Use Change and Forestry (LULUCF) sector, submitted to the United Nations Framework Convention on Climate Change (UNFCCC, http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/7383.php). Summary factsheets, produced by the Department of Energy and Climate Change (DECC), are available at www.gov.uk/government/publications/uk-greenhouse-gas-inventory-summary-factsheets.
**Release schedule**
Provisional figures for woodland area and certified woodland area at March 2015 will be published on 11 June 2015 in "Woodland Area, Planting and Restocking: 2015 Edition".
Final results for woodland area and certified woodland area at March 2015 will be published on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.1.2 Sources: Woodland Inventories
Woodland Inventories
The current National Forest Inventory is the first continuous inventory of British woodlands and is being conducted on a five year cycle. Prior to the National Forest Inventory, a series of one-off woodland inventories took place in Great Britain every 15 years or so.
Most inventories used slightly different definitions of woodland, so some apparent changes in area over time are due to changing definitions. The principal differences for inventories since 1905 are:
- **1905** Felled areas and scrub were not included.
- **1924** Undertaken by questionnaire; woods smaller than 2 acres (0.8 hectares) were not included.
- **1947** Woodlands with an area of less than 5 acres (2 hectares) were not included.
- **1965** Woodlands with an area of less than 1 acre (0.4 hectares) were not included.
- **1980** Woodlands with an area of less than 0.25 hectares were not included.
- **1995-99** Woodlands with an area of 0.1-2 hectares were included on a sample basis; some woodland missing from earlier surveys was included.
- **2010 on** All woodlands with an area of 0.5 hectares or more have been included; all woodlands below 0.5 hectares have been excluded.
Estimates of woodland area prior to 1905 have been obtained from a variety of sources, including:
- Domesday Survey of England - for information in 1086;
- Scottish Woodland History (TC Smout ed, 1997) - for estimate for end Middle Ages in Scotland;
- Roy maps c1750 - for Scotland 17th Century estimate.
National Forest Inventory
In the latest inventory, a digital map based on aerial photography, satellite imagery and other data sources has been produced, from which estimates of total woodland areas have been derived. Data are currently being collected for one hectare sample squares, covering a wide variety of topics, including ownership type, species and age.
Initial results for 2010 were published for countries (Great Britain, England, Wales, Scotland) in Spring 2011. Interim results, based on field survey data combined with information from the NFI map, have since been published on the National Forest Inventory web pages at www.forestry.gov.uk/inventory.
National Inventory of Woodland and Trees
In the 1995-99 inventory, data were collected for one hectare squares, covering a wide variety of topics, include ownership type, species and age. The results were uprated to total woodland areas from a digital map based on aerial photography.
Results have been published for countries (Great Britain, England, Wales, Scotland) and for more detailed geographical breakdowns (regions and counties).
Further details on the 1995-99 National Inventory of Woodland and Trees are available from www.forestry.gov.uk/inventory.
Further information on administrative sources can be found at: www.forestry.gov.uk/forestry/infd-832ey5 11.1.3 Sources: New planting & restocking
New planting & restocking
Introduction
New planting is the creation of new areas of woodland. Restocking is the replanting of areas of woodland that have been felled. New planting can use planting/seeding or natural colonisation. Restocking can also use planting/seeding or natural regeneration.
Data sources and methodology
Information about Forestry Commission, Natural Resources Wales and Forest Service new planting and restocking comes from administrative systems. Information about other woodland has come principally from grant schemes, including the English Woodland Grant Scheme (EWGS), Glastir in Wales, Better Woodlands for Wales (BWW), Rural Development Contracts in Scotland, Scottish Forestry Grant Scheme (SFGS) and Woodland Grant Scheme (WGS).
Areas receiving grant are allocated to years by date of payment. For natural colonisation and regeneration, the areas are generally those for which the second instalment of grant has been paid during the year. The second instalment is approved when woodland reaches a certain stage and density of growth, so this information corresponds approximately to the amount of new and restocked woodland created.
The coverage and level of grant support may differ across schemes, so that figures on grant-aided planting are not directly comparable between countries or over time. Grant support for restocking of conifers has changed with the introduction of Rural Development Contracts in Scotland in 2008. As a result, grant aid is no longer available for restocking with Sitka spruce in many cases. This is likely to have led to a reduction in areas of grant-aided restocking in Scotland.
Further information on current and closed grant schemes in Great Britain is available at www.forestry.gov.uk/planting.
Local estimates for private sector areas of planting and restocking which are not grant-aided are included for England, Wales and Scotland, where possible, but no estimates have been included for restocking of Sitka spruce in Scotland that is no longer supported by grants. Estimates of non-grant-aided planting and restocking are relatively small (less than one thousand hectares annually), and it has been assumed that all of this area is broadleaves. It is assumed that there is no non-FS non-grant aided new planting and restocking in Northern Ireland.
The use of natural regeneration in non-clearfell systems is increasing substantially - particularly for broadleaves in England. These systems are not satisfactorily represented by measuring restocking area within any given year, and so broadleaf planting is likely to be under-reported in this release and other statistics.
Figures for Northern Ireland (Forest Service and private sector woodland) are provided by the Forest Service (www.dardni.gov.uk/forestry).
Further information on administrative sources can be found at: www.forestry.gov.uk/forestry/infd-832ey5
Revisions
Figures for 2013-14 are final; provisional figures were previously released in "Woodland Area, Planting and Restocking: 2014 Edition".
Figures have not been revised from those provided in "Woodland Area, Planting and Restocking: 2014 Edition". Information on revisions made since "Forestry Statistics 2013" are provided in "Woodland Area, Planting and Restocking: 2014 Edition". Information on significant revisions to published statistics is provided in the quality report on Woodland Area, Planting and Restocking, available from our Quality web page at www.forestry.gov.uk/forestry/infd-7zhk85.
The Forestry Commission's revisions policy sets out how revisions and errors are dealt with and can be found at www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf
**Further information**
Accompanying tables to this release, available at www.forestry.gov.uk/forestry/infd-7aqknx, provide longer time series data by country for new planting and restocking.
Figures for new planting are also used to compile the UK's Greenhouse Gas Inventory for the Land Use, Land Use Change and Forestry (LULUCF) sector, submitted to the United Nations Framework Convention on Climate Change (UNFCCC, http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/7383.php). Summary factsheets, produced by the Department of Energy and Climate Change (DECC), are available at www.gov.uk/government/publications/uk-greenhouse-gas-inventory-summary-factsheets.
**Release schedule**
Provisional figures for new planting and restocking in 2014-15 will be published on 11 June 2015 in "Woodland Area, Planting and Restocking: 2015 Edition".
Final results for new planting and restocking in 2014-15 will be published on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.1.4 Sources: Felling
Felling
Introduction
Under the Forestry Act 1967, it is illegal to fell trees in Great Britain without prior approval, although there are a few exceptions (for trees below a specified size, dangerous trees, and very small scale felling operations). There is a presumption against removal of woodland and loss of forest cover in the UK, so felling licences issued under the Forestry Act will normally be conditional (where felling approval is granted subject to restocking). However, the permanent removal of trees may be granted (through an unconditional felling licence) for thinning woodland (a standard woodland management practice) or if there are overriding environmental considerations, for example to enable the restoration of important habitats (and consent may be required under the relevant Environmental Impact Assessment Regulations).
The removal of trees may also be authorised under planning regulations, to enable development (including for windfarms). In this case, a felling licence is not required.
The Forestry Commission, Natural Resources Wales and the Forest Service may also require trees to be felled to prevent the spread of pests and diseases, by serving a Statutory Plant Health Notice (SPHN) on the affected site.
Data sources and methodology
Information about felling licences and Statutory Plant Health Notices comes from Forestry Commission, Natural Resources Wales and Forest Service administrative systems.
Data on felling licences relates to felling licences that have been issued. It does not indicate whether the felling has taken place (and if so, when).
Further information on administrative sources can be found at: www.forestry.gov.uk/forestry/infd-832ey5
Quality
All of the statistics in this chapter are outside the scope of National Statistics.
Revisions
Figures on felling licences and Statutory Plant Health Notices for 2013-14 are released for this first time in this publication.
Figures on Statutory Plant Health Notices in 2010-11 and 2012-13 have been revised from those released in Forestry Statistics 2013.
In Table 1.16a, the number of sites where a Statutory Plant Health Notice has been served has been revised:
- In 2010-11: from 119 to 114 in England, from 9 to 10 in Northern Ireland;
- In 2012-13: from 163 to 166 in England, from 121 to 123 in Scotland, from 14 to 15 in Northern Ireland.
In Table 1.16b, the felling areas under Statutory Plant Health Notices have been revised:
- In 2010-11: from 1.1 to 1.2 thousand hectares in England;
- In 2012-13: from 0.3 to 0.4 thousand hectares in Scotland.
The Forestry Commission's revisions policy sets out how revisions and errors are dealt with and can be found at www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf Further information
Some related figures for England on felling licences and Statutory Plant Health Notices have been released. Data on the total area covered by felling licences (conditional and unconditional) and quarterly figures on the area of woodland to be felled under Statutory Plant Health Notices were released on 22 May 2014 in "Forestry Commission England Corporate Plan Performance Indicators and Woodland Indicators 2014". Figures on area of woodland to be felled under Statutory Plant Health Notices are also released in the quarterly "Forestry Commission England Headline Performance Reports".
Further information on felling licences (including details of exemptions) is available at:
- England - www.forestry.gov.uk/forestry/infd-6dfk86
- Wales - http://naturalresourceswales.gov.uk/apply-and-buy/apply-for-a-tree-felling-licence/?lang=en
- Scotland - http://scotland.forestry.gov.uk/supporting/grants-and-regulations/felling-licences
A new Case Management System was introduced in Scotland in January 2012. This will centralise the data collected on felling licences and provide more information about restocking proposals (including cases where the applicant has agreed to plant an alternative area, does not intend to restock or where open ground is being created) than has previously been gathered.
Further information on tree pests and diseases is available at www.forestry.gov.uk/forestry/infd-6abl5v
Release schedule
Figures on felling licences and Statutory Plant Health Notices in 2014-15 will be published on 24 September 2015 in "Forestry Statistics 2015". 11.2 Sources: Timber
Introduction
This page provides high level information on the sources of the timber statistics presented in Chapter 2; more detailed information is provided on the following pages.
The chapter covers wood production (removals) from UK woodland, and consumption and production by primary wood processors in the UK. The timber statistics presented cover both softwood (wood from coniferous trees such as spruce, pine and larch) and hardwood (wood from non-coniferous trees such as oak, birch and beech). Please refer to the Glossary for an explanation of the terms used.
Quantities of wood can be expressed in different units. Conversion factors can be used to convert between units.
Data sources and methodology
Statistics on timber are obtained from a number of sources. For wood production (removals), data are compiled from:
- Forestry Commission (FC), Natural Resources Wales (NRW) and Forest Service (FS) administrative records of removals from FC/NRW/FS woodlands;
- the Private Sector Softwood Removals Survey for softwood removals from private sector woodlands and deliveries of hardwood to wood processing industries (see below) for total hardwood removals.
There is no source of data for hardwood removals from private sector woodlands, so these are estimated to be:
- deliveries of hardwood to wood processing industries (see below) less hardwood removals from FC/NRW/FS woodlands.
Timber availability forecasts are obtained from the "50 year forecast of softwood availability" and the "50 year forecast of hardwood availability", released in April 2014 and available at www.forestry.gov.uk/inventory.
Deliveries are estimated from the following sources:
- the Sawmill Survey;
- the Wood Panel Industries Federation (for wood-based panels);
- the UK Forest Products Association (for integrated pulp and paper mills);
- the Confederation of Paper Industries (for paper production);
- the Survey of Round Fencing Manufacturers;
- the Private Sector Softwood Removals Survey (for softwood deliveries to woodfuel);
- shavings manufacturers;
- companies believed to export roundwood and/or chips.
Estimates are also provided by the Expert Group on Timber and Trade Statistics: www.forestry.gov.uk/forestry/infd-5rabj3
The Methodology note: UK wood production sets out the data analysis methods used to produce annual estimates of UK wood production.
Quality
Detailed information on the quality of the statistics presented in this publication is available in the "Quality Report: UK Wood Production and Trade" at: www.forestry.gov.uk/pdf/ukwptqrpt.pdf
Further quality information on FC Official Statistics, including separate reports for each of the industry surveys used in this release, is available at: www.forestry.gov.uk/forestry/infd-7zhk85
Revisions
Figures for 2013 and earlier years have been previously published. They are however subject to revisions from those published in "UK Wood Production and Trade: 2013 provisional figures" and previous publications, to reflect late updates to administrative or survey data. Further details on any revisions made are provided in the following pages.
Information on significant revisions to published statistics is provided in the quality report on UK Wood Production and Trade, available from our Quality web page at www.forestry.gov.uk/forestry/infd-7zhk85.
The Forestry Commission’s revisions policy sets out how revisions and errors to these statistics are dealt with, and can be found at: www.forestry.gov.uk/pdf/FCrevisions.pdf
Further information
Most of these statistics are used to compile data that are sent to international organisations in the Joint Forest Sector Questionnaires (JQ1 and JQ2), in some cases giving more detail than in this release. These returns are published as Official Statistics on the FC website; provisional figures in May and final figures in September. The statistics are used by Eurostat Forestry Statistics, UNECE Timber Bulletins, and UN/FAO Forest Product Statistics and are published on the FAOSTAT database (http://faostat.fao.org/). Summary results from the FAOSTAT database are provided in the International Forestry chapter.
The definitions used in this publication are consistent with the international definitions, as given in Eurostat’s "Forestry in the EU and the World 2011": http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-31-11-137/EN/KS-31-11-137-EN.PDF
The Department of Energy and Climate Change publishes an annual Digest of UK Energy Statistics (www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes). Chapter 7 of this digest covers renewable sources of energy including wood. Figures for wood use in renewable energy statistics take into account wood from all sources (including processed wood, recycled wood and imports), not just UK-grown roundwood.
Release schedule
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.1 Sources: Wood production
Wood production
Sources
Figures on UK wood production (or removals) are compiled from a variety of sources:
- Forestry Commission (FC), Natural Resources Wales (NRW) and Forest Service (FS) administrative records - for all removals from FC/NRW/FS woodlands;
- the Private Sector Softwood Removals Survey - for softwood removals from private sector woodlands and
- statistics on deliveries - for total hardwood removals.
The compilation of data on wood production was extended in 2004 to include Northern Ireland.
These sources cover removals of roundwood (trunk and branch wood) only. A new survey was introduced in 2009 to collect data on removals of brash (branch wood and leaf material) and stumps (above-ground base part of trees). The collection of stump removals was discontinued in 2012.
The software used to record Forestry Commission sales has included some sales of mixed softwood and hardwood as softwood in previous years.
Further information on administrative sources can be found at: www.forestry.gov.uk/forestry/infd-832ey5
Methodology
Figures for removals from FC/NRW/FS woodlands are converted from cubic metres (m³) to green tonnes using standard conversion factors. For total softwood figures, the results from the Private Sector Softwood Removals Survey are combined with the data for FC/NRW/FS woodlands to produce total softwood removals.
For hardwood figures, the total hardwood removals are assumed to equal the total hardwood deliveries (obtained from industry surveys and industry associations; see subsequent pages for further information on these sources). Hardwood removals from FC/NRW/FS woodlands are then subtracted to give an estimate of the amount of hardwood removed from private sector woodlands.
Softwood removals methodology change
The methodology used to estimate the quantity of UK softwood removals from private sector woodland was revised for the release of provisional 2011 estimates in "UK Wood Production and Trade: 2011 provisional figures". Details of the change in methodology and its impact on the figures are available in the "Methodology Review of Softwood Removals from Non-FC/FS Woodland" paper, available at www.forestry.gov.uk/pdf/rem_methodology_rev2011-12.pdf
Revisions
Private sector softwood removals are subject to revision annually (see following page, on the Private Sector Softwood Removals Survey). Removals from FC/NRW/FS woodlands are not normally revised. Total hardwood removals (and consequently hardwood removals from private sector woodlands) are subject to annual revisions (see notes on deliveries for further information).
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures". Figures for 2013 and earlier years have not been revised from those provided in "UK Wood Production and Trade: 2013 provisional figures".
Information on revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: Further information
Figures are published as UK totals. Country breakdowns (England, Wales, Scotland, Northern Ireland) are also published for softwood in table 2.2 for private sector removals and table 2.3 for FC/NRW/FS removals. Approximate country breakdowns are also estimated for hardwood removals.
Longer time series, presenting estimates of FC/NRW/FS and private sector removals by country and by softwood/hardwood are available from the Timber Statistics web page at www.forestry.gov.uk/forestry/infd-7aq15b.
Release schedule
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.2 Sources: Private Sector Softwood Removals Survey
Private Sector Softwood Removals Survey
Introduction
The Private Sector Softwood Removals Survey is an annual survey conducted by the Forestry Commission (in association with the Forest Service) of a sample of harvesting companies in the UK.
The survey, which previously covered harvesting companies in Great Britain only, was extended in 2004 to include harvesting companies in Northern Ireland. Figures for Northern Ireland in earlier years have therefore been estimated, based on responses to the 2004 survey.
Figures are published as UK totals and by country (England, Wales, Scotland, Northern Ireland).
Data collected
The questionnaire used for the Private Sector Softwood Removals Survey (available at www.forestry.gov.uk/forestry/infd-94ujw2) is issued annually to around 30-40 harvesting companies, to collect information on:
- the quantity of softwood roundwood harvested from private sector woodlands in the UK in the current (latest) year and in the previous year;
- the quantity of softwood roundwood harvested from certified private sector woodlands and
- (from the 2008 survey) the quantity sold to bioenergy (including wood pellet manufacture).
Response rates
In 2013, the questionnaire was issued to 40 harvesting companies, of which 28 responded, giving a response rate of 70%. These respondents are estimated to account for around 96% of all the softwood harvested by companies covered by the survey.
Private Sector Softwood Removals Survey Response Rates, 2004-2013
| Year | Forms issued | Responses received | Response rate¹ | Weighted response rate² | |------|--------------|--------------------|----------------|-------------------------| | 2004 | 41 | 33 | 80% | .. | | 2005 | 40 | 28 | 70% | .. | | 2006 | 43 | 35 | 81% | .. | | 2007 | 43 | 34 | 79% | .. | | 2008 | 41 | 35 | 85% | 100% | | 2009 | 40 | 30 | 75% | 92% | | 2010 | 40 | 30 | 75% | 97% | | 2011 | 37 | 26 | 70% | 96% | | 2012 | 37 | 27 | 73% | 95% | | 2013 | 40 | 28 | 70% | 96% |
Notes:
1. Response rates are calculated as the number of responses received divided by the number of forms issued.
2. Weighted response rates have been calculated from the 2008 survey onwards. They are an estimate of the proportion of the softwood harvested by companies covered by the survey that is accounted for by respondents.
.. Denotes data not available. Methodology
A review of the methodology used to estimate total private sector softwood removals (including businesses not covered by the survey) was undertaken in 2011-2012.
The "Methodology Review of Softwood Removals from Non-FC/FS Woodland" paper presents the results from this review and the implications of the change in methodology. It can be found at www.forestry.gov.uk/pdf/rem_methodology_rev2011-12.pdf.
In the new methodology, businesses not covered by the survey are assumed to represent 15% of the total softwood removals from private sector woodland. This fixed percentage is applied from 2006 onwards. The previous methodology is used for 2001 and earlier years, and a smooth transition is applied to the years 2002 to 2005 inclusive.
Quality
Detailed information on the survey quality is available in the "Quality Report: Private Sector Softwood Removals Survey" at www.forestry.gov.uk/pdf/qrremovsur.pdf.
Further quality information on FC Official Statistics is available at: www.forestry.gov.uk/forestry/infd-7zhk85
Revisions
Results from the Private Sector Softwood Removals Survey may be revised between the provisional figures published in the First Release "UK Wood Production and Trade: provisional figures" and the final data published in "Forestry Facts & Figures" and "Forestry Statistics", to take account of late returns and the results of additional data quality checking procedures.
In order to use the most accurate information possible in estimating total private sector softwood removals, figures for non respondents in earlier years are estimated wherever possible, using their responses in previous and in subsequent years. This may cause the estimates for all previous years to be revised when new data are received from a former non-respondent. This process reduces the potential over-inflation of estimated removals which can be caused by harvesting companies tending to respond when removals have increased but being less likely to do so when their removals have reduced.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures".
Figures for 2013 and earlier years have not been revised from those in "UK Wood Production and Trade: 2013 provisional figures".
Some figures for 2010, 2011 and 2012 have been revised from those published in "Forestry Statistics 2013":
- In Table 2.28, the percentage of total softwood removals volume that is certified has been revised from 86% to 87% in 2010, 86% to 85% in 2011 and 85% to 84% in 2012.
- In Table 2.30, the woodfuel supplied by sawmills to bioenergy in 2012 has been revised from 545 to 540 thousand green tonnes.
Information on other revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: 2013 provisional figures".
Release schedule
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.3 Sources: Sawmill Survey
Sawmill Survey
Introduction
The Sawmill Survey is an annual survey conducted by the Forestry Commission (in association with the Forest Service) of sawmills in the UK that are believed to use UK-grown logs. The survey comprises a short questionnaire (for smaller mills) and a detailed questionnaire (for larger mills).
The survey, which previously covered sawmills in Great Britain only, was extended in 2004 to include sawmills in Northern Ireland. Figures for Northern Ireland in earlier years have therefore been estimated, based on responses to the 2004 survey.
The detailed survey has changed over the years, both in terms of coverage and periodicity. For 1996 and earlier, detailed questionnaires were issued triennially to mills producing at least 1,000 m³ of sawnwood. From 1998 to 2004, the questionnaires were issued every two years to mills producing at least 5,000 m³ of sawnwood. From 2005, the detailed questionnaires have been issued annually, to mills producing at least 10,000 m³ of sawnwood.
Statistics reported for each year are limited to mills that are known to use UK roundwood, but also include any imported logs used by these mills.
Tables for softwood are broken down by country (England, Wales, Scotland, Northern Ireland) and by size of mill. Given the low number of sawmills using UK hardwood, tables for hardwood are presented at a total UK level only.
The number of active mills (those that produced sawnwood in the reporting year) is presented in tables 2.9 to 2.11.
Longer time series, providing data on numbers of mills and on softwood consumption and production are available from the Timber Statistics web page at www.forestry.gov.uk/forestry/infd-7aql5b. The time series data feature breakdowns by size of mill, by country and by region (in England).
Data collected
Two questionnaires are used for the Sawmill Survey:
- a detailed questionnaire goes to around 50 mills that have annual production of at least 10,000 m³ of sawnwood, and
- a short questionnaire is sent to all other mills that are believed to use UK sawlogs (around 160 mills).
Both questionnaires collect information on:
- the consumption of UK and imported logs,
- the production of sawnwood,
- chain of custody certificates and certified timber,
- (from the 2006 survey) sales to bioenergy,
- (from the 2008 survey) sales as firewood and internal use for heat/energy,
- (from the 2010 survey) other products and
- (from the 2008 survey) total employment.
In addition, the detailed questionnaire also collects information on:
- the source of UK logs (England, Wales, Scotland or Northern Ireland),
- sawnwood product markets,
- other products by type and destination and More information on the Sawmill Survey, including copies of the questionnaires sent to businesses in recent years, can be found at www.forestry.gov.uk/forestry/infd-94pgy5.
**Response rates**
In 2013, detailed questionnaires were issued to 50 mills, of which 34 responded, giving a response rate of 68%. For the short questionnaire, 49 responses were received from the 141 forms issued, corresponding to a 35% response rate. This gives an overall response rate of 43%.
Overall, the 83 sawmills responding to the sawmill survey in 2013 are estimated to account for around 80% of total UK sawnwood production.
### Sawmill Survey Response Rates (all questionnaires), 2004-2013
| Year | Forms issued | Responses received | Response rate | Weighted response rate | |------|--------------|--------------------|---------------|------------------------| | 2004 | 262 | 147 | 56% | .. | | 2005 | 257 | 143 | 56% | .. | | 2006 | 264 | 161 | 61% | .. | | 2007 | 243 | 149 | 61% | .. | | 2008 | 227 | 133 | 59% | 90% | | 2009 | 219 | 122 | 56% | 87% | | 2010 | 211 | 93 | 44% | 85% | | 2011 | 200 | 84 | 42% | 82% | | 2012 | 196 | 86 | 44% | 84% | | 2013 | 191 | 83 | 43% | 80% |
Notes:
1. Response rates are calculated as the number of responses received divided by the number of forms issued.
2. Weighted response rates have been calculated from the 2008 survey onwards. They are an estimate of the proportion of total UK sawnwood production that is accounted for by respondents.
.. Denotes data not available.
**Methodology**
Each year, figures for non respondents are estimated by rolling forward data from previous years for these mills. For larger mills, these estimates may be modified to take account of advice from the Expert Group on Timber & Trade Statistics.
**Time series data for the detailed sawmill survey**
From one year to another, some mills may have moved above or below the threshold for inclusion in the detailed sawmill survey. This may affect the trends over time in tables 2.17a to 2.20a.
The total volume of roundwood consumed and sawnwood and other products produced by sawmills covered by the detailed sawmill survey varies over time, so a change in the percentages shown in tables 2.17a to 2.19a does not necessarily reflect a change in volumes.
**Quality**
Detailed information on the survey quality is available in the "Quality Report: Sawmill Survey" at www.forestry.gov.uk/pdf/qrsawsur.pdf/$FILE/qrsawsur.pdf Revisions
Results from the Sawmill Survey may be revised between the provisional figures published in the First Release "UK Wood Production and Trade: provisional figures" and the final data published in "Forestry Facts & Figures" and "Forestry Statistics" to take account of late returns and the results of additional data quality checking procedures.
All the main results (number of mills, consumption, production) are subject to revision annually, as information becomes available about mills opening or closing, or new information becomes available for previous non-respondents. The most common revisions are relatively small downward changes, but this can vary from year to year as special exercises are run to validate the survey population. Information about new mills opening can on occasion cause much larger upward revisions to softwood volumes. Results from the survey of larger mills, which provides more detailed information, may be revised to take account of new information for previous non-respondents.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures". Revisions are as follows:
- Softwood deliveries to sawmills in 2013 have been revised upwards from 6,371 to 6,407 thousand green tonnes (Tables 2.5 and 2.7).
- Softwood production in 2013 has been revised upwards from 3,525 to 3,536 thousand cubic metres (Table 2.7).
Some figures for earlier years have been revised from those published in "Forestry Statistics 2013":
- In Table 2.19a, direct employment in 2012 by larger sawmills of line & production workers has been revised from 2,557 to 2,573 full-time equivalents, of managerial & administrative staff from 423 to 426 FTEs, and of haulage of logs to the mill from 66 to 67 FTEs.
- In Table 7.2, total employment by all sawmills has been revised from 3,819 to 3,806 in 2009, from 4,146 to 4,108 in 2010, from 4,133 to 4,095 in 2011, and from 4,174 to 4,136 in 2012.
Information on other revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: 2013 provisional figures".
Further information
Figures for UK production and trade of sawn softwood are used alongside data from other sources to assess consumption of sawn softwood in the main end-user markets in the UK. Reports are available at www.forestry.gov.uk/forestry/infd-7fgkh4.
Release schedule
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.4 Sources: Pulp & paper
Pulp & paper
Introduction
Data on the pulp and paper sector are obtained from two sources:
- The UK Forest Products Association (UKFPA, www.ukfpa.co.uk) provides figures on inputs to the integrated pulp and paper mills and
- the Confederation of Paper Industries (CPI, www.paper.org.uk) provides figures on total UK pulp and paper production.
Integrated pulp and paper mills are paper mills that use UK roundwood to produce pulp (an intermediate product in the production of paper). Inputs for other paper mills are not covered in the input statistics reported. The figures for production cover all UK paper mills.
Figures are available at a total UK level only.
Data collected
The data collected on inputs cover the type of input (roundwood, sawmill products) and the type of wood (softwood, hardwood).
Production data covers wood pulp (mechanical or semi-chemical), recovered fibre pulp and paper & paperboard. Paper & paperboard production are available for the following categories: graphic papers, sanitary & household papers, packaging materials and other paper & paperboard. Data are also collected on UK "production" of waste paper, which is the amount recovered from the UK for re-use in the UK or for export.
From 2008, total employment at integrated pulp and paper mills is also requested, to complement the data collected on this topic from other primary wood processors.
Methodology
The data on inputs to integrated pulp and paper mills are collected by the UKFPA from all such mills in the UK. The number of integrated pulp and paper mills has fallen over recent years and currently stands at 2.
The CPI collects production and raw material data from members and non-members, which accounts for the majority of UK production. The remainder is estimated by CPI using a variety of sources.
Revisions
The statistics on pulp and paper are not normally revised after publication. On occasion, a provisional figure or estimate may be published, and replaced by the actual figure in a subsequent publication.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures".
Figures for 2013 and earlier years have not been revised from those in "UK Wood Production and Trade: 2013 provisional figures". Information on revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: 2013 provisional figures".
Release schedule
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures". Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.5 Sources: Wood-based panels
Wood-based panels
Introduction
Data on the wood-based panel sector are obtained from the Wood Panel Industries Federation (WPIF, www.wpif.org.uk) and cover all wood-based panel mills in the UK.
Statistics reported for each year are available at a UK level only.
Data collected
Data are collected on inputs and on production.
The data collected on inputs covers the type of input (roundwood, sawmill products, imports, recycled wood fibre) and the type of wood (softwood, hardwood).
Production data covers all types of wood-based panels made in the UK, which currently comprises particleboard (including oriented strand board) and fibreboard (medium density fibreboard). UK production of hardboard (another type of fibreboard) ended in the UK in 1999 and production of plywood ended in 2000.
From 2008, total employment is also requested, to complement the data being collected on this topic from other primary wood processors.
Methodology
The data on wood-based panels are collected by the WPIF, which represents all UK wood panel manufacturers. Figures on wood consumption are collected annually. Production data (excluding waste and rejects) are derived from quarterly returns. Response rates in recent years have been 100%.
Revisions
The statistics on wood-based panels are not normally revised after publication. On occasion, a provisional figure or estimate may be published, and replaced by the actual figure in a subsequent publication.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures".
Figures for 2013 and earlier years have not been revised from those in "Forestry Statistics 2013".
Release schedule
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.6 Sources: Survey of Round Fencing Manufacturers
Survey of Round Fencing Manufacturers
Introduction
The Survey of Round Fencing Manufacturers is an annual survey conducted by the Forestry Commission (in association with the Forest Service) of round fencing manufacturers (or mills) in the UK that are believed to consume UK-grown roundwood.
The survey, which previously covered mills in Great Britain only, was extended in 2004 to include those in Northern Ireland. Figures for Northern Ireland in earlier years have therefore been estimated, based on responses to the 2004 survey.
Figures are published as UK totals and by size of mill.
Longer time series, providing data on numbers of mills and on softwood consumption are available from the Timber Statistics web page at www.forestry.gov.uk/forestry/infd-7aql5b. The time series data feature breakdowns by size of mill and by country.
Data collected
The questionnaire used for the Survey of Round Fencing Manufacturers is issued to around 70 mills, to collect information on the consumption of UK-grown and (from 2006) imported roundwood. In 2008, the survey was extended to cover woodfuel quantities (sales to bioenergy, sales as firewood and internal use for heat/energy) and total employment. In 2010, the survey was further extended to request data on production of round fencing and other products. A breakdown of the country of origin (England, Wales, Scotland, Northern Ireland) for UK-grown roundwood is also requested.
More information on the Survey of Round Fencing Manufacturers, including copies of the questionnaires sent to businesses in recent years, can be found at www.forestry.gov.uk/forestry/infd-94uk7h.
Response rates
In 2013, the questionnaire was issued to 67 mills, of which 27 responded, giving a response rate of 40%. These respondents accounted for an estimated 51% of roundwood purchased by softwood round fencing manufacturers.
Survey of Round Fencing Manufacturers Response Rates, 2004-2013
| Year | Forms issued | Responses received | Response rate¹ | Weighed response rate² | |------|--------------|--------------------|----------------|------------------------| | 2004 | 107 | 67 | 63% | .. | | 2005 | 103 | 60 | 58% | .. | | 2006 | 109 | 61 | 56% | .. | | 2007 | 103 | 67 | 65% | .. | | 2008 | 87 | 55 | 63% | 88% | | 2009 | 82 | 42 | 51% | 56% | | 2010 | 79 | 34 | 43% | 46% | | 2011 | 72 | 26 | 36% | 58% | | 2012 | 68 | 26 | 38% | 53% | | 2013 | 67 | 27 | 40% | 51% |
Notes:
1. Response rates are calculated as the number of responses received divided by the number of forms issued.
2. Weighted response rates have been calculated from the 2008 survey onwards. They are an estimate of the proportion of total roundwood purchased by softwood round fencing manufacturers that is accounted for by respondents.
.. Denotes data not available.
**Methodology**
Each year, figures for non respondents are estimated by rolling forward data from previous years for these mills.
**Quality**
Detailed information on the survey quality is available in the "Quality Report: Private Survey of Round Fencing Manufacturers" at www.forestry.gov.uk/pdf/qrfensur.pdf.
Further quality information on FC Official Statistics is available at: www.forestry.gov.uk/forestry/infd-7zhk85
**Revisions**
Results from the Survey of Round Fencing Manufacturers may be revised between the provisional figures published in the First Release "UK Wood Production and Trade: provisional figures" and the final data published in "Forestry Facts & Figures" and "Forestry Statistics" to take account of late returns and the results of additional data quality checking procedures.
All figures are subject to revision annually, as information becomes available about mills opening or closing, or new information becomes available for previous non-respondents. Such revisions are generally quite small.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures".
Figures for 2013 and earlier years have not been revised from those in "UK Wood Production and Trade: 2013 provisional figures".
In Table 7.2, total employment by fencing mills has been revised from 369 to 405 full-time equivalents in 2009, from 360 to 396 FTEs in 2010, from 361 to 397 FTEs in 2011, and from 334 to 370 FTEs in 2012, from the figures published in "Forestry Statistics 2013".
Information on other revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: 2013 provisional figures".
**Release schedule**
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.7 Sources: Other deliveries
Other deliveries
Introduction
Data on other deliveries comprise the following:
- shavings - mainly obtained from shavings manufacturers;
- woodfuel - private sector softwood removals survey, woodfuel suppliers and Expert Group on Timber & Trade Statistics estimates;
- hardwood round fencing - Expert Group on Timber & Trade Statistics estimates;
- other miscellaneous products - Expert Group on Timber & Trade Statistics estimates and
- exports of roundwood and chips - companies believed to export roundwood and/or chips and Forest Service (for exports from Northern Ireland).
The figures, which previously covered Great Britain only, were extended in 2004 to include Northern Ireland. Figures for exports prior to 2004 relate to Great Britain only.
Statistics reported for each year are available at a UK level only.
Data collected
The data collected on shavings, woodfuel and other miscellaneous products cover the quantity of roundwood only.
Data collected on exports covers industrial roundwood (excluding sawlogs), logs and chips. For 2004 and earlier years, these figures were provided by the UK Forest Products Association (UKFPA, www.ukfpa.co.uk).
Methodology
For shavings, data are collected from the main companies known to produce shavings. In addition, a small estimate is made to cover other shavings manufacturers.
There are currently no reliable sources for data on hardwood round fencing and other miscellaneous products. As a result, estimates (that are rarely changed) are made by the Expert Group on Timber & Trade Statistics to attempt to take account of these other uses of UK roundwood.
The estimate for hardwood used for woodfuel was revised in 2005 to reflect a perceived increase in woodfuel, but this should not be interpreted as an increase in a single year. From 2007, an estimate of roundwood use for biomass energy was included in the woodfuel figures, based on data reported by suppliers and Expert Group on Timber & Trade Statistics estimates. In 2008, the private sector softwood removals survey was extended to ask how much of the removals reported were believed to be for woodfuel use. Estimates of softwood used for woodfuel for recent years are therefore considered to be more reliable than those for earlier years.
For exports, data are requested from companies believed to have exported roundwood or chips in the last year. Forest Service provides data on behalf of companies exporting from Northern Ireland. If required, a small estimate is made for any non respondents or to cover other companies that may have exported roundwood during the year.
Revisions
Figures for deliveries of softwood for woodfuel may be revised whenever revisions are made to the Private Sector Softwood Removals Survey.
The statistics on other deliveries are not normally revised after publication. On occasion, an estimate may be revised in a subsequent publication, to take account of expert advice on perceived changes in the market for The quality report on UK Wood Production and Trade provides further information, including details of significant revisions to published statistics and is available at www.forestry.gov.uk/forestry/infd-7zhk85.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures".
Figures for 2013 earlier years have not been revised from those in "UK Wood Production and Trade: 2013 provisional figures".
Information on revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: 2013 provisional figures".
**Release schedule**
Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.8 Sources: Comparison of removals and deliveries of UK softwood roundwood
Comparison of removals and deliveries of UK softwood roundwood
The table below provides a comparison between the figures for removals (obtained from Forestry Commission, Natural Resources Wales, Forest Service and Private Sector Removals Survey) and deliveries (obtained from industry surveys and trade associations) of UK softwood roundwood.
Comparison of removals and deliveries of UK softwood roundwood, 2004-2013
| Year | FC/ NRW/ FS removals | Private sector removals | Total removals | Deliveries | Balance¹ | |------|----------------------|-------------------------|----------------|------------|----------| | | thousand green tonnes| | | | | | 2004 | 4 894 | 3 246 | 8 141 | 8 021 | 119 | | 2005 | 4 579 | 3 499 | 8 077 | 8 143 | -66 | | 2006 | 4 582 | 3 661 | 8 243 | 8 187 | 56 | | 2007 | 4 653 | 4 083 | 8 736 | 8 790 | -54 | | 2008 | 4 415 | 3 823 | 8 238 | 8 187 | 51 | | 2009 | 5 126 | 3 266 | 8 392 | 8 304 | 88 | | 2010 | 4 625 | 4 633 | 9 258 | 9 269 | -11 | | 2011 | 4 870 | 5 186 | 10 056 | 9 722 | 334 | | 2012 | 4 836 | 5 259 | 10 095 | 9 831 | 265 | | 2013 | 5 084 | 5 856 | 10 940 | 10 548 | 393 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, industry surveys, industry associations
Notes:
1. The difference between reported removals and deliveries can be caused by variations in the level of stocks between harvesting and delivery to the wood processor, and/or by the differences in data sources and methodologies used to compile removals and deliveries statistics.
The methodology used to estimate the quantity of UK softwood removals from private woodland was revised for the release of provisional 2011 estimates in "UK Wood Production and Trade: 2011 provisional figures". Details of the change in methodology and its impact on the figures are available in the "Methodology Review of Softwood Removals from Non-FC/FS Woodland" paper, available at: www.forestry.gov.uk/pdf/rem_methodology_rev2011-12.pdf/$FILE/rem_methodology_rev2011-12.pdf 11.2.9 Sources: Estimation of hardwood removals from private sector woodlands
Estimation of hardwood removals from private sector woodlands
Figures for hardwood removals from private sector woodlands are derived from total hardwood deliveries (obtained from industry surveys and trade associations) less hardwood removals from FC/NRW/FS woodlands. The table below provides figures for the last 10 years.
| Year | Deliveries | FC/ NRW/ FS removals | Private sector removals | |------|------------|-----------------------|-------------------------| | 2004 | 513 | 113 | 399 | | 2005 | 593 | 101 | 492 | | 2006 | 438 | 45 | 392 | | 2007 | 440 | 40 | 400 | | 2008 | 431 | 43 | 388 | | 2009 | 536 | 87 | 449 | | 2010 | 535 | 70 | 465 | | 2011 | 541 | 75 | 465 | | 2012 | 532 | 55 | 478 | | 2013 | 529 | 79 | 451 |
Source: Forestry Commission, Natural Resources Wales, Forest Service, industry surveys, industry associations 11.2.10 Sources: Woodfuel and pellets
Woodfuel and pellets
Introduction
Data on woodfuel have been obtained from the following sources:
- Sawmill survey and survey of round fencing manufacturers;
- Private sector softwood removals survey and woodfuel suppliers;
- Expert Group on Timber & Trade Statistics estimates.
Estimates of the quantity of recycled wood used for woodfuel are produced by the Wood Recyclers' Association (www.woodrecyclers.org).
Data on UK pellet production are obtained from the survey of UK pellet and briquette production.
For details on roundwood deliveries for woodfuel, see the Sources: other deliveries page.
Figures are published as UK totals.
Data collected
The sawmill survey and survey of round fencing manufacturers included questions asking for the quantity of woodfuel:
- sold to bioenergy,
- sold as firewood and
- used internally for heat/energy.
All 3 questions have been included in the detailed sawmill survey (sent to sawmills believed to produce at least 10 thousand m³ sawnwood annually) for some time. The sawmill survey (for smaller mills) was extended in the 2006 survey to cover quantities sold to bioenergy and again in the 2008 survey to cover firewood sales and use for heat/energy. All three questions were included in the round fencing survey for the first time in 2008.
The survey of UK pellet and briquette production was run for the first time for the collection of 2009 data. The questionnaire asks for data on the total quantity of pellets and briquettes produced, the source of fibres used, the origin of wood used and product markets.
More information on the survey of UK pellet and briquette production, including copies of the questionnaires sent to businesses in recent years, can be found at www.forestry.gov.uk/forestry/infd-94ukb2.
Response rates
Response rates for the sawmill survey and survey of round fencing manufacturers are available on the relevant sources pages.
The 2013 survey of UK pellet and briquette production was sent to a total of 18 companies that were believed to manufacture pellets or briquettes. A total of 8 responded, giving a response rate of 44%. The respondents to the survey are estimated to account for around 91% of the total production of pellets and briquettes in the UK in 2013.
Whilst the low response rates to this survey are of some concern, it is believed that many of the non-respondents are not (currently) producing pellets or briquettes. This is reflected in the much higher weighted response rates and the figures produced are believed to give a reasonable estimate of the true level of UK pellet production. Survey of UK Pellet & Briquette Production Response Rates, 2009-2013
| Year | Forms issued | Response received | Response rate¹ | Weighted Response rate² | |------|--------------|-------------------|----------------|-------------------------| | 2009 | 33 | 17 | 52% | 89% | | 2010 | 27 | 12 | 44% | 95% | | 2011 | 22 | 10 | 45% | 92% | | 2012 | 21 | 5 | 24% | 75% | | 2013 | 18 | 8 | 44% | 91% |
Notes:
1. Response rates are calculated as the number of responses received divided by the number of forms issued.
2. Weighted response rates are an estimate of the proportion of total UK pellet and briquette production that is accounted for by respondents.
Methodology
Details of the methodology used for the sawmill survey and survey of round fencing manufacturers are available on the relevant sources pages.
For the survey of UK pellet and briquette production, estimates were made for non respondents using results from previous surveys (including the 2008 woodfuel suppliers survey) and expert advice.
Quality
Detailed information on the pellet survey quality is available in the "Quality Report: Survey of UK Pellet & Briquette Production" at www.forestry.gov.uk/pdf/ukpelletqrpt.pdf/$FILE/ukpelletqrpt.pdf.
Further quality information on FC Official Statistics is available at: www.forestry.gov.uk/forestry/infd-7zhk85
Revisions
All figures are subject to revision annually, as new information becomes available.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures".
Figures for 2013 and earlier years have not been revised from those provided in "UK Wood Production and Trade: 2013 provisional figures".
Further information
Figures for Woodfuel Demand and Usage in Scotland, covering actual and potential use of woodfuel in the commercial, industrial and electrical energy sectors, are produced annually by Forestry Commission Scotland and available at http://scotland.forestry.gov.uk/supporting/strategy-policy-guidance/climate-change-renewable-energy/woodfuel-and-bio-energy.
The Department of Energy and Climate Change publishes an annual Digest of UK Energy Statistics (www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes). Chapter 7 of this digest covers renewable sources of energy including wood. Figures for wood use in renewable energy statistics take into account wood from all sources (including processed wood, recycled wood and imports), not just UK-grown roundwood.
Release schedule Provisional figures for 2014 will be released on 14 May 2015 in "UK Wood Production and Trade: 2014 provisional figures".
Final figures for 2014 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015". 11.2.11 Sources: Conversion factors
Conversion factors between cubic metres and green tonnes
The following factors have been used in Chapter 2 (Timber) to convert between cubic metres (m³) and green tonnes:
The following factors have been used in Chapter 3 (Trade) to convert between cubic metres (m³) and metric tonnes:
Conversion factors between cubic metres and metric tonnes
| Product | m³ / tonne | |---------------------------------------------------|------------| | Fuelwood, including wood for charcoal | 1.38 | | Wood chips, sawdust, etc | 1.48 | | Industrial roundwood (wood in the rough) - softwood| 1.43 | | Industrial roundwood (wood in the rough) - hardwood| 1.25 | | Sawnwood - softwood | 1.82 | | Sawnwood - hardwood | 1.43 | | Veneer sheets | 1.33 | | Plywood, particleboard | 1.54 | | Hardboard | 1.053 | | MDF (medium density fibreboard) | 1.667 | | Insulating board - density 0.35-0.5 g/cm³ | 1.667 | | Insulating board - other | 4.00 |
The following factors have been used in Chapter 3 (Trade) where required to convert to wood raw material equivalent, which indicates the volume of wood (in m³ underbark) needed to produce one unit of a final product:
Conversion factors to Wood Raw Material Equivalent (wrme) underbark | Product | Measurement unit | Factor to wrme underbark | |----------------------------------------------|------------------|--------------------------| | Fuelwood | tonnes | 1.20 | | Wood charcoal | tonnes | 6.00 | | Chips, sawdust, etc | tonnes | 1.20 | | Industrial roundwood (rough, treated) | m³ | 1.10 | | Industrial roundwood (in the rough) | m³ | 1.00 | | Sleepers | m³ | 1.58 | | Softwood sawnwood | m³ | 2.00 | | Hardwood sawnwood | tonnes | 2.50 | | Wastepaper | tonnes | 2.80 | | Mechanical pulp | tonnes | 2.50 | | Chemical dissolving pulp | tonnes | 2.50 | | Sulphate pulp, unbleached | tonnes | 6.00 | | Sulphate pulp, bleached | tonnes | 4.50 | | Sulphite pulp | tonnes | 5.00 | | Semi-chemical woodpulp | tonnes | 2.75 | | Veneer (< 6mm) | tonnes | 3.45 | | Other wood-based panels | tonnes | 2.50 | | Woodwool, woodflour | tonnes | 1.70 | | Packing cases, pallets | tonnes | 2.00 | | Other manufactured wood | tonnes | 2.50 | | Newsprint | tonnes | 2.80 | | Writing & printing paper, uncoated | tonnes | 3.50 | | Other paper & paperboard | tonnes | 2.50 |
Notes:
1. A revised set of figures was produced in FC Technical Paper 19, "Revised Forecasts of the Supply and Demand for Wood in the UK" (Forestry Commission, 1996), but these have not been used in this publication. 11.3 Sources: Trade
Introduction
Statistics on imports and exports are based on the published overseas trade statistics for intra-EU trade and extra-EU trade produced by HM Revenue & Customs (HMRC) and available at www.uktradeinfo.com
Data on apparent consumption is derived as UK production plus imports less exports.
Data Sources and Methodology
The data obtained from HMRC cover quantities (weights and volumes) and values of wood and wood products imported to and exported from the UK. Data are compiled for the following products:
- roundwood - woodfuel, industrial roundwood;
- wood charcoal;
- wood pellets;
- wood chips, particles and residues;
- sawnwood;
- wood-based panels - veneer sheets, plywood, particleboard, fibreboard;
- pulp - wood pulp, other pulp;
- recovered paper;
- paper & paperboard - graphic papers (including newsprint), sanitary & household papers, packaging materials, other paper & paperboard.
For roundwood, sawnwood and wood-based panels, a softwood/hardwood breakdown is available.
Data are also obtained by country of origin (for imports) and destination country (for exports).
For consistency with timber deliveries data, roundwood and wood chip exports figures are replaced by those compiled from companies believed to export roundwood and/or chips. For Northern Ireland, figures are provided by the Forest Service.
Where the HMRC reporting units for quantity differ from those shown in this publication, figures are adjusted using standard FAO/ECE conversion factors, which are listed in the Timber section of the Sources chapter.
The figures may also be adjusted where an apparent inconsistency in the UK trade figures cannot be resolved before the international return is required.
Historically, HMRC wood trade figures have often necessitated adjustments, following liaison with practitioners in the trade (including the Expert Group on Timber and Trade Statistics, Wood Panel Industries Federation (www.wpif.org.uk) and Confederation of Paper Industries (www.paper.org.uk)). This is partly because detailed intra-EU wood trade data is obtained through a survey of businesses that trade above a particular value threshold. Businesses that trade below this threshold are only required to report the total value of their imports and exports. Therefore the trade data reported in this publication for individual products is based on a potentially biased survey. More information on HMRC statistics can be found at www.uktradeinfo.com/Statistics/Pages/Statistics.aspx
The Methodology note: UK wood imports and exports sets out the data analysis methods used to produce annual estimates of UK wood imports and exports.
Quality
Detailed information on the quality of the trade statistics presented in this publication is available in the "Quality Report: UK Wood Production and Trade" at www.forestry.gov.uk/pdf/ukwptqrpt.pdf/$FILE/ukwptqrpt.pdf Revisions
Statistics on imports and exports are subject to revision after publication if revisions are made to the overseas trade statistics produced by HMRC. Figures may also be refined to take account of expert advice from the Expert Group on Timber & Trade Statistics and trade associations on the trade in specific products.
Figures for 2013 are final; provisional figures were previously released in "UK Wood Production and Trade: 2013 provisional figures", available at: www.forestry.gov.uk/pdf/ukwpt14.pdf/$FILE/ukwpt14.pdf
Revisions have been made to some of the 2013 figures:
- UK import quantities of sawnwood have been revised from 5,500 to 5,494 thousand m3, and of wood-based panels from 2,962 to 2,963 thousand m3 (Table 3.4).
- UK export quantities of sawnwood have been revised from 167 to 164 thousand m3 (Table 3.5).
- UK import values of sawnwood have been revised from £1,181 to £1,179 million, of wood-based panels from £876 to £874 million, of other wood from £85 to £87 million (Table 3.6).
Information on revisions made since "Forestry Statistics 2013" are provided in "UK Wood Production and Trade: 2013 provisional figures".
Information on significant revisions to published statistics is available in the "Quality Report: UK Wood Production and Trade" at: www.forestry.gov.uk/pdf/ukwptqrpt.pdf/$FILE/ukwptqrpt.pdf
The Forestry Commission’s revisions policy sets out how revisions and errors to these statistics are dealt with, and can be found at: www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf
Further information
Most of these statistics are used to compile data that are sent to international organisations in the Joint Forest Sector Questionnaires (JQ1 and JQ2), in some cases giving more detail than in this release. These returns are published as Official Statistics on the FC website; provisional figures in May and final figures in September. The statistics are used by Eurostat Forestry Statistics, UNECE Timber Bulletins, and UN/FAO Forest Product Statistics and are published on the FAOSTAT database (http://faostat.fao.org).
A summary of the international statistics available from the FAOSTAT website are presented in the chapter on International Forestry. For more information, please refer to the International Forestry section of the Sources chapter.
The definitions used in this publication are consistent with the international definitions, as given in Eurostat’s "Forestry in the EU and the World 2011": http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-31-11-137/EN/KS-31-11-137-EN.PDF
Figures for UK production and trade of sawn softwood are used alongside data from other sources to assess consumption of sawn softwood in the main end-user markets in the UK. Reports are available at www.forestry.gov.uk/forestry/infd-7fgkh4.
Release schedule
Provisional trade figures for 2014 will be released in "UK Wood Production and Trade: 2014 provisional figures" on 14 May 2015.
Final trade figures for 2014 will be released in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015" on 24 September 2015. 11.4 Sources: UK Forests and Climate Change
Introduction
Forests can help mitigate climate change by reducing the amount of greenhouse gases in the atmosphere. They do this by absorbing carbon dioxide, using the carbon to produce sugars for tree growth and releasing the oxygen back into the air. As trees grow, they store carbon in their leaves, twigs and trunk, and in the soil around them.
Globally, deforestation caused by the unsustainable harvesting of timber and the conversion of forests to other land uses accounts for almost 20 per cent of global carbon dioxide emissions. The amount of carbon stored can be increased by actions to reduce the amount of deforestation and to convert non-forested areas to forest. Forests can be managed as a sustainable source of wood – an alternative energy source to fossil fuels, and a low-energy construction material.
Woodlands can also help society adapt to a changing climate, by reducing the risk of flooding, providing shade for wildlife, reducing soil erosion and helping to cool down towns and cities.
Data sources and methodology
Carbon cycle
The diagram showing the carbon cycle is adapted from Figure 3 of Broadmeadow and Matthews (2003).
Forest carbon stock
Table 4.1 is adapted from Table 3e in the final UK report submitted in August 2014 to FAO for the Global Forest Resources Assessment (FRA) 2015 (www.fao.org/forestry/fra/76871/en).
Units: This table is shown in million tonnes carbon dioxide equivalent (MtCO₂e) rather than million tonnes carbon (MtC). To convert from CO₂e to C multiply by 12/44.
Timescales: Carbon stock is estimated for 1990, 2000, 2005, 2010 and 2015.
Living biomass: Carbon in living biomass is based on data from "NFI report: Carbon in live woodland trees in Britain" (Forestry Commission, May 2014), uprated from GB to UK estimates based on estimated volumes of growing stock. A "root to shoot ratio" (below ground biomass = 0.36 x above ground biomass) is used to estimate the breakdown between above- and below- ground biomass (Levy et al, 2004).
Deadwood: Consistent with Morison et al (2012), estimates of deadwood volume per hectare are taken from Gilbert (2007). These are rated up by woodland area estimates for FRA 2015, assuming a density of 0.45 ODT/m³, and an average carbon content of 50% is applied.
Litter: Estimates of the carbon content of the litter layer are available from Morison et al (2012). These are rated up by woodland area estimates for FRA 2015 to provide a consistent time series.
Soil carbon: Estimates of the carbon content of soil 0-100 cm for England, Wales and Scotland are available from Morison et al (2012). An estimate of the carbon content of soil for Northern Ireland is taken from Bradley et al (2005) and rated downward to reflect the generally lower carbon content found in Morison et al (2012). The soil carbon estimates are then rated up by woodland area estimates for FRA 2015 to provide a consistent time series. This soil estimate does not take account of soil carbon accumulation. This was previously included from estimates made by the Centre for Ecology and Hydrology in "Land Use, Land Use Change and Forestry" (LULUCF) modelling. It also assumes that the soil carbon content of afforested (and previously unwooded) land has the same soil carbon content as woodland soils, whereas in practice this may vary.
Comparison with other data sources: Figures in this updated table are broadly similar to the estimates made in Morison et al (2012).
**Future updates:** This table will be updated once further information is available from the National Forest Inventory.
**Carbon sequestration**
The information in Table 4.2 is taken from inventory and projections of UK emissions by sources and removal by sinks due to land use, land use change and forestry, produced by CEH for input to 2012 UK Greenhouse Gas emissions final figures (DECC, March 2014) and the National Atmospheric Emissions Inventory (NAEI, http://naei.defra.gov.uk) which incorporates all air pollutants including greenhouse gases. They exclude the pool of carbon in timber products.
Figure 4.2 shows annual estimates of carbon accumulation by country, taken from the same source but shows carbon in living forest biomass only; it excludes carbon in litter, soils and forest products. Future predictions of carbon uptake assume that commercial conifer plantations will be replanted when felled, and that planting of new woodland will continue at the same rate as in 2012 (mid projection).
The carbon sequestration estimates presented in Table 4.2 and Figure 4.2 differ significantly from those published in "Forestry Statistics 2013", due to changes in the data and model used by CEH. For more information, please refer to the CEH "UK Greenhouse Gas Inventory, 1990 to 2012: Annual Report for submission under the Framework Convention on Climate Change" (http://naei.defra.gov.uk/reports/reports?report_id=789) and "Projections of emissions and removals from the LULUCF sector to 2050" (http://naei.defra.gov.uk/reports/reports?report_id=798).
Emissions and sequestration can be presented as tonnes carbon or tonnes carbon dioxide (CO₂). To convert from tonnes CO₂ to tonnes carbon multiply by 12/44.
**Woodland Carbon Code**
The Woodland Carbon Code is a voluntary standard, initiated in July 2011, for woodland creation projects that make claims about the carbon they sequester (take out of the atmosphere). All projects must be placed on the UK Woodland Carbon Registry. Their claims about potential carbon sequestration are validated by an independent certification body. Validated projects are then verified on a regular basis to confirm the progress of carbon sequestration.
Information about Woodland Carbon Code projects comes from the UK Woodland Carbon Registry, housed on the Markit Environmental Registry (www.markit.com/product/registry). The register is a live database and summary data are extracted on a quarterly basis.
Further information on the Woodland Carbon Code is available at: www.forestry.gov.uk/carboncode
Further information on administrative sources can be found at: www.forestry.gov.uk/forestry/infd-832ey5
**Public opinion on climate change**
Public Opinion of Forestry Surveys have been run every 2 years by the Forestry Commission. The surveys cover public attitudes to forestry and forestry-related issues. The surveys included 2 questions on climate change: one asking about ways in which forests and woodlands can impact on climate change (Figure 4.4) and one asking about how UK forests should be managed in response to the threat of climate change. Further information on the surveys is available in the Sources: Public Opinion of Forestry page.
**References**
Bradley, R.I., Milne, R., Bell, J., Lilly, A., Jordan, C., Higgins, A. (2005) "A soil carbon and landuse database for the UK", Soil Use and Management 21 (363-369), DOI: 10.1079/SUM2005351 Quality
All of the statistics in this chapter are outside the scope of National Statistics, but are included here to give a broad indication of the role of UK forests in climate change.
Revisions
Statistics on UK forests and climate change obtained from others are subject to revision whenever the source data are revised.
The Forestry Commission’s revisions policy sets out how revisions and errors to these statistics are dealt with, and can be found at: www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf.
Release schedule
For information on the release schedules of statistics produced by others, see relevant websites (above).
"Woodland Carbon Code Statistics: data to September 2014" will be released on 9 October 2014.
"Woodland Carbon Code Statistics: data to December 2014" will be released on 15 January 2015.
"Woodland Carbon Code Statistics: data to March 2015" will be released on 9 April 2015.
"Woodland Carbon Code Statistics: data to June 2015" will be released on 14 July 2015.
"Forestry Statistics 2015" and "Forestry Facts & Figures 2015" will be released on 24 September 2015.
UK data for the Global Forest Resources Assessment 2015 will be released on 30 October 2014.
The next Public Opinion of Forestry Survey is expected to run in early 2015, with results available in summer 2015. 11.5 Sources: Environment
Introduction
The statistics presented in the Environment chapter of this release cover:
- populations of wild birds;
- woodland vegetation;
- public opinion on tree health; and
- woodland fires.
Woodland fires
Wildfires, including woodland fires, are uncontrolled vegetation fires. Although they can start naturally, the majority are caused by people, either accidentally or deliberately.
Wildfires can impact on transport network and power lines; damage property and businesses; affect tourism and recreation; and threaten people's lives. They also damage the natural and historic environment and release carbon dioxide stored in vegetation and soils which contributes to climate change.
Despite woodland wildfires making up a relatively small proportion of all wildfire incidents in the UK, their impacts can be disproportionately large and costly to society. Destructive wildfire events are predicted to increase in frequency in the UK due to increased land-use pressure and climate change.
Data sources and methodology
Populations of wild birds
Population indices for wild birds are a framework indicator for sustainable development. The data published here are based on those published in the Wild bird populations in the UK, 1970-2012 statistical release (Defra, October 2013), rescaled here to give year 2000 = 100 instead of year 1970 = 100.
The index for woodland specialists was recalculated in 2007 to include 4 additional species; this affected the indices for total woodland birds and (to a lesser extent) all birds.
Woodland vegetation
Figures showing the overall condition and richness of flora in woodland are derived from data collected by the Countryside Survey in 2007 and previous surveys in 1998 and 1990. Results were published in late 2008 (www.countrysidesurvey.org.uk).
Please refer to the Countryside Survey website for an explanation of the vegetation richness and condition scores.
No similar samples were taken in the Northern Ireland Countryside Survey.
Public opinion on tree health
Public Opinion of Forestry Surveys have been run every 2 years by the Forestry Commission. The surveys cover public attitudes to forestry and forestry-related issues. A question asking about tree health was included for the first time in the 2013 surveys (Figure 5.2). Further information on the surveys is available in the Sources: Public Opinion of Forestry page.
Woodland fires
Information about wildfires comes from the Incident Recording System (IRS), reported by Fire and Rescue Services and submitted to the Department for Communities and Local Government, Scottish Government and Welsh Government.
Information on woodland areas has been obtained from the National Forest Inventory woodland map. Further details on the definition of woodland and the coverage of the National Forest Inventory are provided in the Woodland Area and Planting section of the Sources chapter.
A spatial (GIS) analysis has been undertaken to identify fires that occurred in woodlands, as defined by the National Forest Inventory.
References
Department for Environment, Food and Rural Affairs (2013) "Wild bird populations in the UK, 1970-2012", National Statistics Release (www.gov.uk/government/publications/wild-bird-populations-in-the-uk).
Department for Communities and Local Government (2014) "Fire Statistics Great Britain 2012 to 2013", National Statistics Release (www.gov.uk/government/collections/fire-statistics-great-britain)
Quality
Limited data are currently available on the environmental aspects of woodlands. Other than Wild Bird Populations, all of the statistics in this chapter are outside the scope of National Statistics, but are included here to give a broad indication of the woodland environment.
Previous editions of Forestry Statistics included data on ancient and semi-natural woodland and protected areas. However, as estimates have not been updated for some time, these tables have been dropped from this edition.
Revisions
Statistics on the environment obtained from others are subject to revision whenever the source data are revised.
The Forestry Commission’s revisions policy sets out how revisions and errors to these statistics are dealt with, and can be found at: www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf
Release schedule
For information on the release schedules of statistics produced by others, see relevant websites (above).
The next Public Opinion of Forestry survey is expected to run in early 2015, with results available in summer 2015.
"Forestry Statistics 2015" and "Forestry Facts & Figures 2015" will be released on 24 September 2015. 11.6 Sources: Public Opinion of Forestry
Introduction
The Forestry Commission has conducted similar surveys of public attitudes to forestry and forestry-related issues every two years since 1995. Three separate surveys were undertaken in 2013; in Scotland, Wales and across the UK as a whole. A survey for Northern Ireland was most recently carried out in 2014.
Some questions were asked in all of the surveys conducted in 2013/2014 and in the surveys undertaken in earlier years, but an increasing number are survey specific. Questions are asked on a variety of topics including, public awareness of forestry, woodland-based recreation and community involvement, woodfuel and the relationship between forestry and climate change. A new topic, tree health, was introduced in the 2013/2014 surveys.
Data Sources and Methodology
The survey results were obtained by placing questions in omnibus surveys run by private market research companies. The four surveys undertaken in 2013/2014 achieved representative samples of around:
- 2,000 adults across the UK
- 1,000 adults across Scotland
- 1,000 adults across Wales
- 1,000 adults across Northern Ireland
All of the surveys use quota sampling to ensure that the sample selected is representative of the population, and results are weighted to produce estimates for the population as a whole.
Further information on the methodologies used for each survey are provided in the individual survey reports, available at http://www.forestry.gov.uk/forestry/infd-5zy9w
Quality
All results are subject to the effects of chance in sampling, so a range of uncertainty (confidence interval) is associated with results from the surveys. The confidence intervals take into account the effect of clustering, weighting and stratification in the survey designs. For questions asked to the whole UK sample in 2013 of around 2,000, the range of uncertainty around any result should be no more than ±3.3%, while for questions asked to around 1,000 respondents, the corresponding range of uncertainty should be no more than ± 4.6%.
Revisions
Results from the Public Opinion of Forestry (POF) Surveys were previously released in the separate POF reports for each country. The statistics are not normally revised.
The Forestry Commission's revisions policy sets out how revisions and errors are dealt with and can be found at www.forestry.gov.uk/pdf/FCrevisions.pdf
Further information
Reports for UK and England (using a subset of the UK data set), for Scotland and for Wales were published on 25 July 2013, along with the full sets of data tables.
A report for Northern Ireland was published on 28 August 2014, along with the full set of data tables.
Reports and data tables (including results for previous surveys) are available at www.forestry.gov.uk/forestry/infd-5zy9w Release schedule
The next Public Opinion of Forestry surveys are expected to run in early 2015, with results available in summer 2015. 11.7 Sources: Recreation
Introduction
There are two main approaches to visitor monitoring:
- General population surveys of individuals at their home. This approach is employed for the Scottish Recreation Survey, Scotland's People and Nature Survey, the Welsh Outdoor Recreation Survey, the Monitor of Engagement with the Natural Environment (England) and the Public Opinion of Forestry surveys. (Tables 6.1 to 6.6).
- Surveying and counting of visitors to a specific area or woodland. On-site surveying has been employed for the All Forest Monitoring and Quality of Experience surveys. In addition, the Northern Ireland Forest Service keep records of visitors who pay an admission charge to their sites. (Tables 6.7 to 6.10).
There are advantages and disadvantages to each approach, related to factors such as representativeness, feasibility and cost; each approach provides different types of information.
In general, on-site studies provide information on visitor interaction with local or specific woodland areas and include all categories of visitors to a site, regardless of their country of residence and interests.
In contrast, general population studies are limited to residents of a certain country or area, are often carried out by market research companies at a national level, and include people who do not visit woodlands.
Data Sources and Methodology
Household surveys
The information shown in Table 6.1 has been obtained from the following general population household surveys.
- UK Day Visits Surveys (1994, 1996, 1998)
- GB Day Visits Survey (2002/3)
- Scottish Recreation Survey (2004 to 2012)
- England Leisure Visits Survey (2005)
- Welsh Outdoor Recreation Survey (2008, 2011)
- Monitor of Engagement with the Natural Environment (England 2009/10 onwards)
- Scotland's People and Nature Survey (2013)
The Monitor of Engagement with the Natural Environment has also been used to provide information on visitor characteristics in table 6.2. For further information on this survey, see www.naturalengland.org.uk/ourwork/research/mene.aspx
Estimates of frequency of visits to woodlands in Scotland (Table 6.3) has been produced from Scotland's People and Nature Survey, a new survey that ran for the first time from March 2013 to February 2014 and is expected to run every 3 years. Scotland's People and Nature Survey replaces the Scottish Recreation Survey. Further information on both surveys are available at www.snh.gov.uk/land-and-sea/managing-recreation-and-access/increasing-participation/measuring-participation/.
The Welsh Outdoor Recreation Survey also provides statistics on visitor characteristics (Table 6.4). Further information on this survey is available at http://naturalresourceswales.gov.uk/policy-and-guidance/health-and-recreation-policy/welsh-outdoor-recreation-survey/?lang=en
Public Opinion of Forestry Surveys have been run every 2 years by the Forestry Commission. The surveys cover public attitudes to forestry and forestry-related issues, including visits to woodland (Tables 6.5 to 6.6 and Figure 6.1). Further information is available on the previous page.
On-site surveys All Forests Surveys were run at a sample of Forestry Commission sites in Wales in 2004 (Table 6.7) and in Scotland from 2004 to 2007 and in 2012-13 (Table 6.8), to provide estimates of the numbers of visits to Forestry Commission woodland in Wales and in Scotland. Further information is available at www.forestry.gov.uk/forestry/infd-5wcmr4.
Quality of experience surveys have been run at selected Forestry Commission sites in England and Wales. Copies of the reports for each survey are available at www.forestry.gov.uk/forestry/infd-5wwjpt
Statistics on the day visitors to Forest Service sites in Northern Ireland where an admission charge is made is provided by the Forest Service. Further information on the Forest Service is available at www.dardni.gov.uk/forestry
Public Access to Woodland
Data on public access to woodland are derived from sources belonging to the Woodland Trust:
- The Woods for People project created an inventory of accessible woodland in 2004. Annual updates have been undertaken since and are included in Table 6.11.
- The Space for People project analyses information from the Woods for People inventory to produce estimates on the proportion of the population who live close to woods. Full reports have been published for 2004 and 2009. Summary results are in Table 6.12.
Further information is available at www.woodlandtrust.org.uk/
Quality
It is notable from Table 6.1 that different surveys have provided some quite different estimates of the aggregate number of visits to woodlands. It is likely that differences in survey design and methodology have contributed to a considerable proportion of the differences in results between these surveys. As the scope of the surveys has evolved over time, the figures in Table 6.1 should not be interpreted as time trends but instead as separate results from each survey.
For England and GB, the 2002/3 GBDVS showed a lower number of visits to woodlands than previous surveys. For England, ELVS 2005 showed an even lower total. It is likely that the use of different market research companies and varying approaches and practices (in-home or telephone interview, changed questionnaire structure, etc) are responsible for a substantial proportion of the differences identified in the table. The questionnaire wording for MENE, starting in 2009/10, was intended to prompt the reporting of more of the short local trips, and this has resulted in a substantial increase in the total woodland visits reported.
Table 6.1 also highlights large differences between UK/GBDVS and later surveys in the estimates for Scotland and Wales, with results for both countries dramatically higher in recent years (and despite the Welsh figure being limited to trips with woodland as main destination). It is again likely that this variation is primarily connected with the change in survey scope, design and methodology (UK and GB Day Visit Surveys until 2002/3, Scottish Recreation Survey for 2004 to 2012, Welsh Outdoor Recreation Survey 2008 and 2011).
A further inconsistency may have occurred between the Scottish Recreation Survey and Scotland's People and Nature Survey, resulting in an apparently large increase in the number of woodland visits between 2012 and 2013. The 2013 estimate uses a new population estimate to gross up the survey results to an estimate of the total number of visits by the population as a whole, and this change has contributed to at least some of the apparent increase.
In common with all sample based surveys, the results from each survey are subject to the effects of chance, depending on the particular survey method used and the sample achieved, thus confidence limits apply to all results from these surveys. For example, the range of uncertainty around the estimated 62 million visits to woodland in Scotland (by Scottish residents) in 2008, should be within +/-14%, i.e. the true figure is likely to be between around 55 and 69 million. In the Scottish Recreation Survey, the reports produced by TNS calculate the total number of visits for each month based on the average number of visits in a 4-week recall period, scaled up to the number of days in the month, applied to the Scottish adult population. These estimates are then allocated to trip locations using a data set of individual visit-weighted data. In reports produced by TNS and earlier editions of Forestry Statistics, this allocation was done for each quarter using rounded percentages. From Forestry Statistics 2010 the calculation was changed to use annual unrounded weighted data; this should be more accurate and ensures that "main destination" results add across categories.
The Wales 2008 total is not shown explicitly in the initial reports for WORS 2008. It is calculated from the following figures in the tables: 36.028 million visits in 4 weeks x 13 x 14% to woodland (where the 14% is derived, unrounded, from 820/6045 in the weighted results).
For England, MENE 2009/10 to 2012/13, woodland visits were identified in the part of the questionnaire that collected details for one visit per respondent. Appropriate visit weights were applied to each record in this data set, and weighted tables were then produced selecting all visits that included woodland.
Technical reports, providing further information on MENE, ScRS and WORS, are available from relevant websites (see above).
**Comparison between household and on-site surveys in Scotland**
The aggregate visit number estimates for Forestry Commission Scotland woodland obtained from the on-site All Forests Scotland surveys (9.1 million in 2012-13, Table 6.8) is substantially lower than the estimates derived from the Scottish Recreation Survey (around 27 million for 2012, see Forestry Statistics 2013, Table 6.3).
Although it would be unreasonable to expect that two surveys which employ such differing methods would produce consistent estimates, the magnitude of the difference is notable.
The methodology used in the All Forests Surveys is believed to produce a more reliable estimate of the total number of visits annually to Forestry Commission Scotland woodland. It is likely that the estimates derived from the Scottish Recreation Survey may include visits to woodlands owned by others (with respondents reporting "Forestry Commission" as the owner, as this is an organisation that they recognise).
**Revisions**
Most of the statistics in the Recreation chapter have been previously released in other publications, usually by other organisations. The latest year figures for day visitors to Forest Service sites in Northern Ireland and for Woods for People are published for the first time in this release. Figures for earlier years have not been revised from those published in Forestry Statistics 2013.
When originally published by Woodland Trust, Woods for People data for publicly accessible woodland in 2004 included some non-woodland areas. They were revised in 2007, before their first inclusion in Forestry Statistics, to include woodland areas only.
Results for the Scottish Recreation Survey for years up to 2007 (Table 6.1) were amended in 2009 from previously published figures, to incorporate improved weighting procedures.
The Forestry Commission's revisions policy sets out how revisions and errors are dealt with and can be found at www.forestry.gov.uk/pdf/FCrevisions.pdf/$FILE/FCrevisions.pdf
**Further information**
Further information on recreation statistics and access to individual survey reports is available from www.forestry.gov.uk/forestry/ahen-5gcdvl.
**Release schedule** For information on the release schedules of statistics produced by others, see relevant websites (above).
The next Public Opinion of Forestry survey is expected to run in early 2015, with results available in summer 2015.
"Forestry Statistics 2015" and "Forestry Facts & Figures 2015" will be released on 24 September 2015. 11.8 Sources: Employment and businesses
Introduction
Data sources and methodology
Statistics on employment are obtained from:
- the Annual Business Survey (www.ons.gov.uk/ons/rel/abs/annual-business-survey/index.html), formerly the Annual Business Inquiry, (Office for National Statistics (www.ons.gov.uk)), an annual survey of UK businesses, and
- Industry surveys (Sawmill Survey, Survey of Round Fencing Manufacturers) and industry associations (UK Forest Products Association (www.ukfpa.co.uk), Wood Panel Industries Federation (www.wpif.org.uk)) - for employment in primary wood processing.
Statistics for accidents to employees are obtained from Health & Safety Executive statistics for Great Britain, available at www.hse.gov.uk/statistics.
Numbers of businesses are estimated from:
- Industry surveys (Sawmill Survey, Survey of Round Fencing Manufacturers) and industry associations (UK Forest Products Association, Wood Panel Industries Federation) - for businesses believed to be using UK-grown roundwood, and
- UK Business: Activity, Size and Location (Office for National Statistics) - for VAT and/or PAYE registered businesses (www.ons.gov.uk/ons/rel/bus-register/uk-business/index.html).
Standard Industrial Classification (SIC)
The Annual Business Survey (Annual Business Inquiry prior to 2009), statistics on health and safety and statistics on VAT and/or PAYE registrations classify businesses by UK Standard Industrial Classification (SIC) code. Detailed information on the SIC is available at www.ons.gov.uk/ons/guide-method/classifications/current-standard-classifications/standard-industrial-classification/index.html. Businesses are classified to SIC codes according to their main activity. The SIC codes are revised periodically to take account of changes in the global economy. The following codes from SIC 2003 and SIC 2007 have been used in this edition of Forestry Statistics:
| Title | SIC 2003 | SIC 2007 | |------------------------------|-----------------------------------------------|-----------------------------------------------| | Forestry | 02 (forestry, logging & related services) | 02 (forestry and logging) | | Wood products | 20 (manufacture of wood and wood products) | 16 (manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials) | | Sawmilling | 20.1 (sawmilling and planing of wood, impregnation of wood) | 16.1 (sawmilling and planing of wood) | | Panels | 20.2 (manufacture of veneer sheets, manufacture of plywood, laminboard, particleboard and other panels and boards) | 16.21 (manufacture of veneer sheets and wood-based panels); | | Secondary products | Other SIC 20 (manufacture of builders' carpentry and joinery, wooden containers, and other products of wood, straw and plaiting materials) | Other SIC 16 (manufacture of assembled parquet floors, other builders' carpentry and joinery, wooden containers, and other products of wood, straw and plaiting materials) | | Pulp, paper & paper products | 21 (manufacture of pulp, paper and paperboard). | 17 (manufacture of paper and paper products) | | | 21.1 (manufacture of pulp, paper and paperboard). | 17.1 (manufacture of pulp, paper and paperboard). | In addition figure 7.1, covering accidents to employees, also uses the following SIC 2003/2007 codes:
- Agriculture etc: 01/01 (agriculture, hunting) + 02/02 (forestry, logging & related services) + 05/03 (fishing, exc sea fishing);
- Manufacturing: 15-37/10-33 (all categories of manufacturing).
Quality
The forestry and wood processing businesses covered by the Annual Business Survey (Table 7.1), accidents to employees (Table 7.3) and VAT and/or PAYE registered businesses (Table 7.5) differ from those covered by the timber industry surveys and enquiries (Chapter 2, Tables 7.2 and 7.4), as follows:
- Businesses below VAT and PAYE thresholds are excluded from the SIC-based statistics;
- Businesses whose main activity is not forestry or wood processing will be allocated to other SIC codes and therefore excluded from the relevant tables on the Annual Business Survey, accidents and VAT and/or PAYE businesses;
- Businesses that do not use UK-grown roundwood are excluded from the Forestry Commission’s timber industry surveys and enquiries;
- Businesses involved in secondary wood processing are excluded from the Forestry Commission’s timber industry surveys and enquiries.
Reporting requirements for accidents have changed, with absences of at least 3 days to be reported until March 2012 and absences of at least 7 days to be reported from April 2012. As a result, accident data for 2012-13 are not fully consistent with figures for earlier years.
Revisions
Statistics on employment and businesses obtained from others are subject to revision whenever the source data are revised. Statistics from timber industry surveys and enquiries are subject to revision whenever the timber statistics are revised (see relevant pages within the Sources chapter for further information on revisions to industry surveys and enquiries).
The Forestry Commission’s revisions policy sets out how revisions and errors to these statistics are dealt with, and can be found at: www.forestry.gov.uk/pdf/FCrevisions.pdf.
Further information
For further information, please refer to our Employment statistics page at www.forestry.gov.uk/forestry/infd-7avhb2.
Release schedule
For information on the release schedules of statistics produced by others, see relevant websites (above).
"Forestry Statistics 2015" and "Forestry Facts & Figures 2015" will be released on 24 September 2015. 11.9 Sources: Finance & prices
Introduction
The statistics presented in the Finance and Prices chapter of this release cover:
- timber prices;
- financial returns from forestry investment;
- gross value added (GVA);
- government expenditure on forestry; and
- grant schemes.
Figures on financial returns from forestry are produced by another organisation; they are not designated as National Statistics, but are provided to give additional context.
Data Sources and Methodology
Timber Price Indices: Data sources
The Coniferous Standing Sales Price Index and the Softwood Sawlog Price Index are both based on sales of softwood (conifers) by the Forestry Commission and Natural Resources Wales; they do not include any private sector data. They only cover roundwood from woodland; they do not cover sawmill products or other end products.
The Coniferous Standing Sales Price Index (CSSPI) is based on administrative data for standing sales of conifers (softwood) by the Forestry Commission/ Natural Resources Wales. Around half of Forestry Commission/ Natural Resources Wales softwood is sold standing, with the purchaser responsible for harvesting. The standing sales cover a full range of sizes, as they include thinning and removal of trees for environmental reasons, as well as harvesting of mature trees. The data used to compile the index covers volumes sold and values by average tree size.
The Softwood Sawlog Price Index (SSPI) is based on administrative data for sales of softwood sawlogs by the Forestry Commission/ Natural Resources Wales. The data used to compile the index covers volumes and values. Direct production by the Forestry Commission/ Natural Resources Wales (where the softwood is sold after harvesting) also covers a range of sizes, but the price statistics reported are limited to sales of logs (over 14 cm diameter).
Both the Coniferous Standing Sales Price Index and the Softwood Sawlog Price Index include sales by long term contract, where the volume of roundwood covered by the contract is sold over a period of more than one year. To take account of changes in price over the term of the contract, price adjustments are made periodically, as part of the contract. The Coniferous Standing Sales Price Index and Softwood Sawlog Price Index include roundwood sales by long term contract but, at present, price adjustments are not included in the indices.
Further information on the administrative data is provided in the Statement of Administrative Sources on the FC Sales Recording Package, available at www.forestry.gov.uk/forestry/infd-832ey5
Methodology for Coniferous Standing Sales Price Index
The Coniferous Standing Sales Price Index (CSSPI) is an index of the average prices per cubic metre overbark standing achieved for standing sales of conifers by the Forestry Commission/ Natural Resources Wales. It covers all conifer standing sales (open market and negotiated) by the Forestry Commission/ Natural Resources Wales over the twelve month period. All thinning and clearfell data is combined within the index. It includes all species, tree sizes, working practices and conditions. It does not include any private sector data.
The Coniferous Standing Sales Price Index (CSSPI) is calculated using a Fisher index with 5-yearly chain linking. By using a Fisher index to produce the index, distortions in the average price caused by variations in the average tree size over time are corrected. Applying chain linking at regular intervals (in this case, every 5 years) ensures that the index remains relevant over time. Other factors that may affect price (e.g. working conditions, timber quality or species) are not taken into account when constructing the index.
The methodology used to calculate the Coniferous Standing Sales Price Index was reviewed in 2008, with the Fisher index with 5-yearly chain linking introduced from the November 2008 publication of "Timber Price Indices". Further information on the methodology used to calculate the Coniferous Standing Sales Price Index is provided in the paper "Methodology for the Coniferous Standing Sales Price Index", available from the Statistical Methodology and Reviews page of the Forestry Commission website at www.forestry.gov.uk/forestry/ahen-589ddl.
The average prices and the index are expressed in nominal terms (i.e. the actual prices at the time of sale) and in real terms (i.e. the prices converted to 2011). The GDP (Gross Domestic Product at market prices) deflator, produced by the Office for National Statistics (ONS), is applied to the nominal figures to derive real average prices and the index in real terms. The GDP deflator data can be downloaded from the ONS Quarterly National Accounts dataset at www.ons.gov.uk/ons/datasets-and-tables/data-selector.html?dataset=qna, by selecting Table A1: National Accounts Aggregates and Series: YBGB.
**Methodology for Softwood Sawlog Price Index**
The Softwood Sawlog Price Index is calculated from data covering separate 6-month periods to September and March. This means that the changes reported are not covering the same periods as the Coniferous Standing Sales Price Index.
The index measures the average price per cubic metre overbark of sawlog sales, with no adjustment for any change in size mix, as it covers a more limited range of sizes than the Coniferous Standing Sales Price Index.
The index is expressed in nominal terms (i.e. based on the actual prices at the time of sale) and in real terms (i.e. based on the prices converted to 2011 prices, by removing the effects of general inflation). As for the Coniferous Standing Sales Price Index, the GDP (Gross Domestic Product at market prices) deflator is used to convert from nominal to real terms.
For consistency with the Coniferous Standing Sales Price Index, the Softwood Sawlog Price Index is rebased every 5 years; in this release, the period to September 2011 = 100.
**Financial returns**
Estimates of financial returns from commercial Sitka spruce plantations are compiled and published by Investment Property Databank Limited (IPD), www.ipd.com/OurProducts/Indices/UnitedKingdom/UKForestry/tabid/1012/Default.aspx. The returns include changes in the value of forestry estates, as well as timber price changes.
**Gross Value Added**
Gross value added (GVA) measures the contribution to the economy of each individual producer, industry or sector in the United Kingdom. A more detailed definition of GVA is available at www.ons.gov.uk/ons/guide-method/method-quality/specific/economy/national-accounts/gva/index.html
Statistics on gross value added are obtained from the Annual Business Survey, formerly the Annual Business Inquiry, (Office for National Statistics), an annual survey of UK businesses. Further information on the Annual Business Survey is available at www.ons.gov.uk/ons/guide-method/method-quality/specific/business-and-energy/annual-business-survey/index.html
The Annual Business Survey uses the UK Standard Industrial Classification (SIC) to classify businesses to industries according to their main activity. Detailed information on the SIC is available at www.ons.gov.uk/ons/guide-method/classifications/current-standard-classifications/standard-industrial- Government expenditure
Information about government expenditure on forestry is obtained from administrative records held by the Forestry Commission. Expenditure by Natural Resources Wales, Defra and other government departments/Devolved Administrations is excluded.
Further information is available in the Statement of Administrative Sources on FC financial accounts, available at www.forestry.gov.uk/forestry/infd-832ey5. More detailed financial data for the Forestry Commission are published annually in the Annual Report & Accounts produced by National Offices.
Data on grant expenditure are obtained from administrative records for woodland grant schemes across GB. Further information is available in the Statement of Administrative Sources on FC grant schemes data, available at www.forestry.gov.uk/forestry/infd-832ey5.
Quality
The Coniferous Standing Sales Price Index and the Softwood Sawlog Price Index are the only official statistics published for roundwood prices in the UK. So, although they are limited to sales by the Forestry Commission and Natural Resources Wales, they are sometimes used as indicators of price trends for other UK softwood. In recent years, softwood has accounted for more than 90% of all timber harvested in Great Britain, and the Forestry Commission/Natural Resources Wales has accounted for around 45% to 50% of all softwood sold.
For the Coniferous Standing Sales Price Index, data cover a 12 month period (i.e. data for the year to March and data for the year to September). As these periods overlap, comparisons of values should be made with the same period a year earlier.
Unlike the Coniferous Standing Sales Price Index, the Softwood Sawlog Price Index covers 6 month periods (i.e. data for the period October to March and data for the period April to September), so there is no overlapping.
Detailed information on the quality of the statistics presented in this publication is available in the "Quality Report: Timber Price Indices" at www.forestry.gov.uk/pdf/tpiqrpt.pdf
Revisions
Most of the statistics presented in the Finance & Prices chapter have been previously released. The latest year figures for Government expenditure on forestry are published in this format for the first time in this release.
Timber price indices are unchanged from the figures provided in "Timber Price Indices: data to March 2014"
Data on financial returns from forestry are not normally revised. Figures for earlier years have been revised from the figures included in "Forestry Statistics 2013" to reflect changes to the historic data released by IPD.
Data on Gross Value Added (GVA) are subject to revision whenever Annual Business Survey data are revised by the Office for National Statistics. Figures for 2011 have been revised from those shown in "Forestry Statistics 2013" to reflect revisions made to ABS results by ONS.
Data on Government expenditure are not normally revised, but may be subject to revision if revisions are made to the Forestry Commission's financial accounts. Figures for funding public forests in 2012-13 by FC Scotland (Table 8.4) have been revised, resulting in an overall increase in net expenditure of £0.1 million from the figure shown in Forestry Statistics 2013.
The Forestry Commission's revisions policy sets out how revisions and errors are dealt with and can be found at www.forestry.gov.uk/pdf/FCrevisions.pdf Further information
Tables providing longer time series of the Coniferous Standing Sales Price Index and the Softwood Sawlog Price Index and the underlying data used to produce them, are available at www.forestry.gov.uk/forestry/infd-7m2dj
Release schedule
For information on the release schedules of statistics produced by others, see relevant websites (above).
Timber Price Indices are published every six months, in May for data to end March and in November for data to end September. The next editions will be released on the following dates: "Timber Price Indices: Data to September 2014" will be released on 6 November 2014; "Timber Price Indices: Data to March 2015" will be released on 14 May 2015.
"Forestry Statistics 2015" and "Forestry Facts & Figures 2015" will be released on 24 September 2015. 11.10 Sources: International Forestry
Introduction
The statistics presented in the International Forestry chapter of this release cover:
- woodland area;
- carbon stocks;
- wood removals;
- production and apparent consumption of wood products; and
- trade in forest products.
Data sources and methodology
International data on forest area and carbon stocks are obtained from the Global Forest Resources Assessment (FRA) 2010 (www.fao.org/forestry/fra/fra2010/en/), compiled by the United Nations Food and Agriculture Organisation (FAO). The information in Table 9.1 uses forest area from FRA 2010, excluding "other wooded land"; for the UK, this is very similar to the definition of "woodland" used in other tables.
International data on production, imports and exports are obtained from the FAO. Data are collected via the Joint Forest Sector Questionnaire for FAO and other international organisations and published on the FAOSTAT database (http://faostat.fao.org/).
Data on apparent consumption is derived as production plus imports less exports.
Quality
The UK data on forest area and carbon stocks are as submitted by the Forestry Commission to FAO in May 2009. More recent estimates of UK woodland area are provided in the Chapter on Woodland Area and Planting. A copy of the full UK return for the Forest Resources Assessment is available at www.forestry.gov.uk/forestry/infd-7z8k3k
The UK data on production, imports and exports are as submitted by the Forestry Commission to Eurostat in September 2013. More recent UK estimates are provided in the Chapters on UK-grown Timber and Trade. Copies of all UK returns for the Joint Forest Sector Questionnaire are available at www.forestry.gov.uk/forestry/infd-7aqhzh
Revisions
International statistics compiled from FRA are not subject to revision after publication.
International statistics compiled from FAOSTAT may be subject to revision after publication if revisions are made to the data produced by individual countries.
Revisions to historical data have been made in the FAOSTAT database since the publication of "Forestry Statistics 2013" (Tables 9.4 to 9.6). The largest revision resulted in an increase in industrial roundwood removals in the Asia region across all years shown in Table 9.4.
The Forestry Commission’s revisions policy sets out how revisions and errors to these statistics are dealt with, and can be found at: www.forestry.gov.uk/pdf/FCrevisions.pdf
Further information
Statistics on international forestry are reported here at a regional level. Further data (including figures for individual countries) are also available from the original sources (see above).
Information on the Global Forest Resources Assessment 2015 is available on the FAO website at The United Nations Economic Commission for Europe (UNECE) Committee on Forests and the Forest Industry (previously the UNECE Timber Committee) also collects, on an annual basis, estimates for the current year and projections for the following year of wood production, imports and exports. Results are available on the UNECE website (www.unece.org/forests/fpm/timbercommittee.html). Copies of UK returns for the UNECE Timber Forecast Questionnaire are available at www.forestry.gov.uk/forestry/infd-7aqjql
Release schedule
For information on the release schedules of statistics produced by others, see relevant websites (above).
UK data for the Global Forest Resources Assessment 2015 will be released on 30 October 2014.
International data on wood production and trade in 2013 will be released on 24 September 2015 in "Forestry Statistics 2015" and "Forestry Facts & Figures 2015".
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c08043fa1e5e9d6476898cbb8d191ccfd5c06d9b | Foreword
In 2008, I was asked by the Secretary of State for Health to chair an independent review to propose the most effective strategies for reducing health inequalities in England from 2010.
In undertaking this review, we are identifying evidence and making recommendations in the key policy areas – the social determinants of health - where action is likely to be most effective in reducing health inequalities. These are:
- early child development and education
- employment arrangements and working conditions
- social protection
- the built environment
- sustainable development
- economic analysis
- delivery systems and mechanisms
- priority public health conditions
- social inclusion and social mobility.
In every single one of these areas, local government has a significant role to play in working with the NHS and other partners in improving health. The biggest area of local government spending is on education and early years. Local authorities can not only improve and protect working conditions through their environmental health role; they can also contribute to the economic development of their areas and, in almost every area of the country, are themselves among the largest employers. In collaborative working with other key players, they can develop and implement strategies towards the sustainable development of the communities they serve. They can be part of the safety net that protects and supports people who need benefits and social services.
Through their planning powers, management of traffic, parks and open spaces, leisure and cultural services, they can contribute to the quality of the built and social environment. They have specific duties and powers to promote equality and social inclusion and social, economic and environmental well-being. They work in partnership with the NHS and other agencies such as the police to support public health. In short, they make a very important contribution to weaving the social fabric of their areas and seeking to create and sustain healthy places for people to be born, grow, live, work and age.
No review of health inequalities and measures to reduce them in this country can afford to ignore the role of local government. I hope, therefore, that this timely publication will encourage elected members and council officers to reflect on their role in reducing health inequalities and creating the conditions for people to lead flourishing lives and to contribute to the review. I hope also that it will act as a catalyst for others both in the NHS and in government concerned with health, to explore the enormous potential in working alongside local government in tackling what I and others have called ‘the causes of the causes’ of health inequalities.
Professor Sir Michael Marmot Chair of the World Health Organisation Commission on Social Determinants of Health Chair of the Strategic Review of Health Inequalities in England post-2010 Editor’s introduction
“This ends the debate decisively. Health care is an important determinant of health. Lifestyles are important determinants of health. But... it is factors in the social environment that determine access to health services and influence lifestyle choices in the first place.”
(WHO Director-General Dr Margaret Chan, at the launch of the final report of the Commission on the Social Determinants of Health).
The social determinants of health have been defined as: “the socio-economic conditions that influence the health of individuals, communities and jurisdictions as a whole. These determinants also establish the extent to which a person possesses the physical, social and personal resources to identify and achieve personal aspirations, satisfy needs and cope with the environment.”
(Raphael, 2004)
The publication in 2008 of the World Health Organisation (WHO) Global Commission on the Social Determinants of Health report and the subsequent commissioning by the Secretary of State for Health of the Review of Health Inequalities Post-2010 in England (the Marmot Review) has raised the profile of the social determinants of health and of the importance of addressing the conditions of everyday life that lead to health inequities. The WHO Commission argues that for reasons of social justice, action to achieve health equity is imperative. It says that attempts to reduce health inequity must be predicated on addressing the wider social and economic determinants, such as levels of education, economic status, and power relations. In order to address health inequalities it is necessary to address inequities in the way society is organised.
“This requires a strong public sector that is committed, capable and adequately financed. … In a globalised world, the need for governance dedicated to equity applies equally from the community level to the global institutions.”
(World Health Organisation 2008)
The diagram below shows the widening circles of influence on people’s health. These circles are, of course, interpenetrable. For example, your lifestyle ‘choices’ are influenced, even to a large extent constrained by the social, economic and environmental conditions in which you live, as the quotations from Chan and Raphael acknowledge above. Even the difference made by your gender or your age or hereditary factors relating to your ethnic origin will be influenced by the kind of society or community you live in – how it treats older people and women, whether it understands and responds to the health needs of people whose ethnic group is in a minority in that society, and so on. And, of course, people, individually and collectively, influence the circles by the personal and political action they take and the choices they make.
To anyone who knows even a little about the work of local government, it will be clear that local government must be part of the ‘strong public sector’ invoked by the WHO Commission. The actions of local authorities have an influence, sometimes big, sometimes small, in every one of the circles illustrated below and therefore on the health of their residents. The lower half of the diagram shows only some of the local government activities that impact on the social determinants of health in each one of the circles of influence. Some services, of course, such as the planning function, have an influence in more than one circle – in this case potentially impacting on biodiversity, the ‘liveability’ of the environment and opportunities for physical activity and recreation. Local government can also make an impact on what the WHO calls the “unfair and avoidable differences in health status” – the inequities in health – between individuals, groups and communities.
In recognition of the role of local government in health improvement and in tackling the kind of inequities referred to by Marmot, the Department of Health has funded the Improvement and Development Agency (iDeA) to develop a Healthy Communities programme of work which aims to:
• raise awareness among local government elected members and officers of health inequalities and the social determinants of health and of the role of local government and its key partners in addressing these • build capacity, capability and confidence in local government to address the social determinants of health • ensure local government across England is aware of the Marmot review into health inequalities and the social determinants of health and is able to contribute effectively to consultation • disseminate knowledge and learning to all local authorities and their partners. The social determinants of health and well-being
Global Ecosystem Natural Environment Built Environment Activities Local Economy Community Lifestyle People
age, sex hereditary factors
How local government can make a difference This publication is part of that programme. Its purpose is to provide an introduction to and an exploration of health and health inequalities in England and a consideration, through the views of different writers, of the role of local government in addressing health inequalities through action on the social determinants of health. It is illustrated with practical examples and directs readers to sources of further information and support. Many of the case studies that illustrate the text can be found on the Healthy Communities website of the IdeA.
The publication takes the form of a collection of articles by distinguished practitioners of public health, academics with research interests in the social determinants of health and health inequities and local government professionals. Some of the articles are deliberately challenging and provocative; some of them present a picture of what is already happening in local government to tackle the social determinants of health; some of them look to what more local authorities could do in the future, either with additional powers or by using their existing powers and remit. The aim of the publication is to reach beyond those elected members and officers of local government with a specific health remit and to engage with a broad cross section of local government, primary care trusts (PCTs) and the partners who make up local strategic partnerships (LSPs). It will be the forerunner to a short series of pamphlets which look more specifically at aspects of, and professions within local government and their role in addressing health inequalities.
The articles in the first section explore some of the issues with which local government needs to grapple if it wants to make a positive impact on the health of the citizens it represents and on reducing inequalities in health between different communities of identity and place:
- Professor David Hunter gives an overview of the social determinants of health and the potential role of local government
- Professor Danny Dorling takes apart the much-discussed concept of ‘place’, looking at it with a geographer’s eye, and discusses what it would really mean for local authorities to be the ‘place-shapers’ they aspire to be
- Mike Kelly and Tessa Moore look at sources of evidence to which local government can turn in devising effective interventions and emphasise the importance of local authorities collecting and evaluating their own evidence
- Professor Alan Maryon-Davis looks at the developing roles of directors of public health and other public health professionals as they come almost full circle to take their place at the heart of local government.
Section 2 considers the strategic and operational implications for local authorities on the ground of the issues discussed in Section 1.
- John Nawrockyi discusses a pioneering course in Greenwich which takes literally the mantra that ‘health is everyone’s business’ in the local authority
- Dr Tony Hill describes his experience of seconding the whole public health team from the PCT to the local authority
- Martin Seymour looks at practical implications of the ‘Total Place’ programme for health, in bringing together all the resources for an area
- The final chapter in this section briefly discusses individual local government service areas and their potential impact on health and health inequalities. (These service areas will be among the subjects of a forthcoming series of publications from the IdeA.)
In Section 3, a number of different, but not necessarily incompatible approaches to the work of local government are considered in relation to their potential role as tools for health.
- In the most radical and challenging chapter, Professor John Ashton asks us to re-imagine traditional approaches to community development, based on experience in the USA which has influenced President Barack Obama.
- Clive Blair-Stevens explores how marketing approaches initially devised in the commercial world can be harnessed by local government and its public sector partners to meet health objectives.
- Charles Loft discusses some of the new and imaginative ways in which local authorities are using their enforcement roles in licensing, trading standards and environmental health as tools for health improvement.
- Adrian Davis describes the important and increasing use of health impact assessment as a means both of raising awareness of health issues and of evaluating interventions for their effects on health.
- Su Turner considers the increasingly creative ways in which local authority health overview and scrutiny committees are carrying out their work.
- Finally, there is a reminder that local government is in a position to have a direct impact on citizens’ health through its role as a major employer across the country. The context for local government
At the beginning of the Labour Government’s administration in 1997, a shared priority was agreed between central and local government on the need to reduce health inequalities. This priority has been maintained throughout political changes in the control of local authorities and their representative bodies. All the major political parties now recognise the need to tackle health inequalities and the role of local government in doing so. The specific mandate for local government involvement in addressing the social determinants of health has come through various policy documents, including successive public health and local government white papers and the strategy document ‘Tackling Health Inequalities: A Programme for Action’ and associated reports, culminating in the commissioning of the Marmot Review to look beyond 2010.
At the same time, a number of reviews of health services, including that of Wanless (2002) and more recently, Lord Darzi’s (2008) review of the NHS, reported in High Quality Care for All have supported a shift in effort and focus towards prevention of ill health. Similarly, there has been an increased emphasis in policy on social care and support on taking action to prevent people needing services. This policy focus provides opportunities for local authorities and the NHS to work together to tackle the ‘upstream’ causes of wider social, economic and environmental determinants of ill health and inequalities.
The concept of local government as a ‘place shaper’ was developed by Sir Michael Lyons in his influential report, Place-shaping: a shared ambition for the future of local government. Lyons defines place shaping as “the creative use of powers and influence to promote the general well-being of a community and its citizens” (Lyons 2007, p.60). He says that local authorities must use their ability to bring together local stakeholders and develop a vision for their area. From the perspective of addressing health inequalities, it can be seen how galvanising this concept of the local authority as place shaper could be. As Professor Hunter in Chapter 1 puts it, health inequalities bring together a number of complex and intractable issues which demand new approaches in respect of tackling them. Their complexity requires the involvement of many partners, working together to attack the issues on many fronts. And this kind of partnership at the local level requires the kind of vision and leadership that local authorities can provide as place shapers.
Partnerships of various forms and at many levels between the NHS, local government and the voluntary sector are now the norm. Every overarching LSP now has a sub-partnership with a remit for the health and well-being of the area – although, of course, because of the nature of the wider determinants of health, all of the local partnership bodies have a role to play in health improvement. Over 80 per cent of directors of public health (DsPH) are jointly appointed between PCTs and local authorities. PCTs and local authorities work together on the Joint Strategic Needs Assessments for their areas on which short and long-term objectives for health improvement and well-being should be based. In every local authority area, there are numerous work programmes and individual projects that involve both health, local authority and voluntary sector staff working together, often working out of the same offices.
In recent years, there has been an increasing focus on the collection of evidence to inform interventions that are intended to improve health outcomes, as well as those that have a different primary purpose but which are likely to have a health impact. Local authorities, regional public health observatories, the public health directorates of PCTs and university research departments have begun to work together to collect evidence and evaluate interventions.
Individual health profiles for each area of the country have been developed which give local authorities information about the health of their own residents. They also provide a ‘benchmark’ from areas with similar levels of deprivation or affluence to their own, against which they can judge progress in their own area towards reducing inequalities between geographical areas of the kind discussed by Professor Dorling in Chapter 2. There is also more data available about health inequalities between different groups, such as men and women, older and younger people, people from different ethnic groups, which enables local authorities to look within their own areas to interventions targeted at improving the health of groups most in need and thereby reducing inequalities.
As bodies with specific responsibilities to promote equality and social cohesion and as elected representatives of often hugely diverse communities, local authorities have begun (recently with the support of research led by the regional public health observatories) to understand more about how diversity within their communities relates to health. There is greater disaggregation of data accompanied by increased understanding of the correlation between different factors such as poverty, housing, education and environment and health, including the fact that black and minority ethnic groups, especially those of Pakistani and Bangladeshi origin (being among the most deprived) have the worst health and the lowest life expectancy.
Effective and appropriate use of information is one of the themes of this publication. Dorling believes that we already have enough information to indicate some very clear areas in which local authorities could be making inroads in reducing health inequalities – measures to reduce traffic accidents being one example. At the same time, he points to the importance for local authorities for developing a greater understanding of the role that geography plays in inequality.
Paradoxically, despite interest in the place-shaping role of local government following the Lyons report, there has also been increased emphasis in addressing interventions to individuals rather than to places. This is partly because of evidence that addressing public health interventions to a whole population can increase inequalities. For example, people from social class v respond less to anti-smoking campaigns than those from social class 1, with the result that such a campaign can lead to greater inequality (albeit in the context of a reduction in overall smoking levels). Interventions carefully targeted at individuals hope to avoid increasing inequality in this way.
Dorling’s article is a persuasive argument to local authorities to complement approaches targeted at individual behaviour with a response that also recognises the geographical basis of inequality – an acknowledgement of the interdependence of places and people. This interdependence was referred to by the Prime Minister in his announcement of the Marmot Review for England. Gordon Brown pointed out that that “Life expectancy here in London falls by one year for every underground station you stop at from Westminster to Canning Town” and described this as “the geography of inequality, the geography of injustice”. This emphasis chimes very well with the place-shaping model for local government.
Dorling also points to the importance of using the right geographical units to develop the kind of revelatory maps for which his work is known. And this will no doubt become an increasingly important issue as more attention is given to developing a robust evidence base for health interventions. The importance of evidence and evaluation is the topic of the article by Mike Kelly and Tessa Moore. With colleagues at the National Institute for Health and Clinical Excellence, Kelly has been using what evidence there is on public health interventions to produce guidance for local government and its partners. Kelly and Moore strongly reiterate the importance of local authorities contributing to the nascent evidence base through their own rigorous evaluation of their work. Professor Maryon-Davis also takes up this theme in his article, advocating a marriage of public health specialists’ skills in data collection and analysis together with local authorities’ strong record of community engagement in developing new evaluative methods.
Working together to understand their communities’ health profiles and their underlying causes, local authorities and their public health colleagues in PCTs have also begun to recognise the changing nature of a population’s ill health. Health conditions relating to poor sanitation and overcrowding have, to some extent, given way to conditions arising from poor food, lack of exercise and the cycle of poor life and health chances associated with the children of teenage parents. This means that, as Professor Hunter notes in Chapter 1, to a certain extent, the local authority functions which can potentially impact most on health have also changed. For example, from sanitation and waste disposal to school meals, social care and support, leisure facilities and accident prevention. This is not to say that the former can be ignored – indeed overcrowding is rising and is once again associated with tuberculosis in the east end of London, as Dorling points out. So although there are new areas in which local authorities can have a health impact, they still have to keep an eye on the traditional social determinants of health – to be watchful and active on all fronts.
There is no doubt that, despite the many activities of local government and its health partners, some of which are illustrated here, there is still huge scope for further work at a local level to tackle the social determinants of health and reduce health inequalities. Most people – even people in local government and even people in public health – still think of the NHS when they think of health services. Part of the purpose of this publication is to help change that thinking, so that local authority councillors, the officers who support them, the health professionals who work with them and the people who elect them will widen their understanding of what really makes people healthy, what really makes them ill and what causes them to die.
When we focus on the social determinants of health, rather than the medical cause of some specific disease, we see that local government services are health services. It is no exaggeration to say that without local government, adults and children would die sooner, would live in worse conditions, would lead lives that made them ill more often and would experience less emotional, mental and physical well-being than they do now.
Nonetheless, despite overall gains in life expectancy across all socio-economic groups, health inequalities are widening and there is always more that local government can do. The chapters that follow show something of the vast range of possibilities that await those with the imagination and energy to harness local government to the service of the population’s health – the public policy issue that most people care most about. References and further reading
Barton, H. and Grant, M. (2006) ‘A health map for the local human habitat’ in Journal of the Royal Society for the Promotion of Health Vol 126, No 6
Darzi, A. (2008) High quality care for all: NHS Next Stage Review final report, Department of Health: www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_085825
Improvement and Development Agency, Healthy Communities Website: www.idea.gov.uk/idk/core/page.do?pageld=77225
Lyons, M. (2007), Place shaping: a shared ambition for the future of local government, Department of Communities and Local Government
Raphael, D. (2004) Social Determinants of Health: Canadian Perspectives Toronto, CSPI
Wanless, D. (2002) Securing Our Future Health: Taking a Long-Term View, HM Treasury: www.hm-treasury.gov.uk/consult_wanless_final.htm
Whitehead, M. and Dahlgren, G. (1991) ‘What can be done about inequalities in health?’ The Lancet 338 pp1059-1063
World Health Organisation (2008), Closing the gap in a generation: Health equity through action on the social determinants of health: www.who.int/social_determinants/thecommission/finalreport/en/index.html
Website of the Strategic Review of Health Inequalities in England Post 2010 (Marmot Review): www.ucl.ac.uk/g heg/marmotreview
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97272b73b2cf2e6b2a057bd0f26877b9fa257663 | P565 Pad
Consecutive number XXXXXX - XXXXXX To Accounting & Payments Service
√ appropriate box
Cumbernauld □ Shipley □
Consecutive number
0 0 0 0 0 1
Employer's details
Employer’s name (Use CAPITALS)
Employer’s reference Accounts Office reference
Details of overpayment
Year ending 5 April
| Tax | NIC | Total | |-----|-----|-------| | £ | £ | £ |
(Include ‘M’ to show a minus amount of tax or NIC)
√ one of these boxes in all cases. □ Wrongly allocated payment or □ Genuine Overpayment
Where it is genuine overpayment, RPI will be considered.
Disposal of the overpayment
☐ Reallocate to tax year
☐ Treat as permanent overpayment
Note: only overpayments of £10.00 or less should be put to permanent overpayments.
☐ Repay
Name of Payee (Complete in all cases using CAPITALS)
Address of where payable order is to be sent (Use CAPITALS)
Notional overpayment included in total repayment
☐ Reallocate to another √ as appropriate
☐ Special circumstances (please give details here)
Authorising officer’s signature Telephone number
Repayment Security officer’s signature (This must not be the Authorising officer)
Date stamp
P565 (part 1) To Accounting & Payments Service
√ appropriate box
Cumbernauld □ Shipley □
Consecutive number
0 0 0 0 0 1
Employer's details
Employer’s name (Use CAPITALS)
Employer’s reference
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Year ending 5 April
| Tax | NIC | Total | |-----|-----|-------| | £ | £ | £ |
(Include ‘M’ to show a minus amount of tax or NIC)
√ one of these boxes in all cases. □ Wrongly allocated payment or □ Genuine Overpayment
Where it is genuine overpayment, RPI will be considered.
Disposal of the overpayment
☐ Reallocate to tax year
OAS Number (AO Use only)
☐ Treat as permanent overpayment
Note: only overpayments of £10.00 or less should be put to permanent overpayments.
☐ Repay
Name of Payee (Complete in all cases using CAPITALS)
Address of where payable order is to be sent (Use CAPITALS)
Full name
Address
Postcode
Notional overpayment included in total repayment
☐ Reallocate to another √ as appropriate
☐ type of tax for example SA, CT, Reg 80 determinations
☐ employer
Year ending 5 April
| Tax | NIC | |-----|-----| | £ | £ |
Employer/taxpayer’s name if different from above
Accounts Office/Collection/Head of Duty reference
☐ Special circumstances (please give details here)
Authorising officer’s signature
Telephone number
Date stamp
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√ appropriate box
Cumbernauld □ Shipley □
Consecutive number
0 0 0 0 0 1
Employer's details
Employer’s name (Use CAPITALS)
Employer’s reference
Accounts Office reference
Details of overpayment
Year ending 5 April
| Tax | NIC | Total | |-----|-----|-------| | £ | £ | £ |
(Include ‘M’ to show a minus amount of tax or NIC)
√ one of these boxes in all cases. □ Wrongly allocated payment or □ Genuine Overpayment
Where it is genuine overpayment, RPI will be considered.
Disposal of the overpayment
□ Reallocate to tax year
OAS Number (AO Use only)
□ Treat as permanent overpayment
Note: only overpayments of £10.00 or less should be put to permanent overpayments.
□ Repay
Name of Payee (Complete in all cases using CAPITALS)
Address of where payable order is to be sent (Use CAPITALS)
Notional overpayment included in total repayment
□ Reallocate to another
√ as appropriate
□ type of tax
for example SA, CT, Reg 80 determinations
□ employer
Year ending 5 April
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Employer/taxpayer’s name if different from above
Accounts Office/Collection/Head of Duty reference
□ Special circumstances (please give details here)
Authorising officer’s signature
Telephone number
Repayment Security officer’s signature (This must not be the Authorising officer)
Date stamp
P565 (part 3)(RSO copy)
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ed5a45617993bb63ae1262b2ec62ef4bf08cc916 | The Forum to Oversee the Implementation of new HMRC Powers, Deterrents and Safeguards
Report on the year 1 April 2010 to 31 March 2011 to the Exchequer Secretary to the Treasury
There are three annual reports all of which are historic documents and the data has been compiled in a format specifically for the Forum at the time. HMRC will not update these reports. The final Forum meeting was on 21 February 2013. Review of HMRC’s Powers, Deterrents and Safeguards: Implementation Oversight Forum
Introduction
The Forum has met less frequently this year. By and large issues that have arisen have been “one-offs”. The annex to this report lists meeting agendas and content can be accessed from the HMRC website at http://www.hmrc.gov.uk/about/implementation-oversight/impl-oversight-forum.htm
In the light of the relatively few issues that have emerged to date the Forum decided that henceforth it should schedule only two meetings a year. One would be around the mid-year point and, depending on the issues that had arisen, might be a “virtual” meeting using e-mail. The other meeting would always be a full meeting to commission a report for the Minister. Particular issues could be picked up and dealt with through e-mail exchanges.
Forum members agreed that this could be reconsidered if more issues started to arise.
Authorisations
Certain actions must be authorised by a trained and generally more senior officer. HMRC continues to see this as an important safeguard.
Commentary
- Total authorisations requested are almost identical for 2010 and 2011 but there is a rise in numbers granted in the second year. The most likely explanation is greater familiarity with the information that Authorising Offices need in order to authorise an action.
- Unsurprisingly, rejections resulting from insufficient evidence fell by two thirds in 2010/11 in line with the trend in the second half of 2009/10. Clearly officers are much more likely to recognise the need for proper evidence to support an authorisation. Total rejections are only 80 - a third of the previous year’s number of rejections.
- The balance of requests in the second year has changed a little. Unannounced visits rose from 864 to 907. Proportionately larger rises occurred for daily penalties and notices for documents over six years old. Conversely, there has been an almost complete decline in notices for applications to the tribunal for tax related penalties and copies of third party information.
### Authorisations requested: 2009/10 and 2011
| | 2009/10 | 2010/11 | |----------------|---------|---------| | Deferred | 16 | 7 | | Granted | 1414 | 1526 | | Pending | 7 | 27 | | Rejected | 202 | 85 | | Withdrawn | 2 | 5 | | **Total** | **1641**| **1640**|
Figure for rejected authorisations varies slightly due to timing.
### Authorisations granted: 2009/10 and 2010/11
| | 2009/10 | 2010/11 | |-----------------------------------------------------------------|---------|---------| | Apply to tribunal for approval to issue a notice | 158 | 228 | | Apply to tribunal for inspection | 4 | 18 | | Apply to tribunal for tax related penalty | 149 | 2 | | Apply to tribunal not to copy 3rd party information | 98 | 4 | | Daily penalty | 15 | 272 | | Identity unknown notice | 16 | 11 | | Issue notice for documents over 6 years old | 1 | 81 | | Obstruction of inspection penalty | 22 | 1 | | Short notice visits (less than 7 days notice) | 2 | 2 | | Unannounced visits | 864 | 907 | | **Total** | **1329**| **1526**|
### Authorisations rejected: 2009/10 and 2010/11
| | 2009/10 | 2010/11 | |--------------------------------------|---------|---------| | Insufficient evidence | 105 | 33 | | Non compliant with HRA | 1 | 1 | | Not relevant or proportionate to benefit | 30 | 19 | | Preferable alternative course of action | 64 | 27 | | Reasonable excuse accepted | 1 | 0 | | Unspecified | 1 | 0 | | **Total** | **202** | **80** | Statutory Records
There has still been some disquiet about what are and are not statutory records and the lack of appeal right in this respect. This has been in particular from the unrepresented taxpayers’ perspective. Statutory records are required to be kept by law, to enable a person to make an accurate tax return, hence no appeal right. The requirement varies between different taxes and will depend on the size and nature of a business or person’s tax affairs. Guidance is available, highlighting the general rules for record-keeping, including links to the legislation for each tax regime. Some non-statutory records (supplementary records) may also be required to check a person’s tax position and the taxpayer has the options to appeal against the notice requiring them to provide this information.
New Penalties
Commentary
The attached tables analyse penalties arising from compliance checks in 2010/11 (with comparative tables for 2009/10). This year has seen the expected increase in IT cases. There continues to be a significant difference between the use of suspension in VAT cases and in other areas.
Forum members remain concerned that there has not been a significant increase in cases involving deliberate behaviour. Mistake despite Taking Reasonable Care and Failure to Take Reasonable Care (‘FTRC’) together continue to account for 90% of instances, though the balance within that has shifted slightly towards FTRC (where around a third of penalties are suspended). HMRC anticipate that deliberate cases will tend to be more complex and therefore may still be working through towards settlement.
Concerns were also raised that HMRC were not putting questions to agents to ascertain what behaviour gave rise to an under-declaration. HMRC officers needed to understand this before suggesting a penalty and they should explain why a decision was made.
In June 2010 HMRC launched an internal review of the operation of Sch 24 and Sch 41 penalties. The objective was to use feedback from frontline caseworkers and managers to simplify some of the administrative processes and to improve customer focus.
Making processes more proportionate and appropriate
It is now easier for colleagues to progress straightforward cases. Mistakes despite taking reasonable care or careless behaviour can now be agreed with the customer without prior approval from their manager (though this is still subject to final authorisation).
HMRC has also simplified the levels at which certain cases are authorised by more senior staff. The aim is to provide a better balance between keeping more decisions within teams while ensuring there are proper safeguards.
HMRC has also clarified the process for monitoring suspended penalties. **Guidance and training**
All staff working on New Penalties now have access to their own set of help cards. These are a practical and popular aide memoire about the basics of the legislation and all relevant guidance has been brought together into the Compliance Handbook.
One day’s face to face training is currently underway to provide refresher training for some 7,500 staff in Local Compliance alone. The training builds on existing Tax Professional Qualifications and focuses on being able to understand and apply the steps needed to establish and record evidence for issuing a penalty. Representatives from the CIoT attended pilot sessions for the VAT and IT/CT case studies. Their feedback was very positive. Staff attending the pilot sessions have confirmed that this training will give them more confidence in addressing New Penalties with our customers. Part of the face to face training focuses on the suspension of penalties to demonstrate where it is appropriate to use and likely to be effective. Guidance has also been improved in this respect to ensure that staff has a clearer understanding of applying suspended penalties to reach the right end.
Underpinning the guidance and training is a new IT tool to help managers and caseworkers get the process right. This provides an audit trail to ensure that decisions and actions have been taken correctly and provides live links to the appropriate guidance.
HMRC will keep factsheets, and other products, under review, particularly to assist the unrepresented taxpayers. The Low Incomes Tax Reform Group highlighted the absence from factsheets about information HMRC cannot require under Finance Act 2008, Schedule 36: Part 4:Restriction on Powers. HMRC responded to this concern and are currently making changes to factsheet: CC/FS2 “Compliance checks – Requests for information and documents”. HMRC will also continue to highlight the customer's rights and obligations as set out in Your Charter.
| Penalties recorded up to 28/5/2010 | By Regime | Cases | Inc suspensions | Suspended | Due now | |-----------------------------------|-----------|-------|----------------|-----------|---------| | ITSA | 908 | 23 | £10,312 | £188,408 | | PAYE | 279 | 68 | £35,627 | £54,994 | | VAT | 5353 | 832 | £3,359,333 | £4,641,618| | Other | 21 | 3 | £947 | £14,744 | | Total | 6561 | 926 | £3,406,219 | £4,899,764|
| Penalties recorded 2010/11 | By Regime | Cases | Inc suspensions | Suspended | Due now | |-----------------------------------|-----------|-------|----------------|-----------|---------| | CT | 149 | 29 | £82,700 | £352,095 | | Employer compliance | 1,637 | 485 | £1,465,768 | £1,408,175| | ITSA | 30,803 | 1,732 | £2,520,703 | £5,957,064| | NIC | 452 | 1 | £73 | £31,714 | | VAT | 21,555 | 4,011 | £12,603,067 | £24,233,118| | Other | 335 | 2 | £162 | £592,232 | | Behaviour | Cases | Prompted | Unprompted | |---------------------------------|-------|----------|------------| | Deliberate + concealment | 39 | 32 | 7 | | Deliberate | 117 | 113 | 4 | | Failure to take care | 2,679 | 2,545 | 134 | | Failure to notify under-assessment | 256 | 226 | 30 | | Error | 3,782 | 3,337 | 445 | | **Total** | 6,873 | 6,253 | 620 |
| Behaviour | Cases | Prompted | Unprompted | |---------------------------------|-------|----------|------------| | Deliberate + concealment | 152 | 138 | 14 | | Deliberate | 1,112 | 656 | 456 | | Failure to take care | 19,836| 19,344 | 492 | | Failure to notify under-assessment | 2,384| 2,189 | 195 | | Error | 32,320| 31,240 | 1,080 | | Other | 2,246 | 1,604 | 642 | | **Total** | 58,050| 55,171 | 2,879 |
The total number of Cases is greater as a case can exhibit more than one behaviour.
The Internal Review Process figures for 2010/11 can be found at the following link [http://www.hmrc.gov.uk/complaints-appeals/internal-review-process.pdf](http://www.hmrc.gov.uk/complaints-appeals/internal-review-process.pdf)
______________________________________________________________________
**List of Meeting minutes, including sub-group**
**Meeting 27 September 2010**
1. New Penalties Review
2. Self Assessment Enquiries
3. Round table views/feedback
**Meeting 16 May 2011**
1. Communication to general public of introduction of new SA penalties
2. Statutory procedures for direct and indirect tax
3. New Penalties – update
4. Authorisation figures
**Unrepresented Taxpayers’ Subgroup Meeting 24 November 2010**
1. Information about unrepresented taxpayers
2. Authorising officers
## Membership of the Oversight Forum
| HMRC | | |-------------------------------------------|-----------------------------------------------------------------| | Chair – Dave Hartnett | Permanent Secretary for Tax | | Mike Eland | Director General of Enforcement and Compliance | | Anthony Inglese | General Counsel and Solicitor | | Richard Summersgill | Director of Local Compliance | | Simon Norris | Head of the Review of HMRC’s Powers, Deterrents and Safeguards |
| External Representatives | | |-------------------------------------------|-----------------------------------------------------------------| | Chas Roy-Chowdhury | Association of Chartered Certified Accountants (ACCA) | | Ian Menzies-Connacher | Confederation of British Industry (CBI) | | Andrew Hubbard | Chartered Institute of Taxation (CIOT) | | Simon Sweetman | Federation of Small Business | | Paul Aplin (OBE) or Frank Haskew | Institute of Chartered Accountants in England & Wales (ICAEW) Tax Faculty | | David Cruickshank or Derek Allen | Institute of Chartered Accountants of Scotland (ICAS) | | Nigel Popplewell | The Law Society | | Robin Williamson or John Andrews | Low Income Taxpayers Reform Group | | Robert Maas or Bob Davies | Institute of Indirect Taxation |
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b21a291031316bcc7c586eb53f612a919ce2175b | The Forum to Oversee the Implementation of new HMRC Powers, Deterrents and Safeguards
Final Report on the year 1 April 2011 to 31 December 2012 to the Exchequer Secretary to the Treasury
There are three annual reports all of which are historic documents and the data has been compiled in a format specifically for the Forum at the time. HMRC will not update these reports. The final Forum meeting was on 21 February 2013. Review of HMRC’s Powers, Deterrents and Safeguards: Implementation Oversight Forum
Introduction
This is the third report of the Forum who met once this year which is an indication that no major issues have arisen this year. The annex to this report lists the meeting agenda and content can be accessed from the HMRC website at http://www.hmrc.gov.uk/about/implementation-oversight/impl-oversight-forum.htm
Similar to the previous year, only two meetings were scheduled this year with one being a “virtual” meeting using email depending on issues that had arisen. No issues arose.
Schedule 36 Finance Act 2008 Information and Inspection Powers
Authorisations
Certain actions must be authorised by a trained and generally more senior officer. HMRC continues to see this as an important safeguard. The overall levels of authorisations have been broadly static.
Commentary
- Total authorisations requested have reduced by approximately 15% for 2011/12 compared with 2010/11 and there is also a decrease in the proportion granted.
- The balance of requests has changed. Unannounced visits rose from 907 to 1031 for 2011/12. The almost complete decline in notices for applications to the tribunal for tax related penalties and copies of third party information noted in 2010/11 remain unchanged. There have been significant reductions in the requests for daily penalties and applications for approval to issue a notice.
- For the period covering April – December 2012 there has been a steady decrease from previous years comparing figures at the same point:
- total authorisations: 900 (December 2012); 1049 (December 2011) and 1245 (December 2010);
- authorisations granted: 865 (December 2012); 1004 (December 2011) and 1140 (December 2010);
- unannounced visits: 617 (December 2012); 747 (December 2011) and 687 (December 2010).
HMRC will be looking at the value of continuing to record these details going forward and they will consult the Compliance Reform Forum before any final decisions are made.
### Authorisations requested: 2011 and 2012
| | 2010/11 | 2011/12 | April – Dec 2012 | |----------------|---------|---------|------------------| | Deferred | 7 | 3 | 2 | | Granted | 1526 | 1362 | 865 | | Pending | 27 | 12 | 1 | | Rejected | 85 | 37 | 30 | | Withdrawn | 5 | 1 | 2 | | **Total** | 1650 | 1415 | 900 |
### Authorisations granted: 2011 and 2012
| | 2010/11 | 2011/12 | April – Dec 2012 | |-----------------------------------------------------------------|---------|---------|------------------| | Apply to tribunal for approval to issue a notice | 228 | 64 | 52 | | Apply to tribunal for inspection | 18 | 1 | 14 | | Apply to tribunal for tax related penalty | 2 | 1 | 0 | | Apply to tribunal not to copy 3rd party information | 4 | 3 | 12 | | Daily penalty | 272 | 186 | 113 | | Identity unknown notice | 11 | 1 | 0 | | Issue notice for documents over 6 years old | 81 | 70 | 50 | | Obstruction of inspection penalty | 1 | 1 | 0 | | Short notice visits (less than 7 days notice) | 2 | 3 | 0 | | Unannounced visits | 907 | 1031 | 617 | | **Total** | 1526 | 1261 | 861 |
### Authorisations rejected: 2011 and 2012
| | 2010/11 | 2011/12 | April – Dec 2012 | |--------------------------------------|---------|---------|------------------| | Insufficient evidence | 33 | 4 | 1 | | Non compliant with HRA | 1 | 0 | 0 | | Not relevant or proportionate to benefit | 19 | 11 | 5 | | Preferable alternative course of action | 27 | 6 | 3 | | Reasonable excuse accepted | 0 | 0 | 0 | | Unspecified | 0 | 0 | 0 | | **Total** | 80 | 21 | 9 | Schedule 24 Finance Act 2007 Penalties for Errors
During the period HMRC’s Local Compliance business completed its programme to implement the recommendations of the major internal review of the operation of New Penalties which took place in 2010.
Process improvements
In November 2011 we made significant changes to the way in which inaccuracy penalties are authorised, to further streamline the process. The effect of this was to put decision-making into the hands of front-line managers, giving them the primary role that they wanted in ensuring consistency, setting standards and driving up quality. This means that both ownership and also accountabilities are much more clearly defined, with managers taking direct responsibility for the work of their teams as opposed to pushing issues up the management chain.
We have also continued to improve and extend our new interactive IT tool, which ensures that the right actions on penalties are taken at the right times, and which enables decisions to be monitored and validated, to benefit both customers and staff. This has been welcomed by caseworkers and managers.
Guidance and training
In March 2012 we completed the delivery of refresher training to over 7,000 front-line staff. This has been very successful, with nearly 95% of attendees reporting that the event had met their learning needs very or quite well, and nearly 90% feeling that their confidence in using inaccuracy penalties was greatly or somewhat increased.
Building on this training and our existing Tax Professional Qualifications, in 2012/13 we began using some of our most senior and experienced tax professionals to run tailored professional development events on inaccuracy penalties in local offices and business units. These provide a flexible, interactive, practically-focused means of delivering support and up to date information to managers and teams.
In addition we have thoroughly reviewed and updated our guidance and factsheets.
| Penalties recorded 2010/11 | By Regime | Cases | Inc suspensions | Suspended | Due now | |---------------------------|-----------|-------|-----------------|-----------|---------| | CT | 149 | 29 | £82,700 | £352,095 | | Employer compliance | 1,637 | 485 | £1,465,768 | £1,408,175| | ITSA | 30,803 | 1,732 | £2,520,703 | £5,957,064| | NIC | 452 | 1 | £73 | £31,714 |
### Penalties recorded 2011/12
| By Regime | Cases | Inc suspensions | Suspended | Due now | |----------------------------|-------|-----------------|-----------|----------| | CT | 282 | 21 | £29,019 | £596,950 | | Employer compliance | 1,662 | 433 | £2,101,332| £1,244,584| | ITSA | 54,106| 1,072 | £524,831 | £9,791,651| | NIC | 3971 | 1 | £73 | £10,360 | | VAT | 16,453| 3,775 | £15,248,169| £23,230,666| | Other | 680 | 3 | £656 | £680,079 | | **Total** | 77,154| 5,305 | *£17,904,081* | *£35,554,290* |
- The disparity between these figures is accounted for by the shorter recording period for 2012/13 which does not take into account any peak activity approaching the end of the year.
### Penalties recorded 2012/13 – April until December 2012
| By Regime | Cases | Inc suspensions | Suspended | Due now | |----------------------------|-------|-----------------|-----------|----------| | CT | 259 | 31 | £80,267 | £1,130,087| | Employer compliance | 1,097 | 432 | £2,409,698| £3,735,173| | ITSA | 19,363| 1,893 | £1,123,013| £13,832,590| | NIC | 85 | 1 | £243 | £19,083 | | VAT | 6,241 | 1,955 | £9,280,860| £36,968,831| | Other | 406 | 8 | £21,508 | £45,528,258| | **Total** | 27,451| 4,320 | *£12,915,589* | *£101,214,022* |
- The total number of Cases is greater as a case can exhibit more than one behaviour.
### Penalties by behaviour 2010/11
| Behaviour | Cases | Prompted | Unprompted | |----------------------------------------|-------|----------|------------| | Deliberate + concealment | 152 | 138 | 14 | | Deliberate | 1,112 | 656 | 456 | | Failure to take care | 19,836| 19,344 | 492 | | Failure to notify under-assessment¹ | 2,384 | 2,189 | 195 | | Error | 32,320| 31,240 | 1,080 | | Other | 2,246 | 1,604 | 642 | | **Total** | 58,050| 55,171 | 2,879 |
¹ “Failure to notify under-assessment” is no longer a behaviour category on NPPS.
### Penalties by behaviour 2011/12
| Behaviour | Cases | Prompted | Unprompted | |----------------------------------------|-------|----------|------------| | Deliberate + concealment | 164 | 157 | 7 | | Behaviour | Cases | Prompted | Unprompted | |---------------------------------|-------|----------|------------| | Deliberate + concealment | 241 | 233 | 8 | | Deliberate | 1,890 | 1,724 | 166 | | Failure to take care | 22,513| 22,378 | 135 | | Error | 1,828 | 1,813 | 15 | | Other | 2,089 | 1,355 | 133 | | **Total+** | **28,561** | **27,503** | **457** |
*The disparity between these figures is accounted for by the shorter recording period for 2012/13 and taking out the recording of nil penalty cases.*
**Commentary**
Following the introduction of Schedule 24 FA 2007 penalties for inaccuracies, we put in place a system (NPPS) to ‘process’ behaviour-based penalties and bring them into charge.
A design feature of NPPS was that it can process penalties only for cases with a live HMRC reference. As a result, there have always been minor exceptions (Certain VAT work involving overseas entities) that could not be processed via NPPS.
NPPS was designed essentially as a processing system, (rather than a management information system), and has been used as a central source of data relating to behaviour-based penalties.
A recent HMRC sample comparison of cases referred to the Managing Deliberate Defaulters regime with entries on NPPS has brought to light a previously unknown problem. Because NPPS is essentially a system for processing penalties and bringing them into charge, some direct tax cases concluded by ‘contract settlement’ in which ‘FTRC’ and/or ‘deliberate’ penalties were incurred, have not been recorded on NPPS, because it was incorrectly supposed that this was unnecessary as the penalty had effectively already been brought into charge.
Whilst correcting the misunderstanding in relation to contract settlements and NPPS, going forward (and the minor exceptions aside) NPPS will record all behaviour-based penalties; we are also undertaking a more fundamental review of our management information requirements in relation to penalties.
The Internal Review Process figures for 2011/12 can be found at the following link: [http://www.hmrc.gov.uk/complaints-appeals/news.htm](http://www.hmrc.gov.uk/complaints-appeals/news.htm) Annex A: 2011/12 Meetings: http://www.hmrc.gov.uk/about/implementation-oversight/impl-oversight-forum.htm
Meeting 29 May 2012
1. Reasonable Excuse update
2. PAYE Late Payment Penalties update
3. Schedule 55 late filing penalties update: presentation
4. Inaccuracy Penalties update
Meeting 21 February 2013
1. Inaccuracy Penalties update
2. Third Report: Implementation Oversight Forum
3. Future of the Implementation Oversight Forum
Annex B: Future of the Implementation Oversight Forum
At the Implementation Oversight Forum meeting on 21 February 2013, it was agreed to close this Forum. This follows Dave Hartnett’s retirement, the Chair of this Forum, and the development of the Central Tax and Strategy remit in place of the Permanent Secretary for Tax.
However, it was recognised that it was important that there be an avenue by which significant issues in the use of the powers, deterrents and safeguards could be raised at a senior level inside HMRC. It was, therefore, agreed to create a specific sub-group as part of the Compliance Reform Forum, chaired by the Director of Enforcement & Compliance Change.
A document about the History of Powers will be placed on the HMRC website under the Review of Powers part.
## Membership of the Oversight Forum
| HMRC | | |-------------------------------------------|-----------------------------------------------------------------| | Chair – Dave Hartnett | Permanent Secretary for Tax | | Mike Eland | Director General of Enforcement and Compliance | | Anthony Inglese | General Counsel and Solicitor | | Richard Summersgill | Director of Local Compliance | | Simon Norris/Jim Ferguson | Head of the Review of HMRC’s Powers, Deterrents and Safeguards |
| External Representatives | | |-------------------------------------------|-----------------------------------------------------------------| | Chas Roy-Chowdhury | Association of Chartered Certified Accountants (ACCA) | | Ian Menzies-Connacher | Confederation of British Industry (CBI) | | Andrew Hubbard | Chartered Institute of Taxation (CIOT) | | Paul Aplin (OBE) or Frank Haskew | Institute of Chartered Accountants in England & Wales (ICAEW) Tax Faculty | | David Cruickshank or Derek Allen | Institute of Chartered Accountants of Scotland (ICAS) | | Nigel Popplewell | The Law Society | | Robin Williamson or Anthony Thomas | Low Income Taxpayers Reform Group | | Robert Maas or Bob Davies | Institute of Indirect Taxation |
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1790ea0223db6206a5882cb23066d9ca8b7938b3 | | Indicator | Description | Collection Frequency | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | |-----------|-------------|---------------------|-----------|-----------|-----------|-----|-----|-----|-----|--------|----------|-----| | CFD03 | Number of external calls answered within 20 seconds - CYC | Quarterly | 623,686 | 672,088 | 629,381 | 146,073 | - | - | - | - | Neutral | Neutral | | CFD03a | % of external calls answered within 20 seconds - CYC | Quarterly | 91.27% | 88.15% | 89.01% | 87.57% | - | - | - | - | Up is Good | Neutral | | | Benchmark - SSAC Industry Standard | Annual | 80.00% | 80.00% | 80.00% | - | - | - | - | - | Neutral | Neutral | | CFS01 | Overall Customer Centre Satisfaction (%) - CYC | Monthly | 58.15% | 91.54% | 92.48% | 93.23% | - | - | - | - | Up is Good | Neutral | | COMP01 | % of complaints responded to within 5 days | Quarterly | - | - | 75.40% | - | - | - | - | - | Up is Good | Neutral | | FOI01 | FOI & EIR - Total Received - (YTD) | Quarterly | 1,864 | 1,670 | 1,719 | 401 | - | - | - | - | Neutral | Neutral | | FOI02 | FOI & EIR - % In time - (YTD) | Quarterly | 94.00% | 95.60% | 93.14% | 92.50% | - | - | - | - | Up is Good | Neutral | | FOI05 | DP (Data Protection Act) / SAR (Subject Access Request) - Total Received - (YTD) | Quarterly | 131 | 83 | 106 | 13 | - | - | - | - | Neutral | Neutral | | | DP (Data Protection Act) / SAR (Subject Access Request) - In time - (YTD) | Quarterly | 92 | 64 | 89 | 11 | - | - | - | - | Neutral | Neutral | | | DP (Data Protection Act) / SAR (Subject Access Request) - % In time - (YTD) | Quarterly | 70.23% | 77.11% | 83.96% | 84.60% | - | - | - | - | Up is Good | Neutral | | OD01 | Number of hits on yorkopendata.org | Monthly | 7,611 | 91,782 | 93,797 | 37,514 | - | - | - | - | Up is Good | Green | | OD08 | Number of new datasets added to yorkopendata.org | Monthly | 285 | 337 | 273 | 19 | - | - | - | - | Up is Good | Red | | TAP02 | % of panel satisfied with the way the council runs things | Quarterly | NC | NC | 65.54% | 64.76% | - | - | - | - | Up is Good | Neutral | | | Benchmark - LG Inform | Annual | 66.30% | 65.40% | 50.00% | - | - | - | - | - | Up is Good | Neutral | | YCC030 | Footfall in Customer Centre - % served within target wait time | Monthly | 74.00% | 70.00% | 74.69% | 78.01% | - | - | - | - | Up is Good | Green | | YCC030a | Footfall in Customer Centre - Average wait time (Minutes) | Monthly | 7.8 | 8.49 | 7.13 | 6.62 | - | - | - | - | Up is Bad | Green |
## Portfolio - Finance and Performance 2017/2018
No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub August 2017
| 1. Customer Services | 2. Financial Services | |----------------------|-----------------------| | **YCC117** | **YCC201** | | YCC % Calls answered in 20 seconds - TOTAL | Digital Services Transactions / Channel Shift (%) | | Weekly | Quarterly | | 47.60% | - | | 64.90% | - | | 75.70% | - | | 72.67% | - | | Benchmark - SSAC Industry Standard | - | | Annual | - | | 80.00% | - | | 80.00% | - | | 80.00% | - | | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time. | | Produced by the Strategic Business Intelligence Hub August 2017 |
| Previous Years | 2017/2018 | |----------------|-----------| | **Collection Frequency** | **2014/2015** | **2015/2016** | **2016/2017** | **Q1** | **Q2** | **Q3** | **Q4** | **Target** | **Polarity** | **DOT** | | **YCC117** | **YCC % Calls answered in 20 seconds - TOTAL** | Weekly | 47.60% | 64.90% | 75.70% | 72.67% | - | - | - | - | Up is Good | Green | | **Benchmark - SSAC Industry Standard** | Annual | 80.00% | 80.00% | 80.00% | - | - | - | - | - | - | - | - | | **YCC201** | **Digital Services Transactions / Channel Shift (%)** | Quarterly | - | - | - | - | - | - | - | - | - | - | | **adcs03** | **Deprivation: % of the population living in the 20% most deprived Lower Super Output Areas** | Annual | 3.86% (2015) | - | - | - | - | - | - | - | Up is Good | Neutral | | **BPI108** | **Forecast Budget Outturn (£000s Overspent / - Underspent) - All Directorates** | Quarterly | £1,341 | £944 | £624 | £986 | - | - | - | - | Up is Bad | Neutral | | **BPI110** | **Forecast Budget Outturn (£000s Overspent / - Underspent) - CYC** | Quarterly | £688 | £876 | £542 | £636 | - | - | - | - | Up is Bad | Green | | **BUR01** | **Business Rates - Rateable Value** | Monthly | - | - | £247,348,791 | £255,784,571 | - | - | - | - | Neutral | Neutral | | **CES44** | **Cost of landfill tax - Combined (excluding liquid waste) - (YTD)** | Quarterly | £4,189,600 | £4,992,118 | £4,440,959 | - | - | - | - | Up is Bad | Neutral | | **DOD00** | **Indices of Multiple Deprivation** | Five Years | 12.22 (2015) | (Avail 2020) | (Avail 2025) | - | - | - | - | Up is Bad | Neutral | | **National Rank (1 is Bad) (Rank out of 326)** | Five Years | 259 (2015) | (Avail 2020) | (Avail 2025) | - | - | - | - | - | - | | **OCC01** | **% of council tax collected in year - (YTD)** | Monthly | 97.55% | 97.50% | 97.57% | 29.55% | - | - | - | - | 97.80% | Up is Good | Neutral | | **Benchmark - National Data (England)** | Annual | 97.01% | 97.10% | 97.20% | - | - | - | - | - | - | | **Benchmark - Regional Data** | Annual | 95.89% | 95.50% | 96.20% | - | - | - | - | - | - | | **National Rank (Rank out of 353)** | Annual | 203 | 178 | 178 | - | - | - | - | - | - | | **Regional Rank (Rank out of 22)** | Annual | 10 | 9 | 8 | - | - | - | - | - | - | | **OCC02** | **Council tax receipts collected in year (Em) - (YTD)** | Monthly | 90.27 | 91.76 | 95.8 | 30.74 | - | - | - | - | Up is Good | Green |
## Portfolio - Finance and Performance 2017/2018
No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub August 2017
### Previous Years vs 2017/2018
| Indicator | Collection Frequency | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | |-----------|---------------------|-----------|-----------|-----------|----|----|----|----|--------|----------|-----| | OCC03 % of non-domestic rates collected in year - (YTD) | Monthly | 98.20% | 98.40% | 99.04% | 32.02% | - | - | - | - | 98.50% | Up is Good | Neutral | | Benchmark - National Data (England) | Annual | 98.11% | 98.20% | 98.20% | - | - | - | - | - | - | - | - | | Benchmark - Regional Data | Annual | 97.65% | 97.90% | 97.90% | - | - | - | - | - | - | - | - | | National Rank (Rank out of 353) | Annual | 183 | 153 | 58 | - | - | - | - | - | - | - | - | | Regional Rank (Rank out of 22) | Annual | 10 | 7 | 3 | - | - | - | - | - | - | - | - | | OCC04 % reduction in non-domestic rates prior year's balances - (YTD) | Monthly | 33.09% | 30.50% | 42.09% | 23.80% | - | - | - | - | 42.00% | Up is Good | Red | | OCC05 % reduction in council tax prior year's balances - (YTD) | Monthly | 33.78% | 32.30% | 34.20% | 15.26% | - | - | - | - | 42.00% | Up is Good | Red | | OCC06B Number of days taken to process Housing Benefit new claims and change events (DWP measure) | Monthly | 5.91 | 5.87 | 5.58 | 4 | - | - | - | - | - | Up is Bad | Neutral | | Benchmark - National Data | Quarterly | 10 | 8 | - | - | - | - | - | - | - | - | - | | OCC07 Benefit Reception Numbers | Monthly | 1,733 | 1,536 | 1,290 | 1,132 | - | - | - | - | - | Neutral | Neutral | | OCC08 Average Benefit Caseload for CYC | Monthly | 13,461 | 12,572 | 11,874 | 11,617 | - | - | - | - | - | Up is Bad | Green | | OCC10 Non-domestic receipts collected in year (£m) - (YTD) | Monthly | 100.38 | 101.71 | 104.77 | 34.48 | - | - | - | - | - | Up is Good | Green | | OCC11 % of supplier invoices paid within 30 days | Monthly | 96.48% | 95.22% | 95.48% | 96.09% | - | - | - | - | - | Up is Good | Neutral | | OCC12 New Homes Bonus Grant (£m) - (Cumulative) | Annual | £2.99 | £3.62 | £4.65 | - | - | - | - | - | - | Up is Good | Green | | TAP03 % of panel agree the council provides value for money | Quarterly | NC | NC | 45.33% | 48.57% | - | - | - | - | - | Up is Good | Neutral | | Benchmark - LG Inform | Annual | 42.00% | 45.40% | 38.00% | - | - | - | - | - | - | - | - | | % of panel disagree the council provides value for money | Quarterly | NC | NC | 24.06% | 21.10% | - | - | - | - | - | Up is Bad | Green | | YCC001 YFAS Emergency payments (£) TOTAL - (YTD) | Weekly | £117,399 | £41,612 | £31,188 | £3,849 | - | - | - | - | - | Neutral | Neutral |
## Portfolio - Finance and Performance 2017/2018
No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub August 2017
| 2. Financial Services | 3. Risk Management | 4. Human Resources | |-----------------------|-------------------|-------------------| | **YCC002** | YFAS Emergency payments Budget (£) | Weekly | £154,000 | £162,160 | £106,160 | £14,000 | - | - | - | - | Neutral | Neutral | | **YCC004** | YFAS Community payments (£) TOTAL - (YTD) | Weekly | £185,635 | £158,414 | £170,929 | £41,371 | - | - | - | - | Neutral | Neutral | | **YCC005** | YFAS Community payments (£) Budget | Weekly | £261,140 | £412,690 | £263,140 | £135,590 | - | - | - | - | Neutral | Neutral | | **YCC007** | YFAS CTS Discretionary (£) TOTAL - (YTD) | Weekly | £39,875 | £26,745 | £23,957 | £28,871 | - | - | - | - | Neutral | Neutral | | **YCC008** | YFAS CTS Discretionary (£) Budget | Weekly | £100,000 | £90,290 | £90,290 | £60,000 | - | - | - | - | Neutral | Neutral | | **YCC022** | Number of YFAS applications - Grand Total - (YTD) | Weekly | 3,180 | 1,325 | 1,256 | 551 | - | - | - | - | Neutral | Neutral | | **COR01** | Key Corporate Risks - CYC | Quarterly | 11 | 11 | 10 | 11 | - | - | - | - | Neutral | Neutral | | **CORP02 La** | Red rated Large Projects - CYC | Quarterly | - | 0 | 1 | 1 | - | - | - | - | Neutral | Neutral | | **CORP02 Lb** | Amber rated Large Projects - CYC | Quarterly | - | 5 | 5 | 6 | - | - | - | - | Neutral | Neutral | | **OCC09** | CYC Apprenticeships | Annual | 18 | 27 | 25 | - | - | - | - | - | Up is Good | Neutral | | **STF01** | Staff Headcount - CYC Total (Including Schools) - (Snapshot) | Monthly | 6,096 | 5,293 | 4,895 | 4,616 | - | - | - | - | Neutral | Neutral | | **STF08** | Staff FTE - CYC Total (Including Schools) - (Snapshot) | Monthly | 3,995 | 3,915 | 3,631.2 | 3,443.1 | - | - | - | - | Neutral | Neutral | | **STF100** | Average sickness days per FTE - CYC (Including Schools) - (Rolling 12 Month) | Monthly | 9 | 8.1 | 9 | 9 | - | - | - | - | Up is Bad | Neutral | | **STF100** | Average sickness days per FTE - CYC (Excluding Schools) - (Rolling 12 Month) | Monthly | 11.4 | 10.1 | 10.2 | 10.2 | - | - | - | - | Up is Bad | Neutral | | **STF100** | Benchmark - CIPD (All Sectors) | Annual | 6.6 | 6.9 | - | - | - | - | - | - | - | Neutral | | **STF100** | Benchmark - CIPD (Public Sector) | Annual | 7.9 | 8.7 | - | - | - | - | - | - | - | Neutral | | **STF100** | Benchmark - LGA Worker Survey (Excluding Teachers) | Annual | 8.5 | - | - | - | - | - | - | - | - | Neutral | No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time. Produced by the Strategic Business Intelligence Hub August 2017
| 4. Human Resources | Collection Frequency | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | |-------------------|---------------------|-----------|-----------|-----------|----|----|----|----|--------|----------|-----| | STF107 | Voluntary Turnover (%) - CYC Total (Including Schools) - (Rolling 12 Month) | Monthly | 8.50% | 8.80% | 10.00% | 11.30% | - | - | - | - | Up is Bad | Red | | | Voluntary Turnover (%) - CYC Total (Excluding Schools) - (Rolling 12 Month) | Monthly | 7.00% | 7.00% | 7.60% | 8.30% | - | - | - | - | Up is Bad | Neutral | | STF90 | PDR Completion (%) - CYC - (Snapshot) | Quarterly | 58.00% | 59.00% | 75.90% | 40.90% | - | - | - | - | Up is Good | Neutral |
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003d6a52892df714182f60c22e423d6251eedf1b | ## Portfolio - Finance and Performance 2017/2018
No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub November 2017
| 1. Customer Services | Previous Years | 2017/2018 | |----------------------|---------------|-----------| | **Collection Frequency** | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | | CFD03 | Number of external calls answered within 20 seconds - CYC | Quarterly | 623,686 | 672,088 | 629,381 | 146,073 | - | - | - | Neutral | ⇧⇧ Neutral | | CFD03a | % of external calls answered within 20 seconds - CYC | Quarterly | 91.27% | 88.15% | 89.01% | 87.57% | - | - | - | Up is Good | ⇧⇧ Neutral | | | Benchmark - SSAC Industry Standard | Annual | 80.00% | 80.00% | 80.00% | - | - | - | - | - | | CFS01 | Overall Customer Centre Satisfaction (%) - CYC | Monthly | 58.15% | 91.54% | 92.48% | 93.23% | 92.51% | - | - | Up is Good | ⇧⇧ Neutral | | COMP01 | % of complaints responded to within 5 days | Quarterly | - | - | 75.40% | 73.20% | 60.97% | - | - | Up is Good | ⇧⇧ Neutral | | FOI01 | FOI & EIR - Total Received - (YTD) | Quarterly | 1,864 | 1,670 | 1,719 | 401 | 849 | - | - | Neutral | ⇧⇧ Neutral | | FOI02 | FOI & EIR - % In time - (YTD) | Quarterly | 94.00% | 95.60% | 93.14% | 92.50% | 91.64% | - | - | Up is Good | ⇧⇧ Neutral | | FOI05 | DP (Data Protection Act) / SAR (Subject Access Request) - Total Received - (YTD) | Quarterly | 131 | 83 | 106 | 13 | 28 | - | - | Neutral | ⇧⇧ Neutral | | | DP (Data Protection Act) / SAR (Subject Access Request) - In time - (YTD) | Quarterly | 92 | 64 | 89 | 11 | 24 | - | - | Neutral | ⇧⇧ Neutral | | | DP (Data Protection Act) / SAR (Subject Access Request) - % In time - (YTD) | Quarterly | 70.23% | 77.11% | 83.96% | 84.60% | 85.71% | - | - | Up is Good | ⇧⇧ Neutral | | OD01 | Number of hits on yorkopendata.org | Monthly | 7,611 | 91,782 | 93,797 | 37,514 | 39,221 | - | - | Up is Good | ⇧ Green | | OD08 | Number of new datasets added to yorkopendata.org | Monthly | 285 | 337 | 273 | 19 | 55 | - | - | Up is Good | ⇧ Green | | TAP02 | % of panel satisfied with the way the council runs things | Quarterly | NC | NC | 65.54% | 64.76% | - | - | - | Up is Good | ⇧⇧ Neutral | | | Benchmark - LG Inform | Annual | 66.30% | 65.40% | 50.00% | - | - | - | - | - | | | % of panel dissatisfied with the way the council runs things | Quarterly | NC | NC | 20.32% | 20.26% | - | - | - | Up is Bad | ⇧⇧ Neutral | | YCC030 | Footfall in Customer Centre - % served within target wait time | Monthly | 74.00% | 70.00% | 74.69% | 78.01% | 78.96% | - | - | Up is Good | ⇧ Green | | YCC030a | Footfall in Customer Centre - Average wait time (Minutes) | Monthly | 7.8 | 8.49 | 7.13 | 6.62 | 6.1 | - | - | Up is Bad | ⇧ Green | | No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time. | |-----------------------|--------------------------------------------------------------------------------------------------| | Produced by the Strategic Business Intelligence Hub November 2017 |
| Previous Years | 2017/2018 | |----------------|-----------| | | Collection Frequency | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | | 1. Customer Services | YCC117 | YCC % Calls answered in 20 seconds - TOTAL | Weekly | 47.60% | 64.90% | 75.70% | 72.67% | 81.60% | - | - | - | Up is Good | Green | | | Benchmark - SSAC Industry Standard | Annual | 80.00% | 80.00% | 80.00% | - | - | - | - | - | - | - | - | | | YCC201 | Digital Services Transactions / Channel Shift (%) | Quarterly | - | - | - | - | - | - | - | - | Up is Good | Neutral | | 2. Financial Services | adcs03 | Deprivation: % of the population living in the 20% most deprived Lower Super Output Areas | Annual | 3.86% (2015) | - | - | - | - | - | - | Up is Good | Neutral | | | BPI108 | Forecast Budget Outturn (£000s Overspent / - Underspent) - All Directorates | Quarterly | £1,341 | £944 | £624 | £986 | £796 | - | - | - | Up is Bad | Neutral | | | BPI110 | Forecast Budget Outturn (£000s Overspent / - Underspent) - CYC | Quarterly | £688 | £876 | £542 | £636 | £446 | - | - | - | Up is Bad | Green | | | BUR01 | Business Rates - Rateable Value | Monthly | - | - | £247,348,791 | £255,784,571 | £253,966,276 | - | - | - | Neutral | Neutral | | | CES44 | Cost of landfill tax - Combined (excluding liquid waste) - (YTD) | Quarterly | £4,189,600 | £4,992,118 | £4,440,959 | £1,150,296 | - | - | - | Up is Bad | Neutral | | | DOD00 | Indices of Multiple Deprivation | Five Years | 12.22 (2015) | (Avail 2020) | (Avail 2025) | - | - | - | - | Up is Bad | Neutral | | | National Rank (1 is Bad) (Rank out of 326) | Five Years | 259 (2015) | (Avail 2020) | (Avail 2025) | - | - | - | - | - | - | | | OCC01 | % of council tax collected in year - (YTD) | Monthly | 97.55% | 97.50% | 97.57% | 29.55% | 56.07% | - | - | - | 97.80% | Neutral | | | Benchmark - National Data (England) | Annual | 97.01% | 97.10% | 97.20% | - | - | - | - | - | - | | | Benchmark - Regional Data | Annual | 95.89% | 95.50% | 96.20% | - | - | - | - | - | - | | | National Rank (Rank out of 353) | Annual | 203 | 178 | 178 | - | - | - | - | - | - | | | Regional Rank (Rank out of 22) | Annual | 10 | 9 | 8 | - | - | - | - | - | - | | | OCC02 | Council tax receipts collected in year (Em) - (YTD) | Monthly | 90.27 | 91.76 | 95.8 | 30.74 | 58.88 | - | - | - | Up is Good | Green |
## Portfolio - Finance and Performance 2017/2018
No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub November 2017
### Previous Years vs 2017/2018
| Indicator Description | Collection Frequency | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | |-----------------------|---------------------|-----------|-----------|-----------|----|----|----|----|--------|----------|-----| | % of non-domestic rates collected in year - (YTD) | Monthly | 98.20% | 98.40% | 99.04% | 32.02% | 57.90% | - | - | 98.50% | Up is Good | Neutral | | Benchmark - National Data (England) | Annual | 98.11% | 98.20% | 98.20% | - | - | - | - | - | Neutral | Neutral | | Benchmark - Regional Data | Annual | 97.65% | 97.90% | 97.90% | - | - | - | - | - | Neutral | Neutral | | National Rank (Rank out of 353) | Annual | 183 | 153 | 58 | - | - | - | - | - | Neutral | Neutral | | Regional Rank (Rank out of 22) | Annual | 10 | 7 | 3 | - | - | - | - | - | Neutral | Neutral | | % reduction in non-domestic rates prior year's balances - (YTD) | Monthly | 33.09% | 30.50% | 42.09% | 23.80% | 27.32% | - | - | 42.00% | Up is Good | Neutral | | % reduction in council tax prior year's balances - (YTD) | Monthly | 33.78% | 32.30% | 34.20% | 15.26% | 23.39% | - | - | 42.00% | Up is Good | Neutral | | Number of days taken to process Housing Benefit new claims and change events (DWP measure) | Monthly | 5.91 | 5.87 | 5.58 | 4 | 3.82 | - | - | - | Up is Bad | Neutral | | Benchmark - National Data | Quarterly | 10 | 8 | 9 | 9 | - | - | - | - | Neutral | Neutral | | Benefit Reception Numbers | Monthly | 1,733 | 1,536 | 1,290 | 1,132 | 822 | - | - | - | Neutral | Neutral | | Average Benefit Caseload for CYC | Monthly | 13,461 | 12,572 | 11,874 | 11,617 | 11,108 | - | - | - | Up is Bad | Neutral | | Non-domestic receipts collected in year (£m) - (YTD) | Monthly | 100.38 | 101.71 | 104.77 | 34.48 | 62.18 | - | - | - | Up is Good | Green | | % of supplier invoices paid within 30 days | Monthly | 96.48% | 95.22% | 95.48% | 96.09% | 95.65% | - | - | - | Up is Good | Neutral | | New Homes Bonus Grant (£m) - (Cumulative) | Annual | £2.99 | £3.62 | £4.65 | £3.21 | - | - | - | - | Up is Good | Neutral | | % of panel agree the council provides value for money | Quarterly | NC | NC | 45.33% | 48.57% | - | - | - | - | Up is Good | Neutral | | Benchmark - LG Inform | Annual | 42.00% | 45.40% | 38.00% | - | - | - | - | - | Neutral | Neutral | | % of panel disagree the council provides value for money | Quarterly | NC | NC | 24.06% | 21.10% | - | - | - | - | Up is Bad | Neutral | | YFAS Emergency payments (£) TOTAL - (YTD) | Weekly | £117,399 | £41,612 | £31,188 | £3,849 | £7,251 | - | - | - | Neutral | Neutral |
## Portfolio - Finance and Performance 2017/2018
No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub November 2017
| 2. Financial Services | 3. Risk Management | 4. Human Resources | |-----------------------|-------------------|-------------------| | **YCC002** | YFAS Emergency payments Budget (£) | Weekly | £154,000 | £162,160 | £106,160 | £14,000 | £14,000 | - | - | - | Neutral | | **YCC004** | YFAS Community payments (£) TOTAL - (YTD) | Weekly | £185,635 | £158,414 | £170,929 | £41,341 | £76,647 | - | - | - | Neutral | | **YCC005** | YFAS Community payments (£) Budget | Weekly | £261,140 | £412,690 | £263,140 | £135,590 | £135,590 | - | - | - | Neutral | | **YCC007** | YFAS CTS Discretionary (£) TOTAL - (YTD) | Weekly | £39,875 | £26,745 | £23,957 | £11,044 | £14,659 | - | - | - | Neutral | | **YCC008** | YFAS CTS Discretionary (£) Budget | Weekly | £100,000 | £90,290 | £90,290 | £60,000 | £60,000 | - | - | - | Neutral | | **YCC022** | Number of YFAS applications - Grand Total - (YTD) | Weekly | 3,180 | 1,325 | 1,256 | 551 | 589 | - | - | - | Neutral | | **COR01** | Key Corporate Risks - CYC | Quarterly | 11 | 11 | 10 | 11 | 11 | - | - | - | Neutral | | **CORP02 La** | Red rated Large Projects - CYC | Quarterly | - | 0 | 1 | 1 | 1 | - | - | - | Neutral | | **CORP02 Lb** | Amber rated Large Projects - CYC | Quarterly | - | 5 | 5 | 6 | 6 | - | - | - | Neutral | | **OCC09** | CYC Apprenticeships | Annual | 18 | 27 | 25 | - | - | - | - | - | Up is Good | | **STF01** | Staff Headcount - CYC Total (Including Schools) - (Snapshot) | Monthly | 6,096 | 5,293 | 4,895 | 4,615 | 4,602 | - | - | - | Neutral | | **STF08** | Staff FTE - CYC Total (Including Schools) - (Snapshot) | Monthly | 3,995 | 3,915 | 3,631.2 | 3,445.4 | 3,431.5 | - | - | - | Neutral | | **STF100** | Average sickness days per FTE - CYC (Including Schools) - (Rolling 12 Month) | Monthly | 9 | 8.1 | 9 | 9.1 | 9.1 | - | - | - | Up is Bad | | **Benchmark - CIPD (All Sectors)** | Annual | 6.6 | 6.9 | - | - | - | - | - | - | - | | **Benchmark - CIPD (Public Sector)** | Annual | 7.9 | 8.7 | 8.5 | - | - | - | - | - | - | | **Benchmark - LGA Worker Survey (Excluding Teachers)** | Annual | 8.5 | - | - | - | - | - | - | - | - | No of Indicators = 48 | Direction of Travel (DoT) shows the trend of how an indicator is performing against its Polarity over time.
Produced by the Strategic Business Intelligence Hub November 2017
| 4. Human Resources | Collection Frequency | 2014/2015 | 2015/2016 | 2016/2017 | Q1 | Q2 | Q3 | Q4 | Target | Polarity | DOT | |---------------------|----------------------|-----------|-----------|-----------|----|----|----|----|--------|----------|-----| | STF107 | Voluntary Turnover (%) - CYC Total (Including Schools) - (Rolling 12 Month) | Monthly | 8.50% | 8.80% | 10.00% | 11.30% | 10.20% | - | - | - | Up is Bad | Neutral | | | Voluntary Turnover (%) - CYC Total (Excluding Schools) - (Rolling 12 Month) | Monthly | 7.00% | 7.00% | 7.60% | 8.30% | 7.30% | - | - | - | Up is Bad | Neutral | | STF90 | PDR Completion (%) - CYC - (Snapshot) | Monthly | 58.00% | 59.00% | 75.90% | 27.60% | 58.20% | - | - | - | Up is Good | Neutral |
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dc292a23998db8f5bd3d4382a3e2a79b9f3de6eb | Finance & Commercial Director
Job purpose
The Director of Finance and Commercial will oversee a newly formed Directorate covering a wide range of functions including the Finance, Procurement and Commercial teams within The National Archives.
Strong financial, commercial and leadership skills are required within this role, together with the ability to gain a deep understanding of The National Archives’ strategic objectives, to manage our spend in an environment of reducing resources, and maximise our commercial opportunities.
Priorities
- As part of the Executive Team, lead The National Archives effectively as an ambitious, visionary and dynamic organisation in a rapidly changing environment and challenging economic circumstances.
- Further enhance the user engagement across The National Archives’ diverse audiences in an era of increasing expectations.
- Be an active member of the wider Senior Civil Service, working with colleagues across government.
- Develop the organisation’s capability by utilising the talent of all staff, ensuring they have the skills and leadership necessary for the future.
Key responsibilities
Leadership
- Grow skills and talent within The National Archives, giving direction and leadership to nurture and encourage financial awareness and commercial acumen
Financial and Procurement
- Ensuring there is understanding of and compliance with all aspects of Managing Public Money supporting and upholding the Accounting Officer’s responsibilities
- Ensuring that resources are strongly aligned to delivery plans and milestones in business planning within the overall financial context
- Providing strong and tailored management information and value added analysis to support effective decisions by the Executive Team and the Board
- Ensuring the delivery of consistent, robust, timely and relevant financial information across The National Archives to support better management of resources and more effective business decision making, and making sure the Executive Team is fully aware of the financial consequences of their strategic planning
- Overseeing the in-year monitoring and year end processes to ensure no key control totals are breached and to assure the delivery of timely and unqualified Resource Accounts to Parliament
- Leading the procurement team ensuring that the needs of The National Archives are understood and resourced appropriately, ensuring the correct level of support to all high risk / high value procurements
Commercial
- Drive the development of our trading services to deliver a positive net contribution to The National Archives’ overall finances
- Bring strong P&L and marketing discipline to the management of our trading services, ensuring that we are maximising our impact
- Where appropriate support commercial negotiations to ensure that we make robust and appropriately risk-assessed deals with key partners
- Create new models of service provision including what we should do ourselves and what we should do through others
Person specification
Essential
- A CCAB or overseas equivalent qualified accountant
- Strong experience of strategy development, ideally in a B2C environment
- Strong evidence of well-developed commercial acumen, and success
- A proven ability to drive innovation and deliver transformational change
- Very strong negotiation and influencing skills
- Ability to deliver through others and ensure strong buy-in to concepts and ideas
- Leadership skills, with the ability to inspire and motivate people
- Very strong stakeholder engagement and communication skills
Desirable
- Public sector experience, or a strong understanding of the dynamics and differences of leading and working in the public sector
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6ac2e1da06fd4c37293b03e211b6c6ebef7d362e | Financial Planning
Course Summary
If you are about to embark on the business of fundraising – be it for core services or a project; this course is a brilliant first step. Attendees will learn about the language, financial models and governance structures which contribute to successful fundraising. This in turn will help archives to make informed decisions about their fundraising strategies and targets. In short, this course will enable you to ensure that you have the right building blocks in place to begin fundraising.
Learning Objectives
The course will enable participants to
- Understand and articulate their own organisational funding model and benchmark its position relative to the sector.
- Understand how to analyse their cost base and productivity and how this informs their financial planning and options.
- Engage with key decision makers to influence the outcome of governance reviews, options appraisals and commissioning.
- Know where to go for best practice guidance from leaders in the sector and case studies of transformation.
- Take forward a development plan for improving financial resilience.
Summary of content
- Understanding your finances
- Total budget
- Understanding your cost drivers
- Full cost recovery
- Assessing the alternatives: what to start and what to stop
- Evaluating the options
- Developing a business case
- Developing your own plan
- Tools and resources available
- Organisational and individual needs
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2abbab5923bc4f6dd9af1bcd6028282cd056732e | This guidance was produced for The Archives and Records Association by Activist Group.
The authors of the guidance are: Eric Bohl Andrew Holden
Working in partnership with:
© Crown copyright 2016
Front cover image: Come on we are ready, 1894. Catalogue reference Records of the Copyright Office, Stationer's Company COPY1/111 (104)
You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence or email [email protected].
Where we have identified any third-party copyright information, you will need to obtain permission from the copyright holders concerned.
This publication is available for download at nationalarchives.gov.uk.
# Contents
Introduction .......................................................................................................................... 1\
Chapter 1 – Understanding your finances ........................................................................... 3\
1.1. Introduction .................................................................................................................. 4\
1.2 Understanding the future: the squeeze on budgets ....................................................... 4\
1.3 Understanding your total budget .................................................................................. 5\
1.4 Total cost of your service ............................................................................................. 5\
1.5 Understanding your cost drivers .................................................................................. 6\
1.6 Simple activity based costing – checklist: .................................................................. 7\
1.7 Income: are you covering your costs? ......................................................................... 7\
1.8 Demonstrating your strategic role ............................................................................... 8\
1.9 Understanding your finances – checklist: .................................................................. 9\
Chapter 2 – Assessing the alternatives .............................................................................. 10\
2.1 What to start and what to stop: choices, choices ....................................................... 11\
2.2 Salami-slicing and reducing staff costs ..................................................................... 11\
2.3 Economies of scale or scope ..................................................................................... 12\
Case study 1: Keeping it together .................................................................................... 14\
2.4 Generating income from selling your services ............................................................ 15\
Case study 2: Getting serious about income .................................................................. 17\
2.5 Fundraising: separating the rhetoric from reality ....................................................... 20\
Case study 3: Working with a Friends Trust .................................................................. 22\
Case study 4: Development Trust for Capital Project .................................................. 23\
2.6 Spin-outs and alternative service delivery .................................................................. 25\
Chapter 3 – Making your choice ......................................................................................... 27\
3.1 How do you compare? ................................................................................................. 28\
3.2 Evaluating the options - is there a business case? ....................................................... 28\
3.3 Being clear about your plans ..................................................................................... 30\
Case study 5: Long-term planning to drive strategy ..................................................... 31\
Chapter 4 - Where to go for help ....................................................................................... 32\
4.1 Making friends with your accountants ...................................................................... 33\
4.2 Learning the basics and developing your skills ........................................................... 33\
4.3 Build your networks (see Building Networks and Supporters) .................................... 33\
4.4 National Archives advice on spin-outs and the Mutuals Information Service .......... 34\
4.5 Fundraising for Archives: training ............................................................................ 34\
4.6 The National Archives - Income Generation Guidance ............................................. 34 Introduction Introduction to this toolkit
The ‘Fundraising for Archives’ programme recognises that archive services are under increasing financial pressure and that, in order to remain viable, they will need to diversify their funding streams, including through fundraising.
The ‘Financial Planning’ module is one of the core programme modules which are the starting point for the programme. The module enables you to take a strategic, planned approach to fundraising, enabling you to be clear about:
- **Where you stand**: your overall financial position and the scale of the challenge facing you and your service.
- **Your options**: what other choices you have for improving your financial position; how much effort and resource you would need to put into each option; and what your return might be.
- **Your return**: what part fundraising will play in your long-term financial planning and how to resource it.
Who the toolkit is for
The toolkit is likely to be most useful for budget holders of an archive service, whether publicly funded, independent charities or within an HEI, or anyone within the service who has taken on responsibility for income generation. However, it is also likely to be of use if you have some financial responsibilities for an archive service or if you provide accountancy support to the service. The materials are tailored to archive services of all shapes and sizes, so not all the suggestions will be directly relevant to everyone.
How to use the toolkit
The toolkit is designed to provide an easy-to-use overview of the main issues to address. It includes:
- Simple checklists to get you started.
- Links to useful materials.
- Case studies from archive services.
Summary of contents
Section 1 of the toolkit helps you to understand your finances and your prospects.
Section 2 explores the main alternative for improving your financial sustainability.
Section 3 describes how to go about choosing the right way forward and putting your plans into effect.
Section 4 suggests where you can go for more help. Chapter 1 – Understanding your finances 1.1. Introduction
In this section, we set out to help you to:
- Develop a clear sense of what your starting point is: where you are now; what the future holds; what's driving your costs; where you can have an impact (and what's not worth bothering with).
- Become rather more confident in making sense of your budgets by explaining some of the jargon that makes perfect sense to accountants but can leave the rest of us rather bemused.
- Help you to think through how much you can charge for your services so that you know whether you're actually making any money.
1.2 Understanding the future: the squeeze on budgets
The ‘Fundraising for Archives’ programme was created in order to help ensure the financial resilience of archive services in a period when public spending is under severe constraint. The ‘austerity’ which is impacting on publicly funded archives feels like the new normal for many services. But even for archives in the charitable and HE sectors where funding models may be more resilient, competition for fundraising is growing more intense, and the requirement to do more for less is spreading.
If archive services are to be maintained, let alone thrive, they have to look for new ways of ensuring that their funding is sustainable. Archive services are already exploring new ways of diversifying their income base, whether through fundraising or commercial income generation. They are also finding new ways of saving money to avoid reducing service standards to unacceptable levels.
If your archive service is asked to make savings, you're not being picked on. It's the hard reality for many services. You will need to know what the likely savings are that your organisation will be needing to make, not just next year, but over the next three to five years. Most public sector organisations will have something like a 'Medium Term Financial Strategy' that will include existing savings commitments and the 'budget gap' for which new savings will need to be found. Charities and HEIs will normally have a Strategic Plan which will indicate how they plan to adjust finances over three to five years in a similar way.
You will need to be clear:
- What savings you are already committed to delivering over the next three years.
- What savings your directorate, department or division is being expected to find in addition.
- What your contribution might need to be.
- What savings you have already contributed in recent years.
Of course, you will also need to be clear whether your service is offering value-for-money and be ready to argue your case to protect your service from unreasonable and damaging cuts. But it is worth planning for a 'worst case scenario' - and use that to generate new ideas. 1.3 Understanding your total budget
The starting point for any plan to improve your budget position is to know both where you are now and what is likely to come.
Understanding your service’s finances is easier if you have a separate budget. But if you’re in a larger department or organisation with other services you may not be given this level of detail, in which case you might need to do some unpicking.
It’s important for you to be able to understand the following:
- Each element of your total expenditure.
- What you can control or influence directly.
- How to make friends with your accountant and how to talk their language.
1.4 Total cost of your service
Here’s the first key concept you need to grasp: the total cost of the service. It’s often tempting to think that the service costs are made up of the things you directly control. However, the true total cost of the service includes all the other things you need to run the service, such as HR and accountancy and IT support – as well as the cost of occupying buildings including their bills, repair and depreciation. You might not be able to control those costs, but they are (approximately) what the true overall cost of your service is.
Public sector recharges
If you’re in a public body or a university the second key concept for you to understand is the ‘recharge’. The services you depend on but that you don’t control directly, such as support services, are charged (or recharged) to your service, usually using quite a simple formula. For example, it’s likely that the cost of HR services are simply divided equally by the number of employees in the organisation; you will then be charged for the proportion of employees in your service. For example, if the HR service costs £3m and there are 3000 employees in the whole organisation, the cost of HR will be £1000 per employee. So, if you have 10 employees your HR recharge will be £10,000.
What can be a shock is the discovery that recharges can make up 30% or more of your total budget. What can be frustrating is that there is not much you can do about it - nor is there that much point arguing about it. If you win an argument that your IT recharge is too high, the costs will simply be shifted to another service - and you won’t have any more money to spend as a result!
Sometimes, a few of the budgets for these overheads might be under your control, such as energy costs. If they are metered to an individual building that you occupy and charged directly to you, you may be able to make some savings (and benefit directly) with some careful energy management.
The third key concept is what is above or below ‘the line’. Costs that are ‘above the line’ are the things that you can control. Those that are ‘below the line’ (like support service recharges) are ones you can't control. If you can't control them, it may still be worth challenging as they will affect your total costs which you need to include when deciding whether you're covering your costs (see below). However, in the end, even if it makes you feel better to challenge them, it is probably not a good use of your time as there's probably little chance that you'd benefit directly from any savings in them.
**Charity indirect costs/overheads**
If you work in a charity, you will need to understand the language and financial management and accounting systems in the charitable sector, which are different to those in the public sector. However, the principles are very similar.
### 1.5 Understanding your cost drivers
If you are going to be able to make sensible judgements about how to make your finances sustainable, you have to understand why your service costs what it does, ie your **cost drivers**. This will enable you to make more informed judgements about your costs and your plans for income generation.
When you do look more closely, you can be surprised at what you discover. Certain types of activity - or a small number of users - might be consuming far more of your resources than you thought. You might also have underestimated how much you should be charging for a service.
There are various ways of working out what's driving your costs, but one approach that your accountants will be familiar with is 'activity based costing' which has been in vogue for many years, but is seldom done very well, usually because the way it's been done has been over-complicated.
The basic idea is that you work out how you're spending your money: how much does each bit of our service cost and is that the right balance? It's best to keep it very simple. In the end, it's an attempt to work out roughly what we're spending our time on; how much it really costs; and how that balance might have to change. This means working out what the total cost of your service is (include your overheads, but don't get too sophisticated in the way you allocate them) and then work out how your colleagues in the service are spending their time; then divide the total cost by how they're spending their time.
At its simplest, you could work it out from what you know. Alternatively, it might be better to involve your colleagues in estimating how they spend their time. If you want to get more sophisticated, ask each colleague to keep a record.
Think about the types of activity you might want to include, such as:
- Internal meetings.
- Management.
- Storage
- Conservation.
- Supporting enquiries: academic, family history, etc.
- School visits
- Community engagement • Adult learning • Fundraising • Building networks and supporters
1.6 Simple activity based costing – checklist:
☐ Identify the types of activity your colleagues spend their time on. ☐ Create a spreadsheet to show the results, including your total costs and income. ☐ Either collect or estimate the allocation of time for each colleague. ☐ Identify the proportion of each staff member's costs against these activities. ☐ Spread your recharges and overheads approximately over those activities. ☐ Allocate your income against each of the activities. ☐ Review the net results and the balance of your budget spent on each activity. ☐ Consider what you can no longer afford to do at all (or as much of). ☐ Consider how you could release resources to help generate new funding.
Once you've done that, you'll be ready to look at your alternatives for improving your financial position in a more informed way.
1.7 Income: are you covering your costs?
Once you have a fair idea of your cost drivers, you will be in a better position to explore whether you are making a proper return on your expenditure. It is essential to know, for example, whether:
• Your fees and charges are sufficient to cover your costs. • The effort you might put into fundraising would more the cover the costs involved in trying to generate funds.
It is often the case that when fees and charges are set, the only costs taken into account are direct staff costs and/or costs of materials and equipment. Instead, the total costs of an activity could be charged; by the time the total costs of the service are added on, the true cost might be double that currently charged.
Of course, your organisation might choose not to charge the full cost for particular reasons, such as reaching a wider audience or particular target groups. There might also be other reasons why the service might choose to charge at a different level, such as the opportunity to share services with another partner.
Crudely, there are two main concepts to be aware of when trying to work out whether your income is covering the costs involved in doing the work:
• **Key concept 4 - full cost recovery**: the total cost of the service is charged, including all the costs - both above the line and below the line. • **Key concept 5 - marginal cost recovery**: the cost of providing additional services not including the fixed costs that have, in effect, already been paid for, such as IT or property.
If, for example, an archive service went into a shared service arrangement with another organisation, it would want to look at the big picture, ie the total savings made by each partner. In working out a good deal, one service might decide to charge some costs to the partner, eg if it let the partner use spare space in an archive store. Full cost recovery might be prohibitive for the partner if the total cost of the service included very high corporate recharges. Instead, a charge based on covering *marginal costs* might simply include a notional rent and the *additional* staffing costs involved. However, if the archive service was providing a more commercial service to an external customer (eg managing a company's archives), *full cost recovery* will probably be more appropriate.
**Restricted and unrestricted income**
All organisations in receipt of grant funding need to be familiar with the distinction between *restricted* and *unrestricted* income. Increasingly, charitable trusts and even individual donors are more likely to want to give money to specific activities, rather than leave to an organisation to decide how to spend it, particularly if it is not itself a registered charity. Often there will be additional restrictions on the proportion of organisational costs which can be included in the budget for these activities.
Registered charities need to have robust accounting procedures in place to distinguish between income which is *unrestricted* and can be used for any purpose which furthers its charitable objectives, and *restricted* income, which can only be used for the activities for which it was granted.
**Managing your cash flow**
An important consideration for charities without an unrestricted income stream from a core funder or commercial services is managing your *Cash Flow*. If your funding model depends heavily on grant income which is *restricted*, you need to plan carefully to understand how you are going to cover the full costs of running the organisation, and ensure that you aren’t using *restricted* income in order manage your cash flow and pay organisational costs for which it has not been granted. This makes understanding the costs of fundraising all the more important, as this knowledge can help you prioritise better how you allocate resources to fundraising, and schedule your fundraising activities to ensure income is generated in a timely fashion to support the organisation.
**1.8 Demonstrating your strategic role**
Understanding your finances is important, but is pointless if you cannot demonstrate your contribution to your organisation’s strategic objectives. This is not about simply ‘aligning’ yourself with one or more of your organisation’s published list of strategic priorities and objectives.
Those archive services that have survived, prospered and even grown are the ones that have demonstrated their ability to have make a demonstrable influence or a change that adds to their organisation’s success. In the case of a university, this might mean playing a more strategic role in support of the teaching departments. One example is University of Huddersfield where the archive and records service secured Heritage Lottery Funding towards new capital works to create Heritage Quay, a new archive centre in the University which helps to strengthen the History Department’s offer to students.
It is also important to demonstrate the quality of your work and to show that you work to recognised standards. Alison Cullingford, Special Collections Librarian at the J.B. Priestley Library at the University of Bradford stressed the value of The National Archives’ Archive Service Accreditation Standard: “The existence of the standard gives our work credibility and shows the range of our activities. Achieving the standard demonstrates to the University that we are a dynamic and high quality service.”
1.9 Understanding your finances – checklist:
- Learn the 'financial basics' for your organisation.
- Make friends with your accountant.
- Understand the likely future savings targets for your service.
- Get to grips with the detail of your current budget, being clear what you can and can't influence.
- Understand your cost drivers.
- Carry out a simple activity based costing exercise.
- Work out whether your income is covering the costs of generating it.
Further Reading
Hampshire County Council. (2009) *Glossary of Local Government Financial Terms*. A detailed glossary, much of which is relevant to other sectors.
Palmer et al. (2014) *Good Guide to Financial Management*, NCVO, London. This guide has useful guidance that is relevant to charities. Chapter 2 – Assessing the alternatives 2.1 What to start and what to stop: choices, choices
Having analysed your cost drivers and understood how you are covering your costs, you will be able to assess how you might want to shift the balance of staff time, prioritise certain activities to prepare for future budget reductions, or assess where you might increase charges, and how much time you could allocate to income generating activities like fundraising. Given limited resources you will have to make choices - you cannot do it all.
In this section, we outline the choices that you have for becoming financially sustainable. Before considering what place fundraising will place in your plans, you will need work out:
- **Your return**: what realistically each choice could bring.
- **Your investment**: what that choice would cost you.
We run through each of the main alternatives in turn:
- Efficiency savings and cuts.
- Generating economies of scale or scope.
- Selling services.
- Fundraising.
- Spin-outs and other alternative models.
Some approaches may generate larger savings than others, but these are also likely to require a greater investment.
2.2 Salami-slicing and reducing staff costs
Most public services have for many years pursued an annual round of efficiency savings, trimming the ‘fat’ to become more lean. For most services, any fat has long gone, leaving the need for more drastic surgery. Given the proportion of archive services' budgets made up by staff costs, this usually involves reductions in staffing levels through:
- Streamlining management and flattening hierarchies.
- Simplifying or streamlining processes.
- Reduced opening hours.
A number of services have set out to recruit volunteers. Usually, these volunteers have been described as additional resources - to provide the 'added value' support that the core staff team could not undertake. Other services are becoming more explicit about their intention to increase the number of volunteers to help offset the reduction in staff. However, the effort required to manage and support volunteers properly should not be underestimated.
______________________________________________________________________
1 The Archives and Records Association’s 2011 policy on Volunteering in Archives, recognises the support that volunteers can provide alongside “qualified, employed, staff”. Sometimes stopping an activity altogether is the right and only choice, however disappointing for you, your colleagues or regular users.
Archive services have traditionally offered highly specialised professional support to a small number of users to carry out research enquiries or use catalogues and other resources.
Many services have already realised that this is not a cost-effective use of staff time which has limited impact on corporate strategic outcomes which would help sustain the service. Some have scaled back or stopped free access to this type of supported enquiry.
For each of these savings, there are likely to be costs that should be accounted for. These could include redundancies, new technology or consultation. These need to be assessed and factored into your analysis of the options.
**Key issues to explore**
- Operational efficiencies.
- Streamlining management.
- Reductions in service levels.
- Stopping certain services (or starting to charge for them).
- Making greater use of volunteers.
**Further Reading**
Williams, C. (2014) *Managing Volunteering in Archives: Report*. Taunton: Archives and Records Association
Archives and Records Association (2011) *Policy On Volunteering In Archives*
### 2.3 Economies of scale or scope
Most archive services are quite small with budgets to match. One alternative for making savings is to combine services either to achieve economies of scale or, sometimes, ‘economies of scope’.
Economies of scale often are achieved through simple collaborations between organisations. Examples include the London Archives Partnership which is working on joint projects on shared procurement and developing a shared catalogue. These can produce some limited, but worthwhile, savings.
More extensive sharing is likely to bring sizeable savings. A shared service through which one or more organisations share all or most of their archive services can result in savings through sharing back office teams or sharing a single management team. Bigger savings may be possible if the ‘front of house’ service can also be shared, so that both services operate from one location. For example, Sussex University shares its archive service with East Sussex County Council (see case study below). Dr Irene O’Brien of Scottish Archives argues: “Archive services have to examine the potential for collaboration to overcome the problems caused by the limitations of their size. By working together in clusters, we will be able to achieve more". Case study 1: Keeping it together
Summary
East Sussex County Council (ESCC), Brighton and Hove Council (BHC) and the University of Brighton Shared Service operate a shared archive service at The Keep.
Detail
Each partner needed better facilities and realised they would be better together in terms of delivering outcomes and achieving economies of scale. ESCC and BHC set up the partnership board in 2006 and the University joined in 2007. This collaboration led to an HLF application for capital redevelopment in 2008 and The Keep opened in 2013.
At The Keep, visitor services are integrated, whereas in back office there are three separate collections stored together but managed separately. The public collections interface is integrated. Outreach and Learning are managed and delivered both separately and together.
ESCC runs the building and is the budget holder for the shared service. There is a revenue budget for The Keep as well as individual service budgets. Our financial agreement is based on population for the councils and for the University on its proportion of holdings.
The shared service has enabled a much bigger and better service through the new building for the same budget. Elizabeth Hughes, County Archivist, points to a range of other tangible benefits: "We have a pool of staff with a much greater range of skills. We have more clout when applying for funds together, and our profile has been raised with different audience groups."
The challenges of the differing pace and process of decision-making are real, as is the web of legal agreements and protocols needed: “Don't underestimate the management time involved in supporting the governance and operation of the shared service.” She adds: “You need to be aware of the asymmetry of future risks to partners and plan to meet these challenges together.”
Lessons
Elizabeth says that going into a shared service is a process not an event "the edges are getting greyer all the time". Instead of pooling archive services to achieve economies of scale, it is also possible to merge archive services with other services to achieve economies of scope. Archive services already tend to be part of larger heritage or cultural departments or institutions, and are often well integrated with those services. Particularly if they are located together, an archive can share management, back office, storage and customer service functions. There is still capital funding available to invest in innovative new service designs and buildings (eg Heritage Lottery Fund) that can make creative, integrated service offerings possible. These might enable new efficiencies and revenue savings, but the running costs for new or improved buildings can increase (eg if there is a business rate revaluation). A collaborative approach is likely to be viewed even more favourably by external funders.
In deciding whether to pursue shared services or other forms of collaboration, you will need to build in assumptions about:
- Project design and implementation support.
- Legal support to help create shared services agreements.
- Your effort in making it work!
One point to bear in mind is that if you are providing a service to a local authority, the local authority will be able to claim back any VAT. However, if you are outside local government and a council provides a service to you that is VAT rated, you will need to meet that additional cost. For local authorities, that means that some potential partners might find it expensive to take a service from you where that service is VAT rated.
Key issues to explore
- What collaborations are you already engaged in?
- Are there potential partners you could explore sharing services with?
- Are there services or partners that you could integrate better with?
- Will the financial returns justify the investment?
2.4 Generating income from selling your services
Increasingly, archive services are thinking about how to generate more income from their services. Private archives have considerable freedom to sell their services and engage in trading, but charities, universities and local authorities are covered by particular rules:
- They can charge for their services to recover their costs(^2). Although this may appear limiting, once you work out the total cost of the service (see section 1.5), you may find that you have the potential to charge more than you expected.
- They can make a profit from selling their services only through a trading company. This may seem a big hurdle, but you may find that the body already has a trading vehicle that you can make use of.
(^2) In the case of local authorities, they can only do so if they're not services they have a statutory duty to provide free of charge) You may find that your organisation already has a corporate policy on fees and charges and there may be a lead accountant responsible who will help you to decide the right level of charges. Of course, you will need to consider the extent to which charging for your services interferes with your organisation's commitment to open data or with its social policies or commitments to free access. On the other hand, if the service's survival is at stake, those policies may need to be reviewed. While local authority archive services, in particular, are under a duty to provide free access to public records, this does not mean that they are under an obligation to provide free research.
In the case of university archives, ‘full cost recovery’ for services is unlikely to be seen as reasonable as students will have expected to have contributed to the archives’ core costs through their grant. However, university archives do need to make judgements about ‘fair’ levels of charging for wider library services – this will also need to include any charges for self-service photography which is increasingly replacing photocopying. Charges to non-students could reasonably be set at more commercial rates although if trading for profit, this may need to be undertaken through the university’s trading subsidiary. The nature of this activity and the VAT implications will need to be considered carefully before deciding whether it is worth attempting to trade for profit.
The types of income that you may want to look closely at include services such as:
- Routine charges such as printing and copying. Are you recovering the total cost of the service? These charges could include a fair proportion of the full hardware and consumables costs as well as the staff costs involved, such as payment handling.
- Research and enquiries. You could charge for ‘paid searches’ (cf the charges levied by The National Archives), but you will need to be clear about the distinction from Freedom of Information requests, most of which cannot be charged for. Archive services can take the opportunity to charge for research for other organisations to support their Heritage Lottery Fund bids, for example.
- Charges for reusing copyright material. For the collections for which you hold the copyright, you can explore entering into a licensing deal with commercial operators, such as ancestry.co.uk.
- Charges for publications. Some archive services have sold books, pamphlets, postcards, facsimile maps and other materials. You will need to be clear that the income from such publications will outweigh the costs of production, stock management and the sales process.
The harsh reality is that unless you have a collection that is particularly ‘marketable’, you may well find it hard to generate much income from selling your services. However, one example of a service that has made significant progress in generating income is the Norfolk Record Office (see case study). Case study 2: Getting serious about income
Summary
Norfolk Record Office has developed an entrepreneurial approach to generating more income.
Detail
The service has expanded its income-generating activities in order to help meet its financial targets. The current income target for 2014/15 has increased to £123k against expenditure of £1.3m and income is projected to increase by over a quarter more by 2016/17.
Central to the plans is a more commercially minded approach to charging. Whereas in the past, services were often provided free, now the service will charge for the labour incurred in research, talks and other routine activities such as photocopying. A standard labour charge of £48 per hour has been set which takes into account direct staff costs as well as a contribution to overheads.
About half of all income derives from room hire, records storage and digitisation projects, but new income streams have been developed, such as:
- Charging for certified copies of birth, death and marriage certificates (the service has taken over the records from the registrars’ service).
- A storage box-making machine has been invested in, which is generating local demand.
- Digital licensing to commercial family history websites.
Plans for new income streams are also being worked on, such as a 'digitisation on demand' service. The introduction in early 2015 of a more convenient, new online payments system is seen as crucial to success.
Lessons
Gary Tuson, County Archivist, points to the following lessons:
- "Don't undervalue what you do. Sometimes you have to be hard-nosed about it".
- "Focus on income-generating activities that help you to promote your aims as a service". To be effective at selling your services, you will need to sort out your marketing, being clear what you are offering; why it is valuable; and making the customer's experience a positive one. For example, if you haven't got the ability to take electronic payments easily, you will lose a lot of credibility. Again, you should be able to tap into other corporate systems or support to help you with this (or that you can adapt).
You might also want to consider bidding (probably in partnership) to win work from commissioning or tender exercises. However, this will require even more care in ensuring you are geared up to be able to do so: you will need the skills (and authority) to bid and if you want to make a profit, you'll need the right vehicle.
However, you must think carefully about what you charge for and whom. Might you risk alienating researchers who might be your greatest advocates and who you could enlist in volunteering or becoming an active supporter and fund-raiser on your behalf?
There are, of course costs to take into account involved in selling your services: these include:
- Your effort in co-ordinating this work.
- The efforts of your staff.
- The cost of handling cash and card payments and providing invoices.
- Any new technology needed.
- The cost of marketing materials.
Finally, it is important that you understand how the income that you generate benefits your service or is credited to it in some way. For example, the accounting practices within some organisations means that the income you generate might not go directly into your budgets, particularly if your income is being credited to a trading subsidiary. This could act as a disincentive for generating income unless there is some way that your success in generating income is credited to your service. This could involve changing the way income is treated or adjusting your budget reduction targets. For example, in a charity setting, you may want to ensure that the income forms part of your 'unrestricted income' (ie income that is not ring-fenced for particular activities). Key issues to explore
- Your organisation's existing policy on fees and charges and any specialist help available.
- Your existing charges: are you recovering a fair proportion of the total cost of the service?
- Can you start charging for other services - or increase them?
- Have you got the skills to sell your services and offer a positive, professional experience?
- How much of a market would there really be for your services?
- Who do you risk alienating by increasing or extending charges? Could you lose more than you gain?
- How can you ensure that your service benefits from or is credited for the income that it secures?
Further Reading
Charity Finance Directors' Group (2010) *The Tax Implications of Charity Trading.*
LGA (2012) *Enterprising councils - Getting the most from trading and charging.*
The National Archives (2016) *Income Generation Guide.*
ARA Fundraising for Archives programme, *Building Networks and Supporters.* 2.5 Fundraising: separating the rhetoric from reality
Since the arrival of austerity and reductions in core funding for many services, all cultural assets in the public sector have been under increasing pressure to access more resourcing from private funders including trusts and foundations, individual giving and corporate sponsorship. Government policy and Lottery funding have encouraged this trend, including through the Catalyst programme which supports the ‘Fundraising for Archives’ programme.
At the same time, local authorities have been increasingly attracted by the perceived advantages of ‘spinning out’ services to models of organisation which can access charitable and private funding, on the assumption that such funds will be unavailable to them as public bodies.
It is true that often, philanthropic donations will be more readily made to a charity than a public body, but there are examples of individual and corporate donations to publicly owned local services. Equally, some funders may be wary of giving to a new charity or ‘spin-out’ with no track record, or one that is seen as being a municipal vehicle.
Meanwhile, for those already in the charitable sector, competition for funding has become more intense and the requirements of trusts and foundations more rigorous, just as individual giving has become more complex with innovations in online giving and social media.
This means that in assessing your future options, you need to understand your drivers for increased fundraising; be able to challenge assumptions made about the fundraising environment in which you are operating; analyse your local market; and appraise different options which might support a future fundraising strategy for your service.
Also, if you are thinking about fundraising for an archive service within a charity or university, you will need to consider carefully whether and how this might compete with the organisation’s primary fundraising efforts. For example, approaching university alumni for funds to support for an archive can only be done if can justify a place within the mainstream fundraising drives. This will only work if the archive has won recognition for its contribution to the university’s offer to students.
Assessing your funding drivers Crucial to making decisions about where to prioritise your efforts will be knowing what you need to fund in the future. If you know that reductions in core funding in the medium term will make your service unsustainable you will want to consider a fundraising strategy which may require examining different operating and governance models.
If your priority is to fund capital redevelopment, specific funding sources and fundraising vehicles, and particular skill sets will be required. If you need to develop your activities and services with new specialisms and audience groups, you may want to look at particular funders and partners to work together. Understanding your local market There has been a lot of quite heated debate about the maturity of the private fundraising market for culture both in the context of the post-financial crash squeeze on corporate giving and reductions in public funding. Additionally, a key narrative has been the question of whether debate about increasing philanthropy is London-centric, or whether cultural institutions outside London are failing to exploit untapped opportunities in their local area.
While the available evidence seems to support both perspectives to some degree, a robust funding strategy will dig deeper than these broad positions to understand the local market in more detail. A stakeholder analysis should include key charitable funders in your area with national remit, as well as those with geographic and subject-specific funding criteria. You should analyse existing data on individual and corporate giving for which some regular surveys breakdown by region and sector.
It will also be important to consider the competition for fundraising in your local area. Are there other heritage and cultural organisations already accessing significant funding? Depending on the criteria of individual funders this might enhance their willingness to support you, or indicate that they may feel local needs are being met. You should also be aware that your relationship with key partners may change if you are viewed as moving into competition for limited external funding. It can often be difficult to open up this conversation, particularly if your parent organisation is also a funder of potential competitors, or is seen to be cutting funding.
Evaluating your readiness for fundraising Having assessed your local market for fundraising you will be able to analyse your readiness for fundraising and identify where it sits within your priorities for securing your future funding strategy.
This will include considering your track record for fundraising, and your existing skills and experience. From your analysis of your cost drivers, you should know whether you can increase resourcing for fundraising, either alone or in partnership with others. Your stakeholder analysis will also tell you what skills, experience and support you could draw on from colleagues elsewhere in the council, among Friends or local partners.
Staff managing and working in archive services may feel that they are not empowered to have some of the external conversations necessary to pursue some of these steps, so you might want to consider dedicating some planning time to building your networks and supporters, both internally and externally, before considering how to develop your fundraising strategy.
Working with a Development Trust or Friends Trust If you lack access to charitable funding yourself, there may be strong arguments in favour of focusing your resources on two types of fundraising vehicle which will increase your capacity and harness outside support. One is to work more closely with an existing Friends Trust, or discuss with your Friends group whether they might establish a Friends Trust governed and run by supporters. Many archive services already have Friends Groups and a number have existing Trusts which for the benefit of archives or local history in the area. Case study 3: Working with a Friends Trust
Summary
Dorset History Centre and Dorset Archives Trust (DAT) are going from strength to strength together.
Details
Dorset History Centre is a shared service between Dorset, Bournemouth and Poole, with a budget of £560,000.
The Friends Trust was established many years ago but wasn't actively fundraising. The decision was taken to raise the ambition for the Trust as a fundraising driver for the History Centre. County Archivist, Sam Johnston, says that a key factor was the recruitment of an energetic new chair with a strong track record in corporate IT and change management alongside a motivated board of trustees.
DAT received HLF Catalyst support for a fundraising strategy, board development and identity, with advice and training sessions from an external consultant on a more rigorous governance. Sam says "Some of this was stuff that hadn't occurred to me previously because we just felt grateful that people had turned up."
DAT has successfully raised funds from several trusts and foundations as well as HLF, which Sam says builds a confidence factor generally among funders. DAT trustees feel their independence from our governing local authorities is advantage in applying for funding.
In the future the Trust would like to explore electronic payments and gift aid. Dorset History Centre is examining options for a future capital project, and if this goes proceeds, DAT will have a big role in helping deliver its fundraising strategy.
Lessons
Sam Johnston advises to keep flagging the importance of working with the Friends internally. "Make sure that people higher up know about the work of the Trust, when I report to our joint governance board, I always talk up the benefits of DAT."
"Remember that your investment of staff time in fundraising will be considerable, and you can't rely entirely on a volunteer-run Trust." An alternative model for public sector organisations is a Development Trust. This is a registered charity whose charitable objectives are specifically focused on raising money for a particular cause, usually where the parent body is ineligible for charitable funding. As with Trusts operating services directly, a Development Trust must satisfy Charity Commission rules about independence. However, a number of local authorities have successfully used Development Trusts to raise money for cultural services which remain owned by the Council and operated in-house.
**Case study 4: Development Trust for Capital Project**
**Summary**
Cheltenham Borough Council created a Development Trust to support fundraising for the capital redevelopment of its Art Gallery and Museum which reopened in 2012, renamed The Wilson.
**Details**
Cheltenham realised it needed more diverse funding streams to achieve its target for the Art Gallery and Museum capital project, and didn't want to lose momentum. It established a Development Trust in 2008 with £60,000 of legacy funding; its charitable objectives were to support the Art Gallery and Museum and act as guardian of funds raised and champions for the project.
Active fundraising was delivered by Council officers. A Chair and Deputy Chair with really strong skills including charity law were recruited and the board included two ex-officio places for the Cabinet Member and Executive Director. The Chairman of the Art Gallery and Museum Friends Group also sat on board.
Museum, Arts & Tourism Manager, Jane Lillystone, highlights the partnership with their Friends Group. "It was really important to work with them in partnership and co-ordinate fundraising activities and ideas. They raised £250,000 from events." Of the £5.5m capital target, the Trust raised £2.2m raised from funders which Jane says couldn't have been raised without the Trust, including £50,000 in individual donations. Funders weren't worried about the partnership between the Trust and the Council as a public body.
"Our Council had confidence that Trustees were keeping an eye on the finances for the project, while Trustees were also able to ensure Councillors remained committed through the challenges of a large capital project."
**Lessons**
Jane points out that like her, you don't need to be a conventional fundraiser to support such a strategy. "If you're flexible and think strategically about different funders, all you need is some additional research capacity. Think about fundraising as an everyday activity not just about your capital project." Key issues to explore
- Understanding your funding drivers
- Researching the potential market for fundraising
- Assessing your readiness for fundraising among your options
- Considering partnership models for fundraising
Further Reading
Breeze, B. (2014) *Philanthropic Journeys: new insights into the triggers and barriers for long-term giving and volunteering*. Canterbury: University of Kent.
Phillips, P.S. (2012) *Philanthropy beyond London*. DCMS.
The National Archives (2012) *Using Friends Groups to Support Fundraising*
The National Archives (2013) *Use of Development Trusts by Archive Services*
The National Archives (2016) *Building Networks and Supporters.*
For more about working with Friends. 2.6 Spin-outs and alternative service delivery
Many other public services are increasingly being delivered through alternative service delivery models, such as outsourcing, shared services or transfer to community management. There have been a number of examples of shared services, but there is not yet a well-developed market of private sector archive service providers that public bodies can turn to.
More authorities are spinning out their archive services, such as Somerset and Devon and York, usually as part of larger packages of services. Spin-outs have been argued to have a number of particular advantages, such as better productivity and staff motivation, a stronger community focus and the retention of profits for the benefit of the locality. This belief is reflected in the Open Public Services White Paper which set out a commitment offer:
“New opportunities to innovate, improve and inspire; and encourage public sector staff to start their own enterprise.”
Source: Cabinet Office (2011)
The reported advantages of spin-outs have contributed to a number of authorities adopting policies which positively encourage mutualisation. In some authorities every service has been reviewed to assess whether it might lend itself to a spin-out, with staff encouraged to come forward with proposals.
Such spin-outs may be initiated by managers and staff, sometimes in collaboration with service users. The reasons for managers and staff pursuing a spin-out will vary. Some will be driven by a desire to take a more direct role in running their own organisation; others may feel a spin-out will help to protect or shelter a vulnerable service.
Spin-outs can take various forms, such as:
- Charitable Trust
- Community Management
- Local Authority Trading Company
- Mutual
- Social Enterprise
A charitable model has particular attractions to a local authority as significant savings can be made from business rate relief, with part of the costs of the relief transferring to the Treasury. It is also often perceived that a charity will find it easier to access external funding. Fiona Williams, Chief Executive of Explore York (which spun out from York City Council in 2014) reports: "We are finding that people are much more willing to donate time and money to us as a separate organisation." She adds: "Being a charity entitles us to apply for a wider range of grants and funding."
The set-up costs can be high and the processes involved can be very involved, so it is essential that both the authority and the staff transferring to the spin-out are committed to making the new arrangements work. Also, the new European procurement directive introduces some challenges that would need to be overcome is a spin-out is to secure a contract from the council.
A spin-out to a mutual or charitable body is not the only option: outsourcing to the private or third sector is another possibility although there is not yet a well-developed market for archive services.
**Key issues to explore**
- Might a spin-out option bring bigger long-term financial benefits than other alternatives?
- What could spin-out status allow you to achieve that an in-house model couldn't?
- Is there an interest among staff and members for exploring a spin-out?
- Is there a financial case for investing in such a project?
**Further Reading**
Museums Galleries Scotland (2010) *Choices for Change: a toolkit for exploring alternative methods of delivering services.* This toolkit offers some ideas for conducting an option appraisal.
The National Archives (2015) *In a spin: guidance on spinning out local authority archive services.* London: The National Archives. This guidance explores why and how local authorities might spin out archives services.
[Return to the top] Chapter 3 – Making your choice 3.1 How do you compare?
When considering the alternatives open to you, you may find it hard to estimate what might realistically possible unless you can compare with what others are doing:
- Do you spend much more on some activities than do other archives?
- Do they raise more income than you?
- Are your costs already much lower than the norm?
There are several ways you can find out more:
1. Take part in benchmarking exercises, such as those offered by CIPFAstats (which are principally for local authorities) or by the Society of College, National and University Libraries (which are more limited in scope).
2. Find other archive services through your network (or with the help of the TNA’s Engagement Team) to compare with. You could conduct a simple activity-based costing comparison with them using the approach suggested in section 1.4.
The most important part of the benchmarking exercise is learning about what others are doing that is different and generating ideas for what you can achieve and then generating some assumptions that you can use to inform your evaluation of the options. Of course, finding out what others are doing can be somewhat sensitive when you are working in institutions that are in some form of competition.
3.2 Evaluating the options - is there a business case?
In the end, you need to make some decisions about where to focus your efforts. This requires some research into each of the options to identify the art of the possible and the cost of the possible. You'll also need to think about the other implications and factors that will influence your decision about the priorities.
More importantly, you will need to work out whether you can generate an 'invest to save' argument - you will probably need some funds to make the changes needed to improve your finances. Can you make the case for an injection of funding that will deliver savings in succeeding years? Many organisations do operate 'invest to save' approaches, but probably not at the level of budgets involved in a small archive service, so the investment might to be generated internally through reprioritising your resources.
The temptation might be to just get on with what your hunch tells you is the best approach - and you might be right. However, if you want to win support and convince stakeholders that it is the right approach, you'll need to demonstrate that it is the right one. Of course, when you look more closely, you might find that there are hidden costs and risks and that something more or less radical is a better bet. You will need to decide on your own evaluation criteria and any weightings, but the sorts of things you might want to include are:
**Option appraisal: potential criteria**
| Criteria | Things to think about | |---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------| | Return on investment | □ What are the one-off costs?\
□ Are there any new annual revenue costs?\
□ What income or reductions can you expect?\
□ Do you need a return on investment in the short, medium or long term?\
□ Is there the potential for any upfront costs to be met from an ‘invest to save’ fund? | | Service outcomes | □ How will this option help to deliver corporate objectives?\
□ How does this fit your service priorities?\
□ Will the option run counter to your organisation's values or objectives? | | Stakeholder support | □ Do your plans have necessary trustee/political support?\
□ How controversial are the plans likely to be?\
□ Are your colleagues on board? | | Confidence levels | □ How confident are you that the results will be achieved?\
□ How big are the risks?\
□ Have you got access to the skills and expertise needed and can you find them easily? |
You will need to be clear about your assumptions, particularly your financial assumptions. You might not be able to be precise at this stage, but your assumptions need to be realistic.
At the end of the process, you might find that you’d want to pursue more than one option. The question will then be what the most logical sequence might be. Would fundraising be easier if you’d converted to a spin-out first? Or is the funding need too urgent to wait for the delays involved in a lengthy spin-out process? 3.3 Being clear about your plans
Once you've been through the process of selecting the best option and you know what part your fundraising plan will be, you'll need to develop a realistic plan - and probably a project plan so that you know exactly who will be doing what and in what sequence.
A plan focused on income generation might be more straightforward; the set-up of a development trust would be much more complex. Whatever the case, you will need to put the right type of project management in place, involving the right people. You'll also need a logical timetable and clear milestones and deadlines and keep a grip on any spending.
Whatever type of plan you adopt, you will need to make sure that you have a clear and persuasive narrative worked out to describe what you're trying to achieve. That narrative will need to be explained to all the people who may be affected or who could help. You'll want to get their feedback and keep them up to date.
If you are going to build a sustainable financial future for your archive service, you'll also need to think beyond the next year. Your plans and their implications will need to be projected forward over a longer time horizon. Gloucestershire Archives has created a three-year plan (see case study). Case study 5: Long-term planning to drive strategy
Summary
Gloucestershire Archives has used its long-term budget planning to help develop new ideas and a new culture.
Details
Gloucestershire Archives, which delivers an archive service for Gloucestershire County Council and South Gloucestershire Council, began its long-term approach to financial planning in 2008. Head of Information Management & Archives, Heather Forbes, reports "We were looking at different ways of doing things and making the best use of our assets".
This led to a number of changes, including the development of a very active volunteering programme (see case study in 'Building Networks and Supporters' toolkit) which is worth £250k per annum.
The service set about understanding "what everything costs to deliver", says Forbes, and undertaking benchmarking. This led to some activities being stopped and more realistic costs being charged. Learning and outreach activities are usually externally funded or incorporated into partners' bids to the Heritage Lottery Fund.
Using a long-term planning horizon (the current business plan runs until 2020) has encouraged the service to think about how to develop a more diverse funding base. It also challenged the service to explore how working with others could help to deliver shared outcomes. Partnerships, such as with the local Family History Society, are designed to make the service more sustainable.
Lessons
Heather Forbes argues: "You need to think strategically - beyond the period you are being asked to plan for" and stresses: "With a service like archives, you simply have to think a long way ahead". Chapter 4 - Where to go for help 4.1 Making friends with your accountants
Whether you want to make sense of the present or the future, you need to make friends with your accountant. However good your current relationship is, they are also likely to be very busy, particularly if you are in a public sector organisation where budget reductions for support services have often been far greater than for frontline services. Your accountant is unlikely to have much patience with you if you take little interest in your budget; argue pointlessly over corporate recharges neither of you can change; or plead that you're 'not good with numbers'.
On the other hand, if your accountant believes you are serious and putting thought and work into your financial planning, you're more likely to get the help you need. Whether you're confirming your staffing costs or probing into your expenditure and income, you'll probably need your accountant's help to understand the details.
4.2 Learning the basics and developing your skills
That conversation will be easier if you have put the work in to learn the financial basics in your organisation: how to use a spreadsheet; how to use your finance system; and the basic terminology. You will not need Advanced Excel skills - you won't need anything much more sophisticated than understanding how to use a spreadsheet to add up, subtract and divide by 12! You can learn all you need online or by doing an Excel for beginners course. You will need to learn how to use your finance and purchasing systems: again the basic courses will be all you need. Most organisations will also run a 'finance for non-financial managers' course. This is well worth doing. If you've got to grips with the basic tools and jargon, you'll be better placed to plan for the future and to make best use of the help available.
You will probably also want to develop your marketing and lobbying skills - all things that the 'Fundraising for Archives' programme and ARA and TNA materials and training can help with. Some project management skills will also be needed - or programme management if your plans are more complex and the change involved is greater.
Of course, if you're not a one-person band, you don't have to do it all yourself. It's important to draw on the help and skills of your colleagues - and your supporters. That might require an investment in their skills. The bigger the plan or change needed, the more you will need to put into a learning plan that will help to make it possible.
4.3 Build your networks (see Building Networks and Supporters)
You'll need to think hard about how manage relationships with stakeholders to develop powerful advocates who will speak on your behalf. The 'Fundraising for Archives' programme offers a module and toolkit on this important topic. 4.4 National Archives advice on spin-outs and the Mutuals Information Service
A number of government departments and agencies are providing support and funding to help organisations, staff and community groups understand whether spinning out is for them.
The National Archives has published guidance on spinning out archive services and you can also draw on advice from TNA’s Engagement Team and regional Engagement Managers for advice and support: http://www.nationalarchives.gov.uk/archives-sector/ask-question.htm
The Cabinet Office Mutuals Information Service is open to public service organisation and their staff wanting advice and guidance on spinning out services into a Public Service Mutual. The service includes access to training and consultancy support. http://mutuals.cabinetoffice.gov.uk/
4.5 Fundraising for Archives: training
The ‘Fundraising for Archives’ programme offers a wide range of training courses, toolkits and advice to help you work out how to be effective in your fundraising and where to channel your efforts.
4.6 The National Archives - Income Generation Guidance
The National Archives has published guidance on commercial income generation for archives. This guide will be especially useful to archives considering a range of income generation options, including voluntary fundraising and selling services.
Return to the top
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34b0ebd2324a3e2541e11ea038e100672b573f45 | Financial Reporting Council
The UK’s independent regulator for corporate governance and reporting
Paul George Financial Reporting Council What is the FRC?
• The UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment
• Statutory and non-statutory responsibilities
• Sets accounting, auditing and actuarial standards as well as the corporate governance Code
• Provides independent oversight of the regulation of the auditing, accounting and actuarial professions by their respective professional bodies
• Direct regulatory role in monitoring and discipline of the accounting, auditing and actuarial professions (PIEs only)
• Thought leadership in the UK and internationally
• Funded by a voluntary levy on companies, the audit profession and local authorities History of the FRC
• Originally set up in the 1980s as a private sector body tasked with promoting high quality financial reporting. It consisted of two bodies, the Accounting Standards Board and the Financial Reporting Review Panel, respectively setting UK accounting standards and reviewing listed companies’ compliance with those standards.
• Following Enron and WorldCom scandals, the Swift Report recommended that the FRC also take on formal responsibilities for audit and accountancy regulation; this was enacted in 2004.
• From 2006 the FRC also took on formal responsibility for actuarial oversight and standard-setting.
• Publication of “Reform” consultation in 2011 – aimed at cementing FRC’s independence, increasing our effectiveness and focusing our activities on capital markets. FRC current structure
- FRC Ltd Board
- Accounting Standards Board
- Auditing Practices Board
- Board for Actuarial Standards
- Professional Oversight Board
- Financial Reporting Review Panel
- Accountancy & Actuarial Discipline Board
- Corporate Governance Unit
- Audit Inspection Unit FRC proposed new structure
FRC Ltd Board
Codes & Standards
Conduct Professional Oversight Board
• Most of the FRC’s statutory responsibilities under the Companies Act currently rest with the POB
• Oversight of the Recognised Qualifying Bodies and Recognised Supervisory Bodies for audit
• Regular monitoring of the RQBs and RSBs to ensure their continued compliance with the Companies Act
• Annual publication of report to Secretary of State on our activities Audit Inspection Unit
• Part of the Professional Oversight Board
• Monitors the audits of listed companies and certain other public interest entities
• Around 100 audits inspected annually, selected using a risk model
• Also carries out inspections of firm-wide quality control processes at the ten largest firms Audit Inspection Unit reporting
- Private reports to firms on outcome of inspections
- Public reports detailing the results of its inspections of individual firms, as well as an annual report with an overview of its activities
- A letter detailing the AIU’s findings on each individual audit is sent to the relevant Audit Committee Chairman
- Report to Audit Registration Committee on findings
- Post-reform we hope to have the ability to sanction firms whose audits are of unsatisfactory quality FRC and choice in the audit market
• The FRC has been concerned about the extent of market concentration, and the risk of a major firm failing, for some years
• FRC and BIS commissioned Oxera to carry out a study in 2006
• Following on from this the FRC set up the Market Participants Group (MPG)
• This was an attempt to reduce both concentration and the risk of a firm leaving the market by means of voluntary action by market participants FRC and choice in the audit market (cont)
• The MPG produced a list of 15 recommendations, 14 of which have now been implemented • FRC has monitored progress and published a number of progress reports • It is clear that the recommendations may have helped audit quality but have done nothing to reduce market concentration; indeed there is evidence that the market is becoming more concentrated • FRC has exhausted its audit regulator’s toolbox; the issue needs looking at by competition authorities FRC current work on audit market
• Focus on contingency planning; working with firms to develop “living wills”
• Review of recent audit proposals and meetings with audit committee chairs indicate increased propensity for large companies to put audits out to tender, partially for governance reasons, partially to obtain a cut in fees
• Review of recent auditor changes points towards increasing concentration; very few companies switching from Big Four to non-Big Four, but several moving in the opposite direction Specific issues CC may wish to consider
• Possibility of an unequivocal statement that under no circumstances would it permit the market to be dominated by three or fewer audit firms • Hyper-concentration in particular industries (eg banking, insurance, utilities) • Propensity for small FTSE companies to use Big Four auditors; contrast with similarly-sized AIM companies • Big Four expanding into AIM markets • International issues: – Regulation of central entities at heart of global networks – Trend for Big Four networks to acquire smaller rival firms in developing markets • Interaction with European Commission proposals Appendix A – AIU gradings
The AIU rates individual audits as:
- Good with limited improvements required; or
- Acceptable but with improvements required; or
- Significant(^1) improvements required.
A variety of factors are considered when arriving at the conclusion, including:
- Sufficiency of audit evidence
- Quality of audit evidence
- Appropriateness or otherwise of audit judgements
- Evidencing of thought processes underlying audit judgements
- The existence and extent of concerns in other areas
(^1) Factors to be taken into account in assessing significance include the materiality of the area or matter concerned, the extent of any concerns regarding the sufficiency or quality of audit evidence (e.g. whether they relate to specific elements of the audit evidence only or are more pervasive to the overall sufficiency or quality of audit evidence in the areas concerned), whether appropriate professional scepticism appears to have been exercised in forming audit judgments and the extent of any non-compliance with standards or the firm’s methodology identified. Appendix B – MPG recommendations
01. The FRC should promote wider understanding of the possible effects on audit choice of changes to audit firm ownership rules, subject to there being sufficient safeguards to protect auditor independence and audit quality.
02. Audit firms should disclose the financial results of their work on statutory audits and directly related services on a comparable basis.
03. In developing and implementing policy in auditor liability arrangements, regulators and legislators should seek to promote audit choice, subject to the overriding need to protect audit quality.
04. Regulatory organisations should encourage participation on standard setting bodies and committees by appropriate individuals from different sizes of audit firms.
05. The FRC should continue in its efforts to promote understanding of audit quality and should promote greater transparency by the firms and the FRC of the capabilities of individual audit firms.
06. The auditing profession should establish mechanisms to improve access by the incoming auditor to information relevant to the audit held by the outgoing auditor.
07. The FRC should provide independent Guidance to Audit Committees and other market participants on considerations relevant to use of firms from more than one audit network.
08. The FRC should amend the section of the FRC Guidance to Audit Committees dealing with communications with shareholders to include a requirement for the provision of information relevant to the auditor re-selection process.
09. When explaining auditor selection decision, Boards should disclose any contractual obligations to appoint certain types of auditing firms.
10. Investor groups, corporate representatives, firms and the FRC should promote good practices for shareholder engagement on auditor appointment and re-appointments.
11. Authorities with responsibility for ethical standards for auditors should consider whether any rules could have a disproportionately adverse impact on auditor choice when compared to the benefits to auditor objectivity and independence.
12. The FRC should review the Independence section of the FRC Guidance on Audit Committees to ensure that it is consistent with the relevant ethical standards for auditors.
13. Regulators should develop protocols for a more consistent response to audit firm issues based on their seriousness.
14. Every firm that audits public interest entities should comply with the provisions of a Combined Code-style corporate governance guide or give a considered explanation.
15. Major public interest entities (PIEs) should consider the need to include the risk of the withdrawal of their auditor from the market in their risk evaluation and planning.
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ae2e58d558e7ebf5525846db1fa6823d674e2770 | CONSOLIDATED LIST FORMAT GUIDE
The consolidated list is available from the Treasury’s website in four different formats:
- Plain Text (.txt)
- Delimited (.csv)
- Microsoft Excel (.xls)
- HTML (.html) – paragraph style
The data provided in each format is identical.
Field Formats
The information in each file is broken down under the following field headings.
| Heading | Description | |------------------|-----------------------------------------------------------------------------| | Name 6 | The last name of the individual / The full name of the entity | | Name 1 | The first name of the individual | | Name 2 | The second name of the individual | | Name 3 | The third name of the individual | | Name 4 | The fourth name of the individual | | Name 5 | The fifth name of the individual | | Title | Honorary, professional or religious title | | DOB | Date of birth. (in dd/mm/yyyy format) | | Town of Birth | Town of birth, including alternatives | | Country of Birth | Country of birth, including alternatives | | Nationality | The citizenship and/or nationality of the target | | Passport Details | Passport number(s) - where issued, issued/expiry dates | | NI Number | National identification numbers e.g. ID card numbers, Social Security Numbers etc. | | Position | Official title/position | | Address 1 | The first line of the address i.e. where the individual permanently or temporarily resides/lives (legally or illegally). For entities this could include where that entity has branches | | Address 2 | The second line of the address | | Address 3 | The third line of the address | | Address 4 | The fourth line of the address | | Address 5 | The fifth line of the address – normally the town | | Address 6 | The sixth line of address – normally the town, state or region | | Post/Zip Code | Any known postal identifying codes | | Country | The country where the address is | | Other Information| Supplementary data in addition to that in the above categories. This could include gender, nicknames, low quality single name aliases, UN reference number, details of family etc | | Group Type | Individual or Entity | | Alias Type | Prime Alias, AKA (also known as) or FKA (formerly known as) | | Regime | Title of the Financial Sanctions regime under which the target is listed | | Listed On | The date the target was added to the Consolidated List by the Treasury (previously the Bank of England) i.e. the publication date of the relevant notification, notice and/or news release | | Last Updated | The date that the identifying details of the target were last changed on the Consolidated List by the Treasury. | | Group ID | The unique identifying code given to all records/data permutations relating to a specific individual or entity | A separate record is provided for each permutation of data involving “Name”, “Date of Birth”, “Address” and “Regime”.
A unique Group ID code is given to all records/data permutations relating to a specific target. There is no unique record code. Each record/data permutation will have a Group ID code but records that are related (i.e. information relating to the one target) share the same Group ID code.
Records are sorted by “Name 6” in alphabetical order.
**HTML format**
All details for a specific target are linked to produce a single text paragraph grouping together alternative aliases, dates of birth, addresses etc. This version is more reader-friendly. Other versions are more suited to downloading into local systems.
The list is split into “Regimes”. Within each “Regime” the list is split by “Individuals” and “Entities” and sorted by “Name 6” of the Prime Alias in alphabetical order.
A target listed under two regimes (e.g. both “Terrorist Financing” and “Al Qaida and Taliban”) will be shown under both regimes.
**Example**
The following compares how an individual’s details may be shown in each format.
(a) **HTML format**
Name 6: SMITH 1: JOHN 2: JACK 3: n/a 4: n/a 5: n/a. TITLE: Doctor DOB: (1) 01/01/1958 (2) 01/01/1959. POB: Cardiff, Wales a.k.a: SMITH, Jack Nationality: British Passport Details: 455525 (British) issued 1 February 1996, expires 31 January 2006 National Identification no: 11225 (French) issued 1 June 1999 Position: Leader of Taliban Address: (1) 1 London Road, London, United Kingdom, EC2. (2) 1 Cardiff Street, Cardiff, United Kingdom, WA1. Other Information: Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Listed on: 01/07/2003. Last updated: 05/05/2004 Group ID: 65869.
(b) **Plain Text**
Name 6;Name 1;Name 2;Name 3;Name 4;Name 5;Title;DOB;Town of Birth;Country of Birth;Nationality;Passport Details;NI Number;Position;Address 1;Address 2;Address 3;Address 4;Address 5;Address 6; Post/Zip Code;Country;Other Information;Group Type;Alias Type;Regime;Listed On; Last Updated; Group ID
SMITH;John;Jack;;;;Doctor;01/01/1958;Cardiff;Wales;British;45525 (British) issued 1 February 1996, expires 31 January 2006;11225 (French) issued 1 June 1999;Leader of Taliban;1 London Road;;;;;London;EC2;United Kingdom;Name of mother is Joan Smith. Also referred to as ‘Jimbo’.;Individual;Prime;Al Qaida and Taliban;01/07/2003;05/05/2004;65869
SMITH;John;Jack;;;;Doctor;01/01/1958;Cardiff;Wales;British;45525 (British) issued 1 February 1996, expires 31 January 2006;11225 (French) issued 1 June 1999;Leader of Taliban;1 Cardiff Street;;;;;Cardiff;WA1;United Kingdom;Name of mother is Joan Smith. Also referred to as ‘Jimbo’.;Individual;Prime;Al Qaida and Taliban;01/07/2003;05/05/2004;65869
SMITH;John;Jack;;;;Doctor;01/01/1959;Cardiff;Wales;British;45525 (British) issued 1 February 1996, expires 31 January 2006;11225 (French) issued 1 June 1999;Leader of Taliban;1 London Road;;;;;London;EC2;United Kingdom;Name of mother is Joan Smith. Also referred to as ‘Jimbo’.;Individual;Prime;Al Qaida and Taliban;01/07/2003;05/05/2004;65869
SMITH;John;Jack;;;;Doctor;01/01/1959;Cardiff;Wales;British;45525 (British) issued 1 February 1996, expires 31 January 2006;11225 (French) issued 1 June 1999;Leader of Taliban;1 Cardiff Street;;;;;Cardiff;WA1;United Kingdom;Name of mother is Joan Smith. Also referred to as ‘Jimbo’.;Individual;Prime;Al Qaida and Taliban;01/07/2003;05/05/2004;65869
SMITH;John;Jack;;;;Doctor;01/01/1959;Cardiff;Wales;British;45525 (British) issued 1 February 1996, expires 31 January 2006;11225 (French) issued 1 June 1999;Leader of Taliban;1 London Road;;;;;London;EC2;United Kingdom;Name of mother is Joan Smith. Also referred to as ‘Jimbo’.;Individual;Prime;Al Qaida and Taliban;01/07/2003;05/05/2004;65869 | Name 6, Name 1, Name 2, Name 3, Name 4, Name 5, Title, DOB, Town of Birth, Country of Birth, Nationality, Passport Details, NI Number, Position, Address 1, Address 2, Address 3, Address 4, Address 5, Address 6, Post/Zip Code, Country, Other Information, Group Type, Alias Type, Regime, Listed On, Last Updated, Group ID | |---------------------------------------------------------------| | SMITH, John, Jack, ..., Doctor, 01/01/1958, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 London Road, ..., London, EC2, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1958, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 Cardiff Street, ..., Cardiff, WA1, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 London Road, ..., London, EC2, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 Cardiff Street, ..., Cardiff, WA1, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 London Road, ..., London, EC2, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 Cardiff Street, ..., Cardiff, WA1, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 London Road, ..., London, EC2, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 Cardiff Street, ..., Cardiff, WA1, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 London Road, ..., London, EC2, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 | | SMITH, John, Jack, ..., Doctor, 01/01/1959, Cardiff, Wales, British, 45525 (British) issued 1 February 1996, expires 31 January 2006, 11225 (French) issued 1 June 1999, Leader of Taliban, 1 Cardiff Street, ..., Cardiff, WA1, United Kingdom, Name of mother is Joan Smith. Also referred to as ‘Jimbo’. Individual, Prime, Al Qaida and Taliban, 01/07/2003, 05/05/2004, 65869 |
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b712510791c04b2fb23597dfe39df20b45339827 | The National Archives
Education Service
The Great Fire of London
What happened?
Illustration of the fire taken from ZMAP 4/18 The Great Fire of London
Lesson at a Glance
Suitable For: KS1-3
Time Period: Early Modern 1485-1750
Curriculum Link: Events beyond living memory that are significant nationally or globally
- The Great Fire of London
- The development of Church, state and society in Britain 1509-1745
- Society, economy and culture across the period
Learning Objective: To closely examine a document in order to discover information. To consider how and why the fire started, and how the city recovered.
Resources needed: Printed sources and questions
The Fire
London was a busy city in 1666. It was very crowded. The streets were narrow and dusty. The houses were made of wood and very close together. Inside their homes, people used candles for light and cooked on open fires. A fire could easily get out of control. In those days there were no fire engines or firemen to stop a fire from spreading.
The fire began on Sunday evening on the 2nd of September. It started in Pudding Lane in the shop of the king’s baker, Thomas Farrinor. When Thomas went to bed, he did not put out the fire that heated his oven. Sparks from the oven fell onto some dry flour sacks and they caught fire. The flames spread through the house, down Pudding Lane and into the nearby streets.
Soon London was filled with smoke. The sky was red with huge flames from the fire. By Monday, 300 houses had burnt down.
Everybody was in a panic. People loaded their things onto carts and tried to leave town. Others tried to get away on boats on the river. Some people buried their things in the garden, hoping to save them from the fire.
The fire still spread, helped by a strong wind from the east. London Bridge and St Paul’s Cathedral were both burnt. On Tuesday, King Charles II ordered that houses and shops be pulled down to stop the fire from spreading. By Wednesday, they had the fire under control. But by then, 100,000 people were homeless.
Contents:
Teacher’s notes: ........................................... 3 Tasks: .......................................................... 4 Source One: .................................................. 5 Source Two: .................................................. 7 Source Three: ............................................... 8 Source Four: ............................................... 9 Source Five: ............................................... 11 The Great Fire of London
Teacher’s notes
This snapshot can be used with pupils at key stage 1 for the history national curriculum in year 2. It looks at the story of the fire of London through evidence relating to some of the key characters - Thomas Farrinor and Charles II. Background notes also provide contemporary views on the causes of the fire, based on original documents at the National Archives.
Sources
The questions progress in difficulty, so that questions based on source 5 are a little harder than questions based on source 1.
Source 1 provides evidence about Farrinor, the king’s baker, in Pudding Lane. E 170/252
Source 2 shows the instruction given by Charles II to survey the city after the fire. SP 44/23
Source 3-4 reveals how much of the city was destroyed. ZMAP 4/18
Source 5 provides evidence of how Charles hoped to improve the city and prevent such a calamity happening again. SP 29/171
Extension activities
The snapshot could be expanded to ask pupils to attempt a piece of writing on the fire such as a diary entry.
- Pupils could read extracts (or simplified versions) from the diaries of Samuel Pepys and John Evelyn.
- The class could make a class mural of the Great Fire of London or pupils could do an individual drawing.
- The class could discuss how we deal with fires today.
Background
Thomas Farrinor and his wife got out of their bakery in time, but their maid was too frightened to jump from the roof. She was the first to die. Surprisingly, only nine people died as a result of the fire.
Two people have left us eyewitness accounts of the fire. The first is Samuel Pepys, who worked for the Navy. He kept a diary from 1660-1669. The second is John Evelyn, who also kept a diary. Both men describe how dramatic and scary the fire was.
Not everyone at the time thought that the fire was an accident. Some said foreigners caused it. Others felt that the fire was started by those not free to follow their own religion. Some even saw the fire as a punishment from God.
A ten-year-old boy called Edward Taylor and his family were questioned for throwing fireballs at an open window in Pudding Lane and in the streets. Fireballs were made from animal fat (called tallow), set alight and used to start fires. However, the fire was most likely caused by chance rather than by a deliberate act.
Charles II ordered that 10 October 1666 be a day of fasting on account of the fire. He told the Lord Mayor of London to support collections for victims of the fire. Later, close to Pudding Lane, a monument was built so that people would not forget the fire. It was the work of Sir Christopher Wren, who designed many new buildings, including St Pauls Cathedral, when the city was rebuilt after the fire. The Great Fire of London
What happened?
Tasks
Look at Source 1 This source was written about two weeks before the fire. It lists some of the people who lived in Pudding Lane. This is where the fire began.
a) Can you find the name of the king’s baker? b) How many fireplaces and ovens did he have? c) How much tax did the baker have to pay? (Clue: number of hearths and ovens x 1 shilling) d) How many different jobs can you find on the list? Name them. e) How many men had houses on the list? f) How many women had houses on the list? g) How many houses were empty?
Look at Source 2 After the fire, King Charles II wanted a new map of London.
a) Who did Charles ask to make a plan of London? b) Why did Charles want a map showing London after the fire? c) What did Charles feel about the fire?
Look at Source 3 Wenceslaus Hollar drew this map.
a) Can you find the following places on the map? • River Thames • Tower of London • St Paul’s Cathedral (Clue: from above it looks like a cross, not a dome) • Pudding Lane (Clue: north of the river, near the bridge) b) Why are there not many buildings shown in the white middle part of the map? c) Ask your teacher for a map of London today. Try and spot the differences with Hollar’s map of London?
Look at Source 4 On the corner of his map, Hollar put some information. It is a list of places that are numbered on the map. This is called a key.
a) There are a lot of halls. These were meeting places for different kinds of craftsmen. For example, number 130 is the Carpenter’s Hall. Can you find any more? In pairs, talk about what people had to do in these jobs. (Your teacher will help you with the unusual ones.) b) Try and find some new jobs listed here in the key that were not listed in source 1 (for example: 124. weavers). c) How many houses in the city were destroyed by the fire? d) How many churches were burnt
Look at Source 5 King Charles praised the courage of the people in the fire. He hoped to see a more beautiful city rebuilt. He also made plans to prevent another fire. Here are some of his plans.
a) How did Charles plan to stop fires spreading in London? (Clue: There are five different ideas in this source.) How would each of these plans help to stop a fire from spreading? The Great Fire of London
What happened?
Source 1: Pudding Lane Hearth Tax: August 1666: E 179/252 The Great Fire of London
What happened?
Transcript of Source 1: Pudding Lane Hearth Tax: August 1666
[This is a tax record for August 1666. These people lived in Pudding Lane in London. The numbers show the amount of hearths (fireplaces) in each person’s house. People who owned a house had to pay a hearth tax to the king. They paid 1 shilling (5p) for each hearth. This tax was collected twice a year. Some people might stop up their fireplaces for part of the year so they didn’t have to pay the tax twice.]
| Name | Hearths | |------------------------------|---------| | Mary Whittacre widow | 2 | | George Porter plasterer | 3 | | Widdow Gander | 1 | | Benjamin Burstow | 1 | | Thomas Knight Glasier [glass maker] | 4 | | Alice Spencer | 4 | | Empty | 3 | | John Bibie turner [person who works with a turning lathe, a tool for shaping and cutting wood, important in making barrels] | 3 | | Thomas Farrinor baker | 5 | | 1 oven | 1 | | William Ludford plasterer | 3 | | 1 stop up | 1 | | Jones | 2 | | Susanna Noest | 3 | | Empty | 3 | | Lanbe Yard | | | William Burgis hook & eye maker | 3 | | Joshua Sands plateworker | 2 | | Empty | 3 | | Nicolas Carter hook & eye maker | 5 | | Widdow Grimes | 1 | | John Wardley clothworker | 4 | | William Walter smyth [blacksmith who worked with metal and made horseshoes] | 3 | | John Wells porter | 2 | | John Hasleby porter | 2 | | Widdow Pawley | 2 | | William Greene turner | 2 | | | 68 | The Great Fire of London
What happened?
Source 2: Order from Charles II, 10 September 1666 SP 44/23
Full transcript
We have appointed Wencelaus Hollar and Francis Sandford to take an exact plan and survey of our city of London with the suburbs adjoining as the same now stands after the sad calamity of the late fire with a particular depiction of the ruins thereof.
Glossary
Suburbs adjoining = areas where people live next to the city Sad calamity = event that brings terrible loss and sadness; a disaster Depiction = a picture (or a description in words)
Simple transcript
The king has chosen Wencelaus Hollar and Francis Sandford to make a map of the city of London and the nearest suburbs to show the damage caused by the terrible fire Source 3: Map of London after the fire ZMAP 4/18 The Great Fire of London
What happened?
Source 4: Key to map ZMAP 4/18
113. Poulterers Hall
114. Cookes Hall
115. Barber Chirurgeons Hall
116. Scriveners Hall
117. Goldsmiths Hall
118. Waxchandlers Hall
119. Haberdashers Hall
120. Curriers Hall
121. Brewers Hall
122. Gilders Hall
123. Coopers Hall
124. Weavers Hall
125. Macons Hall
126. Mercers Hall & Chapell
127. Grocers Hall
128. Founders Hall
129. Armorers Hall
130. Carpenters Hall
131. Loriners & Glasters Hall
132. Drapers Hall
133. Merchant Taylors Hall
134. Salters Hall
135. Cutlers Hall
Burnt 373 houses within 63 acres & 310 rods without the wall 89 Churches, 13200 Houses 18 Parishes within the Wall's entire.
### Transcript of Source 4: Key to map ZMAP 4/18
| Transcript | Glossary | |------------|----------| | 113. Poulterers Hall | People who sold chickens, hens and eggs | | 114. Cookes Hall | People who prepared and sold cooked food | | 115. Barber Chirurgeons Hall | People who cut hair and beards and could also carry out operations or remove teeth | | 116. Scriveners Hall | People who wrote letters and documents for money | | 117. Goldsmiths Hall | People who worked with gold | | 118. Waxchandlers Hall | People who made candles and sold them | | 119. Haberdasher’s Hall | People who sold men’s clothing | | 120. Curriers Hall | People who worked with leather (colouring it) | | 121. Brewers Hall | People who made beer and ale | | 122. Girdlers Hall | People who made girdles (belts) | | 123. Coopers Hall | People who made and repaired barrels and casks | | 124. Weavers Hall | People who made cloth | | 125. Masons Hall | People who cut stone (for buildings etc) | | 126. Mercers Hall & Chappell | Important traders who sold rich fabrics like silk and velvet | | 127. Grocers Hall | People who sold food, like spices and sugar | | 128. Founders Hall | People who worked with metal | | 129. Armorers Hall | People who made weapons | | 130. Carpenters Hall | People who made furniture from wood | | 131. Loriners & Glasiers Hall | Loriners made metal bits for bridles and saddles (kit for a horse). Glasiers made glass for windows. | | 132. Drapers Hall | People who sold woollen cloth. | | 133. Marchant Taylors Hall | People who bought cloth and made it into clothes, usually for men. | | 134. Salters Hall | People who made and sold salt. | | 135. Cutlers Hall | People who made, sold or fixed knives. |
| Transcript | Glossary | |------------|----------| | Burnt 373 Acres within | 373 acres were burnt within the city walls. One acre is about the same amount of land as a football pitch | | 63 Acres & 3 roods without the walls | 63 acres & 3 roods were burnt outside the city walls. A rood is one quarter of an acre. | | 89 Churches, 132,00 Houses | 89 churches & 132,00 houses were burnt. | | 11 Parishes within City walls entire. | 11 whole communities within the city walls were burnt. | In the first place the woful experience in this late heavy visitation hath sufficiently convinced all men of the pernicious consequences which have attended the building with Timber, and even with Stone it self, and the notable benefit of Brick, which in so many places hath resisted and even extinguished the Fire; And we do therefore hereby declare Our express Will and Pleasure, That no man whatsoever shall presume to erect any House or Building, great or small, but of Brick, or Stone, and if any man shall do the contrary, the next Magistrate shall forthwith cause it to be pulled down,
all other eminent and notorious Streets, shall be of such a breadth, as may with Gods blessing prevent the mischief that one side may suffer if the other be on fire,
not will we suffer any Lanes or Alleys to be erected, but whereupon mature deliberation the same shall be found absolutely necessary,
no house shall be erected within so many foot of the River,
any houses to be inhabited by Brewers, or Distillers, or Sugar-Bakers, which Trades by their continual Smoaks contribute very much to the unhealthiness of the adjacent places; but We require the Lord Major and Aldermen of London upon a full consideration, and weighing all conveniences and inconveniences that can be foreseen, to propose such a place as may be fit for all those Trades which are carried on by smoak to inhabit together, In the first place the woful experience in this late heavy visitation hath sufficiently convinced all men of the pernicious consequences which have attended the building with Timber, and even with Stone itself, and the notable benefit of Brick, which in so many places hath resisted and even extinguished the Fire; And we do therefore declare Our express Wil and Pleasure, That no man whatsoever shal presume to erect any House or Building, great or small, but of Brick or Stone, and if any man shal do the contrary, the next Magistrate shall forthwith cause it to be pulled down, .
...all other eminent and notorious Streets, shal be of such a breadth, as may with Gods blessing prevent the mischief that one side may suffer if the other be on fire, .
...nor wil we suffer any Lanes or Allyes to be erected, but where upon mature deliberation the same shal be found absolutely necessary,
...no house shall be erected within so many foot of the River,
...any houses to be inhabited by Brewers, or Diers, or Sugar-Bakers, which Trades by their continual Smoaks contribute very much to the unhealthiness of the adjacent places, but We require the Lord Mayor and Aldermen of London upon a ful consideration, and weighing all conveniences and inconveniences that can be foreseen, to propose such a place as may be fit for all those Trades which are carried on by smoak to inhabit together, .
Simple Transcript
Firstly, the sad experience of the fire has shown us all the bad results of building with wood, and even with stone, and the good benefits of brick, which in so many places did not catch fire. And it is the King’s wish that no man shall build any house or building, large or small, unless it is made of brick or stone. And if any man does not do this, his house will be pulled down.
All of the main streets shall be wide enough to (God willing) stop a fire spreading from one side to the other.
No lanes or alleys will be built unless we think they are really needed.
No houses shall be built near the river.
Brewers (making beer), dyers (colouring cloth) or bakers are trades whose constant smoke makes nearby places unhealthy. The Lord Mayor and the men who run London must think of a place where all those trades which use fire can be housed together.
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18ca99bfa1b8bbbdd935a0baa856e8f0dce8125f | Interview:
“Children’s services are causing councils the biggest headaches because they can’t predict the level of need”
Andrew Gwynne, Shadow Secretary of State for Communities and Local Government CPL
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© 2017 BBA Consultancy, Investigation & Training Ltd. All Rights reserved. CIT is part of the BBA Group.
Professional Conference
Empowering autistic voices and choice
Be inspired and learn from world-renowned experts at our Autism Professionals Annual Conference 2018
Attend to discover and learn practical strategies for adapting your practice and improving how you deliver support. Meet and network with other professionals and experts in the field.
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Until everyone understands
www.local.gov.uk Future view
Housing is a top priority for councils and the LGA, so it was gratifying to see the Treasury Select Committee endorse our call for all councils to be able to borrow to build more homes (see p5, p24).
LGA support for councils includes its Housing Advisers Programme, which offers specialist support to help you make progress on projects aimed at reducing homelessness or delivering more homes (p16).
Other LGA support featured in this month’s first includes the national graduate development programme (p13), peer challenge (p14) and our Productivity Experts programme (p15).
Looking ahead, what are the implications for local transport of the development of electric and self-driving cars? We look at the possible benefits for residents (p10).
Our interview this month is with Andrew Gwynne MP, Shadow Secretary of State for Communities and Local Government, who talks about the financial pressures facing councils.
Welsh LGA Leader Cllr Debbie Wilcox discusses the role councils in Wales are playing in promoting economic growth via city and growth deals. And James Palmer, Mayor of Cambridgeshire and Peterborough, writes about the importance of devolving skills provision so that it can be tailored to suit the needs of local economies.
Lord Porter is Chairman of the LGA
Editor Karen Thornton Design & print CPL www.cpl.co.uk Advertising [email protected] Write to first Local Government Association 18 Smith Square, London SW1P 3HZ Email [email protected] Tel editorial 020 7664 3294 Tel advertising 01223 378 042 Photography Getty Images and iStock.com unless otherwise stated Circulation 18,200 (January 2018) first is published online at www.local.gov.uk/first at least two days before the magazine. To unsubscribe email [email protected]
The inclusion of an advert or insert in first does not imply endorsement by the LGA of any product or service. Contributors’ views are their own and do not necessarily reflect the opinions or policies of the LGA.
Local Government Association
February 2018
contents
news
4 Roads funding Finance settlement errors 5 Housing cap Permitted developments Northern transport 6 Product safety database Live music venues Modern slavery 7 Child referrals Care inquiry Dental health 8 Regional aid Environment plan Devolution report
interview
18 Andrew Gwynne MP, Shadow Secretary of State for Communities and Local Government “If you are spending on children’s services and adult social care – the two services that most council tax payers don’t see – you’re not spending it on the bread-and-butter issues, like the bins”
features
10 Electric cars and local transport 12 Women’s suffrage 13 Graduate trainees 14 Peer challenge 15 Productivity experts 16 Housing advisers 17 Health inequalities
comment
23 Regional growth in Wales 24 LGA chairman and group leaders 26 Citizenship and young people 27 Mayor James Palmer, Cambridgeshire and Peterborough
regulars
9 Letters and sound bites 29 Parliament – Brexit 30 Councillor – financial scrutiny 31 Local by-elections Local roads funding ‘miles behind’
National roads – motorways and major trunk roads – will receive 52 times more government funding per mile by 2020, compared to local roads maintained by councils.
The LGA is calling for the Government to deal with the disparity in funding, so that councils can tackle the £12 billion repair bill they face to bring our local roads up to scratch.
New LGA analysis shows the Government plans to spend £1.1 million per mile to maintain its strategic road network between 2015 and 2020, but will provide councils with just £21,000 per mile for the local roads they look after.
This is despite an increase in the number of cars travelling on local roads, average speeds falling, and local roads making up 98 per cent of the country’s network.
There are now 125 cars per mile on our roads, compared with 101 in 2000. Councils say this is ratcheting up the pressure on local transport, causing congestion and road maintenance issues, such as potholes, wear-down of road markings, and increasing general wear and tear.
Council leaders want the Government to deliver a radical, fully-funded plan for the growing number of vehicles on the nation’s roads. This should include reinvesting two pence per litre of existing fuel duty into local road maintenance, which would generate £1 billion a year for councils to spend on improving roads and filling potholes.
Cllr Martin Tett, the LGA’s Transport Spokesman, said: “It is wrong that funding for local roads is miles behind that of the strategic road network. Very few journeys begin and end on a motorway or trunk road. Spending 52 times more on improving our national roads will only serve to speed vehicles up between increased delays and congestion on local roads.
“Councils are fixing a pothole every 19 seconds, despite funding pressures. They want to do more, but are trapped in an endless cycle of patching up our deteriorating network. It would already take £12 billion – and more than a decade – for councils to clear the current local roads repair backlog.
“Only long-term and consistent investment in local road maintenance can allow councils to embark on the widespread improvement of our roads that is desperately needed, to the benefit of motorists and cyclists up and down the country.”
Data error on councils’ allocations
No council should receive less funding than it was planning for in 2018/19, the LGA has said, after confirmation that figures in the provisional local government finance settlement were wrong.
The errors arose in data used to calculate business rates tariffs and top-ups, supplied by the Valuation Office Agency (VOA). The VOA is a government agency that compiles and maintains lists of council tax bands for 24 million domestic properties, as well as lists detailing the rateable value of 1.9 million commercial properties for business rates.
Lord Porter, LGA Chairman, said the error was “hugely unhelpful”. He called for urgent clarification of councils’ funding allocations and for the final local government finance settlement to be published.
“The Treasury needs to use its central share of business rates to ensure that no council receives less than what they have been planning for in 2018/19, after the allocations published in the provisional settlement (see first 619),” said Lord Porter.
“Next year will be hugely challenging for councils as they continue to face unprecedented funding pressures. This unhelpful error by the VOA has added to the challenge facing councils when trying to set a budget for 2018/19.
“Councils now need urgent clarification of their allocations and the final settlement.”
He added: “Of course, none of this changes the fact that councils face a £5.8 billion funding gap by 2020, and the Government needs to use the final settlement to provide new funding for all councils over the next few years so they can protect vital local services from further cutbacks.” Call to scrap housing cap
The influential cross-party Treasury Select Committee has backed the LGA’s call for the Government to abolish the housing revenue account borrowing cap to boost council house building.
MPs said scrapping the limit on how much councils can borrow to build new homes was vital, and would “unleash” the potential of local authorities to help solve the housing shortage.
In the Autumn Budget, Chancellor Philip Hammond announced plans to raise the borrowing cap for councils in areas of high housing supply meeting demand unless we face and, as a nation, we have no chance shortage is one of the most pressing issues Government’s target of 300,000 a year.
Across the UK last year – well short of the vital role councils must play in tackling the housing crisis.
More than 217,000 new homes were built across the UK last year – well short of the Government’s target of 300,000 a year.
Lord Porter said: “Our national housing shortage is one of the most pressing issues we face and, as a nation, we have no chance of housing supply meeting demand unless councils can build again.
“When giving evidence to the committee, we were clear that if we are to get back to building 300,000 homes a year, then all areas of the country need to be able to borrow to invest so that councils can resume their role as major builders of affordable homes.
“We now urge the Treasury to act on the committee’s recommendation and use the upcoming final local government finance settlement to completely scrap the cap on the amount councils can borrow to build.
“It also needs to allow councils to keep 100 per cent of receipts from properties sold through Right to Buy to replace homes and reinvest in new housing.”
‘Offices to flats’ warning
Nearly one in 10 new homes over the last two years was converted from an office and included no affordable housing or supporting investment in infrastructure such as roads, schools and health services.
New LGA analysis found a total of 30,575 housing units in England have been converted from offices to flats without having to go through the planning system since 2015.
It warned this has led to the potential loss of more than 7,500 desperately-needed affordable homes. Councils also warned office space could dry up as a result, leaving businesses and start-ups without any premises in which to base themselves.
Office to residential conversions under permitted development rules accounted for 73 per cent of new homes in Stevenage, 64 per cent in Three Rivers, and 61 per cent in Sutton during 2016/17.
In Nottingham, Basildon, Newcastle-under-Lyme, Hounslow and Harlow the number was more than half.
The LGA said permitted development rights rules allowing offices to be converted into housing without planning permission should be scrapped to allow councils to ensure homes are affordable and come with the right infrastructure in place.
Cllr Martin Tett, the LGA’s Housing Spokesman, said: “At present, permitted development rules allow developers to bypass local influence and convert offices to flats, and to do so without providing affordable homes and local services such as roads and schools.
“Permitted development is detrimental to the ability of local communities to shape the area they live in. Planning is not a barrier to house building, and councils are approving nine in 10 planning applications.
“But it is essential that councils, which are answerable to their residents, have an oversight of local developments to ensure they are good quality and help build prosperous places. The resulting loss of office space can risk hampering local plans to grow economies and attract new businesses and jobs to high streets and town centres.”
news in brief
Homes England
A new national housing agency, Homes England, has been launched. It is the successor to the Homes and Communities Agency and will be responsible for building more homes and driving forward changes set out in the Government’s Housing White Paper.
Cllr Martin Tett, the LGA’s Housing Spokesman, said: “For Homes England to be a success, it is crucial that it works positively with local government to deliver the mix of homes, infrastructure and places that people want to see. Every local housing market is different and councils must be able to combine and use Homes England funding flexibly to meet local need and take local opportunities.”
Northern transport plan is published
Civic and business leaders have published Transport for the North’s draft Strategic Transport Plan. The 30-year plan outlines how transport connections across the North of England need to be transformed by 2050 to drive growth and close the economic gap between the region and the rest of England. The plan could deliver a £100 billion economic boost and 850,000 additional jobs by 2050.
John Cridland, Transport for the North Chairman, said: “This is an ambitious programme that will improve our roads and railways, and also drive a sea change in skills development.” See www.transportforthenorth.com/stp
Social housing commission
Housing charity Shelter has launched a commission into the future of social housing to address crucial issues highlighted by the Grenfell Tower fire and to give social housing tenants a louder say in the future of social housing. Cllr Martin Tett, the LGA’s Housing Spokesman, said councils supported any initiative aimed at improving social housing but needed the financial tools to invest in the quality of their housing stock.
He added: “According to the Government’s latest English Housing Survey, 81 per cent of social renters were satisfied with their accommodation. Social housing is twice as likely to meet the decent homes standard as the private rented sector.” Increase in victims of modern slavery
Members of the public are the ‘first line of defence’ in the battle against modern slavery, the LGA has said, amid a 47 per cent rise in victims.
Last July to September, 1,322 victims of modern slavery were directed to the National Referral Mechanism, the UK’s framework for supporting victims, compared with 901 over the same period in 2016.
Overall, government figures suggest that there are between 10,000 and 13,000 victims of slavery in the UK.
The LGA has urged people to be on the lookout for tell-tale signs of victims, including: large numbers of people being transported in vans or minibuses; people who seem to have been deprived of food, water, medical care or sleep; or people who are being coached by someone else.
Cllr Simon Blackburn, Chair of the LGA’s Safer and Stronger Communities Board, said: “A simple phone call could make a world of difference to people living wretched lives at the hands of heartless gangmasters. Councils will not tolerate the exploitation of people in their communities and are committed to protecting the most vulnerable in society.
“Modern slavery can be hidden, often in plain sight; on our high streets, in local businesses and even in suburban streets. Our residents may be unwittingly using victims of modern slavery to wash their cars, paint their nails or lay their drives, unaware of the hell they are living through.”
The LGA is calling for a ‘coherent, cross-sector’ approach to tackling modern slavery, and is hosting a series of regional events for councils, designed to equip them to be as effective as possible in tackling this issue.
The next event is on 27 February in Bristol (see www.local.gov.uk/events). The LGA and the Independent Anti-Slavery Commissioner have also published advice for councils in ‘Tackling modern slavery: a council guide’ (see www.local.gov.uk/publications).
New agency to protect consumers
The Government is to create a new Office for Product Safety and Standards, offering specialist services to support enforcement of trading standards laws and manage responses to large-scale product recalls and repairs.
The LGA has been calling for central capacity to support local teams working on product safety, with latest figures showing firefighters are attending three fires a day caused by faulty tumble dryers.
It also wants to see the setting up of a national database of items subject to recall. Consumer safety charity Electrical Safety First reports that 516 products have been recalled since 2007.
Cllr Simon Blackburn, Chair of the LGA’s Safer and Stronger Communities Board, said: “These measures, including setting up a new Office for Product Safety, should go some way towards helping local trading standards teams protect our residents from faulty electrical equipment.
“The LGA has been calling for central capacity to support local teams working on product safety and we’re pleased that the Government has committed to creating this.
“We’re also pleased that one of the first tasks for the new Office for Product Safety will be to improve the information available to consumers. The consequences of faulty electrical goods catching fire are devastating, damaging property and, in some cases, causing loss of life.
“That’s why councils and fire chiefs have called for a national database of recalled products, so that people can review information about recalls. Moving quickly to create an easily accessible, comprehensive database will be an essential task for the office as it works with trading standards teams in their mission to protect residents.
“Trading standards teams also need adequate funding to make sure they can get faulty appliances off the shelves and out of our residents’ homes.”
He added: “These measures can only work if the public are aware of them, which is why this database and agency should be backed up by a major publicity campaign to help flag it up to consumers as a trusted one-stop site to check all electrical goods.”
Protection for live music venues
Pubs, theatres, music and concert halls will be better protected from unfair noise complaints, thanks to a campaign backed by councils.
The Agent of Change principle, which the Government announced will be included in the National Planning Policy Framework and consulted on in the spring, will ensure a person or business responsible for a change in noise conditions is held responsible for managing that change.
The law currently states that somebody can move next door to a live music venue, for example, and ask for it to be quieter or restricted, regardless of how long the venue has existed or if there is any history of the same noise being a nuisance.
Under the strengthened planning rules, anybody who chooses to move next door to a music venue would be assessed as having made that decision understanding there is going to be some music noise. Equally, a music venue that buys a new public address system would be expected to carry out tests to ensure its noise emissions don’t increase.
Cllr Gerald Vernon-Jackson, Chair of the LGA’s Culture, Tourism and Sport Board, said: “Councils want to protect and maintain the live music venues in their communities, and this much-needed update to the planning rules will help achieve a fair and balanced solution between the obligations of housing developers and protecting our vital grassroots music scene.
“Increasing demand for housing in town and city centres means councils have a duty to help meet this need while also wanting to safeguard what makes our local areas distinctive and attractive – including live performance venues.” Social care inquiry launched
MPs have launched an inquiry into the long-term funding and provision of adult social care, ahead of a government Green Paper expected in the summer.
The Communities and Local Government and Health Select Committees want to identify funding reforms that will command “broad consensus”, to allow progress in ensuring the long-term sustainability of the health and care systems.
Cllr Izzi Seccombe, Chairman of the LGA’s Community Wellbeing Board, said: “The committees are absolutely right to focus on long-term funding solutions and how to build political and public support for them.
“We do not need a major overhaul of our care and support system; the Care Act provided that: What we need is consensus on funding solutions so the Care Act vision can be realised. Long-lasting reforms cannot come soon enough to prevent more care providers going out of business, contracts being handed back to councils, care workers losing their jobs and less investment in prevention, which is hindering the ability of social care to help mitigate increasing pressures on the NHS.
“An essential foundation for long-term reform is greater awareness among the public of why adult social care matters in its own right. Similarly, progress is only likely if there is cross-party consensus on a way forward. The LGA stands ready to help build that consensus.”
But she added: “We must not lose sight of the perilous state of social care funding today. Social care needs to be put on an equal footing with the NHS and government needs to use the upcoming final local government finance settlement to address both the immediate sector pressures and the £2.3 billion funding gap facing social care by 2020.”
news in brief
Rotten teeth
New figures show there were nearly 43,000 hospital operations to remove teeth in teenagers and children last year – equating to 170 a day, up a fifth in four years. The LGA said the worrying figures are, in most cases, likely to reflect the excessive consumption of sugary food and drinks, as well as poor oral hygiene. It has long called for the Government to implement measures to reduce people’s sugar intake, such as reducing the amount in soft drinks and introducing teaspoon labelling on food packaging. It also wants councils to have a say in deciding where the revenue from the soft drinks levy – due to come into effect from April – is spent.
Child health
The LGA has reiterated its call for proper funding of public health services, after a report from the Royal College of Paediatrics and Child Health found that child health in the UK is falling behind that in other European countries. Cllr Izzi Seccombe, Chairman of the LGA’s Community Wellbeing Board, said: “Evidence shows that intervening in the first 1,000 days of a child’s life can make a difference across their lifetime. But councils’ public health grant funding being cut by £531 million between 2015/16 and 2019/2020, and councils facing a £2 billion funding gap to children’s services by 2020, is making that task harder.”
Looked-after boarders
A new Department for Education scheme to give more vulnerable children the chance to attend independent and state boarding schools “provides another option for social workers considering what would work best for individual children and families”, the LGA has said. Cllr Richard Watts, Chair of the LGA’s Children and Young People Board, said: “While a boarding school placement will not be right for every child, making this opportunity available for those who would benefit is a positive move. But it is vital that the Government supplements these specific initiatives by providing the additional funding that councils need to ensure that all children can have the bright futures they deserve.” news in brief
Devolution report
The LGA has warned that areas without devolution deals may be left behind, after the Government’s recently published annual devolution report confirmed no new deals were agreed in 2016/17. Cllr Mark Hawthorne, Chairman of the LGA’s People and Places Board, said: “The devolution deals announced in the Autumn Budget were a step in the right direction. Taking decisions closer to where people live is key to improving public services and unlocking inclusive growth. We urge the Government to jump-start the devolution debate, by providing further detail on the manifesto commitment to a ‘common devolution framework’ as soon as possible.”
Malnutrition in older people
More than one million older people are at risk of “withering away in their own homes” because of malnutrition caused by social isolation and cuts to public services, according to a report from the All-Party Parliamentary Group on Hunger. Cllr Izzi Seccombe, Chairman of the LGA’s Community Wellbeing Board, said: “Councils and providers are doing all they can to provide good care and support, including nutritious meals. However, any proposed duty to provide a hot meal every day will lead to increased costs and exacerbate significant current pressures on providers. Our social care system already faces a £2.3 billion funding gap by 2020. Government needs to address this in the forthcoming final local government finance settlement.”
Illegal waste
The Government has announced new powers to tackle illegal waste and fly-tipping, including councils being able to apply fixed penalty notices to fly-tippers, as called for by the LGA. Cllr Martin Tett, the LGA’s Environment Spokesman, said councils also need a “faster and more effective legal system that means fly-tippers are given hard-hitting fines for more serious offences”. He added: “Clearing up fly-tipping costs councils more than £57 million a year – money that could be spent on other services, such as caring for the elderly, protecting children or tackling homelessness.”
Clarity needed on post-Brexit regional aid funding
The Government is to safeguard subsidies for farmers beyond 2020 – prompting calls from the LGA for a similar commitment to local areas in respect of EU regeneration funding.
Environment Secretary Michael Gove has announced that farmers will receive payment for “public goods”, such as providing access to the countryside and planting meadows, after Brexit. Farming subsidies would be guaranteed until the 2022 General Election, with a transitional period to follow in England. But, while ministers have said that local communities will continue to benefit from £8.4 billion of EU regeneration funds until the end of the current programmes in 2020, they have not committed to fully replacing the funding from 2021.
Cllr Kevin Bentley, Chairman of the LGA’s Brexit Task and Finish Group, said: “The Government is right to be working up plans for how to replace EU funding for farming. But local areas will also need £8.4 billion of EU regional funding replaced after Brexit and the clock is ticking for the Government to similarly set out a firm plan to replace this funding into the next decade and beyond. “Brexit cannot leave local areas facing huge financial funding uncertainty as a result of lost regional aid funding. This money has been used by local areas to create jobs, support small and medium enterprises, deliver skills training, invest in critical transport and digital infrastructure and boost inclusive growth across the country. “To help ensure we have an economy fit for the future, it is essential that this funding to local areas is fully replaced as part of a locally led successor to EU regional aid.”
Recyclable packaging ‘key to cutting plastics pollution’
The Prime Minister has outlined the Government’s 25-year plan to improve the environment, with a strategy designed to reduce landfill, tackle plastic waste and encourage recycling. The measures include: encouraging supermarkets to develop ‘plastic-free’ aisles in an attempt to increase recyclable packaging; extending the charge for plastic carrier bags to smaller retailers; a consultation on plans for a statutory environmental watchdog; a target to eradicate unnecessary plastic waste by 2042; and a fund to encourage plastic innovation.
Last month, the Environmental Audit Committee called for a 25p charge to be introduced on coffee cups to increase recycling and crack down on the use of unrecyclable materials in cups. The Government announced a consultation on charging a levy on coffee cups and similar materials as part of the measures announced in ‘A green future: our 25 year plan to improve the environment’.
The LGA has consistently said that attempts to cut down on waste and encourage recycling must be locally led, as councils understand their areas’ recycling needs best.
Cllr Martin Tett, the LGA’s Environment Spokesman, said: “Councils have asked repeatedly for manufacturers and retailers, who both choose to produce and stock packaging which isn’t easily recyclable, to get around a table with us and work together to explore solutions to this problem. What we need is packaging that is easily recyclable – this would not only make waste disposal easier for our residents, but save considerable amounts of money and energy, while protecting our environment. Producers need to switch to recyclable items so that plastic clogging up our environment becomes a thing of the past.” Help for rough sleepers
Over the past 18 months, a huge amount of work has been taking place to help people who are sleeping rough in Gloucester. The reasons behind each case of homelessness are often complex, so understanding the root causes and circumstances is vital.
Our ‘Street Aware’ campaign aims to raise public awareness about how best to help people. By encouraging residents to refer rough sleepers to our P3 outreach team through StreetLink, we can link rough sleepers to the accommodation and support available. Getting all people off the streets and into suitable, stable and safe accommodation is the ultimate goal, so we must consider whether giving money directly to individuals is the best way to support them and make a sustainable change.
Partnership work has found that in many cases, individuals on the streets are housed and/or in receipt of benefits, but struggle with addictions that can lead to a chaotic lifestyle and begging. Gloucester City Council has rolled out a successful new service that is dedicated to working with these people that offers safe accommodation and supports their complex needs.
Giving money to people who beg may make life easier for them in the short term, but, in the worst case, could feed dependency. It takes more than money to turn a life around, so we must address this if we are genuine about working together to help people to achieve real change.
Cllr Jennie Watkins (Con), Cabinet Member for Communities and Neighbourhoods, Gloucester City Council
Exempting care leavers from council tax
Young people leaving the care of Carmarthenshire County Council when they reach adulthood could soon be exempt from paying council tax until their 21st birthday, following a unanimous vote by councillors in favour of such a move.
The Children’s Commissioner for Wales recently reported that many care leavers have to survive on as little as £8 a day, with council tax their biggest outgoing cost after rent.
Last year, 77 young people (aged 16 or over) left the care of the county council and began the transition out of care and into adulthood.
Care leavers who were looked after by the local authority are among the most vulnerable groups in our community. As a part of our corporate parenting role, we believe that the council should aim to keep young people safe and improve their life chances. We have a duty to care leavers.
We believe that we have a responsibility to ensure that, when young people make the transition from care to adult life, the process is as smooth as possible and that we should do all we can to mitigate the changes that often result in care leavers falling into debt as they begin to manage their own finances.
Following the vote, a policy will now be written and brought back to full council to be formally adopted.
Cllr Glynog Davies (Plaid Cymru), Executive Board Member for Education and Children’s Services, Carmarthenshire County Council
What do you think? Please submit letters for publication by emailing [email protected]. Letters may be edited and published online. features
Streets ahead
Are driverless, electric and connected cars the future of transport? If so, what are the potential risks and benefits to the public services that councils provide, and for the residents they serve?
The LGA is looking at emerging trends that have the potential to revolutionise how we move around. We hope to scan the horizon and think about the risks and opportunities for local authorities.
If we are not active in this conversation, we risk technologies focused on the bottom line creating more congestion in cities, while leaving rural areas ever more isolated. However, if we are able to work in partnership with business, manufacturers and regulators, this technology could be harnessed to solve some of the thorniest issues we face.
Widespread adoption of electric vehicles could reduce emissions and clean our air; the roll-out of autonomous vehicles could help isolated individuals, who are excluded from public transport, to access cheap, tailored mobility services; and vehicles that communicate with each other and the roads could have huge safety benefits.
I chaired a seminar for LGA elected members in December, when experts from the automotive and freight sectors, as well as from government, told us how they were influencing technological developments in transport. This raised a variety of issues for councils to think about.
There was discussion about how this technology could exacerbate the existing urban-rural transport divide. The potential for profit in a much denser, more crowded urban market means rural areas could continue to be left behind. But this doesn’t have to be the case.
New models of economically sustainable, demand-led, shared transport could connect new and existing communities with each other, and enable those without cars to access leisure, shopping and vital public services. The LGA will be examining how councils can help foster innovation in this area.
Speakers mentioned the provision of electric charging points – a classic chicken-and-egg situation. Many consumers do not want to make the switch without the charging network being in place. However, without increasing the number of electric vehicles to serve, it is difficult to make a commercial case for the investment our charging network requires.
The Government is providing grants to get the charging industry started and we are seeing encouraging growth in the number of charging points. But we haven’t yet arrived at a model that will suit mass adoption of electric cars. How will the National Grid cope with the extra demand? How will we replace the lost fuel duty revenue? What do electric ‘petrol’ stations look like and where should they go?
The industry wants designated council officers to discuss the charging needs of an area with private providers. Local authorities can help by making their requirements easy to find on their websites.
The distinction between a taxi and a bus is already being tested by the introduction of taxi buses with flexible routes, offering on-demand services. The increased flexibility afforded by connected and autonomous vehicles that could be routed and re-routed automatically, in real time, means we will need a regulatory regime that enables, rather than constrains. Councils will be keen to work with providers to examine whether a more flexible approach to public transport could benefit residents.
We also reflected on the risks inherent in the potential changes. Local councils are all too aware of the importance of cyber security, given the number of personal and confidential transactions we deal with daily. This challenge will be hugely increased by automated vehicles, which could be hacked remotely, endangering the lives of people using them and the general public. So, security will play a key part in any changes to our transport system. The connectivity of vehicles is a huge opportunity, but a more connected network is also a more vulnerable one – we need to be ready.
Councils invest in infrastructure for the long term, and investment cycles can last decades – so it is vital that these are future-proofed and able to cope with the demands of changing circumstances. Connected infrastructure that interacts with vehicles... will require significant investment. Changes may also be needed in our public realm – what it looks like and its purpose. One of the biggest challenges of this agenda is simply keeping pace with it and ensuring that public investment is not rendered obsolete.
Technology that reduces driving work could also disrupt the jobs market. Currently, logistics and transport account for 1.6 million jobs in the UK. Many of these roles will be driving jobs and, in an autonomous future, they could disappear. While this will reduce transport and freight costs – making the economy as a whole more efficient – we can’t ignore the impact on the individuals who will need to retrain mid-career.
In response to this pressing problem, we need to reconsider the provision of skills and training in our country. Transport automation is yet another reason for the Government to listen to what councils and the LGA have been saying on this issue via our Work Local proposals for a modern, devolved skills system (see www.local.gov.uk/work-local).
In the coming months, we intend to look at three key trends:
- electrification, including how we change the main type of fuel we use to power vehicles
- automation, and whether we will get to a world where no-one needs to drive again
- connectivity – if all vehicles can talk to each other, what will they say?
Whether we arrive at fully autonomous and electrified vehicles by 2040 or 2050, there will be many years of transition during which old and new technologies co-exist. The transition presents both challenges and opportunities for councils in serving their communities, with issues such as congestion and air quality still needing to be managed. They must be aware of the upcoming changes and engage in discussions about managing future impacts.
To help, we will be producing guidance on the developments we can expect, how innovative local authorities are getting involved in trials, and the issues that all councils will need to address in the future. This is an exciting new area of work for the LGA, and I hope what we contribute will be valuable to our members.
If your council is developing good practice in this area, or you want to find out more, please email [email protected]
South West – autonomous vehicles
Bristol City Council and South Gloucestershire Council are at the heart of FLOURISH, a project looking to test autonomous vehicles and establish Bristol as a key part of the emerging industry.
FLOURISH is a multi-sector collaboration, helping to advance the successful implementation of connected and autonomous vehicles (CAVs) in the UK by developing services and capabilities that link user needs and system requirements.
The three-year project, worth £5.5 million, is part-funded by the Government’s £100 million Intelligent Mobility Fund, and delivered by Innovate UK, the country’s innovation agency. It seeks to develop products and services that maximise the benefits of CAVs for users and transport authorities.
By adopting a user-centred approach, FLOURISH will achieve a better understanding of consumer demands and expectations, including the implications and challenges of an ageing society. It will also engage with those who need help with day-to-day living needs to develop services.
It will address vulnerabilities in the technology by focusing on the critical areas of cyber security and wireless communications, and model the impact of CAVs on the transport network.
The project will share outcomes, engage with potential customers, communities and consumers, and advertise the Bristol City Region as a hub for the development of CAV technologies.
FLOURISH is expected to bring a wide range of economic and social benefits to the area, including new jobs, and securing intellectual property for local companies (see www.connectingbristol.org/fLOURISH). 100 reasons to celebrate
Funding is available to help councils mark the centenary of some women getting the vote
This year marks the centenary of the Representation of the People Act 1918, which gave women aged over 30 the right to vote in parliamentary elections.
The LGA aims to mark the occasion by highlighting the history of the struggle for women’s place in politics, and to use the pioneers from the past to inspire the female leaders and politicians of the future.
Women are currently under-represented in local government. In the Census of Local Authority Councillors 2013, the most recent available, around two-thirds (67.3 per cent) of councillors were male and one-third were female. Only 12.3 per cent of local authority leaders in England were women in 2014, compared with 16.6 per cent in 2004.
While this information is outdated – the census will be refreshed this year – it gives cause for concern that councils do not fully reflect the communities they represent.
In recognition of this gap, the LGA’s ‘Be A Councillor’ campaign is developing support aimed specifically at female councillors and candidates. In October 2017, the campaign held a ‘women in politics’ event in Westminster, London, attended by around 50 delegates, and featuring a cross-party panel of councillors, plus MPs who were previously councillors. Panel members spoke about their own political journeys and motivations, the challenges they’ve faced, and the importance of a better understanding of local politics and to support them to consider becoming a councillor. Some of this work will focus specifically on young women.
The LGA has also been working with the Women’s Local Government Society to seek out the pioneers who lobbied and campaigned for votes for women a century ago, and who made an impact in other ways locally. Leaders of local suffrage societies often became the first women councillors, magistrates and mayors, as well as championing a great many other civic societies.
Nominations have been made for pioneers from all walks of life and all corners of the country. They include Catherine Alderton, first Lady Mayor of Colchester and the first female member of Essex County Council, who joined the Liberal Women’s Suffrage Union in 1913 and became its President in 1920. In 1913, she led a pilgrimage of suffrage supporters from all over eastern England to a rally in Hyde Park. She went on to play a significant role as a councillor and also stood for Parliament.
By sharing information about these talented pioneers, we can contribute to a better understanding of the campaign for the vote. But more important is the potential for inspiring others now. Our pioneers programme will ensure the next generation knows about their local heroes. That way, the legacy won’t just be the history of winning the vote, but contributing to future equality.
Funding for centenary celebrations
The Government has announced a £5 million Women’s Vote Centenary Grant Scheme (see www.womensvotecentenaryfund.co.uk). A small grant scheme for grassroots projects is now open for applications, for grants up to £2,000. A large grant scheme (up to £125,000), for projects encouraging women to participate in public life, will open shortly. Seven ‘Centenary Cities’ – Bolton, Bristol, Leeds, Leicester, London, Manchester and Nottingham – will host a range of projects to celebrate, as well as remember, those individuals who helped ensure votes for women.
For more information about the suffrage pioneers, visit www.local.gov.uk/topics/culture-tourism-leisure-and-sport/suffrage-citizenship and www.suffrage-pioneers.net
For the LGA’s Be A Councillor campaign, please visit www.beacouncillor.co.uk On the job
Graduate trainees are helping Luton Council realise its potential – and it’s not too late for other councils to join the LGA’s programme
A n organisation is only as good as its people. It may seem obvious, but it’s a principle that cannot be taken for granted. It’s also something for which we in local government must plan, if we are to best meet the needs of the communities we serve.
For Luton Council, it’s all about securing the best talent to deliver the Luton Investment Framework – our ambitious, but achievable, plan to attract £1.5 billion of inward investment over 20 years and improve the life chances of local people.
We recruited our first national graduate development programme (ngdp) trainees in October 2016, and it quickly became clear the benefits of this scheme flowed both ways. Ask any member of staff who has worked with them and they will agree that our talented national management trainees are already making an impact across the authority.
Securing such high-quality trainees provides an obvious benefit to the council, proving that our offer of genuine development is attractive and spreading the word to other young people.
When they started, our recruits were a little surprised that they would have direct access to the chief executive and myself. But we are keen to give them real responsibility. We make sure they are making a difference – that’s what they came into the public sector to do.
We also want to be challenged by our recruits, and have plans to involve them in a reverse coaching scheme. There are gaps in the knowledge of staff of all ages, throughout all organisations. This scheme is about thinking, ‘we have a need, who could fill it?’, regardless of age or position within the authority.
“We want to be challenged by our recruits”
These are remarkable people, and we are helping them to realise their own potential and the potential of our authority.
Two of our trainees have started blogs, in which they share their Luton experience with their peers. These are genuine and unadulterated opinions from people who are experiencing our authority first-hand. This is fantastic for our employees, but also for the wider image of the council.
The ngdp’s aspiration is to grow the next generation of local government directors and chief executives. We are proud to say Luton has played its part in realising this goal – and received plenty in return.
The national graduate development programme
One of the keys to providing strong public services that improve the lives of our residents is attracting and developing the right people to lead our council teams and organisations.
Over the past 20 years, the LGA has been bringing graduate talent into the sector through its national graduate development programme (ngdp). The programme provides local government with managers and leaders who are ambitious, passionate and committed to improving public services in the best interests of our communities.
The ngdp is highly regarded by councils and graduates, and is ranked in The Times Top 100 Graduate Employers and Guardian UK 300.
It promotes the benefits of a successful and rewarding career in local government, and has provided consistently high-calibre graduate trainees to more than 160 authorities, through 19 previous cohorts.
This year, the scheme has attracted more applications than ever before, with more than 2,700 graduates applying for trainee positions in local authorities across the country.
There is still time to register as a host authority and to realise the benefits of this national, but flexible, programme within your own council.
Please visit www.local.gov.uk/national-graduate-development-programme/ngdp-information-for-councils for more information, or email the ngdp team at [email protected]. The deadline for applications is 30 March. Peer challenge
Councils should be exploiting the expertise and support available within local government to help them improve
The LGA’s Corporate Peer Challenge programme continues to be one of local government’s resounding success stories. It enables hundreds of council officers and elected members to spend time in other local authorities – as ‘peers’ – to provide challenge and share learning. It is a proven tool to support progress, and remains at the heart of what we call ‘sector-led improvement’.
Peer challenge is a tried, tested and trusted scheme. It emerged nearly 20 years ago, as a way for councils to test their effectiveness, assess their performance, and learn from others.
The LGA works with councils to ensure the peer-led approach continues to evolve, keep pace with the changing policy environment, and remain relevant and robust in light of the issues and challenges facing councils today.
In the past six years, 80 per cent of councils have voluntarily commissioned an LGA Corporate Peer Challenge. This suggests they get a lot out of the process.
Of course, I would be expected to say that, as Chairman of the LGA’s Improvement and Innovation Board – but you don’t have to take my word for it.
Over the past six months, the LGA has been surveying leaders and chief executives to understand the impact of the Corporate Peer Challenge programme.
The feedback speaks volumes:
- 96 per cent said that the programme had a positive impact on their council’s performance.
- 96 per cent said it had a positive impact on the delivery of council priorities.
- 72 per cent said it had a positive impact on the financial sustainability of the council.
- 88 per cent said it had a positive impact on the council’s external reputation.
An independent evaluation, published in February 2017, also concluded that the Corporate Peer Challenge continues to be highly regarded by councils, delivers a range of positive benefits and impacts, and offers value for money.
The positive impact of peer challenge has, in my opinion, never been clearer.
For councillors of all parties, our priority is delivering the best possible services to our communities. It is clear to me that peer challenge is a useful tool in supporting this and helping achieve improved outcomes for residents.
However, there are still some councils that are missing out on the benefits of peer challenge.
I strongly urge those authorities that have yet to engage with the programme to think hard about the reasons behind this, and to speak to their LGA regional principal adviser (see www.local.gov.uk/our-support/lga-principal-advisers).
As councillors, we owe it to our residents to encourage our councils to engage in peer challenge regularly and benefit from the learning and support that fellow officers and councillors from across local government can offer.
What is a Corporate Peer Challenge?
- It is a voluntary process commissioned by your council to support improvement and learning.
- It involves a small team of local government officers and elected members, as ‘peers’, spending time in your council to provide challenge and share learning.
- It takes place at a time of your council’s choosing, and focuses on standard elements – such as leadership, governance and finance – as well as on specific areas decided by the council.
- It is fully funded by the LGA on the basis that all councils are entitled to one every four or five years.
- Eighty per cent of councils have commissioned one since 2011. An LGA productivity expert has helped councils in Devon develop an award-winning shared economic strategy
Our focus on collaborative working is already delivering tangible outputs for our local authority areas beyond what could be achieved in isolation. For example, we were able to commission a high-quality business support service with funding from a pooled budget and we established a shared system to manage inward investment data. Additionally, this collective approach aligns with the national push for joint council working.
Support to develop our strategy was made available through the LGA’s Productivity Experts programme, which provides expert support to local authorities to save and generate money. This includes the delivery of economic growth in their local areas.
Our expert was David Howells, Managing Director of Rubicon Regeneration, who worked with the EHOD team to offer clear technical advice and guidance that was instrumental in progressing the strategy and designing a new framework for collaborative economic development across the four local authority areas.
The Exeter and Heart of Devon (EHOD) Shared Economic Strategy 2017-2020, which was recently awarded the accolade of ‘Most Innovative Strategy’ in a national awards programme run by the Institute of Economic Development.
The economic development teams across the councils of East Devon, Exeter City, Mid Devon and Teignbridge launched our strategy last year, following an already successful collaborative approach stemming back several years.
Each local authority has taken ownership of one of four common economic development priorities: business support and transformation (led by Mid Devon); inward investment (Exeter City); strategic planning (East Devon); and employment and skills (Teignbridge).
The strategy establishes targets around increasing high-quality jobs, attracting and retaining investment and enabling development, as well as improving productivity, skills, qualifications and employability.
The Exeter and Heart of Devon Shared Economic Strategy 2017-2020 can be viewed at: www.local.gov.uk/productivity-experts
Expertise on hand
The Productivity Experts programme supports councils to make savings and/or generate an income against a backdrop of decreasing funding and increasing demand for services.
The LGA grants £7,000 to councils who then commission an LGA-recommended expert to provide direct bespoke advice and support. Over its lifetime, the programme has worked with more than 90 councils, contributing to over £150 million of savings or income generation.
These include Allerdale Borough Council, which was enabled to renegotiate its four largest contracts and realised efficiency savings of £2.3 million against an initial target of £1 million; and Wyre Forest District Council, which implemented systems thinking across all services to achieve £700,000 of savings in 2012/13. Gloucestershire County Council completed a diagnostic exercise that identified opportunities to secure savings of £10.3 million in the council’s adult social care learning disability services.
The programme offers a flexible range of support to enable councils to access skills and expertise in their chosen area. All of the recommended experts have a proven ability to work with councils and to deliver results.
Councils can apply at any time during the financial year, and applications should be ambitious with the potential for significant savings or income generation.
For more information, please visit www.local.gov.uk/productivity-experts Grand designs
The LGA is providing housing advisers to help councils find local solutions to the national crisis
Our housing market is broken, and needs fixing. Last year, around 90,000 fewer homes were built than we need to meet our national housing shortage. Every month, councils are housing the equivalent of an extra secondary school’s worth of homeless children.
As house builders, landlords, planners, place-shapers, and agents of growth, transport and infrastructure; as guardians to the vulnerable and the homeless; and because they are democratically accountable to communities, councils are at the heart of the solution to our housing crisis. There is impressive innovation in housing emerging across the sector, and the LGA aims to harness this momentum to help councils meet their local housing need.
One of the ways it is doing this is via the Housing Advisers Programme, launched in September 2017. Flexible and locally led, the programme provides an independent expert for up to 20 days, offering bespoke support to a local authority project to deliver homes, reduce homelessness, or generate savings or revenues.
More than 40 projects at councils across England have been allocated an adviser, and many of these are now under way and beginning to have an impact on their communities (see right).
Cllr Martin Tett, Chairman of the LGA’s Environment, Economy, Housing and Transport Board, said: “There is no substitute for central government giving local authorities the tools they need to invest in the homes, of all types and tenures, which their communities desperately need.
“However, councils need the best tools available to them to help build on the innovation in the sector. The Housing Advisers Programme is an essential aid to councils wanting expertise to innovate and improve their efforts to help build homes, plan prosperous places and economies, and reduce homelessness.”
To find out more about the Housing Advisers Programme and follow the progress of all of the projects, please visit www.local.gov.uk/housing-advisers-programme
Case studies
Warwick Warwick District Council is using its adviser to develop an innovative Student Housing Strategy. The area has a growing student population that is having an impact on the housing market. This project will allow the council to understand expected population projections and establish an appropriate balance between purpose-built accommodation and student houses in multiple occupation (HMOs). This will enable Warwick to manage the impact of student growth on the availability of private rented sector homes for the non-student population, and help the council meet residents’ housing needs.
Northumberland In preparation for the Homelessness Reduction Act 2017, Northumberland County Council is working with its adviser to evaluate its current review and referral processes. The adviser will support the development of protocols and a pilot referral system to ensure that it covers all the people who the new homelessness duties apply to, including those considered ‘non-priority’. This will be rolled out across the council’s Homelessness and Housing Options Service, other council departments, partner agencies and other statutory bodies. The project will strengthen working with institutions such as prisons and hospitals, to ensure that councils are notified in advance of prisoners and patients being released and are best prepared to prevent homelessness.
Test Valley Test Valley Borough Council’s housing adviser is helping unlock a permitted residential development on a former brewery site within Romsey. It has a long and complex planning history dating back to the 1990s, and attempts to build housing have stalled many times. The adviser is exploring the options available to the council to bring forward 200 much-needed homes on the site. It has been found that there is scope for unlocking other permitted residential development sites in neighbouring authorities, with potential to increase the number of new homes being built across authority lines. A matter of justice
Councils have a key role to play in tackling health inequalities in their local areas
In her first speech after becoming Prime Minister in 2016, Theresa May spoke of the “burning injustice that, if you’re born poor, you will die on average nine years earlier than others”.
We know that those living in the most deprived communities experience poorer mental health, higher rates of smoking and greater levels of obesity than the more affluent. They spend more years in ill health and die sooner.
Reducing health inequalities is an economic and social challenge, as well as a moral one. Since 2013, local government has been responsible for public health in England and has a specific remit to tackle health inequalities, plus improve the public’s health overall.
Local authorities and their public health teams have been on a journey to understand how we can use councils’ traditional functions in conjunction with our newly acquired public health expertise, to maximise our contribution to closing the unjust health inequalities gap.
Of course, central government has to play its part in reducing poverty and breaking the link between deprivation, ill health and lower life expectancy. But there is much local government can do, by reducing harm from what we know as the ‘social determinants of health’. These are the factors in people’s lives, such as having a job, friends and a safe place to live, that play the greatest part in determining how long – and with what quality of life – they will live.
When we focus on the social determinants of health, rather than the medical cause of some specific disease, we see that local government services are health services. Almost every council function has an impact on health, including early years’ services, education, housing, employment and welfare, social care, and environmental services, including parks and leisure facilities.
For example, children who live close to green spaces have higher levels of physical activity. Those living closer to green spaces tend to live longer than those with no green space. So something as simple as the proximity of people’s homes to a park can make a difference to the length of their lives.
It is no exaggeration to say that, without local government, many adults and children would die sooner, live in worse conditions, lead lives that made them ill more often, and experience less emotional, mental and physical wellbeing than they do now.
Despite overall gains in life expectancy across all socio-economic groups, however, health inequalities persist – and may even be increasing.
The most significant contribution local government can make is to take a ‘health in all policies’ (HiAP) approach to its core functions and its place-based partnerships. HiAP is a collaborative way of trying to improve the health of all people by systematically and explicitly incorporating health considerations into decision-making.
To ensure that your HiAP approach is aimed at reducing health inequalities – as well as improving the general health of your population – you need to understand the nature of inequalities in your area, who is affected by them, and in what way.
The LGA has recently published guidance for councillors that focuses on these issues, and helps them develop strategies and action plans to reduce health inequalities in their local areas.
We hope this publication will serve as a useful introduction to the issues, and a vital resource for elected members in their struggle against the unacceptable inequity in health experienced by the most deprived people in our communities.
“Local government services are health services: almost every council function has an impact on health”
The LGA publication, ‘A matter of justice: local government’s role in tackling health inequalities’, will shortly be available to download for free at www.local.gov.uk/publications.
‘Narrowing the health inequalities gap’, an annual public health conference and exhibition by the LGA and Association of Directors of Public Health, takes place on 1 March in London.
For information about the programme and to book your place, please visit www.local.gov.uk/events. On the brink
It’s not adult social care but pressures on children’s services that are now most likely to push councils over a financial cliff edge, warns Andrew Gwynne MP, Shadow Secretary of State for Communities and Local Government.
Local government funding may be “on the brink”, but councils shouldn’t expect any good news in the final finance settlement, due out later this month. So says Andrew Gwynne, Shadow Secretary of State for Housing, Communities and Local Government, who is predicting little will have changed from the provisional local government settlement announced before Christmas (see first 619).
The former Tameside councillor identifies a combination of things that have brought local government to a financial precipice – including “the fact that no government since 1991 has bitten the bullet and looked afresh at local government finance”, and a series of “sticking plasters” aimed at trying to alleviate some of the pressures on adult social care.
“Because of those sticking plasters, everybody thought it would be adult social care that pushes councils over that cliff edge. I now suspect it’s more likely to be children’s services,” Mr Gwynne says.
“Speaking to councils, they’re all saying the same thing – that while pressures in social care are still prevalent, it’s children’s services that are causing them the biggest headaches because they can’t predict the level of need.”
The support services that can help divert children from care – such as Sure Start, family support and domestic violence officers – have been “stripped back” as a result of “devastating” funding cuts, leaving children needing specialist help or taking into care, which is expensive, adds Mr Gwynne.
“That then means hard choices need to be made, because if you are spending on children’s services and adult social care – the two services that most council tax payers don’t see – you’re not spending on the bread-and-butter issues that councils are expected to deliver, such as the bins, the parks being maintained, the street lights being switched on and repaired, and all the things that Mrs Smith thinks she pays her council tax for.”
In its General Election manifesto last year, Labour pledged an immediate £1.5 billion for local government, plus £8 billion for adult social care and £0.5 billion for early years. In last November’s Budget, Labour... voted against the cutting of the bank levy by £5 billion, arguing for £2 billion of that to go to children’s services.
“Banks can lobby, children can’t,” says Mr Gwynne, who is worried about the capacity of local government to deliver locally, after eight years of austerity.
“We need to rebuild capacity in local government very quickly, because what we’ve seen is the number of specialist officers – and that historic and corporate knowledge – being whittled down to the bare minimum across all local authorities,” he says.
“It’s all very well us saying we’ve got £0.5 billion for early years [in our manifesto] but – in a lot of councils – Sure Start has been stripped back to the bone or removed altogether, so you’ve got to put that capacity back in.
“Many local education authorities are education authorities in name only, and they don’t have those support officers and networks they once had. We’re going to have to reinvent the wheel – likewise in adult social care, children’s services, and the day-to-day delivery of ordinary services.”
Housing is another area in which Labour’s plans, to build more homes, can only take off if councils have the capacity – in planning departments, enforcement and so on, says Mr Gwynne.
The LGA has long called for the housing borrowing cap to be lifted, to enable councils to resume their historic house building role – something that MPs on the Treasury Select Committee have recently come out in support of, and that Labour backs. Mr Gwynne is keen to see local authorities do more on housing, citing an example from his constituency, Denton and Reddish, in Greater Manchester.
“Stockport Metropolitan Borough Council, which is minority Labour-controlled, has very bravely taken on the decision to create a property company,” he says.
“They’re not just building new homes in Stockport for social and affordable rent, they are also using it as a development vehicle to build homes across the whole of Greater Manchester – both for sale and for other housing associations and housing companies.
“That’s bringing an income into the council to allow them to build more homes for Stockport residents to rent through Stockport Homes, the arm’s-length management company. I think that is such a virtuous circle and a great example of Labour in local government making a big difference to people’s lives.”
Mr Gwynne agrees that central government has a lot to learn from local government when it comes to joining up services locally for the benefit of residents.
“I think we now have to start working more smartly, to make sure the health and wellbeing of the citizen is at the centre of everything that government does,” he says.
“The best in local government have health and wellbeing strategies (HWB) that really direct everything they do.
“Some councils, it’s fair to say, have created HWB strategies because they have to, and they gather dust on the bookshelf. But I’ve seen some really good examples of where the leader of the council is the chair of...” from local retention of business rates because its 10 constituent councils have agreed to pool and share their rates. While Trafford, Manchester and Salford "would be massively advantaged" if they stood alone on business rates, neighbouring Tameside "would need to build another 20 IKEAs just to break even".
"By pooling and sharing, the conurbation breaks even. That then allows the combined authority and the mayor to come up with a really smart economic development strategy, because it means the 10 councils are not all chasing the same pot of gold," says Mr Gwynne.
"They can actually grow the cake together and get a bigger slice of a bigger cake. So rather than all 10 councils chasing after the same business park, you can look at Greater Manchester's strengths and how to develop them economically.
"It might be more development around the old docks at Salford Quays and MediaCityUK. It might be Manchester city centre or the airport. The challenge then is when you get the new jobs in those areas, how do you get the kids from Tameside or Rochdale or Wigan skilled up to be able to access those jobs?"
"Then, with the money that's created from the increase in business rates, how do you get the transport networks and infrastructure in place so the kids who are skilled up to access those jobs can physically get to them as well?"
"I think that's where devolution, joint working, and pooling and sharing of resources actually allows local government to be really innovative and really smart. Greater Manchester is quite an exciting place to be at the moment, because we are at the forefront of pushing that agenda."
Mr Gwynne acknowledges that the current system of devolution works well in the metropolitan areas, with their networks of single-tier authorities, but that it's "going to be incredibly difficult to mirror that model" in two-tier areas.
"We're coming to the conclusion that there isn't a one-size-fits-all approach [to devolution] – it's what works best, and it's down to local government to say what arrangements work," he says.
"That might be partnerships between neighbouring counties working together with their district councils. It might be a collaboration of unitaries and counties working together within their old historic boundaries, with or without a mayor.
"But what works should be the underlying principle, and let local leaders and local communities decide the best fit for their delivery of services and devolution."
There have been six Shadow Secretaries of State for Communities and Local Government since May 2015, and Mr Gwynne is the third to be interviewed by first. Does he expect to be in the job any longer than his predecessors?
"I plan to be," he says, with a smile.
"It really is my dream job, and I'm determined not only to be the Shadow Secretary of State, but also the next Labour Secretary of State for Communities and Local Government, so that all those exciting things we have talked about – reinvesting in local public services, putting the 'local' back in local government – we're going to get on and do."
Mr Gwynne adds: "I've spent equal amounts of time as a local councillor and as an MP, both for my home town – it is a huge privilege to represent my local community in the town hall and here in Westminster.
"In terms of getting things done, making a real difference to people's lives, making real, physical improvements to my community, most of that happened when I was a councillor – I can still point to those things as I go around my constituency. That's the real frustration of being an MP, particularly an opposition MP – you can't make a difference in the way a councillor can." “We’re coming to the conclusion that there isn’t a one-size-fits-all approach to devolution – it’s what works best” LGA Annual Culture, Tourism and Sport Conference
Wednesday 7 – Thursday 8 March 2018, Hull
No one can have missed the enormous success achieved by Hull as UK City of Culture 2017, and we are delighted to take this flagship conference there in March. Delegates will be able to see and hear first-hand about how Hull has used culture to involve nine out of 10 residents in community experiences, attract more than £3.3 billion in investment and achieve the country’s fastest reduction in Jobseeker’s Allowance claimants.
Newly confirmed speakers: • Ros Kerslake OBE, Chief Executive, Heritage Lottery Fund • Rt Hon the Lord Howarth of Newport CBE • Rosie Millard, Deputy CEO, Creative Industries Federation
To book your place visit: www.local.gov.uk/events
Commercial Skills – Masterclasses for councillors
Councils are increasingly looking at alternative delivery models and innovative ways to generate income, in response to shrinking budgets, rising costs and increasing demand for services. Consequently, working in a commercial environment is becoming increasingly key to the role of the modern councillor.
The LGA is offering free, one-day commercial skills masterclasses for councillors, focusing on key topics including strategy development, business planning, budgeting and finance, risk analysis and management, and your duties as a board member.
The sessions take place on 22 February and 16 March at the University of Warwick, Coventry. To book your place, please email Jamie Osowski on [email protected] Local ambition for national growth
Given the increasing dominance of the regional agenda in economic discussions, the oft quoted maxim that ‘all politics is local’ can perhaps be seen as more pertinent than ever.
It was local Welsh councils that took the initiative to form four ambitious regional economic partnerships. Together, locally elected councillors built these partnerships from the bottom up – and they continue to drive the regional agenda forward by leading on collaboration with central governments, the private sector and other partners, such as further and higher education.
Such collaboration has led to invaluable investment in our regions, through city and growth deals.
The Cardiff Capital City Region, for which I am a cabinet member, has attracted £1.2 billion worth of investment, with another £1.3 billion package assembled for the neighbouring Swansea Bay City Region.
North Wales has recently submitted projects totalling £1.3 billion and the partnership in rural Mid Wales is working hard to secure similar investment.
However, these important headline figures form only part of our ambition. Aside from representing multi-million pound investments in areas across Wales, city and growth deals will be a catalyst for further, much-needed private sector investment. Indeed, the target for the Cardiff Capital City Region is to lever an additional £4 billion of private sector investment.
One of the first high-profile projects to be supported is seeking to develop the compound semi-conductor industry in the region.
By working together more closely in taking regional collaborative action, we can ensure that the job-making potential of these deals is fully unlocked to spur local economic growth in our communities.
Special social clauses in procurement contracts will lead to invaluable apprenticeships and training opportunities for local residents.
Innovative and collaborative approaches to such investment will ensure that we deliver demand-led employment and skills support for industry and infrastructure, which will enable economic growth.
Local government has been working pragmatically on the city and growth deals, both with the UK and Welsh governments. Closely aligning the work of the partnerships with the Welsh Government’s Economic Action Plan will ensure all regional economies contribute coherently and effectively to national economic objectives.
If local government is to fully unlock the potential of regional investment, however, central governments must hold fast to their resolve to take bold and radical decisions.
There is widespread support for a proposed tidal lagoon project, worth £1.3 billion, among councillors and businesses in Swansea Bay – though they await a final decision from Westminster. While not part of the city deal, this catalytic project would complement wider efforts to secure development in the region – and there is potential for similar projects in South East and North Wales.
Once-in-a-lifetime investment opportunities don’t hang around forever; dithering and indecisiveness may be all it takes to sound the death knell for key projects and the transformative social benefits that they would bring.
More and more people, it seems, are waking up to the realisation that local, elected councillors are in the best position to play full and invaluable roles in driving the economy in their respective regions. What’s more, they are fully capable and prepared to step up to the plate.
“If local government is to fully unlock the potential of regional investment, central governments must hold fast to their resolve to take bold and radical decisions” group leaders’ comments
Public services: outsourcing or in-house?
“Decisions on how to deliver services – and who should deliver them – should be led by elected local councillors”
The catastrophic collapse of Carillion has understandably dominated the headlines recently and caused many sleepless nights for councillors and officers across the country. As frantic work continues to ensure services continue and jobs are safeguarded, it has also sparked new life into the debate over whether it is appropriate for public services to be run by private companies.
The ideological arguments are well-rehearsed over the years – and elected members of different parties will continue to have sharply opposing views that are unlikely to be reconciled.
But after eight years of harsh austerity, the debate is now on very different ground. Many councils would find it difficult to bring services back in-house, even if they chose to – as they have been forced into serious reductions in the very back office staff that are required to successfully design and run radical, innovative and cost-sensitive services.
Any government that is committed to helping councils run services themselves will need to address the severe funding pressures that have seen councils lose this vital capacity.
It is also important to recognise that many councils – and not just those led by Labour – have few services to bring back in-house anyway, because of conscious decisions not to outsource them in the first place. Indeed, in my own authority, Newcastle, we are proud to run many key services ourselves – and have shown that council-run public services can demonstrate at least the same level of innovation and cost-effectiveness as the private sector claims to offer, and often provide better job security and working conditions.
As localists, we should continue to make the argument that decisions on how to deliver services – and who should deliver them – should be led by elected local councillors. There is no place for legislation or directives from Whitehall that force local decision-makers down a path that they don’t believe is the right course of action for their area.
The real test for measuring how much local residents rate their local services rightly remains the ballot box – and long may that continue.
chairman’s comment
Tackling the housing crisis
However, the LGA has repeatedly called for all local authorities to be given the freedom to borrow to build the additional affordable homes that will not be delivered by the market. That argument has now received significant recognition from the influential Treasury Select Committee, which has said that the cap should be abolished to “unleash” the potential of local authorities to build new homes.
The borrowing cap restricts the number of homes that councils can deliver. So, if the Government really wants to achieve its ambition of 300,000 new homes a year, it needs to ensure all areas of the country can borrow to invest.
Councils are dealing first-hand with some of the consequences of the housing crisis. We expect homelessness will continue to increase as housing becomes less affordable because of rising rents and reduced welfare assistance. It is therefore crucial that government adapts the implementation of welfare reforms to reduce homelessness. This should include lifting the freeze on Local Housing Allowance and relinking it with rents.
Councils are ready and waiting to resume their historic role as major builders of affordable homes. As builders, planning authorities and place shapers, agencies of growth and guardians of the most vulnerable and homeless, they are perfectly placed to lead the way and deliver a renaissance in house building.
We must be at the heart of any housing strategy. And we need government to give us the tools to get building.
“The borrowing cap should be abolished to unleash the potential of local authorities to build new homes” No ‘one-size-fits-all’ solution to waste
“Eight out of 10 people are currently happy with the way their council collects rubbish”
Plastic has become a hot topic in recent weeks. The Prime Minister recently launched the Government’s 25 Year Environment Plan, and the effects of China’s ban on imported plastic waste are already being felt.
I believe that the solution to tackling these issues is not, as has been suggested, to standardise waste collections across the country.
Of the many services local authorities provide, waste collection is one of the highest rated. Indeed, LGA polling shows eight out of 10 people are currently happy with the way their council collects rubbish.
There is no one-size-fits-all solution when it comes to waste collection services. There are vast differences between how waste should be collected from a rural farm to how it should be collected from a block of flats.
Councils are best placed to understand local need, and can do so while working to create a greener Britain.
On another note, I was pleased that Sajid Javid was reappointed as our Secretary of State in the recent government reshuffle, and would like to welcome Rishi Sunak, Heather Wheeler and Dominic Raab to the newly named Ministry of Housing, Communities and Local Government.
I have already had useful meetings with the ministerial team, and very much look forward to working with them in the coming months.
Scrap the borrowing cap to build more homes
“Local government should have the power to direct the use of publicly owned land that is being sold off”
Are the tectonic plates starting to move on council housing?
The cross-party Commons Treasury Select Committee has certainly seen the light and has released a report calling on the housing borrowing cap to be abolished, echoing the long-standing call from the LGA.
And, at our spring conference next month, thanks to a motion that is being tabled by Liberal Democrat councillors, the party will look to reaffirm our pledge to scrap the borrowing cap.
It is by no means the only measure we need to get more socially rented and affordable housing built, but if we are to meet the target of 300,000 homes a year then this can only help.
We are calling for other steps – for example, reform of legislation over empty homes and compulsory purchase orders – so councils have more power to deal with those properties.
We’re saying that local government should have the power to direct the use of publicly owned land that is being sold off – including that owned by Whitehall departments – for socially rented or affordable housing.
In addition, we will pledge to reform the Right to Buy – giving local councils the option of whether or not to continue with the scheme.
Only time will tell if the Government will listen to the calls for reform – but Liberal Democrats will keep up the pressure for action.
Urgent need to tackle plastic pollution
“The Government’s deadline for eliminating avoidable plastic waste may be overtaken by councils and private enterprise taking the initiative”
Britain has been shipping our non-recyclable plastics to China. Now China will not, or cannot, take any more.
Although her party was split on the Brexit issues, it seems the Prime Minister tempted voters across by taking on UKIP’s policies. So, what will happen if the blue party goes really green, with its 25 Year Environment Plan?
I have been shocked to see plastic bags littering even remote and beautiful African desert areas, and much of our plastic waste seems to end up in the sea, as per David Attenborough’s Blue Planet series.
There could be more plastic than fish in the sea by 2050, so the Government’s deadline of 2042 to eliminate avoidable plastic waste is not exactly stretching. Indeed, it may well be overtaken by councils and private enterprise taking the initiative.
What is recyclable has been partly governed by what is profitable for our contractors. Some councils have combined their waste stream into a single contract, making it less confusing for residents and, in some cases, cheaper. Others work with businesses on waste minimisation, enhancing their local economy at the same time. There are many good ideas out there.
So, the PM is embracing the EU legislation that will be adopted by the UK. Thanks to our members for their work in developing this legislation and the consequent UK regulations.
For more information about the LGA’s political groups, see www.local.gov.uk Inspiring tomorrow’s leaders
There’s a lot of debate about the state of British democracy and values at the moment.
As Chairman of Three Rivers District Council Youth Council, I’ve enjoyed seeing first-hand how engaging young people in citizenship and the role of government encourages them to take an interest and play a more active role in society.
Working with primary schools has been particularly rewarding – even from the age of six or seven, it’s really easy to draw students into thinking about how they can play a role in society from a young age. They are learning to be involved and influence the world they will live in for decades to come.
Local authorities are a perfect introduction to governance as these are things they can see within their home environments – from open spaces and refuse, to parking and transport.
We recently had 15 schools in our council chamber debating issues ranging from the challenges elderly people face to controlling parking outside schools (pictured right). We’ve had great success getting school councils more empowered to take the baton themselves and work to bring change in their local area.
We’ve also found that it’s easier to dabble in more experimental areas of teaching that allow teachers to bring in technology and move away from the high-pressured curriculum focus of more traditional subjects. This has included working with schools to make a community video featuring students talking about how they feel about the future of the local area.
Local authorities have an important and exciting role to play in this and I’d encourage making contact with local schools and starting the journey together. I’ve found that teachers have been incredibly receptive, and working with primary and secondary students is wonderfully rewarding and challenging. The feedback and views they express are invaluable.
Most importantly, I do feel we are in safe hands for the future, but it is our job as leaders to get out and inspire the leaders of tomorrow.
For more information, please follow Cllr Michaels on Twitter, @MrAlexMichaels
Annual public health conference and exhibition Narrowing the health inequalities gap
London, 1 March 2018
Public health teams and their partners are striving to help people live healthy lives for longer with less dependence on acute health and care services. Councils continue to tackle persistent problems such as mental illness, children’s health, alcohol and drug abuse, poverty and loneliness in old age. Join us at our most popular health conference to explore how serious health inequalities that still exist within our local communities are being addressed.
Confirmed speakers: Steve Brine MP, Parliamentary Under-Secretary of State for Public Health and Primary Care Baroness Tanni Grey-Thompson, ukactive Lord John Bird MBE, The Big Issue Alison Garnham, Child Poverty Action Group
To book your place visit www.local.gov.uk/events Devolving skills
James Palmer (Con) Mayor of Cambridgeshire and Peterborough
Last November, for the first time, all seven regional mayors met in London.
Though there had been many occasions where some of us had been together since our elections, this was the first time we had all been in the same room.
Despite representing often very different areas with different problems, many of the challenges we face as mayors are similar, and there is great value in us coming together as a collective and – when we can – speaking with one voice.
Despite our party political differences, one issue upon which we all agreed was disappointment at the attitude of the Department for Education towards the devolution agenda.
By and large, since my election, support from the Government has been strong and consistent – from the Department for International Trade’s enthusiasm for mayors acting as ambassadors on the world stage to encourage trade and investment, to the Department for Transport’s financial support in the Budget. However, one department where this has not been the case is the Department for Education (DfE).
Along with housing and transport, skills is one of the three key levers that mayors can pull to help tackle the productivity challenge in their respective areas. Therefore, it is unfortunate that the DfE has not been more enthusiastic about the opportunities that devolution offers to enable us to put together a skills package far superior to the current one on offer.
Though the devolution deals were firm in their support for local skills provision, the experience since the elections has been different. The adult education budget that was meant to be devolved in 2018/19 has been delayed by a year, while the department remains firmly wedded to an overly centralised way of delivering skills.
What’s clear to me is that, as mayor, I have a pretty good understanding of the Cambridgeshire and Peterborough economy and the skills requirements of local businesses.
A large amount of my time is spent meeting business people across Cambridgeshire and Peterborough as well as leaders from our further education colleges. Senior business leaders in my area make it clear to me the shortcomings of the system as it stands, and I find it extremely frustrating that, as mayors, we’re not able to do more in this field.
It’s hardly as if the centralised approach is working that well.
Last autumn, Ofsted gave an “inadequate” rating to Learndirect – an organisation responsible for running courses for 70,000 trainees. Meanwhile, after encouraging trends, the number of new apprentices for May-July 2017 was only 43,600, down from 113,000 over the same period in 2016 – a 61 per cent drop – following the introduction of the apprenticeship levy.
As a result, I struggle to see why there isn’t more enthusiasm within the DfE for a more decentralised approach to skills provision. It’s only right that each area has the flexibility to design a skills system that suits the needs of its economy.
What works in one area might not be the solution elsewhere. Devolution should be seen as the ideal opportunity to try out a new approach.
Devolution of skills post-16 is not the only way in which we can improve skills provision in this country; much also needs to be done to reform the ways schools are assessed and more balanced careers advice given from an early age.
However, a shift in attitude within the DfE – one which would lead the department to viewing devolution as an opportunity and not a threat to established power bases – would be most welcome.
“It’s only right that each area has the flexibility to design a skills system that suits the needs of their economy” Know your patch
Have you ever wondered what proportion of your residents are employed or how many local schoolchildren are obese? How does that compare to other places?
LG Inform gives you and your council easy access to up-to-date published data about your local area and the performance of your council and fire and rescue service.
Whether you’re interested in scrutiny, a particular service area, or simply need an overview, it can help you review and compare performance with other authorities and assess whether your council is meeting your residents’ needs.
In addition, we now offer LG Inform Plus to complement LG Inform. This subscription service gives users the power to drill down from authority wide information to much smaller areas.
The service offers more detailed performance and contextual data helping you to make the right decisions about the services you provide to your residents. It provides direct support, online tools and a data feed to use in your corporate systems and external apps.
www.local.gov.uk/lginformplus
To view LG Inform and register visit: www.lginform.local.gov.uk Brexit debates
Since last autumn, the EU (Withdrawal) Bill has been dominating parliamentary time and debates. What form our relationship takes with the EU once we leave will have a significant impact on our communities and the way that local government works for them.
With key issues that affect local government still being decided upon, the work the LGA has undertaken recently in Parliament has been extremely important. We have been lobbying for the replacement of £8.4 billion of EU regional growth and other funding; pushing for a UK alternative to the Committee of Regions, so that local government retains a say on legislative changes affecting it; and looking at some of the thousands of EU laws that affect local government that will need to be adopted or amended.
In Parliament, we have been raising councils’ concerns and aspirations for the UK, post-Brexit. We have briefed MPs ahead of parliamentary debates either side of Christmas, given evidence to parliamentary committees, and worked with parliamentarians to table questions.
Among the latter, our Chairman, Lord Porter, has asked what progress has been made in securing a formal advisory role for councils in UK law-making to replace the one they currently have in respect of EU law-making through the Committee of the Regions.
This issue was addressed by parliamentarians during the EU (Withdrawal) Bill debate, with Chris Leslie MP (Lab, Nottingham East) noting how “many local authorities value the voice that they have through that committee into the policy-making process at European level”.
“The question they are asking is: will they still have those same consultative rights when those areas of policy are brought back into a UK context? It is a fair question and I hope that the LGA’s points will be addressed,” he added.
The LGA and local government associations in Wales, Scotland and Northern Ireland continue to discuss how these rights and responsibilities can be transferred into UK law.
As reported in last month’s first 619, the Government has confirmed that EU regional and regeneration funding – worth £8.4 billion to local communities in the UK – will continue until the end of the current programme in 2020. The LGA is now focusing on what happens from 2021, and the development of a UK replacement scheme for EU funding.
In evidence to the Communities and Local Government Select Committee, Melanie Dawes, Permanent Secretary at the Ministry for Housing, Communities and Local Government, said the replacement for the EU Structural Fund presented opportunities to streamline the process and make it more community led.
She also highlighted the potential for growth in local areas from the Government’s Industrial Strategy in a post-Brexit landscape. And she discussed issues around the health and social care workforce, and areas of legislation that come from other departments that affect local government and originate in the EU.
Cllr Kevin Bentley, Chairman of the LGA’s Brexit Task and Finish Group, gave evidence to the same committee, and spoke about the need for the Government to develop a fully funded and locally driven successor scheme to the EU Regional Growth Fund.
He told MPs: “More clarity is urgently needed. The very nature of local government means we are very close to the residents we serve, so this is about people, their jobs, their family, and it is hugely important.”
As first was going to press, the EU (Withdrawal) Bill was due to have its Second Reading in the Lords, where we will work with parliamentarians and the Government to ensure that the challenges and opportunities for local government are taken into consideration as the Bill is debated and agreed.
For more information about the LGA’s work in Parliament, please visit www.local.gov.uk/parliament Watching the pennies
As a councillor, it is imperative that you operate good financial stewardship principles, to ensure your council spends its money wisely.
Being a good financial scrutineer does not require you to be a financial expert, but it does mean asking pertinent questions, robustly challenging the council’s spending plans, and ensuring there are sufficient financial resources to fund its current and future plans.
Given the need for councils to monitor and account for their expenditure, it is becoming increasingly important for elected members to understand how their council uses the money it receives from the many stakeholders who have a vested interest in its financial affairs. These include central government, partner agencies and local public auditors, as well as the various communities they serve.
The sums of money involved in local authority finance can be sizeable, and the task of monitoring and accounting can be one of the most challenging elements of the wider oversight function of a councillor. However, good financial scrutiny does not require a detailed understanding of columns of figures so much as a willingness to seek clarity on the information that is available within the council, from either cabinet members or officers.
This work can involve:
- challenging how the budget has been put together before it is agreed – and before the level of council tax has been set
- looking at the assumptions that lie behind the executive’s budget strategy and the main savings proposals
- carrying out budget-monitoring activity – for example, in areas where expenditure against budget looks to be well above or below forecasts, and where growth/savings targets and revised forecasts are involved
- undertaking some evaluation of performance and value for money
- maintaining a ‘big picture’ view of the financial pressures affecting the council and continuously challenging how these might impact on existing budgets and budget-setting in subsequent years.
The LGA has recently revised its councillor workbook on finance scrutiny, to assist with this complex – and often challenging – aspect of their role.
It gives useful guidance on the principles and tasks involved in being an effective scrutineer, as well as advice and help with the process of financial scrutiny, budget setting and monitoring.
The workbook also gives some useful advice on: the determination of medium-term financial plans; the link between performance and expenditure; and how to develop an effective culture of scrutiny, based on consensual politics, robust challenge and accountability.
Case study
In 2017, Bristol City Council’s Overview and Scrutiny Management Board reviewed how its scrutiny was working, to try to find new and better ways of working.
Eleven priority topics were identified, and each piece of scrutiny was to be conducted in a way most appropriate for the topic. One of the priority areas selected was the council’s Medium-term Financial Plan. Because of the importance of this work, it was agreed that a commission would meet regularly to carry out this ongoing scrutiny.
Cllr Graham Morris (Con), Chair of Bristol’s Business Change and Resources Scrutiny Commission, said: “For any large organisation, a clear financial strategy is essential.
“The work that is being undertaken will ensure a robust and rigorous framework for the Medium-term Financial Plan, which will then be reviewed on an annual basis.
“It will improve transparency, and ensure that all officers, residents, interested parties and members can have a single view of council finances.”
The LGA is running free masterclasses on commercial skills for councillors, on 22 February and 16 March, in Coventry. For more information and to sign up, please email Jamie Osowski on [email protected]
‘A councillor’s workbook on scrutiny of finance’ can be downloaded from www.local.gov.uk/councillor-workbook-scrutiny-finance Looking ahead to May poll
The electoral landscape has changed significantly since 2014, and with it the prospects for this year’s English local elections.
Four years ago, the locals coincided with the European Parliament contests in which UKIP topped the poll in both votes and seats. The party failed to match that feat at council level, but registered a strong third place everywhere except London and gained more than 150 seats.
Labour councillors won half the 4,000-odd seats up for grabs nationwide (and made 300 gains), with the Conservatives pegged back by more than 200 seats and losing control of 13 councils.
The 2018 elections mainly reprise these contests with a total of nearly 4,400 vacancies across 151 local authorities. However, 17 of these councils have inaugural elections on new boundaries and 14 of them have experienced boundary changes during the past four years. There are also mayoral elections in four London boroughs (Hackney, Lewisham, Newham, and Tower Hamlets) and in Watford.
With the obliteration of UKIP widely expected (the party failed to retain a single seat at the 2017 local elections) recent by-elections demonstrate how both Labour and the Conservatives could benefit from the fall-out.
With the two main parties currently neck-and-neck, according to most opinion polls, there is scope for both to make gains this May.
In London, where in 2017 Labour won more than half of all votes cast at a General Election for the first time since the Attlee landslide of 1945, the party has its eyes on taking Barnet and even the former low poll tax flagship authority of Wandsworth directly from the Conservatives.
In the shires, conversely, the Conservatives will be aiming to make gains in some former UKIP hot spots such as Basildon, Cannock Chase, and Great Yarmouth, where it polled a third of the vote and more in 2014.
As always, the Liberal Democrats present more of a forecasting puzzle. Some of their local by-election victories in recent months have been spectacular; elsewhere they are finding it hard to break out from the dire performances common during their years in coalition with the Cameron government.
Can they bounce back in the south west London borough of Kingston upon Thames, which they lost directly to the Conservatives last time? Will the coincident mayoral and whole council contests in Watford serve to reaffirm their local strength there following a very distant third place at last year’s General Election?
For more information on recent local by-elections, please visit www.local.gov.uk/first
local by-elections
| Location | Party | Result | Turnout | |-----------------------------------------------|-------|--------|---------| | Bolton, Hulton | CON | GAIN FROM LAB | 9.4% over Lab | Turnout 30.5% | | Bournemouth, Throop and Muscliff | IND | HELD | | Turnout 24.5% | | Hertsmere, Borehamwood Cowley Hill | LAB | GAIN FROM CON | 27.7% over Con | Turnout 19.2% | | Kent, Birchington and Rural | CON | HELD | | Turnout 17% | | Lancashire, Wyre Rural Central | CON | HELD | 37.5% over Lab | Turnout 29% | | Milton Keynes, Newport Pagnell North and Hanslope | CON | HELD | 28.2% over Lab | Turnout 32.3% | | Rochford, Downhall and Rawreth | LIB DEM | HELD | 54% over Con | Turnout 20.7% | | Thanet, Thanet Villages | CON | HELD | 24.4% over Lib Dem | Turnout 23.1% | | Wyre, Preesall | CON | HELD | 10.5% over Lab | Turnout 35.6% | LGA Annual Fire Conference and Exhibition
13-14 March 2018, Hilton Hotel Newcastle Gateshead
The LGA’s Annual Fire Conference and Exhibition is a key event for senior fire officers and members of fire and rescue authorities. The terrible fire at Grenfell Tower has raised new questions about fire safety and the inspection and enforcement role of fire services. This is against a backdrop of continuing fire reform with implications for collaboration, recruitment, procurement, culture and standards, and the appointment of a new inspectorate.
Join us to discuss these changes, look at good practice and examine how we can develop this further.
To book your place visit: www.local.gov.uk/events
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eccbb4bc57ef98c4d4cf27decbab98184a14ed93 | New interactive online map reveals global reach of the First World War
Friday 1 August 2014, London—To mark the centenary of the outbreak of the First World War, The National Archives is launching a new interactive online map – First World War: A Global View. It will map the global reach of the conflict using the official records of the First World War from The National Archives collection.
The map shows countries, territories and empires as they were during wartime alongside a map of the present day for comparison. This is the beginning of a four year project which starts by focusing on the involvement of countries from across the British Empire during wartime. Each of these countries has an interactive tab which contains images and links to documents drawn directly from primary sources held by The National Archives. They highlight key events, historical figures and some lesser known stories from the war.
First World War: A Global View
Over the course of the four years, the map will be expanded to include Europe, the Middle East, the Americas, Africa and Asia. When complete it will offer a truly global view of the First World War.
Dr Stephen Twigge, Records Specialist at The National Archives said: “This new map reveals the many nations that joined forces to go to war. You can now explore lesser known stories from countries involved alongside famous events to understand the full impact and global scale of the First World War.”
First World War: A Global View is part of The National Archives’ centenary programme – First World War 100 – which spans a five-year period from June 2014 to June 2019.
Examples of lesser known First World War stories:
**Bermuda:** During the Boer War (1899-1902), camps were set up in Bermuda to hold Boer prisoners of war and this practice was readopted in the First World War. The majority of the German prisoners held on Bermuda were men taken off ships from America, who were attempting to return to Germany to enlist.
Conditions in the camps appear to have been relatively good and the prisoners were even allowed to manufacture souvenirs which were sold to tourists. The American Consul who monitored conditions in the camp recorded a rather unusual complaint from the prisoners, which was that ‘there was not enough discipline exercised over the camp by the officer-in-charge.’ The prisoners went on to say that they felt that ‘a considerable portion of the discontent was due to a lack of sterner discipline’. (CO 37/259)
**Falkland Islands:** On the morning of 8th December 1914, the day of the Battle of the Falklands Islands, the movements of three incoming German ships were reported from the town of Fitzroy, 20 miles west of Port Stanley. They were reported by telephone by Mrs R. S. Felton, the wife of the manager of a sheep station. As her husband and the workers were out working, Felton and her two maids, Christina Goss and Marian Macleod were alone when she received a call from Port Stanley that vessels had been seen approaching. From that moment, the two maids took it in turns to ride to the top of a nearby hill to record the movements of the incoming ships and report them back to Felton who telephoned them through to authorities in Port Stanley.
Felton was praised by the Admiralty for making “valuable and accurate reports in the presence of considerable danger, and entirely unprotected.” (CO 323/850 folio 139). Her reports allowed HMS Bristol and Macedonia to be dispatched accurately to where the ships were positioned.
Mrs Felton and her maids were honoured in a telegram from the Secretary of State for the Colonies in July 1915 and presented with silverware for their work. (CO 458/5 f.105) Mrs Felton is reported to have later received an OBE for her services.
**Jamaica**: supported the war effort through gifts of its own produce as well as military support. In a telegram of 1 September 1914, the Governor declared: 'The people of Jamaica unanimously desire to contribute to the Imperial Government in some way towards the expenses of the war other than its own local defence.' (CO 137/704/58) In October 1914, the Legislative Council agreed a gift of £50,000 worth of sugar (CO 137/705 folios 44-6). By November 1914, shipments of donations of oranges and grapefruits for wounded soldiers (CO 137/705 folio 197-203) and cigarettes for the troops were beginning to be shipped to the UK (CO 137/705).
**Examples of well-known events relating to the First World War:**
**Australia**: was the second largest of the self-governing Dominions with a population of just under 5 million people in 1914. From the outbreak of the conflict Australia strongly supported the Imperial war effort. Over 400,000 men enlisted in the armed forces, whilst many more men and women did essential war work at home.
The first major deployment of Australian troops came in the campaign to seize the Gallipoli peninsula in 1915. Australian troops landed on 25 April 1915 and were involved in heavy fighting throughout the campaign. The battle saw one of the largest numbers of Victoria Crosses awarded for a single action in the First World War. Six of these Victoria Crosses were awarded for the extraordinary defence of the Australian positions against overwhelming Ottoman assaults on the 9 August.
For media enquiries please contact Rebecca Simpson, Press Officer at The National Archives on 0208 392 5277 or by email: [email protected].
**Notes to Editors:**
**Spokespeople available:**
Dr Stephen Twigge is Head of the Modern Records Team at The National Archives. Stephen joined The National Archives in 1999. Stephen was formerly a Post Doctoral Research Fellow at the Department of International Politics, University of Wales, Aberystwyth and is a Fellow of the Royal Historical Society. He has published a number of books and articles on cold war history including German Unification 1989-90, Berlin in the Cold War 1948-1990, British Intelligence, Avoiding Armageddon and Planning Armageddon.
**Images available:** [Click here for screenshots of First World War: A Global View on Flickr](#) First World War 100 - The National Archives First World War Centenary Programme
First World War 100 - a new digital platform - has been created to guide people through the vast collection of historic records, letters, wills, maps, photographs, illustrations and artworks held by The National Archives.
Adding content throughout the five year programme, First World War 100 will be the central hub for the public to search and view official First World War records. There will be links to video, podcasts and multi-media applications, such as the All Pals Together online videoconference for schools, to fit with anniversaries, themes and lesser known stories in First World War history.
About The National Archives: For the record, for good…The National Archives is a government department and an executive agency of the Ministry of Justice (MoJ). As the official archive of the UK government and England and Wales, we look after and make available to the public a collection of historical records dating back over 1,000 years, including records as diverse as Domesday Book and MI5 files. www.nationalarchives.gov.uk www.legislation.gov.uk
First World War Centenary Partnership, led by IWM The National Archives is a member of the First World War Centenary Partnership, established in 2010 and led by IWM. The First World War Centenary Partnership is a network of over 2,000 cultural and educational not-for-profit organisations from 37 countries, who are producing a collective programme of events, activities and resources from 2014 – 2018 to mark the centenary. www.1914.org
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1e2973accba5c34d785d82957d6b43bd7c85b148 | First World War for a Digital Age
First World War Diaries Go Online to Mark Centenary
EMBARGOED UNTIL Tuesday 14 January 2014, London, 00:01 GMT – Today The National Archives is making the first batch of digitised First World War unit war diaries from France and Flanders available online\* via its First World War 100 portal. Once complete, it will comprise more than 1.5 million pages, opening them up to a global audience for the first time. Also launching today is Operation War Diary, an innovative online crowdsourcing partnership project between The National Archives, Imperial War Museums (IWM) and Zooniverse, which aims to unearth the details from within the diaries.
The First World War unit war diaries are the most popular records from The National Archives’ First World War collection (file series WO 95) and the first in a series of First World War records to be digitised as part of The National Archives’ centenary programme – First World War 100 – which spans a five-year period from June 2014 to June 2019.
William Spencer, author and military records specialist at The National Archives said: “Making the First World War unit diaries available online, allows people across the world to discover the daily activities, stories and battles of each unit for themselves. It also creates opportunities for the public, history enthusiasts, family historians and researchers worldwide to explore the official records which may lead to some new discoveries and perspectives of this important period of history.”
With some surprising revelations and astonishing stories, this first batch of unit war diaries reveals the real-time account of the first three cavalry and the first seven infantry divisions who were part of the first wave of British army troops deployed in France and Flanders. They cover the entire period of the units’ involvement in the war, from their arrival on the front to their departure at the end of the war.
In this first batch of 1,944 digitised unit war diaries is the daily account of the First Battalion South Wales Borderers in 1914 (WO 95/1280/3), providing insight into the anxiety and terror of the opening days of the war with the First Battle of Marne and Aisne, right up until June 1919 with an account of sporting events, such as tug of war and rugby, and even farewell dinners marking the end of the war.
Other unit war diaries included in the first batch are:
- The 4th Dragoon Guards who fired the first shots in Mons. (WO 95/1112/1)
- 5th (Royal Irish) Lancers who saw action continuously from 1914-18, were in some of the bloodiest battles and included the last British soldier to die in the First World War, Private George Edwin Ellison, shortly before Armistice came into force. (WO 95/1134/2) • 9th (Queen’s Royal) Lancers who were in the final “lance on lance” action of the First World War. (WO 95/1113/2)
Read alongside other records in The National Archives' First World War collection, such as the Prisoner of War interview reports (file series WO 161), the pieces of the jigsaw can be put together to form a catalogue of first-hand official accounts of the First World War.
Further batches of the unit war diaries will be released throughout the course of The National Archives’ centenary programme.
**Operation War Diary – Your Archive Needs You!**
As part of the digitisation of the Unit War Diaries and to engage people in the centenary, The National Archives is teaming up with Imperial War Museums (IWM) and Zooniverse to launch Operation War Diary. IWM’s expertise in citizen history and Zooniverse’s citizen science technology, previously used to map the stars, is combined in this innovative crowdsourcing history project which will enable the public to capture information from The National Archives’ unit war diaries.
We are encouraging volunteers to sign up to Operation War Diary who will be assigned a segment of a unit war diary and asked to tag key details from the pages, such as names, places and events. The data inputted by volunteers will be collected and used to enrich The National Archives’ catalogue descriptions for the unit war diaries, enabling family historians around the world to trace their army ancestors and providing academics and researchers with a better understanding of how the war was fought.
Information gained through Operation War Diary will also be incorporated into IWM’s Lives of the First World War project, which will launch in late Spring 2014. Lives of the First World War is an innovative, interactive platform that will inspire people across the world to discover, remember and share the life stories of those who served in uniform and worked on the home front. By the end of the centenary it will become the permanent digital memorial to more than 8 million men and women from across Britain and the Commonwealth, saving their stories for future generations.
We have made 100 unit war diaries available on Operation War Diary in the first instance, with more diaries to be added over the coming months and as they are published on The National Archives’ website.
Volunteers wishing to take part in Operation War Diary can join the project here: www.operationwardiary.org.
Luke Smith, Digital Lead for IWM’s First World War Centenary Programme said: “Operation War Diary will uncover new first-hand information about day to day life in the First World War – information that may not have previously been communicated through letters home or covered in traditional history books. This project will also be an invaluable source for IWM’s Lives of the First World War as it will help today’s generation to discover even more about the full life-stories of the people they choose to remember.”
Chris Lintott, Founder of Zooniverse and primary presenter of the BBC series The Sky at Night said: "History is an amazing and rich topic that many people love. We're hoping to bring it onto people's desktops and tablets in a new and amazing way. This will be our first pure history project and we're excited to tell our Citizen Scientists that they now be Citizen Historians too!"
Maria Miller, Culture Secretary, Maria Miller, said: “The National Archives’ digitised First World War unit diaries will allow us to hear the voices of those that sacrificed their lives and is even more poignant now there are no living veterans who can speak directly about the events of the war. This new online vehicle gives a very public voice to some of these soldiers, through which we will be able to hear their thoughts and feelings. Using Operation War Diary, we can follow in their physical shadow as they fought across the Western Front.
The First World War centenary is all about remembrance, recognition and understanding. Yesterday informs today. The National Archives’ initiatives are at the heart of the Government's First World War centenary programme to forge lasting connections between the past, present and future as we commemorate the lives and bravery of all those who served in the First World War.”
For media enquiries please contact Rebecca Simpson, Press Officer at The National Archives on 0208 392 5277 or by email: [email protected]. Notes to Editors: \*Searching the records on Discovery, our online catalogue, is free. A small fee applies to download digital copies. Visitors to our reading rooms can view them free of charge.
Spokespeople available:
William Spencer is the Principal Military Specialist at The National Archives where he has worked since 1993. He served in the Royal Navy, including operational service in the Falklands in 1982, and holds an MA in War Studies from the prestigious Department of War Studies at King's College London. William is the author of the bestselling books Medals: the Researcher's Guide, Army Records, Air Force Records and Family History in the Wars.
Luke Smith, Digital Lead, First World War Centenary Programme, Imperial War Museum
Professor Richard Grayson: Head of History & Professor of Twentieth Century History, Goldsmiths, University of London and Chair of IWM's Academic Advisory Group
Dr Chris Lintott, Zooniverse PI, Astronomer and founder of both Galaxy Zoo and Zooniverse that grew from it. He is also primary presenter of the BBC series The Sky at Night.
Images available: Image of unit war diary First Battalion South Wales Borderers in 1914 (WO 95/1280/3) Screen shot of Operation War Diary All available via Flickr here
More on the Unit War Diaries (file series WO 95) The unit war diaries are arranged by front, then by division, then by the units within each division. We have digitised the most popular segment of the unit war diaries to allow researchers around the world to access the diaries as never before. We hope to be able to digitise more war diaries, particularly those beyond the western front, before the end of our centenary programme.
First World War 100 - The National Archives First World War Centenary Programme First World War 100 - a new digital platform - has been created to guide people through the vast collection of historic records, letters, wills, maps, photographs, illustrations and artworks held by The National Archives.
Adding content throughout the five year programme, First World War 100 will be the central hub for the public to search and view official First World War records. There will be links to video, podcasts and multi-media applications, such as the All Pals Together online videoconference for schools, to fit with anniversaries, themes and lesser known stories in First World War history.
The National Archives First World War collection and resources The National Archives’ unique collection documents ‘the road to war’ from the high level strategy and orders through to the ‘troops on the ground’ with the unit war diaries and medal cards of the regiments. The collection covers a large number of government departments, and incorporates many notable documents, including the UK’s official copy of the Treaty of Versailles. The National Archives also has a series of online education resources for secondary school students and teachers focused on original documents from the First World War.
About The National Archives: For the record, for good...The National Archives is a government department and an executive agency of the Ministry of Justice (MoJ). As the official archive of the UK government and England and Wales, we look after and make available to the public a collection of historical records dating back over 1,000 years, including records as diverse as Domesday Book and MI5 files. www.nationalarchives.gov.uk www.legislation.gov.uk About IWM The Imperial War Museum (IWM) was established in 1917 while the First World War was still being fought, to ensure that future generations would understand the unprecedented scale and impact of the war, and to record the contributions of the men, women and children who played their role.
2014 - 2018 marks the centenary of the First World War, a landmark anniversary for Britain and the world. IWM will mark the centenary by leading a vibrant, four year programme including Lives of the First World War and the opening of brand new First World War Galleries at IWM London in summer 2014 and a major exhibition at IWM North. For more information visit www.iwm.org.uk
For information about IWM's Lives of the First World War, please contact Lucy Donoughue, IWM on 020 7416 5311 or by email [email protected]
About The Zooniverse The Zooniverse is a collaboration between universities and museums, led by the University of Oxford and the Adler Planetarium in Chicago, which creates citizen science and humanities projects. To date, nearly a million people have used Zooniverse websites to discover planets, transcribe ancient papyri and keep an eye on plankton. The war diaries project builds on the team's experience with the award-winning Old Weather project, which has mined more than a million pages drawn from 19th and early 20th century ship's logs in order to find information of interest to climate scientists and historians.
First World War Centenary Partnership, led by IWM The National Archives is a member of the First World War Centenary Partnership, established in 2010 and led by IWM. The First World War Centenary Partnership is a network of over 2,000 cultural and educational not-for-profit organisations from 37 countries, who are producing a collective programme of events, activities and resources from 2014 – 2018 to mark the centenary. www.1914.org
Government's First World War Centenary Programme On 4 August 2014 it will be 100 years since Britain entered the First World War. Within government the Department for Culture, Media and Sport is leading plans to build a commemoration fitting of this significant milestone in world history. As the Prime Minister made clear when he launched the programme in October 2012, the main theme will be remembrance with a particular focus on bringing the centenary alive for young people. There will be a number of national events across the four years, as well as cross-Government programmes to help deliver this. Further details can be found here: https://www.gov.uk/government/topical-events/first-world-war-centenary
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4ecae30e0a32b8ddc824b155186654a795a2e950 | FRAMEWORK OF STANDARDS FOR ARCHIVES
Our new framework of standards, incorporating suggestions made by consultation respondents, has now been drawn together. This framework of standards, as proposed in our consultation paper, will inform and support The National Archives’ (TNA) new standard for records repositories, which is currently being prepared by TNA inspection and advisory staff.
The majority of the following standards were proposed in The National Archives’ November 2003 consultation paper on the framework of standards. Others were proposed for inclusion by one or more respondents to that consultation paper. This list will now be referred to as “The National Archives’ Framework of Standards”.
A secondary list of best practice guidance follows the list of standards below. This second list contains publications which, while not actually standards in themselves, offer guidance which TNA recognises as being of particular value to all those concerned with the wellbeing of archives.
Both the standards list and the best practice guidance list will remain dynamic as we pilot-test and evaluate the framework this year. We will continue to take account of suggestions and comments raised by consultation respondents and other colleagues, and look forward to a dialogue with the archival community as we make progress with this work. THE NATIONAL ARCHIVES’ FRAMEWORK OF STANDARDS
Records Storage BS 5454:2000 Recommendations for the Storage and Exhibition of Archival Documents
Public Access National Council on Archives: Public Services Quality Group, A Standard for Access to Archives (2003) final endorsed edition (work in progress)
Cataloguing International Council on Archives, General International Standard of Archival Description [ISAD (G)], 2nd edition, 1999
International Council on Archives, International Standard Archival Authority for Corporate Bodies, Persons and Families, (ISAAR (CPF)), 1996 (currently being revised: new edition expected 2004)
National Council on Archives, Rules for the Construction of Personal, Place and Corporate Names, 1997
BS 6879 / ISO 3166-2: 1998, Codes for the representation of names of countries and their subdivisions, Part 2
Conservation and preservation BS 4971:2002, Repair and allied processes for the conservation of documents - Recommendations
BS 1153: Recommendations for processing and storage of silver-gelatine-type microfilm
Records Management BS ISO 15489-1: 2001, Information & documentation - records management
ISO 9706: 1994 Information and documentation - Paper for documents – requirements for permanence
Electronic Records BS 4783 Storage, transportation and maintenance of magnetic media in data processing and information storage Parts 1-8, 1988-94. BEST PRACTICE GUIDANCE
General Standing Conference on Archives in Museums, *Code of practice on archives for museums and galleries in the United Kingdom*, 2002
National Preservation Office preservation guidance leaflets, available at http://www.bl.uk/services/npo/publicationsleaf.html
Museums and Galleries Commission, *Standards in the museum care of photographic collections*, 1996
Records Storage Museums, Libraries and Archives Council, *Benchmarks in Collections Care: a self-assessment checklist*, 2002
Kitching C, Edgar H and Milford I, *Archival documents: guide to the interpretation of BS 5454:2000, PD 0024*, 2001
Jones M and Beagrie N, *Preservation management of digital materials: a handbook*, Resource and The British Library, 2001
BS ISO 10214: 1991 *Processed photographic materials: filing enclosures for storage*
Public Access Museums, Libraries and Archives Council, *Inspiring Learning for All*, 2004
Museums, Libraries and Archives Council, *The Disability Portfolio*, 2003
Tim Padfield, *Copyright for Archivists and Users of Archives*, 2nd edition 2004
Cabinet Office, *Charter Mark Standard*, http://www.chartermark.gov.uk/apply/CharterMarkStandard.pdf
Cataloguing International Council on Archives, *General International Standard of Archival Description [ISAD (G)]*, 1994.
International Council on Archives, *International Standard Archival Authority for Corporate Bodies, Persons and Families*, (ISAAR (CPF)), 1996 (currently being revised: new edition expected 2004). National Council on Archives, *Rules for the Construction of Personal, Place and Corporate Names*, 1997
**Conservation and preservation**
Pickford C, Rhys-Lewis J and Weber J, *Preservation and Conservation: a guide to policy and practices in the preservation of archives*, Best Practice Guideline 4, Society of Archivists, 1997
**Records Management**
Public Record Office, *Standards for the management of Government records* (Introduction, File Creation, Tracking Records, Disposal Scheduling, Guidelines on the Planning of Records Appraisal, Retention, Storage of semi-Current Records), 1998-99.
British Standards Institution, *'Records Management -A Code of Practice’* (work in progress).
**Electronic Records**
PD 0008:1999 - A code of practice for Legal Admissibility and Evidential Weight of Information Stored Electronically
Public Record Office, *Management, appraisal and preservation of electronic records* (Vol.1 Principles; Vol.2 Procedures), 2nd editions, 1999.
Missenden Consulting, *Archives in the Digital Age: a study for Resource*, Resource, 2002
**Staffing**
Investors in People UK, *Investors in People: The Standard*, 2004
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264c77bbf8bc3513fd39991bba93d62c728ccd62 | Framework agreement between the Law Officers and the Director of Public Prosecutions
13 March 2019 Overview
1. This framework agreement is made between the Attorney General and Solicitor General (the Law Officers) and the Director of Public Prosecutions (the Director). It replaces the protocol between the Attorney General and the Prosecuting Departments, including the Crown Prosecution Service (CPS), signed in July 2009.
2. This agreement sets out the main points of the relationship which the Law Officers and the Director expect to conduct, in the discharge of their respective functions in relation to the CPS. This relationship is an essential component of the governance and therefore of the standing and success of the CPS. It is entered into in a spirit of mutual understanding, respect and support for the functions engaged on each part, and of commitment to the organisation, its work, and the contribution it is expected to make to justice, the rule of law, and economic wellbeing in England and Wales.
3. In particular this agreement sets out the understanding and expectations of the Law Officers and the Director about:
• their respective roles and responsibilities, and the relationship between them; • the governance structures put in place to support those roles and responsibilities; • how the CPS’s strategic direction and objectives are developed and set; and • the principles behind the day-to-day ways of working they expect to see between officials in the CPS and the AGO in support of their relationship and functions.
4. This agreement is not intended to be an exhaustive statement of the relevant legal functions of the Law Officers or of the Director. Its operation will be reviewed by the Law Officers and the Director at intervals of not more than three years. It will also be reviewed following the appointment of any new Director or Attorney General.
The Crown Prosecution Service
5. The CPS was created and given its functions and powers by the Prosecution of Offences Act 1985 (the Act); it exercises those functions on behalf of the Crown. It is a non-ministerial department (NMD) headed by the Director of Public Prosecutions(^1). It also forms one of the ‘Law Officers’ Departments(^2), and as
______________________________________________________________________
(^1) Guidance on NMDs is set out in the Public Bodies Handbook: [https://www.gov.uk/government/publications/classification-of-public-bodies-information-and-guidance](https://www.gov.uk/government/publications/classification-of-public-bodies-information-and-guidance); and the Arm’s Length Body Code of Good Practice: [https://www.gov.uk/government/publications/partnerships-with-arms-length-bodies-code-of-good-practice](https://www.gov.uk/government/publications/partnerships-with-arms-length-bodies-code-of-good-practice) such constitutes a public arm’s length body sponsored by the Attorney General’s Office (AGO).
6. The CPS is the principal public prosecuting authority for England and Wales and constitutes a central part of the UK criminal justice system. Its role in that system is to take independent decisions on individual cases referred to it by the police and other criminal investigation authorities, based on the evidence available and the public interest in pursuing prosecution. Where a decision is taken to prosecute, the CPS undertakes prosecution by exercising its functions, in accordance with the law, with a view to preserving and enhancing public confidence in the criminal justice system. It also pursues criminals for recovery of unlawful financial gains.
Appointments
07. The Director is appointed by the Attorney General, as set out in s2(1) of the Act. The role is equivalent to Permanent Secretary grade within the Civil Service and the process subject to the relevant Civil Service appointment rules.
08. The AGO manages the appointments process in partnership with the Cabinet Office and Civil Service Commission. The CPS funds all costs in relation to the recruitment of the Director. The appointment and conditions of service of the Director are set out in a Memorandum of Understanding between AGO, CPS and the Cabinet Office.
09. The Director is responsible for the appointment of CPS staff. The Director appoints senior staff(^3) in consultation with the Law Officers, including as to the processes of appointment.
10. The Director is responsible for appointing a suitable number of (but at least four) CPS Non-Executive Board Members (NEBM)s with skills appropriate to the CPS’s business needs through fair and transparent competition and in line with Civil Service rules and guidance on such appointments. Appointments are made in consultation with the Law Officers, including as to the processes of appointment. The Director-General or Director of the AGO will be included in the appointment panel.
Roles and Responsibilities
11. The Director is a statutory office holder operating within the provisions of the Act. The Director and all staff of the CPS are subject to the Civil Service Code.
12. The Director’s statutory functions are exercised subject to the statutory superintendence of the Attorney General, as set out in the Act. The Solicitor
(^2) The Serious Fraud Office; Government Legal Department and HM Crown Prosecution Service Inspectorate
(^3) Chief Executive Officer General may undertake functions of the Attorney General in accordance with the Law Officers Act 1997.
13. The Director is responsible for deciding which cases the CPS should prosecute. The Director exercises independence in individual casework decisions.
14. The Director is responsible for, and bound by, the Code for Crown Prosecutors. The Code gives guidance to prosecutors on then general principles to be applied when making decisions about prosecutions.
15. The Director is required by law to issue the Code for Crown Prosecutors and consults the Attorney General and the Director of the Serious Fraud Office about any proposed changes to the Code. This is followed by wider consultation with other prosecutors, and by public consultation.
16. The Director is the Accounting Officer (AO) for the CPS. The Director appoints the Chief Executive as an additional AO.
17. The Law Officers, supported by the AGO, exercise their sponsorship and statutory superintendence functions as set out in this Framework and in accordance with government guidance. The Director-General of the AGO is the Senior AGO Sponsor for the CPS.
18. The Attorney General supports and holds the Director to account for the running of the CPS and the discharge of the CPS’s functions. The Director:
- engages with the AGO on the preparation of the CPS’s Corporate Plans in order to deliver the CPS’s strategic aims and priorities;
- keeps the AGO informed of progress in delivering those plans and the deployment of resources to do so;
- provides the AGO with timely forecasts and management information relating to budgetary and other financial matters;
- works with the AGO on the preparation for spending reviews; and
- keeps the AGO informed about cases which are of significant public interest, may impact on wider government priorities, or have implications for the development of the law.
19. The Law Officers are accountable to Parliament for the exercise of their sponsorship and superintendence functions. This includes answering Parliamentary Questions, questions from Select Committees, and correspondence from Members of Parliament about the CPS. The Director ensures that the CPS supports the Law Officers in fulfilling this duty. Where a Parliamentary Select Committee or other Parliamentary Group seeks evidence directly from the Director, the Attorney General and the Director will consult one another about how best to meet the requirements of the Committee.
20. The Law Officers are responsible for safeguarding the independence of CPS prosecutors in taking individual prosecution decisions, in accordance with this agreement.
21. The Director is a civil servant. The Cabinet Manual states that civil servants are ultimately accountable to the Head of the Civil Service/Cabinet Secretary. The Cabinet Secretary is responsible for the management of the overall Civil Service appraisal process.
22. The NEBMs carry out an important advisory and challenge role both to the Director and to the Law Officers. They provide advice and bring an external perspective to the CPS's business by sitting on the departmental board. They may also provide feedback on the Director's performance to the AGO and the Law Officers and to the Cabinet Secretary. The NEBMs meet with the Law Officers regularly and at least twice a year. They do not have ‘executive’ decision-making powers.
**Governance and Accountability**
**The Ministerial Strategic Board**
23. The Attorney General and the Director will, with the other members of the Ministerial Strategic Board (MSB) endorse the strategic direction of the CPS. The MSB is chaired by the Attorney General or the Solicitor General. A secretariat is provided by the AGO. Its membership comprises:
- the Law Officers
- the Director
- the Director-General of the AGO
- the Chief Executive of the CPS
- an appropriate NEBM of the CPS
24. The Chief Inspector of HMCPSI will attend by invitation as required. The Director of the AGO will undertake the role of Board Secretary.
25. The MSB’s overarching aim is to oversee the strategic direction for the CPS and jointly hold the CPS to account for the delivery of its strategic objectives.
26. The terms of reference of the MSB are set from time to time by the Law Officers for ratification by the MSB and must include responsibility for:
- supporting the roles and responsibilities of the Law Officers and the Director, and the work of the CPS and the AGO in supporting them;
- endorsing and overseeing the strategic direction of the CPS via an agreed multi-year Strategic Plan which will align with wider government strategies;
- providing context for the CPS about wider government and justice system policies and priorities;
- agreeing the CPS' priorities for engaging with other government departments, law enforcement agencies, the wider criminal justice system and international partners;
- agreeing and supporting policy development where it impacts on wider government priorities; • agreeing and supporting an overarching strategy for the Director and the CPS on their approach to public and media engagement, and a Memorandum of Understanding on ways of working between the CPS and AGO; and • approving the CPS business plan, endorsing the Director’s annual report to the Attorney General under s.9(1) of the Act (to be laid before parliament by the Attorney General under s.9(2)), and reviewing the budget and financial management, performance, efficiency, effectiveness and reputation of the CPS in year.
27. The MSB meets three times a year.
The CPS Board
28. The CPS Board (the Board) is chaired by the Director and meets eight times a year. Its membership includes senior members of staff across operational, legal and corporate functions and all NEBMs of the CPS. The Director-General or Director of the AGO may be invited to observe meetings of the Board.
29. The membership and conduct of the Board are the responsibility of the Director. Members of the Board must comply at all times with the Code of Conduct for Board Members of Public Bodies and with the rules relating to the use of public funds and to conflicts of interest.
30. The Board’s overarching aim is to provide strategic leadership to the CPS, ensuring the effective delivery of the CPS’s strategic and operational objectives; and to advise the MSB on strategic priorities. It plays a key role in ensuring that the CPS is equipped to provide a professional, efficient and high quality service.
Financial Accountability and Audit
31. The AGO negotiates the CPS’s budget with HM Treasury, in partnership with the Director and Chief Executive, as part of the Spending Review process. The CPS will negotiate the annual Main and Supplementary Estimates in consultation with the AGO. The CPS has its own estimate and the Director and the CPS Board determine the CPS’s approach on corporate and financial matters, in accordance with applicable guidance and with the Director’s responsibilities as AO.
32. The CPS is responsible for seeking Parliament’s consent to spend or commit resources through the Estimates process. Any adjustments to the CPS’s baseline will be settled through the standard Supplementary Estimates process (once annually). During the year, the CPS is expected to operate within the control totals framework for resource, capital, annual managed expenditure (AME) and for its net cash requirement. HM Treasury will monitor the CPS’s in-year budget spend through its monthly Online System for Central Accounting and Reporting (OSCAR) returns. The AME pension budget sits with the CPS.
4 https://www.gov.uk/government/publications/code-of-conduct-for-board-members-of-public-bodies; https://www.gov.uk/government/publications/managing-public-money 33. Any requests for budget exchange into the following financial year will be coordinated by the CPS in the discussions with HM Treasury, consulting with the AGO throughout the process.
34. As agreed between the CPS, AGO and HM Treasury, the CPS may apply for additional funding from the DEL Reserve fund. This funding is provided by HM Treasury directly to the CPS as part of its supplementary funding. Access to the reserve will be considered by Treasury ministers in exceptional circumstances, on a case-by-case basis.
35. As AO, the Director is personally responsible for safeguarding public funds; for ensuring propriety, regularity, value for money and feasibility in the handling of those public funds; and for the day-to-day operations and management of the CPS. The Director ensures that CPS governance is at all times in accordance with Managing Public Money guidance. In particular, the Director must:
- sign the accounts, and ensure proper records are kept relating to the accounts and that the accounts are properly prepared and presented in accordance with any directions issued by the Law Officers or by HM Treasury;
- prepare and sign a governance statement covering corporate governance, risk management and oversight of any local responsibilities, for inclusion in the annual report and accounts; and
- act in accordance with this agreement, Managing Public Money and other instructions and guidance issued from time to time by the AGO, HM Treasury or the Cabinet Office relating to financial management.
36. The Director is accountable to the parliamentary Public Accounts Committee for the CPS’s stewardship of public funds.
37. Within the governance structures set out in this agreement, the Director must:
- ensure that the Law Officers are able to review CPS spend in-year;
- keep the AGO informed of all significant financial discussions with HM Treasury or Cabinet Office; and
- ensure that AGO are informed if the CPS plans to seek HM Treasury approval for payments which: fall outside their delegated authorities; or raise novel or contentious issues; or could set a potentially expensive precedent or cause repercussions for other public sector organisations.
Personal injury payments and payments associated with personnel matters may not be included for data protection reasons or reasons of confidentiality.
38. The CPS must establish and maintain arrangements for internal audit. The internal audit service must have a right of access to all documents, including in any cases where services are contracted out. The CPS will:
- inform the AGO of its audit strategy, periodic audit plans and annual audit report; • keep a written record of any fraud or theft suffered by the CPS, and produce an annual report on fraud and theft to be shared with the AGO; and • notify the Treasury and AGO of any unusual or major incidents as soon as possible.
39. The CPS publishes an annual report of its activities together with its audited accounts after the end of each financial year. The annual report and accounts must comply with all relevant legal obligations and any directions from the Law Officers, including the Treasury’s Financial Reporting Manual(^5) (FreM); outline main activities and performance during the previous financial year and set out forward plans in summary form; and cover any corporate, subsidiary or joint ventures under its control. The CPS must provide the AGO its finalised (audited) accounts in a timely manner.
40. The Comptroller & Auditor General (C&AG) audits the CPS’s annual accounts and lays them before Parliament, together with its report. The C&AG:
• consults the CPS on whether the National Audit Office (NAO) or a commercial auditor should undertake the audit on his behalf; • is entitled to obtain relevant documents and information, including any held by another person in receipt of payments or grants from the CPS; and • may provide government departments and other relevant bodies with Regulatory Compliance Reports and other reports relating to the CPS where these have been properly requested at the commencement of the audit.
The AGO
41. The AGO supports the performance of this agreement by:
• advising the Law Officers about their powers, duties and responsibilities in relation to the CPS and supporting the discharge of their relevant functions; • supporting the performance, accountability and independence of the Director, and advising the Director about the policy, strategic and legislative framework relevant to the CPS; • advising other government departments about CPS policy and objectives, and ensuring these are considered as part of wider policy development; • advising the Law Officers and other government departments on budgetary matters relating to the CPS; and • advising the Law Officers and the Director on media activities relevant to the CPS.
HM Crown Prosecution Service Inspectorate (HMCPSI)
42. The Attorney General may invite HMCPSI to support him in the discharge of his functions by undertaking inspections of the CPS in relation to any of its
(^5) https://www.gov.uk/government/publications/government-financial-reporting-manual-2018-to-2019 operational or corporate functions. The commissioning of and response to HMCPSI reports on the CPS will be considered by the MSB.
Ombudsman
43. The CPS receives and handles correspondence and complaints from members of the public in accordance with clear procedures which must be published on the CPS website. This includes Victim’s Right to Review Scheme procedures. Where the complainant is not satisfied with the CPS response and the complaint relates to the Code of Practice for Victims of Crime, the complainant may complain to their MP who may refer the matter to the Parliamentary and Health Services Ombudsman. If the complaint concerns the personal conduct of the Director, complainants must be notified that they may be referred to the Attorney General. In those instances, the CPS ensures that the Attorney General is provided with all relevant information.
44. The Attorney General may commission the Independent Assessor of Complaints to undertake investigations on behalf of the AGO or the CPS. Where such investigations fall outside usual IAC practice, specific terms of reference for the review will be prepared.
Casework
45. The CPS is independent in making decisions whether or not to prosecute a case. Those decisions are the responsibility of the Director, who may delegate authority to appropriate staff within the CPS. The Attorney General is responsible for safeguarding the independent decision making of the CPS.
46. The decision whether or not to prosecute and, if so, for what offence, or whether to seek another measure (such as civil recovery of the proceeds of crime, a deferred prosecution agreement or out of court disposal), is a quasi-judicial function of the Director which requires evaluation of the strength of the evidence. It is also a judgment about whether a prosecution is in the public interest. The CPS must take such decisions in a fair and impartial way, acting at all times in accordance with the highest ethical and professional standards and in the best interests of justice. This is central to the maintenance of a just, democratic and fair society based on scrupulous adherence to the rule of law.
47. The CPS takes casework decisions and conducts individual cases applying the law, and the framework of principles set out in the Code for Crown Prosecutors, together with any relevant published guidance issued by the Director, or the Attorney General.
48. Other than as set out in this agreement, the Law Officers do not participate in CPS casework decisions.
______________________________________________________________________
6 HMCPSI has a statutory role as set out in the Crown Prosecution Service Inspectorate Act 2000, giving them the power to inspect the CPS. Attorney General’s consent to prosecute
49. For a small number of specific offences, Parliament has made statutory provision for the Attorney General’s consent to be legally required before a prosecution is brought in individual cases.
50. It is a constitutional principle that when taking a decision whether to consent to a prosecution, the Attorney General acts quasi-judicially and independently of government, applying well established prosecution principles of evidential sufficiency and public interest. The Attorney General has regard to, but is not limited by, the public interest factors set out in the Code for Crown Prosecutors.
51. Where consent has been given and a prosecution is commenced, the prosecutor keeps the AGO informed of its progress. Where practicable, the prosecutor consults the Attorney General if the prosecutor is contemplating either dropping the case on public interest grounds, or accepting pleas. If the case can no longer proceed for evidential reasons which emerge after a prosecution is started, the prosecutor informs the Attorney General of the decision as soon as it is taken.
Attorney General’s directions where necessary to safeguard national security
52. Exceptionally, and only where in the Attorney General’s opinion it is necessary to do so for the purposes of safeguarding national security, the Attorney General will consider the exercise of their power to issue a direction that a prosecution is not started or not continued.
53. The offences most likely to give rise to the exercise of this function are those which require the Attorney General’s consent to prosecution in any event. If national security considerations emerge during such a prosecution, or in cases which do not require consent, the Director must inform the Attorney General as soon as this becomes evident.
54. The Attorney General consults the Director before contemplating issuing a direction.
55. The Attorney General reports any such direction to Parliament, in so far as that is itself compatible with the public interest in national security.
Representations on the Public Interest
56. The Code for Crown Prosecutors sets out the general public interest considerations which are relevant to prosecution decisions. In a few very exceptional cases the Director (or the Attorney General in a consent case) may consider that it is desirable to be informed in doing so by consulting within government about the relevant public interest considerations as part of that decision making process. The Director may raise such a case with the Attorney General, and the Attorney General may advise on whether it is in the public interest to seek wider ministerial representations in a public interest consultation. exercise\\textsuperscript{7}, in a consent case, the Attorney General may decide to seek such representations of his own motion.
57. The purpose of the exercise is confined to identifying particular public interest considerations which may be relevant to the prosecution decision. The relevance and weight to be given to such considerations, and the eventual prosecution decision, are matters for the prosecutor.
58. The Attorney General ensures that these public interest consultation exercises are conducted with propriety; that consultees are informed that the decision is for the prosecutor alone; and that the wider Ministerial representations tending to any particular conclusion are probed appropriately.
Statutory superintendence
59. The Attorney General’s responsibilities for superintendence and accountability to Parliament imply a limited engagement with some individual CPS cases set out at paragraph 60 which do not require consent to prosecute. This is a function which the Law Officers exercise quasi-judicially and must carry out in the public interest.
60. The Director alerts the Law Officers to any case which:
- he considers is particularly sensitive;
- has potential precedent-setting implications for prosecution or criminal justice policy or practice; or
- reveals systemic issues for the framework of the law, or the operation of the criminal justice system.
61. The Director may alert the Law Officers via senior officials within the AGO and/or through regular meetings with the Law Officers.
62. The Director may seek guidance from the AGO as to whether any case ought to be drawn to the attention of the Law Officers for these or any other reasons. The Law Officers may ask for information about the case, or to be kept informed of developments. The decisions in these cases remain for the Director.
63. The Law Officers may ask for information about any case in order to perform another Law Officer function, such as considering potential contempt of court, making references on a point of law, or deciding whether to refer an unduly lenient sentence. These do not involve consultation on any prosecution decision by the CPS.
64. Subject to paragraph 67 below, the Director may raise any case with the Law Officers for advice or discussion to assist the Law Officers in providing public or parliamentary assurance that a decision has been carefully and properly taken.
\\textsuperscript{7} sometimes referred to as a Shawcross exercise 65. The Attorney General may be called upon to help prosecutors to resolve cases where they have not reached agreement, for example where prosecutors have overlapping remits over the same case or adopt different approaches to the same legal question or where there is concurrent jurisdiction.
66. The Attorney General's assistance may be sought by the CPS in an individual case to ensure that processes of securing evidence or disclosure of material by another government department run smoothly, where such processes are in the interests of ensuring a fair trial.
67. Unless for any reason a decision is required from the Attorney General by law (such as in a consent case), the Law Officers will never be consulted or otherwise engaged on any case which:
- relates to a Member of Parliament (including Peers) or minister;
- relates to a political party or the conduct of elections; or
- gives rise to any question of personal or professional conflict of interest for the Law Officer.
68. The AGO may assist the CPS in identifying such cases, and provide any relevant context or advice which is agreed to be proper. The AGO does not advise on prosecution decisions.
Wider collaboration
69. The CPS will collaborate between agencies and Departments on wider strategic and operational priorities. The Law Officers expect the CPS to work with the SFO, National Crime Agency, police, HMRC, wider criminal justice agencies and international networks where appropriate. These partnerships will be underpinned by agreements or Memoranda of Understanding. The AGO will be kept informed of these arrangements. Where operational activity (nationally and internationally) may impact on wider government policy, the CPS will consult the AGO and agree strategic engagement plans.
Prosecution Policy and Guidance
70. The Attorney General has ministerial responsibility at Cabinet level for government policy in relation to prosecution functions. The Law Officers' ministerial responsibilities include ensuring that the functions of the CPS are understood and taken account of in the development of government policy more generally.
71. The Director supports the Law Officers in the exercise of this function by providing information and advice, and ensuring that the knowledge and expertise of prosecutors are made available to those developing Government policy.
72. The Director ensures that, consistently with maintaining proper independence in taking prosecution decisions, policies and guidance adopted by CPS are consistent with and give due effect to relevant government policy. The AGO supports this role.
73. The Director may promulgate guidance or principles about the conduct of casework. These should be reviewed on the appointment of a new Director, or to reflect changes in government priorities for criminal justice, and at least every 3 years. The Director ensures that the Law Officers are asked for their views in a timely way about any proposed statement of prosecution policy or guidance which raises difficult or sensitive questions of law or public policy. The Director accords particular weight to the Attorney General’s views where difficult questions arise in balancing competing public interest considerations in prosecution guidance.
74. The Director must consult the Attorney General about any guidance on matters in which the Law Officers exercise special public interest functions, for example in relation to contempt of court, public interest immunity, unduly lenient sentences, consent cases or victims’ right to review.
75. The Attorney General may issue guidance on cross cutting legal issues, practice or policy to ensure consistency of approach across public prosecution or government legal functions. The Attorney General consults the Director before issuing any guidance affecting the CPS.
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c215636620f3f1e59bcc087abdddc9203c6be0e9 | Fraud Policy Contents
1. Introduction ........................................................................................................................................... 3
2. Scope of Application of this Policy ........................................................................................................ 3 2.1 TNA employees .................................................................................................................................. 3 2.2 Suppliers and Contractors .................................................................................................................. 4 2.3 Organisations/projects that TNA grant funds or manages on behalf of others ........................................ 4
3. What is Fraud? ........................................................................................................................................... 4 3.1 Examples of frauds that may be perpetrated against TNA ................................................................. 5 3.2 Possible consequences of fraud to TNA .............................................................................................. 5 3.3 Possible consequences of fraud to the individual .............................................................................. 5 3.4 Avenues for reporting fraud .............................................................................................................. 6
4. Responsibilities .......................................................................................................................................... 6 4.1 Chief Executive and Accounting Officer ............................................................................................ 6 4.2 Director of Finance and Performance .................................................................................................. 6 4.3 Directors, heads of department, executive reports and heads of teams .............................................. 7 4.4 Director of Human Resources and Organisational Development ..................................................... 8 4.5 Line managers ..................................................................................................................................... 8 4.6 All TNA staff and Board members ..................................................................................................... 9 4.7 Audit Committee .................................................................................................................................. 9 4.8 Internal Audit ...................................................................................................................................... 9 4.9 Other bodies ....................................................................................................................................... 10
5. Conclusion ................................................................................................................................................ 10
Annex A Fraud Response Plan .................................................................................................................... 11 Annex B The Civil Service Code key values ................................................................................................. 14
Policy Owner: Finance Published: June 2010 Reviewed: June 2010
This policy was agreed with the Trade Union Side on 14 June 2010 It will be reviewed in June 2012, or earlier at the request of either party 1 Introduction
This document contains TNA’s policy on fraud. The purpose of this Statement is to remind staff of the risks of fraud, theft and corruption, and to outline TNA’s policies and responsibilities and the procedures that are followed when fraud, theft or corruption is suspected or identified.
TNA has a zero tolerance to fraud and corruption and is committed to:
- preventing fraud and corruption from occurring
- developing and maintaining effective controls to prevent fraud
- taking all allegations of fraud seriously
- investigating all allegations of fraud appropriately
- maintaining procedures for assessing the risk of fraud, notifying fraud, investigating it
- educating staff and partners on fraud awareness and the relevant procedures
- reviewing systems and procedures when a fraud has occurred to prevent similar frauds
TNA has established a Fraud Response Plan (see Annex A), which sets out guidance in the event of fraud being discovered or suspected and how investigations will be conducted and concluded. This plan forms part of TNA’s anti-fraud policy.
TNA requires staff and partners to act honestly and with integrity at all times and to safeguard the public resources for which they are responsible. TNA will not tolerate fraudulent activity and every case of attempted, suspected or proven fraud and/or corruption will be thoroughly investigated and dealt with appropriately in accordance with the Fraud Response Plan (See Annex A). There will be consistent handling of all attempted, suspected or proven fraud cases without regard to the position held or length of service of the individual(s) involved. Errors may be made by staff in the course of their work that might be interpreted as fraud, but in any case of alleged fraud the degree of intent will be an important factor.
TNA is committed to ensuring that opportunities for fraud and corruption are reduced to the lowest possible level of risk.
This policy is concerned with internal and external fraud, committed against TNA by TNA employees (including agency staff engaged by TNA and non-executive directors), suppliers of goods and services, agents working on behalf of TNA, contractors in the course of their work or other persons and organisations that TNA funds or has an interest in. Guidance on issues arising from the private and personal activities of staff which may impinge on the performance of their duties or risk bringing discredit to TNA is contained in paragraphs 1.6 – 1.8 of the Staff Handbook.
2 Scope of Application of this Policy
This Policy applies to the following groups of people:
2.1 TNA employees
As a public body we have a wide discretion in how we deal with money. The temptation could exist in these circumstances to seek some personal advantage. Examples of this might take the form of: • Accepting gifts; these could be seen as bribes or payment for favours • Accepting hospitality: lunches, trips abroad etc • Stealing TNA equipment, property or money
The first two examples might in fact be perfectly innocent, but we have to be aware of how these look to the outside world. We have to be careful not only to do the right thing, but to be seen to be doing it as well.
2.2 Suppliers and Contractors
Not everyone we deal with will have the same attitude to fraud that TNA has, and in some areas the giving of gifts in return for contracts is considered to be standard business practice, TNA emphasises that this is not acceptable and any member of staff offered such a gift is referred to the Staff Handbook guidance on gifts and hospitality. TNA’s Gifts and Hospitality Policy is available HERE.
In addition, suppliers and contractors who suggest fraudulent activity breach TNA’s Procurement Code and should be warned that they risk sanctions.
2.3 Organisations/projects that TNA grant funds or manages on behalf of others
All grant funding is subject to an element of trust, and it is a serious matter for this trust to be broken. Not only might fraud cause problems in the funded body, but in some circumstances TNA might be seen to be responsible for not taking proper care in monitoring them or controlling their activities.
3 What is Fraud?
The Fraud Act came into effect in January 2007 and introduced a new general offence of fraud which can be committed in three ways:
**Fraud by false representation** i.e. if someone makes a false representation and intends by making the representation to make a gain for himself or another, or to cause loss to another or expose another to risk of loss. A representation is false if it is untrue or misleading, and the person making it knows that it is, or might be, untrue or misleading. The person making the false representation, failing to disclose information or abusing their position must do so with the intention of making a gain or causing loss or risk of loss to another. The gain or loss does not actually have to take place
**Fraud by failing to disclose information** i.e. if someone dishonestly fails to disclose to another person information which he is under a legal duty to disclose and intends, by failing to disclose information, to make a gain for himself or another, or to cause loss to another or expose another to risk of loss
**Fraud by abuse of position** i.e. if someone occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person, and he dishonestly abuses that position, and intends, by means of the abuse of that position, to make a gain for himself or another, or to cause loss to another or to expose another to a risk of loss
The Act created new offences of obtaining services dishonestly and of possessing, making and supplying articles for use in frauds. 3.1 Examples of frauds that may be perpetrated against TNA are:
- the dishonest use of a TNA credit card to pay for items
- the dissemination of an email to large groups of people falsely representing that the email had been sent by TNA
- theft, the misappropriation or misuse of assets or funds for personal benefit
- bribery and corruption – offering, giving, soliciting or accepting an inducement or reward that may influence the actions taken by TNA or its staff, for example in the procurement of goods and services
- false accounting and/or making fraudulent statements with a view to personal gain or gain for another: for example falsely claiming overtime, travel and subsistence, sick leave or special leave (with or without pay), giving incorrect information, untrue details or fake invoices
- externally perpetrated fraud against TNA, for example in the procurement and delivery of goods
- Being under undue influence - failing to disclose an interest, failing to record hospitality or offers of gifts
- Extortion - obtaining favours by the use of threats
- Conspiracy, collusion and corruption - entering into agreements with others to carry out illegal activities
- Money laundering
These activities are contrary to all of the core values of the Civil Service Code (see Annex B)
3.2 Possible consequences of fraud to TNA
These include:
- Loss of resources or property
- Failure to obtain value for money and/or required outputs, failure to obtain the goods and services we have paid for with public money
- Costs and disruption from investigation
- Damage to TNA’s reputation and standing with partners and stakeholders
- Adverse publicity
3.3 Possible Consequences of fraud to the individual
All cases where a suspicion of fraud has been raised will be dealt with appropriately in accordance with the Fraud Response Plan. Individuals involved in fraudulent activity may face the following consequences:
Most of the categories of fraud set out above are criminal offences, and if convicted, the perpetrator may be subject to the criminal punishment of fines, imprisonment and recovery of assets, through the Magistrates or Crown Court.
The alleged commission of any fraudulent activity is a disciplinary matter for that employee, and the person involved will be subject to the Disciplinary Procedure in TNA’s Staff Handbook. If the property obtained illegally belonged to TNA it can be recovered through the Civil Courts, and the person involved (and their assets) can be subject to civil claims, injunctions and penalties.
3.4 Avenues for Reporting Fraud
TNA has in place procedures for reporting suspicions of fraud without fear of prejudice or harassment
Any suspicions of fraud should be reported as soon as possible.
All matters will be dealt with in confidence and in strict accordance with the terms of the Public Interest Disclosure Act 1998. The statute protects the legitimate personal interests of staff. Vigorous and prompt investigations will be carried out into all cases of actual or suspected fraud discovered or reported.
Detailed reporting and procedural guidance is contained in the Fraud Response Plan (see Annex A)
See also TNA’s Confidential Reporting (‘Whistle-blowing’) Policy (available on Narnia HERE)
4 Responsibilities
Depending on an individual’s responsibilities within TNA, the Board and employees will have different roles to play in relation to identifying, reporting, investigating and dealing with fraud.
4.1 Chief Executive and Accounting Officer
As Accounting Officer, TNA’s Chief Executive is responsible for managing our risks, including fraud. TNA faces a range of fraud risks specific to our business, from internal and external sources. These are set out in Managing Public Money. The risk of a given fraud is usually measured by the probability of it occurring and its impact in monetary and reputational terms should it occur. TNA’s Chief Executive is responsible for establishing and maintaining a sound system of internal control that supports the achievement of departmental policies, aims and objectives. The system of internal control is designed to respond to and manage the whole range of risks that a department faces. The system of internal control is based on on-going process designed to identify the principle risks, to evaluate the nature and extent of those risks and to manage them effectively. Managing fraud risk will be seen in the context of the management of this wider range of risks.
4.2 Director of Finance and Performance
Overall responsibility for managing the risk of fraud has been delegated to the Director of Finance and Performance. Their responsibilities include: • Developing a fraud risk profile and undertaking a regular review of the fraud risks associated with each of the key organisational objectives in order to keep the profile current; • Establishing an effective anti-fraud policy and fraud response plan, commensurate with the level of fraud risk identified in the fraud risk profile; • Identify appropriate targets to combat fraud; • Designing an effective control environment to prevent fraud commensurate with the fraud risk profile; • Establishing appropriate mechanisms for: o reporting fraud risk issues; o reporting significant incidents of fraud to the Accounting Officer o reporting to HM Treasury in accordance with Government Accounting 2000 Chapter 5 • co-ordinating assurances about the effectiveness of anti-fraud policies to support the Statement of Internal Control • Liaising with the Audit Committee • Making sure that all staff are aware of the organisations anti-fraud policy and know what their responsibilities are in relation to combating fraud • Ensuring appropriate anti-fraud training and development opportunities are available to appropriate staff in order to meet the defined competency level • Ensuring that vigorous and prompt investigations are carried out if fraud occurs or is suspected • Taking appropriate legal and/or disciplinary action against perpetrators of fraud • Taking appropriate action against line managers where supervisory failures have contributed to the commission of fraud, this might be retraining or possible disciplinary action • Taking appropriate disciplinary action against staff who fail to report fraud • Taking appropriate action to recover assets • Ensuring appropriate action is taken to minimise the risk of similar frauds occurring in the future
4.3 Directors, Heads of Department and Executive Reports
• Ensuring that an adequate system of internal control exists within their areas of responsibility and that controls operate effectively • Preventing and detecting fraud • Assessing the types of risk involved in the operations for which they are responsible • Reviewing and testing the control systems for which they are responsible regularly • Ensuring that controls are being complied with and their systems continue to operate effectively • Implementing new controls to reduce the risk of similar fraud occurring where frauds have taken place • Heads of Team will ensure that their teams comply with the above duties • Heads of Team are expected to be aware of how a team member might report suspicions of fraud • Heads of Team are expected to follow the Fraud Response Plan (see Annex A) when a suspicion of fraud is reported to them • Heads of Team will keep each team updated on changes in this Policy 4.4 Director of Human Resources & Organisational Development
Parts of this policy interact with HR policies in respect of codes of conduct for staff and disciplinary procedures. In particular the role of HR Director is to:
- ensure that HR policies tie in with the Fraud Policy and vice versa
- monitor the investigation process for compliance with disciplinary procedures
4.5 Line Managers
While overall responsibility lies with the Accounting Officer, primary responsibility for the prevention and detection of fraud falls to line managers. There is a need for all line managers where appropriate to:
- assess the types of risk involved in the operations for which they are responsible
- ensure that an adequate system of internal control exists within their area of responsibility and that controls operate effectively, taking into account the scale of the risk in the particular business area
- review and test regularly the control systems for which they are responsible
- ensure that controls are being complied with, and that systems continue to operate effectively
- prevent and detect fraud
- implement new controls to reduce the risk of similar fraud occurring, where frauds have already taken place
- provide assurances on their internal control systems
Line managers are responsible for ensuring that their staff have had fraud awareness training specific to the business area in which they are employed. Training should include:
- awareness of the risk of fraud and the appropriate counter measures available
- management awareness including profiles of the type of people most likely to commit fraud and examples of areas of potential fraud
- practical approaches on risk analysis and effective preventive and detective controls
Line managers must ensure that the opportunities for staff to commit fraud are minimised. In terms of establishing and maintaining effective controls it is generally desirable that:
- there is rotation of staff, particularly in key posts
- wherever possible there is a separation of duties so that control of a key function is not vested in one individual
- backlogs are not allowed to accumulate
- in designing any new system consideration is given to building in safeguards against internal and external fraud
As regards the personal conduct of staff, line managers should:
- ensure that staff under their control have read and understood the content of the Civil Service Code
- ensure that staff under their control are aware of the rules relating to confidentiality of information • ensure that staff under their control have been made aware that fraudulent behaviour is wrong • provide and regularly review a register to record gifts and hospitality • regularly reinforce the rules relating to personal conduct
4.6 All TNA staff and Board Members
TNA subscribes to the core values of the Civil Service Code.
TNA staff and Board Members are all subject to criminal and civil laws and Civil Service Code principles and are responsible for complying with them. All staff members are expected to act at all time with propriety and integrity in the exercise of their duties and in the use of official resources and the handling and use of funds, whether or not they are involved with cash or payment systems, receipts or dealing with suppliers.
TNA staff and Board Members are all responsible to TNA (as employer or as members of the Board) to be aware of activities around them and to immediately report suspicions of fraud, however minor and must be alert to the possibility that unusual events or transactions could be indicators of fraud. Staff must cooperate fully with whoever is conducting internal checks, reviews or fraud investigations by making available all relevant information and by co-operating in interviews.
All staff are advised to consider their personal and business activities and whether these may be considered to conflict with their duty to the office. Any potential conflict of interest should be dealt with in accordance with paragraphs s 1.6-1.8 of the Staff Handbook. If you are unsure whether any personal activity you are planning to undertake might present a conflict of interest with your role and responsibilities at TNA then you should, in the first instance, seek advice on the matter from your Line Manager or Director. Any agreement on what activities you may or may not carry out should be recorded and a copy sent to HR for filing on your staff file for future reference.
As stewards of public funds staff must have, and be seen to have, high standards of personal integrity. As stewards of public funds, all civil servants must have, and be seen to have, high standards of personal integrity. Staff should not accept gifts, hospitality or benefits of any kind from a third party that might be seen to compromise their integrity. For full details on accepting gifts and hospitality see section 3. of the Staff Handbook.
4.7 Audit Committee
• Receive reports from Director of Finance and Performance concerning investigations and recommendations • Chair of Audit Committee can receive disclosures under the Public Interest Disclosure Act 1998
4.8 Internal Audit
It is not the function of auditors to prevent fraud. Internal Audit is responsible for: • Delivering an opinion to the Accounting Officer on the adequacy of arrangements for managing the risk of fraud and ensuring that the department promotes and anti-fraud culture • Assisting in the deterrence and prevention of fraud by examining and evaluating the effectiveness of control commensurate with the extent of the potential exposure/risk in the various segments of TNA’s operations • Ensuring that the management has reviewed its risk exposures and identified the possibility of fraud as a business risk • Assisting management in conducting potential fraud investigations where appropriate. Management and outcome of these investigations still resides with senior management
4.9 Other bodies
The Police: The Director of Finance & Performance has responsibility for requesting Police involvement, and for arranging liaison with TNA staff during their investigations.
Serious Fraud Office: Where the case is of great concern or of public interest, the Director of Finance & Performance will consider making a report to the Serious Fraud Office.
HM Treasury & National Audit Office: The Director of Finance & Performance has responsibility for making the required reports to HM Treasury and NAO
The Media: The Director of Finance & Performance has responsibility for notifying the Director of Customer and Business Development of the investigation and agreeing an appropriate approach to the media with the Press Office during and after it.
5 Conclusion
TNA takes fraud and potential fraud seriously.
The circumstances of individual frauds will vary, however it is important that all are vigorously and promptly investigated and that appropriate action is taken.
Successful fraud prevention involves creating an environment which inhibits fraud. It is the responsibility of all staff to ensure that such an environment is created.
A manager who is alert to the possibility of fraud and who acts accordingly is a powerful deterrent against fraud.
Report immediately any suspicion or discovery of fraud to your Line Manager, your Director, the Director of Finance and Performance or the Chair of the Audit Committee. Annex A FRAUD RESPONSE PLAN
Introduction
This fraud response plan includes information on:
- arrangements for establishing facts and securing evidence
- ensuring that further breaches are not made
- making appropriate notifications
- arrangements for managing or conducting the investigation
- decisions on follow up action, including liaising with the Police
- identifying and disseminating lessons for the future.
If a fraud has occurred or is suspected the following action must be taken:
The person who discovers the fraud must report the occurrence to their line manager in the first instance. If it is not appropriate for the individual to speak to their line manager because of fear of harassment or victimisation resulting from making the report or because the suspicion involves their line manager they may contact the Director of Finance and Performance (on extension 5287) or contact the Chair of the Audit Committee (contact details available from Head of Corporate Planning on extension 2391). Alternatively anyone wishing to report a fraud or suspected fraud anonymously may do so to the following email address: [email protected] using private and non-identifiable email accounts.
All matters will be dealt with in confidence and in strict accordance with the terms of the Public Interest Disclosure Act 1998 and TNA’s Forensic Readiness Policy.
The contacted person will speak to Internal Audit or ensure a senior manager (normally at head of department level or above) is directed to instigate an investigation and will brief the Director of Finance and Performance and the Chair of the Audit Committee as appropriate. The investigation will cover the degree to which the alleged fraud was intentional. The Head of Internal Audit will be informed of all suspected frauds and irregularities from the outset of any investigation which might be undertaken.
In the first instance Internal Audit or a senior manager will normally investigate the alleged fraud and will lead the investigation. The facts should be quickly established by the operational managers; any threat to further frauds or losses should be removed immediately, for example by changing procedures or suspending payments.
It is essential that no attempt is made to investigate a suspected or alleged fraud involving computers and/or other ICT equipment without reference to the TNA’s Forensic Readiness Policy. Any investigation into suspected or alleged fraud involving computers and/or other ICT equipment must be carried out strictly in accordance with requirements set out in TNA’s Forensic Readiness Policy (available on Narnia HERE). Advice on the policy and its application can be obtained from IT Security Officer. The sensitivity of some frauds means that information about them has to be restricted. This is especially true where knowledge of discovery might hinder an investigation, or where setting out case details might lead to ‘copycat’ offences.
**Minor Fraud**
A suspected minor fraud is one that is unlikely to result in police action, for example travel claim fraud, excess overtime, flexi fraud. In cases of minor fraud:
- Internal Audit or the investigating person should liaise with Departmental Security Officer (DSO) to secure any evidence at the outset of the investigation. This should be done in a manner that does not alert the person alleged to have committed the fraud or impair future investigation or prosecution.
- A decision to interview the alleged person must be made in conjunction with senior management which will be the Director of Human Resources and Organisational Development and the Director of Finance and Performance. Notes taken must be written up, agreed and signed as a fair representation of the interview by all parties. The alleged person will normally be dealt with through the disciplinary procedures detail in the TNA Staff Handbook and may be accompanied by a friend or trade union representative.
- Disciplinary action may also be taken against any member of staff whose actions (or inaction) are found to have materially contributed to the fraud.
**Major Fraud**
If the nature of the alleged fraud is classed as serious (this decision will be taken by the Director of Finance and Performance, Internal Audit and the Chair of the Audit Committee) then a case meeting will be called with the Director of Finance and Performance, the Chief Executive, Internal Audit and Human Resources where the decision on whether to involve the police will be made. The police will then lead all investigations and Security, Human Resources, Internal Audit etc. will follow their directions.
- If the fraud is classed as serious evidence must be secured in a legally admissible form e.g. evidence must be carefully preserved; it should not be handled and no marks made on original documents; a record should be kept of anyone handling evidence. It is important that this is undertaken by the police if the evidence will later be relied on in criminal proceedings. See also reference above to application of TNA’s Forensic Readiness Policy.
- Prompt action may have to be taken against an individual who is under suspicion. Any action to suspend, discipline or dismiss the individual must be taken in conjunction with the HR department and in accordance with TNA’s Disciplinary Policy. Employees under suspicion who are allowed to stay on the premises must be kept under constant surveillance. An immediate search of the employee’s work area including computer files and filing cabinets must be made by the investigating officer, accompanied by either line manager, Director of Finance and Performance or similar and results noted and agreed between parties. All interviews in pursuance of a potential criminal prosecution must be conducted under properly controlled conditions in order to ensure that any statement taken and subsequently used as evidence in a court case will not be rejected as inadmissible. These interviews must be carried out by the police under their evidence rules.
Recovering Assets
TNA may ask the courts to pursue an action to recover all assets that have been taken illegally from TNA.
Liaison with Press
If there is likely to be media interest then Press Office must be contacted by senior management with what information can be released and the Press Office is to keep a log of who requests or is given the information and what information has been provided.
Learning Lessons and Improving Risk Mitigation Measures
At the conclusion of the investigation the person investigating the alleged fraud should identify any lessons learned. The Director of Finance and Performance is responsible for disseminating them across the organisation where appropriate. Where there has been a failure of control a full risk assessment and a revised procedure should be immediately put in place after taking advice from the Director of Finance and Performance, who will take action with managers to ensure that control changes are implemented quickly. Annex B The Civil Service Code
The Code sets out the four core values that underpin every civil servant’s work.
They are:
**Integrity** Putting the obligations of public service above personal interests.
**Honesty** Being truthful and open.
**Objectivity** Basing advice and decisions on rigorous analysis of the evidence.
**Impartiality** Acting solely according to the merits of the case and serving governments of different political parties equally well.
The Civil Service Code can be found in full at:
[www.civilservice.gov.uk/about/values/cscode/CS-Values.aspx](http://www.civilservice.gov.uk/about/values/cscode/CS-Values.aspx)
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e3f49c6b4e127a061be51417eb74bd0ac9dd78f8 | Freedom of information
Information on what a freedom of information request is and how to make a request.
Under the Freedom of Information (FOI) Act 2000 and the Environmental Information Regulations (EIRs) 2004, you can request any recorded information held by a public body. This includes information held on computers, in emails, datasets, printed or handwritten documents, images, videos and sound recordings.
The FOI Act and EIRs provide the general right of access to information held by public authorities.
Almost all of the requests received by the FSA are FOI rather than EIR requests. For this reason, this guidance focuses on submitting FOI requests.
The Freedom of Information Act
The Freedom of Information Act 2000 requires us to:
- provide information about the FSA through our publication scheme
- provide a guide to this information, and
- respond appropriately to requests for information within 20 working days.
Who can make a request
Anyone can make a freedom of information request. You do not have to be a UK citizen, or resident in the UK to submit a request. Freedom of information requests can also be made by organisations, such as newspapers, campaign groups, or companies.
Before you make an FOI request
Before you make an FOI request, you should check our website to see if the information you require is already available. We are committed to the transparent and open publication of information explaining what we do and how we ensure that food is safe.
Our guidance on what we publish outlines the range of information available online. The publication scheme details:
- information available by class, such as our priorities, policies and procedures
- whether information is published on the internet or as a hard copy
- whether the material is available free of charge or on payment of a fee.
You can check previous published FOI requests via our datasets. Some sensitive information is not available to the public. If this is the case, we will tell you why we cannot provide some, or all, of the requested information.
This will be through using one or more of the exemptions of the Freedom of Information Act. Making an FOI request
You can make a freedom of information request by email to [email protected]. You can also write to us by post to:
FOI, Complaints and Transparency Team Food Standards Agency Clive House, 70 Petty France Westminster London SW1H 9EX
When making a request, you must provide:
- your name
- an address where you would like the information sent to (this can be an email or postal address)
- a clear description of the information you want. You should be as specific as possible in your request and avoid general questions.
If you need help forming your request you can visit the Information Commissioner's Office for useful tips.
Once we receive your request, we will write to you to provide an acknowledgement. We will provide our response to your request within the legal deadline of 20 working days.
Our response will let you know whether we hold the information. If we do, we will either supply a copy of the requested information, or set out the reasons why we believe an exemption applies.
Requests for personal data and subject access request should be sent to the Knowledge, Information Management Team (KIMS) at [email protected]
Exemptions
The FOI Act contains a number of exemptions which may apply to information held by the FSA.
We are required to consider whether an exemption is absolute or qualified.
An absolute exemption is where we are not required to consider the public interest in disclosing or withholding the information. Examples of absolute exemptions include:
- information accessible to the applicant by other means
- information that is personal and would breach the Data Protection Act 1998 and GDPR Act 2018
- information provided in confidence. A **qualified exemption** is where we are required to consider the public interest in disclosing or withholding the information. Examples of qualified exemptions include:
- information intended for future publication
- information that is pre-published research data
- information that impacts the health and safety of an individual
- information covered by Legal Professional Privilege (LLP)
- information that impacts the commercial interests of any organisation.
Once a qualified exemption is used, the FSA is legally able to extend the statutory deadline. This is only applicable if we require more time to consider the public interest arguments. This is the only time when the 20-working day statutory deadline can be extended without the response being treated as a late reply.
If we need to extend the deadline, we will write to you before the original response date to inform you of this.
**Appealing an FOI response**
If you are not satisfied with the way the FSA has handled your freedom of information request, you can request an internal review within two calendar months of the response letter. You should write to the FOI, Complaints and Transparency Team (FCT). They will arrange for the Complaints Coordinator to conduct the review.
The Complaints Coordinator can be contacted by email at [[email protected]](mailto:[email protected]) or by post at:
**FSA Complaints Coordinator**
**Food Standards Agency**
**FOI, Complaints and Transparency Team**
**Clive House, 70 Petty France**
**London**
**SW1H 9EX**
If you are not content with the outcome of the internal review, you may then apply directly to the Information Commissioner (ICO) for a decision. The ICO will investigate the case and decide whether your request for information has been dealt with in accordance with the requirements of the FOI Act.
Generally, the ICO will not investigate a case unless you have exhausted the internal review procedure provided by the FSA.
The Information Commissioner can be contacted online at [www.ico.gov.uk](http://www.ico.gov.uk) or by post at:
**Information Commissioner’s Office**
**Wycliffe House**
**Water Lane** How we use your personal information
The FCT team will use your personal information to log, consider and answer your FOI request to the FSA. We will liaise with colleagues internally (including those collating the information requested, and any other FSA offices with a valid interest in the response) as well as, on occasion, external third parties who may need to be consulted on any potential disclosure. We will not disclose personal details during any third-party consultations.
If you refer your request to the ICO, and thereafter the relevant tribunal system, we will share your information as necessary in answering regulatory enquiries and making submissions.
For more information about how we handle your personal information, and your rights under data protection legislation, please see our privacy notice.
Publishing responses
Our datasets list some of our responses to requests made under both the FOI Act and EIRs. We will publish information in this way where we consider that there is a wider public interest.
This decision to publish is guided by the following criteria:
- if there is a substantial public, rather than private, interest in the information
- if a number of requests have been made on the same or similar subject
- if publication would demonstrate how we spend money
- if publication would demonstrate how we exercise our regulatory functions and makes decisions
- if publication would inform public debate.
When publishing responses, we will remove all references to personal information where necessary to comply with the Data Protection Act 2018 and General Data Protection Regulation (GDPR).
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94c222d90ccd734c0ca340bfc4b5fd34ae2730b9 | Freedom of Information exemptions
First published: May 2016
Reviewed: June 2019
© Crown copyright 2019
You may re-use this publication (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence v3.0. To view this licence visit nationalarchives.gov.uk/doc/open-government-licence; or write to the Information Policy Team, The National Archives, Kew, Richmond, Surrey, TW9 4DU; or email: [email protected].
Any enquiries regarding this publication should be sent to us at [email protected]. Contents Introduction ........................................................................................................................................3 Summary of FOI Exemptions ...........................................................................................................4 Information exemptions (exceptions) in the Environmental Information Regulations ...............10 Introduction
The Freedom of Information Act 2000 (FOIA) repealed the vast majority of section 5 of the Public Records Act 1958 (PRA) which concerned access to public records. The text that applies to The National Archives (at s5(3)) now reads:
It shall be the duty of the Keeper to arrange that reasonable facilities are available to the public for inspecting and obtaining copies of public records in the Public Record Office which fall to be disclosed in accordance with the Freedom of Information Act 2000
Therefore, access to information in public records is provided under the FOIA although physical access to the records themselves continues to fall under the PRA.
Under the FOIA there is a presumption of openness, irrespective of the date of the record, unless an exemption applies.
There are two categories of exemption: absolute exemptions and qualified exemptions. An absolute exemption means there is no obligation under the FOIA to release the requested information (although there may be other reasons outside the act to do so). A qualified exemption means that the public authority has to assess the balance of the public interest for and against disclosure. The arguments against need to outweigh those in favour to justify non-disclosure. All exemptions in the Environmental Information Regulations are qualified and are called exceptions.
Exemptions can be either class- or prejudice-based. A class-based exemption means that if the information is of a type described in the exemption, then it is covered by that exemption. All absolute exemptions, and some qualified exemptions, are class-based. This means that in order to use the exemption the authority does not have to demonstrate that any particular harm would be caused by disclosure, however, in the case of qualified exemptions, authorities still need to consider the balance of public interest before deciding whether or not to disclose the information.
Prejudice-based exemptions are where the authority has to show that the prejudice or harm that is specified in the exemption either would, or would be likely to, occur. If an exemption is prejudice-based then the authority still must carry out the public interest test. Some FOI exemptions automatically cease to apply after 20 years, or some other pre-defined period. In the case of exemptions without a pre-defined cut-off date (indefinite exemptions), the information will remain exempt for as long as the criteria for the use of the exemption continues to be applicable.
The need to apply an exemption, or to apply it in the public interest, will generally diminish as time passes so that such records can be released eventually. The exemption for personal information (s40) ceases to apply when the individual concerned is no longer alive.
Summary of FOI Exemptions
The table below shows the exemptions to the rights to information, noting their duration and also whether the public interest test applies.
The designation ‘\* Secretary’ indicates that the Secretary of State must be consulted about a proposed refusal to disclose in the public interest information in a record in The National Archives or in a record retained under PRA s3(4).
The designation ‘20 \*\*’ indicates that the exemption duration has reduced to 20 from 30 years as a result of the Constitutional Reform and Governance Act 2010 section 46. This is an incremental transition from 2013 as per the Freedom of Information (Definition of Historical Records) (Transitional and Saving Provisions) Order 2012.
| Section | Exemption | Absolute or public interest test? | Class or prejudice test? | Duration | |---------|-----------|----------------------------------|--------------------------|----------| | 21 | Information already accessible (through another act or included in Publication Scheme) | Absolute | Class | Disapplied for records over 20 \*\* years old in The National Archives | | Section | Exemption | Absolute or public interest test? | Class or prejudice test? | Duration | |---------|---------------------------------------------------------------------------|-----------------------------------|--------------------------|----------| | 22 | Information intended for future publication (whether the date is determined or not) | Public interest | 'reasonableness' test | Disapplied for records over 20 \*\* years old in The National Archives | | 23 | Information supplied by, or relating to, bodies dealing with security matters (named) | Absolute unless in an historical record in The National Archives | Class | Indefinite * Secretary | | 24 | National security | Public interest | Prejudice test (using different wording: 'for the purpose of safeguarding national security' implies a test) | Indefinite * Secretary | | 26 | Defence | Public interest | Prejudice test | Indefinite * Secretary | | 27(1) | International relations – prejudice | Public interest | Prejudice test | Indefinite * Secretary | | 27(2) | International relations – information provided in confidence by other states or international organisations or courts | Public interest | Class | Indefinite * Secretary | | 28 | Relations within the UK (between the UK government, the Scottish Administration, the National Assembly for Wales and the Executive Committee) | Public interest | Prejudice test | 30 years * Secretary | | Section | Exemption | Absolute or public interest test? | Class or prejudice test? | Duration | |---------|---------------------------------------------------------------------------|-----------------------------------|--------------------------|----------| | | of the Northern Ireland Assembly) | | | | | 29 | The economy | Public interest | Prejudice test | Indefinite * Secretary | | 30(1) | Criminal investigations and proceedings conducted by the authority | Public interest | Class | Indefinite * Secretary | | 30(2) | Relating to civil or criminal investigations and proceedings which use confidential sources | Public interest | Class | Indefinite * Secretary | | 31 | Law enforcement | Public interest | Prejudice test | 100 years * Secretary | | 32 | Court records etc. | Absolute | Class | 20 \*\* years | | 33 | Audit functions | Public interest | Prejudice test | 20 \*\* years * Secretary | | 34 | Parliamentary privilege | Absolute | Prejudice test (using different wording: ‘for the purposes of avoiding an infringement of the privileges of) | Indefinite | | Section | Exemption | Absolute or public interest test? | Class or prejudice test? | Duration | |---------|---------------------------------------------------------------------------|-----------------------------------|--------------------------|----------| | | | either House’ implies a test) | | | | 35(1)(a)| Formulation of government policy | Public interest | Class | 20 \*\* years | | | | | * Secretary | | | 35(1)(b)| Ministerial communications | Public interest | Class | 20 \*\* years | | | | | * Secretary | | | 35(1)(c)| Law Officers’ advice | Public interest | Class | 20 \*\* years | | | | | * Secretary | | | 35(1)(d)| Operation of Ministerial Private Office | Public interest | Class | 20 \*\* years | | | | | * Secretary | | | 36 | Prejudice to effective conduct of public affairs | Public interest | Prejudice test | 20 \*\* years | | | | | This remains at 30 years for Northern Ireland material | | | | | | * Secretary | | | 37(1)(a), (aa), (ab) | Communications with Royal Family and Household (Sovereign and person who is, or becomes, heir and second heir) | Absolute | Class | CRAG Act has changed s37(1)(a) by splitting it into several parts | | | | | | 20 years or five years after death of person concerned, whichever is later | | 37(1)(ac)| Communications with other members of the Royal Family not on behalf of those covered by (a)-(ab) | Public interest | Class | 20 years or five years after death of person concerned, whichever is later | | | | | | * Secretary | | Section | Exemption | Absolute or public interest test? | Class or prejudice test? | Duration | |---------|---------------------------------------------------------------------------|-----------------------------------|--------------------------|--------------------------------------------------------------------------| | 37(1)(ad) | Communications with the Royal Household not on behalf of those covered by (a)-(ab) | Public interest | Class | 20 years or five years after death of Sovereign contemporary with the information, whichever is later * Secretary | | 37(1)(b) | Honours | Public interest | Class | 60 years * Secretary | | 38 | Health and safety | Public interest | Prejudice test | Indefinite * Secretary | | 39 | Environmental information (obliged to make available under the Aarhus convention, or would be obliged but for an exemption in Regulations under s74) | Public interest | Class | Indefinite * Secretary | | 40(1) | Personal information where the applicant is data subject | Absolute | Class | Lifetime of data subject | | 40(2) | Personal information where the applicant is a third party | Absolute in relation to categories (a)-(d) data, qualified in relation to category (e) data | Prejudice test (using different and complex wording): disclosure should not cause breach of the principles set out in— Article 5(1) of the GDPR, and section | Lifetime of data subject | | Section | Exemption | Absolute or public interest test? | Class or prejudice test? | Duration | |---------|-----------------------------------------------|-----------------------------------|--------------------------|-------------------------------| | | | 34(1) of the Data Protection Act 2018 | | | | 41 | Information provided in confidence | Absolute | Variation of prejudice test (breach of confidence must be ‘actionable’) | Indefinite | | 42 | Legal professional privilege | Public interest | Variation of prejudice test (claim could be maintained in legal proceedings) | 20 \*\* years * Secretary | | 43(1) | Trade secret | Public interest | Class | 30 years * Secretary | | 43(2) | Commercial interests | Public interest | Prejudice test | 30 years * Secretary | | 44 | Prohibitions on disclosure: | Absolute | Class | Indefinite | | | (a) acts | | | | | | (b) community obligations | | | | | | (c) contempt of court | | | |
## Information exemptions (exceptions) in the Environmental Information Regulations
| Regulation | Exception | Absolute or public interest test? | Duration | Note | |------------|---------------------------------------------------------------------------|-----------------------------------|----------------|----------------------------------------------------------------------| | 12(3) and 13 | Personal information | As FOIA s40 | Lifetime of data subject | | | 12(5)(a) | International relations, defence, national security or public safety | Public interest test | Indefinite | | | 12(5)(b) | Course of justice, ability of a person to receive a fair trial or ability of a public authority to conduct a criminal or disciplinary inquiry | Public interest test | Indefinite | | | 12(5)(c) | Intellectual property rights | Public interest test | Indefinite | | | 12(5)(d) | Confidentiality of proceedings of that or any other authority where such confidentiality is provided by law | Public interest test | Indefinite | Cannot be used if information relates to emissions | | 12(5)(e) | Confidentiality of commercial or industrial information where such confidentiality is provided by law to protect a legitimate economic interest | Public interest test | Indefinite | Cannot be used if information relates to emissions | | Regulation | Exception | Absolute or public interest test? | Duration | Note | |------------|-----------|----------------------------------|----------|------| | 12(5)(f) | Interests of person who provided information where that person: (i) was not under, and could not have been put under, a legal obligation to supply it to that or any other authority (ii) circumstances of supply are not such that any authority is entitled, apart from EIR, to disclose it, and (ii) has not consented to its disclosure | Public interest test | Indefinite | Cannot be used if information relates to emissions | | 12(5)(g) | The protection of the environment to which the information relates | Public interest test | Indefinite | Cannot be used if information relates to emissions |
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a3d4015d66e5cf2e3bc162f8c6217cba3b8477d2 | Guidance - Freedom of Information Publication Schemes
Number: 19 Date: 15 October 2002 (Revised 15 March 2008)
The purpose of this guidance is to draw a distinction between the supply of information held by public authorities under Freedom of Information legislation and the re-use of that information, explaining those circumstances where formal licensing is required.
Background
1. Under the Freedom of Information Act 2000 (FOI) each public authority has a duty to adopt and maintain a Publication Scheme. Publication Schemes provide details of information which each public authority publishes or intends to publish.
Copyright and Licensing
2. Information listed in Publication Schemes, which can be disclosed under FOI, will be subject to copyright protection. The supply of documents under FOI does not give the person who receives the information an automatic right to re-use the documents without obtaining the consent of the copyright holder. Permission to re-use copyright information is generally granted in the form of a licence.
Chapter III of The Copyright, Designs and Patents Act 1988 (CDPA 88) describes circumstances when copyright material can be reproduced without infringing copyright. These are generally referred to as the fair dealing provisions. The Copyright and Related Rights Regulations 2003 (SI 2003 No. 2498) amended certain provisions of the Copyright, Designs and Patents Act 1988. One of the most significant changes was to specify that the fair dealing provisions for research only applies where the copying is for a non-commercial purpose. This guidance reflects these changes. Under fair dealing, copyright material can be reproduced for the purposes of:
- Research for non-commercial purposes and private study; and
- For criticism, review and news reporting.
Chapter III of the CDPA 88 also sets out the special arrangements that apply to copying copyright material for educational use and to copying by libraries and archives. Further information on fair dealing and other exceptions to the general copyright procedures can be found on The Patent Office website at: www.intellectual-property.gov.uk/std/faq/copyright/ex_fair_dealing.htm It is always advisable to check that any copying of copyright material is allowed. If in doubt, contact: HMSO Licensing. Crown Copyright
4. Copyright works made by central government qualify for Crown copyright protection under section 163 of the CDPA 88. The Controller of Her Majesty’s Stationery Office has responsibility for the administration and licensing of Crown copyright. Various categories of Crown copyright material can be reproduced without a formal licence. OPSI Online provides details of categories of Crown copyright material where this applies, including examples of information where the copyright has been asserted but waived. This includes government press notices, legislation, ministerial speeches, consultation documents, documents featured on official websites (except where expressly indicated otherwise), headline statistics and unpublished public records. More details of these categories can be found at: www.opsi.gov.uk/advice/crown-copyright/copyright-guidance/index.htm
5. At Annex A, you will find sample wording that can be used and adapted to explain:
- who owns copyright in the information; and
- contact details on how to obtain a licence.
While FOI deals with all public authorities, it is important to remember that Her Majesty’s Stationery Office’s responsibility extends only to those public authorities that produce information that is protected by Crown copyright. We call these organisations Crown bodies. The advice contained in this Guidance Note is primarily aimed at these organisations. However, non-Crown bodies may, if they wish, adapt the wording for their own use and we have included an example of how this could be done at Annex A.
6. The Publication Scheme should feature an appropriate copyright notice such as those provided at Annex A. More detailed guidance on copyright notices for Crown bodies can be found on OPSI Online at: www.opsi.gov.uk/advice/crown-copyright/copyright-guidance/copyright-and-publishing.htm. Non-Crown bodies may wish to adapt the notices to meet their own specific needs.
Third Party Copyrights
7. Not all information listed in Publication Schemes will necessarily be owned by the public authority which produced the Scheme. It will, therefore, help users if any such material is identified together with details of who owns the copyright, where known.
Other Forms of Intellectual Property Rights (IPR)
8. Most information falling within the scope of FOI is likely to be covered by copyright. It is conceivable, however, that some of the information supplied under the terms of the Act could involve other forms of intellectual property, e.g. patents and trademarks. The re-use of these forms of IPR would also require the permission of the rightsholder. Information on IPR generally can be found on the Patent Office website.
CAROL TULLO Controller Her Majesty’s Stationery Office Queen’s Printer
ANNEX A
Publication Schemes: Copyright and Licensing Notices
Where licensing of Crown copyright is handled by Her Majesty’s Stationery Office:
The [insert Name of Department] is a Crown body and the information we produce is subject to Crown copyright, which is administered by Her Majesty’s Stationery Office. The material listed in this Publication Scheme is Crown copyright unless stated otherwise. The copyright in some of the material which may be found in this Publication Scheme has been waived, meaning you can reproduce this material freely. Categories of material for which copyright has been waived include: government press notices, legislation and explanatory notes on the legislation, ministerial speeches, consultation documents, documents featured on official websites (except where expressly indicated otherwise), headline statistics and unpublished public records. More details of these and other categories can be found at: www.opsi.gov.uk/advice/crown-copyright/copyright-guidance/index.htm
For other types of material however, the supply of documents under Freedom of Information does not give the person or organisation who receives them an automatic right to re-use the documents in a way that would infringe copyright, for example, by making multiple copies, publishing and issuing copies to the public.
Brief extracts of any of the material included in this Publication Scheme may be reproduced under the fair dealing provisions of the Copyright, Designs and Patents Act 1988 (sections 29 and 30) for the purposes of research for non-commercial purposes, private study, criticism, review and news reporting.
Details of the arrangements for reusing Crown copyright material can be found on the OPSI website or by contacting Her Majesty’s Stationery Office at:
Office of Public Sector Information
Information Policy Team Kew Richmond Authorisation to re-use copyright material not owned by the Crown should be sought from the copyright holders concerned. If in doubt, users should contact Her Majesty’s Stationery Office in the first instance.
Where licensing of non-Crown copyright is handled by a public authority:
The copyright in the material listed in this Publication Scheme is owned by [Name of Public Body] unless otherwise stated. The supply of documents under Freedom of Information does not give the person or organisation who receives them an automatic right to re-use the documents in a way that would infringe copyright, for example, by making multiple copies, publishing and issuing copies to the public.
Brief extracts of the material may be reproduced under the fair dealing provisions of the Copyright, Designs and Patents Act 1988 (sections 29 and 30) for the purposes of research for non-commercial purposes, private study, criticism, review and news reporting.
Details of the arrangements for reusing the material owned by [Name of Public Body] can be found on our website at: [ xxxxxx ] or by contacting us at:
\[xxxxx
xxxxx
xxxxx
xxxxx
xxxxx\]
Authorisation to re-use copyright material not owned by [Name of Public Body] should be sought from the copyright holders concerned. If in doubt, users should contact us in the first instance.
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a0bc8da5f729ff2652670798015910566cd0efd1 | Flood Risk from Extreme Events (FREE)
Progress Report October 2008
Chris. G. Collier, FREE Science Coordinator Centre for Environmental Systems Research, University of Salford
A. Progress against Research Themes
| Theme 1: Improved modelling and forecasts through new data assimilation methods | Theme 2: New approaches to modelling uncertainty in an integrated modelling environment | Theme 3: The statistics of extremes and their use | Theme 4: The Impacts of a changing climate on the occurrence of flooding | |---|---|---|---| | Illingworth – NWP and new remote sensing observations | Zou – linking meteorological, hydrological and coastal models using ensemble methods | Svensson – joint probability analysis of fluvial and estuarine floods | Osborn – changing occurrence of rainfall | | Dance – initialisation of coastal sediment models | Beven – constraining uncertainty in hydrologic modelling | McSharry – quantifying flood risk using density forecasts based on a new digital archive and weather ensemble predictions | Cloke – changes in hydrological and hydraulic flows | | TBC – reducing the risk of pluvial flooding | Wheater – groundwater modelling of rare events | Toumi – a hybrid model for predicting the probability of very extreme rainfall | Reynard – changes in fluvial flooding and inundation | | O’Connell – impact of land use on behaviour of floods | | | Williams – changes in characteristics of coastal floods | Theme 1: Improved modelling and forecasts through new data assimilation methods
Considerable progress has been made in developing numerical weather prediction and new remote sensing observations (Illingworth). Five months of quasi-operational refractivity data has now been collected at Cobbacombe. In early April the Intermediate Frequency filters were optimised for refractivity work at Cobbacombe providing a significantly improved range pattern of the radar pulse. Comparisons with synoptic stations close to Cobbacombe over several months show that the refractivity inferred from the radar tracks well. The accuracy of the radar data continues to be assessed so that errors can be derived. Data is clearly degraded when the radar transmit frequency exhibits very large excursions. Following the success of the trials at Cobbacombe, the code will be rolled-out to several other radars in the UK operational network in the coming months.
On deriving insect winds, the comparison between the Thurnham and Chenies radar has been completed, pending modifications to improve the Thurnham radar's sensitivity. The insect season has begun and data are now being examined from all operational Doppler radars. This will give a better idea of data availability and coverage for insect wind measurements. The operational threshold for Doppler returns has been lowered, so during this summer changes to insect return utilisation for VADs in the Met Office's NWP are being monitored. Test assimilations of insect VADs have been conducted with the Met Office observation processing and assimilation systems. Experiments to assimilate VADs from all radars into a full quasi-operational assimilation-forecast cycle are under development. This will test the effect of the additional wind data on the forecast. [Relevance: Observing the two new parameters is crucial to the success of the project.]
Further analysis of the previously-performed 4km ensemble simulations for CSIP [Convective Storm Initiation Project funded by NERC] IOP18 is being carried out and is now near completion. The analysis aims to determine the direct effects of the perturbation on the model state, and based on this to build an understanding of the variations in cloud distribution and RMSE of precipitation. Preliminary results indicate that the sensitivity to the perturbation changes during the day, and is dependent on perturbation intensity with a modulating effect due to the typical scale length. Conclusions from this work will drive the choice of the perturbation strategy for the 1.5 km experiments. The Boscastle flood was chosen for several parts of this study as common event to test both the hydrological effects of the current version of the ensemble, and the data exchange with the Joint Centre for Mesoscale Meteorology (JCMM). [Relevance: Knowledge of physical processes that lead to predictability and error growth is key for a meaningful design of the meteorological ensemble.]
Further results have been obtained using the distributed G2G hydrological model configured over an area of southwest England as part of the Boscastle case study. The model performance is being assessed in both simulation and forecast mode (assimilation of flow data) for a range of lead times. [Relevance: Progress on a convective storm case study using high resolution NWP rainfall forecasts in a distributed flood forecasting model and in ensemble mode.]
The project led by Dance has received tidal constituent data from Roger Proctor at POL. These will provide the tidal boundary conditions for the Morecambe Bay and Dee estuary hydrodynamic models. Discussions are underway with Kevin Horsburgh at POL (replaced Roger Proctor who has taken a new position in Hobart) to obtain surge input data for the hydrodynamic models. Surge input is necessary for assigning heights to the waterline data.
Various numerical schemes for solving the sediment conservation equation have been received, and it has been decided to use the Euler-WENO method of Long et al. (Long W, Kirby JT, Shao Z, 2008. A numerical scheme for morphological bed level calculations. Coastal Engineering 55, p167.). This has been implemented in the old Morecambe Bay model, for comparison against the old Lax-Wendroff scheme, which suffers from dispersion. The Euler-WENO scheme has some teething problems. The data assimilation/parameter estimation scheme has been further developed to estimate the parameters associated with the sediment flux in a simple nonlinear model. The results of this scheme are currently being analysed.
There has been significant involvement with other bodies including the Environment Agency, HR Wallingford and Lancaster City Council. Nigel Cross of Lancaster City Council arranged for Tania Scott and Polly Smith to visit Morecambe Bay and familiarise themselves with the site. This involved a quad-bike tour of the flats organised by NWNW Sea Fisheries Association. Nigel Cross visited ESSC to discuss the project and exchange data. He is interested in mapping changes in low-water channels in Morecambe Bay for flood management purposes, and to aid navigation across the flats. Nigel supplied the project with complete LiDAR coverage of Morecambe Bay flown at low-water in November 2005. This will be extremely useful for data assimilation and model validation. He also provided data from GPS surveys of the tidal flats. In return access to SAR images was provided.
**Theme 2: New approaches to modelling uncertainty in an integrated modelling environment**
The project aimed at linking meteorological, hydrological and coastal models using ensemble methods (Zou) has set up the MM5 mesoscale model in two regions to simulate extreme events included in the ERA40 re-analysis data set such as the 1987 and 1990 storms. The MM5 has been setup using the four dimensional data assimilation option (fdda) in order to assimilate the re-analysis data when running the model for several days. The MM5 allows assimilating wind, temperature and mixing ratio. For every field to be assimilated, a nudging coefficient has to be defined allowing the model state to move towards the analysis. The nudging coefficient is very important because it may force the model state too much towards the re-analysis, decreasing the ability of the model to resolve mass-momentum imbalances. Different nudging factors have been tested and the results will be compared using hundred of wind and atmospheric pressure observations from ground surface stations within the UK. A study is also currently underway to develop a methodology to generate ensemble simulations using the re-analysis data. The work on tide, surge & wave model has focused on the sensitivity tests of both POLCOMS and WAN models to gain further understanding of hydrodynamics produced by the model. Two sites have been used for these tests: the Irish Sea and English Channel, in order to get the model ready for specific sites to be identified in the project.
(a) Irish Sea
The quantitative assessment of wind and wave boundary forcing effects on wave climates has been carried out by running WAM model alone in the North Atlantic Sea (NAS) and in the Irish Sea (IRS). The model was first run in NAS domain, with 64 different wind forcing cases: combinations of 8 different wind directions (0º, 45º, 90º, 135º, 180º, 225 º, 270 º, 315 º, anti-clockwise to East) with 8 different wind speed (5m/s, 10m/s, 15m/s, 20m/s, 25m/s, 30m/s, 35m/s, 40m/s). The model was then run in IRS domain with three scenarios: (a) wind forcing only; (b) wave forcing only; and (c) both wind and wave forcing for all the wind speeds. The same wind conditions were used in these two domains and the wave forcing conditions for the IRS domain were obtained from the larger NAS domain by nesting techniques. Fig 1 shows the comparisons of the significant wave height and mean wave direction (vectors) between different forcing scenarios for cases with U=40m/s and Dir=90 º. It can be seen clearly that wave height responses to the wind forcing well, but is limited by the wind fetch (Fig 1a). As shown in Fig 1b, the wave forcing which represents the swell waves from far field affects significantly the wave field in the domain, but propagates to the limited area near the forcing boundaries, without the details of the waves affected by the local winds, in comparison with Fig 1c. The sensitivity of wind velocity and direction on different locations has been analysed and several look-up tables of the significant wave height at selected points have been created, although not shown here.
(b) English Channel
The POLCOMS and WAM models have also been successfully set up in the English Channel, with appropriate implementations of parameter settings for local bathymetry, tidal and wave boundary conditions required. The preliminary results on tidal currents and waves are shown in Fig 2. Further validations of models with the field measurement data is currently being carried out.
Computed surface elevation (m) and tidal currents (m/s)\
Computed significant wave height (m)
Figure 2: Computed tides and waves at 00:00:00 09/11/2008
Constraining uncertainty in hydrological modelling (Beven) has involved has involved assembling comprehensive data sets for model application and development for the specified test site from a variety of sources. In particular, topographic information (such as river cross sections, LiDAR and IfSAR data) were acquired and processed (see Fig. 3). Also, historic river flow and level data have been gained from the Environment Agency (EA) for the River Dee, River Alun and other major tributaries. Finally, two satellite images of the December 2006 flood event were acquired from the European Space Agency (ESA) and processed in order to derive flood extent maps (see Fig. 3).
Figure 3: Test site: River Dee between Farndon and Iron Bridge and River Alyn between Pont-y-Capel and the confluence (black line); Environment Agency gauging stations (black circles); flood extent derived by using the ESA satellite image (ERS-2 SAR, grey area) [left panel]; DTM at 2 m resolution derived by using LiDAR and IfSAR data (grey scale) [right panel].
A variety of 1D and 2D hydrodynamic models were built for the test site (e.g. Fig. 4):
- 1D model (HEC-RAS);
- Low resolution 2D model (50m, LISFLOOD-FP, Fig. 2);
- High resolution 2D model (20m, LISFLOOD-FP). Working is ongoing in developing adaptive real time Transfer Function forecasting techniques applicable for the River Dee. Work has focused upon capturing the interaction of the tidal and river dynamics. Of particularly interest have been the tidal bore and any control placed on the drainage of the flood plain (after flooding). The nature of the transfer functions constructed for a prediction of a single location is inherently multiple input, single output (MISO). The ARMAX transfer function formulation for MISO systems appears unable to reproduce the system dynamics so alternative transfer function formulations are being explored. These include the use of state dependant denominators and the use of a separate transfer function for each input the results of which are then summed (see Jakeman et al., 1980, IEEE Transactions on systems, man and cybernetics, Vol 10 Pgs 593-602.)
An adaptable framework for incorporating heteroscedacicity into the error structure for the forecasting model has been formalised and incorporated within the simulation environment constructed for testing purposed.
Software and hardware infrastructure has been configured and deployed at the gateway site in the new River Dee deployment. This infrastructure, in combination with the previously reported software framework will allow the deployment of transfer function models developed by Lancaster’s Environmental Science department to be hosted locally on the flood plain and integrated with the sensing hardware.
Deployment of the gateway node is complete and further deployment locations (Figure 5) have been refined based upon the results of the initial results from WP1, on-site range testing and surveying of specific locations for sensor deployment. Discussions are ongoing with local landowners and fishing clubs to ensure suitable access. The previously reported Dust/Java wrapper has been extended significantly, allowing for fine-grained remote control of critical mote functionality such as scheduling sensor readings and modifying network structure. A new C-based Dust network driver has also been created allowing the Dust motes to be used as a network interface card by host systems with insufficient resources to support Java. Additionally, a graphical system has been developed for logging and retrieving sensor data over the GSM link to the flood site.
The campus-based test deployment of Dust sensor nodes has been successfully completed and factors such as battery life and range have been tested with extremely positive outcomes (e.g. high reliability and battery life of multiple years). Ongoing work in this area now focuses upon testing of the same hardware at the River Dee deployment site.
Work has continued on improving the understanding of the groundwater system to be able to better predict groundwater flooding (Wheater). Specifically, an understanding of the 2000/1 groundwater flooding event continues to be developed, including the collation of data which describes this event. The MaBSWeC model has been enhanced to simulate the 2000/1 event on a daily time step. Work has also been carried out to ensure that the ZOOMQ3D model can be run on the National Grid Service (www.ngs.ac.uk). Time series techniques have been developed and applied to simulate groundwater levels.
The 1D model has been applied to all field sites. Performed well except in 2006, where large gaps in rainfall data are thought to be the problem. Further insights will be made with 2D model. This has been applied to the hillslope around East Ilsley. Currently the simulated water table response is too attenuated, which is thought to be associated with the specific storage.
A meeting was held after the last quarterly report submission, in which a work plan was drawn up regarding how to proceed with modelling of the river Lambourn around the village of Boxford. Specific objectives were to determine the distance away from Boxford beyond which changes in aquifer parameters would not affect Boxford hydrology and to determine how adjusted aquifer parameters at Boxford would affect the time-variant boundary conditions supplied by the larger regional model, were that model to be run with those adjusted parameters. Additionally, it was agreed that the effect of layering would be examined. This work is ongoing.
A technical meeting of the staff from the project led by O’Connell was held at Lancaster (May 28/29th). The meeting included a field visit to the Hodder catchment, during which several sites undergoing land use/management changes were identified for small scale monitoring (by Newcastle University) to support the Imperial College metamodelling (WP1). Newcastle are in the process of obtaining permissions for the installation of weirs at the sites, which are required for the provision of accurate flow measurements. A technical meeting was also held at Gregynog (July 10th/11th). This included a field trip to the Pontbren catchment (Upper Severn), which has been the focus for the initial development of the IC metamodelling.
Soil properties data (including HOST) have been purchased from NSRI (Cranfield) for each of the three study catchments (Severn, Eden, Hodder). These data are being used to setup the small-scale physics-based models that underpin the metamodelling approach, and to support regionalisation.
A preliminary comparison of regionalisation approaches has been carried out for Pontbren. A new approach to regionalisation has been developed, using the Base Flow Index (from the HOST classification) as an uncertainty restriction for modelling current conditions. Land use effects for the Pontbren field-based model have been evaluated using a local precipitation scenario and an extreme event recorded near Carlisle.
A physics-based model of drained / undrained peat response has been developed and used for sensitivity studies. The development has utilised data from the Upper Eden (Gais Gill). Agreement has been reached with Joe Holden (University of Leeds) to access experimental data sets from peat plots/hillslopes to support model development and parameterisation. This will supplement the data being collected in the Hodder.
Software has been developed to generate river networks from high resolution DEMs). This will be used to couple the hydraulic models and the runoff generation metamodels for the test catchments. A field survey of channel cross sectional geometry has been performed in the Hodder. Using these data, scaling relationships have been developed (bankfull depths / widths / area relationships with upstream area) to fine-tune a DEM generated network of the Hodder. A grid representation of the Pontbren catchment has been prepared (100m x 100m scale). The grid representation and corresponding parameter sets have been provided for Information Tracking implementation. The Upper Severn (to Shrewsbury) boundaries have been obtained from Hannah Cloke (King’s College London FREE project).
Significant advances have been made in the development of a new algorithm for Information Tracking. An adjoint model has been created for the non inertia approximation to the Saint Venant equations, with special attention given to the accurate representation of flows at junctions and backwater effects. The algorithmic differentiation of the adjoint model provides a Jacobian, the elements of which relate the sensitivity of an impact (e.g. the catchment peak flows) to a change in a model parameter at a particular location. Using this approach it is possible to simultaneously calculate the impact sensitivities with respect to all possible perturbations in channel flow, resulting from a change in a model parameter, in a single simulation (i.e. the sensitivity is known for a change at any given landscape unit). This allows the creation of 2D vulnerability maps, showing where local scale changes will have the greatest impact on downstream flooding.
Current activities are focusing on the further development of the adjoint model to study the propagation of impacts during extreme events, initially focusing on the Hodder. To create physically realistic coupling, attention is being paid to the interaction between channel processes and the hydrological processes on adjacent land surface (i.e. flood inundation processes).
A space-time rainfall model has been developed for the Upper Eden (upstream of Temple Sowerby). In the first instance, the model has been calibrated using daily data. Hourly data have now been assembled to improve the calibration. Finally a literature review on peat hydrology has been completed. This includes information regarding the hydrological impacts of upland peat gripping and grip blocking.
**Theme 3: The statistics of extremes and their use**
Three more trial locations have been selected in Great Britain, and data have been retrieved for use by both CEH Wallingford (Svensson) and Lancaster. The trial locations now total five sites, with varying soils/geology and climatic characteristics. The CEH work focuses on an event-based joint probability approach, although continuous data series are used to appropriately define the event variables. The characteristics of rainfall events of different durations are being investigated, and some tentative series of monthly rainfall maxima have been derived. Monthly river flow maxima have also been retrieved and plotted together with the associated rainfalls. Convex hull plots have been derived for some of the data, to illustrate the seasonal variation in the dependence between the variables, and in the marginal distributions of the variables. Lancaster have concentrated on developing covariate and random effects models for the rate of occurrence of flow events. Covariates used so far include baseflow and a moving average of (lagged) rainfall. The use of random effects was motivated by the observation that the number of events per year is over-dispersed for many UK catchments (even after accounting for covariates). Random effects are useful when there are missing covariates. Investigations of a more theoretical nature have also been made into the effect on the distribution of the annual maxima when different probability distributions are used for the number of events per year and, when included, the random effects. So far efforts have been concentrated on a single site, with considerable time being spent on identifying flow events and their properties. Some time has also been spent on getting acquainted with relevant hydrological literature.
The project led by McSharry has reached a milestone in reporting on a procedure for producing site-specific probability density rainfall forecasts which are needed to price insurance premiums, contracts, and other financial products based on precipitation.
The digitisation and GIS part of the project including British Rainfall (BR) data entry and map scanning; BR data entry checking and extreme event classification has been complete. A data preparation analysis including ECMWF data conversion and other data arching (Met Office MIDAS, NCEP GENS forecasts) has also been completed. In addition GLM ensemble calibration and quantile regression have been completed as has the model development.
The spatio-temporal correlations in UK daily rainfall amounts over the Thames Valley have been investigated, and a statistical, Markov chain generalised linear models (Markov GLM) of rainfall have been constructed. Point and density forecasts of total rainfall amounts have been produced, and compared with each other and with forecasts of probability of occurrence rain from other proposed density models, including persistence, statistical climatology, Markov chain, unconditional gamma and exponential mixture models, and density forecasts from GLM regression post-processed NCEP numerical ensembles, at up to 45 day forecast horizons.
The Markov GLMs and GLM processed ensembles produced skilful one-day ahead and short term point forecasts. Diagnostic checks show all models are well-calibrated, but GLMs perform best under the continuous-ranked probability score. For lead times of greater than one day, no models were better than the GLM processed ensembles at forecasting occurrence probability. Of all models, the ensembles are best able to account for the serial correlations in rainfall amounts. In conclusion, we recommend GLMs for future site-specific density forecasting. Investigations explain this conclusion in terms of the interaction between the autocorrelation properties of the data and the structure of the models tested.
Work on the development of a hybrid model for predicting the probability of very extreme rainfall (Toumi) continues. A numerical modelling case study of a very extreme rainfall event is underway. In order to fully understand the response of the model to changes in atmospheric moisture availability a simpler set of idealised experiments are underway. To date, most of the work has concentrated on these idealised experiments. A suite of experiments using the WRF (Weather Research and Forecasting) model has been completed. This suite of experiments comprises both 2-D and 3-D simulations of an idealized squall line for a range of temperatures with relative humidity held constant. In this way, the precipitable water (i.e. the atmospheric moisture availability) can be changed while the system remains in dynamic balance. A detailed analysis of the model response to the changes in moisture availability is currently being undertaken.
The WRF model (version 3) is a fully compressible, non-hydrostatic regional atmospheric model that is under constant development through the collaborative efforts of various research and operational institutions worldwide. One of the main advantages it has over other similar models is that it has been developed to enable simulations of a number of atmospheric situations within an idealised framework. This allows the user to fully isolate the effects of changes to any of the forcing mechanisms in the initial conditions or model physics.
For the experiments the model is run with a horizontal resolution of 1km on a domain that is 800km in the x-direction and 160km in the y-direction (for 3-D simulations). 80 vertical levels are used with a grid spacing of 250m with the model top at a height of 20km. Open lateral boundary conditions are used in at the x boundaries and periodic boundary conditions are applied at the y boundaries. For cloud microphysics parameterisation, a Kessler type scheme is used. This is a simple warm cloud scheme that includes water vapour, cloud water and rain. The effects of Coriolis force, surface physics and atmospheric radiative transfer are not included.
The model is initiated with vertical profiles of temperature and water vapour that are based on a typical condition for strong midlatitude convection. The vertical profile of wind includes strong shear in the lowest 2.5 km of the atmosphere. Squall lines are initiated by a line oriented thermal perturbation with a x-radius of 5km and vertical radius of 1.5 km placed at the domain centre 1.5km above the ground. For the 3-D experiments small random temperature perturbations are added to the thermal in order to accelerate the squall line towards a 3-dimensional structure.
For constant relative humidity, theory suggests that the amount of atmospheric precipitable water is constrained by the water vapour content of saturation, which is governed by the Clausius-Clapeyron relation. The Clausius-Clapeyron relation predicts that there will be a 7% increase in precipitable water per degree of warming. Fig. 1 shows the peak 1-hour rainfall accumulation from the simulated idealised squall line for a range of initial surface temperatures. It is clear that up to a temperature of about 25C the response of peak hourly precipitation to increased temperature (and therefore moisture as relative humidity is held constant) scales with the Clausius-Clapeyron relation. However, at higher temperatures this scaling diminishes. For the 8-hour accumulation period, the peak accumulation actually decreases with increasing temperature. Figure 6: Peak precipitation accumulation on a logarithmic scale as a function of temperature.
The solid line in Figure 6 shows the peak 1-hour precipitation, the dashed line shows the peak 8-hour accumulation and the dotted lines show the Clausius-Clapeyron relation (7% increase per degree C). The decrease in peak 8-hour accumulation and diminishing increase for the 1-hour accumulation with increasing temperature is due to an increase in the speed at which the squall line moves. Fig. 7 shows Hovmöller diagrams for squall lines with initial surface temperatures of 22°C, 25°C and 28°C. From Fig. 7 it is clear that as the temperature is increased, the heaviest rainfall moves more rapidly to the east. At this stage, the team believe that this is due to increased latent heat release as a result of a warmer moister atmosphere. This energy is converted to momentum that increases the strength of the rear-to-front flow in the squall line thus accelerating the system. A full momentum analysis is being undertaken in order to test this hypothesis. The results suggest that, at least for the case of an idealised squall line, increased moisture availability does not necessarily result in an increase in point rainfall accumulations, particularly for warmer temperatures and longer accumulation periods. This means that rainfall extremes, which are typically associated with convective rainfall, may not be governed by moisture availability alone. Further idealised experiments are planned that will help to clarify the role of other influences on extreme rainfall for squall lines such as vertical wind shear and topography. Initially the plan was to use the Met Office Unified Model (UM) to study the July 2007 extreme rainfall event. However, for consistency with the idealised experiments, it was decided to use the WRF model. In addition, it was felt that the WRF model provides a much more user-friendly solution to performing the sorts of experiments of interest.
A control run to simulate the July 2007 event has been carried out using the WRF model with initial and boundary conditions provided by analyses from the Global Forecasting System. The model is run in nested configuration with the highest resolution nest having a grid length of 3km. At this grid length it is expected that the model will be able to explicitly resolve convective processes, so no cumulus parametrisation is employed. An initial examination of the model output suggests that WRF does a reasonable job in simulating the rainfall extremes observed in this event, although there are some small errors in the timing and location of the extreme rainfall. For this project interest is focused on the effects of increasing atmospheric moisture availability on the extreme amounts of rainfall rather than timing and location of these extremes. extremes, so it was felt that such errors would not affect the interpretation of the results. Modifications have been made to the WRF code to allow the temperature in the initial and boundary conditions to be increased whilst keeping the relative humidity fixed in a consistent manner. Simulations are ongoing.
**Theme 4: The impacts of a changing climate on the occurrence of flooding**
Work continued to study the relation between air flow indices and precipitation extremes in the UK (Osborn). VGAM (Vector Generalised Additive Models) statistical models have been developed that describe the relationships between airflow indices and the probability distribution of monthly precipitation maxima across the UK. The spatial and seasonal variations in the statistical model parameters have been visualized, and physical explanations for these variations, including elevation and exposure to prevailing winds, have been sought. These statistical models have been used to identify time-variations in UK precipitation extremes that can be explained by time-variations in the air flow characteristics over the UK, and also the residual variations that cannot be explained in this way by our models.
New work has been begun during this period to extend the analysis of the relationships between air flow and UK precipitation extremes to simulations with the HadRM3H regional climate model.
Knowledge about the covariates is important to identify physical drivers of extreme precipitation. These links are now being used to evaluate the performance of regional climate models. Knowledge about their future behaviour will also help to better predict changes in extreme precipitation.
Work continues (Cloke) on developing uncertainty assessments of flood inundation impacts using spatial climate change scenarios to drive an ensemble of distributed models for extreme conditions. The aim is to improve estimates of flood inundation hazard by propagating uncertainties from Regional Climate Model precipitation projections into an ensemble of flood inundation predictions for large river catchment scales, based on the Upper Severn catchment, UK (in particular the reach Buildwas to Montford which includes the town of Shrewsbury). The initial simulation set is now almost complete with regards to generating the various input precipitation fields, routing these through part of the model cascade (LisfloodRR and FP) and analysing the sensitivities of the modelling components. All RCM data is now downloaded and processed along with new observed gridded meteorological data from the Met Office.
Overall the intention is to use a cascade of distributed climate, rainfall-runoff and flood inundation models to: (i) Quantify the top-end uncertainties by assessing extreme precipitation fields produced using two contrasting approaches. (ii) Assess the impact of these top-end uncertainties on flood inundation predictions. (iii) Quantify all inter- and intra- model uncertainties of the cascade framework for various climate, land use and soil moisture scenarios. (iv) Assess the impacts of using different existing rainfall-runoff and flood inundation models with a relatively low number of simulations using novel techniques. (v) Deliver a methodology for general use that is highly scaleable. The major progress over the last 6 months in the project FRACAS: A next generation national Flood Risk Assessment under climate ChAnge Scenarios (Reynard) has been in applying the large basin NSRP model to simulate spatial rainfall for the Eden catchment (Cumbria) at the hourly level. All available hourly and daily rainfall data above Temple Sowerby (near Carlisle, 616 km² area) have been analysed and used in fitting the model (see Figure 8).
The model performs well for a range of daily and hourly properties, including cross-correlations (Figure 9) and extremes at high and low elevation sites (Figure 10).
Figure 8: The locations of the daily and hourly raingauge records for the Eden catchment above Temple Sowerby.
Figure 9: Daily cross-correlation against raingauge separation estimated for all observed sites for (Obs) for January and July compared with the corresponding estimate from a 10 member ensemble of 20y simulations sampled at all raingauges.
Figure 10. Gumbel plots comparing simulated daily and hourly annual extreme rainfall amounts. Estimates of the observed extremes are plotted as curves. Simulated extremes are plotted as confidence intervals displaying the 10th and 90th percentiles of the simulated extreme distribution. This parameterisation has been obtained using detailed statistics from the observed rain gauge network, which is a time-consuming process and is not practical for repetition in other, larger basins. This model will therefore be used as a benchmark for comparison with more parsimonious fitting methods suitable for application in regional and national settings.
This approach will use 5km statistics derived from the UKMO 5km data sets used in the UKCIP08 weather generator, allowing the same methodology for perturbation for climate change to be applied. An extension of the UKCIP08 methodology to spatial application has now been outlined and work will commence soon on implementation.
Work has also progressed on the frequency curve mapping (Ledingham). The overall aim is to develop a technique to estimate flood frequency curves (ffc) from rainfall frequency curves (rfc), accounting for antecedent rainfall. A number of advances have been made in the last 6 months:
**Data Discretisation.** Since daily rainfall data are more widely available than hourly, analysis was carried out to allow the estimation of the fraction of the effective flood generating rainfall contained within the same or previous 24 hr period (09.00-09.00) as the flood peak. Discretisation factors in the region of 1.14 were found, this agrees broadly with the work undertaken by Dwyer and Reed (1995).
**Rainfall and Flow Seasonality.** The seasonality of annual maximum and POT5 rainfall and flow data have been investigated for around 500 UK catchments. Polar plots such as those shown in figure 11 provide an initial assessment of how well the rainfall and flow regimes correspond, therefore indicating those catchments where the Flood Curve Mapping (FCM) methodology is more likely to work.
**Development of the Link between Rainfall and Flood Frequency.** Work has centred on assessing the correlation of the r-largest events in the rainfall and flood peak series (where r=1 corresponds to an annual maximum analysis). Work has now moved on to investigation of dependence of matching on physical catchment descriptors such as area and PROPWET. Key findings so far include:
- With annual maximum data, patterns of matching are similar to the distribution of mean annual rainfall in the UK with better matches in the West and Northern Areas (Figure 12).
- Maximum matching values are around 60% for the annual maximum analysis, with most around the 40% mark.
- The POT analysis provided broadly similar results and with the top three rainfall events provided improved matching with around 90-95% maximum matching values. For the work to develop national rainfall datasets to derive the Grid-to-Grid (G2G) model, having sourced the RCM rainfall data sets have been sourced, and alternative sources are now being collated. These include the space-time rainfall for the study catchments from Newcastle University and the rainfall data from the Upper Severn catchment from the “Uncertainty Assessments of Flood Inundation Impacts: Using spatial climate change scenarios to drive ensembles of distributed models for extremes” FREE project led by Kings College, London.
The G2G Model has been configured for a range of UK catchments including the Thames region. The model, which has recently been reconfigured to use soil datasets, has been run at the national scale using the Hadley Centre RCM data from the HadRM3 (“acqqa” and “acqqb”) runs. Figure 13 shows the estimated percentage change in modelled 20-year return period flow across the UK. G2G modelled river flows for the Eden catchment near Carlisle are being used by HR-Wallingford to drive the new methodologies being developed within RASP HLMplus. Three options have been devised for incorporating continuous flow data, provided by the CEH G2G model, into the RASP HLMplus framework, where each approach offers differing advantages and disadvantages in terms of ease of implementation and benefits gained over the existing approach. The preferred option is outlined in Figure 14 and offers the following enhancements over the existing RASP HLMplus model:
- The assumption of load dependence between different river reaches is relaxed through the use of continuous flow data to represent flood events.
- Consideration of continuity between the river and the floodplain is improved, allowing losses upstream to be better accounted for when estimating downstream flood risks.
- More advanced breach volume calculations, involving varying breach size with time, are enabled through the use of HR Breach within InfoWorks RS.
However, this option also necessitates significant modification of the existing flood risk analysis model, requiring the development of new software code to allow additional analyses to be undertaken and to enable linking/communication between new and existing model components, which hitherto have not been coupled. It is still unclear at this stage whether such modifications will be feasible; thus, it may be necessary to resort to alternative options for incorporating continuous flows into the flood risk analysis framework. These options would either involve a simplified defence system analysis (using expected values) or simplified floodplain volume calculations.
Nevertheless, each of the three devised options requires the sampling/screening of flood events from the continuous flow series to allow efficient computation of flood risk. Work has progressed on the development of a flood event selection tool comprising a pre-processing method for extracting summary hydrograph information, a flow database for storing continuous flows and summary characteristics, and a flexible query/selection method based on peaks-over-threshold. This tool is being developed with the use of a test dataset provided by CEH consisting of 2 months of continuous flow data for the Carlisle area.
Figure 14: Preferred option.
Within the Coastal Flooding by Extreme Events (CoFEE) project (Williams) the University of Plymouth team have produced a review of state-of-the-art for the CoFEE study site (Sefton Coast) has been completed and will, be made available to all CoFEE Partners at the next Project meeting to be held in Plymouth on 20-21 October 2008. This includes: Introduction; Description of the Study Sites; General overview; Description of the UK study site: Dee estuary and Liverpool Bay; risk definition (for each site); existing hazards at each study site; existing management plans; shoreline management plans (SMPs); catchment flood management plans (CFMPs); Proposed methods to be used to assess each risk at the study area (on a probabilistic base approach); strategic approaches (e.g. vulnerability indexes, set-back lines – used for special planning on a decadal basis); operational approaches (e.g. real time models – used for civil protection plans); potential improvements; civil protection schemes; summary of datasets availability; final considerations; and works cited. In addition they have been: (a) analysing remote sensing data to assess rates of shoreline recession; (b) progressing coastal flooding modelling using ANUGA; (c) compiling and processing the Sefton GIS; and (d) analysing net shoreline movement using the USGS Digital Shoreline Analysis System (DSAS) with ESRI ArcGIS to give statistics for 100 years and for the Dune Toe GPS surveys from 2001-2008. These will be cross-referenced to historical storms.
Data management (BODC): In collaboration with BADC, the period May to September has been spent identifying the main data types used by CoFEE project partners. With these data types identified, the feasibility of using different data management methods has been assessed. It is now becoming clear that the best approach to data management for CoFEE involves selective banking, concentrating on definitive model runs along with the boundary condition inputs, aerial photographs and verification data such as erosion monitoring data. Work to assemble a suitable data suite is currently underway.
POL has been working on improving the coupling between the wave model WAM and POLCOMS aimed primarily at the related surface stresses and looking at the effect that this modified stress has on the storm surge, hence its implication for flooding. This work has been submitted to Continental Shelf Research and presented in PECS 2008 and UK Marine Sciences. An abstract and paper have been submitted to Littoral’08. It should be noted that work during the last 6 months has been hampered at POL due to catastrophic failure of its disk system, which left us without reliable computers for 2 months. Nevertheless, a 10 hind cast of waves and currents have been carried out for the North Atlantic and work preparing simulations for the Irish sea are almost in place. Setting the fine resolution Liverpool Bay is almost ready, tidal barotropic runs have been successful in reproducing tidal elevation and currents (work presented at PECS, paper in preparation) and work is been carried out to properly couple wind and waves with the wetting and drying algorithms.
EHU have continued with the bi-monthly sedimentary monitoring along the north Sefton Coast. A small number of short [50cm] cores have been taken from across the Marshside marshes and north Southport beach, some of which have had preliminary work [particle size, magnetics and some chemistry]. EHU have met [with GL] with the RSPB warden from Hesketh Out Marsh and assessed the site with the aim of coordinating the placement of a series of sediment traps across the Marsh. Note: Hesketh Out Marsh was selected for returning to the sea by DEFRA and Natural England as part of their flood protection strategy for the Ribble Estuary. It is considered that the breaching of the [1980s] embankment may ultimately have significant effects upon the sediment deposition and accretion further south i.e. across our monitoring sites. This may be detected in the monitoring over the next couple of years.
UoL activity has undertaken: a review of published literature and reports on the evolution of the interface between the Mersey Estuary and the Irish Sea: the South Sefton Shore; a review of published literature and reports on the sediments of the Irish Sea and their interaction with the Sefton coast; and a collation of particle size data on the bed sediments of the Irish Sea, and laser granulometry of the sediment samples collected during Irish Sea Observatory cruises. These reports and data will be passed to Project Partners soon. B. Papers
1. Contribution to paper on groundwater flooding for the Floodrisk 2008 conference (www.floodrisk2008.net) [Wheater project]. A paper at this conference was also presented on the FREE Project by the Science Coordinator.
2. A paper on the Carlisle Flood Case Study using high resolution NWP rainfalls for flood warning has been accepted for publication in Met. Apps.. This work was presented as a poster paper at EGU2008 in April along with a second oral paper on model initialisation and data assimilation for the distributed G2G hydrological model. [Illingworth project – CEH Wallingford].
3. Planet Earth magazine invited JJW to write a feature article. This was submitted on 8 May 2008 and will appear in the next edition.
4. A draft report on data assimilation for parameter estimation with a linear advection model has been written. Once a few details have been polished it will be published on the web as a Reading Mathematics Dept Report.
5. Monthly Weather Review paper (see below) has been accepted for publication.
6. Weather paper (see below) currently in revision.
7. Second paper for Hydrology and Earth Systems Sciences (see below) describing the automated classification technique has been accepted for publication.
8. Exploration for the use of HTML files for displaying data is in progress.
Peer-Reviewed Papers and Conference Presentations
09. “Site-Specific Density Forecasting of UK Daily Rainfall: Generalised Linear Models versus Ensembles”, M. A. Little, P. E. McSharry, J. W. Taylor, Monthly Weather Review (in press)
10. “Extreme Rainfalls in the British Isles 1866-1968”, H. J. E. Rodda, M. A. Little, R. G. Wood, N. MacDougal, P. E. McSharry, Weather (in revision)
11. “Parsimonious Modeling of UK Daily Rainfall for Density Forecasting”, in Geophysical Research Abstracts, EGU General Assembly, Vienna 2008, Volume 10.
12. The UEA team received the reviews of their paper about the annual cycle of extreme UK precipitation (submitted to the International Journal of Climatology). It has been revised and returned to the Journal Editor.
13. A poster (“Estimating climate change impacts on river flows across the UK: how uncertainties in model structure can affect predictions”) was presented at a workshop on Hydrological Monsters and Outliers, Cemagref and ENGREF-AgroParistech, Paris, 18-20 June 2008. A draft paper has been written describing and comparing the application of two alternative configurations, the “Slope-G2G” and the “Soil-G2G”, at the national scale, as well as presenting change in peak flows under a future climate scenarios and a method for assessing those areas of the country where the signal of change in peak flows is more “robust”.
14. A paper has been drafted by the Beven team for the forthcoming special issue of Meteorological Applications.
C. Web sites
1. Development of a website and wiki (http://www.groundwaterflooding.org) for the Wheater project.
2. Sefton's Dynamic Coast Landform, Ecology and Management Conference was held in Southport on 1st September 2008, (http://www.seftoncoast.org.uk/research_conf2008.html). The conference was attended by the majority of CoFEE Partners.
D. Deliverables
There follows a first attempt to assess the level to which the Programme Deliverables specified at the beginning of the Project have been achieved.
Objective 1
• Joint research to be undertaken by an identifiable integration of science communities.
Several of the projects are bringing together different communities. For example in the project led by Illingworth Hydrologists at CEH Wallingford are working with meteorologists from the JCMM at Reading. In the project led by Dance satellite remote sensing scientists are working with coastal oceanographic modellers, and in the project led by Zou hydrometeorologists are working with ocean wave modellers.
The UEA joint British Council/DAAD (German Academic Exchange Service) project was completed and a final report sent to the British Council (this project supported scientific exchanges between UEA and the University of Potsdam, with much knowledge shared and joint analysis done on the topic of climate/weather extremes).
The project led by O’Connell has collaborated King’s College London FREE project for the modelling of the Upper Severn (Hannah Cloke’s group: “Uncertainty Assessments of Flood Inundation Impacts”). This project has also agreed with Joe Holden (University of Leeds) for the provision of access to field data collected from upland peat sites. Collaboration with the FRACAS FREE project and the Newcastle-led project has also been arranged for the generation of rainfall fields under present and future climates.
The modelling work in the FRACAS Project will involve use of Met Office and UKCIP08 datasets. • Language integration across discipline boundaries leading to the training of a new generation of scientists having an integrated way of approaching environmental scientific research.
Research students such as Polly Smith (Reading; Dance project), Josie Geris (Newcastle; O’Connell project), Jamie Ledingham (Newcastle; Reynard project) and Kim Bartholomew (Reading, Illingworth project) are all working in projects involving cross-discipline activities.
• Synergy between different models specifically demonstrated by a prototype complete integrated system or through its component parts.
Particularly good examples of synergy between models are discussed in sections 1, 2 and 4 above.
Objective 2
• Specifying techniques for data assimilation through coupled models between meteorological, hydrological, hydraulic, coastal and climate models.
Work in the projects led by Illingworth, Dance, Wheater, Cloke, Williams, Zou and Reynard illustrate excellent progress towards this deliverable.
• Transfer of data handling, quality control and assimilation techniques between disciplines.
There is evidence that this is happening within projects, but not between projects, although the Data Management Plan is providing a framework for data archiving.
• Demonstrated complimentarity with, but not duplication of, the FRMRC programme.
Several of the FREE researchers are working on FRMRC projects for example Beven, Wheater, Reeve and O’Connell. At present overlaps do not seem to be occurring, but further analysis will be undertaken.
Objective 3
• Quantification of forecast uncertainty across disciplines and within data and models.
There is much activity in specifying and dealing with uncertainty, see for example the projects let by Toumi, McSharry and Svensson. Much more work in this area is planned. • **Specifying and managing the propagation of uncertainty across discipline and model boundaries.**
This is particularly well illustrated in the projects led by Beven, Cloke and Illingworth.
• **Estimating and utilising uncertainty in the physical processes represented in models.**
To some extent the derivation of refractivity and insect winds in the project led by Illingworth provide information which will reduce uncertainty in high resolution meteorological models. In addition the project led by Beven work is well advanced in the project led by Toumi using the WRF model.
• **Analysis of factors impacting changes in frequency and intensity of storms and extreme flood events.**
The projects led by Osborn and Reynard are investigating the impact of climate change upon extreme rainfall, and the projects led by Svensson and Toumi are examining frequency analysis and conditions leading to extreme storms.
• **Preparing a scientific approach to the development of risk assessment tools.**
New approaches are being developed in the projects led by Beven, McSharry, Svensson, Reynard and Toumi.
• **New approaches for forecasting extreme events in rapid response catchments.**
The CEH work in the Illingworth led project is particularly relevant to this deliverable.
• **New approaches for forecasting extreme pluvial events in urban and built up areas.**
Not being addressed yet.
• **Analysis of the relative contributions to flooding from natural variability and human forcing of climate change.**
The projects led by Williams, Reynard, O’Connell and Cloke are particularly relevant.
**Objective 4**
• **Achieve a better understanding of the sensitivity of fluvial, surge and total water levels to uncertainties in model inputs.** Projects led by Zou, Williams, Dance, O’Connell, Wheater and Beven are all relevant to this deliverable.
- Development of procedures for constraining and presenting risk and uncertainty to end users, and the impact of this uncertainty on the environment.
The Beven led project aims to deliver appropriate procedures as do the projects led by Cloke, Zou, Williams and McSharry.
- Consider the relationship of meteorological indices in global models to the likelihood of catchment flooding and coastal surges.
To be analysed.
**Objective 5**
- Identifying the implications of uncertainty across disciplines for policy development e.g. within the framework of the EU Water Framework Directive.
To be analysed.
- Identifying consequent changes in engineering design risk in both fluvial and coastal zones arising from the impact of sediment transport and geomorphologic change caused by extreme events.
To be analysed.
- Development of a national network of world class scientists and professionals in this multi-disciplinary field.
Certainly the FREE Projects promise major outputs which will illustrate the excellence of UK research in the multi-disciplinary field represented by FREE.
**Objective 6**
- To develop for this programme a methodology for gathering new data and collating existing data for extreme events shortly after they occur.
The basis of a methodology has already been established through FLoAT.
- Archiving within the Research Council Data Centres using the e-science Data Grid, data sets derived from research studies and extreme events occurring during FREE. The FREE Data Management Plan has been established.
**Objective 7**
- *Quarterly updates describing activity and new opportunities presented by research outputs.*
Updates are being produced as required by most projects, although some projects have to be pushed!
- *Identification of specific routes to user involvement and early adoption of science by operational agencies.*
The Met Office and the Environment Agency are both closely involved in some of the projects. The Met Office has already adopted the procedures for deriving refractivity and insect winds developed in the project led by Illingworth.
- *Demonstrations of outputs at appropriate events or workplaces.*
The radar products from the Illingworth project have been demonstrated at the Cobbacombe Met Office operational radar site. It is expected that other demonstrations from other projects will take place.
- *Transfer of research outcomes to policy makers.*
To be analysed.
**Objective 8**
- *Research degrees awarded from FREE supported research.*
To be analysed at the end of the programme.
- *Involvement of a mix of cross-disciplinary students in FREE and related international activities.*
To be analysed. A number of students are participating in national and international conferences.
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e41af77df9a645024bffb7aa5669d390c382d513 | FLOOD RISK FROM EXTREME EVENTS – FREE
The science of flooding
SCIENCE PLAN
1. Introduction
There is increasing evidence that more frequent flooding resulting from increases in the frequency and intensity of storms are likely to be one consequence of anthropogenic climate change in many parts of the world including the United Kingdom. Flooding in the UK is currently a major and costly environmental hazard with annual damage from floods of around £1 billion at present levels of protection. In the autumn of 2000 up to 11,000 properties were flooded, and the financial cost was in excess of £1.3 billion. Recent figures from Defra show that the UK’s assets at risk from flooding by the sea are valued at £132.2 billion, from fluvial flooding valued at £81.7 billion and from coastal erosion at £7.8 billion.
As a consequence of economic growth (with, for example, increased building on flood plains) and climate change (increased frequency and severity of severe storms and sea level rise), these costs are set to rise further. It follows that an improved ability to forecast, quantify and manage flood risks is essential to protecting the public, property and infrastructure, and to maintaining a sustainable economy. It also impacts on our ability to investigate the impacts of climate variability and change. This will be achieved only from increasing our scientific understanding of the frequency, intensity and structural behaviour of such extreme events across several aspects of the earth system sciences.
In what follows we describe a five year integrated plan of interdisciplinary scientific research funded by the Natural Environment Research Council at the level of £6 million, including management costs, aimed at addressing these issues over the period 2005-2010. FREE will bring together researchers in the meteorological, hydrological, terrestrial and coastal oceanographic communities. The programme will focus on challenges in and around the UK, but will be built on world leading science that has strong linkages with research being undertaken elsewhere.
2 Background
The risk of floods can be expressed as the probability of such an occurrence within the intended design life of a mitigation scheme, or as the typical probability in any year. The reciprocal of this annual exceedance probability defines a return period in years of such an occurrence. Extreme floods, which might occur beyond the length of formal records, can be investigated using both statistical methodologies and modelling techniques.
A key issue in searching for plausible expectations of future probabilities of extreme floods is the evolution of precipitation extremes (Christensen et al, 2005), catchment hydrological response, storm surges (Lowe et al, 2001) and sea level rise (Church et al, 2001). Even though many climate models predict a decrease in average precipitation in European summers, the predictions do not prevent extreme precipitation values from increasing over most of Europe (Christensen and Christensen, 2003, 2004).
Regional models such as the Met Office’s Hadley Centre regional model HaDRM2 predict significant reductions in return periods by an order of magnitude for annual maximum rainfall under climate change at several flood-sensitive locations. A rise in mean sea-level and increases in storm-surges due to changes in winds and pressure also combine to reduce return periods of extreme high water levels at coastal locations around the UK (Senior et al, 2002).
Predictions at shorter time scales begin with a characterisation of the current state of the system referred to as initialisation. The future states of a system are then predicted according to our current understanding of the dynamic behaviour of the system. Hunt and Burgers (2002) point out that atmospheric, land surface and ocean phenomena occur on all scales, but there are strong interactions between characteristic phenomena over differing scales. This affects how models are formulated, how they represent physical processes and how they are interpolated as the resolution of the computations improves. Consequently many elements of model structures offer varying degrees of predictability. Hence it is of great importance that the uncertainties and limits of prediction are established and communicated to users.
As the resolution of atmospheric models improves explicit forecasts of convection are possible (Done et al, 2004). However, variabilities on ranges of scales that are impossible to resolve remain, and therefore important issues in the formulation of models remain especially in terms of sub-grid scale processes.
Data assimilation is the application of a set of mathematical techniques that provide physically consistent estimates of spatially distributed environmental variables (see for example Andersson et al, 2005). The estimates are usually based upon merging scattered and / or indirect measurements of states and parameters with dynamic models that impose physical consistency constraints. However, both the background model predictions and the measurements are uncertain, and data assimilation procedures merge these estimates depending upon the degree of uncertainty.
To achieve the best results from the merging of observations and models it is necessary to consider the discretisation and degree of spatial variability in hydrologic models.
The parameters of hydrological models are frequently estimated by minimising some form of cost function that involves the error between the model-generated flow and the measured flow. This approach is similar to that employed in meteorological variational analysis schemes (for a review see Rihan et al, 2005). Young (2002) reviews the statistical framework for data assimilation with stochastic transfer function models based on the use of the Kalman filter. One limitation of this approach is its assumption that the stochastic processes are Gaussian. In fact this limitation may be removed by using Baysian numerical methods (see for example Krzysztofowicz, 1999) or Monte Carlo Markov Chain algorithms (see for example Vrugt et al, 2003).
Similar approaches are employed in storm surge models. The initial state of the Dutch Continental Shelf Model (Gerritsen et al, 1995) is optimized by a Kalman filtering module that assimilates water levels along the UK coast in combination with oil platform data. Modelling of wind-wave propagation in coastal areas requires improvement in air-sea interaction processes which need observations of wind, waves and bathymetry. Of particular importance are improvements to the long-term evolution of estuary hydrodynamics and morphology, and the interaction of the shoreline and offshore sediments.
Due to strong nonlinearities in the behaviour of systems, the diverse spatial scales involved, new observations of the water cycle and a lack of knowledge of the uncertainties in models and observations, much research is needed in the field of data assimilation.
The use of ensembles in both meteorological (see for example Du et al, 1997, Hamill and Colucci, 1997) and hydrologic (see for example De Roo et al, 2003) forecasting is one approach to dealing with uncertainty. This approach generally assumes that the uncertainty in flow predictions is primarily attributed to uncertainty in the input i.e. rainfall to the hydrologic model. However, uncertainty in model parameter estimates (calibration and spatial generalisation e.g. Lamb and Kay, 2004) and model structure also require attention.
Areas at risk of inundation need to be modelled. This requires calibration and validation of model storage capacity and flow resistance due to various sub-grid natural and man-made elements in the terrain. In both fluvial and coastal areas the uncertainty involved in predicting inundation area involves flow routing models which require accurate topographical data, information on roads, levees and other infrastructure and, where necessary, reliable bathymetry which may indicate changes with time during storms.
A US Workshop on Predictability and Limits-to-Prediction in Hydrologic Systems (National Research Council, 2003) stressed the conceptual framework for hydro-meteorological predictability as that of a coupled atmosphere-land-ocean system. Regular variations of water through the system have superimposed upon them irregular fluctuations or changes caused by the chaotic dynamics of the atmosphere-land-ocean system.
To address the wide range of coupled models representing water related processes it is necessary to consider an appropriate framework providing a generic interface between models. Such a framework was, for example, developed as the basis of the River Flow Forecasting System (RFFS) (Moore et al, 1990). More recently, for example, HarmonIT - an EU 5th Framework project, sought to provide a framework based upon an open modelling interface, the OpenMI (Moore and Tindall, 2004). Work is ongoing to ensure that this approach is developed into a self sustaining standard.
3 Mission statement
To reduce the flood risk in the UK from extreme events
The overall aim of this research programme is to improve the prediction of river catchment and coastal floods occurring from extreme events, accompanied by quantitative measures of uncertainty which take into account the non-stationarity of environmental conditions.
4 Broad objectives
In carrying out research within the Earth system of specific relevance to flooding it will be necessary to,
- improve the estimation and prediction of flood risk from extreme events through considering the processes involved as an integrated system;
- seek ways to reduce uncertainty and improve the quantification of flood risk; and
- identify and articulate critical guidance on how flood risk is changing.
Achieving this will involve the coupling of a range of models, operating over differing time and spatial scales, of the atmosphere generating rainfall forecasts, through hydrological (including ‘continuous simulation’), hydraulic and storm surge models to impact models and decision making tools. Socio-economic aspects, although important, will be regarded as on the fringe of this programme with work concentrating on the environmental science aspects of this directed topic.
5. Scope of the programme
In 2003/4 the Office of Science and Technology promoted the Foresight project on Future Flooding. The results from this project show that, under certain scenarios, flood risk (measured as flood probability times consequences) could rise twenty-fold over the next 100 years or so. Even with a well funded response to this risk it was felt that future flooding could still be approximately twice the severity that we now experience. In response to this conclusion Defra and the EA have reviewed their joint research programme in flood and coastal risk management (Defra / EA, 2005) within the context of the first government response to the autumn 2004 Making Space for Water consultation exercise (Defra, 2005).
A number of future directions for research were identified. Of particular relevance here, Research Councils were urged to investigate
- the impact of science and technology on the future flood and coastal erosion risk management;
- climate change in particular sea level, surges and waves; and
- hydrology – updating methods in current water industry practice plus next-generation methods, flood assessment for small catchments and urban, rural and mixed land use sub-catchment runoff.
The FREE programme will seek to address these research needs within the limitations imposed by the project budget and taking cognisance of the on-going work in the EPSRC-led Flood Risk Management Research Consortium (FRMRC).
The programme will concentrate on the analysis and understanding of flood risk from extreme events, defined as occurring with a recurrence frequency of 1 in 50 years or rarer, thereby including floods which result in loss of life, significant economic impact and/or widespread impact on the public, property and the national infrastructure. Proposals for studies linked to extremely rare events are encouraged. Events resulting from a series of linked occurrences whose joint probabilities exceed 1 in 50 years also often result in serious damage and risk of loss of life. These are equally important and are also considered here. This programme will therefore relate to the Defra “Source-Pathway-Receptor” framework.
It is recognised that there is not one specific approach to environmental flood risk modelling. However, the programme will aim to use and extend existing **modelling frameworks** within which different systems may communicate with each other. The emphasis is not on developing new models from scratch, but on developing novel functionality to deliver pertinent results. At the assessment stage projects that do not demonstrate this integrated approach are likely to be either rejected, put together, or considered in a complementary way to each other, to achieve an integrated “clouds-to-catchment-to-coast” approach to flood forecasting.
It is important that FREE recognises and complements existing research and development programmes such as the Flood Risk Management Research Consortium (FRMRC), the Lowland Catchment Research (LOCAR) programme and the Catchment Hydrology And Sustainable Management (CHASM) programme. The FRMRC is concerned with the development of new flood modelling tools, real-time updating including aspects of new observational technology and other more engineering aspects of flood defence and warning. The objectives of the FRMRC include undertaking research to enhance flood risk management practice worldwide, demonstration of proof-of-concept applications and the delivery of tools and techniques to users.
On the other hand LOCAR has addressed issues concerning the understanding and modelling of permeable catchment systems and their associated aquatic habitats at different spatial and temporal scales and for different land uses. CHASM seeks to understand catchment scale issues and the anthropogenic and future climate change influences within catchments leading to better sustainable management.
FREE differs from these programmes in seeking to bring all the communities involved in fluvial, estuarine and coastal flood forecasting and warning of extreme events together to improve the scientific linkages between disciplines. These linkages are necessary to enable progress towards achieving a fully integrated system. The programme will focus on the scientific basis of risk and uncertainty throughout the full range of geophysical processes involved in all types of flooding occurrence in catchments, rivers, urban drainage systems, estuaries and coastal environments.
### 6 Specific objectives
**Objective 1:** To develop and extend the science underpinning integrated modelling frameworks enabling models to work sensibly and more effectively together
Wise investment in fluvial and coastal defences and the property thereby protected depends upon accurate quantification of future changes in the frequency and intensity of storms, river catchment responses (groundwater and river flows), coastal storm surges, estuarine hydrodynamics and morphology and tidal extremes. Climate, regional and mesoscale numerical weather forecasting models contain large uncertainties in their predictions of precipitation, wind and waves. It is necessary to couple these models to catchment, estuarine and coastal surge models to achieve both reliable engineering design criteria for protection works and reliable flood warning systems. Similarly simplified models of the evolution of the shape or morphology of a beach are necessary to understand how best to develop more complex operational models. Research will be supported enabling the scientific basis of models to be used in ways which will enable more effective linkages between different model types leading to improvements in the development of modelling frameworks. This will be a major part of the programme.
The scientific basis of modelling frameworks requires a detailed analysis of appropriate procedures for the transfer of information across space and time scales and the different component models. They will aim to describe extreme flooding events such as those associated with flash floods, floods arising from long duration rainfall and coastal surges and flooding in locations such as the Thames estuary. Also included in the frameworks will be the ability to investigate critical areas at risk of flooding under conditions of human-induced climate change. Integration between the models needs to be at the heart of this system and methods developed for coupling components will be explored for their utility. The expected prediction time-scale for such systems range from a few days to many tens of years and beyond. Thus real-time and medium term forecasting are included, as is the quantification of flood frequencies.
**Objective 2: To identify and spread scientific improvements in model initialisation, data assimilation and the processing of forecast ensemble outputs across modelling communities**
Precipitation arises from processes occurring in larger-scale weather systems as well as from localised convection in conditions of small-scale forcing. For the predominantly forced systems, improvements in forecast skill will arise from scientific advances connected with better model resolution of smaller-scale features, improved observations for initialising forecast models, better utilisation of those observations within data assimilation techniques and improved design of ensemble prediction systems.
Extreme events in estuaries do not necessarily follow the largest or longest-lasting storms, but often comprise a combination of factors at vulnerable times and places due to inputs from, and interactions between, both river catchments and ocean. The dynamic components of estuarine flooding include waves, tides, surges and river flows, and require understanding of the long-term evolution of estuary hydrodynamics and morphology, and the interaction of the same between on-shore and off-shore environments. Operational forecasting is limited for waves and surges offshore by the accuracy and resolution of wind forecasts, and hence to time-scales of hours to a few days. It is further limited near-shore by lack of knowledge of evolving bathymetry. Forecasting of river and upper estuarine water levels is limited by model structure and input data particularly rainfall estimates.
Research is required on data assimilation techniques that allow forecasts to be updated and made more accurate using the latest observations of the atmospheric state, particularly from remotely sensed data (radar, satellites), river flow, geomorphology of river channels and estuaries and wind and waves. The investigation of the more general deployment of techniques developed across disciplines that takes greater account of the error characteristics of the data will be undertaken. Optimal methods for data assimilation from ground-based catchment and coastal observation networks (tide gauges, coastal radar etc.) should also be investigated. Work going on in the FRMRC will be noted to ensure that research undertaken in FREE complements that comprising this programme.
**Objective 3: To understand and quantify the propagation of uncertainty within a changing environment and within rapidly changing catchments**
The chain of modelling and data assimilation involved in forecast construction for a river network requires research on the estimation and propagation of uncertainty and the related task of decision-making to trigger a flood warning. Recent advances made in model calibration and performance assessment, need to be utilised and linked to forecast uncertainty estimation using ensemble techniques. Modelling methodologies for forecasting very extreme events cannot rely on data being available for model calibration and demand innovative approaches.
Of particular interest will be new approaches to deal with rapid response catchments, downscaling issues, identifying areas of vulnerability and the investigation of the impact on flood forecasts of meteorological models having associated with them improved representations of the hydrological cycle, both surface and subsurface flows. Also of importance is the understanding of the dynamics of the evolution of the shoreline and its interaction with river flows and off-shore currents.
At longer forecast lead-times, and in the context of long-term frequency estimation, it becomes increasingly important to consider how the ocean and atmosphere interact. A basic question to be addressed is the magnitude of the relative contributions to flooding from natural variability and human forcing of climate change. For estimating the chance, for example, of a wetter than normal winter, advances in seasonal forecasting are needed. For this it is essential to develop coupled ocean-atmosphere-land surface models.
Confidence in all such results is reduced by poor spatial resolution in global coupled models, by uncertainties in physical processes and by a lack of estimates of uncertainty in the models. Research is needed to tackle these scientific problems. An example is the uncertainty associated with parameterisations and the resolving of convection within models. An improved understanding of the factors that determine changes in the frequency and intensity of storms in a warmer world will be a major theme. This will require improvements in knowledge of storm tracks, weather regimes and storm dynamics and physics, undertaken by using regional climate models. Investigation is also needed into the role of persistent precipitation events and the impact on storm tracks and mesoscale development.
Meteorological and hydrological models are closely linked, and in operational or strategic planning environments this needs to be recognised and implemented. Through evaporation and transpiration the hydrology provide important feedbacks to meteorological systems while the atmosphere drives both these processes. The underlying surface influences the amount of rainfall meteorological systems generate. Understanding of the role of land use and surface heterogeneity (including urban, rural and mixed land use) in catchment hydrology under climate variability is likely to require continuous simulation techniques to represent the full range of hydrological processes which determine flood generation. For integrated catchment-scale decision support, models must be capable of application to data-rich and data-sparse situations, that is, the science of the ‘ungauged site’ is vital to consideration of full spatial risk.
Research is also needed into advanced statistical techniques, which can take rare events (meteorological, hydrological and coastal) fully into consideration in computation at high return periods. Joint-probability analyses of rainfall, water level and surge and wave occurrence with other parameters also need to be fully investigated.
**Objective 4:** To develop techniques for uncertainty reduction at the output stage enabling the communication of risk assessment to the user community and its use by that community.
A better understanding of the sensitivity of fluvial, surge and tidal water levels to uncertainties in model inputs (e.g. from atmospheric models; boundaries between models; initial hydrological and geomorphologic data) is needed so that both atmospheric and hydrological ensemble techniques can be developed to quantify and understand how best to present, uncertainty in outputs, which can be used as inputs to estuary and coastal surge models. This includes consideration of exceptionally rare flood events of high magnitude.
The estimation of true spatial risk, as opposed to the spatial mapping of arrays of point risks, will be explored (that is, covering the co-location characteristics of catchment flooding). Consideration is needed of methodologies for catchment areas which are data-poor as well as data-rich. This research will also be extended to the joint likelihood of concurrent coastal and catchment flooding, using both modelling and statistical methodologies.
An alternative approach considers the modification of meteorological indices within Global Climate Models (in particular the North Atlantic Oscillation), which are known to be closely correlated with the likelihood of surges. Studies of how these indices might change in the future, can be used to infer changes in surge climatology. These approaches need to be consolidated, and thoroughly tested, to develop an overall view of surge modification around the UK.
**Objective 5:** To enable mitigation of, and adaptation to, floods by the provision of advice on flood risk management system development.
Land use and land management have been identified as potentially important considerations in flood risk. Urban development is a dramatic example of environmental change, but agricultural land management practices and natural estuarine morphology may also alter flood risk at some scales and some recurrence intervals. The development of new decision support tools is not the aim of FREE, but scientific studies of the effects of change at various scales, together with inundation mapping and spatial analysis of risk assessment are appropriate. It is likely that such output will help improve the development of appropriate flood risk management systems.
It is important to assess the impact on sediment transport and coastal geomorphologic change caused by cumulative extreme events (the increased frequency of major storms may prevent the system “recovering” between events). Improvements in understanding of wave “set up” are an important aspect of these processes. Such changes could have a substantial impact on bathymetry, susceptibility to storm surge and management options available to society. It is important that the evolving dynamics of open coasts (particularly rates of erosion) associated with rising sea level are factored in with regard to these issues.
This meteorological, hydrological, hydraulic and coastal research should lead to the availability of tools for decision-making which will impact sustainable flood risk management and hence policy development relating to the requirements of the EU Water Framework Directive.
**Objective 6:** To seek the use, or re-analysis and use, of existing datasets whilst organising and creating a methodology to enable specific data to be collected following any extreme event that might occur during the period of FREE.
Whilst it is not the intention within the FREE programme to collect new data sets, it is recognised that the development and modelling of new methodologies using existing data will lead to new science outcomes which may need to be archived. It is anticipated that such output will be archived within the Research Council Data Centres using the e-science Data Grid.
Ways of making data collection more efficient and effective are included e.g. retention of mesoscale model data sets, aircraft and satellite data (including land use, terrain modelling and actual flood extents) and data on coastline changes. Existing data offer new opportunities for analysis within innovative modelling frameworks. In addition it is hoped that procedures to collect specific data following any extreme events which might occur during FREE will be developed, and these data lodged at the Research Council Data Centres using the e-science Data Grid.
**Objective 7:** To engage with the national and international community and stimulate knowledge transfer and user engagement
FREE represents a major national initiative for research into the science underpinning flood forecasting and warning. The programme will benefit from engagement with the national and international community through participation of those working in the programme with groups overseas. This will be encouraged, and where possible supported. Of particular importance are the World Meteorological Organisation’s APFM, GEWEX and World Weather Research (WWRP) programmes, the EU COST-713 Action, the upcoming UNESCO-WMO flood initiative, the upcoming European Union Framework 7 and the European Science Foundation programmes. Efforts will be made to participate in appropriate workshops and be involved in consortium / proposal writing for these programmes. To achieve knowledge transfer from research outputs to users it will be necessary to involve users and industry closely in the implementation of the research, and in the training of scientists. With this in mind Industrial CASE studentships are to be encouraged. FREE will allocate money to a knowledge transfer fund to encourage engagements of ideas with users, and with small businesses. Links will be developed to other schemes such as Faraday Partnerships.
It is also envisaged that during the course of this programme there will be considerable interaction of scientists with user groupings (such as the Environment Agency and the Met Office) through Knowledge Transfer initiatives which participants are encouraged to identify. Further details will be provided in the Implementation Plan of the programme.
**Objective 8: To provide training opportunities through research studentships including CASE awards, and to encourage the involvement of students funded via other means in FREE activities**
The inter-disciplinary, multi-institute programme with relevance to Defra, Environment Agency, Met Office and consultancy activities offers excellent opportunities for younger researchers, and it is anticipated that a significant number of research studentships (for PhD training) will be supported. Those involving participation with user groups and industry are particularly sought. The participation of students in national FREE and international activities will also be strongly encouraged.
**Summary:**
The programme will concentrate on the environmental scientific research and training activities needed to meet these objectives of understanding river catchment and coastal flood risk. The interest will focus upon ways of using models within an integrated system to improve understanding of physical and dynamical processes. The emphasis will not be on developing new models, but will seek the development of novel techniques of using and extending existing model structures and output on all time scales. For example, appropriate areas of study are the information on the water cycle contained within mesoscale atmospheric models within ungauged catchments, the use of data on severe convective storm development that might have been gathered during field campaigns such as Hyrex and the recent Convective Storm Initiation Project (CSIP), the identification of changes in morphology in estuarine areas through the use of existing wind and wave data, or the development of new flood frequency estimation techniques.
The interaction between atmospheric, hydrological, river, estuarine and coastal forecasting and flood frequency estimation models and techniques will involve the influence of topographic, morphologic and other controls. Representations of these interactions require improved description of water movement in the air, land and ocean phases. This offers an important opportunity for crosscutting research of value to the flood risk assessment need. There are new applications to be addressed encompassing the basic science underpinning first alert and global/continental/regional/local flood risk assessment systems. Applying and utilising advances in direct- and remotely-sensed monitoring of hydro-meteorological variables, soil moisture, river level and the coastal ocean will provide opportunities to improve fluvial and estuarine flood forecasting and warning.
7 Deliverables
Objective 1
- Joint research to be undertaken by an identifiable integration of science communities.
- Language integration across discipline boundaries leading to the training of a new generation of scientists having an integrated way of approaching environmental scientific research.
- Synergy between different models specifically demonstrated by a prototype complete integrated system or through its component parts.
Objective 2
- Specifying techniques for data assimilation through coupled models from meteorological, hydrological, hydraulic to coastal oceanographic models.
- Transfer of data handling, quality control and assimilation techniques between disciplines.
- Demonstrated complementarity with, but not duplication of, the FRMRC programme.
Objective 3
- Quantification of forecast and flood frequency estimation uncertainty across disciplines and within data and models.
- Specifying and managing the propagation of uncertainty across discipline and model boundaries.
- Estimating and utilising uncertainty in the physical processes represented in models.
- Analysis of factors impacting changes in frequency and intensity of storms and extreme catchment and coastal flood events.
- Preparing a scientific approach to the development of risk assessment tools.
- New approaches for forecasting extreme events in rapid response catchments.
- New approaches for forecasting extreme pluvial events in urban and built up areas.
- Understanding and quantification of land use effects on flood risk at specific scales and recurrence intervals.
- Analysis of the relative contributions to flooding from natural variability and human forcing of climate change. Objective 4
- Achieve a better understanding of the sensitivity of fluvial, surge and total water levels to uncertainties in model inputs.
- Techniques for the inclusion of exceptionally rare river and coastal flood magnitudes.
- Development of procedures for constraining and presenting risk and uncertainty to end users, and the impact of this uncertainty on the environment.
- Consider the relationship of meteorological indices in global models to the likelihood of catchment flooding and coastal surges.
Objective 5
- Identifying the implications of uncertainty across disciplines for policy development e.g. within for example the framework of the EU Water Framework Directive.
- Identifying consequent changes in engineering design risk in both fluvial and coastal zones arising from the impact of sediment transport and geomorphologic change caused by extreme events.
- Development of a national network of world class scientists and professionals in this multi-disciplinary field.
Objective 6
- To develop for this programme a methodology for gathering new data and collating existing data for extreme events shortly after they occur.
- Archiving at the BADC data sets derived from research studies and extreme events occurring during FREE.
Objective 7
- Quarterly updates describing activity and new opportunities presented by research outputs.
- Identification of specific routes to user involvement and early adoption of science by operational agencies.
- Demonstrations of outputs at appropriate events or workplaces.
- Transfer of research outcomes to policy makers.
Objective 8
- Research degrees awarded from FREE supported research.
- Involvement of a mix of cross-disciplinary students in FREE and related international activities. 8 Output measures
The intention is to benchmark the position at the start of FREE, possibly through review material, a Workshop, or in terms of the bids received following the Call for Proposals. The achievements of the programme will be assessed through:
**Outputs**
- Future science priority measured by comparison with and input to the NERC science programme.
- number of bids which are inter-disciplinary
- number of CASE awards
- scientific papers in high (top twenty) impact journals
- number of publications with authorship from more than one discipline group
- demonstration activities with stakeholder groups
- inter-disciplinary workshops
- reports on progress and achievements; final report
- number of research degrees based on FREE research
**Outcomes**
- success in training scientists to think in an inter-disciplinary way (in making future research bids)
- scientists working across disciplinary boundaries
- the emergence of new research groups developing in a multi-disciplinary way e.g. Environmental (ESSC) and the National Centre for Oceanographic Forecasting (NCOF)
- the adoption of research outputs in activities of operational agencies and advisory services that improve the civil contingency response to flooding from extreme events
- an increased understanding amongst user communities of the capabilities and limitations of predicting and assessing flood risk from extreme events and vice versa with research
- influence on future policy making in the management of, and adaptation to, flood risk
9 Project management
The FREE Steering Committee (Chair: Professor Paul Hardaker (Met Office)) provides science direction and advice. The general scientific management of FREE will be undertaken by the Science Co-ordinator Professor Chris Collier (University of Salford) who will report to the Steering Committee and the NERC Science and Innovation Manager. Individual Principal Investigators (PIs) will manage their respective programmes liaising with the Science Co-ordinator to ensure that the programme objectives are met. The NERC Programme Administrator is Dr Sally Palmer. References
Andersson, E., Bauer, P., Beljaars, A., Chevallier, F., Holm, E., Janiskova, M., Kallberg, P., Kelly, G., Lopez, P., McNally, A., Moreau, E., Simmons, A.J., Thepaut, J-N and Tompkins, A.M. (2005) “Assimilation and modelling of the atmospheric hydrological cycle in the ECMWF forecasting system”, Bull. Am. Met. Soc., 86, 387-402
Christensen, J.H. and Christensen, O.B. (2003) “Severe summertime flooding in Europe”, Nature, 421, 805-806
Christensen, O.B. and Christensen, J.H. (2004) “Intensification of extreme European summer precipitation in a warmer climate”, Glob. Plan. Change, 44, 107-117
Christensen, O.B., Christensen, J.H. and Frei, C. (2005) “European precipitation extremes: can we expect more?”, GEWEX News, 15, May, 10-11
Church, J.A., Gregory, J.M., Huybrechts, P., Kuhn, M., Lambeck, K., Nhuan, M.T., Qin, D. and Woodworth, P.L. (2001) “Changes in sea level”, in Climate Change 2001: The scientific basis, contribution to Working Group I to the 3rd Assessment Report of the IPCC (ed. J.T. Houghton et al), Cambridge University Press, 639-693
Defra (2005) Making space for water; Taking forward a new Government strategy for flood and coastal erosion risk management in England, March, 47pp
Defra / EA (2005) An independent review of the Defra / EA research and development joint programme in flood and coastal erosion risk management, authors E. Penning-Rowsell et al., 62pp
De Roo, A.P.J., Bartholmes, J., Bongioannini-Cerlini, P., Todini, E., Bates, P.D., Horrit, M., Hunter, N., Beven, K., Pappenberger, F., Heise, E., Rivin, G., Hils, M., Hollingsworth, A., Holst, B., Kwadijk, J., Regiani, P., VanDijk, M., Sattler, K.D. and Sprokkereef, E. (2003) “Development of a European flood forecasting system”, Int. J. River Basin Management, 1, 49-59
Done, J., Davis, C.A. and Weisman, M. (2004) “The next generation of NWP: explicit forecasts of convection using the weather research and forecasting (WRF) model”, Atmos. Sci. Let., 5, 110-117
Du, J., Mullen, S.L. and Sanders, F. (1997) “Short-range ensemble forecasting of quantitative precipitation”, Mon. Wea. Rev., 125, 2427-2459
EA / Defra (2004) Performance measures for flood forecasting, Review and recommendations, R & D Tech. Rep., W5C-021/2b/TR, 72pp
Gerritsen, H., DeVries, J.W. and Philipport, M.E. (1995) “The Dutch Continental Shelf Model”, Coastal and Estuarine Studies, ed. D.R. Lynch and A.M. Davis, 47, 425-467, Washinton D.C., Am. Geophy. Union Hamill, T.M. and Colucci, S.J. (1997) “Verification of Eta-RSM short-range ensemble forecasts”, *Mon. Wea. Rev.*, **125**, 1312-1327
Hunt, J.C.V.R. and Burgers, J.M. (2002) “Floods in a changing climate: a review”, *Phil. Trans. R. Soc. Lond.*, **A360**, 1531-1543
Krzysztofowicz, R. (1999) “Bayesian theory of probabilistic forecasting via deterministic hydrologic model”, *Water Resources Res.*, **35**, 2739-2750
Lamb, R. and Kay, A.L. (2004) “Confidence intervals for a spatially generalised, continuous simulation flood frequency model for Great Britain”, *Water Resources Res.*, **40**(7), W07501
Lowe, J.A., Gregory, J.M. and Flather, R.A. (2001) “Changes in the occurrence of storm-surges around the United Kingdom under a future climate scenario using a dynamic storm-surge model driven by the Hadley Centre climate models”, *Climate Dynamics*, **18**, 179-188
Marsigli, C., Montani, a., Nerozzi, F., Paccagnella, T., Tibaldi, S. and Molteni, F. (2001) “A strategy for high resolution ensemble prediction II: Limited-area experiments in four Alpine flood events”, *Quart. J. R. Met. Soc.*, **127**, 2095-2115
Moore, R.J., Jones, D.A., Bird, P.M. and Cottingham, M.L. (1990) “A basin-wide flow forecasting system for real-time flood warning, river control and water management”, in Int. Conf. River Flood Hydraulics, ed. W. R. White, publ. Wiley, Chichester, 21-30
Moore, R.V. and Tindall, C.I. (2004) “The HarmonIT project and the development of the OpenMI: a standard interface for model linking”, in Hydrology: Science Practice for the 21st Century, Volume I, publ. British Hydrological Society, 322-328
National Research Council (2003) Report of a Workshop on Predictability and Limits-To-Prediction in Hydrologic Systems, publ. Nat. Academy Press, Washington D.C., 118pp
Rihan, F.A., Collier, C.G. and Roulstone, I. (2005) “Four-dimensional variational data assimilation for Doppler radar wind data”, *J. Comp. App. Math.*, **176**, 15-34
Senior, C.A., Jones, R.G., Lowe, J.A., Durman, C.F. and Hudson, D. (2002) “Predictions of extreme precipitation and sea-level rise under climate change”, *Phil. Trans. R. Soc. Lond.*, **A360**, 1301-1311
Vrugt, J.A., Gupta, H.V., Bouten, W. and Sorooshian, S. (2003) “A shuffled complex evolution Metropolis algorithm for optimization and uncertainty assessment of hydrologic model parameters”, *Water Resources Res.*, **39**, 1201, 10.1029/2002WR001642
Walser, A. and Schar, C. (2004) “Convection-resolving precipitation forecasting and its predictability in Alpine river catchments”, *J. Hydrology*, **288**, 57-73 Young, P.C. (2002) “Advances in real-time flood forecasting”, *Phil. Trans. R. Soc. Lond.*, A360, 1433-1450
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e90b4542b290bed4ed33ab57b50dce8b200ebef0 | Regulating rail freight
- Fair access and treatment
- The freight market
- Enhancements
- Performance
- Track access
- Casework
- Access rights
- European rules
- Discussion The freight market
- **Freight Rail Usage**
- **Freight lifted** fell to 18.8 million tonnes in 2016-17 Q1, a decrease of 15.3%. The amount of **coal lifted** was 2.7 million tonnes, a decrease of 52.1%.
- **Freight delay** in 2016-17 Q1 fell to 9.7 minutes per 100 train kilometres, a reduction of 6.1% compared to 2015-16 Q1.
- Total **freight train kilometres** was 8.37 million kilometres, a decrease of 0.6 million kilometres (-6.%) compared to 2015-16 Q1.
- [http://orr.gov.uk/\_\_data/assets/pdf_file/0015/22902/freight-rail-usage-2016-17-quarter-1.pdf](http://orr.gov.uk/__data/assets/pdf_file/0015/22902/freight-rail-usage-2016-17-quarter-1.pdf)
- **Coal in decline**
- **Still a busy network with competing demands**
- **New markets opening up** eg parcels, urban centres
- **Competition role** eg FL undertakings Enhancements
■ Funded enhancements – Government sets publicly funded enhancement priorities - recent Hendy review. SFN £235M. – Governance of the fund works well through SFN steering group to identify schemes – Example bigger passing loops to enable longer more efficient trains – Felixstowe branch enhancements – an example where NR is working better with FOCs to report progress and decide best option to improve capacity – BUT NR’s project delivery performance needs to be better
■ Private investment – Ports and freight terminals – New/recycled rolling stock
■ DfT freight strategy – Commitment to freight, looking to unlock potential,
■ NR freight study Freight performance
- ORR holds NR to account
- PR13 and licence condition
- Freight delivery metric for CP5 is 92.5%
- 15 minutes of scheduled arrival time
- NR met this in all but one period but some specific issues
- NR also measures lateness for departures and arrivals
- Balance filling train vs leaving on time.....effect on performance
- Industry working together to improve performance – lateness can have big impact on freight operators
- Network capability
- NR funded to maintain published capability [line speed, gauge etc]
- Freight reasonable expectation to go anywhere on network so expect NR to maintain all of the network
- Holding NR to account - Freight performance improvement steering group; The Freight Attribution Delivery Group; The Network Capability Steering Group
- Possessions
- Managing over-runs & minimising disruption (PDI-f measure 0.73 exit of CP5) Access and Licensing- casework
- Framework agreements
- New TACs: ‘big 5’ TACs run to 2026, provides certainty
- We decided between several passenger proposals for ECML but in doing so made sure freight needs considered
- Streamlining general approval and updating guidance
- Freight customer TACs available
- Facility Access
- ORR approval needed for access agreements, if not exempted (s17 and s18)
- Updating General Approval and new guidance
- Appeals
- Connection contracts
- Updated guidance & updating connection contracts
- Licensing and licence exemptions
- NR land disposals Access rights issues
- Timetabling and flexibility of rights to make better use of network
- Windows instead of ‘levels’
- Surrender of unused access rights,
- 4,400 paths surrendered with 20% returned to strategic capacity
- Strategic capacity
- Freight has to be reactive to customers’ needs
- Strategic Capacity Statement: new QJ virtual paths, flexing, working with TOCs, code of practice – explaining timetabling decisions
- DfT/FOC working group
- Track access options
- Improving procedures – following up industry workshop
- Rail freight industry code of practice – industry solutions New European access rules
- **Service Providers**
- The Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016
- Information about facilities
- Access
- Charges
- Information on website or via Network Statement
- ORR is appeals body
- New ORR guidance
- **Implementing Acts** – service facilities, timetabling, framework agreements – opening up market
- **Fourth Railway Package** – “the final step…”
- **European freight corridor**
- **European train control system**
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3698c8e5bad2b33ed95b7eeb26e488604f6e1b5b | ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Freight customer event
Welcome
21 November 2018 Setting the Context ORR Freight Customer Event
Maggie Simpson Director General – RFG 21 November 2018 Growth – the long view
Growth in Freight moved (bn tkm)
- Construction
- Intermodal Renewing the environmental case
- Working to update environmental measurements and comparisons.
- Research to inform future traction options including potential to replace / supplement diesel.
- Continued pressure for longer trains, moving more with each locomotive.
- Consideration of options to improve air quality emissions in terminals. Investment needs for next control period
4320 lorries shifted from road to rail each day under Midlands Rail Hub plans Positioning for successful Brexit
Brexit BOOST for Network Rail as expensive EU regulations set to be DROPPED
‘Don’t forget rail’ in Brexit talks, urge UK industry leaders
By Benjamin Fox and Ian Hall | EURACTIV
Rail industry seeks post-Brexit customs depots around UK
Inland freight terminals would ease congestion at Channel tunnel, says group Rail Review raises questions for freight.
| Vertically Integrated | Private Sector | Public Sector | |-----------------------|----------------|---------------| | Direction of Conservative Party Policy | | Direction of Labour Party Policy |
| Vertically Separated | Private Sector | Public Sector | |----------------------|----------------|---------------| | | | UK railways 2018 | Summary
• Strong prospects for rail freight growth
• Rail freight sector is working to reconfirm its environmental position for the future.
• Brexit remains a risk, but work is developing on key areas including Channel Tunnel.
• Potential structural reform needs careful thought to be a positive for freight sector. Thank You
[email protected] www.rfg.org.uk CP6 freight access charge decisions
Freight customer event 21 November 2018
Pedro Abrantes Headlines
Charging framework:
- Stability
- Simplification
Quantum:
- 2019 – 2021: Variable costs going up by CPI inflation
- 2021 – 2028: Variable costs going up by CPI + ~3.2% p.a.
- Infra costs going up by CPI for ESI coal, iron ore and spent nuclear fuel
- Biomass to pay Infra Cost Charge from 2021 Variable charges - headlines
- Legal framework:
- Infra costs directly incurred must be recovered from operators
- Changes can be capped and phased-in over a finite period of time
- Capacity charge and coal spillage charge will be scrapped = saving
- But:
- CP5 capping catching-up with us
- NR variables costs have continued to increase
- Without capping/phasing-in, total variable charges would have gone up by 26% + inflation over CP6
- Capping/phasing-in mean that:
- 2019-2021: variable charges will increase with CPI inflation
- Overall CP6 increase = CPI inflation + 10%
- Change from RPI to CPI further expected to save 5% by end of CP6. Variable Usage Charge capping/phasing-in detail
- Decision took account of ORR’s statutory duties, in particular:
- Better use of the network
- Supporting rail sector growth and stability
- Impact on funding
- Total variable charges will increase by CPI inflation between March 2019 and March 2021
- Then transitioning to uncapped levels via a steady straight-line ‘glide path’ to end of CP7 (March 2024) ~ CPI + 3.2% p.a.
- The increase in total variable charges over CP6 will be CPI+10% Infrastructure cost charges (1)
- Freight-only line (FOL) and freight specific charge (FSC) being replaced with overall infrastructure cost charge (ICC)
- ESI coal, iron ore and spent nuclear fuel will continue to be charged ICCs
- Charges will increase with CPI inflation
- Freight services carrying biomass for the electricity supply industry (ESI biomass) deemed to be able to bear a mark-up charge in CP6
- This will be introduced in April 2021 and increase gradually to the end of CP6
- Our decision took into account the fact that there could be some reduction in biomass traffic as a result of this charge. Infrastructure cost charges (2)
Similar to the way ICCs were introduced for ESI coal, iron ore and spent nuclear fuel in CP5, the charge will be phased in for biomass services over CP6.
| 2017-18 prices | 2019-20 | 2020-21 | 2021-22 | 2022-23 | 2023-24 | |----------------|---------|---------|---------|---------|---------| | ESI coal | 1.6 | 1.6 | 1.6 | 1.6 | 1.6 | | Iron ore | 1.6 | 1.6 | 1.6 | 1.6 | 1.6 | | Spent nuclear fuel | 34.2 | 34.2 | 34.2 | 34.2 | 34.2 | | ESI biomass | 0.0 | 0.0 | 0.3 | 0.9 | 1.4 |
Note: charge in £ per thousand gross tonne mile (kgtm). Biomass takes into account phase-in profile. ORR Freight Customer Event Network Rail update
Paul McMahon Managing Director, Freight & National Passenger Operators 21st November 2018 Safety moment Freight & National Passenger Operators
- Established as “ninth operational route” or “virtual route”
- Formation of FNPO, built on National Freight team, established following McNulty
- Strongly supported by customers and stakeholders with high levels of FNPO people engagement
- Do not physically operate infrastructure but are accountable for outputs
- Principal point of contact with customers who operate over multiple routes
- Work closely with rail freight end users, who include ports, aggregates companies, third party logistics providers Our national customers and our priorities
Our Purpose
Deliver growth and provide excellent service for our customers and stakeholders, through improving safety and performance, and enhancing capacity and capability, at an efficient cost. FNPO Priorities
Deliver safe, reliable and efficient performance
Customer focused and collaborative
Develop the FNPO team, in line with wider transformation
Identify and provide network capacity and capability
Business development to generate growth
## FNPO Route Scorecard at Period 8
### Route
#### NATIONAL OVERVIEW
| Route Scorecard - FNPO | Period Business Review | |------------------------|------------------------| | **Report Owner** | Paul McMahon |
#### SUPPORT FUNCTIONS
| Period | YTD | FYE | |--------|-----|-----| | | | |
#### STRATEGIC PAPERS
| Period | YTD | FYE | |--------|-----|-----| | | | |
#### GUEST PAPERS
| Period | YTD | FYE | |--------|-----|-----| | | | |
### Safety - (PRP 20%)
| PRP Weighting | Actual | Target | Actual | Target | FYE | Worse than Target | Target | Better than Target | FYE | Achievement | FYE Weighted Achievement | |---------------|--------|--------|--------|--------|-----|-------------------|--------|-------------------|-----|-------------|--------------------------| | Work related absence | 5.0% | 0 | 1 | 0 | 13 | 10 | 40 | 20 | 0 | 75% | 3.75% | | Violations | 4.0% | 0 | 1 | 0 | 6 | 6 | 12 | 12 | 12 | 0 | 0.00% | | SPADs | 4.0% | 0 | 1 | 0 | 6 | 6 | 12 | 12 | 12 | 0 | 0.00% | | Close Calls Raised | 2.0% | 19 | 12 | 12 | 112 | 111 | 229 | 131 | 17 | 233 | 20.00% | | Close calls closed within 90 days | 2.0% | 100% | 100% | 90% | 100% | 80% | 90% | 20.00% | | Operator last time incidents on NR infrastructure | 1.0% | 0 | 1 | 2 | 7 | 6 | 16 | 12 | 8 | 20.00% |
### Track Performance Measures - (PRP 20%)
| PRP Weighting | Actual | Target | Actual | Target | FYE | Worse than Target | Target | Better than Target | FYE | Achievement | FYE Weighted Achievement | |---------------|--------|--------|--------|--------|-----|-------------------|--------|-------------------|-----|-------------|--------------------------| | Freight Delivery Metric (ODM-R) | 6.0% | 94.0% | 93.9% | 93.7% | 93.4% | 93.0% | 94.0% | 94.5% | 96.5% | 30% | 1.00% | | Right time Departures - Freight | 3.0% | 76.9% | 76.9% | 76.4% | 76.9% | 76.9% | 76.9% | 76.9% | 76.9% | 76.9% | 76.9% | | ROC on TDC (PM/ID train km) | 3.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | | Delay per incident - Freight | 0.0% | 35.5 | 38.8 | 27.5 | 26.6 | 26.8 | 26.3 | 27.1 | 28.0 | 31% | 0.00% | | Cross Country - PMI | 3.0% | 82.5% | 87.6% | 83.5% | 87.9% | 82.3% | 80.2% | 90.0% | 90.0% | 90.0% | 0.00% | | Cross Country - Calls | 3.0% | 5.7% | 6.7% | 6.0% | 5.3% | 6.0% | 5.3% | 5.3% | 5.3% | 5.3% | 0.00% | | Cross Country - Time to 3 minutes | 0.0% | 63.6% | 64.8% | 67.2% | 72.7% | 65.4% | 72.5% | 73.5% | 76.5% | 0% | 0.00% | | Cross Country - Cancellations | 0.0% | 2.4% | 2.9% | 2.7% | 3.1% | 2.1% | 2.0% | 2.0% | 2.0% | 2.0% | | Calendarian Sleeper-Right Time | 1.0% | 77% | 75% | 70% | 77% | 80% | 75% | 80% | 80% | 80% | 1.50% | | Charter Train - performance measure | 0.0% | 80% | 91% | 90% | 90% | 88% | 88% | 90% | 90% | 90% | 0.00% |
### Investment & Asset Management - (PRP 10%)
| PRP Weighting | Actual | Target | Actual | Target | FYE | Worse than Target | Target | Better than Target | FYE | Achievement | FYE Weighted Achievement | |---------------|--------|--------|--------|--------|-----|-------------------|--------|-------------------|-----|-------------|--------------------------| | CPS S/N schemes - current year GIP G-completion vs baseline | 10.0% | 90% | 90% | 90% | 90% | 90% | 90% | 90% | 90% | 90% | 5.00% |
### Customer - (PRP 30%)
| PRP Weighting | Actual | Target | Actual | Target | FYE | Worse than Target | Target | Better than Target | FYE | Achievement | FYE Weighted Achievement | |---------------|--------|--------|--------|--------|-----|-------------------|--------|-------------------|-----|-------------|--------------------------| | Network rail index - Freight (Great Britain) | 4.0% | 1.0% | 0.8 | 7.1 | 6.5 | 11.4 | 11.4 | 11.4 | 11.4 | 11.4 | 3.00% | | Freight service plan review - delivery against agreed milestones | 3.0% | 100% | 90% | 94% | 90% | 90% | 90% | 90% | 90% | 90% | 1.50% | | Strategic capacity - Freight | 3.0% | 21% | 15% | 21% | 15% | 15% | 15% | 15% | 15% | 15% | 1.50% | | Cross Country - Average minutes late | 4.0% | 6.0% | 5.0% | 6.0% | 6.0% | 6.0% | 6.0% | 6.0% | 6.0% | 6.0% | 0.00% | | Cross Country - Access planning agreed milestones met | 4.0% | 81% | 60% | 70% | 80% | 78% | 78% | 80% | 80% | 80% | 3.00% | | Calendarian Sleeper - Roll-up of customer scorecard | 1.0% | 50% | 50% | 50% | 50% | 50% | 50% | 50% | 50% | 50% | 2.25% | | Charter planning compliance | 1.0% | 61% | 61% | 61% | 75% | 75% | 75% | 75% | 75% | 75% | 3.00% | | Freight End Use (RUL) satisfaction | 6.0% | 61% | 61% | 61% | 75% | 75% | 75% | 75% | 75% | 75% | 3.00% |
### Financial Performance - (PRP 15%)
| PRP Weighting | Actual | Target | Actual | Target | FYE | Worse than Target | Target | Better than Target | FYE | Achievement | FYE Weighted Achievement | |---------------|--------|--------|--------|--------|-----|-------------------|--------|-------------------|-----|-------------|--------------------------| | Financial Performance Measure (FPM) | 15.0% | -4% | -8% | -1% | 0% | -1% | -10% | 0% | 10% | 87% | 7.04% |
### People - (PRP 10%)
| PRP Weighting | Actual | Target | Actual | Target | FYE | Worse than Target | Target | Better than Target | FYE | Achievement | FYE Weighted Achievement | |---------------|--------|--------|--------|--------|-----|-------------------|--------|-------------------|-----|-------------|--------------------------| | Your Voice Action Plans - delivery against agreed milestones | 5.0% | 100% | 90% | 100% | 80% | 80% | 80% | 80% | 80% | 80% | 5.00% |
### Period 8
- **Network Rail Index - Freight (Great Britain)**: 11.4%
- **Freight Service Plan Review - Delivery Against Agreed Milestones**: 90%
- **Strategic Capacity - Freight**: 15%
- **Cross Country - Average Minutes Late**: 6%
- **Cross Country - Access Planning Agreed Milestones Met**: 80%
- **Calendarian Sleeper - Roll-up of Customer Scorecard**: 50%
- **Charter Planning Compliance**: 61%
- **Freight End Use (RUL) Satisfaction**: 61%
- **Financial Performance Measure (FPM)**: 87%
- **People - (PRP 10%)**: 80% Freight traffic trends
## Capacity & Capability – Total SFN Contributions £419.7m
| Scheme | SFN funding (£m) | Complete (freight part) | Output | |-----------------------------------------------------------------------|------------------|-------------------------|------------------------------------------------------------------------| | Ipswich Chord | 50.5 | Mar-14 | Increased capacity, faster journey times | | Ipswich Yard | 32.7 | Dec-14 | Increased capacity, longer trains, better operations | | North Lincolnshire resignalling and re-control | 4 | Jan-16 | Improved operations | | Southampton – WCML diversionary gauge | 29.2 | Jul-16 | Clearance for diversionary capability | | Southampton Freight Train Lengthening | 90.5 | Mar-19 | 775m capability | | Banbury area remodelling / Oxford corridor | 20.2 | Mar-19 | Line speed improvement, reduced headways | | Northern Ports Freight Capacity | 8 | Mar-19 | Improved capacity to Port of Liverpool | | Great Western Main Line gauge clearance | 15.2 | Mar-19 | Clearance for 9’6” high maritime containers on standard deck wagons | | Thames Haven Level Crossing improvements | 0.5 | Mar-19 | | | Peak Forest Freight Train lengthening | 48.9 | Mar-19 | Longer, heavier trains, upto 3000t | | Gauge clearance schemes connecting W Midlands / S East with N East / Scotland | 67.3 | Mar-19 | Clearance for 9’6” high maritime containers and domestic/European swapbodies on standard deck wagons | | Ripple Lane Nodal Yard (GRIP 3) | 0.3 | Jul-19 | Enables European traffic to access terminals in Barking/Dagenham area | | Felixstowe Branch Line Capacity | 52.4 | Aug-19 | Upto 47tpd each way | | Question | Score (out of 5) | |-------------------------------------------------------------------------|------------------| | 1 – During the last 6 months, how satisfied are you with Network Rail | 3.47 | | overall? | | | 2 – During the last 6 months how satisfied are you with the Network | 3.13 | | Rail Freight? | | | 3 – In the last 6 months are you satisfied Network Rail has put safety | 3.93 | | first in its dealings with your company? | | | 4 – During the last 6 months how satisfied are you with Network Rail | 3.13 | | infrastructure reliability and performance? | | | 5 – During the last 6 months how satisfied are you with the progress | 2.80 | | of any current / relevant Network Rail delivered projects (eg Strategic | | | Freight Network / other Enhancements / improvements)? | | | 6 – Thinking about the last 6 months how satisfied are you that Network | 3.47 | | Rail is helping to deliver your wider business objectives? | |
**Overall score 61% against a target of 73%**
# Proposed Freight End User Scorecard
| Freight End User Scorecard | Satisfaction | Traffic | Performance | Safety | |----------------------------|--------------|---------|-------------|--------| | All Commodities | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Intermodal | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Construction | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Metals | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Energy | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Automotive | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Royal Mail | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC | | Other | Target | TBC | TBC | TBC | | | Actual | TBC | TBC | TBC |
A better railway for a better Britain FNPO Route
- Noted that FNPO route is different
- Role is to provide “advocacy” for customers across all NR
Stakeholder engagement and satisfaction
- Continue customer/FEU satisfaction surveys
- Set up Supervisory Board
CP6 Scorecards
- Content with Route scorecard targets
- FDM 94.0%; FDM on Route scorecards
- All ‘TBC’ to be agreed by March 19
- Supportive of customer scorecards
- FEU scorecard to be developed
Access charges
- Freight access charge increases – capped and phased
Safety
- Allocated £22m to address and mitigate safety risk
Scotland
- Specific measures for growth, gauge and journey time
Capacity & capability
- Maintain published and operational capability
- 15.6% growth in freight moved assumed
Financials
- £28m for Opex CP6 Traffic Forecast
Historical and forecast total rail freight tonnes lifted in GB: scenarios for 2023/24
- Actual
- Sc B3
- Sc A3
- RSP
- Sc D2
- Sc C2
Million tonnes per year
2004 2009 2014 2019 2024
## CP6 candidate enhancement schemes
| Key Freight Corridor | CP6 Candidate Freight Schemes | Estimated cost range | |----------------------|-------------------------------|----------------------| | **Felixstowe to West Midlands & the North** | – Doubling of Haugley Jn\
– Signalling Headways Bury\
– Ely area (level crossings / bridge speeds)\
– Ely to Soham doubling\
– Peterborough - Syston signalling/level crossings\
– Syston – Sheet Stores gauge (W10/W12)\
– Further refine layout at Ipswich Yard | £10m – £15m\
£50m – £70m\
£100m – £250m\
£120m – £150m\
£50m - £60m\
£5m - £10m\
£1m - £5m | | **Southampton to West Midlands & WCML** | – Kenilworth doubling | £100m - £170m | | **Channel Tunnel classic route** | – Gauge enhancement (up to W12) | £50m - £80m | | **Cross London, and Essex Thameside** | – Ripple Lane Nodal Yard\
– Thameside Level Crossings (capacity) | £10m - £15m\
£30m – £40m | | **Northern Ports & Trans Pennine** | – Trans Pennine gauge enhancement (up to W12)\
– New loop between Up Decoy and South Yorkshire Joint Line\
– Trans Pennine freight capacity | £100 - £200m\
£5m-£10m\
tbc | | **Total** | | c.£0.6bn - £1bn | The future... The case for Government support for the rail freight industry is articulated in its Rail Freight Strategy
- Government’s Rail Freight Strategy was published in September 2016
- Government policy: support modal shift and rail freight growth to mitigate the negative external impacts of road haulage.
- Support for rail freight based on productivity gains, reduced road congestion and environmental benefits.
- Sets out vision for how rail freight can continue to grow, collaborate, and innovate to help relieve pressure on the road network.
- Identifies intermodal, construction and automotive sectors as key growth areas The strategy identifies four priority areas where action by Government & industry could help rail freight achieve its potential
| Innovation and skills | Network Capacity | |-----------------------|------------------| | ✓ BEIS’ Clean Growth Strategy to look at freight into cities with zero emission last mile delivery | ✓ HLOS & SOFA include funding for strategic freight network | | ✓ Innovate UK funded Accelerating Rail Innovation project into short freight ‘track train’ | ✓ NR’s ‘FNPO’ established | | ✓ SofS issued guidance to ORR to consider affordability of charges, recognising benefits of rail freight | ✓ Investment in digital ETCS freight cab fitment | | ✓ ORR’s Final Determination issued cap and phasing-in of VUC for rail freight | ✓ Freight in franchising workstream |
| Track access charging | Telling the story of rail freight | |-----------------------|---------------------------------| | ✓ HLOS & SOFA include funding for strategic freight network | ✓ RDG published ‘Rail Freight: Working for Britain’ in summer 2018 | | ✓ NR’s ‘FNPO’ established | ✓ DfT Rail Freight video | | ✓ Investment in digital ETCS freight cab fitment | | | ✓ Freight in franchising workstream | | We meet regularly with our stakeholders to identify the strategic challenges facing the rail freight industry. DfT is working on many live issues to support rail freight – many require collaboration with industry and across government
| Freight enhancement schemes in CP6 | Continuation of red diesel rebate | Continuation of MSRS | Development of Strategic Capacity | Better understanding of economic value of rail freight | |-----------------------------------|----------------------------------|----------------------|----------------------------------|-----------------------------------------------------| | HS2 | Cross-modal approach to freight policy | Ensuring freight has appropriate protections in any new model | Clarifying what capacity is available for freight growth | Working with industry on decarbonisation and air quality | | Stable and affordable track access charging regime | Ensuring freight is properly represented in the Rail Review | Highlighting the benefits of rail freight to OGDs | A good Brexit outcome for Channel Tunnel rail freight | Ensuring industry behaviours facilitate rail freight growth | New Approach to Enhancements Rail Network Enhancements Pipeline
James Conway Programme Director, London and South East Rail Enhancements Lessons from Control Period 5
Report from Sir Peter Hendy to the Secretary of State for Transport on the replanning of Network Rail’s Investment Programme
November 2018 Rail Network Enhancements Pipeline Engaging with the pipeline
- Only commit to the next stage of the pipeline
- Each decision taken will be informed by a business case
- Entry into the pipeline does not guarantee it will be delivered
More information at: https://www.gov.uk/government/publications/rail-network-enhancements-pipeline Delivering Enhancements in CP6
Dave Whyte Planning & Investment Manager, West Midlands, Chiltern and Freight Enhancements delivered or in delivery through the SFN Fund in CP5
- Felixstowe Branch Capacity Enhancement
- Southampton Freight Train Lengthening
- Buxton Peak Forest
- Ripple Lane Nodal Yard
- Gauge Clearance (Humber / Yorkshire to Midlands; ECML North)
- Enhanced capacity / gauge to ports (Liverpool / Thameshaven / Immingham)
- Business case development for potential CP6 enhancements Approach for CP6
SFN Steering Group: Chaired by NR FOCs RFG DfT Advises FEPB
Freight Enhancements Programme Board: Chaired by DfT Meets bi-monthly Oversees Programme
Enhancements Portfolio Board: Change in scope / cost / milestones
BICC / Rail Investment Board / Network Services Board: Funding / Business Case Approval ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Freight customer event
ORR regulation
21 November 2018
Gordon Herbert, Patrick Talbot, Lisa Thurston, Jeremy Bohl. ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future. ORR overview
- Our railway health, safety, economic and road functions overall are driven by UK and EU legislation and on the basis that we are also accountable to laws passed by the Scottish government.
- As a regulator we are accountable to Parliaments and the public to:
- Protect the people who work on, use, or interact with the railway. This is both to ensure continuous improvement in health and safety and, on the economic side, to temper the monopoly power of Network Rail.
- Ensure fair access to a rail network and other infrastructure which are becoming increasingly congested.
- Ensure Highways England carries out its investment programme on England’s strategic road network effectively. It is our job to report on Highways England’s progress in delivering this investment, on budget and to time.
- Protect the interests of future users by working with the industry and with funders as they develop the network of tomorrow. Freight customers
- Freight customers are those with a direct interest in rail freight, including purchasers of services and their representative bodies, but not the operators of the trains.
- ORR wants to better understand the interests of rail freight customers, balancing them with the interests of other users and with funders of the rail network.
- Webpage, feedback and ideas
- [http://orr.gov.uk/about-orr/who-we-work-with/industry-organisations/freight-customers](http://orr.gov.uk/about-orr/who-we-work-with/industry-organisations/freight-customers).
- Freight customer panel
- “help to ensure that our policies and regulatory decisions take into account the commercial environment that freight customers work within”.
- ORR’s panel is made up of freight customers who represent a wide area of expertise and interest from across the rail freight community.
- Specific initiatives
- Freight customer track access contracts. ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Access
Gordon Herbert Track access manager (freight) Access and Licensing Team, ORR [email protected] [email protected] Access: framework
- Railways Act, Access and Management Regulations
- Track access
- NR contracts
- New/other IMs
- Facility access
- Contracts
- Appeals
- Connection contracts
- ORR guidance and advice
- Open, transparent, efficient and competitive market. Access: current issues
- Service facility transparency
- AMRs and Implementing Regulation on Service Facilities
- NR network statement and other IMs – NR templates
- “The Common Template” is available on RailNetEurope’s website.
- [email protected]
- Model clauses FACs
- New networks/other than NR
- Changing markets and access rights
- Access rights framework, model clauses
- Enhancements, Capacity, Investment ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
ORR’s approach to competition policy in the rail freight industry
Jeremy Bohl Lisa Thurston November 2018 Agenda
- ORR’s competition role
- Competition CA98 investigation: Intermodal (deep sea container) case
- Access issue: Scope for potential application of the A&M Regs
- What you can do ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future. We use competition policy (and where necessary our powers) to optimise competitiveness and create conditions for innovation, efficiency and growth. Competition powers
**Competition Act 1998 (CA98)**
- Chapter 1/ Article 101 TFEU – agreements between undertakings (business) or decisions of associations of undertakings (e.g. trade associations), and concerted practices which have, as their object or effect, the prevention, restriction or distortion of competition within the United Kingdom (or any part of it) and which may affect trade in the United Kingdom
- Chapter 2/ Article 102 TFEU - conduct by one or more undertakings amounting to the abuse of a dominant position in a market which may affect trade within the United Kingdom. This is known as the Chapter II Prohibition
**Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016 (A&M Regs)**
- Regulation 34 provides ORR with the power to issue directions to correct discrimination against applicants for access to the rail network, market distortion; or undesirable developments in relation to the competitive situation in the rail services markets ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Competition CA98 investigation: Intermodal (deep sea container) case Overview
- CA98 opened in August 2014
- Suspected abuse of a dominant position in the provision of deep sea container rail transport services between ports and key inland destinations in Great Britain.
- ORR accepted commitments in December 2015. These will remain in force until 31 March 2019 ORR’s competition concerns
Contractual Clauses
- Restrictions on resale
- Minimum volume commitments
- Loyalty enhancing rebates
- Exclusive purchasing obligations
- Duration Commitments – some examples
**Outright/express exclusivity**
- Outright end to practice
- Not enter any contracts which require customers to purchase exclusively from a single FOC
**Restrictions on resale**
- Outright end to practice
- Not enter into any contracts which place any restrictions or conditions on re-sale.
**Retroactive rebates**
- Outright end to practice.
- Remove all retroactive rebates in place with customers on the routes specified in the commitments.
**Minimum volume commitments**
- Mitigation
- Provide customers with rights to reduce their minimum volume commitments after a set period
**Duration**
- Outright end to practice
- Remove evergreen clauses. Not enter any contracts with a duration of more than 5 years. Impact
- Preliminary data suggests a positive impact on competition:
- Ability for customers to choose shorter more flexible contacts
- As contacts are open to competition on an annual basis, customers have more ability to choose the FOC with the most competitive offering
- Indications of more rivalry between FOCs
- However, there are still issues with gaining access to the network ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Access issue: Potential application of the A&M Regs Complaint regarding access to rail facilities
- Key concern was the potential that the operator of the facility was preventing a customer of a freight operator from operating at the facility and expanding its business.
- ORR considered all options including issuing a direction under the A&M regs.
- ORR’s policy objective was to ensure fair competition and market conditions for growth.
- Ultimately resolved issue without the use of regulatory or competition powers. What you can do
■ If you experience an issue which could be anti-competitive contact us:
http://orr.gov.uk/rail/promoting-competition/how-to-report-a-breach-of-competition-law
■ Examples of anti-competitive conduct:
– Issues with getting access to rail facilities – Price fixing between freight operators – Markets being split by geography or customer by freight operators (customer sharing) – Exclusivity requirements by freight operators ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Safety Matters
Patrick Talbot Health and Safety Regulation
- Safety Regulator for Britain’s Railways
- Responsible for all railways (mainline, metros, heritage, trams)
- Certification body (safety certificate/authorisation)
- Enforcing authority for health and safety legislation
- Prosecuting authority What about off-network sites?
- Enforcing Authority is most likely either ORR or HSE
- Health and Safety (Enforcing Authority for Railways and Other Guided Transport Systems) Regulations 2006 (as amended) (EARR)
- Clarification in the MoUs between ORR, HSE and ONR
- Enforcing Authority may vary depending on the nature of the activity carried out on site
- Usually exempt from the requirements of ROG S
iPort Rail Freight Safety Issues
- Unauthorised access
- Freight derailment
- Interconnected factors (infrastructure condition, vehicle maintenance and loading) lead to derailment
- Industry Cross Industry Group (XIFDWG)
- Collaborative approach to solving a system problem
- Representatives from Network Rail, FOCs, Customers, Wagon owners, consultants Off- Network Infrastructure
- Two questions…
- How can railway safety performance be improved and maintained?
- How can guidance, best practice and learning from incidents be shared? Questions/ queries/ more information:
Patrick Talbot, HM Principal Inspector of Railways
- [email protected]
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c05c7575cce802583dd9cd6bc0044e0cf39818c0 | Freight customer event follow up discussion on VUC
Justin Nsengiyumva, Ben Worley, Pedro Abrantes
18th March 2019 Purpose of the slides
Following the ORR’s Freight Customer Event of 21st November 2018, FOCs (i.e. construction industry mainly through the MPA letter of 11th March 2019) requested a separate session to discuss:
- The process ORR adopts to determine charges.
- The accuracy of ORR’s communications re: average increases for CP6 freight charges.
- Effect of the changes in the VUC and other charges from CP5 to CP6 specifically relating to construction traffic.
- Treatment of Network Rail’s own engineering services in the cost models and how the network damage cost that they create is recovered across the rail sector.
- Mechanism of converting cost recovery to tariff charging, in particular how incentives to invest / use track friendly technology is captured and applied.
- To understand how the 'market can bear' assessment and capping is attributed.
The purpose of these slides is to provide clarifications on the above issues. Contents
■ Introduction ■ PR Process: Who does what? ■ Variable Usage Charge (VUC) ■ PR18 Final Determination on track access charges – CP6 charging framework – Variable charges – headlines – Freight Variable Charges in numbers – VUC rates variability ■ Incentives to invest in track-friendly wagons – IIAB wagon example ■ Treatment of Network Rail engineering services Introduction
- ORR has a statutory duty to undertake Periodic Reviews (PR) of Network Rail every five years.
- During a PR process we determine
- what Network Rail should deliver in respect of its role in operating, maintaining and renewing the network; and
- how the funding available should be best used to support this
- We also set out how we will regulate it over the next five years i.e. Control Period.
- This feeds through into:
- the service that passengers and freight customers receive and, together with taxpayers, ultimately pay for; and
- the track access charges to train operators PR Process: Who does what? The process
Secretary of State (for England & Wales) and the Scottish Ministers each provide ORR with:
- **High level output specification (HLOS)** What they want to be achieved by railway activities during the control period
- **Statement of funds available (SoFA)** Public resources likely to be available to achieve the HLOS
**ORR then:**
- Undertakes the review to seek to achieve the HLOS; and
- Checks that the funding in the SoFA is consistent with the HLOS
Over a 2-3 year period, ORR develops its policy framework for the periodic review
Network Rail produces its ‘strategic business plans’ setting out how it would deliver the HLOS requirements and how much this would cost
Determines whether Network Rail’s SBP would deliver the HLOS and whether there are sufficient funds available for this
NR Net Revenue Requirement = Government Grant + Track Access Charges Determining charges – ORR vs. NR Roles
**ORR Role**
- Publication of charging objectives and guidance on calculations and audit: *Policy framework*
- Audit
- Approval of charges
**Network Rail Role**
- Cost Analysis SBP
- Calculation of charges
- Amendments to charges (if necessary)
- Publish final charges/price list
Network Rail charging price lists for CP6: [https://www.networkrail.co.uk/running-the-railway/long-term-planning/periodic-review-2018-pr18/](https://www.networkrail.co.uk/running-the-railway/long-term-planning/periodic-review-2018-pr18/) Variable Usage Charges (VUC) What is VUC?
- The VUC recovers operating, maintenance and renewal costs that vary with traffic - Direct costs
- Track 85%: track maintenance and renewal
- 70% of costs related to vertical rail forces; and
- 30% of costs relate to horizontal rail forces
- Civil 10%: under bridges, embankments, etc.
- Signalling 5%
- For any vehicle type, VUC is determined by its “track friendliness”
- Track friendliness is determined by:
- Axle load
- Operating speed
- Un-sprung mass
- Bogie primary yaw stiffness (indicative of its curving ability) VUC Policy: PR08 vs PR13 vs PR18
■ Our PR13 policy on freight VUC – In PR13, we capped the average freight VUC rate increase at 10% from CP4. This cap was phased-in over CP5. – This cap prevented VUC significant increases (e.g. construction materials rate increased only by 19% instead of the possible 46%). See PR13 FD p.577 – In PR13, we applied an 18.9% efficiency overlay to the VUC, from the first year of CP5. These savings have not been achieved – Network Rail has become less efficient compared to CP4. This has led to an increase in the costs used to calculate the VUC. – In PR18 we have undertaken minor recalibration of the VTISM
■ With no mitigation, unwinding PR13 cap combined with Network Rail’s inefficiency and VUC recalibration, average uncapped freight VUC would increase by 38% in PR18 – Construction would increase by 58% (see slide 19 below) PR18 Final Determination on Track Access Charges CP6 charging framework
Charging framework’s aim:
- Simplification
- Stability
4 Infrastructure cost charge (ICC)- As per MCB Analysis
- Infra costs going up by CPI for ESI coal, iron ore and spent nuclear fuel
- Biomass to pay Infra Cost Charge from 2021 Variable charges - headlines
- Legal framework
- Costs directly incurred (e.g. VUC) must be recovered from operators
- Charges can be capped and phased-in over a finite period of time
- But
- CP5 capping catching-up with us
- NR variable costs have continued to increase
- Capacity charge and coal spillage charge will be scrapped = saving
- Forecast average increase in total variable charges relative to the final year of CP5 for freight (PR18 FD, Table 9.1): Not just construction!
| Operator type | Uncapped increase from close CP5 to CP6 | Capped increase averaged across CP6 | Capped increase from close CP5 to final year of CP6 | |---------------|----------------------------------------|------------------------------------|-----------------------------------------------| | Freight | 26% | 4% | 10% | Variable charges – headlines (2)
- **CP6 capping/phasing-in mean that:**
- 2019-2021: Total variable charges will only increase by CPI inflation
- Apart from VUC that will be changing following the transition profile, others will be held constant.
- Capped increase from close CP5 to final year of CP6 will be CPI+10%
- Average annual increase years 3-5 of CP6 is CPI+ 3.2%
- Change from RPI to CPI further expected to save 5% by end of CP6. Transition profile to full cost recovery
- Capped operators will benefit from a two-year adjustment period during which there will be no increase in their total variable charges in real terms (shown in dark blue).
- The transition to uncapped levels is then based on a steady straight-line ‘glide path’ to the end of CP7.
- This means that the VUC for capped operators will also include phasing-in to adjust for the changes to other variable charges (including the removal of the capacity charge).
## Freight Variable Charges in numbers
| £m | CP6 | CP7 | |----|-----|-----| | Period ending | Mar-19 | Mar-20 | Mar-21 | Mar-22 | Mar-23 | Mar-24 | Mar-25 | Mar-26 | Mar-27 | Mar-28 | Mar-29 | | Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | | VUC Uncapped | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | 63.63 | | VUC (capped and phased in) | 46.07 | 48.98 | 48.98 | 50.81 | 52.64 | 54.47 | 56.30 | 58.13 | 59.97 | 61.80 | 63.63 | | change yoy (%) | 3.8% | 6.3% | 0.0% | 3.7% | 3.6% | 3.5% | 3.4% | 3.3% | 3.1% | 3.1% | 3.0% | | CC | 3.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | | EAUC | 0.48 | 0.64 | 0.64 | 0.64 | 0.64 | 0.64 | 0.64 | 0.64 | 0.64 | 0.64 | 0.64 | | Coal Spillage | 0.19 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | | EC4T | 6.24 | 6.36 | 6.36 | 6.36 | 6.36 | 6.36 | 6.36 | 6.36 | 6.36 | 6.36 | 6.36 | | Other variable charges | 9.91 | 7.00 | 7.00 | 7.00 | 7.00 | 7.00 | 7.00 | 7.00 | 7.00 | 7.00 | 7.00 | | Total variable freight charges | 55.98 | 55.98 | 55.98 | 57.81 | 59.64 | 61.47 | 63.30 | 65.14 | 66.97 | 68.80 | 70.63 | | change YoY (%) | 3.1% | 0.0% | 0.0% | 3.3% | 3.2% | 3.1% | 3.0% | 2.9% | 2.8% | 2.7% | 2.7% | | CP % change cumulative | 9.0% | 0.0% | 0.0% | 3.3% | 6.5% | 9.8% | 13.1% | 16.3% | 19.6% | 22.9% | 26.2% | | Total uncapped VC (including CC+CSC) | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 | 73.53 |
### TVC increase capped to uncapped (YR0 VS YR10)
[ \\frac{(70.63-55.98)}{55.98} \\times 100 = 26% ]
### TVC increase at end CP6 (YR0 vs YR5)
[ \\frac{(61.47-55.98)}{55.98} \\times 100 = 10% ]
### Average annual increase YRS 3-5 of CP6
[ \\frac{(3.3%+3.2%+3.1%)}{3} = 3.2% ]
### Average TVC increase over CP6
[ \\frac{(0%+0%+3.3%+6.5%+9.8%)}{5} = 4.0% ]
### VUC increase capped to uncapped (YR0 vs YR10)
[ \\frac{(63.63-46.07)}{46.07} \\times 100 = 38% ]
### VUC Average increase in CP6
[ \\frac{(6.3%+0.0%+3.7%+3.6%+3.5%)}{5} = 3.4% ] VUC rates variability by commodity segment Individual VUC Rates’ variations
- There is considerable variation in the changes of the individual vehicle and (for freight) commodity rates around the average figures presented reflecting
- the different vehicle characteristics; and
- the variation in CP5 capping arrangements.
- We analysed the potential impact of the proposed increases in variable charges in CP6 across the various freight commodity segments.
- The implied impact of the higher charges on traffic in CP6 was calculated based on each commodity segment’s elasticity (MDST, 2012) and compared to the forecast traffic growth for that commodity segment (MDST, 2017).
- The increase in total variable charges is not expected to result in a material contraction of any of the freight commodity segments; and
- Our capping/phasing-in transition profile acts to moderate the rate of increase in rates to uncapped levels.
## VUC rates by commodity
| Freight Traffic Commodity | 2018/19 (kgtm) | Uncapped CP6 rate (£/kgtm) | 18/19 | 19/20 | 20/21 | 21/22 | 22/23 | 23/24 | 18/19 discount vs. uncapped rate | 2019/20 change (%) | 2020/21 change (%) | 2021/22 change (%) | 2022/23 change (%) | 2023/24 change (%) | |--------------------------|----------------|-----------------------------|-------|-------|-------|-------|-------|-------|---------------------------------|-------------------|-------------------|-------------------|-------------------|-------------------| | Construction Materials | 4,801,077.79 | 4.11 | 2.60 | 2.81 | 2.81 | 2.97 | 3.13 | 3.29 | 58% | 8% | 8% | 14% | 20% | 27% | | European Conventional | 285,022.05 | 2.99 | 2.42 | 2.51 | 2.51 | 2.57 | 2.63 | 2.69 | 24% | 3% | 3% | 6% | 8% | 11% | | Steel | 1,722,598.20 | 3.50 | 2.43 | 2.62 | 2.62 | 2.73 | 2.84 | 2.95 | 44% | 8% | 8% | 12% | 17% | 21% | | Iron Ore | 147,123.11 | 4.59 | 2.98 | 3.21 | 3.21 | 3.39 | 3.56 | 3.73 | 54% | 8% | 8% | 14% | 19% | 25% | | European Automotive | 2,690.06 | 3.67 | 2.84 | 3.05 | 3.05 | 3.13 | 3.21 | 3.28 | 29% | 8% | 8% | 10% | 13% | 16% | | Industrial Minerals | 419,924.57 | 3.99 | 2.68 | 2.89 | 2.89 | 3.02 | 3.16 | 3.30 | 49% | 8% | 8% | 13% | 18% | 23% | | Coal ESI | 120,405.24 | 3.84 | 2.42 | 2.60 | 2.60 | 2.76 | 2.91 | 3.07 | 59% | 7% | 7% | 14% | 20% | 27% | | Domestic Automotive | 416,039.95 | 2.12 | 1.97 | 1.94 | 1.94 | 1.97 | 1.99 | 2.01 | 8% | -1% | -1% | 0% | 1% | 2% | | Biomass | 1,227,268.07 | 3.74 | 2.30 | 2.48 | 2.48 | 2.64 | 2.79 | 2.95 | 63% | 8% | 8% | 15% | 22% | 28% | | Chemicals | 1,126.60 | 3.43 | 2.68 | 2.77 | 2.77 | 2.86 | 2.94 | 3.02 | 28% | 4% | 4% | 7% | 10% | 13% | | European Intermodal | 123,723.84 | 2.01 | 1.96 | 1.84 | 1.84 | 1.86 | 1.89 | 1.91 | 2% | -6% | -6% | -5% | -4% | -3% | | Domestic Intermodal | 10,437,628. | 2.01 | 1.66 | 1.75 | 1.75 | 1.78 | 1.81 | 1.85 | 21% | 5% | 5% | 7% | 9% | 11% | | Total/Average | 24,895,868 | 2.56 | 1.85 | 1.97 | 1.97 | 2.04 | 2.11 | 2.19 | 38% | 6% | 6% | 10% | 14% | 18% | VUC for construction in summary
- In 18/19, construction gets a greater discount than the freight average (58% vs. 38%)
| | CP6 uncapped | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 | 2023/24 | |------------------|--------------|---------|---------|---------|---------|---------|---------| | Average Rate (£/kgtm) | 4.11 | 2.60 | 2.81 | 2.81 | 2.97 | 3.13 | 3.29 | | VUC revenue (£m) | 19.73 | 12.50 | 13.47 | 13.47 | 14.25 | 15.03 | 15.82 | | Increase vs 18/19 (end CP5) | 58% (discount) | 8% | 8% | 14% | 20% | 27% | | YoY increase | 8% | 0% | 6% | 5% | 5% | | | CC not paid (Gain to FOCs) | 0.57 | 0.57 | 0.57 | 0.57 | 0.57 | |
- But we analyzed the impact of possible modal shift due to higher prices
- According to MDST (2012, P.2), doubling construction’s VUC may lead to a 14.8% reduction in its traffic but likelihood of moving traffic to road is not very high (=medium).
- MDST (2017) forecast for construction traffic growth from 16/17 to 23/24 is 33%
- Our analysis (not discussed here) showed that construction traffic growth forecast is 30% (net of possible CP6 modal shift) for same period. Incentives to invest in track-friendly wagons Incentives to invest in track-friendly wagons
- The VUC aims to be cost-reflective –
- Therefore, if operators run more ‘track friendly’ wagons they will pay lower VUCs
- By ‘track friendly’ we mean factors like;
- lower un-sprung mass,
- lower axle load and
- TF25 bogies, rather than three-piece bogies
- In simple terms, each wagon type is given a ‘damage score’ which its VUC is based on
- The damage score is based on engineering equations derived through engineering modelling, including using the Vehicle Track Interaction Strategic Model (VTISM)
- For example, track damage score is calculated as follows:
[ \\text{Track damage score} = Ct \\times \\left( 0.473 \\times e^{0.133A} + 0.015 \\times S \\times U - 0.009 \\times S - 0.284 \\times U - 0.442 \\right) \\times \\frac{\\text{vehicle miles} \\times \\text{axles}}{1000} ]
(Ct = \\text{freight suspension factor} \\quad A = \\text{axle-load (tonnes)} \\quad S = \\text{operating speed (mph)} \\quad U = \\text{un-sprung mass (tonnes/axle)}) Incentives to invest in track-friendly wagons (2)
- The graph below illustrates the relative differences between rolling stock types/operating conditions.
- If a vehicle has a lower axle-load, for example, it will get a receive a lower ‘damage score’
- We understand that the VUCs that a wagon will pay are a relevant consideration when an operator, or freight customer, is purchasing new wagons?
- Below, are examples what we believe to be older wagons being replaced by new more ‘track friendly’ wagons
| Old wagon | Old charge (2019/20 rates and prices) | New wagon | New charge (2019/20 rates and prices) | Reduction in charge | |-----------------|---------------------------------------|-----------------|---------------------------------------|---------------------| | JNAC (construction) | £3.7275/kgtm | JNAT (construction) | £3.0882/kgtm | £0.6396/kgtm (-17%) | | PCAC (construction) | £4.1823/kgtm | IIAB (construction) | £3.2968/kgtm | £0.8855/kgtm (-21%) | What is the Vehicle Track Interaction Strategic Model (VTISM)?
- VTISM is an engineering model, owned by Network Rail and RSSB, which uses engineering science to predict track degradation and the remedial effects of heavy maintenance and renewal.
- It is a collection of databases and calculation modules, controlled by a master database (see picture, above).
- It was first released in 2006, following a significant industry-led research programme.
- VTISM is used by Network Rail primarily to forecast the future track maintenance and renewal volumes.
- However, it is also used by Network Rail in the calculation of VUCs – it used to estimate the average cost per mile of an ‘additional train’ and the relationship between factors such as axle-load and track ‘wear and tear’. IIAB wagon example Change in IIAB construction rates between CP4 and CP6 (laden, 2017/18 prices)
- The graph, below, illustrates for the IIAB wagon the change in the construction VUC rate since CP4.
- It also shows the impact of ORR’s decision to cap the increase in charges for CP5 and CP6.
- All values are in constant 2017/18 prices.
Research carried out for CP5 implied in a significant increase in VUC rates for heavy axle-load vehicles, including laden construction wagons (54% for this wagon).
For CP5 ORR capped and phased-in the increase in freight charges at a level at which it considered the market could afford (23% for this wagon).
For CP6 ORR again capped and phased-in the increase in freight charges at a level at which it considered the market could afford (28% for this wagon).
Our VUC costs increased by c. 30% between CP5 and CP6 (increase from 3.64 to 4.71 in example). Treatment of Network Rail engineering services Engineering traffic in VUC calculation (1)
- Engineering traffic is included in step 1 of the VUC calculation – estimating an average VUC rate.
- This average rate is primarily derived using the engineering model VTISM, by modelling different traffic scenarios (explained further on the next slide).
- This average rate informs both passenger and freight VUC rates (it does not only affect freight).
- Engineering traffic only comprises approximately 3% of total tonnage.
Network wide ‘wear and tear’ costs
- Signalling (5%)
- Civils (10%)
- Track (85%)
Apportioned between Trains based on:
- axle load
- speed
- un-sprung mass
- primary yaw stiffness
VUC vehicle rate 1 (passenger) VUC vehicle rate 2 (passenger) VUC vehicle rate 3 (passenger) VUC vehicle rate 4 (passenger) VUC vehicle rate 5 (Freight) VUC vehicle rate 6 (Freight) VUC vehicle rate 7 (Freight) VUC vehicle rate 8 (Freight)
Average variable usage cost rate x baseline traffic = Network wide ‘wear and tear’ costs Engineering traffic in VUC calculation (2)
- To calculate the average VUC rate we run two modelling scenarios using VTISM (illustrative example, below):
1. A ‘baseline’ traffic scenario assuming starting CP6 traffic levels
2. A ‘baseline +5%’ traffic scenario
- Both scenarios include c.3% engineering traffic
| Simplified illustrative example (with engineering) | Baseline | Baseline +5% traffic | Change | |---------------------------------------------------|----------|----------------------|--------| | Passenger and freight 1,000 gross tonne miles (kgtm) | 200m | 210m | 10m | | Maintenance and renewal (M&R) costs | £1,000m | £1,020m | £20m |
- We then divide the change in cost by the change in traffic to calculate an average VUC rate:
[ \\text{£2 per kgtm average rate} = \\frac{\\text{£20m increase in M&R costs}}{10m increase in kgtm} ]
- If engineering traffic were to be excluded it would result in lower traffic and lower costs
- Therefore, likely to only have a negligible affect on the average VUC rate (illustrative example, below):
| Simplified illustrative example (without engineering) | Baseline | Baseline +5% traffic | Change | |------------------------------------------------------|----------|----------------------|--------| | Passenger and freight 1,000 gross tonne miles (kgtm) | 194m | 203.7m | 9.7m | | Maintenance and renewal (M&R) costs | £970m | £989.4m | £19.4m |
[ \\text{£2 per kgtm average rate} = \\frac{\\text{£19.4m increase in M&R costs}}{9.7m increase in kgtm} ] PR18 independent reporter review findings
• During PR18 freight colleagues raised concerns about the treatment of engineering traffic in the VUC calculation
• In particular, freight colleagues were concerned that: • costs associated with engineering traffic were ‘washed across’ freight traffic only; and • engineering wagons were some of the least ‘track friendly’ on the network
• ORR and Network Rail decide to ask the independent reporter, Arup, for advice on this issue (amongst other things)
• Arup’s report is available on our website here
• Following review, Arup concluded the following:
“Arup’s view is that the calculation process and decision to include the cost of engineering trains in the cost of track maintenance and renewals is reasonable given the fact that engineering work cannot be undertaken without the use and support of engineering trains.
Analysis also indicates that they are not excessively damaging to the track when compared to other freight traffic.”
• After weighing up the evidence, including the consultant’s advice, ORR decided to retain engineering traffic in the VUC calculation for CP6 How does engineering traffic compare to other commodities?
| Commodity | Average NR vehicle engineering rate | Average chargeable rate by commodity | |----------------------|-------------------------------------|-------------------------------------| | Engineering | 2.49 | | | Domestic Intermodal | 1.62 (35%) | | | Biomass | 2.12 (15%) | | | Petroleum | 1.85 (26%) | | | Construction Materials | 2.61 5% | | | Coal ESI | 2.42 (3%) | | | Steel | 2.43 (2%) | | | Domestic Waste | 2.42 (3%) | | | European Intermodal | 1.96 (21%) | | | Coal Other | 2.82 13% | | | Iron Ore | 2.98 20% | | | European Conventional| 2.42 (3%) | | | Industrial Minerals | 2.55 2% | | | Domestic Automotive | 2.02 (19%) | | | Royal Mail | 1.78 (29%) | | | Enterprise | 2.40 (4%) | | | Other | 2.67 7% | | | Chemicals | 2.65 6% | | | European Automotive | 2.79 12% | | | Total | 2.04 (18%) | | Infrastructure cost charge (ICC) The infrastructure cost charge
- ICCs are intended to recover a proportion of Network Rail’s fixed costs. This type of charge is known as a mark-up which, under European and domestic legislation, may only be levied on market segments that can bear them.
- Freight market is segmented by commodity carried.
- A freight market segment can bear a charge if the increase in charges does not have a significant affect on the amount of the commodity moved by rail.
- In CP5, ICCs (previously called mark-ups) were levied on freight services carrying:
- Electricity supply industry (ESI) coal;
- Iron ore; and
- Spent nuclear fuel.
- In CP6 we determined that those same freight services could still bear an ICC, but only at the current level (i.e. total charges would remain unchanged for those three commodities.)
- We also determined that ESI biomass could afford to pay an ICC.
- We determined that other commodities could not bear to pay the ICC. Calculating the ICC
Total charges remain the same (on average)
FSC FOL CSC (if applicable) CC VUC
CP5 CP6 Thank You Any Question?
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4366068edbe642beed01c9517680372d4537d024 | Integrating community engagement and service delivery – pointers to good practice Contents
Part 1: Introduction 3 Part 2: The case for engagement 4 Part 3: Overview 5 Part 4: Some key ingredients 6 Part 5: The challenge ahead 20 Acknowledgements 21 Part 1: Introduction
This guide aims to help local authorities ensure that the results of their community engagement processes (that is, what people say) are built into their service plans and the ways that they deliver services. It completes the circle of finding out what communities think, feeding back and then acting on it. It builds on the two empowerment mapping tools already available: How strong is your neighbourhood? A mapping tool for communities and How strong are your neighbourhoods? A mapping tool for local authorities and their partners. A guide on Developing a neighbourhood empowerment plan is also available; this provides a template to produce a plan based on the outcomes of the two empowerment mapping tools.
This guide has been developed by Social Regeneration Consultants (SRC) for Local Government Improvement and Development with input from members of the Network of Empowering Authorities (NEA). It draws heavily on case study material provided by a range of councils who have outlined their approach to connecting the views of communities to service planning and delivery. Part 2: The case for engagement
Whilst councils have a statutory Duty to Involve there are other compelling reasons why councils and their partners should engage with, involve and seek to empower their communities and these are now well documented.¹
The present Government’s ambitions to strengthen the role of individual citizens and communities and decrease the role of the state are also highly relevant. Its ideas are wrapped up in the concept of the ‘big society’ and include proposals related to services, such as a ‘community right to buy’ threatened amenities, a right to bid to run services and giving parents the right to run schools. This agenda will be put in place at the same time as severe and prolonged reductions in public sector budgets, which will have a significant impact on the capacity of local authorities and other services as well as the community and voluntary sectors.
For all councils this will be a major challenge but also an opportunity. Ways to improve how they make use of the results from community engagement will be under greater scrutiny. Councils will have an even more pressing imperative to draw on the knowledge and experiences of residents in improving the services they provide and in making them more tailored to local priorities. The business case for engagement is strong, not least in ensuring that councils deliver better, more effective and efficient services, based on what residents and communities want, so improving the value for money they offer. Conversely, not involving communities can be costly and lead to poorer services.
It is clear that councils that develop a meaningful dialogue with their residents, in good times and in difficult ones, find community engagement and empowerment saves them time and money, creating more satisfied communities.
Elected members have a central role to play in finding out what local residents want and in ensuring this affects the way services are delivered. By getting people involved, councillors increase their accountability to, and credibility with, local communities, strengthening the democratic process.
¹ Local Government Improvement and Development (formerly IDeA) (2010): Community Empowerment: what is it and where is it going? Local Government Improvement and Development (2009): The consequences of not empowering communities Local Government Improvement and Development (2010): The benefits of investing in community empowerment Involve (2005): The true costs of public participation Involve (2010): Talking for a change These pointers to good practice are written for councils. They draw on the experience and innovative work of a number of councils across the country. Examples are provided of how they are approaching the challenge of ensuring that what local people say directly influences service planning and delivery.
The guide outlines some of the key ingredients that can help lay a foundation for responsive service planning and delivery influenced by the priorities and genuine needs of local people. This list is not exhaustive but it does provide a starting point to encourage councils to reflect on their own approach and consider their own strengths and areas for development. The case studies outlined demonstrate how councils are putting some of the ingredients into practice and provide examples of specific approaches. Not all of these councils are mixing all the ingredients together – many have only some ingredients in their bowl – and none would say that what they are doing is perfect! But there is some excellent practice to learn from and apply.
The case studies reflect both a diversity of organisational structures and differing local circumstances. Centrally managed processes exist alongside a range of service-based activities. The pointers to good practice are intended to apply to both levels - at a corporate level within a council and to specific service areas, focusing on activities rather than strategies and policies.
It is clear that, in many areas, communities have a tangible influence and that locally determined priorities are acted upon. The challenge for councils is then to look at ways of ensuring local people have a greater degree of control over the way services are managed and provided and the way that resources are deployed over time.
The complex and more strategic nature of some of the issues facing local authorities can only be addressed by working closely with partner organisations and this is well recognised by councils. Local strategic partnerships have played an important role in sharing information on, and responding to, these issues. In some places area-based partnership structures are being created alongside existing council structures to mobilise a more effective response to area-wide problems that cut across services and organisations. Part 4: Some key ingredients
Key ingredients
• An organisational culture where councillors, directors, service managers and frontline staff value engagement.
• A locally-based planning mechanism that feeds into service planning.
• An identifiable staff resource to link community planning to operational management.
• An accessible way for residents to raise and track issues of concern, demonstrating how services have responded to their influence.
• A strong message within corporately produced guidance on service planning.
• A commitment to using the experience from everyday transactions (engagement between frontline staff and those who use services) to help shape those services.
• An openness to considering and developing new ways to deliver services.
4.1 An organisational culture that values engagement
An organisation that understands and acknowledges the value of resident and community engagement will be prepared to embrace its implications. The statutory requirement plus a clearly documented case for engagement provide a foundation to see the possible benefits. In addition political and managerial commitment and leadership provide the bedrock for creating a culture that will embrace engagement and lead to change. Without this commitment it will prove harder for communities to ensure that service planning takes local priorities on board and involves them. West Berkshire Council is strongly committed to the community-led planning process and its outcomes, it is ‘part of the council’s lifeblood’. The chief executive has provided strong leadership in committing the council to actively supporting the development and implementation of community-led plans at parish level (the local government unit considered to be most easily recognised by residents). Senior managers and officers throughout the organisation, along with elected members, have demonstrated a level of commitment that has survived a change of political leadership. Community-led planning has a high profile in the council (it was awarded Beacon Status for parish planning in 2006) and is used to build the council’s reputation with its communities. The council has established and funded a process for the development of local plans and, as importantly, has demonstrated a commitment to ensuring that the outcomes of this process impact on service planning and that community priorities are translated into action. Major issues arising from newly developed plans are collated and presented to an annual community planning conference chaired by the chief executive.
Wiltshire Council has a culture that publicly recognises the value of engagement. In seeking unitary status a strong case was made for working closely with Wiltshire’s local communities through governance arrangements that would empower local councillors to get more people involved and able to influence decisions affecting their lives. Through an extensive communications strategy there has been a very public expression of a political commitment to ensure that the county is one ‘where everybody matters’. This commitment is reflected at the top level in the council with community engagement and local governance established as a major corporate initiative. It is also contained within corporate guidance to senior managers. Principles for service directors to take into account in service design explicitly include the community dimension. Service priorities and plans are expected to take into account local priorities, issues and concerns identified by area boards in their work with the community area partnerships, through community area debates and community area plans.
Some pointers
- Strong and overt leadership from councillors and senior managers will create an environment in which engagement is seen to be valued.
- Given such an environment councils can become ever more ambitious in their commitment to making sure the results of engagement activity impacts on the way they do business.
- Regular communication channels with both staff and communities can be used to reinforce this message. 4.2 A locally-based planning mechanism that feeds into service planning
Many councils have governance arrangements in place that incorporate some type of geographically defined neighbourhood or area committee structure. Such arrangements will usually include a remit for the production of local plans. The plans will be the result of local engagement activity and will attempt to reflect community priorities. People will perceive these structures and planning arrangements as being successful if they can see visible changes being made in their area based on the concerns they have expressed.
The geographical level at which local planning takes place will vary according to local circumstances.
Braintree District Council supports the production of parish plans, which are produced at a local level with a high degree of community inclusion and with the full involvement of parish councils. The plans play an important role in governance at a local level as well as providing information that is useful to the council in the planning and delivery of its services. The plans are dependent on volunteer involvement and take between 18 months and three years to produce. An estimated 50 per cent of actions included are things that communities can do for themselves.
To link parish plans more directly to statutory plans and the delivery of services the council set up the Parish Plans Support Group in 2008, which sits alongside three member-led local committees. The remit of this joint member/officer support group is to enable ward members to work more closely with community groups in the production of parish and neighbourhood plans and to integrate those actions that require assistance into business planning and service delivery systems.
The work of this group has been found to be highly effective in strengthening the links between the different levels of plans within the council and in ensuring that the aspirations expressed in parish plans are deliverable. It is now developing its role by focusing on improving the quality of the action plans contained within parish plans. The support group arranges for community groups to meet face to face with service providers to look at possible solutions to local issues. This has been found to be of great benefit to both services and residents.
A guide for community groups is planned for late 2010 detailing the support available throughout the process of preparing a plan and the linkages between the action plan and delivery of council services. In West Berkshire 65 per cent of parishes now have a plan. Parish councils are involved in their production but do not usually take the lead role.
Early plans were mixed in nature but over time a process has developed that provides a consistent framework, promotes better engagement at local level, offers guidance and support to communities, tracks activity against objectives and ensures both quality and deliverability.
A key element within this process is the support of a development worker from the Community Council for Berkshire (CCB). This post is funded through a service level agreement, guaranteeing that support is available without the council being seen as directing the process. The worker makes contact with the parish; a steering group is established following consultation with the wider community; a draft plan is produced by the group and issues and solutions identified.
An important feature of the process is the help that is made available through regular surgery sessions and ‘meet the experts’ events hosted by the council. Informal discussion at this stage can help shape the plan more realistically before expectations become unmanageable. This promotes confidence that the final plan is deliverable.
The officer resource provided to support this process is focused on ensuring service cooperation. The draft plan is examined formally by the council’s principal policy officer who liaises with relevant departments, a vital role in ensuring that senior level consideration and feedback are given. The draft provides an opportunity for heads of service to see what parishes are looking for, which, in turn, can inform service planning and decisions about the use of resources.
The significance given to parish plans means that they are taken seriously and when finalised, each plan goes through a formal endorsement process.
West Berkshire sets aside capital funding of £60,000 each year. Parishes can bid through their plans for grants. This has proved an important kick-start to get plans developed and to achieve ‘quick wins’.
The main impact on service delivery has been in highways, a particularly responsive service. The council uses information on roads and highways from parish plans to inform decisions on their work programme and assist in setting priorities for the district as a whole. The council’s Arts and Leisure Team also acts directly on the information channelled through young people’s Speak Out events, which are often an integral part of the parish planning process. Salford City Council also has an established system for community planning. Community committees - made up of representatives of the local community, voluntary organisations in an area and ward councillors - generate a community action plan that expresses local priorities. These plans are used to inform the business planning of the council.
Community committees also decide on the use of local budgets to achieve priorities. £1 million is devolved down to neighbourhoods each year. Some of these committees use participatory budgeting; others allocate the money via task groups. Services can be commissioned from providers in any sector.
More recently, Salford Council has moved to strengthen these arrangements and tackle issues across agency boundaries. As a result eight neighbourhood partnership boards have been created. These boards are made up of local councillors, senior officers from the council, health trust, police and other key service providers as well as community committee representatives. Their stated objective is two-fold - to assist community committees to develop a vision for their neighbourhoods, and to seek improvements in service delivery in line with agreed community and public service priorities. The boards do this by bringing together performance information from their agencies to promote a shared understanding of progress in the neighbourhood, which is then reviewed critically and proposals for change are made. Some councils not only devolve budgets to area-based committees but have taken steps to make services accountable through local planning structures.
**Wiltshire Council** has moved down this route. A pivotal change has been the setting up in June 2009 of 18 area boards, which have provided an enhanced capacity for local planning. They have now become a powerful model and form part of the council’s constitution.
Every service area of the council is accountable through the boards (with the exception of planning), powers have been devolved to make decisions locally and funding has been delegated (£4.5 million over two years).
The aim of the area boards is to encourage residents to discuss issues with their local councillors so that their views are taken into account when making decisions. Police, fire and rescue services and National Health Service (NHS) Wiltshire also play an active part, together with town and parish councils and members of the local community area partnerships. On a rotating basis, members of the council’s cabinet will attend board meetings and make sure that communities can feed in concerns about how the council’s policies are working for them. Attendance is good, with an average of 65 people at meetings.
In developing local devolution, the council has put time and money into making the boards a success and has established a dedicated team. There is a commitment from all council services and other key groups such as neighbourhood policing teams to work closely with the boards. Intelligence across agencies and council departments is gathered and presented using commonly defined boundaries, allowing an in-depth focus on communities living in the area covered by the board. Newcastle City Council has moved a step further into local management of services with the long established ward committees now controlling part of the council’s labour force.
The ward is seen as the most credible unit of governance for service delivery and democratic accountability in the city; the council has worked with forms of ward committees since the 1970s. 26 committees exist, made up of ward councillors with support from a full time officer. They meet frequently and councillors play a key part in them, offering a very tangible role for non-executive members.
Ward committees have access to service departments and senior managers and control delegated funds for use within their ward. Each year the committees make decisions on almost £4 million of spending.
The committees have been given a higher profile in recent years, directly monitoring the performance of neighbourhood response units that are responsible for environmental services. Managers report to the committees and residents are able to directly influence the way that the teams deliver services.
The ward is also the unit for local planning. Each ward has a plan developed in association with the community, setting out local priorities and standards. The plans will soon be supported by neighbourhood charters which have been piloted in the city and are due to be launched in autumn 2010. These charters will be implemented and monitored by the ward committees and mainly cover local authority, police and environmental services. Communities have been consulted in drawing up the charters.
At a neighbourhood level there will be ‘mini charters’ to reflect priority issues in the communities identified (148 neighbourhoods in total across the city). The council’s data and intelligence system drills down to this level. Councils will often operate area planning mechanisms alongside service-based engagement and planning activity. This presents a challenge for authorities to ensure that these processes are ‘joined up’ and that both add value for residents.
**North Tyneside Council** uses its area forums as its primary mechanism to ensure local views influence service planning and delivery. For example, the council has allocated £250,000 to each of its four area forums to make recommendations for spend on roads and pavements. Ideas are sought through the ‘ideas form’, started in March 2010 and distributed to households in each forum area prior to meetings, as well as from those attending forum meetings. Priorities for roads and pavement improvements are discussed and analysed and a priority list for the area drawn up. Ward councillors meet after the analysis has been done and decide on which improvements to recommend to the mayor and cabinet (North Tyneside works to an elected mayor model). To date more than 25 improvement recommendations have been accepted. A similar process is in place for spend on local environmental improvement projects such as planting, wall repairs and skip days.
The work of area forums sits alongside a range of well established service-based engagement activities within the council. For example **North Tyneside Homes**, the council’s housing service, has in place a clear pathway for tenants to influence service delivery.
Information on the service is collected in a number of ways - consultation exercises, mystery shopping, complaints, performance data – and issues arising are fed into one of 14 service development groups; borough-wide service-based groups based on issues such as repairs and allocations. The profiles of these groups are regularly monitored and targets set to increase under-represented sections of the population.
The groups have been successful in ensuring that the housing service’s plans are influenced by tenants’ priorities. The groups work up proposals based on the issues that come in, consult on ideas and agree final improvements with officers. These are then built into the service’s improvement plans for the following year or implemented immediately if it is possible to do so.
All of the groups are involved in monitoring performance. For example, tenants on the repairs panel discussed repairs performance in 2009/10, set targets for improvement in 2010/11 and are now monitoring these at their meetings. In addition one of the 14 groups, the Involvement Group, specifically monitors tenant involvement in improving services and has set targets for improving involvement that are tracked every three months.
A ‘you said, we did’ column is included in the regularly produced magazine for tenants. The groups present each year to four area-based events and refresh priorities with tenants. A more recent development is the setting up of an overview panel that is developing a scrutiny role across the service, including spending priorities and reinvestment. Some pointers
• It is important to demonstrate to both council officers and residents alike that community-led planning can be a ‘win-win’ process. It offers the opportunity for officers to put across their priorities and potential constraints to communities as well as providing the opportunity for local people to present their views on which issues are most important to them and to suggest other ways that services could be delivered.
• Having local plans does not, in itself, guarantee more responsive service planning. It is only one piece of the jigsaw. But supporting the production of such plans does help strengthen the council’s reputation with its communities and build relationships between officers and local residents. It makes the most of the local knowledge, time and other resources that residents bring to the process and which can yield a level of detail and rate of response that would otherwise be difficult for a council to achieve.
• A matching of aspirations is beneficial to both residents and councils. Services need to be honest about available resources and neighbourhoods more aware of the constraints within which councils operate.
• A key success factor in ensuring local planning arrangements have an impact is to identify a resource within the council that will provide a direct link between the community planning process and operational managers. This officer can act as a broker between the local groups and services and help facilitate a resolution if issues arise in implementing local action plans.
• Use of a formal but not overly restrictive council process for adoption of local plans encourages communities and reassures them that their views are being taken seriously.
• The delegation of budgets to local committees can provide a degree of control over resources by communities. A bolder step is to devolve management of some key services that impact directly on neighbourhoods, giving local people a mechanism to more directly influence the way those services are delivered in their areas.
• Residents and user groups need to be able to be independent and confident in their approach to managing devolved responsibilities. Identifying and protecting resources for capacity building is an important part of the jigsaw.
• Working on local plans can bring together different service providers, increasing cross organisational working to meet the needs of the community. This can increase effectiveness and deliver efficiencies when it means that people’s contributions are taken on board following a single engagement, so avoiding consultation fatigue. 4.3 An accessible way for residents to raise and track issues of concern
There are many ways in which residents can raise issues of concern with their council. Some of these have been touched on in section 2. Community engagement programmes will use a variety of approaches and techniques to maximise input from their target populations. These have been well documented elsewhere.²
Producing plans to address local issues more effectively is a useful first step. Residents can then see that those issues they are concerned about have been identified.
Beyond this, residents also require a mechanism that allows them to be reassured that these issues have not got lost and that they are being acted upon by their council (and its partners where appropriate). Such a mechanism can take different forms but it needs to be made known to residents and be easily accessed.
People raise issues in a variety of ways with Newcastle City Council, including through an online ‘your views matter’ submission. This links to an interactive ward website to enable residents to raise queries and track responses. Each issue raised is included as a matter of local concern, is allocated an individual reference number and reviewed by the relevant ward committee and supporting officers. It is then allocated to an individual council officer and the response is monitored by the committee.
Issues can also be registered in writing or by telephone. Residents are informed of when the next ward committee papers will appear so they can see that their issue is included on the agenda – matters of local concern are a standing item.
To encourage local residents to make use of ward committee meetings to raise issues, the meetings begin with an opportunity for them to talk to individual services for up to an hour. It is not then necessary to sit through the whole meeting. Issues can be resolved through this channel but if this is not possible, services complete a form registering the issue or complaint and a copy is given to the resident. On the form the service has to indicate the action that will be taken. The service decides on the timescale involved and this is logged. Progress can be tracked.
This process feeds into the council’s performance management system and is included in the council’s suite of local performance indicators. Indicators introduced include the number of matters of local concern raised, the time taken to resolve them and the numbers of matters registered electronically.
² Local Government Improvement and Development, section on ‘Practical ways to engage your community’ www.idea.gov.uk/idk/core/page.do?pageId=16639575 and People and Participation website www.peopleandparticipation.net To improve the way it deals with issues raised Wiltshire Council launched a web-based system in 2009. The system enables people to submit issues, track the progress of the issue and see the outcome. There is a commitment to resolve and report back on every issue to the person who raised it.
A simple form is available online to submit an issue. It is logged and the community area manager checks to see if the issue is one for the area board to consider. Some issues are better referred to the relevant service provider. A report is then prepared for the board based on information from the person raising the issue, the local councillor and other board members. If the issue is not resolved at the board, the chair will then host roundtable discussions with relevant officers and councillors, town or parish council. Outcomes from this are fed back to the area board and the person raising the issue.
Publicity for the area board meetings and the online issues process is through Just a minute newsletters placed in public places and through e-bulletins sent to online community area networks built up from key community and service delivery contacts. Targeted consultations are carried out around specific issues of concern, including with under-represented groups such as young people, disabled people and people from black and ethnic minority communities.
Those wishing to attend and speak at area boards can do so with the prior agreement of the chair. To reduce barriers to participation the public meetings feature good sound and audio-visual systems and aim to be as interactive as possible, encouraging audience participation and voting on key issues.
Well over 100 issues are referred to the area boards each month. By bringing together council services, public agencies such as the police and National Health Service (NHS) Wiltshire, councillors, parish and town councils and the public, over 50 per cent of these issues have been resolved and local people are able to track the progress on any outstanding issue. Some pointers
- Encourage residents to use online systems to raise issues but recognise that not all residents will be able to access them at present.
- Make it a priority to have in place a publicly available system so that progress can be tracked on issues that have been raised. This is fundamental in evidencing to residents that their issues have been noted and that, where appropriate, action has been taken.
- Review feedback processes regularly to make sure they still work well. Ask residents what they think and how improvements can be made to make these processes more effective.
- Be aware that ‘face-to-face’ contact with services can sometimes resolve issues most directly. Make use of the opportunities presented by area-based meetings to encourage informal ways of providing that contact, such as market stalls for services.
North Tyneside Council is also developing an engagement tracker to go live in September 2010. This will be an online facility to track engagement activities using a database searchable by issue, date, and so on. It will aim to report on what practically has changed as a result of specific engagement activity, completing the feedback loop. In addition, it aims to identify which key strategies and policies these activities will feed into.
Local residents have recently selected between 10 and 12 performance indicators for each of their four area forums, creating an area scorecard. Examples include:
- number of grass cuts scheduled and carried out in the previous quarter
- percentage of streets with widespread litter
- total number of anti-social behaviour incidents which are alcohol related as a proportion of all incidents.
The indicators are being monitored and report backs to the forums will be made regularly. The indicators were selected from a menu and will be reviewed at the end of the first year when residents may want to change them if they are not providing the information they think is important. 4.4 Use of guidance on service planning to reinforce the message
Local authorities operate within an environment that requires plans to be produced at different levels within the organisation. The business planning model which a council adopts will depend on the type of authority and the particular local circumstances.
Planning for the delivery of specific services will form a part of that model. How this is done will depend on how the council organises itself and how it groups its functions. In many cases such plans sit beneath directorate plans and can be referred to as business plans or service plans.
In some authorities they are referred to as service improvement plans. This underlines the expectation that a service will reflect on the feedback received from the people who use it and, if necessary, identify ways to do things differently as a result. The plan will also spell out the priorities for the service in the year(s) ahead.
Services will often be advised on the required contents of these plans by guidelines that are produced by the council’s corporate centre.
For example, Salford City Council has corporate business planning guidance in place for the period 2010-13. Called One council improvement framework, it identifies the customer view as a key driver:
“We shape business planning decisions by what we know about the views of our communities and customers, who are both internal and external to the organisation”
Such corporate guidance will provide a template for the structuring of a plan to ensure a degree of consistency across all council services. The guidance may also clearly state the type of information that should be included in the plan, for example, how the service implements the council’s equality and diversity responsibilities.
Councils have the opportunity to state explicitly in their corporate guidance that services should make clear:
- the results of consultation and engagement activities undertaken within the service, across the council and by partners
- evidence how this has impacted on the service’s priorities for the year(s) ahead and, if necessary,
- demonstrate how service provision will be changed as a result. Some pointers
• Corporate guidance needs to steer the production of service plans to ensure that services make clear the connection between what they have been told by residents and how they intend to respond.
• Such guidance need not be rigid – it should be the result of a dialogue between services and the council’s corporate centre on what constitutes a good plan.
• In the development of service plans value can be added by a service using a wide range of intelligence, including the results of all types of engagement activity in which it has been involved and community intelligence gleaned from any available source.
• Producing corporate guidance on the required content of service plans will not in itself be sufficient - councils may need to ensure that a sign-off process for plans is in place. This process would include monitoring to see that services have complied with the corporate guidelines provided. These pointers draw on a variety of existing good practice within councils. Some local authorities have a long-established commitment to engagement and have processes in place to both engage with their communities and to plan their services at a local level. This will often involve local councillors working with local people who live in those areas. Many councils can be proud of their achievements to date.
However the landscape is rapidly changing and ever more responsive and effective services are being sought. Expectations and aspirations on the part of local communities are getting higher, local authorities are becoming leaner and the expectation of cross-agency working to address complex issues demands a partnership approach if they are to be tackled effectively. Reductions in budgets may prove an additional incentive to redesign services from the perspective of the citizen so that the need for wasteful contact with councils is further reduced. The opportunity to radically improve the relationship between engagement activity, and ways of delivering services within councils and in conjunction with partners, has never been more relevant.
The research for these pointers to good practice has demonstrated that this is not easy. Success is sometimes more dependant on the quality and drive of individual officers and members who make things happen, rather than on organisational structures. Corporately produced directives and guidance for services, for example, are of limited value if service managers themselves do not understand the value and benefits of engagement. But it is evident that when commitment levels are high there are clear advantages to be secured in engaging local people, not only in helping determine local priorities but also in identifying new and improved ways of delivering their vital local services. Such input will pay dividends, both in building the reputation of local services, and in helping address the major challenges that lie ahead for the public sector. We would like to thank those who have contributed to this guide and who have provided material for the case studies:
Braintree District Council Jan Cole Newcastle City Council Bryan Beverley North Tyneside Council Anne Foreman Davina Brain Salford City Council Gareth Wilkinson West Berkshire Council Jo Naylor Wiltshire Council Julie Ann Martin
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6b4ebffbb87b2f4db07f3a213721eaa00612a12f | Intelligence Briefing 2012-02
March 2012
London Assembly Constituency Profiles 2012
For more information please contact:
Opinion Research and General Statistics Team Intelligence and Analysis Unit Greater London Authority City Hall The Queen’s Walk London SE1 2AA
Tel: 020 7983 4327 [email protected]
Copyright © Greater London Authority, 2012
ONS data produced in this Briefing have been reproduced with the permission of the Controller of Her Majesty’s Stationery Office and the Queen’s Printer for Scotland and are © Crown Copyright. An acknowledgement of the source is given at the end of each table, chart or map.
ISSN 1479-7879
## Contents
| Section | Page | |--------------------------------------------------------------|------| | Introduction | 4 | | Map of Constituency boundaries by Borough | 5 | | London Assembly Constituency Profiles | 6 | | Data Sources, Notes and Links | 20 | Introduction
This report provides a summary of demographic and related data for each Greater London Assembly constituency. The profiles are designed to provide an overview of each area by combining data on a range of themes. Each constituency is compared to equivalent statistics for Greater London.
The report takes much of the data used in the recently produced borough profiles, which are available on the London Datastore. Small area profiles have also been produced for those more interested in patterns at neighbourhood level. These include profiles for Ward, and both Lower, and Middle Super Output Areas (LSOA and MSOA).
A summary of the 2008 election results for the London Assembly for each constituency can be found on the London Datastore also (see pages 12-16 of the London Elections report).
The profiles are formatted to show the most recent data for each indicator plus a comparison with a figure about 4 years ago, to compare the change over the term since the last election. The change figure is included, along with the London average for the most recent data only.
Along with this report, a spreadsheet and an InstantAtlas report have been produced. Within the spreadsheet, there are charts that show most of the indicators, so that is it easy to compare each of the 14 constituencies, and see how each area ranks. The InstantAtlas report shows the data on an interactive map, and bar chart.
At the back of this report, as well as in the spreadsheet is a list of data sources used for these profiles, along with any important notes about the data.
The majority of the Greater London Assembly constituencies consist of two boroughs (see the map on the following page). All constituencies are listed below:
- Barnet and Camden
- Bexley and Bromley
- Brent and Harrow
- City and East London - (Barking and Dagenham, City of London, Newham, Tower Hamlets)
- Croydon and Sutton
- Ealing and Hillingdon
- Enfield and Haringey
- Greenwich and Lewisham
- Havering and Redbridge
- Lambeth and Southwark
- Merton and Wandsworth
- North East - (Hackney, Islington, Waltham Forest)
- South West - (Hounslow, Kingston upon Thames, Richmond upon Thames)
- West Central - (Hammersmith and Fulham, Kensington and Chelsea, Westminster)
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | Total Population | 536,500 | 561,600 | 25,100 | 8,078,900 | | Projected population in 2031 | n/a | 641,900 | 80,300 | 9,050,300 | | % population aged 0 to 16 | 20.4 | 20.7 | 0.3 | 21.9 | | % population aged 75 and over | 5.8 | 5.5 | -0.3 | 5.3 | | Average Age | 36.7 | 36.5 | -0.2 | 35.8 | | Area | n/a | 10,854 | - | 157,215 | | Population Density | 49.4 | 51.7 | 2.3 | 51.4 | | Daytime population | n/a | 781,495 | - | 9,301,333 |
## Households
| Indicator | Total number of households | Couple Households | Lone Parents Households | One Person Households | Other Households | |---------------------------------|---------------------------|-------------------|-------------------------|-----------------------|-----------------| | | 225,576 | 93,868 | 18,438 | 90,079 | 23,191 |
## Employment
| Indicator | Number of workers | Number of businesses | 3 year business survival rate | Employment rate - aged 16-64 | Employment rate males - aged 16-64 | Employment rate females - aged 16-64 | Unemployment rate - aged 16-64 | |---------------------------------|-------------------|----------------------|-------------------------------|-------------------------------|-------------------------------------|-----------------------------------|-------------------------------| | | 418,000 | 41,315 | 56.3 | 68.0 | 75.0 | 61.2 | 7.0 |
## Diversity
| Indicator | % from BAME groups | % born abroad | Largest migrant population | Second largest migrant population | Third largest migrant population | % of adults who don’t speak English at home | % pupils with first language other than English | Pupils highest language other than English | |---------------------------------|--------------------|---------------|-----------------------------|-----------------------------------|----------------------------------|---------------------------------------------|---------------------------------------------|---------------------------------------------| | | 30.0 | 37.9 | Bangladesh | USA | India | 19.5 | 42.8 | Bengali |
## Education and Skills
| Indicator | All Schools | Independent Schools | % pupils at independent schools | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | % aged 16-24 NEET | % adults with degree level and above | % adults with no qualifications | |---------------------------------|-------------|---------------------|---------------------------------|--------------------------------------------------------|------------------|-----------------------------------|----------------------------------| | | 243 | 64 | 16.8 | 55.3 | 10.7 | 42.1 | 10.5 |
## Housing
| Indicator | % households owned outright | % households being bought with mortgage or loan | % households private rented | % households social rented | % households 'other' tenure | |---------------------------------|-------------------------------|-----------------------------------------------|-----------------------------|---------------------------|---------------------------| | | 22.1 | 27.9 | 20.7 | 25.0 | 4.3 |
## Crime
| Indicator | Crime rate | % Turnout | % Turnout | |---------------------------------|------------|-----------|-----------| | | 130.5 | 102.7 | -27.8 |
## Deprivation
| Indicator | % working age people claiming out of work benefits | % 60+ claiming pension credit | % of Children in “Poverty” | % of SOAs in Quintile 1 of IMD | % of SOAs in Quintile 2 of IMD | % of SOAs in Quintile 3 of IMD | % of SOAs in Quintile 4 of IMD | % of SOAs in Quintile 5 of IMD | |---------------------------------|--------------------------------------------------|-------------------------------|-----------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------| | | 10.6 | 23.5 | 29.7 | 20.0 | 29.0 | 33.0 | 17.0 | 0.0 |
## Elections
| Indicator | Total Electors | % Turnout | % Turnout | |---------------------------------|----------------|-----------|-----------| | | 374,093 | 38.4 | 47.8 |
## GLA Constituency Election
| Indicator | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |---------------------------------|--------------------------------------|---------------------------------|----------------------------------|----------------------------------| | | 35.3 | 26.7 | 17.5 | 20.5 |
## GLA List Election
| Indicator | % of votes for Conservative party | % of votes for Labour party | % of votes for Lib Dem party | % of votes for ‘Other’ parties | |---------------------------------|----------------------------------|-----------------------------|-----------------------------|-------------------------------| | | 32.8 | 25.1 | 17.0 | 25.1 |
London Assembly Constituency Profiles 2012
Intelligence Briefing 2012-02
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | Total Population | 531,700 | 541,100 | 9,400 | 8,078,900 | | Projected population in 2031 | n/a | 573,200 | 32,100 | 9,050,300 | | % population aged 0 to 16 | 21.1 | 21.4 | 0.3 | 21.9 | | % population aged 75 and over | 7.6 | 7.4 | -0.2 | 5.3 | | Average Age | 39.0 | 38.7 | -0.2 | 35.8 | | Area | n/a | 21,072 | - | 157,215 | | Population Density | 25.2 | 25.7 | 0.4 | 51.4 | | Daytime population | n/a | 484,763 | - | 9,301,133 |
## Households
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | Total number of households | 219,630 | 224,893 | 5,263 | 3,296,293 | | Couple Households | 120,550 | 120,053 | -496 | 1,352,024 | | Lone Parents Households | 16,973 | 19,202 | 2,229 | 334,470 | | One Person Households | 70,385 | 75,010 | 4,626 | 1,287,458 | | Other Households | 11,725 | 10,626 | -1,100 | 322,357 |
## Employment
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | Number of workers | 199,000 | 199,000 | 0 | 4,788,000 | | Number of businesses | 18,670 | 19,475 | 805 | 403,080 | | 3 year business survival rate | 62.2 | 61.5 | -0.7 | 59.5 | | Employment rate - aged 16-64 | 74.5 | 73.3 | -1.2 | 68.1 | | Employment rate males - aged 16-64 | 82.4 | 77.0 | -5.4 | 75.4 | | Employment rate females - aged 16-64 | 66.9 | 69.8 | 2.9 | 60.6 | | Unemployment rate - aged 16-64 | 4.6 | 6.1 | 1.6 | 9.2 |
## Diversity
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | % from BAME groups | 11.5 | 16.0 | 4.4 | 37.4 | | % born abroad | 11.5 | 13.9 | 2.5 | 35.9 | | Largest migrant population | India | India | - | India | | Second largest migrant population | South Africa | Nigeria | - | Bangladesh | | Third largest migrant population | Ireland | Ireland | - | Poland | | % of adults who don’t speak English at home | 5.1 | 4.1 | -1.0 | 21.7 | | % pupils with first language other than English | 8.5 | 9.7 | 1.2 | 41.7 | | Pupils highest language other than English | Yoruba | n/a | - | Bengali |
## Education and Skills
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | All Schools | 202 | 195 | -7 | 3,022 | | Independent Schools | 18 | 20 | 2 | 520 | | % pupils at independent schools | 5.6 | 5.4 | -0.2 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 54.4 | 63.4 | 9.0 | 58.2 | | % aged 16-24 NEET | 17.4 | 19.5 | 2.1 | 15.8 | | % adults with degree level and above | 29.3 | 31.2 | 1.9 | 41.3 | | % adults with no qualifications | 9.6 | 9.3 | -0.3 | 10.2 |
## Housing
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | % households owned outright | 31.7 | 32.1 | 0.3 | 20.5 | | % households being bought with mortgage or loan | 43.7 | 39.2 | -4.5 | 28.9 | | % households private rented | 9.0 | 13.6 | 4.7 | 24.1 | | % households social rented | 14.5 | 13.6 | -0.8 | 24.2 | | % households 'other' tenure | 1.1 | 1.5 | 0.4 | 2.1 |
## Crime
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | Crime rate | 86.3 | 66.2 | -20.1 | 105.3 |
## Deprivation
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | % working age people claiming out of work benefits | 8.6 | 9.4 | 0.8 | 12.4 | | % 60+ claiming pension credit | 15.2 | 14.6 | -0.6 | 24.0 | | % of Children in “Poverty” | 17.5 | 18.1 | 0.6 | 29.6 | | % of SOAs in Quintile 1 of IMD | 8.0 | 8.2 | 0.2 | 26.2 | | % of SOAs in Quintile 2 of IMD | 17.0 | 19.0 | 2.0 | 30.0 | | % of SOAs in Quintile 3 of IMD | 19.0 | 14.9 | -4.1 | 19.7 | | % of SOAs in Quintile 4 of IMD | 24.0 | 26.8 | 2.8 | 15.1 | | % of SOAs in Quintile 5 of IMD | 32.0 | 31.2 | -0.8 | 8.9 |
## Elections
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | Total Electors | 409,458 | 415,643 | 6,185 | 5,796,259 | | % Turnout | 41.5 | 49.9 | 8.4 | 45.2 |
## GLA Constituency Election
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | % of votes for Conservative candidate | 40.4 | 52.6 | 12.2 | 35.3 | | % of votes for Labour candidate | 15.6 | 15.0 | -0.7 | 26.4 | | % of votes for Lib Dem candidate | 18.9 | 10.6 | -8.2 | 12.9 | | % of votes for ‘Other’ candidates | 25.1 | 21.8 | -3.3 | 25.4 |
## GLA List Election
| Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | % of votes for Conservative party | 37.6 | 49.1 | 11.5 | 34.6 | | % of votes for Labour party | 16.3 | 15.4 | -0.8 | 27.6 | | % of votes for Lib Dem party | 16.5 | 9.6 | -6.8 | 11.4 | | % of votes for ‘Other’ parties | 29.6 | 25.8 | -3.8 | 26.4 | | Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 505,800 | 523,700 | 17,900 | 8,078,900 | | Projected population in 2031 | n/a | 566,700 | 43,000 | 9,050,300 | | % population aged 0 to 16 | 22.1 | 23.0 | 1.0 | 21.9 | | % population aged 75 and over | 6.0 | 6.3 | 0.3 | 5.3 | | Average Age | 36.8 | 36.7 | -0.1 | 35.8 | | Area | n/a | 9,370 | - | 157,215 | | Population Density | 54.0 | 55.9 | 1.9 | 51.4 | | Daytime population | n/a | 463,852 | - | 9,301,133 | | **Households** | | | | | | Total number of households| 187,531 | 195,129 | 7,598 | 3,296,293 | | Couple Households | 92,841 | 93,283 | 442 | 1,352,024 | | Lone Parents Households | 18,158 | 20,998 | 2,841 | 334,470 | | One Person Households | 56,219 | 60,947 | 4,727 | 1,287,458 | | Other Households | 20,314 | 19,911 | -403 | 322,357 | | **Employment** | | | | | | Number of workers | 193,000 | 195,000 | 2,000 | 4,788,000 | | Number of businesses | 21,240 | 23,465 | 2,225 | 403,080 | | 3 year business survival rate | 56.3 | 59.6 | 3.4 | 59.5 | | Employment rate - aged 16-64 | 68.4 | 67.9 | -0.5 | 68.1 | | Employment rate males - aged 16-64 | 76.1 | 76.9 | 0.8 | 75.4 | | Employment rate females - aged 16-64 | 60.4 | 58.7 | -1.7 | 60.6 | | Unemployment rate - aged 16-64 | 9.4 | 8.5 | -0.9 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 59.4 | 56.6 | -2.8 | 37.4 | | % born abroad | 46.2 | 51.8 | 5.6 | 35.3 | | Largest migrant population | India | India | - | India | | Second largest migrant population | Kenya | Ireland | - | Bangladesh | | Third largest migrant population | Sri Lanka | Somalia | - | Poland | | % of adults who don’t speak English at home | 33.6 | 35.7 | 2.0 | 21.7 | | % pupils with first language other than English | 53.7 | 56.4 | 2.7 | 41.7 | | Pupils highest language other than English | Gujarati | n/a | - | Bengal | | **Education and Skills** | | | | | | All Schools | 183 | 185 | 2 | 3,022 | | Independent Schools | 28 | 33 | 5 | 520 | | % pupils at independent schools | 8.7 | 8.5 | -0.1 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 55.4 | 61.1 | 5.8 | 58.2 | | % aged 16-24 NEET | 15.7 | 9.3 | -6.4 | 15.8 | | % adults with degree level and above | 29.5 | 31.4 | 1.9 | 41.3 | | % adults with no qualifications | 10.2 | 4.3 | -5.9 | 10.2 | | **Housing** | | | | | | % households owned outright | 24.2 | 24.5 | 0.3 | 20.5 | | % households being bought with mortgage or loan | 36.1 | 27.8 | -8.2 | 28.9 | | % households private rented | 19.2 | 27.2 | 8.0 | 24.1 | | % households social rented | 18.3 | 18.6 | 0.3 | 24.2 | | % households 'other' tenure | 2.2 | 1.9 | -0.3 | 2.1 | | **Crime** | | | | | | Crime rate | 96.8 | 91.4 | -5.4 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 12.1 | 12.4 | 0.2 | 12.4 | | % 60+ claiming pension credit | 24.0 | 23.8 | -0.2 | 24.0 | | % of Children in “Poverty” | 29.6 | 28.2 | -1.4 | 29.6 | | % of SOAs in Quintile 1 of IMD | 14.0 | 15.4 | 1.4 | 26.2 | | % of SOAs in Quintile 2 of IMD | 38.0 | 37.0 | -1.0 | 30.0 | | % of SOAs in Quintile 3 of IMD | 27.0 | 26.4 | -0.6 | 19.7 | | % of SOAs in Quintile 4 of IMD | 14.0 | 13.8 | -0.2 | 15.1 | | % of SOAs in Quintile 5 of IMD | 7.0 | 7.4 | 0.4 | 8.9 | | **Elections** | | | | | | Total Electors | 365,961 | 389,809 | 23,848 | 5,796,259 | | % Turnout | 38.0 | 42.9 | 4.9 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 34.0 | 36.2 | 2.2 | 35.3 | | % of votes for Labour candidate | 30.0 | 37.3 | 7.3 | 26.4 | | % of votes for Lib Dem candidate | 17.7 | 12.5 | -5.2 | 12.9 | | % of votes for 'Other' candidates | 18.3 | 14.1 | -4.3 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 31.1 | 33.3 | 2.2 | 34.6 | | % of votes for Labour party | 30.1 | 34.5 | 4.4 | 27.6 | | % of votes for Lib Dem party | 16.5 | 10.8 | -5.7 | 11.4 | | % of votes for 'Other' parties | 22.3 | 21.4 | -0.9 | 26.4 | | Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 687,700 | 748,200 | 60,500 | 8,078,900 | | Projected population in 2031 | n/a | 923,300 | 175,100| 9,050,300 | | % population aged 0 to 16 | 24.7 | 24.9 | 0.2 | 21.9 | | % population aged 75 and over | 4.2 | 3.9 | -0.3 | 5.3 | | Average Age | 33.1 | 32.8 | -0.3 | 35.8 | | Area | n/a | 9,499 | - | 157,215 | | Population Density | 72.4 | 78.8 | 6.4 | 51.4 | | Daytime population | n/a | 1,179,132 | - | 9,301,133 | | **Households** | | | | | | Total number of households| 258,183 | 281,632 | 23,449 | 3,296,293 | | Couple Households | 99,237 | 100,651 | 1,415 | 1,352,024 | | Lone Parents Households | 30,291 | 35,188 | 4,897 | 334,470 | | One Person Households | 100,786 | 116,351 | 15,565 | 1,287,458 | | Other Households | 27,871 | 29,442 | 1,571 | 322,357 | | **Employment** | | | | | | Number of workers | 671,000 | 741,000 | 70,000 | 4,788,000 | | Number of businesses | 30,980 | 38,420 | 7,440 | 403,080 | | 3 year business survival rate | 58.8 | 59.0 | 0.2 | 59.5 | | Employment rate - aged 16-64 | 58.1 | 57.7 | -0.4 | 68.1 | | Employment rate males - aged 16-64 | 69.5 | 69.4 | -0.2 | 75.4 | | Employment rate females - aged 16-64 | 45.4 | 45.1 | -0.4 | 60.6 | | Unemployment rate - aged 16-64 | 12.2 | 14.0 | 1.8 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 55.1 | 59.4 | 4.3 | 37.4 | | % born abroad | 39.5 | 43.8 | 4.4 | 35.9 | | Largest migrant population | Bangladesh | Bangladesh | - | India | | Second largest migrant population | India | India | - | Bangladesh | | Third largest migrant population | Former USSR etc | Pakistan | - | Poland | | % of adults who don’t speak English at home | 28.5 | 40.8 | 12.2 | 21.7 | | % pupils with first language other than English | 58.1 | 62.6 | 4.5 | 41.7 | | Pupils highest language other than English | Bengali | n/a | - | Bengali | | **Education and Skills** | | | | | | All Schools | 275 | 279 | 4 | 3,022 | | Independent Schools | 23 | 31 | 8 | 520 | | % pupils at independent schools | 3.2 | 3.8 | 0.6 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 41.1 | 52.0 | 10.9 | 58.2 | | % aged 16-24 NEET | 22.3 | 22.1 | -0.1 | 15.8 | | % adults with degree level and above | 23.6 | 31.5 | 7.9 | 41.3 | | % adults with no qualifications | 20.5 | 15.5 | -5.0 | 10.2 | | **Housing** | | | | | | % households owned outright | 13.8 | 11.2 | -2.6 | 20.5 | | % households being bought with mortgage or loan | 24.2 | 21.0 | -3.2 | 28.8 | | % households private rented | 18.7 | 31.9 | 13.2 | 24.1 | | % households social rented | 41.2 | 34.0 | -7.2 | 24.2 | | % households 'other' tenure | 2.1 | 1.9 | -0.2 | 2.1 | | **Crime** | | | | | | Crime rate | 155.8 | 134.6 | -21.1 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 17.1 | 17.0 | -0.2 | 12.4 | | % 60+ claiming pension credit | 38.8 | 37.2 | -1.7 | 24.0 | | % of Children in “Poverty” | 47.9 | 42.5 | -5.4 | 29.6 | | % of SOAs in Quintile 1 of IMD | 73.0 | 70.0 | -3.0 | 26.2 | | % of SOAs in Quintile 2 of IMD | 21.0 | 22.8 | 1.8 | 30.0 | | % of SOAs in Quintile 3 of IMD | 5.0 | 5.5 | 0.5 | 19.7 | | % of SOAs in Quintile 4 of IMD | 0.0 | 1.0 | 1.0 | 15.1 | | % of SOAs in Quintile 5 of IMD | 0.0 | 0.7 | 0.7 | 8.9 | | **Elections** | | | | | | Total Electors | 467,724 | 507,691 | 39,967 | 5,796,259 | | % Turnout | 33.4 | 39.8 | 6.4 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 18.1 | 17.5 | -0.7 | 35.3 | | % of votes for Labour candidate | 29.1 | 34.7 | 5.6 | 26.4 | | % of votes for Lib Dem candidate | 13.9 | 7.5 | -6.5 | 12.9 | | % of votes for 'Other' candidates | 38.8 | 40.3 | 1.5 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 16.1 | 17.9 | 1.8 | 34.6 | | % of votes for Labour party | 27.9 | 37.4 | 9.5 | 27.6 | | % of votes for Lib Dem party | 12.4 | 6.5 | -6.0 | 11.4 | | % of votes for 'Other' parties | 43.6 | 38.2 | -5.4 | 26.4 |
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | Total Population | 529,200 | 542,600 | 13,400 | 8,078,900 | | Projected population in 2031 | n/a | 590,500 | 47,900 | 9,050,300 | | % population aged 0 to 16 | 22.5 | 22.9 | 0.4 | 21.9 | | % population aged 75 and over | 6.2 | 6.1 | -0.1 | 5.3 | | Average Age | 37.3 | 37.2 | -0.1 | 35.8 | | Area | n/a | 13,035 | - | 157,215 | | Population Density | 40.6 | 41.6 | 1.0 | 51.4 | | Daytime population | n/a | 484,185 | - | 9,301,133 |
## Households
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | Total number of households | 219,654 | 227,675 | 8,020 | 3,296,293 | | Couple Households | 106,420 | 105,686 | -734 | 1,352,024 | | Lone Parents Households | 20,792 | 23,116 | 2,324 | 334,470 | | One Person Households | 79,233 | 86,967 | 7,734 | 1,287,458 | | Other Households | 13,212 | 11,904 | -1,307 | 322,357 |
## Employment
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | Number of workers | 219,000 | 212,000 | -7,000 | 4,788,000 | | Number of businesses | 17,940 | 18,995 | 1,055 | 403,080 | | 3 year business survival rate | 60.7 | 61.9 | 1.1 | 59.5 | | Employment rate - aged 16-64 | 74.8 | 73.1 | -1.6 | 68.1 | | Employment rate males - aged 16-64| 79.8 | 81.8 | 2.0 | 75.4 | | Employment rate females - aged 16-64| 69.9 | 64.6 | -5.3 | 60.6 | | Unemployment rate - aged 16-64 | 7.0 | 7.8 | 0.8 | 9.2 |
## Diversity
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | % from BAME groups | 25.5 | 28.3 | 2.8 | 37.4 | | % born abroad | 20.6 | 21.2 | 0.5 | 35.9 | | Largest migrant population | India | India | - | India | | Second largest migrant population| Kenya | Jamaica | - | Bangladesh | | Third largest migrant population | Ireland | South Africa | - | Poland | | % of adults who don’t speak English at home | 10.0 | 11.0 | 1.0 | 21.7 | | % pupils with first language other than English | 18.3 | 22.3 | 4.0 | 41.7 | | Pupils highest language other than English | Tamil | n/a | - | Bengal |
## Education and Skills
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | All Schools | 233 | 219 | -14 | 3,022 | | Independent Schools | 37 | 33 | -4 | 520 | | % pupils at independent schools | 9.8 | 8.9 | -0.9 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 49.0 | 58.7 | 9.8 | 58.2 | | % aged 16-24 NEET | 10.5 | 16.6 | 6.0 | 15.8 | | % adults with degree level and above | 30.6 | 36.7 | 6.1 | 41.3 | | % adults with no qualifications | 13.0 | 6.8 | -6.2 | 10.2 |
## Housing
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | % households owned outright | 27.4 | 23.4 | -4.0 | 20.5 | | % households being bought with mortgage or loan | 43.1 | 44.8 | 1.7 | 28.9 | | % households private rented | 11.4 | 14.6 | 3.3 | 24.1 | | % households social rented | 16.0 | 15.3 | -0.7 | 24.2 | | % households 'other' tenure | 2.2 | 1.9 | -0.2 | 2.1 |
## Crime
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | Crime rate | 89.8 | 82.8 | -6.9 | 105.3 |
## Deprivation
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | % working age people claiming out of work benefits | 10.1 | 11.3 | 1.2 | 12.4 | | % 60+ claiming pension credit | 18.4 | 17.9 | -0.5 | 24.0 | | % of Children in “Poverty” | 22.9 | 23.2 | 0.3 | 29.6 | | % of SOAs in Quintile 1 of IMD | 11.0 | 12.3 | 1.3 | 26.2 | | % of SOAs in Quintile 2 of IMD | 25.0 | 26.4 | 1.4 | 30.0 | | % of SOAs in Quintile 3 of IMD | 24.0 | 25.2 | 1.2 | 19.7 | | % of SOAs in Quintile 4 of IMD | 21.0 | 22.3 | 1.3 | 15.1 | | % of SOAs in Quintile 5 of IMD | 20.0 | 13.8 | -6.2 | 8.9 |
## Elections
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | Total Electors | 381,661 | 402,511 | 20,850 | 5,796,259 | | % Turnout | 37.8 | 49.0 | 11.2 | 45.2 |
## GLA Constituency Election
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | % of votes for Conservative candidate | 38.6 | 44.1 | 5.5 | 35.3 | | % of votes for Labour candidate | 19.1 | 19.5 | 0.4 | 26.4 | | % of votes for Lib Dem candidate | 21.1 | 18.6 | -2.5 | 12.9 | | % of votes for ‘Other’ candidates | 21.2 | 17.8 | -3.4 | 25.4 |
## GLA List Election
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------------|---------------------|------------------|--------|----------------| | % of votes for Conservative party | 33.9 | 40.9 | 7.0 | 34.6 | | % of votes for Labour party | 19.9 | 20.6 | 0.7 | 27.6 | | % of votes for Lib Dem party | 19.0 | 14.5 | -4.5 | 11.4 | | % of votes for ‘Other’ parties | 27.2 | 24.0 | -3.2 | 26.4 | | Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 584,500 | 606,800 | 22,300 | 8,078,900 | | Projected population in 2031 | n/a | 665,800 | 59,000 | 9,050,300 | | % population aged 0 to 16 | 22.7 | 23.7 | 1.0 | 21.9 | | % population aged 75 and over | 5.8 | 5.8 | 0.1 | 5.3 | | Average Age | 36.4 | 36.2 | -0.2 | 35.8 | | Area | n/a | 17,125 | - | 157,215 | | Population Density | 34.1 | 35.4 | 1.3 | 51.4 | | Daytime population | n/a | 652,479 | - | 9,301,133 | | **Households** | | | | | | Total number of households| 221,574 | 231,155 | 9,581 | 3,296,293 | | Couple Households | 110,465 | 110,803 | 339 | 1,352,024 | | Lone Parents Households | 19,219 | 22,262 | 3,043 | 334,470 | | One Person Households | 71,648 | 78,292 | 6,644 | 1,287,458 | | Other Households | 20,242 | 19,800 | -441 | 322,357 | | **Employment** | | | | | | Number of workers | 337,000 | 319,000 | -18,000| 4,788,000 | | Number of businesses | 22,290 | 23,750 | 1,460 | 403,080 | | 3 year business survival rate | 56.1 | 58.2 | 2.1 | 59.5 | | Employment rate - aged 16-64 | 69.0 | 69.3 | 0.3 | 68.1 | | Employment rate males - aged 16-64 | 76.8 | 77.2 | 0.4 | 75.4 | | Employment rate females - aged 16-64 | 61.0 | 60.9 | -0.1 | 60.6 | | Unemployment rate - aged 16-64 | 7.0 | 8.7 | 1.7 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 38.1 | 47.7 | 9.7 | 37.4 | | % born abroad | 32.4 | 35.2 | 2.8 | 35.3 | | Largest migrant population| India | India | - | India | | Second largest migrant population | Ireland | Poland | - | Bangladesh | | Third largest migrant population | Poland | Sri Lanka | - | Poland | | % of adults who don’t speak English at home | 22.6 | 26.1 | 3.6 | 21.7 | | % pupils with first language other than English | 40.6 | 46.1 | 5.6 | 41.7 | | Pupils highest language other than English | Panjabi | n/a | - | Bengali | | **Education and Skills** | | | | | | All Schools | 209 | 214 | 5 | 3,022 | | Independent Schools | 27 | 31 | 4 | 520 | | % pupils at independent schools | 9.2 | 8.8 | -0.5 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 50.1 | 59.7 | 9.6 | 58.2 | | % aged 16-24 NEET | 15.1 | 18.2 | 3.2 | 15.8 | | % adults with degree level and above | 29.9 | 35.4 | 5.5 | 41.3 | | % adults with no qualifications | 12.8 | 11.7 | -1.1 | 10.2 | | **Housing** | | | | | | % households owned outright | 25.8 | 22.9 | -2.9 | 20.5 | | % households being bought with mortgage or loan | 39.1 | 34.3 | -4.8 | 28.8 | | % households private rented | 14.9 | 22.0 | 7.2 | 24.1 | | % households social rented | 18.5 | 19.2 | 0.7 | 24.2 | | % households 'other' tenure | 1.7 | 1.6 | -0.2 | 2.1 | | **Crime** | | | | | | Crime rate | 115.4 | 100.2 | -15.2 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 10.8 | 11.1 | 0.3 | 12.4 | | % 60+ claiming pension credit | 21.6 | 20.9 | -0.7 | 24.0 | | % of Children in “Poverty” | 27.4 | 26.8 | -0.6 | 29.6 | | % of SOAs in Quintile 1 of IMD | 15.0 | 14.0 | -1.0 | 26.2 | | % of SOAs in Quintile 2 of IMD | 32.0 | 34.1 | 2.1 | 30.0 | | % of SOAs in Quintile 3 of IMD | 30.0 | 30.7 | 0.7 | 19.7 | | % of SOAs in Quintile 4 of IMD | 15.0 | 13.4 | -1.6 | 15.1 | | % of SOAs in Quintile 5 of IMD | 9.0 | 7.8 | -1.2 | 8.9 | | **Elections** | | | | | | Total Electors | 415,773 | 440,428 | 24,655 | 5,796,259 | | % Turnout | 37.3 | 42.5 | 5.2 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 32.4 | 43.2 | 10.7 | 35.3 | | % of votes for Labour candidate | 24.5 | 26.6 | 2.1 | 26.4 | | % of votes for Lib Dem candidate | 16.8 | 10.4 | -6.4 | 12.9 | | % of votes for ‘Other’ candidates | 26.3 | 19.8 | -6.4 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 28.8 | 38.5 | 9.7 | 34.6 | | % of votes for Labour party | 27.1 | 27.6 | 0.5 | 27.6 | | % of votes for Lib Dem party | 15.0 | 9.2 | -5.8 | 11.4 | | % of votes for ‘Other’ parties | 29.1 | 24.8 | -4.3 | 26.4 | | Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 528,000 | 542,700 | 14,700 | 8,078,900 | | Projected population in 2031 | n/a | 582,200 | 39,500 | 9,050,300 | | % population aged 0 to 16 | 22.6 | 23.3 | 0.7 | 21.9 | | % population aged 75 and over | 5.0 | 5.0 | -0.1 | 5.3 | | Average Age | 35.5 | 35.2 | -0.3 | 35.8 | | Area | n/a | 11,043 | - | 157,215 | | Population Density | 47.8 | 49.1 | 1.3 | 51.4 | | Daytime population | n/a | 479,645 | - | 9,301,133 | | **Households** | | | | | | Total number of households | 208,983 | 217,141 | 8,158 | 3,296,293 | | Couple Households | 91,596 | 91,503 | -93 | 1,352,024 | | Lone Parents Households | 21,922 | 24,809 | 2,887 | 334,470 | | One Person Households | 75,417 | 81,248 | 5,832 | 1,287,458 | | Other Households | 20,050 | 19,586 | -465 | 322,357 | | **Employment** | | | | | | Number of workers | 188,000 | 186,000 | -2,000 | 4,788,000 | | Number of businesses | 18,135 | 19,765 | 1,630 | 403,080 | | 3 year business survival rate | 57.1 | 60.3 | 3.1 | 59.5 | | Employment rate - aged 16-64 | 69.9 | 62.8 | -7.1 | 68.1 | | Employment rate males - aged 16-64 | 79.2 | 68.8 | -10.4 | 75.4 | | Employment rate females - aged 16-64 | 60.4 | 56.5 | -3.9 | 60.6 | | Unemployment rate - aged 16-64 | 4.6 | 11.2 | 6.6 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 36.1 | 41.7 | 5.6 | 37.4 | | % born abroad | 33.4 | 38.5 | 5.1 | 35.3 | | Largest migrant population | Turkey | Turkey | - | India | | Second largest migrant population | Cyprus | Jamaica | - | Bangladesh | | Third largest migrant population | Ghana | Poland | - | Poland | | % of adults who don’t speak English at home | 22.9 | 25.3 | 2.3 | 21.7 | | % pupils with first language other than English | 43.2 | 46.4 | 3.1 | 41.7 | | Pupils highest language other than English | Turkish | n/a | - | Bengali | | **Education and Skills** | | | | | | All Schools | 197 | 201 | 4 | 3,022 | | Independent Schools | 22 | 23 | 1 | 520 | | % pupils at independent schools | 4.5 | 4.6 | 0.2 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 45.5 | 53.5 | 8.0 | 58.2 | | % aged 16-24 NEET | 22.8 | 15.2 | -7.6 | 15.8 | | % adults with degree level and above | 35.9 | 36.9 | 1.0 | 41.3 | | % adults with no qualifications | 13.7 | 11.1 | -2.6 | 10.2 | | **Housing** | | | | | | % households owned outright | 19.7 | 21.6 | 1.9 | 20.5 | | % households being bought with mortgage or loan | 38.8 | 31.2 | -7.6 | 28.9 | | % households private rented | 13.5 | 23.6 | 10.1 | 24.1 | | % households social rented | 26.5 | 21.7 | -4.8 | 24.2 | | % households 'other' tenure | 1.5 | 1.8 | 0.4 | 2.1 | | **Crime** | | | | | | Crime rate | 112.8 | 92.8 | -20.0 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 15.4 | 16.4 | 0.9 | 12.4 | | % 60+ claiming pension credit | 28.0 | 27.8 | -0.2 | 24.0 | | % of Children in “Poverty” | 38.3 | 35.5 | -2.9 | 29.6 | | % of SOAs in Quintile 1 of IMD | 37.0 | 39.4 | 2.4 | 26.2 | | % of SOAs in Quintile 2 of IMD | 34.0 | 30.2 | -3.8 | 30.0 | | % of SOAs in Quintile 3 of IMD | 16.0 | 16.6 | 0.6 | 19.7 | | % of SOAs in Quintile 4 of IMD | 10.0 | 9.2 | -0.8 | 15.1 | | % of SOAs in Quintile 5 of IMD | 4.0 | 4.6 | 0.6 | 8.9 | | **Elections** | | | | | | Total Electors | 365,538 | 383,831 | 18,293 | 5,796,259 | | % Turnout | 36.1 | 46.3 | 10.1 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 27.9 | 32.4 | 4.5 | 35.3 | | % of votes for Labour candidate | 29.2 | 33.3 | 4.1 | 26.4 | | % of votes for Lib Dem candidate | 17.0 | 14.9 | -2.1 | 12.9 | | % of votes for 'Other' candidates | 26.0 | 19.5 | -6.5 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 25.8 | 30.7 | 4.9 | 34.6 | | % of votes for Labour party | 28.8 | 32.2 | 3.4 | 27.6 | | % of votes for Lib Dem party | 16.3 | 12.2 | -4.1 | 11.4 | | % of votes for 'Other' parties | 29.1 | 24.9 | -4.1 | 26.4 |
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | Total Population | 507,100 | 526,300 | 19,200 | 8,078,900 | | Projected population in 2031 | n/a | 618,800 | 92,500 | 9,050,300 | | % population aged 0 to 16 | 22.4 | 23.1 | 0.7 | 21.9 | | % population aged 75 and over | 4.8 | 4.6 | -0.2 | 5.3 | | Average Age | 35.1 | 35.0 | -0.1 | 35.8 | | Area | n/a | 8,248 | - | 157,215 | | Population Density | 61.5 | 63.8 | 2.3 | 51.4 | | Daytime population | n/a | 422,220 | - | 9,301,133 |
## Households
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | Total number of households | 213,937 | 220,983 | 7,046 | 3,296,293 | | Couple Households | 83,910 | 83,197 | -713 | 1,352,024 | | Lone Parents Households | 26,483 | 28,404 | 1,921 | 334,470 | | One Person Households | 82,256 | 88,429 | 6,173 | 1,287,458 | | Other Households | 21,286 | 20,958 | -328 | 322,357 |
## Employment
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | Number of workers | 154,000 | 155,000 | 1,000 | 4,788,000 | | Number of businesses | 12,795 | 14,250 | 1,455 | 403,080 | | 3 year business survival rate | 57.7 | 58.2 | 0.5 | 59.5 | | Employment rate - aged 16-64 | 69.4 | 68.0 | -1.5 | 68.1 | | Employment rate males - aged 16-64 | 74.2 | 77.3 | 3.1 | 75.4 | | Employment rate females - aged 16-64 | 64.7 | 58.7 | -6.0 | 60.6 | | Unemployment rate - aged 16-64 | 8.5 | 9.6 | 1.1 | 9.2 |
## Diversity
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | % from BAME groups | 32.3 | 39.8 | 7.6 | 37.4 | | % born abroad | 26.6 | 35.1 | 8.5 | 35.5 | | Largest migrant population | Nigeria | Nigeria | - | India | | Second largest migrant population | Jamaica | Jamaica | - | Bangladesh | | Third largest migrant population | Ireland | India | - | Poland | | % of adults who don’t speak English at home | 15.9 | 12.5 | -3.4 | 21.7 | | % pupils with first language other than English | 32.5 | 33.2 | 0.8 | 41.7 | | Pupils highest language other than English | Yoruba | n/a | - | Bengali |
## Education and Skills
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | All Schools | 198 | 197 | -1 | 3,022 | | Independent Schools | 18 | 22 | 4 | 520 | | % pupils at independent schools | 6.4 | 6.6 | 0.2 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 39.9 | 51.6 | 11.7 | 58.2 | | % aged 16-24 NEET | 20.1 | 18.2 | -1.9 | 15.8 | | % adults with degree level and above | 31.0 | 39.9 | 8.8 | 41.3 | | % adults with no qualifications | 14.1 | 11.1 | -3.0 | 10.2 |
## Housing
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | % households owned outright | 14.2 | 15.0 | 0.8 | 20.5 | | % households being bought with mortgage or loan | 34.9 | 30.0 | -4.9 | 28.9 | | % households private rented | 17.1 | 23.8 | 6.7 | 24.1 | | % households social rented | 32.2 | 29.1 | -3.0 | 24.2 | | % households 'other' tenure | 1.6 | 2.0 | 0.4 | 2.1 |
## Crime
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | Crime rate | 129.1 | 107.1 | -22.0 | 105.3 |
## Deprivation
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | % working age people claiming out of work benefits | 15.2 | 15.5 | 0.3 | 12.4 | | % 60+ claiming pension credit | 28.2 | 27.2 | -1.0 | 24.0 | | % of Children in “Poverty” | 34.8 | 32.7 | -2.1 | 29.6 | | % of SOAs in Quintile 1 of IMD | 41.0 | 41.1 | 0.1 | 26.2 | | % of SOAs in Quintile 2 of IMD | 44.0 | 41.1 | -2.9 | 30.0 | | % of SOAs in Quintile 3 of IMD | 13.0 | 14.6 | 1.6 | 19.7 | | % of SOAs in Quintile 4 of IMD | 2.0 | 3.2 | 1.2 | 15.1 | | % of SOAs in Quintile 5 of IMD | 0.0 | 0.0 | 0.0 | 8.9 |
## Elections
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | Total Electors | 346,945 | 358,308 | 11,363 | 5,796,259 | | % Turnout | 35.1 | 43.0 | 7.9 | 45.2 |
## GLA Constituency Election
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | % of votes for Conservative candidate | 20.4 | 25.2 | 4.8 | 35.3 | | % of votes for Labour candidate | 33.3 | 36.2 | 2.9 | 26.4 | | % of votes for Lib Dem candidate | 17.6 | 12.4 | -5.3 | 12.9 | | % of votes for 'Other' candidates | 28.7 | 26.2 | -2.5 | 25.4 |
## GLA List Election
| Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------------|---------------------|------------------|--------|----------------| | % of votes for Conservative party | 18.4 | 24.5 | 6.1 | 34.6 | | % of votes for Labour party | 31.5 | 34.0 | 2.6 | 27.6 | | % of votes for Lib Dem party | 15.9 | 10.8 | -5.0 | 11.4 | | % of votes for 'Other' parties | 34.3 | 30.6 | -3.6 | 26.4 | | Indicator | Data four years ago | Most recent data | Change | London average | |-----------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 489,100 | 504,900 | 15,800 | 8,078,900 | | Projected population in 2031 | n/a | 563,900 | 59,000 | 9,050,300 | | % population aged 0 to 16 | 21.9 | 22.5 | 0.6 | 21.9 | | % population aged 75 and over | 6.9 | 6.6 | -0.4 | 5.3 | | Average Age | 37.9 | 37.4 | -0.5 | 35.8 | | Area | n/a | 16,877 | - | 157,215 | | Population Density | 29.0 | 29.9 | 0.9 | 51.4 | | **Households** | | | | | | Total number of households | 188,688 | 195,320 | 6,632 | 3,296,293 | | Couple Households | 105,875 | 106,945 | 1,070 | 1,352,024 | | Lone Parents Households | 14,748 | 17,276 | 2,528 | 334,470 | | One Person Households | 57,002 | 61,110 | 4,109 | 1,287,458 | | Other Households | 11,067 | 9,992 | -1,075 | 322,357 | | **Employment** | | | | | | Number of workers | 160,000 | 161,000 | 1,000 | 4,788,000 | | Number of businesses | 15,880 | 17,500 | 1,620 | 403,080 | | 3 year business survival rate | 58.1 | 58.5 | 0.4 | 59.5 | | Employment rate - aged 16-64 | 70.1 | 67.9 | -2.2 | 68.1 | | Employment rate males - aged 16-64 | 77.5 | 77.8 | 0.3 | 75.4 | | Employment rate females - aged 16-64 | 62.8 | 57.9 | -4.9 | 60.6 | | Unemployment rate - aged 16-64 | 5.5 | 8.7 | 3.2 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 29.3 | 35.4 | 6.0 | 37.4 | | % born abroad | 21.4 | 24.8 | 3.4 | 35.3 | | Largest migrant population | India | India | - | India | | Second largest migrant population | Kenya | Pakistan | - | Bangladesh | | Third largest migrant population | Ireland | Sri Lanka | - | Poland | | % of adults who don’t speak English at home | 15.3 | 20.7 | 5.3 | 21.7 | | % pupils with first language other than English | 29.5 | 35.3 | 5.8 | 41.7 | | Pupils highest language other than English | Urdu | n/a | - | Bengali | | **Education and Skills** | | | | | | All Schools | 188 | 186 | -2 | 3,022 | | Independent Schools | 24 | 26 | 2 | 520 | | % pupils at independent schools | 5.5 | 5.4 | -0.1 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 56.8 | 64.6 | 7.8 | 58.2 | | % aged 16-24 NEET | 16.1 | 16.7 | 0.5 | 15.8 | | % adults with degree level and above | 26.2 | 25.6 | -0.6 | 41.3 | | % adults with no qualifications | 14.3 | 15.2 | 1.0 | 10.2 | | **Housing** | | | | | | % households owned outright | 30.8 | 30.9 | 0.0 | 20.5 | | % households being bought with mortgage or loan | 44.0 | 35.8 | -8.2 | 28.9 | | % households private rented | 10.9 | 18.3 | 7.4 | 24.1 | | % households social rented | 13.5 | 13.4 | -0.2 | 24.2 | | % households 'other' tenure | 0.7 | 1.6 | 0.9 | 2.1 | | **Crime** | | | | | | Crime rate | 92.3 | 83.1 | -9.2 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 9.9 | 10.6 | 0.8 | 12.4 | | % 60+ claiming pension credit | 20.6 | 20.0 | -0.6 | 24.0 | | % of Children in “Poverty” | 23.2 | 23.7 | 0.5 | 29.6 | | % of SOAs in Quintile 1 of IMD | 6.0 | 7.1 | 1.1 | 26.2 | | % of SOAs in Quintile 2 of IMD | 27.0 | 24.4 | -2.6 | 30.0 | | % of SOAs in Quintile 3 of IMD | 28.0 | 31.2 | 3.2 | 19.7 | | % of SOAs in Quintile 4 of IMD | 30.0 | 26.6 | -3.4 | 15.1 | | % of SOAs in Quintile 5 of IMD | 10.0 | 10.7 | 0.7 | 8.9 | | **Elections** | | | | | | Total Electors | 371,429 | 391,743 | 20,314 | 5,796,259 | | % Turnout | 39.0 | 45.5 | 6.5 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 34.6 | 25.2 | -9.4 | 35.3 | | % of votes for Labour candidate | 21.7 | 11.4 | -10.3 | 26.4 | | % of votes for Lib Dem candidate | 10.5 | 4.0 | -6.6 | 12.9 | | % of votes for ‘Other’ candidates | 33.2 | 59.4 | 26.2 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 33.1 | 40.9 | 7.8 | 34.6 | | % of votes for Labour party | 21.4 | 22.2 | 0.9 | 27.6 | | % of votes for Lib Dem party | 11.3 | 6.5 | -4.8 | 11.4 | | % of votes for ‘Other’ parties | 34.1 | 30.3 | -3.8 | 26.4 |
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Total Population | 570,000 | 593,900 | 23,900 | 8,078,900 | | Projected population in 2031| n/a | 697,800 | 103,900| 9,050,300 | | % population aged 0 to 16 | 19.8 | 19.8 | 0.1 | 21.9 | | % population aged 75 and over| 3.9 | 3.8 | -0.2 | 5.3 | | Average Age | 34.0 | 34.0 | -0.1 | 35.8 | | Area | n/a | 5,567 | - | 157,215 | | Population Density | 102.4 | 106.7 | 4.3 | 51.4 | | Daytime population | n/a | 643,478 | - | 9,301,133 |
## Households
| Indicator | Total number of households | Couple Households | Lone Parents Households | One Person Households | Other Households | |----------------------------|----------------------------|-------------------|-------------------------|-----------------------|-----------------| | | 238,317 | 75,299 | 29,238 | 96,753 | 37,024 | | | 250,586 | 74,524 | 30,381 | 105,415 | 40,263 |
## Employment
| Indicator | Number of workers | Number of businesses | 3 year business survival rate | Employment rate - aged 16-64 | Employment rate males - aged 16-64 | Employment rate females - aged 16-64 | Unemployment rate - aged 16-64 | |----------------------------|-------------------|----------------------|-------------------------------|-------------------------------|-------------------------------------|----------------------------------|-------------------------------| | | 347,000 | 21,540 | 55.8 | 66.7 | 76.3 | 56.4 | 8.8 | | | 384,000 | 24,890 | 58.2 | 69.4 | 73.3 | 65.1 | 12.4 |
## Diversity
| Indicator | % from BAME groups | % born abroad | Largest migrant population | Second largest migrant population | Third largest migrant population | % of adults who don’t speak English at home | % pupils with first language other than English | Pupils highest language other than English | |----------------------------|--------------------|---------------|-----------------------------|----------------------------------|----------------------------------|---------------------------------------------|-----------------------------------------------|---------------------------------------------| | | 41.1 | 35.9 | Nigeria | Jamaica | Ghana | 20.8 | 44.3 | Yoruba | | | 39.7 | 37.0 | Nigeria | Jamaica | Ireland | 16.3 | 42.8 | n/a |
## Education and Skills
| Indicator | All Schools | Independent Schools | % pupils at independent schools | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | % aged 16-24 NEET | % adults with degree level and above | % adults with no qualifications | % households owned outright | % households being bought with mortgage or loan | % households private rented | % households social rented | % households ‘other’ tenure | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|-------------|--------------------|---------------------------------|--------------------------------------------------------|------------------|-------------------------------------|---------------------------------|-------------------------------|-----------------------------------------------|-----------------------------|-----------------------------|-----------------------------|---------------------------------|-----------------------------|-----------------------------|---------------------------------|---------------------------------| | | 209 | 20 | 9.8 | 40.5 | 19.2 | 39.6 | 20.2 | 12.8 | 23.6 | 17.9 | 44.2 | 1.5 | 15.2 | 31.7 | 26.9 | 26.1 | 15.4 |
## Housing
| Indicator | % working age people claiming out of work benefits | % 60+ claiming pension credit | % of Children in ‘Poverty’ | % of SOAs in Quintile 1 of IMD | % of SOAs in Quintile 2 of IMD | % of SOAs in Quintile 3 of IMD | % of SOAs in Quintile 4 of IMD | % of SOAs in Quintile 5 of IMD | |----------------------------|---------------------------------------------------|-------------------------------|-----------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------| | | 14.7 | 35.0 | 36.7 | 54.0 | 35.0 | 8.0 | 2.0 | 0.0 |
## Crime
| Indicator | Crime rate | Deprivation | |----------------------------|------------|-------------| | | 142.9 | % working age people claiming out of work benefits | % 60+ claiming pension credit | % of Children in ‘Poverty’ | % of SOAs in Quintile 1 of IMD | % of SOAs in Quintile 2 of IMD | % of SOAs in Quintile 3 of IMD | % of SOAs in Quintile 4 of IMD | % of SOAs in Quintile 5 of IMD | | | 12.4 | 14.7 | 35.0 | 36.7 | 54.0 | 35.0 | 8.0 | 2.0 | 0.0 |
## Elections
| Indicator | Total Electors | % Turnout | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|----------------|-----------|-------------------------------------|---------------------------------|---------------------------------|---------------------------------| | | 393,701 | 33.4 | 15.2 | 31.7 | 26.9 | 26.1 |
## GLA Constituency Election
| Indicator | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|-------------------------------------|---------------------------------|---------------------------------|---------------------------------| | | 15.2 | 31.7 | 26.9 | 26.1 |
## GLA List Election
| Indicator | % of votes for Conservative party | % of votes for Labour party | % of votes for Lib Dem party | % of votes for ‘Other’ parties | |----------------------------|----------------------------------|-----------------------------|-----------------------------|-------------------------------| | | 15.4 | 31.8 | 24.3 | 28.6 |
London Assembly Constituency Profiles 2012
Intelligence Briefing 2012-02
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Total Population | 494,000 | 514,700 | 20,700 | 8,078,900 | | Projected population in 2031 | n/a | 569,700 | 55,000 | 9,050,300 | | % population aged 0 to 16 | 19.1 | 20.2 | 1.0 | 21.9 | | % population aged 75 and over | 4.9 | 4.6 | -0.2 | 5.3 | | Average Age | 35.5 | 35.2 | -0.3 | 35.8 | | Area | n/a | 7,189 | - | 157,215 | | Population Density | 68.7 | 71.6 | 2.9 | 51.4 | | Daytime population | n/a | 432,216 | - | 9,301,133 |
## Households
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Total number of households | 206,180 | 215,378 | 9,198 | 3,296,293 | | Couple Households | 85,525 | 85,684 | 159 | 1,352,024 | | Lone Parents Households | 15,540 | 17,444 | 1,904 | 334,470 | | One Person Households | 77,451 | 84,395 | 6,944 | 1,287,458 | | Other Households | 27,662 | 27,870 | 208 | 322,357 |
## Employment
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Number of workers | 207,000 | 197,000 | -10,000| 4,788,000 | | Number of businesses | 21,675 | 23,540 | 1,865 | 403,080 | | 3 year business survival rate | 50.7 | 58.2 | 7.6 | 59.5 | | Employment rate - aged 16-64 | 75.3 | 72.4 | -2.8 | 68.1 | | Employment rate males - aged 16-64 | 80.9 | 82.4 | 1.5 | 75.4 | | Employment rate females - aged 16-64 | 69.7 | 62.4 | -7.3 | 60.6 | | Unemployment rate - aged 16-64 | 5.9 | 8.0 | 2.1 | 9.2 |
## Diversity
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | % from BAME groups | 25.3 | 27.9 | 2.7 | 37.4 | | % born abroad | 33.2 | 38.3 | 5.1 | 35.3 | | Largest migrant population | South Africa | South Africa | - | India | | Second largest migrant population | Australia | Poland | - | Bangladesh | | Third largest migrant population | Poland | Pakistan | - | Poland | | % of adults who don’t speak English at home | 15.3 | 19.1 | 3.8 | 21.7 | | % pupils with first language other than English | 35.3 | 39.9 | 4.6 | 41.7 | | Pupils highest language other than English | Urdu | n/a | - | Bengali |
## Education and Skills
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | All Schools | 177 | 179 | 2 | 3,022 | | Independent Schools | 40 | 43 | 3 | 520 | | % pupils at independent schools | 18.4 | 19.5 | 1.2 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 47.3 | 57.8 | 10.5 | 58.2 | | % aged 16-24 NEET | 10.4 | 15.5 | 5.0 | 15.8 | | % adults with degree level and above | 46.9 | 58.7 | 11.8 | 41.3 | | % adults with no qualifications | 11.3 | 4.5 | -6.9 | 10.2 |
## Housing
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | % households owned outright | 19.6 | 19.3 | -0.3 | 20.5 | | % households being bought with mortgage or loan | 36.4 | 32.5 | -3.9 | 28.9 | | % households private rented | 22.4 | 29.8 | 7.4 | 24.1 | | % households social rented | 18.7 | 16.0 | -2.8 | 24.2 | | % households ‘other’ tenure | 2.9 | 2.4 | -0.5 | 2.1 |
## Crime
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Crime rate | 96.3 | 79.1 | -17.2 | 105.3 |
## Deprivation
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | % working age people claiming out of work benefits | 8.3 | 8.5 | 0.2 | 12.4 | | % 60+ claiming pension credit | 23.6 | 21.5 | -2.2 | 24.0 | | % of Children in ‘Poverty’ | 24.0 | 22.8 | -1.3 | 29.6 | | % of SOAs in Quintile 1 of IMD | 6.0 | 7.0 | 1.0 | 26.2 | | % of SOAs in Quintile 2 of IMD | 27.0 | 29.5 | 2.5 | 30.0 | | % of SOAs in Quintile 3 of IMD | 27.0 | 29.2 | 2.2 | 19.7 | | % of SOAs in Quintile 4 of IMD | 22.0 | 17.4 | -4.6 | 15.1 | | % of SOAs in Quintile 5 of IMD | 17.0 | 16.8 | -0.2 | 8.9 |
## Elections
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Total Electors | 361,696 | 378,091 | 16,395 | 5,796,259 | | % Turnout | 38.5 | 47.2 | 8.6 | 45.2 |
## GLA Constituency Election
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | % of votes for Conservative candidate | 38.8 | 44.9 | 6.0 | 35.3 | | % of votes for Labour candidate | 25.3 | 29.2 | 3.9 | 26.4 | | % of votes for Lib Dem candidate | 14.4 | 10.3 | -4.1 | 12.9 | | % of votes for ‘Other’ candidates | 21.5 | 15.7 | -5.8 | 25.4 |
## GLA List Election
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | % of votes for Conservative party | 33.5 | 40.5 | 7.0 | 34.6 | | % of votes for Labour party | 26.1 | 27.2 | 1.1 | 27.6 | | % of votes for Lib Dem party | 14.6 | 9.7 | -4.9 | 11.4 | | % of votes for ‘Other’ parties | 25.8 | 22.6 | -3.2 | 26.4 |
## Demographics
| Indicator | Data four years ago | Most recent data | Change | London average | |----------------------------|---------------------|------------------|--------|----------------| | Total Population | 660,200 | 699,200 | 39,000 | 8,078,900 | | Projected population in 2031| n/a | 796,200 | 97,000 | 9,050,300 | | % population aged 0 to 16 | 21.7 | 21.9 | 0.2 | 21.9 | | % population aged 75 and over| 4.3 | 4.2 | -0.1 | 5.3 | | Average Age | 34.4 | 34.4 | -0.1 | 35.8 | | Area | n/a | 7,271 | - | 157,215 | | Population Density | 90.8 | 96.2 | 5.4 | 51.4 | | Daytime population | n/a | 706,995 | - | 9,301,133 |
## Households
| Indicator | Total number of households | Couple Households | Lone Parents Households | One Person Households | Other Households | |----------------------------|----------------------------|-------------------|-------------------------|-----------------------|-----------------| | | 270,011 | 93,843 | 31,489 | 113,840 | 30,833 |
## Employment
| Indicator | Number of workers | Number of businesses | 3 year business survival rate | Employment rate - aged 16-64 | Employment rate males - aged 16-64 | Employment rate females - aged 16-64 | Unemployment rate - aged 16-64 | |----------------------------|-------------------|----------------------|------------------------------|-------------------------------|-------------------------------------|-----------------------------------|-------------------------------| | | 339,000 | 29,225 | 58.8 | 65.0 | 72.2 | 58.1 | 9.5 |
## Diversity
| Indicator | % from BAME groups | % born abroad | Largest migrant population | Second largest migrant population | Third largest migrant population | % of adults who don’t speak English at home | % pupils with first language other than English | Pupils highest language other than English | |----------------------------|--------------------|---------------|---------------------------|----------------------------------|---------------------------------|---------------------------------------------|---------------------------------------------|---------------------------------------------| | | 41.2 | 33.9 | Turkey | India | Ireland | 16.4 | 45.4 | Turkish |
## Education and Skills
| Indicator | All Schools | Independent Schools | % pupils at independent schools | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | % aged 16-24 NEET | % adults with degree level and above | % adults with no qualifications | % households owned outright | % households being bought with mortgage or loan | % households private rented | % households social rented | % households ‘other’ tenure | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|-------------|--------------------|--------------------------------|--------------------------------------------------------|------------------|-----------------------------------|---------------------------------|-------------------------------|---------------------------------------------|-----------------------------|-----------------------------|-----------------------------|--------------------------------|-----------------------------|-----------------------------|-----------------------------|--------------------------------| | | 262 | 39 | 9.2 | 42.7 | 18.4 | 34.9 | 19.6 | 14.0 | 27.5 | 16.6 | 40.2 | 1.7 | 18.1 | 29.1 | 18.7 | 34.2 | 17.1 |
## Housing
| Indicator | % working age people claiming out of work benefits | % 60+ claiming pension credit | % of Children in "Poverty" | % of SOAs in Quintile 1 of IMD | % of SOAs in Quintile 2 of IMD | % of SOAs in Quintile 3 of IMD | % of SOAs in Quintile 4 of IMD | % of SOAs in Quintile 5 of IMD | |----------------------------|---------------------------------------------------|-------------------------------|-----------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------|-------------------------------| | | 17.5 | 36.0 | 42.0 | 66.0 | 30.0 | 3.0 | 1.0 | 0.0 |
## Crime
| Indicator | Crime rate | % Turnout | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|------------|-----------|-------------------------------------|--------------------------------|---------------------------------|---------------------------------| | | 155.3 | 33.9 | 18.1 | 29.1 | 18.7 | 34.2 | 17.1 | 28.7 |
## Deprivation
| Indicator | % of votes for Conservative party | % of votes for Labour party | % of votes for Lib Dem party | % of votes for ‘Other’ parties | |----------------------------|----------------------------------|-----------------------------|-----------------------------|-------------------------------| | | 17.1 | 28.7 | 17.8 | 36.4 |
## Elections
| Indicator | Total Electors | % Turnout | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|----------------|-----------|-------------------------------------|--------------------------------|---------------------------------|---------------------------------| | | 446,658 | 33.9 | 18.1 | 29.1 | 18.7 | 34.2 | 17.1 | 28.7 |
## GLA Constituency Election
| Indicator | % of votes for Conservative candidate | % of votes for Labour candidate | % of votes for Lib Dem candidate | % of votes for ‘Other’ candidates | |----------------------------|-------------------------------------|--------------------------------|---------------------------------|---------------------------------| | | 18.1 | 29.1 | 18.7 | 34.2 |
## GLA List Election
| Indicator | % of votes for Conservative party | % of votes for Labour party | % of votes for Lib Dem party | % of votes for ‘Other’ parties | |----------------------------|----------------------------------|-----------------------------|-----------------------------|-------------------------------| | | 17.1 | 28.7 | 17.8 | 36.4 |
London Assembly Constituency Profiles 2012
Intelligence Briefing 2012-02 | Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 576,200 | 596,400 | 20,200 | 8,078,900 | | Projected population in 2031 | n/a | 635,400 | 39,000 | 9,050,300 | | % population aged 0 to 16 | 21.3 | 22.2 | -0.9 | 21.9 | | % population aged 75 and over | 5.7 | 5.6 | -0.1 | 5.3 | | Average Age | 36.7 | 36.4 | -0.3 | 35.8 | | Area | n/a | 15,065 | - | 157,215 | | Population Density | 38.2 | 39.6 | 1.3 | 51.4 | | Daytime population | n/a | 621,866 | - | 9,301,133 | | **Households** | | | | | | Total number of households| 230,524 | 240,607 | 10,083 | 3,296,293 | | Couple Households | 113,498 | 114,105 | 607 | 1,352,024 | | Lone Parents Households | 16,004 | 18,533 | 2,529 | 334,470 | | One Person Households | 81,403 | 88,925 | 7,522 | 1,287,456 | | Other Households | 19,612 | 19,039 | -573 | 322,357 | | **Employment** | | | | | | Number of workers | 315,000 | 314,000 | -1,000 | 4,788,000 | | Number of businesses | 26,810 | 29,710 | 2,900 | 403,080 | | 3 year business survival rate | 63.0 | 62.7 | -0.3 | 59.5 | | Employment rate - aged 16-64 | 74.5 | 72.3 | -2.2 | 68.1 | | Employment rate males - aged 16-64 | 80.6 | 75.7 | -4.9 | 75.4 | | Employment rate females - aged 16-64 | 68.4 | 68.6 | 0.3 | 60.6 | | Unemployment rate - aged 16-64 | 5.5 | 6.9 | 1.3 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 25.5 | 28.3 | 2.8 | 37.4 | | % born abroad | 26.3 | 32.6 | 6.3 | 35.3 | | Largest migrant population | India | India | - | India | | Second largest migrant population | South Africa | Poland | - | Bangladesh | | Third largest migrant population | Ireland | Sri Lanka | - | Poland | | % of adults who don’t speak English at home | 15.4 | 21.2 | 5.9 | 21.7 | | % pupils with first language other than English | 34.7 | 38.6 | 3.8 | 41.7 | | Pupils highest language other than English | Panjabi | n/a | - | Bengali | | **Education and Skills** | | | | | | All Schools | 230 | 221 | -9 | 3,022 | | Independent Schools | 43 | 45 | 2 | 520 | | % pupils at independent schools | 14.8 | 15.1 | 0.3 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 54.3 | 62.5 | 8.2 | 58.2 | | % aged 16-24 NEET | 17.8 | 13.5 | -4.3 | 15.8 | | % adults with degree level and above | 41.7 | 48.3 | 6.6 | 41.3 | | % adults with no qualifications | 9.0 | 8.7 | -0.3 | 10.2 | | **Housing** | | | | | | % households owned outright | 25.9 | 27.7 | 1.8 | 20.5 | | % households being bought with mortgage or loan | 42.9 | 30.2 | -12.7 | 28.9 | | % households private rented | 13.2 | 24.5 | 11.3 | 24.1 | | % households social rented | 16.0 | 15.7 | -0.3 | 24.2 | | % households ‘other’ tenure | 2.0 | 1.8 | -0.2 | 2.1 | | **Crime** | | | | | | Crime rate | 89.4 | 78.3 | -11.1 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 7.5 | 7.7 | 0.3 | 12.4 | | % 60+ claiming pension credit | 18.4 | 17.4 | -0.9 | 24.0 | | % of Children in "Poverty" | 20.0 | 19.5 | -0.6 | 29.6 | | % of SOAs in Quintile 1 of IMD | 5.0 | 3.7 | -1.3 | 26.2 | | % of SOAs in Quintile 2 of IMD | 23.0 | 19.1 | -3.9 | 30.0 | | % of SOAs in Quintile 3 of IMD | 22.0 | 20.9 | 1.1 | 19.7 | | % of SOAs in Quintile 4 of IMD | 26.0 | 32.0 | 6.0 | 15.1 | | % of SOAs in Quintile 5 of IMD | 24.0 | 24.3 | 0.3 | 8.9 | | **Elections** | | | | | | Total Electors | 414,857 | 438,908 | 24,051 | 5,796,259 | | % Turnout | 40.3 | 46.2 | 5.9 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 33.0 | 40.8 | 7.8 | 35.3 | | % of votes for Labour candidate | 17.0 | 16.0 | -1.0 | 26.4 | | % of votes for Lib Dem candidate | 30.3 | 26.5 | -3.7 | 12.9 | | % of votes for ‘Other’ candidates | 19.7 | 16.6 | -3.1 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 30.4 | 38.2 | 7.8 | 34.6 | | % of votes for Labour party | 19.5 | 19.1 | -0.5 | 27.6 | | % of votes for Lib Dem party | 24.7 | 20.1 | -4.6 | 11.4 | | % of votes for ‘Other’ parties | 25.4 | 22.6 | -2.8 | 26.4 | | Indicator | Data four years ago | Most recent data | Change | London average | |---------------------------|---------------------|------------------|--------|----------------| | **Demographics** | | | | | | Total Population | 558,500 | 577,000 | 18,500 | 8,078,900 | | Projected population in 2031 | n/a | 625,000 | 48,000 | 9,050,300 | | % population aged 0 to 16 | 16.3 | 16.6 | 0.3 | 21.9 | | % population aged 75 and over | 5.5 | 5.5 | 0.1 | 5.3 | | Average Age | 37.3 | 37.4 | 0.1 | 35.8 | | Area | n/a | 5,001 | - | 157,215 | | Population Density | 111.7 | 115.4 | 3.7 | 51.4 | | Daytime population | n/a | 1,499,250 | - | 9,301,133 | | **Housesholds** | | | | | | Total number of households| 264,836 | 271,900 | 7,064 | 3,296,293 | | Couple Households | 78,481 | 75,773 | -2,708 | 1,352,024 | | Lone Parents Households | 19,496 | 21,820 | 2,324 | 334,470 | | One Person Households | 130,903 | 136,975 | 6,082 | 1,287,456 | | Other Households | 36,770 | 37,328 | 558 | 322,357 | | **Employment** | | | | | | Number of workers | 870,000 | 912,000 | 42,000 | 4,788,000 | | Number of businesses | 65,135 | 71,550 | 6,415 | 403,080 | | 3 year business survival rate | 52.1 | 57.2 | 5.1 | 59.5 | | Employment rate - aged 16-64 | 63.3 | 65.8 | 2.5 | 68.1 | | Employment rate males - aged 16-64 | 70.7 | 74.8 | 4.1 | 75.4 | | Employment rate females - aged 16-64 | 55.8 | 56.2 | 0.4 | 60.6 | | Unemployment rate - aged 16-64 | 8.4 | 7.2 | -1.2 | 9.2 | | **Diversity** | | | | | | % from BAME groups | 32.6 | 32.0 | -0.6 | 37.4 | | % born abroad | 46.3 | 49.0 | 2.7 | 35.3 | | Largest migrant population | USA | USA | - | India | | Second largest migrant population | France | France | - | Bangladesh | | Third largest migrant population | Ireland | Ireland | - | Poland | | % of adults who don’t speak English at home | 21.8 | 24.2 | 2.4 | 21.7 | | % pupils with first language other than English | 52.1 | 57.4 | 5.3 | 41.7 | | Pupils highest language other than English | Arabic | n/a | - | Bengali | | **Education and Skills** | | | | | | All Schools | 236 | 236 | 0 | 3,022 | | Independent Schools | 86 | 87 | 1 | 520 | | % pupils at independent schools | 33.6 | 34.5 | 0.9 | 10.5 | | % pupils achieving 5+ A\*-C GCSEs inc English and Maths | 45.1 | 60.5 | 15.4 | 58.2 | | % aged 16-24 NEET | 14.3 | 12.9 | -1.4 | 15.8 | | % adults with degree level and above | 47.5 | 56.0 | 8.5 | 41.3 | | % adults with no qualifications | 11.3 | 8.6 | -2.7 | 10.2 | | **Housing** | | | | | | % households owned outright | 18.1 | 18.8 | 0.7 | 20.5 | | % households being bought with mortgage or loan | 21.5 | 15.7 | -5.7 | 28.9 | | % households private rented | 25.0 | 30.8 | 5.8 | 24.1 | | % households social rented | 30.4 | 29.8 | -0.6 | 24.2 | | % households ‘other’ tenure | 5.0 | 4.8 | -0.2 | 2.1 | | **Crime** | | | | | | Crime rate | 200.4 | 184.6 | -15.9 | 105.3 | | **Deprivation** | | | | | | % working age people claiming out of work benefits | 10.5 | 10.9 | 0.4 | 12.4 | | % 60+ claiming pension credit | 24.1 | 23.5 | -0.6 | 24.0 | | % of Children in “Poverty” | 36.3 | 33.9 | -2.4 | 29.6 | | % of SOAs in Quintile 1 of IMD | 24.0 | 22.8 | -1.2 | 26.2 | | % of SOAs in Quintile 2 of IMD | 31.0 | 32.0 | 1.0 | 30.0 | | % of SOAs in Quintile 3 of IMD | 27.0 | 24.9 | -2.1 | 19.7 | | % of SOAs in Quintile 4 of IMD | 17.0 | 20.1 | 3.1 | 15.1 | | % of SOAs in Quintile 5 of IMD | 0.0 | 0.3 | 0.3 | 8.9 | | **Elections** | | | | | | Total Electors | 368,090 | 376,472 | 8,382 | 5,796,259 | | % Turnout | 35.3 | 48.3 | 13.1 | 45.2 | | **GLA Constituency Election** | | | | | | % of votes for Conservative candidate | 44.7 | 53.4 | 8.7 | 35.3 | | % of votes for Labour candidate | 18.9 | 21.7 | 2.8 | 26.4 | | % of votes for Lib Dem candidate | 15.1 | 9.8 | -5.2 | 12.9 | | % of votes for ‘Other’ candidates | 21.4 | 15.0 | -6.3 | 25.4 | | **GLA List Election** | | | | | | % of votes for Conservative party | 41.7 | 48.4 | 6.7 | 34.6 | | % of votes for Labour party | 20.2 | 20.7 | 0.5 | 27.6 | | % of votes for Lib Dem party | 14.6 | 8.8 | -5.8 | 11.4 | | % of votes for ‘Other’ parties | 23.5 | 22.2 | -1.3 | 26.4 | Data Sources, Notes and Links
This section contains extra information on the data sources used as part of the constituency profiles:
Demographics
- Total Population
- Projected population in 2031
- % population aged 0 to 16
- % population aged 75 and over
- Average Age
- Population Density
Note: The recent data is for 2012 and the previous data for 2008 Source: GLA projections (2011 Round SHLAA Projections - standard fertility). Link: http://data.london.gov.uk/datastore/package/gla-population-projections-2011-round-shlaa-borough-sya
- Area
Source: Ordnance Survey Link: http://data.london.gov.uk/datastore/package/land-area-and-population-density-borough
- Daytime population
Sources: Business Register and Employment Survey (BRES), Annual Population Survey (APS), ONS Mid-year Population Estimates (MYE), Department for Education (DfE), GLA Population Projections, and GLA Economics estimates (GLAE). Link: http://data.london.gov.uk/datastore/package/daytime-population-borough
Households
- Total number of households
- Couple Households
- Lone Parents Households
- One Person Households
- Other Households
Note: The recent data is for 2011 and the previous data for 2006 Source: GLA Household projections (2011 Round SHLAA Projections - standard fertility) Link: http://data.london.gov.uk/datastore/package/2011-round-shlaa-based-household-projections-standard-fertility-variant
Employment
- Number of workers
Note: The recent data is for 2010 and the previous data for 2006 Source: Office for National Statistics. 2006 from ONS Jobs Density data, 2010 from combination of BRES and APS data. Link: http://data.london.gov.uk/datastore/package/jobs-and-job-density-borough
- Number of businesses
- 3 year business survival rate
Note: The recent data is for 2010 and the previous data for 2006 (for survival rates: Born in 2003 survived to 2006, and born in 2007 survived to 2010.) Source: The Inter-Departmental Business Register (IDBR), ONS Link: http://data.london.gov.uk/datastore/package/business-demographics-and-survival-rates-borough
- Employment rate – aged 16-64
- Employment rate males – aged 16-64
- Employment rate females – aged 16-64
- Unemployment rate – aged 16-64
Note: The recent data is for 2010/11 and the previous data for 2006/07 Source: Office for National Statistics (Annual Population Survey). Link: http://data.london.gov.uk/datastore/package/london-borough-profiles or http://www.nomisweb.co.uk/
Diversity
- % from BAME groups (BAME=Black, Asian, and Minority Ethnic ie excludes ‘White’ group)
- % born abroad
- Largest migrant population
- Second largest migrant population
- Third largest migrant population
Note: The recent data is for 2010 and the previous data for 2006 Source: Office for National Statistics (Annual Population Survey). Link: http://data.london.gov.uk/datastore/package/london-borough-profiles
- % of adults who don’t speak English at home
Note: The recent data is for Jul-Sep 2009 and the previous data for Jul-Sep 2006 Source: Office for National Statistics (Labour Force Survey). Link: http://data.london.gov.uk/datastore/package/first-language-spoken-home-borough
- % pupils with first language other than English
Note: The recent data is for 2011 and the previous data for 2007 Source: Department for Education Link: http://data.london.gov.uk/datastore/package/percentage-pupils-first-language-borough
- Pupils highest language other than English Note: The only data is for 2008 Source: 2008 Annual School Census via Institute for Education, Centre for Analysis of Social Exclusion (LSE), and London Borough of Newham Link: http://data.london.gov.uk/datastore/package/languages-spoken-pupils-borough-msoa
**Education and Skills**
- All Schools
- Independent Schools
- % pupils at independent schools
Note: The recent data is for 2011 and the previous data for 2007 Source: Department for Education Link: http://www.education.gov.uk/rsgateway/DB/SFR/s001012/index.shtml
- % pupils achieving 5+ A\*-C GCSEs inc English and Maths
Note: The recent data is for 2010 and the previous data for 2007. Data is for pupils in maintained schools only Source: Department for Education Link: http://data.london.gov.uk/datastore/package/gcse-results-location-pupil-residence-borough
- % aged 16-24 NEET
- % adults with degree level and above (% aged 16+ with NVQ level 4+)
- % adults with no qualifications
Note: The recent data is for 2010 and the previous data for 2006 Source: Office for National Statistics (Annual Population Survey). Link: http://lseo.org.uk/data/local-data
**Housing**
- % households owned outright
- % households being bought with mortgage or loan
- % households private rented
- % households social rented
- % households 'other' tenure
Note: The recent data is for 2010 and the previous data for 2006 Source: Office for National Statistics (Annual Population Survey). Link: http://data.london.gov.uk/datastore/package/london-borough-profiles
**Crime**
- Crime rate (Recorded crimes per 1,000 population)
Note: The recent data is for 2010/11 and the previous data for 2006/07. Source: Met Police Service, and Home Office. Population data from ONS Estimates Deprivation
- % working-age people claiming out of work benefits
- % 60+ claiming pension credit
Note: The recent data is for 2011 and the previous data for 2007. Source: Department for Work and Pensions Link: https://www.nomisweb.co.uk/
- % of Children in “Poverty”
Note: The proportion of children living in families in receipt of out of work benefits or tax credits where their reported income is less than 60% median income. The recent data is for 2009 and the previous data for 2006. Source: HM Revenue and Customs Link: https://www.nomisweb.co.uk/
- % of SOAs in Quintiles 1-5 of IMD
Note: Percentage of small areas (LSOAs) falling within each of the England quintiles from the Index of Multiple Deprivation. Quintile1=most deprived The recent data is for 2010 and the previous data for 2007. Source: Indices of Deprivation (CLG) Link: http://data.london.gov.uk/datastore/package/indices-deprivation-2010
Elections
- Total Electors
Note: The recent data is for 2011 and the previous data for 2007. Source: Office for National Statistics. Link: http://data.london.gov.uk/datastore/package/population-electoral-roll-borough
- % Turnout (in Assembly List Election)
GLA Constituency Election
- % of votes for Conservative candidate
- % of votes for Labour candidate
- % of votes for Lib Dem candidate
- % of votes for ‘Other’ candidates
GLA List Election
- % of votes for Conservative party
- % of votes for Labour party
- % of votes for Lib Dem party
- % of votes for ‘Other’ parties Note: The recent data is for 2008 and the previous data for 2004. Source: Greater London Authority Link: http://data.london.gov.uk/datastore/package/london-elections-results-2008-borough
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192907eda08820555b5386b0b64eb42eac41c288 | Online platforms and digital advertising
Market study interim report The Competition and Markets Authority has excluded from this published version of the market study report information which it considers should be excluded having regard to the three considerations set out in section 244 of the Enterprise Act 2002 (specified information: considerations relevant to disclosure). The omissions are indicated by [●]. [Some numbers have been replaced by a range. These are shown in square brackets.] [Non-sensitive wording is also indicated in square brackets.]
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | Summary | 6 | | Introduction | 6 | | What are our findings to date? | 9 | | Which interventions are we considering? | 21 | | Provisional view on the case for a market investigation | 26 | | Next steps | 28 | | 1. Introduction | 29 | | Context | 29 | | Evidence gathering | 31 | | This document | 32 | | 2. Overview | 35 | | Introduction | 35 | | The business model of platforms funded by digital advertising | 36 | | Search and social media | 43 | | Digital advertising markets | 47 | | Market outcomes | 50 | | Impacts on consumers | 55 | | 3. Competition in consumer services | 59 | | Introduction | 59 | | Competition in search | 60 | | Barriers to entry and expansion in search | 71 | | Initial findings in search | 82 | | Competition in social media | 84 | | Barriers to entry and expansion in social media | 97 | | Initial findings in social media | 107 | | 4. Consumer control over data | 109 | | Introduction | 109 | | The role of data in digital advertising and consumer services | 111 | | The importance of data protection legislation | 116 | | Consumer attitudes to data processing | 119 | | How consumers can control their data | 122 | | Consumer engagement with privacy policies and controls | 128 | | Possible barriers to effective engagement | 135 | | Data protection regulation and competition | 145 | | Initial findings | 148 | | 5. Competition in digital advertising | 150 | | Introduction | 150 | | Characteristics of digital advertising markets | 151 | | Competition in search advertising | 162 | | Competition in display advertising | 177 | | The open display market | 192 | | The relationship between large digital platforms and publishers | 215 | | Initial findings | 225 | | 6. Potential Interventions | 228 | | Introduction | 228 | | Overview: development of a pro-competitive regulatory regime | 229 | | Code of conduct for online platforms with strategic market status | 233 | | Interventions to address specific concerns under themes 1 to 3 | 243 | Appendices
A: The legal framework B: A summary of responses to our statement of scope C: Market outcomes D: Profitability of Google and Facebook E: The role of data F: Consumer control over data collection G: Evidence on consumers’ attitudes and behaviour H: Intermediation in digital advertising I: Potential practices to be tackled through a code of conduct J: Potential interventions in general search K: Potential interventions in social media L: Potential approaches to improving personal data mobility M: Potential interventions in digital advertising Glossary Summary
Platforms funded by digital advertising provide highly valuable services, allowing us to find information in an instant and connect with family and friends from around the world – all at no direct cost to the consumer. Google and Facebook are the largest such platforms by far, with over a third of UK internet users’ time online spent on their sites. Google enjoys a more than 90% share of the £6 billion search advertising market in UK, while Facebook has a share of almost 50% of the £5 billion display advertising market. Both companies have been highly profitable for many years.
Both Google and Facebook grew by offering better products than their rivals. However, we are concerned that they are both now so large and have such extensive access to data that potential rivals can no longer compete on equal terms. These issues matter to consumers. If competition in search and social media is not working well, this can lead to reduced innovation and choice in the future and to consumers giving up more data than they feel comfortable with. Weak competition in digital advertising can increase the prices of goods and services across the economy and undermine the ability of newspapers and others to produce valuable content, to the detriment of broader society.
We are consulting on a range of potential interventions to improve competition in these markets, including: a code of conduct to govern the behaviour of platforms with market power; rules to give consumers greater control over their data; and interventions to address the sources of the market power of Google and Facebook (including data access remedies, measures to increase interoperability and structural interventions). We welcome views from stakeholders on the issues we have identified and the potential interventions we are considering.
Introduction
1. This is the interim report in our market study into online platforms and digital advertising. The report provides an update on the work we have carried out, highlights our emerging findings and ongoing lines of inquiry and sets out, for consultation, our initial views on the concerns that we have identified and potential interventions to address them.
2. Digital advertising plays an important role in the provision of hugely valuable services and content to consumers, including internet search, social media and news journalism. Consumers typically do not pay directly for these services – rather, platforms and publishers finance them by using consumers’ attention and data to sell targeted digital advertising. In turn, for a wide range of firms, from the largest conglomerate to the local café, digital advertising provides a highly effective method of delivering adverts that are relevant to consumers, helping to drive brand awareness and sales.
3. The main types of digital advertising are search advertising, in which sponsored ads are provided in response to users’ search queries, and display advertising, in which static or video ads are displayed alongside the content a user is interested in. Currently, Google dominates search advertising while Facebook has a strong position in display advertising. Alongside the owned and operated platforms of Google and Facebook there is also an ‘open display market’ in which publishers such as online newspapers compete in real time to sell advertising inventory to a wide range of advertisers. Each of these forms of digital advertising requires a relevant ad to be selected and served to an individual consumer in a fraction of a second – an extraordinary technological feat that was not possible only a few years ago.
**Scope and objectives**
4. This study aims to inform the debate on the regulation of online platforms, as explored in the recent Furman(^1) and Stigler Center(^2) reviews. These reviews each concluded that new approaches needed to be taken to regulating platforms, that relying solely on enforcing existing competition law was not sufficient and that introducing pro-competitive rules and regulations was necessary. Government is currently considering its response to the Furman Review.
5. Digital advertising provides the substantial majority of the revenues of some of the largest platforms in the world including Google and Facebook, and an important objective of our study is therefore to ensure that any proposals for the future regulation of platforms by government are based on a sound understanding of advertising-funded platforms’ business models and the challenges that they may pose. The market study sits alongside parallel and complementary policy work that we are undertaking on non-advertising-funded platforms.
6. More specifically, our study aims to assess whether the markets for digital advertising – and the consumer-facing services that are funded by digital advertising such as search and social media – are working well. We have organised our work into three high level themes:
- Theme 1 considers **to what extent Google and Facebook have market power in search and social media** respectively and the sources of this market power;
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(^1) Furman Review (2019), *Unlocking digital competition.*
(^2) Stigler Center (2019), *Committee on Digital Platforms Final Report.* • Theme 2 assesses **whether consumers have adequate control over the use of their data by online platforms**, by exploring the choices they are given, how easy it is to exercise those choices and whether there is adequate protection for those who do not engage; and
• Theme 3 focusses on the business to business digital advertising markets, exploring a range of concerns including **a lack of transparency, conflicts of interest and the leveraging of market power** to undermine competition.
**Why do these issues matter for consumers?**
07. Although consumers do not typically pay for the content that is supported by digital advertising, we all stand to experience harm in a variety of forms if competition in these markets is not working well.
08. First, competition problems may **inhibit innovation and the development of new, valuable services for consumers**. It is the threat of being overtaken by rivals that provides the spur to companies to innovate and produce new products that consumers want. If platforms are insulated from this threat – or indeed if they can stop new alternative platforms from growing – consumers will suffer from reduced innovation and choice in the future.
09. Second, while services such as search and social media appear to be free to those who use them, they are paid for indirectly through advertising revenues. The **costs of digital advertising, which we estimate to amount to around £13bn in the UK in 2018, are reflected in the prices of goods and services across the economy**. Therefore, if these costs are higher than they would be in a more competitive market, this will be felt in the prices that consumers pay for hotels, flights, consumer electronics, insurance and many other products that make heavy use of digital advertising.
10. Third, for content providers such as online newspapers, digital advertising represents a vital part of their business. If problems in the digital advertising market mean that such providers receive a lower share of advertising revenues than they should, this is likely to **reduce their incentives and ability to invest in news and other online content**, to the detriment of those who use and value such content and to broader society.
11. Fourth, limited choice and competition also means that **people will be less able to control how their personal data is used** and may effectively be faced with a ‘take it or leave it’ offer when it comes to signing up to a platform’s terms and conditions. For some, this will mean they have to provide more personal data to platforms than they would like.
12. Fifth, competition problems may result in consumers receiving **inadequate compensation for their attention and the use of their data**. Although many online services are currently provided for free, in a well-functioning market, consumers might be paid for their engagement online, or offered a choice over the amount of data they provide.
13. Finally, we note there are many other forms of societal harm that have been linked to the behaviour of online platforms, such as online harms, fake news and the possibility of political manipulation. While these lie outside of the scope of this study, it is plausible that the competition concerns about market power and asymmetric information that we are considering may exacerbate these broader harms and that the remedies arising from this study may help to address them. Work is underway elsewhere in government to address these broader harms, and we will share with relevant government departments any insights that we gain into these issues in the course of our study.
**What are our findings to date?**
**Size of market and market shares**
14. Our current estimate is that around £13bn was spent on digital advertising in the UK in 2018. Search advertising comprised around half of these revenues, at around £6.4 bn, and display just over £5bn. The balance was made up of online classified advertising (comprising digital comparison tools and online marketplaces). This is shown in the figure below.
15. Media agencies and most advertisers have told us that search and display advertising are not substitutable, mainly because they perform different roles. Search is intent-based advertising designed to encourage those consumers who have already shown an interest in buying the product to make a purchase, while display is suitable for raising brand awareness and reaching new audiences that might not yet have shown interest.
16. Google has had a consistently high share of the general search market for many years. Google has generated around 90% or more of UK search traffic each year over the last ten years and generated over 90% of UK search advertising revenues in 2018. The only fully independent competitor to Google in the core functions of general search is Bing, owned by Microsoft. Google also has a very strong position in various segments of the open display market.
17. Facebook (including Instagram, which it bought in 2012) generated almost half of overall display advertising revenues in 2018. For comparison, this was larger than the entirety of the open display market and more than four times the revenues of its next largest competitor, YouTube (owned by Google).
18. It is important to be clear that ‘big’ is not necessarily ‘bad’ in these markets. Where a platform has gained a large market share by being consistently better than its competitors and where it must respond to continued competitive pressures to maintain that position, it may be considered to operate within a competitive market even with a large market share. However, if potential competitors face substantial barriers to entry and expansion, such that the market is no longer properly contestable, then a high market share can translate into market power, giving the platform the opportunity to increase prices, reduce quality or leverage market power to undermine competition in potentially competitive markets.
19. In our study we have considered a number of characteristics of these markets that may inhibit entry and expansion by rivals and undermine effective competition. These include:
- network effects and economies of scale;
- consumer behaviour and the power of defaults;
- unequal access to user data;
- problems relating to a lack of transparency; and
- vertical integration and conflicts of interest.
20. We note that these characteristics can be mutually reinforcing, and we discuss each of them below, drawing on Chapters 2 to 5 of the report which present our findings in more detail under each of themes 1 to 3. Finally, we consider the available evidence on the harm arising from these characteristics.
**Network effects and economies of scale**
21. Network effects occur when the value of a service to its users increases as the total number of users increases, while economies of scale arise where average costs decrease with increasing scale. In combination, these features can mean that once a platform reaches a certain size, it can be extremely difficult for smaller new entrants to challenge them effectively. Our initial assessment is that both search and social media are characterised by significant network effects and economies of scale.
22. In relation to search, the crawling and indexing activities required to create a ‘map’ of the internet that can be searched in real time represent a major cost and are subject to significant economies of scale.
23. There are advantages to scale in user queries and click behaviour (known as ‘click-and-query’ data), since the more such data that search engines have, the more able they are to improve their algorithms.\\textsuperscript{3} We understand that scale advantages are particularly high for uncommon or ‘tail’ queries. Both Google and Microsoft said that a substantial proportion of queries that they see are uncommon or new (around 15% of the daily queries on Google’s search engine have never been seen before), which suggests that the ability to return appropriate results for such tail queries is likely to be an important factor in users’ assessment of search quality. In addition, a higher volume of user search queries is of benefit to advertisers wishing to bid for keywords in the tail of less common search queries.\\textsuperscript{4}
24. Overall, our initial assessment is that the greater scale of queries seen by Google support its ability to deliver more relevant search results compared to its competitors, especially in relation to uncommon and new queries. In light of the importance of search relevance to consumers and keyword coverage to advertisers, a lack of comparable scale in click-and-query data is likely to be a key factor that limits the ability of other search engines to compete with Google.
25. Social media platforms are characterised by strong network effects, since the value to someone of joining a network is directly related to the other people who are already on the network. Given the high level of fixed costs, social media platforms also exhibit strong economies of scale, creating a cost advantage for larger rivals over smaller potential entrants.
26. Our initial view is that these characteristics lead to substantial barriers to expansion. We note that there have been several recent examples of entry of in the social media sector funded by display advertising, including Instagram, Snapchat, Pinterest and TikTok. However, with the possible exception of Instagram, these platforms are yet to reach a very significant scale in the supply of display advertising. In the case of Instagram, its success in achieving scale may be linked to its acquisition by Facebook and we are investigating this further.
27. Overall, rival social media platforms do not currently appear to be acting as a material threat to Facebook’s competitive position. While new entry is possible, new platforms must overcome network effects and other barriers by offering a differentiated proposition that induces users to switch. No current platform offers a comparable range of services to Facebook and none can provide access to a similarly extensive user base. Even where platforms are
\\textsuperscript{3} In this sense, search engines are subject to network effects, since they can improve their ranking algorithms and return more relevant results to a user when other users have entered similar search queries in the past.
\\textsuperscript{4} These keywords (which for example might include specific detail on product characteristics desired by the user) are often preferred by advertisers as they can allow for more specific targeting and higher returns on investment. successful in developing a user base, to be viable in the long-term, they must successfully monetise their services, and in the last ten years we note that rival platforms have struggled to do this.
**Consumer decision making and the power of defaults**
28. The digital economy has transformed the way we interact with information – the answer to a question that in the past would have taken considerable time and effort to find is now available in a fraction of a second. As access to huge reserves of information has become almost instantaneous, so our ability to filter extraneous information and focus on what is most relevant has become more important, and our tolerance for delays has fallen. Both of these factors have encouraged ‘default behaviour’ on the part of consumers – a propensity to avoid wasting time by accepting the default option presented to us, so that we can focus on what is important.
29. We have found that **default behaviour by consumers has had a profound impact on the shape of competition in both search and social media.** First, defaults play a very important role in influencing consumers’ use of search engines, and second, default settings and the way in which choices are presented to consumers have a strong influence on the ability of platforms – particularly social media platforms – to collect data about their users, and the ability of users in turn to control the use of their data.
30. In search, Google has negotiated agreements with Apple and with many of the largest mobile phone manufacturers under which it pays a share of search advertising revenues to these partners in return for Google Search occupying the default search positions on the device. The scale of these payments is striking and demonstrates the value that Google places on these default positions. In 2018, Google paid $1.3 billion in return for mobile default positions in the UK alone, the vast majority of which was paid to Apple for being the pre-installed default on the Safari browser. Rival search engines to Google that we spoke to highlighted these default payments as one of the most significant factors inhibiting competition in the search market.
31. We consider that **Google’s extensive default positions across very large parts of the desktop and mobile landscape act as a barrier to expansion for other search engines**, making it more difficult for these providers to grow their user bases and improve their search quality and search monetisation rates. In addition, there is likely to be a positive feedback loop between Google’s position as the largest search engine and its ability to acquire extensive default positions that further reinforce this position.
32. It is important that consumers have control over the use of their data – allowing them to decide whether to provide or deny access and share it with others if they wish – as this will both benefit consumers directly and help increase competition between platforms. However, our work to date suggests that consumers sometimes have inadequate control over the data that is provided to online platforms.
33. Most platforms only collect limited data about consumer engagement with their privacy settings and controls, but the evidence that does exist suggests that consumer engagement is low at registration. For example, we found that only a small proportion of Facebook consumers viewed their ad settings within 30 days of registering. Because consumer engagement is low, most consumers follow the default settings set by platforms even if these do not match their preferences.
34. This behaviour can be explained in part by the fact that consumers sometimes have limited choice. In all cases across the social platforms that we reviewed including Facebook and Instagram, consumers are opted into personalised advertising by default and are unable to turn off personalised advertising while continuing to use the service. This is in contrast to search engines: both Google and Bing allow consumers to opt out of personalised advertising and some search engines such as DuckDuckGo do not use personalised advertising at all.
35. Further, in those cases where consumers do in principle have a choice, it is often time consuming and complicated to exercise this choice because of the way in which options are framed. For all of the social media platforms reviewed, we found that it is not obvious how to access privacy settings, which may only be visible after navigating through multiple menus. Again, this is in contrast to search platforms, where privacy settings are generally easier to access and control.
36. We also found that platforms’ privacy terms and conditions were long and complicated, typically stretching to many thousands of words. We do not think it is reasonable for platforms to expect consumers to have read and understood all of these, often complex, terms before signing up to use a service. Research has shown that very few consumers read privacy policies when signing up to an online service and the evidence we have gathered confirms this: for example, in a recent 28-day period, the average visit to the Google privacy page was just 47 seconds, with 85% of visits lasting less than 10 seconds. Unequal access to user data
37. Data on users is highly valuable for targeting digital advertising (particularly display advertising) and measuring its effectiveness. Advertisers and publishers have told us that Google and Facebook enjoy significant competitive advantages in both targeting and measuring effectiveness because of their extensive access to user data.
38. Google collects a vast amount of user data from three main sources: its user-facing services (it provides over 50 such services, including search and Gmail); mobile devices running Android, Google’s operating system; and from the analytical technology they place on third-party sites and apps (known as tags). Facebook gathers user data from the three main services it provides in the UK (Facebook, Instagram and WhatsApp) and from Facebook analytics technology placed on third-party sites.
39. Advertisers and media agencies have told us that Google offers in-depth targeting options, driven by its unique and vast sources of data, while Facebook has the advantage of offering the ability to target specific audiences based on demographic characteristics, interests and location. This creates a substantial competitive advantage for Google and Facebook, both of which have access to more extensive datasets than their rivals. The inability of smaller platforms and publishers to access user data may therefore create a significant barrier to entry.
40. The available evidence suggests that the user data used for targeting digital advertising is highly valuable to advertisers and publishers. For example, Google ran a trial in 2019 to compare the revenue publishers received from personalised advertising with revenue from non-personalised ads. The results indicate that UK publishers earned between 50% – 65% less revenue when they were unable to sell personalised advertising but competed with others who could.
41. The ability to measure the effectiveness of advertising is an important driver of advertisers’ decisions on how to allocate expenditure across publishers and platforms. To measure effectiveness, advertisers need to be able to track user actions online, which is done through analytical tools such as tags. Google and Facebook tags are widely available on advertiser websites and apps: we understand that Google tags cover almost 90% of UK websites and that Facebook’s cover about 50% of UK websites, both dwarfing other platforms’ very limited coverage. In addition, Google’s mobile data also allows it to track user actions offline (eg to identify store visits). This means that Google and Facebook are better able to track users and demonstrate the effectiveness of using their platforms relative to others, which is likely to create a barrier to entry for potential rivals.
42. We have also heard views that that aspects of the design and interpretation of data protection regulation risks creating competition concerns by entrenching these data advantages and favouring the business model of large, vertically-integrated platforms over smaller, non-vertically-integrated publishers.
43. In principle, the General Protection Regulation (GDPR) makes gaining and managing consent within a ‘walled garden’ to deliver a particular purpose, an easier exercise than sharing data between firms to deliver the same purpose. Large, vertically-integrated platforms such as Google and Facebook may therefore have an easier task in obtaining consent from consumers to use their data for personalised advertising compared with publishers such as newspapers involved in the supply of display advertising in the open market.
44. This risks creating a significant competitive advantage for vertically integrated platforms and could substantially reduce revenue for newspapers and others advertising in the open market. Such risks may become more pronounced as the display advertising industry moves to address concerns raised by the Information Commissioner’s Office (ICO) about how widely data is shared between firms in the open display market. We have had constructive interactions with ICO on this topic and welcome the pragmatic view they have taken to date. We will continue to engage with them in the second half of the study to explore potential ways forward that could both address legitimate data protection concerns while preserving effective competition in the open display market.
Lack of transparency and asymmetric information
45. One of the key functions of online platforms that are funded by digital advertising is to facilitate complex decision making in real time using large quantities of data. This applies equally to user-facing services such as search and social media as to the operation of programmatic digital advertising: neither of these would be possible without the use of sophisticated algorithms. Yet one consequence of this reliance on black box decision making is that market participants find it difficult to understand or challenge how decisions are made and to exercise choice effectively.
46. We have heard, for example, concerns from several newspapers about the impact of the algorithms employed by Google and Facebook on traffic to their sites. We have found that these two platforms provide just under 40% of the traffic to large publishers and have heard concerns about unexpected changes to the Google search and Facebook News Feed algorithms that have resulted in dramatic reductions in traffic to certain newspapers overnight. While we recognise that these algorithms have to be updated frequently and that too much transparency may lead to gaming behaviour, we acknowledge publishers’ concerns that sudden, unexplained and significant algorithm changes can have harmful financial consequences for them which they are unable to predict or manage.
47. We have also found that advertisers and other market participants face a lack of transparency in relation to several key aspects of digital advertising, which undermines their ability to make effective decisions and drive competition, including: the quality and effectiveness of advertising; how auctions are carried out and auction outcomes determined; and how intermediaries acting on advertisers’ behalf are remunerated.
48. In principle, the extensive data that is collected in the sector could address some of these concerns, but as noted above, this data is held by only a few parties, leading to concerns relating to asymmetric information. In relation to quality and effectiveness, for example, we have heard that neither Facebook nor Google allow full independent verification of their own inventory, leading to a perception on the part of advertisers and agencies that we spoke to that Google and Facebook are able to ‘mark their own homework’ for the measurement of viewability of ad impressions on their own inventory. This could weaken competition and potentially result in advertisers over-paying for advertising inventory.
49. The lack of transparency is particularly acute in the open display market where publishers and advertisers rely on intermediaries to manage the process of real-time bidding and ad serving but cannot observe directly what the intermediaries are doing or, in some cases, how much they are being charged. Market participants typically do not have visibility of the fees charged along the entire supply chain and are concerned that this limits their ability to make optimal choices on how to buy or to sell inventory, reducing competition among intermediaries. Lack of transparency may also give rise to rent-seeking behaviour and arbitrage opportunities, ie the possibility for an intermediary to buy impressions at one price and sell them at a higher price, without its customers being aware of this.
50. Overall, the lack of transparency that we have observed has the potential to create or exacerbate a number of competition problems. Suppliers may have the incentive and ability to overstate the quality and effectiveness of their advertising inventory, for example, or to increase prices. Suppliers with market power can take steps to reduce the degree of transparency in digital advertising markets, forcing advertisers to rely on information and metrics provided by those suppliers. Asymmetric access to information across suppliers may also create opportunities for exclusionary behaviour on the part of the large advertising platforms. The upshot of all of these issues is likely to be that competition is weakened.
**Vertical integration and conflicts of interest**
51. All of the advertising-funded platforms that we have considered in this study are vertically integrated in the sense that they run integrated sales functions – often based on the use of quality-adjusted second-price auctions – for the sale of their own advertising inventory. We refer to this as ‘owned and operated’ inventory. In contrast, in the open display market, publishers and other content providers compete to sell advertising inventory using a wide variety of third-party intermediaries and exchanges.
52. We have heard a number of concerns, particularly from publishers, about the extent of vertical integration that has taken place in the open display market. **While vertical integration can allow intermediaries to realise technical efficiencies, it can also give rise to conflicts of interest** and allow companies with market power at one stage of the value chain to use it to undermine competition at other stages.
53. The concerns that we have heard focus on the role of Google, which, as shown in the figure below, has a particularly strong position in advertising intermediation, controlling a share of in excess of 90% of the ad server segment(^5) and shares of between 40% and 60% in supply-side platforms (SSPs) and of between 50% and 70% in demand-side platforms (DSPs), according to our preliminary estimates.
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(^5) A publisher ad server manages the publisher’s inventory and provides the decision logic underlying the final choice of which ad to serve, based on real time bids and bilateral deals. Publishers typically single-home on one ad server and have told us that switching ad server is a complex and lengthy process which takes several months to complete and involves significant risks of revenue loss. 54. Google has market power in the open display market stemming from three main sources: its inventory of search and display advertising; its data on users and on advertising attribution; and its position as the dominant publisher ad server. We have heard a variety of concerns from market participants, including that Google is able to: use its market power in inventory and data to advantage its DSP services; use its influence over advertiser demand (from Google Ads) to favour its ad server and SSP; and use its market power as an ad server to favour its SSP.
55. We are still considering the concerns that have been expressed to us in relation to these practices and have not reached a conclusion on any potential anti-competitive effects or efficiency justifications. What does appear clear, however, is that there are legitimate concerns about perceived conflicts of interests for actors that operate at multiple levels of the intermediation value chain. When operating on behalf of the publisher, such a firm might have an incentive to favour bids coming through its own advertiser-side intermediaries, rather than necessarily those that are best for the publisher, and when acting for advertisers, it might have an incentive to channel an advertiser’s spend to its publisher clients, rather than to the publishers that are best for the advertiser.
56. In the case of Google, the fact that it operates as a publisher ad server, with influence over which ads are served and which bidding information is provided to publishers and intermediaries, as an SSP, which sells inventory on behalf of publishers, and as a DSP, which buys inventory on behalf of advertisers, raises several potential conflicts of interest. Evidence of harm
57. We have considered the potential harmful effects of the concerns we have identified in these markets, and the extent of the evidence that these harmful effects are taking place in practice.
58. Typically, a firm with market power would be able to exploit it by raising prices. We note that advertising-funded platforms use auctions rather than setting prices directly, and therefore may be considered to have less influence over the price. However, such platforms can employ various levers within those auctions that directly and indirectly influence advertising prices. For example, search engines such as Google determine the maximum number of ads that can be shown per search query, how these ads are presented, the way in which relevance is assessed, the level at which reserve prices are set and the way in which matching algorithms work. These levers collectively influence the prices advertisers pay.
59. We have found that the profitability of both Google and Facebook has been well above any reasonable estimate of what we would expect in a competitive market for many years. In 2018 we estimated that the cost of capital for both Google and Facebook was around 9%, compared to actual returns on capital of over 40% for Google and around 50% for Facebook. This evidence is consistent with the exploitation of market power.
60. We have also considered the available evidence on price levels. Google has achieved somewhat higher prices on average than Bing over the last three years, which is consistent with evidence from advertisers, most of whom suggested that Google tended to have higher prices than Bing for similar keywords. Facebook’s prices have been increasing over the last three years and are significantly higher on average than its rivals, YouTube and Instagram. However, at this stage we interpret the evidence on relative pricing with caution, as relative prices are likely to be driven by a number of factors including differences in quality. We are considering further analysis in the second half of the study that could help us make a more like-for-like comparison of price levels.
61. As noted above, a potential concern arising in the open display market is that intermediaries might be able to exploit the lack of transparency to extract excessive fees. The Cairncross report expressed concern that there is a lack of transparency about the amount paid to intermediaries along the supply chain for online programmatic display advertising and these concerns have been echoed by publishers in their engagement with us.
62. We have gathered evidence on fees from the main intermediaries currently operating in the UK. Our initial estimates suggest that the weighted average DSP fee is around 18% of advertising spend and that the overall weighted average of SSP/ad network fees is around 22%. In broad terms, our estimates to date are similar to those previously estimated by Plum consulting for the Cairncross report. We are intending to carry out further work to investigate money flows along the intermediation chain in the second half of the study, including an analysis of transaction-level data to investigate the potential for ‘hidden fees’ arising from arbitrage behaviour.
63. Harm could also take the form of exclusionary behaviour. Google and Facebook appear to have the incentive and ability to leverage their market power in general search and social media into other related services – both user-facing services and wider digital advertising markets. This can have the effect of making it more difficult for competitors in these markets to compete and of protecting the platforms’ core market power. We have heard these types of concerns raised in relation to several user markets, and are considering how to take these complaints forward in the second half of the study.
**Which interventions are we considering?**
64. We have considered a range of potential interventions to address the concerns that we have identified, drawing on proposals that have been put to us by parties in the course of the study. Our objective in identifying these interventions at this interim stage is to seek the views of stakeholders on the case for, and appropriate form of, the intervention, to inform the recommendations that we make at the time of the final report.
65. Overall, the work we have carried out on the study to date has strengthened the view we expressed in our statement of scope that there is a strong argument for the development of a pro-competitive regulatory regime to regulate the activities of online platforms funded by digital advertising. In considering the appropriate nature of this regime, and the specific rules and regulations within it, we have considered three broad categories of intervention:
- Rules to govern the behaviour of platforms with market power (including in particular the Furman proposal of an enforceable code of conduct for firms with Strategic Market Status).
- Rules to give consumers greater control over data and to improve transparency. • Interventions to address specific sources of market power and to promote competition (including data access, consumer default, interoperability and structural interventions).
**Behavioural rules for firms with market power: enforceable code of conduct**
66. The first category of intervention comprises rules to govern the behaviour of firms that enjoy a position of market power. Its intention is to address the harmful effects that can arise from the exercise of market power, rather than tackling the causes of that market power. The Furman Review proposed that there should be a code of conduct which would set rules for large platforms with ‘Strategic Market Status’ (SMS), the objective of which would be to address competition problems more quickly than can be achieved through antitrust enforcement.
67. Our initial view is that an enforceable code of conduct may help address a number of concerns that we have identified in digital advertising markets. Based on the submissions we have received, we consider there are a number of examples of behaviour where a code of conduct would potentially make the market work better, and where the range and complexity of issues are such that antitrust tools alone are not sufficient to resolve them. The code of conduct could work as an effective complement to competition law, addressing concerns that require rapid intervention to avoid lasting competitive harm and, for the firms captured by the code, providing increased certainty over what represents acceptable behaviour when interacting with users and competitors.
68. At this stage, our initial view is that both Google and Facebook would likely be considered to have SMS, although we note that other platforms may be considered to have SMS when considering their role in other markets outside the scope of this study.
69. We have considered the potential content and design of a code. Our initial view is that the code should take the form of high-level principles rather than detailed and prescriptive rules. Given the complex and rapidly-changing nature of the markets within scope and the issues we have identified, there is a risk that overly prescriptive rules would soon become redundant or fail to anticipate important new developments. Our current view is that, for platforms funded by digital advertising, the key provisions of the code could be summarised in the form of three overarching principles: ‘fair trading’; ‘open choices’; and ‘trust and transparency’.
70. An expert body would be required to enforce the provisions of the code, but at this stage, our assessment has focused on regulatory functions and design principles rather than on which institutions might discharge those functions.
**Rules to improve transparency and give users greater control over data**
71. One of the main problems we have identified in our study is the lack of transparency and asymmetry of information between platforms and their customers. This affects both individual consumers, who lack awareness of how their data is used and the ability to control it, and businesses, who often lack the requisite information to exercise choice effectively in digital advertising markets. We have therefore considered potential interventions designed to improve transparency and address asymmetric information for both consumers and businesses. Some these interventions would likely apply only to SMS firms while others may require broader sector-wide regulation to achieve their intended effects.
72. For consumers, the problems we have identified relate to a perceived lack of control over data extraction due to: the importance of default settings and the fact that current defaults may extract more data than consumers are comfortable with; the restricted availability of choices to opt out; and difficulties in exercising those choices. The interventions we are considering are designed to facilitate informed choice and greater control for those consumers who wish to engage, while providing greater protection for those who do not. They include:
- A rule that **all platforms should be required to give consumers an option to use their services without requiring in return the use of consumers’ data for personalised advertising.**
- Changes to default settings for SMS platforms, **to require a default ‘opt-in’ to personalised advertising rather than the current default opt-out.**
- A principle of **‘fairness by design’ placing an ex ante obligation on platforms to design consent and privacy policies in a way that facilitates informed consumer choice**, with additional obligations to trial and test choice architecture for SMS platforms.
73. These would be significant changes and would require careful consideration. It is plausible that in combination they would shift the balance of power between consumers and platforms, giving consumers greater control over their data and in turn encouraging platforms to offer greater incentives to consumers to provide access to their data. But we are also mindful of the risk that these changes would damage the business model of platforms, particularly for new entrant and challenger platforms that currently generate limited revenue, and are therefore keen to seek views on the extent to which requirements should be adjusted according to whether a platform has SMS status.
74. Regarding the risk that aspects of the design and interpretation of current data protection regulation favour the business model of large, vertically-integrated platforms over smaller, non-vertically-integrated publishers, we think it is very important for competition and data protection authorities to consider jointly the interface between consumer, competition and data protection law, as this is likely to produce the best outcomes for consumers in assessing conduct with overlaps across these regimes. Such cooperation is particularly important at the current time, when the interpretation and practical application of GDPR is still evolving.
75. In relation to the concerns about the current open display market, we welcome the pragmatic approach that the ICO has taken to date on this topic, reflecting the importance of this market for newspapers and other content providers. We also recognise the security concerns arising from the sharing of data between multiple firms and think that DPAs could enable appropriate sharing of data between firms by prioritising support for the development of codes of conduct and certification regimes under the GDPR, which would facilitate the secure sharing of a consumer’s personal data. We will continue to engage with the ICO and Irish Data Protection Commission (DPC) on these issues in the second half of our study.
76. Our initial view is that regulatory reform could also improve transparency in the digital advertising markets. A new regulatory framework could include rules on the information that should be provided on certain activities which are essential for the effective working of digital advertising, including verification or attribution. It could also require increased interoperability to support a well-functioning market, where measures such as common identifiers, formats or verification could be approved by a regulatory body where the adoption of a common standard would deliver benefits of the sector as a whole. In some cases (for example, the operation of auctions) transparency to other sector participants may not be appropriate for competition or data protection reasons. A regulatory framework could address this by allowing auditability and monitoring of algorithms by a regulator, to
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6 They could, for example, encourage greater more widespread adoption of ‘Personal Information Management’ solutions (which have so far not proved commercially viable) thereby encouraging consumer-led data mobility. ensure that actual behaviour matches expectations and that conflicts are managed.
**Potential interventions to address sources of market power and promote competition**
77. We have also considered a range of interventions to address the sources of market power that we have identified, to address concerns on both the supply and the demand side of the markets we have reviewed. These include some very significant interventions, the costs and benefits of which would need to be considered very carefully. We welcome views of the case for, and appropriate design of, each of these options.
78. To address the concerns that we have identified in relation to Google’s market power in general search, we are considering two principal interventions.
79. First, we are considering a requirement that Google provide click-and-query data to rival search engines. The purpose of this intervention would be to overcome Google’s scale advantages by providing data to improve the quality of rivals’ search algorithms. We are aware of the potential impacts on Google’s incentives to innovate and invest and are interested in views on how these risks could be addressed, and the terms on which any access should be provided.
80. Second, we are considering two proposals to address concerns relating to Google’s control over Android defaults and its ability to pay more than its rivals to be the default on browsers such as Safari. The first intervention we are considering is whether there should be some form of restriction on the ability of Google to enter into arrangements to be the default search engine on devices and browsers.
81. The second intervention would be a requirement to offer choice screens to consumers on devices and browsers allowing consumers to choose their default search engine, building on Google's recent introduction of choice screens on all Android devices. We are considering proposals regarding the design of these choice screens, including the use of non-monetary criteria to allocate slots and proposals to extend the requirement to offer choice screens beyond Android devices.
82. The market power of Facebook derives in part from the strong network effects stemming from its large user base. We have therefore considered potential interventions to increase interoperability to help overcome these network effects for new entrant and challenger social media platforms. We are interested in views on whether Facebook should be required to interoperate specific features of its current network with existing competitors; the scope of any interoperability requirements, such as the ability to post content across several platforms simultaneously; the ability to view posts from friends on other social platforms; and how the standards surrounding these features should be developed and monitored.
83. Other options we are considering include whether there should be limits on Facebook’s ability to impose restrictions on competitors’ use of the interoperable features and whether aspects of past API access should be restored to facilitate competition. Finally, we are interested in views as to whether any rules requiring greater interoperability should apply to Facebook alone or also to other social media platforms.
84. To address concerns relating to Google’s conflicts of interest in the open display market, we are considering the case for a range of separation remedies. These could include, for example, the separation of the ad server (which plays a key role in the selection and pricing of adverts and in which Google has a very high market share) from the rest of Google’s business, or a requirement on Google to trade on an arm’s length basis with its analytics business and offer analytics to third-party providers.
85. Separation could cover a range of options, from management separation to full ownership separation (divestiture). In relation to the former we would need to consider whether such an intervention would be effective and practical, while in relation to the latter, we recognise this would be a highly interventionist remedy and we would need to consider not only the costs and benefits but the feasibility of the UK acting unilaterally in this area.
Provisional view on the case for a market investigation
86. Since launching our market study, we have received several representations from parties for us to make a market investigation reference and we are therefore required under statute to consult on whether or not to make such a reference.
87. The CMA can make a market investigation reference when: the findings of a market study give rise to reasonable grounds for suspecting that a feature or combination of features of a market or markets in the UK prevents, restricts or distorts competition; and a market investigation reference appears to be an appropriate and proportionate response. Based on our initial findings, we consider there are reasonable grounds for such a suspicion in the following areas: • the open display advertising market, with a focus on the conflicts of interest Google faces at several parts of its vertically integrated chain of intermediaries;
• general search and search advertising, with a focus on Google’s market power and the barriers to expansion faced by rival search engines; and
• social media and display advertising, with a focus on Facebook’s market power and the lack of interoperability between Facebook and rival services.
88. Further, many of the potential interventions discussed above could in principle be implemented through the order making powers available to the CMA under a market investigation. The decision on whether to propose a market investigation reference therefore rests on whether it is the most appropriate mechanism for delivering potential reforms.
89. In our statement of scope, we indicated that we saw recommendations to government as the best mechanism for delivering reforms, as part of a comprehensive regulatory framework to govern the behaviour of online platforms. Although it is a finely balanced judgement, we remain of the view that a comprehensive suite of recommendations to government is currently the best way forward and are therefore consulting on not making a market investigation reference at this stage. There are several reasons for this position:
90. First, the government has been committed to regulatory reform in this area. We therefore currently believe that there are good prospects that any recommendations coming from our study would be implemented in practice. Further, there is a programme of work by government considering how to regulate a wider range of online platforms than those we have considered in this study and we risk complicating the landscape by seeking to implement major reforms in parallel for a narrower set of companies. We want to inform the government’s work in this area rather than cut across it.
91. Second, the concerns we have identified regarding online platforms such as Google and Facebook are a truly global antitrust challenge facing governments and regulators. Therefore, in relation to some of the potential interventions we may consider in a market investigation, and in particular any significant structural remedies such as those involving ownership separation, we need to be pragmatic about what changes could efficiently be pursued unilaterally by the UK. We will continue to work as closely as we can with our international counterparts to develop a coordinated position on these issues in the second half of the study.
92. Third, we still have considerable work to do to understand the nature and extent of the issues in the market, and what the appropriate range of remedies might be to address them. We hope to test our initial findings through this consultation, gather more evidence through the second half of the study, and come to more precise judgements in our final report.
93. For these reasons, we do not propose to make a market investigation reference at this stage. Our preferred approach to tackling the problems we have identified continues to be through recommendations to government for regulatory reform.
94. We would like to receive views from a broad range of parties on this issue, and in particular on whether recommendations to government would be the most appropriate route to addressing the issues we have identified. We will make our final decision taking into account the consultation responses that we receive and any relevant developments since this provisional assessment.
**Next steps**
95. This report provides an update on the progress we have made to date in this market study. It sets out our initial findings on a wide range of potential concerns within each of our three themes and identifies the range of potential interventions we are considering to address them. In the second half of the study, we intend to gather more evidence to test and refine our thinking in these areas, and to identify which are the most appropriate interventions. This consultation is an important first step in that process. We welcome responses by 12 February.
96. We will set out conclusions and recommendations for interventions in our final report, which we will publish by 2 July 2020.
97. Introduction
Context
1.1 The CMA launched its Digital Markets Strategy on 3 July 2019, setting out our intended approach to tackling the challenges posed by the digital economy. A core part of this strategy was the launch of a market study into online platforms and digital advertising in the UK. This report provides an update on the progress we have made in the first six months of the study.
1.2 This market study was launched in the context of concerns, raised in the UK and globally, about the powerful position held by a small number of online platforms. These have focussed, alongside a broader set of issues such as online harms and fake news, on the market power of large online platforms and their ability to extract large volumes of data from consumers to entrench that power. Several institutions in the UK raised specific concerns about the market power of platforms funded by digital advertising, and the lack of transparency and conflicts of interest in the business-to-business digital advertising market, and recommended that the CMA undertake a market study in this area (some examples of these calls are provided in Box 1.1).
1.3 We launched our market study in response to these recommendations. Its scope is broad, covering the nature of competition in both consumer-facing and digital advertising markets, while recognising the critical role that data plays in linking them. We have structured our work into three related themes that group potential sources of harm to consumers. These themes consider:
1. to what extent online platforms have market power in consumer-facing markets, and what impact this has on consumers;
2. whether consumers have adequate control over how data about them is used and collected by online platforms; and
3. whether competition in the digital advertising market is distorted by a lack of transparency, conflicts of interest or market power held by platforms.
1.4 This scope, and the nature of each theme, has remained broadly unchanged from our statement of scope.
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7 The CMA’s Digital Market’s Strategy, July 2019. 8 Online platforms and digital advertising market study case page. Box 1.1: Calls for a CMA market study into digital advertising
Digital Competition Expert Panel (Furman Review): 9
‘The CMA should conduct a market study into the digital advertising market encompassing the entire value chain, using its investigatory powers to examine whether competition is working effectively and whether consumer harms are arising.’
Cairncross Review: 10
‘The Review recommends that the Competition and Markets Authority use its information-gathering powers to conduct a market study into the online advertising industry. By looking more closely into the position of different players, their roles, costs and profitability, the CMA will be able to identify how efficiently the online advertising market is working, and what remedies, if any, are needed.’
House of Lords Select Committee on Communications: 11
‘We recommend that the Competition and Markets Authority (CMA) should conduct a market study of digital advertising to investigate whether the market is working fairly for businesses and consumers.’
Which?: 12
‘The Competition and Markets Authority (CMA) should conduct a market study into the digital advertising industry as a matter of urgency.’
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9 Unlocking digital competition, report of the Digital Competition Expert Panel aka ‘the Furman Review’. 10 The Cairncross Review: a sustainable future for journalism. 11 Select Committee on Communications, UK advertising in a digital age. 12 Which?, Control, Alt, or Delete? The future of consumer data. 1.5 As explained in our strategy document, this study aims to inform government thinking on the regulation of online platforms and to provide analysis to support the government’s response to the Furman Review.\\textsuperscript{13} Our aim is to ensure that any proposals for future regulation by government are based on a sound understanding of advertising-funded platforms’ business models and the challenges that they may pose. The market study sits alongside parallel and complementary policy work that we are undertaking outside of the study, which includes consideration of non-advertising-funded platforms, as well as institutional questions arising from the Furman Review’s recommendations.
1.6 We intend that our study should not only address concerns specific to digital advertising, but also inform the development of a new regulatory landscape that extends beyond advertising-funded platforms, here in the UK and globally. Using our information-gathering powers, we have set out to test the principles and concepts developed in previous work, to establish whether they apply in practice to some of the most significant global platforms and the markets within which they operate.
Evidence gathering
1.7 Since launching the study, we have consulted a large number of parties, and gathered a broad range of evidence. This has involved a high volume of submissions from parties, in response both to our statement of scope and our requests for information. We are grateful to all those who have helped us progress our work at rapid pace. Figure 1.1 summarises our progress to date in gathering evidence.
\\textsuperscript{13} Furman Review (2019), Unlocking digital competition. 1.8 A summary of the responses to our statement of scope can be found in Appendix B.
This document
1.9 The market study is approaching the half-way stage. The purpose of this document is to provide an update on our approach and our progress, to indicate the direction of travel our analysis is taking in relation both to concerns and potential interventions to address them, and to test these initial findings with stakeholders.
1.10 This report sets out our understanding of how the companies and markets within our scope function. We do this at the highest level in Chapter 2, which provides an overview of how the markets, platforms, and issues within our scope interrelate. The chapters that follow then provide more detailed and targeted explanations of these issues. Where there are elements that are more complex or technical, such as how the open display advertising market operates, we have sought to provide additional detail in supporting appendices. We hope that stakeholders will study this detail and bring any inaccuracies to our attention.
14 See Appendix H for a detailed explanation of how the open display advertising market works. 1.11 We have also set out our early findings on the key issues and concerns that may be present in each market. Building on the strong groundwork provided by the Furman Review for the UK Government, the special advisors’ report for the European Commission, and Stigler Center Committee’s report on the challenges posed by digital platforms, we have attempted to take the discussion forward by identifying which specific features are most relevant to each market or individual platform. Chapter 3 reviews the consumer-facing services within general search and social media markets. Chapter 4 analyses issues relating to consumer control of data on those same platforms. Chapter 5 considers issues that are specific to the digital advertising market.
1.12 In the context of our early findings, Chapter 6 outlines the range of potential interventions that we will look to assess in more detail in the second half of the study. Our consideration of reforms is in its early stages – we would like to use this consultation to gather views on the merits, risks, and practical challenges of implementing each of them.
1.13 Chapter 7 then sets out our current view on whether these potential interventions would best be delivered through recommendations to government, or by the CMA’s order-making powers available under a market investigation. We conclude that, at this stage, we are minded against making a market investigation reference. We are publishing this document to inform a thorough consultation on this issue.
1.14 Consistent with our intention for this study to shine a light on these complex and opaque markets, we have attempted to reveal as much detail from our evidence and findings as possible. In doing so, we have surfaced a great deal of information that was not previously in the public domain. However, there has been some information we have chosen not to publish at this stage – in some cases because the information is highly commercially sensitive, and in others because parties that provided the information to us indicated that they wished to remain anonymous for fear of repercussions in the market if their identity were revealed. There are as a result some instances where we have anonymised parties’ submissions, presented confidential numbers in ranges, or sought to make more generalised statements in order to convey the key messages while not disclosing confidential information. We indicate these instances with the use of [square brackets].
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15 Furman Review (2019), Unlocking digital competition. 16 Jacques Cremer, Yves-Alexandre de Montjoye and Heike Schweitzer (2019), Competition for the digital era, final report for the European Commission. 17 Stigler Center (2019), Committee on Digital Platforms Final Report. 1.15 Before we draw firm conclusions about competition concerns or potential reforms, we have further work to do in the second half of our study to refine our understanding and firm up our evidence base. Our final report will contain a more comprehensive assessment of the issues set out in this document will be provided in our final report. This will include our conclusions on the problems and challenges to be addressed, and the reforms that should be delivered to maximise the benefits to consumers from these markets and services. 2. Overview
- Google and Facebook are the largest online platforms that are funded by digital advertising. Their business model relies on attracting consumers’ attention and gathering data about them, which they use to sell targeted advertising.
- The services provided by both companies are highly valued by consumers. Search engines give us instant access to information, news and a wide range of goods and services. Social media services enable us to connect with friends and family around the world, keep up with news or current trends and share creative content with one another.
- Over a third of UK internet users’ total time online is spent on sites owned by Google and Facebook. Both companies are also able to gather substantially more data about consumers than their rivals.
- As a result, Google and Facebook have grown to dominate the UK digital advertising market. We estimate that search advertising revenues in 2018 totalled around £6.4 billion in 2018, of which more than 90% was earned by Google. Total spend on display advertising was worth £5.1 billion, of which we estimate almost half went to Facebook.
- Both Google and Facebook are highly profitable. The return on capital earned by both companies has for many years been substantially higher than any reasonable estimate of what we would expect in a competitive market.
- In this study we are investigating whether rival providers of search and social media services can no longer compete effectively with Google and Facebook because of their size, and a range of concerns in the digital advertising market including a lack of transparency and conflicts of interest.
- These issues matter to consumers: if competition in search and social media is not working well, this can lead to reduced innovation and choice, while the resulting poor competition in digital advertising can increase the prices of goods and services across the economy, and undermine the incentive or ability of newspapers and other providers to produce valuable content, as they may not receive a fair share of revenues.
Introduction
2.1 Our study covers three related themes relating to platforms that are funded by digital advertising: competition in consumer-facing services; consumer control over data; and competition in digital advertising markets. The aims of this chapter are to explain why we are looking at each of these three themes and how they are connected, to explain how the key consumer-facing and digital advertising markets work; and to set out at a high level why this all matters to consumers.
2.2 The chapter covers the following topics:
- The business model of platforms funded by digital advertising, including an explanation of the importance of consumer attention and data. This section clarifies why we have focused on the services provided by Google and Facebook.
- A high-level introduction to the digital advertising market, including the different types of digital advertising.
- A summary of key market outcomes, including expenditure on different forms of digital advertising, and an analysis of the profits earned by Google and Facebook.
- An explanation of how a lack of competition in these markets can result in a wide range of negative impacts for consumers.
The business model of platforms funded by digital advertising
2.3 Online platforms typically seek to attract consumers by offering their core services for free. Once they have attracted a critical mass of consumers, they seek to make money from business users on another side of the platform. In transaction-based platforms, such as Amazon Marketplace or Apple’s App Store, this is predominantly through the commission that is charged to retailers or app developers respectively.
2.4 For other platform services, such as search engines and social media services, monetisation comes predominantly through serving adverts. Google and Facebook are by far the largest two companies operating with this business model – we have therefore focused heavily on these two companies within our market study.
2.5 Although consumers do not pay money for these services, they can be considered to pay for them by giving the platform their attention and data about themselves. Advertising-funded platforms are able to combine the attention of their users with contextual or personal information they have about them to serve highly-targeted adverts, which are in high demand by advertisers. These exchanges are illustrated in Figure 2.1 below. The importance of consumer attention and data in the digital advertising market is explained in more detail later in this chapter. 2.6 The advertising-funded business model is not novel. Newspapers have been generating revenue in the UK through advertising for several hundred years. On television, ITV provided the first alternative to the BBC in 1955, when it began its ad-funded broadcasting. Similarly, commercial radio stations have been generating revenue through advertising in the UK ever since the market was liberalised in 1973. These services have added substantial value to our society.
2.7 The same is true of many services provided by digital platforms. Search engines give us instant access to information, news, directions, and other websites with minimal effort. Social media services enable us to connect with friends and family around the world, make new friends, keep up with news or current trends, and share creative content with one another. These services, which are funded by digital advertising, are highly valued by consumers (see Box 2.1).
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18 ITV summary of its history. 19 Frequencyfinder.org.uk, history of radio transmission in the UK. Box 2.1: The value of online platform services
Platform services that are funded by digital advertising bring substantial benefits to consumers, while being provided free of charge. Research published in 2018 demonstrated that consumers place great financial value on a range of online services, with values of multiple thousands of dollars being assigned to search engines and digital maps. Video streaming services such as YouTube, and social media more broadly received lower, but still significant valuations that by far exceed the price that is paid.(^{20})
The fact that these services are so important to consumers and valued so highly is precisely why it is critical that competition is effective in these markets. Through our work in this area we want to ensure that current consumers are reaping the maximum potential rewards from these services, and that future consumers will continue to benefit from new innovative services that can transform our lives.
2.8 The targeted nature of digital advertising can add value to both advertisers and consumers. For consumers, targeted adverts will be more relevant to them, which can make them less irritating and more likely to provide genuinely useful information about products and services they may be interested in. For advertisers, improved targeting should deliver a greater return on their investment as their adverts will be viewed more often by their intended audience. Overall, more relevant and better targeted adverts can be expected to result in more purchases, increasing consumer and producer welfare as a result.
2.9 Despite these benefits that online platforms have undoubtedly delivered, the markets within which they operate contain a range of features that mean they frequently tend towards a ‘winner-takes-most’ dynamic with limited competition ‘in’ or ‘for’ the market. This may result in sub-optimal outcomes for consumers over the longer term. These features, which have been well-articulated in existing reports, including the Furman(^{21}) and Stigler Center(^{22}) reviews, are summarised in Box 2.2.
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(^{20}) Brynjolfsson, Eggers, and Gannamaneni (2018), Using massive online choice experiments to measure changes in well-being, National Bureau of Economic Research, Working Paper 24514.
(^{21}) Furman Review (2019), Unlocking digital competition.
(^{22}) Stigler Center (2019), Committee on Digital Platforms Final Report. Box 2.2: Key features of online platforms
While the precise characteristics of each platform varies from market to market, they tend to share a set of general features that collectively support a ‘winner takes most’ dynamic:
- Online platforms typically have very low marginal costs and significant economies of scale in delivering the core service.
- Network effects mean that the value of a service to existing users of a platform increases as the total number of users increases. The nature of the network effects can vary significantly between platforms.
- The fact that consumers do not pay directly for the platform’s services limits their incentives to switch, and means that new entrants must attract users through demonstrably better quality or innovative features, rather than being able to undercut on price.
In this report we have set out our initial assessment of how important these and other features are in general search and social media – the two most significant platform markets funded by digital advertising.
Google’s and Facebook’s positions in respect of consumer attention and data
2.10 There are two key factors that influence the revenue that online platforms and publishers can generate through digital advertising:
- **Capturing consumers’ attention**: this is an essential requirement for selling any form of advertising inventory. The more of consumers’ attention platforms can capture, whether that is through increased reach or keeping consumers online for longer periods, the more attractive the platform’s inventory is to advertisers, and the more inventory they will ultimately have to sell.
- **Understanding preferences and purchasing intent**: understanding the wants and needs of specific consumers at any point in time is valuable to advertisers as they can target their adverts towards those individuals that they suspect are most likely to make a purchase. This targeting results in a higher return on investment for advertisers, and a willingness to pay higher prices. Platforms are therefore rewarded by advertisers for having
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23 Advertising ‘inventory’ is essentially space, whether located on a billboard, in a newspaper, on a web page, or on a TV screen, where adverts can be displayed. extensive and up-to-date knowledge of their consumers’ characteristics, preferences, and intentions. The key input to this knowledge is data.24
2.11 The following sections of this chapter explain how Google and Facebook lead the race to capture online consumers’ attention and to gather data on their preferences and intentions.
Consumer attention
2.12 UK internet users spend an average of three hours 15 minutes each day online,25 with the majority of this time spent in a relatively narrow set of sites and services, including social media, information, news, shopping, and entertainment such as videos, music, and games.
2.13 The characteristics of many of these markets mean that they tend to tip towards high levels of concentration. With a narrow set of highly concentrated markets, the majority of internet users’ attention is captured by a small number of very large companies, and in particular, mainly by Facebook and Google.
2.14 In terms of reach, around 95% of UK internet users access at least one Google site each month. Facebook’s reach is around 85%. Of the total time spent by users online, just over a third is on sites owned by either Google (including YouTube) or Facebook (including Instagram and WhatsApp).26
2.15 This success by Google and Facebook in attracting consumers’ attention is illustrated by Figure 2.2 below, which shows consumer time spent on the top 1000 properties. Consumers spend around 86% of their total time online on these top 1000 properties, with the remaining 14% split between an extremely long tail in excess of 16,000 websites.27
24 See Appendix E for more detail on the role of data. 25 Comscore, MMX MP, Total Digital Audience, Desktop aged 6+, Mobile aged 13+, June 2019, UK. 26 Ibid. 27 Ibid. Consumer preferences and purchasing intent
2.16 While there are important differences in the data-gathering practices of Google and Facebook, both companies are able to combine various sources and types of data to build up a profile of an individual, which can be used to make inferences about the types of products and services that they are likely to purchase. These profiles can include information on a consumer’s individual characteristics, likes and dislikes, political views, income, frequent locations and journeys, and so on. They can pool this information from a number of sources, including:
- information that consumers volunteer when registering for a service, such as name and contact details;
- observed contextual information such as information about a device being used to access the service or the precise location of the consumer at a particular time; • observed data from tracking users’ activity across the web, from which inferences can be drawn based on the articles they read or the websites they visit; and
• conclusions about a consumer’s characteristics and preferences that are inferred from observing their activity within the services, such as posts they like or click on within Facebook, or videos they view on YouTube.
2.17 The ability to target an advert at a specific individual with a particular set of characteristics, or even where an individual has revealed a demand for a particular product or service, is highly valuable to advertisers. Similarly, the ability to demonstrate a link between exposure to an advert and consumer purchasing behaviour is key in attracting and retaining advertisers. Both require data and this is why platforms are incentivised to gather as much data as they can on as many consumers as possible.
Regulations to protect privacy
2.18 There are tensions between these incentives to compete for consumer data, and the legal framework that is in place to protect consumers’ privacy. Box 2.3 highlights some of the key elements of the law that governs the use of personal data for advertising purposes, while a more detailed description of the legal and voluntary framework can be found in Appendix A. We explore the synergies and trade-offs between data protection regulation and competition in Chapter 4.
Box 2.3: data protection law
There are several aspects of law in the UK that relate to the protection of consumers’ personal data. These include:
• The General Data Protection Regulation 2016/679 (the ‘GDPR’) – the GDPR provides the general framework for the protection of personal data that applies in the UK. Coming into effect in May 2018, it built upon similar principles derived from the Data Protection Directive 95/46/EC and in the Data Protection Act 1998. Amongst other things, it sets out the range of circumstances in which processing of an individual’s personal data can be lawful.
• The Consumer Rights Act 2015 (CRA) – part 2 of the CRA requires the terms in consumer contracts and consumer notices to be fair and, if written, transparent.
28 See Appendix E for an explanation of how Google and Facebook are able to track internet users’ activity on third-party websites and apps. • **Unfair Contract Terms Directive (2005/29/EC) / Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (CPRs)** – broadly speaking, they prevent businesses (described as ‘traders’ in the CPRs) from treating consumers unfairly. Businesses are also responsible for the commercial practices of anyone who acts on their behalf or in their name. Both the business and those acting on their behalf may be held liable for breaches of the CPRs.
**Search and social media**
2.19 Google and Facebook’s advantage in attracting consumers’ attention and collecting their data, and their resultant high share in digital advertising revenues, has been achieved primarily through their core services in general search and social media respectively. These consumer facing markets are therefore the primary focus of our analysis in Chapter 3.
**Understanding general search**
*The demand-side*
2.20 Web-based search engines are a tool to help consumers to navigate the Internet and find useful information in response to a broad range of search queries. They make money by serving these consumers with paid-for adverts.
2.21 Research by Ofcom shows that search engines are consumers’ preferred method for finding what they are looking for online: 29
- 97% of UK adults reported using a search engine in the past year to look for information online; and
- for 50% of UK adults, the first place they usually go online is a search engine.
2.22 Consumers access search engines in several ways:
- **Web-browsers** – web browsers have default search engines in the navigation bar; some consumers may choose their browser and search engine at the same time.
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29 Ofcom (2019), *Online Nation*.
43 • **Web-navigation** – in the course of a session, consumers may navigate to one or more search engines, and many have a search engine as their home page.
• **Search apps** – on mobile devices, consumers tend to access search engines via apps such as widgets. They may use default search apps that come installed on mobile devices, or choose to download their preferred search app from an app store.
• **Voice assistants** – via smart speakers such as Amazon Echo and Google home.
*The supply-side*
2.23 General search engines work by maintaining an index of the websites that are available on the internet and returning a set of ranked, curated search results when consumers enter search queries.
2.24 Google’s general search results pages return different categories of search results, including generic search results and specialised search results. In addition, Google Search may return a third category of results, namely online search advertisements.
*Understanding social media*
*The demand-side*
2.25 Social media platforms facilitate interaction between their users, allowing them to communicate with each other, and share and discover engaging content. Social media platforms are generally available through a mobile app, with some also available via a web browser. As with general search, providers of social media services make money by serving their consumers with paid for adverts.
2.26 Features commonly provided by social media platforms include: user profiles or accounts; user ‘friends’ or connections; a personalised ‘feed’ of news or other content; content sharing features; comments; private messaging features; and likes or ‘reactions’.
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30 Some social media platforms may only be accessible via mobile eg TikTok or Snapchat. 31 Ofcom (2019), *Online Nation.* 2.27 A survey by Ofcom asked users what was important to them when they accessed Facebook, Twitter, Snapchat, Instagram and YouTube. The factors that were most often rated as very or fairly important were the following:(^{32})
- keeping in touch with friends and family;
- browsing to pass the time;
- sharing photos and videos;
- keeping up-to-date with news and current affairs; and
- watching videos.
**Box 2.4: What is social media?**
This box sets out attempts by a selection of other institutions to define social media.
**The ACCC(^{33})**
Social media platforms are ‘online services that allow users to participate in social networking, communicate with other users, and share and consume content generated by other users (including professional publishers). Social media platforms generally display content for consumption as linear ‘feeds’, curated by algorithms or displayed chronologically. Examples include Facebook, Instagram and Snapchat. Platforms may also offer additional functions including instant messaging services.’
**Ofcom’s Online Nation (2019)(^{34})**
‘Social media’ is often used generally to refer to a set of popular online services, encompassing a range including Facebook, Twitter, Snapchat, Instagram, YouTube, Reddit, Tumblr, Pinterest and WhatsApp. Attempting to map the exact boundaries of the social media sector, however, is more difficult.
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(^{32}) Ofcom (2019), *Online Nation*.
(^{33}) ACCC (2019), *Digital platforms inquiry – final report*.
(^{34}) Ofcom (2019), *Online Nation*. Communicating with others through user-generated text, photos and videos might be considered the central function of ‘social media’ in its most basic terms – but, many online platforms facilitate these kinds of interactions. Further, whether a service is considered ‘social media’ can often depend on the individual using it – for instance, Reddit or YouTube could have primarily ‘social’ functions for some users but not others. Some companies even reject the ‘social media’ label – Snapchat, for instance, refers to itself as a camera company, while Pinterest’ recent IPO filing emphasised its uniqueness as a ‘media-rich utility’.
Consequently, the concept of ‘social media’ has blurred boundaries that intersect with video-sharing services, blogging sites, messaging apps and forums.
**Bundeskartellamt Facebook decision (2019)**
'It can be assumed that there is a specific demand for social networks, which is fundamentally different from the demand for other social media. The key purpose of social networks is finding and networking with people the users already know, and to exchange on a daily basis experiences, opinions and contents among specific contacts which the users define based on identity. Providers meet this demand by offering the corresponding core functionalities which grant users a "rich social experience".'
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**The supply-side**
2.28 The social media sector is generally understood to include a range of online services, including those offered by Facebook, Twitter, Snapchat, Instagram, YouTube, Reddit, Tumblr, Pinterest and WhatsApp.
2.29 A differentiated service to consumers appears to be the main way in which social media platforms compete for consumer attention. Differentiation can incentivise consumers to access multiple platforms, allowing for the co-existence of platforms.
2.30 To create a service that is attractive to consumers, social media platforms must be able to present their users with relevant content. Successful social media platforms feature a vast quantity of content that may be shown to consumers. To prevent congestion and maintain consumer attention, platforms must determine the most relevant content for a given consumer, and the order in which to present it. They do this using an algorithm, which
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35 Bundeskartellamt (2019), Bundeskartellamt prohibits Facebook from combining user data from different sources.
36 Ofcom (2019), Online Nation. makes decisions based on a range of data about the consumer and the content.
**Digital advertising markets**
2.31 Digital advertising is the largest and fastest growing segment within the UK advertising sector. According to estimates by the Internet Advertising Bureau (IAB) report, the UK digital advertising market was worth £13.4bn in 2018, up from £11.7bn in 2017, and now accounts for 57% of total advertising revenues.
2.32 This increasing importance of online channels for advertising campaigns has created opportunities as well as challenges. Entirely new businesses and markets have developed in response to technological advancements offered by online advertising. And small businesses now have much improved access to flexible and targeted advertising opportunities. But on the other hand, there are many existing businesses, such as newspapers, that previously relied on traditional forms of advertising revenue that have had to adapt.
2.33 There are three broad types of digital advertising: search, display, and classified. We explain these at a high level below, and consider the markets in more detail in Chapter 5.
**Search advertising**
2.34 Search advertising is where an advertiser pays for its advert (typically in the form of a text link) to appear next to the results from a consumer’s search on an internet search engine, although adverts may also appear in other forms of search, for example on maps. The selection and targeting of these adverts is based primarily on keywords entered by the user. Advertisers will pay for their adverts to be displayed when consumers enter particular keywords or phrases.
2.35 The advert shown to a consumer may also be influenced by data about the person making the search, such as their previous search history or location at the time. For example, if a consumer is searching for a ‘coffee shop near me’, the advert displayed will depend on a combination of which companies have purchased impressions for the keywords ‘coffee shop’, and on which of them are closest to the location of the user.
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37 Report provided to us by the IAB. 38 Advertising Association and WARC press release (2019), 2018 UK advertising spend hits £23.6bn following nine years of growth. 2.36 Consumers can then click on the text link, as they can with the other organic search results (ie those that have not been paid for). In search advertising, advertisers or their agencies generally buy direct from search providers using the providers’ self-service online sales interfaces, such as Google Ads. Search advertising is aimed at driving consumers to take a particular action such as clicking a link. It is therefore used for direct response campaigns and is normally paid for on a cost-per-click (CPC) basis.
**Display advertising**
2.37 Display advertising enables advertisers to place ads on websites or apps in a variety of formats, including banner-style adverts, ‘native’ advertising, sponsored content, and video advertising. The space that the website or app owners – referred to in this context as publishers – sell for this advertising is referred to as inventory.
2.38 The display advertising sector is segmented into two channels: owned and operated platforms; and the open display market.
2.39 The owned and operated channel is primarily made up of large social media platforms, which sell their own advertising inventory directly to advertisers or media agencies through self-service interfaces. For example, an advertiser can purchase inventory directly through Facebook Ads Manager or Snapchat Ads Manager.
2.40 In the open display market, a wide range of publishers (for example, including online newspapers) sell their inventory to a wide range of advertisers through a complex chain of third-party intermediaries that run auctions on behalf of the publishers and advertisers. In practice, some of the most important intermediaries in this complex chain are owned by a single company – Google. This is particularly the case for publisher ad servers, supply-side platforms (SSPs) and demand-side platforms (DSPs).
2.41 Though some direct deals for display advertising continue to be made through traditional channels (ie involving human interaction), the use of programmatic technology has increased over time, with the result that almost all display
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39 We explain these formats in more detail in Chapter 5. 40 Publisher ad servers manage publishers’ inventory and are responsible for the decision logic underlying the final choice of which ad to serve, based on the bids received from different SSPs and the direct deals agreed between the publisher and advertisers. 41 SSPs provide the technology to automatize the sale of digital inventory. They allow real-time auctions by connecting to multiple DSPs, collecting bids from them and performing the function of exchanges. They can also facilitate more direct deals between publishers and advertisers. 42 DSPs provide a platform that allows advertisers and media agencies to buy advertising inventory from many sources. DSPs bid on impressions based on the buyer’s objectives and on data about the final user. advertising is now sold programmatically (ie ad selection, pricing and delivery of ads is automated by computers using complex algorithms).
2.42 Programmatic display advertising provides an opportunity for businesses and other organisations to target their marketing messages to particular audiences on the basis of detailed consumer profiles. It is particularly associated with raising brand awareness and shifting brand perceptions. Display advertising may be sold on a CPC basis, but is more commonly sold on the basis of how many times it is viewed, referred to as cost per impression, and typically measured as cost per thousand impressions (CPM).
**Classified advertising**
2.43 Classified advertising involves advertisers paying online companies to list specific products or services on a specialised website serving a particular vertical market. Payments for classified advertising will typically consist of listing fees or commissions.
2.44 We did not find that there was a consistent industry definition for what should be included within classified advertising. For the purposes of our study, we note that there are a broad range of online platforms focused on specific sectors that provide the ability for advertisers to list specific products and services and the functionality for consumers to then make comparisons across these listings. Sectors where classified advertising is common include recruitment, ecommerce, consumer finance, travel, property and cars. We have considered the role of classified advertising previously in our Market Study on Digital Comparison Tools.
2.45 As set out in our statement of scope, classified advertising is not a central focus of our study.
**Demand for digital advertising**
2.46 Unlike traditional advertising channels such as television and print media, digital advertising has increasingly opened up flexible and affordable opportunities for smaller companies. The scale of the large platforms, such as Google and Facebook, provides the possibility for small advertisers to reach out to potential customers on a national scale. These platforms provide self-service interfaces that automate and simplify the complex process of buying
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43 IAB (2018), Digital Advertising Effectiveness. 44 CMA (2017), Digital comparison tools summary of final report. From the consumer’s perspective, classified advertising is very closely associated with digital comparison tools, defined by the CMA previously as ‘digital intermediary services used by consumers to compare and potentially to switch or purchase products or services from a range of businesses’. advertising. This makes advertising accessible to businesses with very small budgets, or even to individuals. The 2018 expenditure of the median UK advertiser on Google is £[200-300] and on Facebook only £[0-100].
2.47 The use of media agencies is still common among larger advertisers running large multi-channel campaigns. Based on information provided by media agencies, we estimate that around a quarter of all digital advertising expenditure in the UK was channelled through media agencies in 2018. Decision-making by larger advertisers is becoming increasingly data-driven and sophisticated. The use of technology tools provided either by the platforms or intermediaries to target audiences and measure advertising outcomes at a granular level is becoming increasingly common.
Market outcomes
2.48 As noted in Chapter 1, several bodies and independent reviews called on the CMA to undertake this market study. One of the key motivations they cited for doing so was the fact the we have information-gathering powers, allowing us to collect data on issues and concerns where there is currently a lack of evidence.
2.49 We have used these powers to gain a more detailed understanding of how these markets work and of key outcomes within them. This work is ongoing, and in this section we set out some of our key findings to date, and highlight some of the further work we intend to do in the second half of the study. We consider three main areas: overall revenues in digital advertising; the fees charged by intermediaries in the open display market; and the profitability of Google and Facebook.
Digital advertising revenues
2.50 Search advertising is the largest category of digital advertising in the UK, with our estimates of total ad spend of £6.4 billion in 2018, of which we found Google earned more than 90%.
2.51 Total spend in display advertising was worth £5.1 billion, of which we estimate more than half went directly to either Facebook or Google. Over a third was sold through the open display market. Video advertising accounts for the largest share of the display advertising market at £1.9 billion.
2.52 These estimates, based on data provided by market participants, are comparable with other publicly-available estimates. For example, the most recent IAB/PwC Digital Ad Spend report estimated that total spend on UK search advertising was around £6.7 billion in 2018, spend on display advertising was around £5.2 billion, and spend on classified advertising was around £1.5 billion over the same period.\\textsuperscript{45}
2.53 These splits are illustrated in Figure 2.3 below.
**Figure 2.3: Types of digital advertising and channels of purchase**
![Diagram showing types of digital advertising and channels of purchase]
Source: CMA estimates for 2018 for search and display advertising. Estimate for classified comes from IAB/PwC Digital Ad Spend report.\\textsuperscript{46}
2.54 We have used information in Chapter 5 to estimate shares of supply for different platforms. We are continuing to extend and refine our analysis, as described in more detail in Appendix C.
**Fees charged by intermediaries**
2.55 Several publishers have expressed concerns that a lack of transparency and competition in ad tech intermediation allows intermediaries to extract a large share of advertisers’ expenditure, reducing the amount that is ultimately paid to publishers. The difference between what advertisers pay and publishers earn from digital advertising is sometimes referred to as the ‘ad tech tax’. If publishers earn lower revenues than would be the case in a more competitive
\\textsuperscript{45} IAB UK and PwC Digital Adspend study (2018).
\\textsuperscript{46} The IABUK and PWC report assesses classified advertising more narrowly than we have in our study. This figure may therefore be an underestimate of what we have defined as classified advertising. and transparent market, this would reduce their ability and incentive to fund quality content that ultimately benefits consumers.
2.56 Past estimates of the ‘ad tech tax’ vary, but they all suggest that intermediaries capture a significant portion of advertisers’ expenditure. For example, research by Plum consulting indicated a range between 43% and 72%, with an average of 62%. Similar research by the Association of National Advertisers (ANA), the Association of Canadian Advertisers (ACA), Ebiquity, and AD/FIN found a range between 54% and 61% in relation to advertising sales in the US and Canada. In both cases, the estimates did not account for the possibility of arbitrage and hidden fees, nor for the potential effects of ad fraud.
2.57 We have gathered our own evidence on revenues from the main intermediaries currently operating in the UK. An advantage over previous studies is that these revenue figures should cover the vast majority of sales in the open display advertising market. Our initial estimates suggest that the weighted average DSP fee is around 18% of advertising spend (with a wide range of fees charged from 8% to 40% depending on the service provided – for example, whether there are additional fees for third-party sources of user data). We estimate that the overall weighted average of SSP/ad network fees is around 22%. These figures do not include ad server charges or other elements of the ‘buy side’ fee, such as agency charges and trading desk fees. In broad terms, our estimates are similar to those previously estimated by Plum and the ANA/ACA.
2.58 We have also carried out analysis of Google and Facebook’s advertising revenues based on information in their management accounts. This suggests that, where small publishers use Google’s AdSense for Content product to monetize their advertising inventory, Google retains on average 32% of the revenues earned from advertisers. Similarly, where small publishers use Facebook Audience Network to monetize their advertising inventory, Facebook retains on average 27% of the revenues earned from advertisers.
2.59 We are intending to carry out further work to investigate money flows along the intermediation chain in the second half of the study. We plan to extend our aggregate analysis of intermediary revenues to better understand fees in other parts of the value chain, including demand-side fees. We also intend to analyse transaction-level data from Google to understand better where Google earns its revenues from different parts of the intermediation chain, and
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47 Plum Consulting (2019), Online advertising in the UK. 48 The Association of National Advertisers (ANA), the Association of Canadian Advertisers (ACA), Ebiquity, and AD/FIN (2017), Programmatic: seeing through the financial fog. to investigate claims that Google is able to earn ‘hidden fees’ by arbitraging its position on both the buy side and sell side of the ad tech stack.
**Profitability of advertising-funded platforms**
2.60 As highlighted in the sections above, Google and Facebook’s strong positions in the general search and social media markets respectively have translated into substantial revenues in the digital advertising market. This section summarises our initial analysis of the profits earned by Google and Facebook from these core services.
2.61 We have focused on a few standard reporting metrics to inform our analysis of these companies’ revenues, costs, and profits. In particular:
- We have assessed the amount of profit each company has earned in absolute terms using the metric ‘earnings before interest and taxation’ (EBIT).
- We have analysed the level of their profits with reference to the ‘return on capital employed’ (ROCE). This approach compares accounting profit with the size of investment made by firms to achieve those profits.
- We have compared our findings against the companies’ weighted average cost of capital (WACC), which is a widely used benchmark for returns on an investment. The WACC is essentially the minimum return required on an investment or asset to satisfy the owners and creditors.
2.62 We summarise the main findings of this analysis below, while a more detailed explanation can be found in Appendix D.
**Revenues and costs for Google and Facebook**
2.63 Figure 2.4 shows the revenues and costs for Google and Facebook from 2010 to 2018. Profits earned by Google and Facebook
2.64 Figure 2.5 shows their profits (measured using EBIT) in absolute terms from 2009 to 2018 for each company at the group-level based on published information. Figure 2.6 then compares our estimates of the two companies’ ROCE with our estimates of their WACC – this analysis looks at the profitability of individual segments within the groups (ie the profitability of Google Search, compared to Alphabet). This is based on information supplied to us by the companies. 2.65 We have found through our profitability analysis that the return on capital employed for both Google and Facebook has been well above any reasonable benchmarks for many years. We estimated that the cost of capital for both Google and Facebook in 2018 was around 9%, whereas their actual returns have been substantially higher, at least 40% for Google’s search business and 50% for Facebook. This evidence is consistent with the exploitation of market power.
2.66 We explain this analysis, including sensitivities, and our full range of findings in more detail in Appendix D.
Impacts on consumers
2.67 Competitive markets have the potential to deliver good outcomes for consumers when sellers are incentivised to differentiate themselves from their rivals through lower prices, higher quality, or innovative new offerings.
2.68 In this study, we are assessing whether problems such as market power, lack of transparency and conflicts of interest mean that competition is not working as well as it should. There are multiple ways in which consumers could be harmed by weak competition in digital platform markets, both directly and indirectly. These are shown in Figure 2.7 and explained in more detail below.
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49 This analysis is based on Facebook’s whole business, where 99% of its revenues are from digital advertising, and a lower estimate of the ROCE of Google’s search business, which takes account of data provided by Google. 2.69 On one side of a platform, consumers face a range of potential direct impacts from a lack of competition, felt through the transactions between them and the platform. These could affect the following outcomes:
- **Reduced innovation** – barriers to entry and expansion could weaken the incentives of new entrants, and more importantly their investors, to come forward with disruptive innovation. Instead, they might be limited to investing in innovations that complement the incumbents’ services. These dynamics will also limit the incentives of incumbents to innovate themselves. The result is that the range of new features and services being brought to market is more limited than it might otherwise have been.
- **Poor returns to consumers** – the price charged by Google and Facebook to access their services is currently zero. It’s plausible that the price charged in more competitive circumstances would be negative, with consumers rewarded, financially or otherwise, for entering a search query or scrolling through their news feed.
- **Excessive extraction of data** – consumers pay for using search and social media services through the provision of their attention and their data. In a more competitive market, consumers might not need to provide so much data in exchange for the services they value. • **Lower quality of service** – there are various ways that the quality of services offered by platforms might be enhanced if they were subject to more intense competition. Looking beyond the immediate quality of the core services provided (e.g., relevance of search results or ease of communication with friends) the platforms might be judged on a range of other factors, such as: the extent to which they protect consumers’ privacy; the volume and density of adverts that they carry; how clearly and easily the adverts can be distinguished from organic content; and how easily the services can interoperate with other complementary ones.
2.70 On the other side of the platforms, a lack of competition may result in direct harm to business users. In the case of platforms funded by digital advertising, these businesses could include advertisers, publishers, advertising intermediaries, and content creators. Absent effective competition, these various businesses could expect to face lower quality services, higher prices, or a lower share of the revenues than they might otherwise expect in a more competitive market. Ultimately, we can expect these effects to be passed through to consumers with the following indirect impacts:
• **Price of goods and services being advertised** – online platforms with market power may be able to exploit advertisers through high prices and increasing the cost of advertising. If the costs of digital advertising are higher than they would be in a more competitive market, we would expect this to be felt in the prices that consumers pay for hotels, flights, consumer electronics, insurance and many other products that make heavy use of digital advertising.
• **Quality and range of creative content, including journalism** – for content providers such as online newspapers, digital advertising is a vital source of revenue. If problems in the digital advertising market mean that such providers receive a lower share of advertising revenues than they should, this is likely to reduce their incentives and ability to invest in news and other online content, to the detriment of those who use and value such content. At a broader social level, a thriving and competitive market for independent news and journalism is essential for an effective democracy.
• **Price, quality and choice in adjacent markets** – a powerful platform may seek to leverage its strong position in its core market into other adjacent markets, ultimately giving itself an advantage over its rivals. The effects of limited competition for consumers discussed above are then potentially spread out to a wider range of markets. Importantly, this could act as a handbrake on innovation right across the ecosystem of online services and related technology. 2.71 This document sets out our initial findings on the level of competition faced by Google and Facebook, both in their consumer facing markets, and in digital advertising. This informs our assessment of the potential of the above harms to consumers arising in practice. 3. **Competition in consumer services**
- Google has significant market power in the general search sector, having had a share of supply of around 90% or higher in the UK for more than a decade.
- Google’s strong position is primarily maintained by three key barriers to entry and expansion: economies of scale in developing a web index, access to click-and-query data at scale, and Google’s extensive default positions across desktop and mobile devices.
- Facebook has significant market power in the social media sector. Strong network effects mean that entry over the last decade has only been successful where platforms have provided a sufficiently different service. The evidence that we have reviewed suggests that entrants place only a limited constraint on Facebook.
- By controlling (and sometimes degrading) the level of interoperability that it offers to other social platforms, Facebook may have further insulated itself from competitive pressure.
**Introduction**
3.1 Online platforms that are funded by digital advertising serve multiple user groups, including consumers and advertisers.(^{50})
3.2 As discussed in the previous chapter, the high revenues that Google and Facebook generate from digital advertising are linked to their success in capturing consumers’ attention and understanding their characteristics and preferences. They achieve this primarily through their search and social media platforms.
3.3 This chapter sets out our initial research and findings in relation to:
- the extent of market power enjoyed by Google and Facebook on the consumer side of their search and social platforms; and
- the key barriers to entry and expansion in these sectors.
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(^{50}) Some of these platforms also serve other user groups, such as publishers, retailers and app developers. Competition in search
3.4 Web-based search engines play an important role for consumers in the modern world, helping them to navigate the Internet, and quickly and easily find useful information in response to a broad range of search queries.
3.5 Figure 3.1 below shows the key elements of a search engine results page. When users enter queries into the search box, the search engine returns a set of organic links and may also return search adverts and other content and features.
Figure 3.1: Illustration of a search engine results page
3.6 Search engines such as Google and Bing (which is owned by Microsoft) maintain an index of websites and use algorithms to determine which results to serve in response to a query. These steps can be summarised as follows:
- **Crawling** – search engines use automated bots to crawl the web for new or updated webpages and bring data about those pages back to the search engine’s servers. These bots follow links from known webpages and use known webpages’ URL addresses. Search engines also make use of crawl requests and sitemaps submitted by webmasters (ie people who are responsible for maintaining websites) who want their website to be found.
- **Indexing** – search engines record and organise data and metadata collected from crawling into an index. This data can include the title of a webpage, the words it contains and their location within the webpage, as well as metadata on the author of the page and the time the page was last updated. Search engines supplement data derived from crawling with other information. This may include, for example, local business databases or live feeds of sports scores or exchange rates.
- **Ranking and returning results** – when users enter a search query, search engines use a series of algorithms in order to assess the intent behind the query and instantly select and return the most relevant and useful information from the index.
Figure 3.2: Web crawling and indexing
3.7 Aside from Google and Bing, other English-language search engines do not maintain their own at-scale index of webpages, but instead buy organic links and search adverts through syndication agreements. For example, Yahoo Search (owned by Verizon Media), Ecosia, and DuckDuckGo access Bing’s organic links and adverts through syndication deals.(^{51})
**Box 3.1: History of search**
In the 1990s, at least fourteen search engines launched their services for the first time, deploying a range of different approaches to indexing and ranking webpages.
- JumpStation (which launched in 1993) used a web-crawling technology to build an index of the web,(^{52}) whereas Yahoo (which launched in 1994) relied on staff categorising websites into a hierarchical structure.
- Other early launches included Lycos in 1994, Ask Jeeves (which would later become Ask.com) in 1997, and Google and MSN Search (which would later become Bing) in 1998.(^{53})
By the early 2000s, Google had established itself as one of the top search engines in the world, alongside Yahoo and MSN Search.(^{54})
- Google said that the initial innovation that drove its success was its proprietary PageRank algorithm, which judged relevance based on the number of websites linking to potentially relevant pages.
- Google received a capital injection in 1997(^{55}) and by 2000 it had developed the world’s largest search index.(^{56})
Through the 2000s, search engines innovated through the addition of features.
- By 2005, Google, MSN and Yahoo all offered web, news and images search features. Google also had shopping sites (Froogle) and Maps. MSN search had Encarta. Yahoo’s features included Video, Directory and Products.(^{57})
- Google was the first search engine provider to launch a mapping product, with Maps for desktop launching in 2005 and Maps for mobile following in 2007.(^{58})
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(^{51}) Verizon Media (owner of Yahoo Search and AOL) and Ecosia have syndication agreements with Microsoft. DuckDuckGo has a sub-syndication agreement with Verizon Media.
(^{52}) Dynamic Competition in Online Platforms, BEIS, March 2017, page 32-33.
(^{53}) Dynamic Competition in Online Platforms, BEIS, March 2017, page 32-33.
(^{54}) The Guardian, ‘Google timeline: a 10 year anniversary’, 7 Sep 2008, Accessed 31.10.2019.
(^{55}) The Telegraph, ‘The man who Googled himself $1 billion’, 5 Oct 2004, Accessed 31.10.2019.
(^{56}) Google blog, ‘Google Launches World’s Largest Search Engine’, 26 Jun 2000, Accessed 31.10.2019.
(^{57}) The Guardian, ‘Online’s top 25 search engines’, 24 Feb 2005, Accessed 31.10.2019.
(^{58}) Google blog, ‘Google announces launch of Google maps for mobile with ‘my location’ technology’, 28 Nov 2007, Accessed 31.10.2019. There is a long history of search providers other than Google and Bing choosing to outsource some or all of their search engine activities.
- As early as 2000, Yahoo agreed to make Google its default search results provider. Yahoo’s president said that ‘Google will provide its underlying Web search engine to serve as a complement to Yahoo’s popular Web directory and navigational guide’.
- By late 2010, Yahoo had outsourced its search results and advertising to Microsoft and Ask.com had refocused away from developing its own search engine technology.
- This left Google and Microsoft as the only two large web-crawling English-language search engines, which remains the case today.
3.8 We refer to Google, Bing, and the search engines that syndicate from them as ‘general search’ providers. These are platforms that are used by consumers to answer a broad range of search queries.
3.9 General search engines are not the only online platforms that help consumers to find information online. Online marketplaces (such as Amazon and eBay) and price comparison sites (such as Booking.com and Comparethemarket.com) also help consumers to search for certain types of information. We refer to platforms that specialise in a subset of consumer queries as ‘specialised search’ providers.
3.10 We first set out below how general search platforms compete, before presenting shares of supply and outlining competitive constraints faced by Google Search. We then discuss potential barriers to entry and expansion. Finally, we present our initial findings on the extent to which Google Search may hold market power.
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59 Google blog, ‘Yahoo! Selects Google as its Default Search Engine Provider’, 26 Jun 2000, Accessed 1/11/2019.
60 The same press release noted that Yahoo! used a different indexing method compared to Google and others ‘Unlike search engines, which use automated “spiders” to electronically crawl the Web to capture and store sites in the search engine’s index, Yahoo!’s staff of experts appropriately categorizes Web sites into an intuitive hierarchical organizational structure’.
61 In 2009, Yahoo and Microsoft agreed that Microsoft would be the exclusive provider of algorithmic search results and search advertising to Yahoo in EMEA. This partnership was renewed in 2018, subsequent to Verizon Media’s acquisition of Yahoo’s operating business.
62 The Guardian, ‘Ask.com gives up on search as Google takes over – adieu Jeeves’, 9 Nov 2010, Accessed 1/11/2019. Parameters of competition
3.11 Search engines compete for consumers directly by seeking to provide high-quality services. They also compete over access to consumers, through the default search positions on web-browsers and devices.63
3.12 Search engines compete for consumers over the following dimensions of quality:
- **Relevance of results** – the ability of a search engine to return useful, relevant results in response to a range of queries is a key dimension of quality. Activities such as crawling and indexing, developing additional features, and refining algorithms each play a role in search relevance.64
Box 3.2: How search engines measure and improve search quality
Search engines engage in several types of experimentation and testing in order to iterate and improve search quality.65
Firstly, search engines may conduct **live experiments**, where they direct a proportion of user traffic to a new trial version of the search engine. For example, one group of users may be served results based on the current ranking algorithm, while another group is served results based on a modified algorithm. The search engine analyses interaction data (for example, data on what links the user clicked and whether they hit the back button following a click) in order to build a picture of which version works better for users.
Secondly, some search engines seek qualitative feedback from **dedicated panels** of human reviewers who have agreed to evaluate the product. For example, reviewers may be asked to compare two candidate sets of search results (or two candidate ways of presenting the results) and state which one they prefer. Some search engines also use human reviewers to judge various aspects of web-page quality and trustworthiness.
- **Ease of use** – consumers also want to be able to conduct their searches effectively and efficiently. Many search engines have built ‘instant answer’
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63 For example, when a consumer buys a new mobile phone, search queries typed into the pre-installed browser or search widget will be served by the default search engine, unless the consumer makes an active choice to move away from the default. We discuss default search positions later in this chapter.
64 As discussed later on this chapter, search engines that access search results through syndication agreements undertake these activities to a more limited extent.
65 See for example: Google, ‘How search works’ and ‘How our Quality Raters make Search results better’, Accessed 26 November 2019. boxes into the search results page, reducing the need for consumers to click through to other web pages. Features such as autocomplete and voice search also contribute to ease of use.
- **Attractiveness of interface** – search engines also compete to provide visually attractive interfaces, which can be another aspect of quality from the perspective of consumers.
- **Privacy and trust** – some consumers prefer to accept less personalised (and potentially less relevant) search results and adverts, in return for their search engine collecting and storing less data about their searches.
- **User rewards and incentives** – price is not a key parameter of competition in search; none of the general search engines that we heard from charge users or pay them for searches undertaken. However, some consumers value the non-monetary rewards for searches (such as promotional points or contributions to good causes) offered by certain search engines.
3.13 The evidence that we have reviewed suggests that search engines and consumers generally see relevance of results as the most important aspect of quality.(^{66}) This suggests that, in addition to any points of differentiation that they offer, competitive search engines need to at least offer a similar level of relevance to that of the market leader (Google).
3.14 Competition over quality in search plays out through various mechanisms, including in-house innovation (for example, to improve search algorithms), the acquisition of innovative companies and the signing of commercial partnerships with third parties that offer databases, maps or other features (to supplement organic links).
3.15 However, competition over access to consumers is also a very important feature of the search sector. For example, Google makes very large payments to Apple in particular in return for being the default search engine on its devices. We discuss access to consumers later in this chapter.
3.16 Search engine providers also compete to attract advertisers to their platforms, in order to fund the services that they supply to consumers. Google and Bing own and operate their own search advertising infrastructure. Other search engines rely in part or whole on search adverts that they access through syndication agreements. We discuss search advertising in Chapter 5.
(^{66}) See for example survey conducted by DuckDuckGo. Shares of supply
3.17 Google has persistently had a very high and stable share of general search in the UK over the period for which data is available. As shown in Figure 3.3, based on Statcounter data on website referrals, Google’s share of supply has been between 89% and 93% throughout the last ten years.67,68
Figure 3.3: Shares of supply by page referrals from January 2009 to June 2019
Source: Statcounter Global Stats. Notes: UK data for June 2009 – June 2019.
- Bing’s share represents that of Bing and MSN Search. MSN was rebranded as Bing in 1998. † ‘Other’ consists of: AolSearch; AVGSearch; Babylon; Baidu; Conduit; NortonSafeSearch; Snapdo; Webcrawler; WindowsLive; Yandex; and ‘other’.
3.18 MSN (now known as Bing) overtook Yahoo Search in 2009 and these search engines have continued to be the second and third biggest providers in the UK throughout the subsequent ten years.
3.19 After Google, Bing and Yahoo Search, DuckDuckGo and Ecosia are among the next most popular search engines in the UK as of 2019. DuckDuckGo was launched in 2008 and Ecosia launched in 2009. Both of these search engines use Bing search results and adverts and had a share of less than 1% of general search as of 2019.69
67 Source: Statcounter Global Stats. As explained in Appendix C, Statcounter calculates shares of supply as the quantity of page referrals generated through a search engine, as a proportion of total page referrals generated through search engines. 68 We plan to calculate shares on the basis of the volume of searches conducted through search engines in the second half of the study. See further Appendix C. 69 Source: Statcounter data and Comscore MMX MP, Total Digital Audience, Desktop aged 6+, Mobile aged 13+, June 2019, UK. (Statcounter does not include results for Ecosia). See further Appendix C. 3.20 Google’s share of supply is very high in desktop search and close to 100% in mobile search. Bing has a larger share of desktop search than mobile search. As of 2019:
- Google’s share of supply in search is 92% overall, 97% on mobile devices and 86% on desktop devices.
- Bing’s share of supply in search is 5% overall, less than 2% on mobile devices and 11% on desktop devices.(^{70,71})
3.21 Overall, the evidence we have seen suggests that many consumers mostly use one general search engine per device. For example, research by Google into the desktop sector in the US found that around 70% of consumers use either Google or Bing exclusively, and around 30% use both. Google’s very high share of supply in mobile search suggests that the proportion of consumers using only one search engine is higher still on mobile devices.
3.22 Several factors may explain why consumers do some searching on a second search engine. Firstly, they may face different defaults on different devices. Secondly, some consumers may actively choose to use a different search engine for certain tasks.(^{72})
3.23 In the section below, we consider sources of competitive constraint on Google Search, including from rival general search platforms and specialised search platforms.
**Competition between general search platforms**
3.24 Google Search has played an important role in helping consumers to navigate the Internet since its launch in 1998 and is well-known for introducing innovations to web-based search, including its ‘PageRank’ algorithm.
3.25 As by far the most-used general search engine in the UK, Google handles a larger volume of UK search queries and operates a larger volume of UK search advertising inventory than its competitors. Microsoft indicated that Google’s greater scale enables it to more easily deliver more relevant results for users and to attract more advertisers. Other general search engines identified Google as their main competitor or as one of their main competitors (alongside Microsoft Bing).
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(^{70}) Source: Statcounter Global Stats data for June 2019. The methodology is explained in Appendix C.
(^{71}) Desktop devices include laptop devices. Mobile devices include tablet devices.
(^{72}) For example, DuckDuckGo said that ‘some users choose to only use us when making perceived more-private searches and choose to use Google the rest of the time’. 3.26 As discussed above, relevance of results is widely viewed as the most important aspect of quality for consumers. Relevance is subjective and there is no single measure that is used across the sector to compare different search engines. However, the evidence that we have reviewed to date, which includes internal documents and consumer research submitted by parties, suggests that consumers generally view Google’s English-language search results as being more relevant than those of other search engines. For example:
- Google submitted UK consumer research in which Google search results were rated more highly than those of other search engines, including in relation to 'random queries'.
- Google also submitted research showing that a sample of US consumers had identified 'quality and relevance', along with 'familiarity and habit', as their top reasons for using Google Search.
- Microsoft submitted internal documents stating that Bing was 'trailing' Google on relevance in a number of regions outside of the US.
- Microsoft told us that Google's perceived advantage on relevance among consumers especially applies to uncommon queries (also known as 'tail queries') and that Google has richer local and specialty results. Tail queries account for a significant proportion of the traffic seen by search engines. For example, Google said that about 15% of its daily traffic is comprised of queries that it has never seen before.
- Microsoft submitted qualitative research that indicated that the perceived relevance of results was a source of relative weakness for Bing in the UK. This study was based on discussions with a small number of Bing users.
3.27 The ‘Google’ brand is closely associated with the act of web-searching and several competitors highlighted this as a source of strength. DuckDuckGo submitted that ‘users have come to expect Google as the default and think of it synonymously with search. Even die-hard DuckDuckGo users still say they “Google it.”’
3.28 Google’s competitors also cited its search default positions as a source of strength. As discussed in the sections below, Google Search holds extensive default positions across nearly all UK mobile devices and a large proportion of UK desktop devices. Meanwhile, Bing holds default positions on Windows PCs, through Microsoft’s agreements with Windows PC manufacturers.
3.29 Google submitted that Bing was the main competing general search engine to Google Search in the UK. Aside from Google, Microsoft is the only other search engine provider that maintains an at-scale English-language index and produces its own organic search results and search adverts.
3.30 Microsoft said that Bing’s strengths relative to Google are that it is a good alternative for consumers for most of their likely search queries (ie common queries) and for those who dislike Google. One way that Bing differentiates from Google is through Microsoft Rewards. Under this scheme, signed-in Bing users receive promotional reward points for undertaking searches.73
3.31 In addition to their general search functions, both Google Search and Bing offer a wide range of search features. For example, both allow consumers to make specific searches for images, videos, maps, shopping and flights.74,75 An internal document from Google comparing its own business to other search engines including Bing, DuckDuckGo and Ecosia stated that ‘Google leads in search features (coverage and utility)’.
3.32 Google highlighted its recent innovations in areas such as ‘activity cards’,76 visual previews and artificial intelligence. It said that the actions of its general search engine competitors were not a significant consideration behind these investments, because its main focus is innovating to improve the user experience. We consider that Google’s investments in search features may have several motivations. While some may be motivated by retaining search customers, others may in part reflect a desire to expand into new markets.
3.33 Other general search engines used by UK consumers include Yahoo Search, Ecosia and DuckDuckGo. As explained above, each of these relies on search results and adverts from Bing.77 DuckDuckGo has a focus on privacy and describes itself as ‘the search engine that doesn’t track you’,78 while Ecosia is a ‘purpose company’, whose advertising profits are reinvested or used to plant trees.79
3.34 Downstream search engines with syndication business models appear to provide some fringe competition to Google.80,81 However, we consider that
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73 These can be redeemed for gift cards, donation and sweepstake entries, but do not have a monetary value. 74 Google, accessed on 9.10.2019. 75 Bing, accessed on 10.10.2019. 76 A Google Search feature that organises information about a user’s previous searches to help them to ‘pick up where they left off’ when they start another search session. See Google (2019), Pick up where you left off on Search, accessed on 3.12. 2019. 77 Verizon Media (owner of Yahoo Search and AOL) and Ecosia have syndication agreements with Microsoft. DuckDuckGo has a sub-syndication agreement with Verizon Media. 78 DuckDuckGo, accessed 7.11.2019. 79 Ecosia (2019), Financial reports and tree-planting receipts, accessed on 10.10.2019. 80 For example, Google submitted that DuckDuckGo is one of the ‘privacy-focused players’ that it competes with and that ‘DuckDuckGo’s key advantage is the reputation it has cultivated amongst users for protecting user privacy [and] choosing not to offer personalised search services’. It also submitted that Ecosia was one of the general search engines that it competes with. 81 For example, most DuckDuckGo users have switched to it from Google Search. competition to Google from platforms that do not produce their own organic links and adverts is likely to be limited in scope.
3.35 In summary, Google has been by far the most-used search engine in the UK for at least a decade. We consider that Bing is Google’s closest competitor in general search. However, as discussed later in the chapter, several barriers to expansion appear to limit the degree of competition to Google from Bing and other search engines alike.
**Competition between Google Search and specialised search platforms**
3.36 Google submitted that it also faces competition from a range of vertical or specialised search platforms in relation to different types of product query, including Amazon in retail and Booking.com in travel.
3.37 We note that, from a consumer perspective, there are substantial differences between general search and specialised search. Firstly, general search engines help consumers with a wider range of queries including many that are not served by specialised providers. Secondly, general search engines can lower transaction costs for consumers, by reducing the need for them to manually navigate between multiple websites and apps.
3.38 In practice, Google Search often serves as a gateway to specialised search rather than an alternative. As discussed in Chapter 5, there is some evidence that Amazon is less heavily reliant on Google than other specialised search providers and may compete directly with Google in relation to retail search advertising. However, retail queries only represent one element of what consumers want from general search. Overall, we consider that Amazon is likely to provide only a limited competitive constraint to Google Search on the consumer side of the platform.
3.39 We also note that competition between general and specialised search has been looked at before by the European Commission in its Google Search (Shopping) investigation, which found specialised search and general search services to be in distinct markets.
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82 As set out in Chapter 5, Comscore data (for desktop only) shows that a large proportion of traffic arriving on vertical search websites comes directly from Google websites. In turn, it appears that a large proportion of Google’s revenues in sectors where specialised search providers are present, comes from the specialised search providers themselves.
83 39740 Google Search (Shopping) case page accessed on 29 November 2019. 3.40 Overall, we consider that specialised search providers are likely to provide only a limited competitive constraint to Google Search on the consumer side of the platform.
**Barriers to entry and expansion in search**
3.41 Having considered sources of competitive constraint on Google Search, we now discuss potential barriers to entry and expansion that may prevent other search engines from acting as an effective constraint.
**Web-crawling and indexing**
3.42 In order to return relevant search results, search engines must be able to draw on an index that provides an up-to-date picture of a very wide range of relevant webpages (or else syndicate results from a provider that does so).
3.43 Google and Microsoft are the only two search engine providers that maintain at-scale English-language web indices. The main way that they acquire information for their index is through their automated web-crawling bots. These bots follow the links between webpages and bring data about those pages back to the search engine’s servers.
3.44 Based on submissions from these parties, Google’s index contains around [500-600 billion] pages and Microsoft’s index contains around [100-200 billion] pages. Our understanding is that the total number of pages in a web index is only one measure through which indices can be assessed; the relevance of the pages in an index is also important, as is the extent to which an index is up-to-date.
3.45 Crawling and indexing the web represents a significant cost for those search engines that do it. Microsoft estimated that its indexing investments added up to billions over time, while other estimates have suggested that Google and Bing spend hundreds of millions of dollars a year on this activity.
3.46 Developing a web-index is subject to economies of scale; the costs associated with crawling and indexing do not increase proportionally with the number of users of the search engine. It is difficult for smaller search engines
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84 Other web-crawling search engines include Yandex, Cliqz and Mojeek. Yandex is a Russian multinational that has a more-than 50% share of search in Russia. Cliqz is a Germany-based search engine. Mojeek is a small UK-based search engine.
85 For example, the European Commission quoted DuckDuckGo as follows: ‘Bing and Google each spend hundreds of millions of dollars a year crawling and indexing the deep Web. It costs so much that even big companies like Yahoo and Ask are giving up general crawling and indexing. Therefore, it seems silly to compete on crawling and, besides, we do not have the money to do so’. Source: Google Search (Shopping) Commission Decision (non-confidential version), 27 June 2017, page 66. to invest in at-scale crawling and indexing, since their ability to repay these costs and earn a return on investment is contingent on their ability to secure the other inputs necessary to compete effectively in search. For example, they would also need to achieve scale in both search queries and search advertising, in order to offer relevant results and monetise effectively.
3.47 Some parties suggested that crawler-blocking is an issue for web-crawling search engines. The mechanism for crawler-blocking is that webmasters (ie people who are responsible for maintaining websites) place robots.txt files on their websites, requesting that some or all crawlers do not access all or parts of the website. We heard that website owners may have legitimate motivations for doing so. For example, motivations can include fraud prevention and avoiding the increased running costs that can result from a large number of automated bots crawling a website.
3.48 We heard that, when web-crawlers encounter blocking, search engine providers can contact webmasters to seek a change of policy. However, the effort and cost of doing so means that search engines that are subject to fewer blocking instructions may have an advantage.
3.49 Microsoft submitted that while, overall, its index was competitive with Google’s, a small fraction of sites have robot.txt files that enable Google to crawl the site but prohibit Bing. Microsoft gave several examples of websites that allow crawling by Google but prohibit crawling by Bing over all or part of the site. These include eBay’s UK website, the UK Passport Service website, and the London Stock Exchange website. Its main concern was that user impression of Bing search quality would be harmed if several high profile websites were not properly searchable.
3.50 Yandex (which has a more-than 50% share of search in Russia) and Mojeek (a small UK-based search engine) indicated that crawler-blocking was not the main barrier to them expanding their English-language web-indices. Rather, economies of scale and other issues were more important. However, Cliqz said that it had incurred ‘significant business development expenses’ over the last 5 years by having to contact popular publishers to gain permission to crawl their websites.
3.51 Our own research into this issue found that the web-crawler bot of a new search engine that honoured all robots.txt would have access to approximately 0.2% fewer sites compared to Google and Bing. We found that
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86 See further: description of robots.txt files. 87 eBay.co.uk robot.txt, accessed on 13 November 2019. 88 UK Passport Service robot.txt, accessed on 15 October 2019. 89 London Stock Exchange robot.txt, accessed on 15 October 2019. the difference between the proportion of sites providing access to Google and the proportion providing access to Bing was smaller still. Therefore, differences in access levels provided to search engines appear to be small in numerical terms. However, if even a small number of popular sites cannot be crawled by some search engines, this could limit the ability of those search engines to return high-quality search results to certain queries. Our research, which is based on a limited sample of domains, is set out in Appendix E. We would welcome further evidence and views on whether crawler-blocking is a significant barrier to the development of at-scale web-indices.
3.52 In summary, Google and Microsoft are the only two providers that undertake English-language web-crawling and indexing at a scale that can support a competitive search engine in the UK. We consider that this reflects substantial scale economies in crawling and indexing, plus uncertainty for other search engines as to whether they can secure the other inputs (including sufficient scale in search queries and adverts) needed to earn a return on these investments. In combination, these factors represent a barrier to entry and expansion for English language web-crawling search engines. We discuss scale-effects in search queries and adverts in the sections below.
**Scale effects in click-and-query data**
3.53 Network effects occur when the value of a service to its users increases as the total number of users increases. Search engines are subject to same-side network effects, in the sense that users benefit from increased quality as the search engine acquires a greater number of users.90
3.54 The main mechanism for this is that search engines can improve their ranking algorithms, and return more relevant results to a user, when other users have entered similar search queries in the past.
3.55 Search engines collect and store aggregated ‘click-and-query’ datasets containing information about what users searched for and how they interacted with the results that they were served. They collect this data from searches
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90 In principle, search engines may also benefit from cross-side network effects, between users and webmasters (people who operate and maintain websites). First, the more users a search engine has, the more incentive webmasters have to design their website or take actions that make their website more easily found by that search engine. This could include prioritising limited bandwidth to allow crawlers of popular search engines but not others to crawl and index the website. It could also include prioritising submitting updated site maps and crawl requests to popular search engines but not others, which helps popular search engines have more up-to-date results. Second, the more websites optimise their website to be more easily found by a search engine, the better its quality of search results which helps it to attract and retain more users. The evidence that we have reviewed so far suggests that this cross-side network effect, which is discussed in the section on web-crawling and indexing above, is not as significant as the same-side network effect from improvements to returning more relevant results to a user detailed in this section. undertaken on their own platforms and, where applicable, searches undertaken on the platforms of their downstream syndication partners.
3.56 Click-and-query data plays an important role in helping search engines to improve the relevance of results. It helps search engines to understand how well their product is performing and to identify and test potential improvements, such as changes to ranking and spelling correction algorithms.91
3.57 This data is particularly important to search engines that produce their own organic links (for example, Google and Bing), but certain click-and-query data is also collected by syndicator search engines, for example, to test how well instant answers and other features that they control are performing.
3.58 The evidence that we have reviewed so far suggests that:
- **There are advantages to scale in click-and-query data** – in general, search engines that see more queries (and more consumer responses to those queries) can engage in increased experimentation and learning about what consumers want, and have greater possibilities to iterate and improve their service.
- **The marginal benefit of additional data depends on how common and fresh the queries are** – where a search engine sees a search query very frequently (sometimes referred to as ‘head queries’) and where the user intent behind that query is static, then the marginal benefit from seeing that query more often is likely to be relatively low. Conversely the marginal benefit of seeing a query more often will be higher for uncommon queries (sometimes referred to as ‘tail queries’) and for queries where the user intent changes over time (these are known as ‘fresh queries’).92
3.59 Both Google and Microsoft said that a substantial proportion of queries that they see are uncommon or new:
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91 We review the importance of data in detail in the Appendix E. 92 For example, the query ‘weather’ is commonly seen by search engines (ie it is a ‘head query’). It is also a relatively static query in the sense that the consumers of today, last week, and last year are all likely to have had a similar intent when entering this query (ie the intent to find a weather forecast). By contrast, search queries related to contemporary events, such as fashion trends and local news, may be less commonly seen (ie they may be ‘tail queries’) and the results that consumers are seeking may be changeable over time (ie they may be ‘fresh queries’). • Google submitted that the proportion of its daily traffic which are queries that it has never seen before ‘has remained constant at about 15% for many years’.
• Microsoft submitted that roughly 36% of the search queries run on Bing are entered 10 or fewer times in a month.
3.60 This indicates that, for a substantial proportion of search queries, there is a material benefit to both Google and Bing from receiving additional queries of the same type.
3.61 As the most-used search engine, we expect that, on average, Google sees each uncommon query more times than Bing in a given time period. We consider that, in particular, this is likely to support Google’s ability to serve more relevant results to uncommon queries compared to Bing. Given the importance of relevance to consumers, even if this advantage for Google is only substantial for a modest proportion of search queries, it is likely to further reinforce consumers’ perceptions of Google as the highest-quality search engine and make them less inclined to consider alternative providers.
3.62 Importantly, any search engine seeking to improve its relevance and compete with Google faces a chicken-and-egg problem; clicks help improve relevance, but relevance is needed to attract clicks. Overall, our initial assessment is that the greater scale of English-language queries seen by Google is likely to support its ability to deliver more relevant search results compared to its competitors, especially in relation to uncommon and fresh queries. Given the importance of search relevance to consumers, lack of comparable scale in click-and-query data is likely to limit the ability of other search engines to compete with Google.
**Syndication agreements**
3.63 As highlighted above, search engines including Yahoo Search, DuckDuckGo and Ecosia access Bing search results and adverts through negotiated syndication agreements.
3.64 Under syndication agreements, the upstream provider (Google or Bing) agrees to provide search results and adverts, and the downstream provider incorporates these into its own search engine product, under its own branding. The downstream provider may supplement the syndicated results and adverts with additional information and features.
**Box 3.3: The role of syndicators from a consumer perspective**
Search engines that rely on syndications agreements present organic search results produced by Bing or Google. So how do these syndicators differentiate themselves? At present, we understand that sources of differentiation include:
- **Social purpose** – some syndicators spend part of their search advertising revenues on social or charitable causes.
- **Privacy** – some syndicators say that they do not log or store information about user searches.
- **Search features** – when users enter search queries, syndicators and their upstream partners alike often serve additional features (such as map extracts, news clippings and weather forecasts), alongside organic links and adverts. Some syndicators serve different features compared to their upstream partner.
It is possible that syndicators could play a more distinct role in the sector in future. For example, we are not aware of any current syndication agreements that allow syndicators to re-rank the organic search results that they receive from Google or Bing. If this were to change, then syndicator search engines may be able to differentiate themselves more strongly.
3.65 In the agreements that we have seen, advertising revenues arising from clicks on search adverts on the downstream search engine are generally shared between the two parties. In addition, or instead, the downstream provider may be charged a fixed fee per 1,000 search requests and certain additional fees.
3.66 From the perspective of upstream providers, syndication agreements act as a distribution channel for their search results and adverts and help them to achieve greater scale. This may lead to direct benefits, in the form of revenue-share and other payments made by the downstream partner. In addition,
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93 From the agreements that we have seen, downstream search engines generally syndicate organic search results and search adverts from the same upstream provider. However, in some cases, downstream search engines have the possibility of buying organic search results without adverts. For example, Google’s Websearch Service allows website owners to use Google search results in exchange for a search fee. Website owners then have the option of also displaying Google search adverts through its AdSense for Search and AdSense for Shopping services. these agreements help upstream providers to build greater scale in click-and-query data and in search advertising, which may in turn help the provider to improve its search relevance and search advertising monetisation.\\textsuperscript{94,95}
3.67 From the perspective of downstream providers, syndication agreements can provide them with a viable means of competing in search. As highlighted above, competitive web-crawling search engines have to overcome a series of interrelated challenges including developing sufficiently relevant search results (through at-scale crawling and indexing and at-scale access to customers and clicks) and developing an at-scale advertising platform (which also requires at-scale access to customers and clicks). By contrast, syndication strategies appear to be lower cost and lower risk.\\textsuperscript{96} Several downstream providers indicated that, in combination, the barriers to developing their own competitive results and adverts were not surmountable, leaving syndication as the only viable option.
3.68 As the only at-scale English-language web-crawling search engines, Google and Bing will naturally have a strong bargaining position in discussions with downstream search engines. As a result, they may choose not to offer agreements to some providers, or may insist on terms that limit the ability of downstream providers to compete. For example, Ecosia said that it had approached Google many times over the years but that Google had always declined its request. In addition, none of the syndication agreements that we reviewed allows downstream providers to re-rank the search results that they received. Several downstream providers said that they would like to be able to modify search results, in order to improve their ability to differentiate.
3.69 We consider that downstream search engines with syndication business models have provided some fringe competition to Google, by taking Bing’s organic results and adding their own selling points and features. However, there are limits to the degree of competition that can come from businesses that do not produce their own organic links and search adverts. In particular, search engines that rely on Bing’s organic links (including Yahoo Search, DuckDuckGo and Ecosia) are likely to be constrained in their ability to compete with Google on search relevance. In addition, the syndication terms currently available appear to be further limiting the ability of search engines
\\textsuperscript{94} For example, Microsoft submitted that: ‘a primary motivation for entering syndication deals is to help increase our scale to improve competitiveness over time’.
\\textsuperscript{95} We have seen some syndication agreements where the upstream provider receives only a low share of search advertising revenues. In these cases, we consider that obtaining greater scale in click-and-query data and in search advertising volume may be the main benefits that the upstream provider derives from the syndication agreement.
\\textsuperscript{96} In addition, where syndication agreements are based on a revenue share, they provide downstream search engines with a degree of hedging between costs and revenues. with syndication business models to differentiate from their upstream partners and play a more substantial role in the competitive process.
**Other supply-side barriers**
3.70 Some parties highlighted additional supply-side barriers to entry and expansion.
3.71 Microsoft suggested that accessing at-scale location data from user devices is a critical input to providing relevant, localised results. It indicated its belief that Google has unique advantages in this area, due to the location data that it receives from the Android operating system and the location data it receives when users access Google Search or other apps like Google Maps/Waze. As noted above, Google Search accounts for almost all of the mobile search sector in the UK (97%).
3.72 We consider that limited access to consumer location data may limit the ability of search engines other than Google to return relevant results to local queries. We would welcome further submissions on this point.
3.73 Some parties highlighted broader economies of scale in search, in addition to those that relate to investments in a web-index. For example, Ecosia said that developing additional content around the organic links that it syndicates from Bing is subject to clear economies of scale, because the product development effort is fixed, regardless of the number of consumers served. Google said that, 'apart from limited economies of user data scale, Search does not enjoy significant benefits from its scale in other areas'.
**Consumer access to search and default arrangements**
3.74 Consumers generally access search engines on mobile and desktop devices through web-browsers or search widgets. In many cases, mobile and desktop devices come with a default browser and widget which, in turn, feature a default search engine.
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97 Search widgets typically take the form of a rectangular search bar on the home screen of a mobile device. 98 Browsers generally allow consumers to change the initial default search engine (sometimes referred to as the primary default) through the browser settings. Within these settings, consumers may be presented with several alternative options (sometimes referred to as secondary defaults). Unless otherwise stated, we use the term 'default' to refer to the initial or primary default on a browser or device. 3.75 In their submissions to the CMA, a range of search engines indicated that defaults play an important role in influencing consumers’ usage of search engines.99
3.76 Google owns the popular web-browser Chrome, which has Google Search set as the default search engine. Google has also negotiated default agreements with Apple and with many of the largest Android mobile phone manufacturers and mobile phone networks. Google pays a share of search advertising revenues to these partners in return for Google Search occupying the default search positions on devices.
3.77 For example, Google’s agreement with Apple means that, by default, any search queries typed into the Safari explorer bar are executed by Google Search.
3.78 In relation to desktop devices, Microsoft pays Windows PC manufacturers to pre-install Microsoft web browsers which have Bing set as the default search engine.
3.79 Several pieces of evidence indicate the importance of default positions in the general search engine sector.
3.80 Firstly, we have viewed internal documents submitted by Google which suggest that at least part of the rationale for entering into default agreements is to make Google’s search advertising revenues more secure. For example, an internal document referred to search advertising revenues as being ‘exposed’ where these came from mobile devices for which Google did not have a default agreement in place.
3.81 Secondly, the high level of default payments, known as ‘traffic acquisition costs’, made by Google in particular demonstrates that it values these default positions highly. In 2018, for mobile devices alone,100 Google paid around $1.3 billion USD for default positions in respect of UK consumers. This was around 16% of Google’s total annual UK search revenues. The vast majority of these payments were to Apple. The default payments that Microsoft made to Windows PC manufacturers in the same year in respect of UK consumers were significantly lower and equated to a lower proportion of Bing’s annual UK search revenues.
3.82 Thirdly, there is positive correlation between the defaults held by search engines and the search traffic that they receive. For example, while Google is
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99 For example, Verizon Media submitted that it ‘has observed a strong correlation between default settings in browser/OS and user search behaviour’.
100 Including mobile phones and tablets. the largest search engine in the UK across mobile and desktop devices, its share of search is relatively higher in mobile, where it occupies default positions across a relatively greater proportion of the UK browser sector.
Figure 3.4: Proportion of desktop and mobile browser sectors for which Google and Bing hold default search engine positions
![Graph showing proportions of desktop and mobile browser sectors for Google, Bing, and Other]
Source: CMA Analysis of Statcounter Global Stats. Notes: UK data for June 2019. Laptops are included in desktop devices. Tablets are included in mobile devices.
3.83 As shown in Figure 3.4, Google holds default positions across a relatively larger part of the UK mobile browser sector (99%) than the UK desktop browser sector (84%). In turn, Google has a relatively higher share of supply in mobile search (97%) than it does in desktop search (86%). A similar correlation can be observed for Bing. Bing holds default positions across 16% of the UK desktop browser sector and almost none of the UK mobile browser sector. Bing’s share of supply is much higher in desktop search (11%) than in mobile search (less than 2%).
101 The shares given in this paragraph are based on Statcounter’s Global Stats for browsers. Statcounter calculates browsers’ shares of supply on the basis of page referrals, where a browser’s share is the number of pages referred through that browser as a proportion of the total number of pages referred through browsers in total. See more detail on our market outcomes analysis Appendix C. Box 3.4: Android choice screens
Following the European Commission’s Android decision in July 2018, Google announced that users would be provided with a choice screen of general search providers on all new Android phones and tablets in the European Economic Area, including the UK, where the Google Search app is pre-installed.102
The choice screen will appear during initial device setup for new devices distributed in the EEA on or after March 1, 2020. It will feature multiple search providers, including Google, and users will be required to choose one search provider from the choice screen during setup.
The effect of a user selecting a search provider from the choice screen will be to (i) set the search provider in a home screen search box to the selected provider, (ii) set the default search provider in Chrome (if installed) to the selected provider, and (iii) install the search app of the selected provider (if not already installed).
Stakeholders’ views regarding the likely effectiveness of this choice screen at improving competition are described in Appendix J.
3.84 The power of default settings is an area of behavioural economics that has been well researched and is well-evidenced across a wide range of settings, such as pension savings, medical insurance and food consumption. There is a general recognition that the presence of status quo bias means that individuals will often stick with the default choices they are presented with.
3.85 The influence of defaults in general search is likely to be underpinned by several factors. Firstly, consumers may not understand that they can change the default search engine on a device or in a browser. Secondly, they may be put-off by complexity or other hassle factors. For example, Ecosia told us that Google displays a warning notice when consumers seek to change the default search engine in Chrome or on Android devices and that this discourages consumers from following through with a switch. Thirdly, consumers may perceive little benefit to changing defaults, especially if the default search engine is the market leader (Google) and the alternatives are not well understood. Finally, when consumers do seek to change the default search engine on their browser or device, their choice may be reversed following software updates.
3.86 Several providers told us that they were unable to compete with Google for default positions due to the scale of payments required. Microsoft suggested that Google has been able to secure default placement on Android and Apple
102 Android (2019), About the choice screen, accessed on 26 November 2019. devices and that this was likely due to its ability to share large amounts of search revenues resulting from its market position in search.
3.87 Google indicated that the level of revenue share payment that it offers was a secondary consideration for mobile phone manufacturers and mobile phone networks and that it primarily competes for default positions on the basis of search quality. Apple told us that it selected Google as the default search engine on its products because that is what most consumers want.
3.88 Overall, we consider that Google’s ability to conclude default agreements across very large parts of the desktop and mobile landscape acts as a barrier to expansion for other search engines, making it more difficult for these providers to grow their user bases and improve their search quality and search monetisation rates.
3.89 In addition, we consider that there is likely to be a positive feedback loop between Google’s position as the largest and most revenue-generating search engine and its ability to acquire extensive default positions that further reinforce this position.103
Scale effects in search advertising
3.90 Search engines are also subject to cross-side network effects. Search engines become more valuable to advertisers as the number of consumer queries and clicks increases. Therefore, more popular search engines may be able to use their higher advertising revenues to fund improvements in search quality and, in turn, attract more consumers. We heard that smaller search engines running their own advertising platforms would not be able to monetise effectively unless they attract a critical mass of consumers. This may further impede their ability to grow and compete with larger incumbents. We discuss barriers to entry and expansion that relate to the advertising-side of search in Chapter 5.
Initial findings in search
3.91 Search engines play an important role for consumers in the modern world, helping them to navigate the web, and quickly and easily find useful and interesting information. Google Search in particular is well-known for providing
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103 As set out earlier in this chapter, Google’s scale in search queries and search advertising is likely to support its ability to offer higher search quality and to earn more revenues (per click) compared to its competitors. The default positions held by Google make it more difficult for alternative search engines to access users and advertisers and improve their search quality and monetisation rates. a high-quality search product and for introducing a series of search-related innovations, from PageRank to Google Maps.
3.92 The evidence that we have reviewed so far suggests that Google has significant market power in general search.
3.93 Google has had very high and stable shares of supply in both mobile and desktop search in the UK for at least the last ten years. We consider that innovation played an important role in helping Google to build its customer base in the early years of web-based search: it grew by offering a high quality product that consumers valued. However, general search is now subject to significant barriers to entry and expansion, which together limit the current and potential competitive threat faced by Google.
3.94 In order to compete effectively, search engines must be able to access consumers and deliver relevant results to a wide range of queries. The key inputs to achieving relevant results include click-and-query data and a web-index.
3.95 Web-index development is subject to economies of scale; search engines with a web-crawling business model need to make substantial server and engineering investments against a backdrop of uncertain returns.
3.96 Click-and-query data is also subject to scale effects. Google’s greater scale supports its ability to iterate and improve quicker than other search engines and maintain a lead on search relevance. By contrast, rival search engines seeking to improve their relevance face a chicken-and-egg problem; clicks help improve relevance, but relevance is needed to attract clicks.
3.97 We consider that Google’s extensive default positions across the desktop and mobile landscape act as a significant barrier to expansion for rival search engines, by limiting their ability to grow into stronger competitors over time. As the market-leader, Google is able to pay more for these default positions than other search engines. This makes it more difficult for other search engines to get their products in front of potential users and to iteratively grow their scale and improve their search quality and search monetisation.
3.98 Scale effects also apply on the advertising-side of search engine platforms. In particular, we heard that smaller search engines running their own advertising platforms would not be able to monetise effectively unless they attract a critical mass of consumers. This creates an additional barrier to expansion. We discuss this further in Chapter 5.
3.99 Syndication agreements enable search engines that lack scale in consumers and advertising to participate in the search sector. However, the most-used syndicating search engines in the UK (such as Yahoo Search, DuckDuckGo and Ecosia) rely on Bing’s organic results and appear to represent only a fringe source of competition to Google.
3.100 The combination of barriers to entry and expansion above may negatively affect consumers in several ways. Firstly, Google is likely to face weaker incentives to keep improving Google Search in the interests of consumers, compared to a scenario where it faced a stronger competitive threat. For example, Google may choose to invest less of its profits in further improving search relevance compared to a more competitive scenario. Secondly, Google may be able to collect more consumer data (or offer consumers worse terms in return for their data), compared to a scenario where it faced a stronger competitive threat from other search engines. We discuss consumer control over data in Chapter 4. Finally, consumers may be harmed indirectly through higher prices for other goods and services, if Google is able to use its market power over consumers to raise search advertising prices above competitive levels. We discuss competition in digital advertising in Chapter 5.
**Competition in social media**
3.101 As set out in Chapter 2, we use the term ‘social media’ to describe a range of online platforms that allow consumers to communicate with each other and share and discover engaging content.
3.102 In general, social media platforms have some common features such as: consumer accounts or profiles, which allow consumers to create an online persona; messaging features allowing consumers to communicate directly with others; and a ‘feed’ or homepage where consumers can engage with organic content including posts, photos and videos. In addition to featuring this organic content, most social media platforms also feature adverts, as shown below in Figure 3.5. 3.103 We consider a sample of the largest platforms that meet this description in this chapter, specifically: YouTube; Facebook.com; Snapchat; WhatsApp (owned by Facebook Inc.); Instagram (owned by Facebook Inc.); Twitter; LinkedIn; TikTok; Pinterest; Reddit; Tumblr. Of these, Facebook.com and YouTube have had by far the greatest shares of supply for at least the last five years. In this chapter we assess the competitive positions of Facebook and YouTube and the competitive constraints that each faces.
3.104 A key aspect of competition amongst social media platforms is their ability to offer consumers a different experience from the others. Social media platforms differentiate by focusing on different functions and delivering these in different ways. Relatedly, there is some debate as to whether platforms that are closely focused on either direct communication (for example, direct messaging services such as WhatsApp) or content consumption (for example, video platforms such as YouTube) should be considered social media platforms. We have included these platforms in our analysis in order to support a more extensive assessment of the positions of Facebook (which includes the Facebook.com, Instagram and WhatsApp platforms) and Google (which owns YouTube).
3.105 We first set out below how social media platforms compete, before presenting shares of supply and outlining the current state of competition in the UK’s social media sector. We then discuss potential barriers to entry and expansion. Finally, we present our initial views on the competitive constraints faced by Facebook and to what extent it may hold market power.
**Parameters of competition**
3.106 Generally, consumers access social media platforms to communicate or interact with other consumers and to view content.
3.107 Social media platforms compete for attention along the parameters listed below:
- **Innovation** – offering innovative new ways to communicate or consume content may attract consumer attention. Platforms therefore compete to offer new features that will attract consumers. Platforms may also innovate by improving on existing features.
- **Size and type of user base** – generally, a social media platform with a larger consumer base is more likely to be attractive to consumers as there is a greater chance that other consumers they want to interact with are on the platform. Advertisers are also more likely to want to advertise on platforms with a larger user base as this gives them access to a wider audience. Platforms may also choose to differentiate by focusing on attracting particular types or groups of consumers.
- **Content featured** – successful social media platforms must be able to show consumers interesting content to keep them engaged, with platforms competing to provide this content. The type of content displayed by platforms can vary. All social media platforms allow consumers to share their own content, known as ‘user generated content’. Content may be personal to consumers eg photos of themselves or their friends. Other content may be related to consumers’ interests, such as posts on sports
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106 We discuss this further later in the section within our assessment of network effects. or current events. Many platforms also feature professional content produced by third parties.
- **Ad load and quality of advertising** – social media platforms need to monetise to be successful in the long-term. Typically, they do this by displaying adverts. However, greater levels of advertising are generally disliked by consumers, so platforms typically self-enforce rules on the quantity and quality of advertising that may be displayed. Platforms may also provide consumers with controls over the advertising they are shown.
- **Price** – social media platforms generally offer services to consumers at zero monetary cost. However, some services can also be provided on a subscription basis.(^{107})
- **Privacy** – consumers may wish to control the extent their activity on platforms can be viewed by other users and external parties. Platforms may therefore compete to offer better privacy controls to consumers.(^{108})
- **Platform ‘governance’** – as social media platforms allow consumers to share content, it is possible that negative or harmful content may be uploaded and displayed. Platforms must therefore moderate content posted to prevent negative content from degrading consumers’ experience.(^{109})
3.108 As noted above, consumers access social media platforms to communicate with other consumers and experience engaging content. A wide range of platforms provide features that allow consumers to do a combination of these activities, and many offer similar functionalities as shown by Table 3.1 below:
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(^{107}) EG LinkedIn, or Friends Reunited.
(^{108}) Facebook and LinkedIn submitted that privacy is increasingly important to users. Facebook submitted that it is seeking to build a ‘privacy-focussed’ social platform, revolving around seven principles: private interactions; encryption; reducing permanence; safety; interoperability; secure data storage. LinkedIn noted that users’ ability to protect their privacy and alter settings is increasingly important.
(^{109}) Google submitted that recent innovation on YouTube has focused on identifying and removing negative content, and that it will prioritise responsibility to its users ie trust and safety. TikTok submitted that ‘ensuring a safe and positive in-app environment’ is a top priority. Verizon Media submitted in relation to Tumblr that content moderation tech and staff is a required input. Tumblr was acquired by Automattic Inc. in August 2019. Table 3.1: Social media platforms' functionalities
| Platform | Profile/Account | Curated/Personalised Feed | Friends/Contacts/Connections | Followers/Subscribers | Photo Sharing | Video Sharing | Comments | Messaging | |-------------------|-----------------|---------------------------|-----------------------------|-----------------------|---------------|---------------|----------|-----------| | YouTube | ✓ | ✓ | | | | | | | | Facebook.com | ✓ | ✓ | ✓ | ✓ | | | | | | Snapchat | ✓ | ✓ | | | | | | | | WhatsApp | ✓ | ✓ | | | | | | | | Instagram | ✓ | ✓ | | | | | | | | Twitter | ✓ | ✓ | | | | | | | | LinkedIn | ✓ | ✓ | | | | | | | | TikTok | ✓ | ✓ | | | | | | | | Pinterest | ✓ | ✓ | | | | | | | | Reddit | ✓ | ✓ | | | | | | | | Tumblr | ✓ | ✓ | | | | | | |
Source: Adapted from Ofcom (2019), Online Nation.
- Available on iOS only
3.109 Social media platforms sometimes also offer consumers features that allow them to interact with the services of other social media platforms, through ‘open source APIs’. We discuss these features further in the ‘Barriers to entry and expansion’ section below.
3.110 While they have similar broad functionalities, as shown by Table 3.1, social media platforms are differentiated in some important ways. An important aspect of platforms’ differentiation appears to be the extent to which they emphasise promoting communication between their users as opposed to the consumption of content:
- Snapchat, a more recent entrant, is an example of a communication-focussed platform. Snapchat emphasises communication amongst close friends, through visual rather than text-based messages. See more information in Box 3.5.
- Content-focused platforms include TikTok and Pinterest. TikTok allows consumers to create and share content in the form videos of up to 15 seconds.(^{110}) Pinterest offers features allowing for consumer communication, but as a visual ‘discovery tool’ is more commonly used for its content offerings.
- Facebook.com offers a range of services across the communication-content spectrum, from its communication focused ‘Messenger’ product to the more content-oriented ‘Facebook Watch’. Facebook-owned Instagram is primarily used by consumers for viewing and sharing visual content.
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(^{110}) Slate (2018), A guide to TikTok for anyone who isn’t a teen, accessed 03/12/2019. Facebook-owned WhatsApp is generally used for private communication between (groups of) consumers. Therefore, Facebook offers a broad spectrum of communication and content-based differentiation through multiple platforms.
3.111 As well as positioning themselves differently with respect to a balance of communication and content, social media platforms often also differentiate on the basis of one or more of the characteristics described earlier in the chapter. For example:
- LinkedIn is positioned as a social media platform for consumers’ professional networks. In this respect, LinkedIn has differentiated itself by focussing on a particular type of consumer.
- Pinterest is particularly popular with consumers seeking to experience content relating to specific interests, including food and drink, travel, style and beauty, and fitness.
- Snapchat’s ephemeral features mean that it is generally considered a more ‘private’ platform than its competitors, encouraging its users to present themselves more authentically.
- Twitter originally differentiated itself by limiting the length of its users’ posts, with consumers only being able to make text posts of 140 characters or less.111
3.112 Consistent with social media platforms’ differentiated strategies, consumers access different platforms for different reasons. For example, a platform that is oriented more towards communication may be more commonly accessed by consumers to have conversations with friends than a platform oriented more towards content. Social media platforms compete more closely (on the consumer side) if they are generally accessed by consumers for similar reasons. Facebook’s platforms will therefore likely face the greatest constraint from platforms accessed by consumers for broadly similar reasons.
Box 3.5: Recent entrants
In the last ten years only Instagram and Snapchat have entered the social media sector and grown to account for a share of more than 5% of consumer time spent on social media platforms in the UK. Both entered by offering consumers differentiated experiences and features:
111 BBC (2016), Twitter axes Vine video service, accessed 02/12/2019. • **Instagram** began as a photo sharing app in 2010 and differentiated itself to consumers through its emphasis on visual content. Though Instagram has the second largest consumer base it is not a competitive threat to Facebook.com, having been acquired by Facebook Inc. in 2012. As well as growing its user base, Instagram has been successfully monetising its services. However, it is unclear whether Instagram would have been as successful in monetising without Facebook’s wider resources. Facebook told us that it has experienced economies of scope resulting from Instagram using Facebook.com’s advertising infrastructure, but that these do not serve as a barrier to entry.
• **Snapchat** entered in 2011 with a then-unique offering that allowed consumers to send contacts photos that would disappear after a specified period of time. Snapchat has been successful in generating consumer engagement and is particularly popular with younger demographics. However, Snapchat has been less successful than Instagram at monetising its services, despite achieving comparable levels of consumer engagement in terms of consumer time spent on the platforms.(^{112}) This is suggestive of Facebook’s wider resources having contributed to Instagram’s success.
We note that both Instagram and Snapchat remain significantly smaller than Facebook.com.
**Shares of supply**
3.113 Facebook.com and YouTube (owned by Google) are by far the largest social media platforms in the UK, both in terms of the number of consumers accessing them and the amount of time that consumers spend on them.
3.114 As shown by Figure 3.6, both Facebook.com and YouTube seem to be consistently growing their user bases. Facebook.com has an audience of over 42 million users in the UK, accounting for 83% of the British online population.(^{113}) YouTube is even larger, with an audience of almost 46 million users accounting for 91%. In contrast, Instagram with the next largest audience, reaches only 56%.
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(^{112}) See Figure 3.8.
(^{113}) As of June 2019. 3.115 Facebook.com and Google-owned YouTube also account for the greatest share of consumer time spent on social media platforms in the UK. As illustrated by Figure 3.7, both have had consistently high shares for the entire period for which we have data. 3.116 As above, YouTube is a content-focused platform and appears to compete more closely with providers of audio-visual content (including music streaming platforms and video streaming platforms) rather than Facebook’s social media platforms. We have therefore also calculated shares of supply based on consumer time spent on the platforms, excluding YouTube.
3.117 When YouTube is excluded, Figure 3.8 shows that Facebook.com had a share of 58% of time spent on social media platforms in the most recent period. Therefore Facebook.com has by far the greatest share of consumer attention amongst the social media platforms we considered. Snapchat, a recent entrant that holds the next greatest share, had only 13% of time spent. Facebook.com’s share has declined over the last five years, having fallen from 80% in July 2015. However, we note that the number of users accessing Facebook.com has increased throughout the period and the absolute time spent by users on Facebook.com has increased in the last two years. Combined, Facebook’s platforms (Facebook.com, Instagram and WhatsApp) had a share of 75% as of June 2019.114
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114 Comscore MMX MP, Total Digital Audience, Desktop aged 6+, Mobile aged 13+, June 2019, UK. 3.118 Consumers can choose to access multiple social media platforms over a period of time. We analysed Comscore’s ‘cross-visiting’ data to assess the extent to which consumers access multiple social media platforms. A consumer is described as ‘cross-visiting’ between two platforms if they access both of the specified platforms within a calendar month. However, the cross-visiting data does not allow us to assess consumers’ intensity of use. To be counted as a consumer that has cross-visited, an individual must simply access both platforms once within the month.115
3.119 The majority of every social media platform’s audience ‘cross-visits’ with Facebook.com. For example, as shown by Figure 3.9 below, 97% of Instagram’s audience cross-visited with Facebook.com and 95% of Snapchat’s audience cross-visited with Facebook.com. In contrast, 66% of Facebook.com’s audience cross-visited with Instagram and 68% cross-visited with Snapchat. The lowest proportion of a social media platform’s audience cross-visiting with Facebook.com was TikTok at 70%, demonstrating that each social media platform we analysed is generally used in conjunction with Facebook.com.
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115 See Appendix C for further detail on our market outcomes analysis. Figure 3.9: Consumer cross-visiting behaviour amongst Facebook, Instagram and Snapchat
Source: Comscore MMX MP, Total Digital Population, Desktop aged 6+, Mobile aged 13+, June 2019, UK \*Including Messenger.
**Competition between Facebook and existing social media platforms**
3.120 Since Facebook and YouTube account for a significantly larger portion of time spent online than other social media platforms (as shown in Figure 3.7 above), we have considered first the degree of competition between them, and second the extent to which other platforms appear to act as a competitive constraint on Facebook.
**Competition between Facebook and YouTube**
3.121 We note that of the platforms we considered, consumers seem to access YouTube for particularly distinctive reasons. As a result, YouTube does not currently appear to compete closely with Facebook’s platforms, despite its comparable reach and levels of consumer engagement. We further note that:
- YouTube is heavily oriented towards content, rather than communication. Consistent with this, consumers tend to view YouTube as a platform for video consumption, with only a minority emphasising its communication features.(^{116}) Internal documents submitted by Google indicate that the most common reasons consumers in the UK access YouTube are for entertainment and to view ‘how-to’ videos on the platform.(^{117})
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(^{116}) Ofcom (2019), *Online Nation*, page 133.
(^{117}) This is consistent with Ofcom (2019), *Online Nation*, which found music videos and how-to vids to be most the popular categories of video amongst UK consumers watching online video content. • ‘User generated content’ is a key feature of social media platforms, including YouTube. However, YouTube also provides access to a wider range of content, including through its paid-for ‘premium’ music and video streaming services. Such services are not available on the other social media platforms in our sample.
• Finally, Google told us that YouTube does not have a social graph. Social graphs give social media platforms the ability to identify connections between consumers. Therefore, YouTube cannot recommend videos based on consumers’ ‘friends’ viewing behaviour or recommend content users may like based on friends’ activity, as done by other social media platforms such as Facebook.com and Instagram.
3.122 As a result of these differentiating characteristics, YouTube seems to face closer competition from other providers of audio-visual content than from social media platforms.118 Consistent with this, we have received evidence indicating that YouTube competes with firms outside of the social media sector, both from these firms’ submissions and from Google’s internal documents.
3.123 Additionally, we have received some evidence demonstrating that social media platforms seem to view YouTube as a competitor in its capacity as a provider of content rather than as a provider of the wider communication services offered by social media platforms. Again, this suggests that YouTube may not currently be a close competitor to Facebook, or to the other social media platforms we have considered as part of this Study.
Competition between Facebook and other social media platforms
3.124 Aside from YouTube, the next two largest platforms to Facebook in terms of number of users are Facebook-owned WhatsApp and Instagram. These platforms are therefore not a competitive threat to Facebook.com.
3.125 None of the other social platforms currently offer a comparable portfolio of services to Facebook.com. Instead, each provides a specialised offering that competes with some aspect of Facebook’s services. For example:
• Snapchat is used as a platform for interacting with close friends and therefore seems to compete most closely with Facebook.com’s Messenger product that allows consumers to communicate privately.
118 YouTube may compete with social media platforms to the extent that they provide such content. • Reddit is a ‘network of communities’ and in this respect appears to compete most closely with Facebook.com’s ‘Group’ features.
• TikTok is used to create and share short form videos that are set to music. It seems to compete most closely with Facebook.com’s ‘Facebook Watch’ offering.
3.126 The high proportions of other platforms’ audiences that cross-visit with Facebook.com, and the substantively lower proportion of Facebook’s audience that cross-visits with each of the other platforms, seem consistent with this. Other platforms may be used by sub-sets of users, but nearly always in combination with Facebook.com.
3.127 We consider that the wider breadth of services offered by Facebook.com and the scale of its consumer network mean that it can fulfil a wider variety of consumer needs compared to other social media platforms.
3.128 The wider ‘family’ of Facebook platforms reinforces Facebook’s competitive position, as consumers may choose to ‘switch away’ from Facebook.com but remain within the Facebook ‘ecosystem’ of apps. Facebook’s ‘family’ of apps also gives it a very strong competitive position with respect to certain consumer uses of social media platforms. For example, both WhatsApp and Facebook Messenger are private messaging platforms.
3.129 While the Facebook.com platform has a relatively lower share of time spent for younger consumers, 18-24 year olds still spend the greatest proportion of their time on social media platforms within the Facebook ‘ecosystem’.120
3.130 Overall, Facebook appears to have significant market power. Facebook.com is a ‘must have’ platform for social media users. While other platforms have been able to enter the market and grow their user base, users of these platforms almost all still use Facebook.com. While Facebook.com’s overall share of time spent has been declining slowly over time, it remains significantly the largest player, and its number of active users has not declined. Facebook’s platforms (Facebook.com, Instagram and WhatsApp) had a combined share of 75% of time spent on social media platforms as of June 2019.121
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119 Where ‘switching’ describes reducing the proportion of time spent on the platform. 120 See Appendix C for social media platforms’ shares amongst consumers of different age groups. 121 Comscore MMX MP, Total Digital Audience, Desktop aged 6+, Mobile aged 13+, June 2019, UK. Barriers to entry and expansion in social media
3.131 Having considered the current state of competition in the social media sector, we now discuss potential barriers to entry and expansion that may prevent other social media platforms from acting as an effective constraint on Facebook.
Network effects
3.132 Social media platforms are characterised by same-side and cross-side network effects. Here we discuss how social media platforms are affected by network effects and the extent to which these impose a barrier to entry and expansion for a platform seeking to compete with Facebook.
3.133 All of the social media platforms we contacted as part of the study agreed that network effects are important to their services in some way. However, the nature and importance of network effects appears to vary between different platforms. This seems to be influenced by the platforms’ differentiated strategies and the purpose for which consumers access their services.
Same-side network effects
3.134 Social media platforms, particularly those focussing on communication, will become more valuable to consumers if other consumers they want to interact with join the platform. Consumers access social media platforms for different reasons and need to interact with different (groups of) people for each of these reasons. For example:
- Snapchat is primarily used to communicate with close friends and family members. Snapchat’s services will become more valuable to a given consumer if more of their close friends join the platform. In this case, the network effects are ‘identity-based’ because Snapchat only becomes more valuable to the consumer if specific people join the platform. As people tend to only have a few close friends, each consumer’s network is small, but every connection is highly valued.
- LinkedIn’s services are used to interact with professional networks. Consumers will likely have a larger professional network than network of close friends. To offer a valuable service, LinkedIn must be able to offer its users access to this wider network. Consumers may value the presence of specific individuals, but generally value that their wider industry is represented on the platform. • YouTube is used to consume and share video content. Consumers do not seem to access YouTube to interact with people they know personally before watching their videos.\\textsuperscript{122} Therefore, these same-side network effects do not appear to be strongly ‘identity based’. Instead, the presence of other consumers may be valued to the extent that they contribute either content or reactions.
3.135 Strong same-side network effects lead to feedback loops. More users joining the platform leads to still more users joining, whilst users leaving the platform leads to still more users leaving. See Box 3.6 for an example of this.
**Box 3.6: Myspace**
Myspace launched in 2004 and was once the largest social media platform. However, in 2008 Myspace was overtaken by Facebook.com. Myspace then quickly lost its user base, with numbers falling to 73 million users by January 2011 and then to 63 million users in February 2011.\\textsuperscript{123} This rapid and increasing decline in users shows the power of the network effects affecting social media platforms.
Facebook told us that Myspace lost a significant proportion of users due to its focus on maximising short-term revenue through advertising rather than delivering long term value to its users. Facebook has argued that this shows that the largest social media platforms’ competitive positions are not unassailable.
However, we consider that Myspace’s position in the early 2000s was materially different to Facebook’s current position:
• Facebook.com’s current scale of two billion global monthly active users is far greater than Myspace’s peak of 100 million global monthly active users. This implies that Facebook.com is currently much further away from a ‘tipping point’ in its user base than Myspace was at its prime. • it is not clear that the market had fully ‘tipped’ to Myspace in the first place. Myspace was the most popular platform for only a couple of years. Facebook.com has been the most popular social media platform for over a decade.\\textsuperscript{124}
3.136 Strong same-side network effects can also act as a barrier to entry and expansion by restricting platforms’ ability to grow their consumer networks.
3.137 If a new entrant does not have a suitable consumer network, consumers may not be able to use its services for the same reasons they access the incumbent’s services. Individual consumers may therefore be unable to
\\textsuperscript{122} Ofcom (2019), *Online Nation*, page 152. \\textsuperscript{123} The Telegraph (2011), *MySpace loses 10 million users in a month*, accessed 28.11.19. \\textsuperscript{124} Furman Review (2019), *Unlocking digital competition*, paragraphs 1.101-1.102. replace the services they receive from large incumbents such as Facebook.com by switching to the new entrant. In particular:
- consumers may be unable to communicate with a comparable network by accessing the new platform; and
- consumers may not have access to a similarly extensive or high-quality body of ‘user-generated-content’ by accessing the new platform.
3.138 In this way, consumers may be ‘locked in’ to incumbent platforms. Absent a mechanism facilitating switching amongst groups of consumers or the capability to interact with consumers active on a different social media platform, this may restrict new entrants’ ability to grow their consumer networks.
3.139 Platforms’ submissions outlined some strategies that new entrants could use to try to facilitate switching amongst groups of consumers:
- **Importing contacts from user devices** – this helps consumers find friends on the platform or invite friends to the platform.(^{125}) However, this strategy seems limited to platforms that seek to enable consumers to interact with close friends. Consumers are unlikely to have access to wider networks on their devices.
- **Entering from adjacent markets** – where the entrant has already developed a digital audience. In this case, the platform will have access to a network of potential users upon entry. However, the new platform will still lack a social graph. If the entrant has a large enough digital audience in the adjacent market, all of the people that a given consumer wants to interact with will be present on the new platform. However, they will not be linked as ‘friends’ or ‘connections’ on the platform. Instead, consumers will have to develop this network of connections themselves over time. See Box 3.7 for a discussion of Google+, one of the most prominent examples of this strategy.
- **‘Social graph’ APIs** – these can give new platforms access to incumbents’ social graph data. For example, an API could allow users to export lists of ‘friends’ from an existing platform and invite them to join the new platform. In this way, a new entrant could gain access potential users and their valued networks.(^{126})
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(^{125}) For example, by finding friends through their phone numbers or their email addresses.
(^{126}) However, these users must decide to switch to the new platform. Box 3.7: Google+
In 2011, Google tried to launch its own social media platform ‘Google +’ as a direct competitor to Facebook.com. Google+ offered its users a range of features including: video chat; photo sharing; ‘circles’, a feature for connecting with social groups; a ‘+1’ feature similar to Facebook’s ‘like’ button; and a ‘check-in’ feature allowing users to log their location.
However, ultimately Google+ failed to engage users, with the vast majority of consumers’ sessions on Google+ lasting less than five seconds. Google told us that its users ‘spent many more minutes on Facebook than they did logged into Google+’.
The failure of Google+ to successfully enter the social media sector is particularly notable given the extensive resource that was available to it through Google. Specifically, we consider that Google+’s failure:
- demonstrates that access to a wide network of potential users and consumer data, as held by Google, is not determinative of successful entry to the social media sector. and
- indicates that entry with a service similar to that provided by Facebook.com is very difficult indeed.
3.140 In the absence of a mechanism facilitating switching amongst groups of consumers, new entrants attract consumers by providing a sufficiently differentiated proposition. Consistent with this, platforms told us that the most important ‘input’ to a new social media platform is a compelling idea. This may persuade consumers to switch despite the new service having a more limited consumer base, thereby mitigating network effects as a barrier to entry. However, there also seem to be some limitations to this strategy:
- entering by providing consumers with a specialised service may limit the scale of the consumer base that new entrants can develop in the long-term; and
- existing platforms, such as Facebook.com, may experience an incumbency advantage through their ability to copy the innovations of new entrants and deliver those new services to a larger consumer audience. As a result of their pre-existing audiences, they are likely to be better able to monetise the new innovation than the entrant. In turn, this may reduce incentives for new entrants to innovate.
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127 Google told us in relation to YouTube that ‘Offering a popular and innovative service that attracts users is more important than a pre-existing user database’. 128 A possible example of this dynamic is when Facebook introduced a feature similar to Snapchat’s ‘Stories’ feature on its platforms. 3.141 In markets characterised by network effects, consumer multi-homing can increase the competitive pressure faced by incumbents such as Facebook.com and prevent the market from ‘tipping’.
3.142 Consumers do appear to ‘cross-visit’ across multiple social media platforms. However, this does not in itself demonstrate that multi-homing behaviour acts as a genuine competitive constraint on Facebook, ie that the different platforms accessed are substitutes, drawing time and attention away from Facebook. Based on the evidence gathered regarding social media platforms’ highly differentiated strategies and the variety of consumer purposes for which they can be used, these other platforms do not appear to act as close substitutes to Facebook. In turn, the consumer cross-visiting behaviour we described previously appears to impose more limited competitive pressure on Facebook.com, compared to a scenario where the other social platforms were close substitutes to Facebook.
3.143 There also appear to be some barriers to consumer multi-homing in the social media sector, especially when it comes to multi-homing between platforms that are relatively closer substitutes. Examples include:
- The ‘opportunity cost’ to consumers of the time they spend accessing one platform rather than another.
- The process of setting up an account on a new platform.
- That social media platforms are not interoperable. Friends on one platform cannot be contacted from another platform, nor can the content from one platform be consumed on another platform. As a result, consumers have less of an incentive to ‘multi-home’ with smaller platforms.129
3.144 We have heard that features sometimes offered by social media platforms may help to address these barriers and encourage consumer multi-homing. These include:
- **Single sign-in tools** – these allow consumers to sign-in to multiple platforms using the same username and password.130 By removing the need for consumers to remember multiple usernames/passwords, the service encourages consumers to access multiple platforms. However, we also heard some concerns relating to these services:
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129 Furman Review (2019), Unlocking digital competition, paragraphs 1.84-1.88. 130 These are most commonly provided by Google and Facebook ie Google and Facebook offer services whereby consumers may sign-in to other platforms using their Google or Facebook username and password. Access to data about the platform receiving the sign-in tools may be given to the platform providing the sign-in tools. Submissions explained that this may allow the provider to replicate the service of the platform being provided with the sign-in tools. This may reduce the incentives of the platform receiving the single sign-in service to innovate.
The service may create a dependency upon the provider of the sign-in tool, which often operates a rival social media platform. The service’s discontinuation may potentially lead to a decline in consumer engagement for the platform receiving the service.
- **Consumer ‘cross-posting’** – in some cases, consumers can post content from one social media platform to a different social media platform using open APIs. Competitors to Facebook told us that this feature encourages consumers to create and share content on platforms where they do not have developed networks, as it allows them to share the content with networks outside of the platform. In this way, cross-posting mitigates the barriers to consumer multi-homing imposed by platforms’ lack of interoperability. Cross-posting may also increase the quantity and diversity of content available on social media platforms, making them more attractive to consumers. We discuss potential issues with current cross posting functionality below.
3.145 Same-side network effects reinforce Facebook.com’s competitive position. As previously noted, Facebook.com’s consumer base is significantly larger than that of its competitors. As of June 2019, its audience was roughly 1.7 times larger than Twitter’s, the next largest social media platform not owned by Facebook. Internal documents note that the breadth of Facebook.com’s user base is a key differentiator of the platform. As noted by a Facebook internal document, Facebook.com is the ‘network for everyone you know’.
3.146 The breadth of Facebook.com’s user base and its highly developed social graph, combined with the comparatively more limited consumer networks of all the other social media platforms, mean that consumers may be unable to use other social media platforms for the same reasons they access Facebook.com. As a result, consumers may be unable to replace Facebook.com’s services with another social media platform.
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131 One social media platform submitted that this functionality allows users to increase their reach and helps drive traffic to their platform. Another submitted that this ability allows users to efficiently reach more people and also overcomes or shares the benefits of network effects.
132 Excluding YouTube. YouTube lacks a social graph and appears to compete with Facebook with respect to the provision of content, rather than providing services to communicate with a user’s network.
133 Top four platforms ranked in order of user base are: Facebook.com; Instagram; WhatsApp; and Twitter. Cross-side network effects
3.147 The value of a social media platform to its users may also depend on the number of customers active on another ‘side’ of the platform:
- **Content providers** – social media platforms often feature content created by third-party providers. This content is often displayed alongside the ‘user generated content’ and is typically of a similar format. Content providers can include businesses, celebrities or users that acquired mass audiences on the platform.(^{134}) Featuring greater quantities of high-quality content may make a platform more valuable to users.
- **Third-party developers** – platforms may allow third-party developers to develop apps, such as games, for their platform. This increases the features available on the platform and can make it more valuable to users.(^{135})
3.148 Content providers and third-party developers value social media platforms more if they can provide access to a wider audience of consumers. However, content also helps to attract consumers. The platforms we contacted explained that content is a ‘key input’ for their services and vital to gaining consumer engagement. There are therefore cross-side network effects acting between third-party content providers and consumers which may act as a barrier to entry and expansion.
3.149 The extent to which the cross-side network effects described above affect social media platforms varies, with some platforms submitting that they are not important to their services.(^{136}) Facebook.com features games and apps developed by third parties, facilitated by the Facebook Platform for Consumer Apps. This allows third-party content providers to ‘build and create valuable content for Facebook’s users’, thereby enriching users’ experience on the platform.
3.150 As Facebook is able to offer its users access to this wider range of content this may impose even greater barriers to any platform seeking to compete directly with its services.
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(^{134}) These users are subsequently treated as content providers by the platform eg YouTube’s revenue sharing arrangements.
(^{135}) Social media platforms also exhibit cross-side network effects with respect to users and advertisers.
(^{136}) LinkedIn submitted that ‘the social networking experience on LinkedIn does not depend on applications or content being developed specifically for LinkedIn’. API access and interoperability
3.151 As noted previously, social media platforms sometimes ‘interoperate’ or allow their users to interact with the services of other social media platforms. This is achieved through the use of open source APIs. Facebook told us that it operates in a largely open source environment, and that this has ‘unlocked innovation and enriched users’ online experiences significantly’.
3.152 As well as improving consumers’ experiences by increasing the range of services they can access through social media platforms, greater API access seems to promote competition by mitigating the barriers imposed by network effects. Specifically, as discussed earlier, cross-posting and social graph APIs may encourage consumers to access multiple platforms.
3.153 However, the importance of these APIs in mitigating the effects of network effects may create a dependency between the platform receiving the services, and the platform providing access.
3.154 This dependency may also allow incumbents to worsen smaller competitors’ offerings to consumers. By either degrading the functionalities enabled by the APIs or removing the service entirely, large incumbents may be able to affect the level of competition that they face. As shown by the examples below, this may be done on a targeted basis or as part of a general policy change on the part of the platform providing access. Facebook refers to such changes as ‘deprecation’ of the APIs.137
3.155 For example, in 2013 Twitter acquired a video sharing platform called Vine. Prior to the acquisition Vine users were able to find friends they already knew on Facebook.com through Facebook’s ‘Find Contacts’ API. However, following its acquisition by Twitter, Facebook disallowed Vine’s access to this API. In doing so, Facebook was able to degrade consumers’ experience of Vine and reduce the platform’s competitive threat. Vine was discontinued by Twitter in 2016.138
3.156 Additionally, the functionalities enabled by APIs may not be reciprocal. For example, prior to 2018, Facebook.com featured a ‘Publish Actions’ API which allowed consumers to post content onto Facebook.com from other social media platforms. However, consumers were unable to post content from Facebook.com onto other social media platforms. This asymmetry in consumers’ cross-posting abilities may favour Facebook.com by leading to
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137 For example: New Facebook Platform Product Changes and Policy Updates, Facebook (2018), accessed 02/12/2019. 138 Twitter axes Vine video service, BBC (2016), accessed 02/12/2019. greater and more varied content being shared on Facebook.com compared to the social media platforms from which content is shared.\\textsuperscript{139}
3.157 Cross-posting capabilities between Facebook.com and other social media platforms remain asymmetric, as shown by Figure 3.10.
**Figure 3.10: Current Facebook.com cross-posting functionality**
Source: The CMA has created this image by taking a screenshot of the Facebook platform for the background and adding logos of other social media platforms, along with ticks or crosses based on whether cross-posting functionalities are possible from and onto the Facebook platform.
**Access to data for personalisation and targeting**
3.158 Successful social media platforms feature a vast quantity of content that may be shown to users. To prevent congestion due to a large amount of content and maintain user attention, platforms must be able to determine the most relevant content for a given user and help users to locate this content quickly, which they do using algorithms. For example, platforms may: select and rank the content showed in each users’ feed; make recommendations as to what
\\textsuperscript{139} This API has since been deprecated by Facebook. See Appendix K for potential interventions for this issue. content users may wish to consume next; or suggest new connections they may wish to make.\\textsuperscript{140,141} Platforms also use data to target advertising.
3.159 The vast majority of this data held about consumers’ likely demographic attributes, preferences and behaviours is sourced from their interactions with the platforms. It includes data submitted by users, data on users’ interaction with a platform, and inferred data. See Appendix E for further discussion of the types of data used.
3.160 As well as access to content, access to data used for targeted advertising and personalisation can act as a barrier to entry and expansion:
- Social media platforms that offer greater targeting capabilities are more valuable to advertisers. Platforms with greater quantities of consumer data are better able to target advertising and may be better able to successfully monetise their services.
- Consumer data is an important input to social media platforms’ personalisation functionalities. By providing better recommendation and personalisation functionalities, platforms may become more appealing to consumers and lead them to spend more time on the platform. However, as demonstrated by the case studies described earlier in this chapter, limited access to data does not seem prohibitive of entry. Additionally, access to data does not appear to be determinative of successful entry.
\\textit{Economies of scale}
3.161 Social media platforms seem to experience some economies of scale, that may make it difficult for new entrants to compete. These occur on both advertiser ‘sides’ of the platform.
3.162 On the consumer side, these occur because platforms must offer basic features and functionality irrespective of the number of users on the platform. However, some costs to a social media platform increase with the number of users accessing it, as platforms must invest in infrastructure to support a greater number of users. Google submitted that YouTube has not experienced substantive economies of scale. Facebook submitted that it has experienced limited economies of scale and only in the early years of development, as costs per user have increased along with user base.
\\textsuperscript{140} Some platforms submitted that device and/or connection data may also be used to personalise content.
\\textsuperscript{141} Certain functionalities offered by social media platforms may require further data, eg Snapchat’s ‘geo-filters’. 3.163 On the advertiser side, these occur because of the role that consumer data plays in targeted advertising and the cross-side network effects between advertisers and consumers. We have received evidence showing that platforms need to achieve a ‘critical mass’ of consumers in order to monetise sustainably. These issues are discussed further in Chapter 5.
**Initial findings in social media**
3.164 Social media platforms offer consumers a range of differentiated experiences. However, in general, consumers access social media platforms to communicate with each other and view content.
3.165 The evidence we have gathered so far suggests Facebook has significant market power in social media. None of the platforms currently active in the UK’s social media sector appear to impose a strong competitive constraint on Facebook.com. No existing social media platform offers a comparable range of consumer services, has access to as extensive a consumer network or has a similarly well-developed social graph. Consumers are unlikely to be able to replace Facebook.com’s services entirely with another platform’s unless that platform can offer access to each of these components.
3.166 Additionally, entry does not appear to act as a meaningful threat to Facebook’s competitive position. Network effects act as a strong barrier to entry and expansion in the social media sector, because consumers value the presence of other consumers and an array of relevant, high-quality content. A platform that lacks these may struggle to attract consumers.
3.167 Recent entrants appear to have responded to the barriers imposed by network effects by inducing consumers to multi-home with differentiated offerings. However, the nature of this strategy implies that the constraint placed on Facebook by such an entrant will be limited. In particular, we note that there has been no successful entry in the last 10 years by a platform competing directly with a comparable set of services to those provided by Facebook.com, with Google’s attempt having failed.
3.168 We have also seen some evidence indicating that, even with a differentiated business model, new entrants may struggle to monetise their services. To do so successfully, platforms seem to require a ‘critical mass’ of users. Additionally, we note that Instagram has been far more successful than Snapchat in monetising, despite similar levels of consumer engagement. This suggests Instagram’s access to Facebook’s wider resources may have contributed to its success.
3.169 The Facebook ‘family’ of apps further insulates Facebook.com from competitive pressure. We have also received some evidence demonstrating that new entrants may, in some circumstances, be reliant on Facebook. This appears to primarily occur through the provision of open source APIs eg providing access to the Facebook social graph, or cross-posting capabilities. By permitting and then restricting other social media platforms’ access to these APIs, Facebook may be able to affect the competitive constraints it faces.
3.170 In combination, we consider that the factors above limit the competitive pressure on Facebook. This may have several negative impacts for consumers. Firstly, Facebook may have weaker incentives to innovate and to develop its platforms in ways that are valued by consumers, compared to a more competitive scenario. In addition, Facebook may be able to extract more consumer data, or worsen the terms that it offers consumers for this data. We discuss consumer control over data in Chapter 4. Finally, consumers may be harmed indirectly through higher prices for other goods and services, if Facebook is able to use its market power over consumers to raise the prices its charges to display advertisers above competitive levels. We discuss competition in digital advertising in Chapter 5. 4. Consumer control over data
- Online platforms offer a range of services that are valued by consumers for no monetary cost in return for their attention and data.
- It is important that consumers can make an informed decision over whether to accept the terms of this exchange and that they receive the right level of protection where they are not able to engage. Equally, it is important that consumers have control over the use of their data, so that they can decide whether to provide or deny access and share it with others if they wish.
- In surveys, most consumers say they place value on their ability to control access to their data, and only a minority are happy to share their data in return for relevant adverts. However, we found that engagement with platforms’ privacy policies and privacy controls is generally very low. There are several reasons for this.
- First, there is in some cases a lack of choice: social media platforms such as Facebook do not allow consumers to turn off personalised advertising.
- Second, where choice does exist, it can be difficult to exercise due to a strong tendency to accept default settings presented by platforms. For example, most platforms we assessed served consumers with personalised advertising by default, and we found that engaging with privacy settings was complicated, particularly for social media platforms like Facebook.
- Terms and conditions are also long and complex. We have found that a consumer may need to read 10,000 words before signing up to a service if they are to understand how their data will be used, yet the average visit to the Google privacy page was just 47 seconds.
- Effective regulation that puts consumers in control of their own data is essential in the modern digital economy. However, we have heard concerns that aspects of data protection regulation risk creating competition concerns by unduly favouring the business model of large, vertically-integrated platforms over smaller, non-vertically-integrated publishers. We are working constructively with the ICO to consider how to address these concerns.
Introduction
4.1 Many consumers use a range of online platforms every day. They may use Google to find a local restaurant, access Facebook to see what their friends are doing and buy a book on Amazon. When they use these services, platforms collect and use information about them to serve personalised advertising. In return, these services are typically free to use and allow them to do a range of things such as search the web, connect with friends, share content and receive more relevant advertising. 4.2 While platforms provide services that are free to consumers when they use them, they also generate very large revenues – and are extremely profitable. This is because people pay for them indirectly when they buy goods or services from the businesses who pay to advertise on the platforms.
4.3 This is not a new phenomenon. Many newspapers have been provided free to readers for some time, covering their costs by the advertising revenues. While, other things being equal, some people might prefer these services to be ad-free, the truth is that without ads, people would either have to pay directly for the services – or the services would disappear. What is new, however, is the ability of digital platforms to collect and use personal data. This allows them to target advertisements – or indeed provide other services – on the basis of what they know about the particular circumstances of the individual consumer.
4.4 We recognise that, if consumers want high quality content and services without paying money directly for them, platforms need to be able to generate enough revenue to fund them. However, it is important that consumers can make an informed decision over whether to accept the terms of this exchange offered by platforms and that they receive the right level of protection where they are not able to engage. Equally, it is important that consumers have control over the use of their data, so that they can decide whether to provide or deny access and share it with others if they wish. Getting this balance right can both protect consumers and benefit them by increasing competition between platforms. Finally, it is important that the design of regulation in this area is mindful of competition effects, and that in particular regulation is not designed in such a way as to entrench further the market power of incumbents.
4.5 The regulation of data protection and privacy in the EU is the responsibility of national data protection authorities (DPAs) such as the ICO in the UK and the DPC in the Republic of Ireland. However, competition and consumer authorities are increasingly carrying out work in this area, reflecting the close links between consumer control over data and competition and consumer concerns more generally. We have worked closely with the ICO during the course of this study.
4.6 It is within this complex landscape that we have sought to understand how consumers’ data is used, the controls they have and how they use them, and the impact of both consumer behaviour and data protection law on
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142 For example the Bundeskartellamt prohibition decision B6-22/16 Facebook Inc. and others dated 15 February 2019 (currently under appeal), and the decision of the Autorità Garante della Concorrenza e del Mercato, dated 29/11/2018, against Facebook for violations of the Consumer Code. competition in the markets within the scope of the study. This chapter discusses:
- the role of data, how it is collected and its value to publishers, advertisers and platforms;
- the importance of data protection legislation;
- consumers’ attitudes to data collection;
- the controls that consumers have over the collection and use of their data for personalised advertising;
- how consumers engage with the information they are presented with, the choices they make and the platforms’ use of default settings; and
- barriers to effective engagement by consumers.
4.7 We conclude with a summary of our initial findings on this theme.
The role of data in digital advertising and consumer services
4.8 In order to understand the extent of any problems regarding consumers’ control of their data, we have first sought to understand the role of data for online platforms funded by digital advertising. The data is used to provide services to consumers as well as digital advertising services to advertisers. In the following sections, we have assessed what data is collected, how it is collected, and why it is collected.
What data is collected?
4.9 Data is collected online by a wide range of market participants, including platforms, advertisers, publishers and data brokers. This data can include a consumer’s behaviour online such as their search history, what they click on, the content they create and share, and their location through device information.
4.10 The data collection by some platforms can be extensive. For example, Google collects consumer information such as name, contact details, consumer name and passwords provided voluntarily by consumers when creating a Google account. It also collects information that the consumer may be unaware of, such as device and browser information, IP addresses, operating system versions; information on the consumer’s activity such as preferences, interaction data (eg clicks and mouse hovers), search history and location data. This means that by, for example, using their mobile phones during the course of a day, consumers transfer a large number of valuable information to Google such as where they are and have been, what they like and are interested in and if they are looking to buy any product or service.
4.11 Advertisers, publishers, online platforms and data brokers also collect data from a range of services. In addition to data about consumers, they can collect and share data once the ad is placed, such as: contextual data (the context in which the ad is served, such as knowing the consumer is on a sports website); campaign data (information on the reach and success of an ad campaign); and search data (eg what is being searched for, the number of clicks and purchases they generate).
4.12 The individual level data collected by platforms such as Google, Facebook and Twitter remain under the control of these platforms and it is generally not shared with other market participants. However, outside of these ‘walled gardens’, data is shared between publishers and advertisers through a large number of intermediaries in order to identify consumers and provide personalised advertising.
**How is data collected?**
4.13 Data can be collected in several ways, but the main ways are: (a) through consumer-facing services that platforms offer to consumers; and (b) through services offered on third-party websites and apps.
4.14 Online platforms, such as Google and Facebook, can collect large datasets because they operate platforms used by a large number of consumers. For example, Google collects data from more than 50 consumer-facing services, including Google Search, and Android phones. Facebook collects data from Facebook, Instagram and WhatsApp. Both companies reach a large majority of online consumers through one or more of their services.
4.15 Platforms also collect data through services they offer on other websites and apps. This allows them to gather information about consumers and how they interact with third-party sites, therefore extending their reach and data collection beyond their own services. There are several ways in which they do so, but at this stage we understand that there are four main sources of this data:
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143 Appendix E explains how platforms share aggregate-level data with other market participants. 144 However, Facebook said that it does not use WhatsApp account information in the European Region to improve consumers’ Facebook product experiences or provide a more relevant Facebook ad experience. See also ICO WhatsApp undertakings, given 12 March 2018. • Advertisers, publishers and data brokers can provide data they collect about consumers visiting their platforms to enable a better targeting of digital advertising.
• Advertisers and publishers can allow platforms to collect observed and volunteered data from their own online services through a range of technologies such as pixels, tags and cookies. In this way, platforms collect large amount of data about consumer preferences and behaviours on other websites and apps and add it to the information they already possess about how consumers interact with their own services.
• Platforms collect data when consumers sign into an app or website using their sign in functionality, whereby consumers can securely sign in to third-party apps without having to create, authenticate and remember new usernames and passwords. This means that, when a consumer signs into a website to, say, purchase something using her Facebook login details, Facebook collects data about the behaviour and interaction of the consumer with that website and adds it to the information it already has about that consumer.
• Platforms collect information such as device and browser information, bid information and event information (impression, click or conversion data) from the ads placed on publisher websites.
4.16 Finally, Google is able to gain data from mobile devices running the Android operating system, which gives Google a significant advantage in relation to specific types of consumer data such as location data.
4.17 The figure below provides a high-level illustration of our current understanding on the amount and types of data that Google, Facebook and other large platforms and a group of smaller platforms possess. Google and Facebook collect a large amount of data from their leading consumer-facing services, including Google Android, and tags placed on publishers’ and advertisers’ websites. Compared to them, other platforms’ data and targeting capabilities are relatively limited to user data from their own services and are extremely limited in their ability to collect data about consumers on third-party websites and apps and combine it with their own first-party data.
4.18 While we recognise that this assessment is to a certain extent subjective, the overall conclusion that Google has more data than the other platforms is recognised in an internal Google document, which states ‘Google has more data, of more types, from more sources than anyone else […] Google is a big part of this scaling machine with massive reach across the internet.’ Why is data collected?
4.19 Data is valuable to advertisers, publishers and platforms as it helps them generate revenue from personalised advertising and deliver consumer-facing services. In turn, consumers tend to express a preference for adverts that are relevant to them. For instance, Harris Interactive found that 54% of consumers would prefer to see adverts that were relevant to them rather than seemingly random adverts.(^{145})
For digital advertising
4.20 Data on consumers is highly valuable for targeting digital advertising and measuring its effectiveness.
4.21 There are many types of targeted advertising which can fit into two broad groups – contextual and personalised advertising – according to the degree of targeting and the use of consumer data. Contextual advertising targets ads on the basis of the content of the page viewed and only requires some very limited types of consumer data such as device, location and language. Personalised advertising, on the other hand, uses personal data, including demographic and interest-based data alongside data inferred from other consumers, to provide advertising targeted on the basis of consumers’ characteristics. The main types of personalised advertising are audience segmentation (the grouping of consumer profiles into ‘audiences’)
(^{145}) Harris Interactive (2019), Adtech – Market Research Report. characterised by intent, demographics and interests) and retargeting (the serving of targeted ads to specific individuals whom advertisers identify as customers or potential customers).
4.22 The second main purpose of data in digital advertising is to provide verification, measurement, and attribution. Consumer data is particularly important for measuring attribution (the extent to which exposure to an ad leads to a ‘conversion’ of some sort such as a sale) as it requires the matching of data on consumers’ exposure to adverts with data on the consumers’ subsequent actions.
4.23 The importance of data, and consumer data in particular, depends on the type of advertising used and, in turn, on the campaign objectives and KPIs that advertisers want to meet. In general, we have heard that personalised advertising is more important in display than in search advertising (since the contextual information provided in a search query is highly valuable in itself for targeting without the need for consumer data), while the use of consumer data to demonstrate attribution is often more important in search (where sales are often the key KPI) than display (which aims to meet a wider variety of objectives, including greater brand awareness).
4.24 More information can be found on the role of data in Appendix E.
For consumer-facing services
4.25 The use and importance of certain types of data differs between search and social media.
4.26 As explained in Chapter 3, a high-quality search engine requires access to a web index, click and query data, and certain contextual data. Web indices are created by collecting large amounts of data on websites and webpages, and the information that they contain. This is drawn from by a search engine to generate relevant and useful results in response to queries. Click and query data includes what consumers search for, which results they select, and whether they spend time on the web page. This data is used by search engines to train their algorithms on the most relevant results to serve in response to particular queries. They also use data on the context in which the consumer is making a search (eg the time or date) to return relevant search results. Other data that search engines use to tailor search results is location data which is becoming increasingly important with the increased use of mobiles.
4.27 Social media platforms fundamentally rely on enabling the sharing of information through peoples’ posts, comments and ‘likes’ – consumers are attracted to particular platforms because of the ability to access other consumers’ content. The platforms can also make use of consumer data to improve their services to consumers. The most important data for this purpose is content data (consumer generated information such as consumers’ photo, videos and posts), profile data (consumer information provided when setting up an account) and interaction data (such as likes, shares and comments).
The importance of data protection legislation
4.28 The role of data protection legislation is to protect the fundamental rights and freedoms of consumers and their right to the protection of their personal data. The General Data Protection Regulation (‘GDPR’), the Data Protection Act, and the Privacy and Electronic Communications Regulations, provide the framework for the lawful, fair and transparent processing of personal data, setting overarching data protection principles and providing data protection rights.146
4.29 Integral to this framework is enabling consumers to have effective control over the processing of their personal data and to be empowered to make informed and granular choices over its processing (who, what, when, for what purpose(s), for how long etc.), underpinned by a regime that enables the protection of their fundamental rights by design and default.
4.30 In this study we have encountered a variety of interpretations of the GDPR and we note that, as the GDPR has been in effect for a little over 18 months, there is some genuine uncertainty on where the precise contours of the regulatory landscape lie. However, the GDPR’s core principles are not new and were reflected in the preceding legal framework. Further in many areas there has been detailed guidance from the ICO, and also the European Data Protection Board (EDPB) on the GDPR, which also adopted the guidance of its predecessor Article 29 Working Party, on the matters relevant to this to this study.
4.31 We think that greater understanding of the views that data protection authorities will take on these matters is likely to emerge during the course of this study. For example, the ICO has been doing detailed policy work in the online advertising space,147 and the first wave of statutory inquiries by the Irish DPC, the lead supervisory authority for many of the multinational platforms of relevance to this study, are expected to conclude soon.148 Greater clarity is also likely to emerge in due course as specific enforcement
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146 See Appendix A for more information on the legislative data protection framework. 147 ICO update report into adtech & RTB, 20 June 2019. 148 DPC Annual Report, 25 May to 31 December 2018. action taken under the GDPR will in turn lead to appeals through the domestic and European court systems, with resulting judgments that clarify certain points of legal interpretation.
4.32 In this context, we believe this study can play a role to support a conversation on how the GDPR can be effectively interpreted in its implementation, to have due regard to wider market impacts, to ensure that the fundamental rights and freedoms of consumers and their right to the protection of their personal data is protected in the long term.
4.33 For processing of personal data to be lawful under the GDPR, it requires a lawful basis. Under the GDPR, the lawful basis applies in the context of generally applicable prescribed ‘data protection principles’ such as fairness, transparency, purpose limitation and data minimisation which apply to all processing of personal data. The main legal basis identified by market participants for the lawful processing of personal data by in this market study have been consent, contract and legitimate interests.149
4.34 A short description of the three legal bases identified are:
- **Art. 6 (a) Consent** – which means a freely given, fully informed, specific and unambiguous indication of the consumer’s wishes by way of a statement or clear affirmative action, which signifies agreement to the specific processing of their personal data, and is as easy to withdraw as to give.150 For consent to be valid it has to be a genuine, free and appropriately granular choice the consumer. It must be ‘opt-in’ not ‘opt-out’ and the consumer must have ongoing control over the specific processing of their personal data which is taking place.
- **Art. 6 (b) Contract** – which means the processing is necessary for the performance of a contract with the consumer, which means the processing is necessary to deliver the purpose of the contract with the consumer, rather than simply what is in the terms of the contract.
- **Art. 6 (f) Legitimate interests** – means processing can be lawful if it is necessary for the legitimate interests pursued by the controller. To rely on this basis the controller must properly carry out a three-part legitimate interests assessment that includes a balancing exercise to establish
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149 Article 6 of the GDPR also provides for processing for (c) compliance with a legal obligation, (d) protecting vital interests, and (e) in the public interest or an official authority, which were not identified as the basis for operating an online platform or for digital advertising.
150 As explained in Appendix A, consent is a defined term in the GDPR (Art. 4 (11)), with further provision made throughout the GDPR for example Art.7 ‘Conditions for consent’. whether the interests and fundamental rights and freedoms of the consumer override the controller’s own interests in that situation.
4.35 The GDPR does not contain a ‘hierarchy’ of lawful basis. The ICO’s guidance clarifies that no single basis is ‘better’ or more important than the others – the one that is most appropriate depends on the controller’s purpose and its relationship with the individual. However, in some circumstances it will be more appropriate to rely on one lawful basis over another.
4.36 We note that in the context of real-time bidding, the ICO observes that consent is likely to be the most appropriate lawful basis for the intensive processing of personal data for personalised digital advertising in the UK. This is due to the requirements of PECR, which prescribe the basis in respect of the processing activities it governs. This is explained in the ICO’s Update Report into Adtech and RTB: ‘In [the ICO’s] view, the only lawful basis for ‘business as usual’ RTB processing of personal data is consent (ie processing relating to the placing and reading of the cookie and the onward transfer of the bid request).’
4.37 In respect of the other two lawful basis we have encountered in the study, the ICO has observed either in its guidance or RTB interim report, that they are not likely to be suitable basis for personalised advertising.
4.38 In relation to performance of a contract, ICO’s view is that this can be a suitable basis for processing a consumer’s personal data where the objective purpose for which a consumer enters into a contract with an online service provider, eg a shopping platform, is to process their data to provide the core service. An example may be a contract with an online shopping platform whereby the platform needs to process the consumer’s data, like address, in order to deliver the purchased product to the consumer. In contrast, the further processing of their personal data for ancillary purposes, such as personalised advertising based on the consumer’s observed preferences, is not necessary to provide the core contracted service, and so contract is not
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151 ICO update report into adtech & RTB, 20 June 2019, page 18. As the ICO observes, that view is consistent with guidance from other data protection authorities. In its report, the ICO explains that this is informed by the requirements of PECR, where personalisation of advertisements does not involve the processing activities to which PECR applies (ie use of cookies and similar technologies) the ICO has indicated that legitimate interests may in principle be considered as an appropriate lawful basis on a case by case basis. an appropriate legal basis for that additional processing.\\textsuperscript{152} The ICO’s view is consistent with the EDPB’s view.\\textsuperscript{153}
4.39 In relation to legitimate interests, while serving advertising is legitimate in principle, the ICO’s view is that in the context of the intensive processing of personal data involved in personalised digital advertising, it is unlikely that the legitimate interests of a data controller to process consumers’ data to serve personalised advertising would override the data protection interests of the consumer.\\textsuperscript{154,155} However, where personalisation of advertisements does not involve the processing activities to which PECR applies (ie the use of cookies and similar technologies) the ICO has indicated that legitimate interests may, in principle, be considered as an appropriate lawful basis on a case by case basis.
4.40 We note that using consent as the legal basis for processing personal data for personalised advertising, rather than contract or a ‘legitimate interests’ balancing exercise, puts the emphasis on informing the consumer of the proposed processing of their personal data and puts them in control.\\textsuperscript{156}
**Consumer attitudes to data processing**
4.41 Consumers place importance on their ability to control access to their data: a 2016 survey by the European Commission found that 96% of UK consumers thought that it was important that their personal information on their computer, tablet or smartphone could only be accessed with their permission.\\textsuperscript{157} Whilst many people see data collection as a part of everyday life, the majority of people are still uncomfortable with it.\\textsuperscript{158}
\\textsuperscript{152} The ICO detailed guidance on contract explains: ‘the profiling of an individual’s interests and preferences based on items purchased is not necessary for the performance of the contract and the controller cannot rely on Article 6(1)(b) as the lawful basis for this processing. Even if this type of targeted advertising is […] a necessary part of your business model, it is not necessary to perform the contract itself.’
\\textsuperscript{153} See for example, EDPB, Guidelines 2/2019 on the processing of personal data under Article 6(1)(b) GDPR in the context of the provision of online services to data subjects, 8 October 2019, [52] ‘As a general rule, processing of personal data for behavioural advertising is not necessary for the performance of a contract for online services. Normally, it would be hard to argue that the contract had not been performed because there were no behavioural ads.’
\\textsuperscript{154} ‘Reliance on legitimate interests for marketing activities is possible only if organisations don’t need consent under PECR and are also able to show that their use of personal data is proportionate, has a minimal privacy impact, and individuals would not be surprised or likely to object. We believe that the nature of the processing within RTB makes it impossible to meet the legitimate interests lawful basis requirements…’ ICO update report into adtech and RTB, 20 June 2019, page 18.
\\textsuperscript{155} This is consistent with the guidelines of the EDPB and its predecessor body the Article 29 Working Party, eg pages 46 and 47 of Opinion 06/2014 on the notion of legitimate interests of the data controller under Article 7 of Directive 95/46/EC, 9 April 2014 and page 68 ‘Example 26’, and references therein.
\\textsuperscript{156} For particularly sensitive ‘special category’ data, the ICO observes that explicit consent is the only possible legal basis for the processing to serve personalised advertising.
\\textsuperscript{157} European Commission (2016). Flash Eurobarometer 443: e-Privacy.
\\textsuperscript{158} Which? (2018). Control, Alt or Delete? Consumer research on attitudes to data collection and use. 4.42 As indicated above, recent research suggests that many consumers prefer advertising on websites to be relevant to them. For instance, Harris Interactive found 54% of participants in an online survey would prefer to see adverts that are relevant to them rather than seemingly random adverts.\\textsuperscript{159} Similarly, Which? found that in focus groups, most participants preferred targeted advertising and personalised discounts to non-targeted advertising and generic discounts.\\textsuperscript{160}
4.43 However, only a small minority of all consumers are happy to share their data to receive relevant advertising. For example, Ofcom found that only 15% of respondents were happy for online companies to collect and use their data to show more relevant adverts or information.\\textsuperscript{161} Further, research conducted by Ofcom, the ICO and Which? all showed that the more consumers understood about how targeted advertising works, the more concerned they became about it, and began to feel less in control of their data and that, in addition, consumers can become less willing to receive personalised advertising.\\textsuperscript{162}
4.44 More generally, consumers’ acceptance of data processing is heavily influenced by demographic factors, the nature of the data involved, and with whom the data is being shared.
- Overall, younger consumers and those who describe themselves as confident internet users are more likely to be comfortable with data processing. In 2019, Ofcom found that 28% of respondents aged between 16-24 were unhappy with companies collecting and using personal information for any reason, compared to 56% of those between 55-64.\\textsuperscript{163}
- Consumers tend to be reluctant to share sensitive personal information. The Open Data Institute (‘ODI’) found that while 53% of respondents were comfortable sharing their name with an organisation they knew, only 22% were comfortable sharing their medical records.
- Consumers trust public organisations more than many private sector organisations. The European Commission asked UK respondents who they trusted to protect their personal information and found that 81% trusted health and medical institutions compared to 32% that trusted online businesses.
\\textsuperscript{159} Harris Interactive (2019). Adtech – Market research report. \\textsuperscript{160} Which? (2018). Control, Alt or Delete? Consumer research on attitudes to data collection and use. \\textsuperscript{161} Ofcom (2019). Adults: Media use and attitudes report 2019. \\textsuperscript{162} Harris Interactive also found that after providing a description of how ‘real-time bidding’ in advertising worked, the percentage of respondents who said they did not prefer relevant ads increased from 20% to 61%. \\textsuperscript{163} Ofcom (2019). Adults: Media use and attitudes report 2019. 4.45 We interpret this research to mean that, if consumers had more information about what data is collected and how it is used, they might wish to make different choices.
4.46 It is important to consumers that they can control what data they share and that they can trust the platforms that they share it with. However, the survey evidence we have reviewed suggests that very few consumers feel they have complete control of their data. For instance, Ipsos Mori found that 69% of consumers felt they had little or no control over their online data. Similarly, in 2019 a survey by the European Commission found that 84% of UK respondents felt that they had only partial or no control over their online data.
4.47 While it appears that some consumers believe they can manage some aspects of data processing, such as who initially has access to their personal data, these same consumers still feel that their scope to act meaningfully is very limited. For example, Ipsos MORI found that some respondents felt like the only way to control who initially has access to their data is to choose whether or not they enter a website. Once their data has been handed over, these same respondents feel they have lost control over who has access to their data.
4.48 We have also found that consumers lack trust in online platforms, with only a minority saying they would trust an online platform with their data. Social media platforms are consistently ranked as the least trusted platforms in surveys. For example, a survey by Ipsos MORI in 2016 found that only 9% of respondents trusted social media platforms with their data. Low trust can lead to consumers not sharing their data and realising the possible benefits of doing so, which also affects the ability of platforms to monetise their services using targeted advertising.
4.49 Some surveys have sought to understand why consumers do not feel they have control. In one survey, most consumers reported that they did not find it easy to access and change the personal information held by businesses, so their feeling of a lack of control arose out of difficulty with navigating to the choices available and exercising them. In other survey evidence, consumers reported that it was hard to effectively engage with companies who collect and use their data because they feel:
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164 Ipsos MORI (2016). Digital footprints: Consumer concerns about privacy and security. 165 European Commission (2019). Special Eurobarometer 487a: The General Data Protection Regulation. 166 Ipsos MORI (2016). Digital footprints: Consumer concerns about privacy and security. 167 Information Commissioner’s Office (2019). Information rights strategic plan: Trust and confidence. • disempowered by their lack of knowledge and transparency about how companies collect, use and share their data;\\textsuperscript{168}
• reliant on data-driven services which they do not believe they can give up,\\textsuperscript{169} and
• there is a perceived lack of alternatives if they want to stop using specific companies whose data collection they are concerned by.\\textsuperscript{170}
4.50 Our initial view from the available literature is that consumers value their data and think it should only be used with their permission, and that the market does not meet their expectations by putting them in control.
4.51 See Appendix G for more information on consumer attitudes to data processing.
How consumers can control their data
4.52 We have carried out a review of the controls available to consumers on a sample of key search engines and social media platforms.\\textsuperscript{171} We set out below the controls available to consumers over the use of their data, including in particular whether consumers are able to decide whether they receive personalised advertising while continuing to use the platform’s services. In the following section, we consider the extent to which consumers engage with those controls and the use made by the platforms of default settings.
The controls available to consumers on search engines
4.53 Search engines allow consumers to search and make sense of a vast number of websites across the internet and find what they are looking for. In return for this service, many search engines collect data about consumers to improve the functioning of their search algorithm and to target them with relevant advertising which, in turn, pays for the service.
4.54 Both Google and Bing use consumers’ data to display personalised advertising, but they allow consumers to opt out of this, irrespective of whether a consumer is logged in or not. Personalised advertisements are based on consumers’ previous activity such as searches and site visits,
\\textsuperscript{168} Which? (2018). Control, Alt or Delete? Consumer research on attitudes to data collection and use.
\\textsuperscript{169} Miller, C., Coldicutt, R., & Kitcher, H. (2018). People, Power and Technology: The 2018 Digital Understanding Report.
\\textsuperscript{170} Which? (2018). Control, Alt or Delete? Consumer research on attitudes to data collection and use.
\\textsuperscript{171} The platforms included in our review were: the search engines Google, Bing and DuckDuckGo; and the social media platforms Facebook, Instagram, Snapchat and Twitter. demographic information and interests, as well as other information such as location, time of day and interactions (for example agreeing to receive updates from an advertiser). Consumers have differing controls depending on whether or not they are logged-into an account and we discuss these in detail below.
4.55 Not all search engines we examined use personalised advertising. Some platforms, such as DuckDuckGo, market themselves as a ‘privacy friendly’ search engine and do not store personal information, including IP addresses, and have no associated user account. DuckDuckGo claims to be an ‘Internet privacy company that empowers you to seamlessly take control of your personal information online, without any tradeoffs.’(^{172}) Instead of personalised advertising, DuckDuckGo serves contextual ads to consumers, based on their searches. It follows that it does not offer consumers any controls for personalised ads.
Non-logged in consumers
4.56 Search engines can be used without the need for consumers to create an account or log in – they can simply use the engine to browse the web. This does not, however, mean that no data is collected about them. For example, whilst Google does not require any information to be volunteered by the consumer to use their search engine, they do observe the consumer’s behaviour and store this against unique identifiers along with interests and inferred characteristics. This can include browsing history, location data, IP address, devices the consumer uses, device characteristics such as its operating system and battery life, and engagement with third-party sites using Google’s advertising services.
4.57 We found that both Google and Bing allow consumers to opt out of personalised advertising. For Google, logged-out consumers can control whether they are shown personalised advertisements both on the Google search engine and across their ad network including YouTube and the millions of websites that partner with Google to show ads.
4.58 Location information is available to search engines by default.(^{173}) This enables basic country, language and security features, as well as tailored search results and advertising. By default, a non-logged in consumer on Google will receive ads based on their location and this is unaffected by whether the consumer has elected not to see personalised advertising. This may include
(^{172}) DuckDuckGo homepage.
(^{173}) Subject to consumers’ settings on browsers and devices. information drawn from their device, their web/App activity and their IP address.
Logged-in consumers
4.59 For some search engines, such as Bing and Google, consumers can set up an account to which they can log in and then use a range of services, such as email and document storage. This involves the consumer volunteering some additional information to open an account, but in return this also gives them more granular controls over their data.
4.60 Opening an account with Google or Bing is a simple process. For both platforms, consumers need to provide a name and date of birth. In addition, Microsoft requires a country. In creating the account, the consumer will generate an email address, if they did not already provide one, and password information. Consumers may also provide information such as gender and phone details.
- Both Google and Bing allow consumers to opt out of personalised advertising, but consumers that are logged in have more granular controls. For instance, logged in consumers can adjust the interests, and in some cases demographic information, that the platforms have assigned to them and which are used to tailor the advertisements shown.
- As for non-logged in consumers, location data is collected by default. The Google account settings includes one for ‘Location History’, which is a feature that provides personalized maps and other information to consumers. However, while data from this feature can be used to influence the ads shown to a consumer, it is just one of a number of sources of location information. This means that, although this setting is set to pause by default, it does not stop location information being collected or used.
4.61 For logged-in consumers, Google and Bing offer a set of more granular controls in addition to the option to turn off personalised advertising. For Google, we found that the main ‘Privacy Checkup’ control area provided around 39 options within six areas. These cover activity controls, ad settings (where interest categories can be amended, or personalised advertising can be turned off), information displayed about the consumer and
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174 Web and App activity, Location History, Voice and Audio recordings, YouTube search and watch history. shared endorsements settings, phone numbers, Google Photos settings, YouTube settings, plus a review reminder.
4.62 Bing’s ‘Privacy Dashboard’ provided 10 main options that allow consumers to view and clear data.\\textsuperscript{175} Eight further options linked to other privacy settings,\\textsuperscript{176} including an ad preferences area where interest categories can be amended, or personalised advertising can be switched off.
4.63 In summary, we found that by default, the most popular search engines use a range of consumers’ data for personalised advertising services. Both Google and Bing allow consumers to opt out of personalised advertising, whether they were logged-in or not.
\\textbf{The controls available to consumers on social media platforms}
4.64 We have explored whether consumers can turn off personalised advertising when using these platforms, and instead receive ads that are not based on their personal data. We found that consumers have to accept personalised advertising to use the social media platforms we examined, but to differing degrees:
- Facebook and Instagram users cannot turn off personalised advertising. They can, however, see what interest segments they are placed in and manually switch these off, such as removing ads based on a particular football team. Consumers can opt out of seeing ads on other websites and apps that are based on their Facebook activity.
- On Snapchat, consumers cannot turn off ads based on their personal data gathered by Snapchat when using their services. However, they can turn off ads based on information collected about them on third-party services.\\textsuperscript{177}
- Twitter always uses information it gathers from consumers’ activity on the platform, including information from consumers’ devices, the location where they signed up and their current location, to personalise the ads they see and their experience on the platform. Twitter users can customise their settings to prevent Twitter from combining their on-
\\textsuperscript{175} Browsing history, Search history, Location activity, Voice activity, Media activity, Product and service activity, Product and service performance, and Cortana’s Notebook, plus product-specific data for LinkedIn and Health Vault.
\\textsuperscript{176} Windows, Xbox, Skype, Promotional communications, Apps and Services, Office, Advertising preferences, Other Microsoft products, Pus privacy team contact.
\\textsuperscript{177} Consumers can opt out of being shown some targeted ads, such as Audience Based (ie those based on advertisers’ audience lists) and Activity-Based ads (ie those based on information about consumers’ activities away from Snapchat. platform activity with personal information obtained by Twitter from its partner organisations.
4.65 Below we set out the differences in control that consumers have depending on whether or not they are logged into a social media account.
Non logged-in consumers
4.66 Unlike search engines, social media platforms are predicated on sharing some amount of personal information with friends and families, interacting with businesses and sharing content. It follows that for most social media platforms, the consumer can do very little without setting up, and logging into, an account. For example, on Facebook a consumer who is not logged in can only see a limited range of Facebook’s pages, for example those of businesses that are publicly viewable. By contrast, Twitter allows slightly more functionality as consumers can view public tweets and replies.
4.67 Facebook, in addition to Facebook.com and Facebook Messenger, is the owner of other social media platforms, including Instagram and WhatsApp. Unlike the services offered by Google, the various social media platforms offered by Facebook do not have to be integrated into a consumer’s single account and a consumer will not automatically be provided with, for example, an Instagram account when they create a Facebook.com account. Consumers are able to choose which of these platforms they want to use and will be required to complete the process of opening an account for each (although consumers are able to use their Facebook.com account details to create accounts for Facebook Messenger and Instagram).
Logged-in consumers
4.68 Like search engine accounts, social media accounts require consumers to provide certain pieces of personal information to create an account. Generally, all platforms require that consumers provide at least a mobile number or email address for identification.
4.69 Other data may be voluntarily provided by consumers during their use of the platform, for example, content, liking pages and engaging with brands. This data can be used to infer consumers’ interests for the purpose of targeted advertising. In some cases, the choice of whether to provide such information or not, does not affect the consumer’s access to the platform’s services. A consumer could be described as being in control of this information.
4.70 Other data may be collected by platforms from consumers automatically and without the platform providing an option for consumers to prevent this happening. A consumer could be described as having no control over this information being collected. An example of this would be information regarding a consumer’s device attributes as collected by Facebook. Some platforms believe it is necessary to collect such information to optimise the way their website or application is displayed on a consumer’s device.
4.71 In between these two types of information, there may also be some information collected by platforms where a consumer can either influence the extent to which this information is collected, without fully preventing its collection, or the way the information is used. Consumers may therefore be said to have some control over this information.
4.72 Facebook’s default settings determine that:
- consumers’ posted content and any additional personal information other than their name, gender (if provided), username and user ID will only be shared with their ‘friends’;
- consumers will not be shown ads based on data provided by Facebook’s partners but can opt in via Facebook’s Ad Preferences page to be shown such ads;
- consumers’ activity is used to personalise ads, both on Facebook and on third-party websites and apps;
- some information, such as device attributes and usage of Facebook, is automatically collected; and
- device-based location settings and face recognition is turned off.
4.73 Other social media platforms that we reviewed took a comparable approach to Facebook towards their default settings regarding advertising.
4.74 In summary, we found that social media platforms required consumers to give more data to use their services than for general search platforms and the use of personal data for advertising was a condition of accessing the service. Controls over additional information, such as data about consumers’ devices, are variable across platforms.
4.75 More detail on the extent to which consumers have control over different categories of information is set out in Appendix F. Consumer engagement with privacy policies and controls
4.76 Surprisingly, most of the platforms we contacted were only able to provide limited data about consumer engagement with privacy policies or controls.
4.77 None of the twelve platforms we contacted could tell us how many consumers accessed their privacy policy during registration. Only two platforms provided data about access to their privacy policy on an ongoing basis and for both parties this data was limited in terms of the time period it covered.
4.78 Only Facebook, Google, Verizon Media and TikTok could provide data about how consumers use settings and controls. Only Verizon Media could provide robust data and for the other three platforms, the data was either limited in detail or deleted after a short period of time. For example, Google did not provide historic data as it usually only maintains this data for 28 days before being deleted.
4.79 The lack of data collected by platforms stands in stark contrast to the substantial collection of data in other parts of their business and means there is very little evidence on how consumers behave in practice. This makes it hard to determine how much consumers care about privacy and whether an online platform’s approach to privacy is effective in promoting consumer engagement.
4.80 The ICO, when giving guidance on how to draft ‘privacy information’ in response to the hypothetical question ‘Should we test our privacy information?’; observes that testing and collecting such data ‘will help you improve the effectiveness of your delivery of the information. You are likely to come up with a far more useful and engaging approach if you consider feedback from the people it is aimed at’. The ICO suggests testing to gather feedback from consumers on how they accessed the privacy policy; if they found it easy to understand; whether anything was difficult, unclear or they did not like it; or if they identified any errors. The ICO gives an example of how this consumer testing might allow optimisation of a policy for those who access it via different ways.
4.81 The data that was provided by Google and Facebook indicates that few consumers engage with privacy settings when they register for a service. Consumer engagement appears to be slightly higher on an ongoing basis when people use the service but remains low overall.
178 ICO general guidance on GDPR – ‘how should we draft our privacy information.' 4.82 Below, we set out our initial findings on consumer engagement with privacy policies both at sign up and on an ongoing basis. We then discuss consumer engagement with privacy settings or controls, which are the tools by which consumers can limit or otherwise control how the data about them is collected or used. Finally, we discuss the apparent discrepancy between low levels of engagement with privacy settings and the concerns people have about privacy – the so-called the privacy paradox.
**Evidence of engagement with privacy policies**
4.83 A ‘privacy policy’ is the statement or legal document which sets out the ways in which a firm will collect, use, disclose and manage a consumer’s data. It informs the consumer what specific information is collected, and whether it is kept confidential, shared with partners, or sold to other firms or enterprises.(^{179}) When consumers sign up to a service, they are asked to review the privacy policy.(^{180}) Importantly, no platform could tell us the proportion of consumers who accessed their privacy policy when first using the service or creating an account. However, from the limited data available, there is evidence that consumer engagement with privacy policies on an ongoing basis is low.
4.84 Google provided data on the number of visits to its Privacy Policy on the Privacy Policy Web page between 21 July and 19 August 2019. If we divide this figure by the number of unique authenticated users over this period, this would be equivalent to [0-5]% of UK users having visited the Privacy Policy on the Privacy Policy Web page over this period. However, if a user visited the Privacy Policy more than once than that would imply that this figure is an overstatement.
4.85 Google also provided data for the 28-day period between 13 September and 11 October 2019 which showed that the average visit to the Privacy Policy Web page lasted 47 seconds. Furthermore, 85% of the visits in this period lasted less than 10 seconds and only 0.4% of visits lasted over 30 minutes.(^{181}) Given that for UK consumers the privacy policy totals over 6,000 words, this
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(^{179}) It is in its privacy policy that a firm often seeks to discharge its obligations under the GDPR to provide information to consumers. We have also encountered other terms such as ‘data policy’.
(^{180}) The finding that consumers do not typically access privacy policies is in line with a number of academic studies:
- Bakos et al (2014) found that only 0.05% of agreements were accessed by consumers before they consented to them;
- the European Commission (2016) in a study involving experiments involving privacy policies, found that only 9.4% of participants accessed terms and conditions when it was optional to do so; and
- in an experimental study, Obar & Oeldorf-Hirsch (2018) found that 74% of respondents did not open the privacy policy.
(^{181}) This is supported by information Google provided to the Australian Competition and Consumer Commission which showed that the average time spent by Australian consumers viewing the Google Privacy Policy web page was less than two minutes. Australian Competition and Consumers Commission (2019), Digital platforms inquiry – final report. page 403. very short time for reading the policy indicates that consumers are not able or willing to engage with privacy policies of this length or complexity.
4.86 In their response, Google explained that they did not believe that user visits to a Privacy Policy page or how long a consumer spent on the privacy policy web page were reliable measures for consumer engagement. For example, Google explained that a relatively quick visit to the Privacy Policy may indicate that a consumer has had a successful visit and found what they needed. However, we note that Google’s own data indicates that 85% of consumers visited the privacy policy web page for less than 10 seconds. We do not consider that they can have engaged meaningfully with the privacy policy in such a short period of time. As a result, we consider that this evidence shows that consumer engagement is very low and that visits to privacy policies are brief.
4.87 This finding that consumers spend very little time engaging with privacy policies is also consistent with the academic research which indicates that consumers are not spending long enough on such policies to have read and understood them properly. For instance, Bakos et al (2014) found that consumers that accessed an End User Licensing Agreement (‘EULA’) spent an average of just over one minute on the EULA page (with the median time being just over 30 seconds). Obar & Oeldorf-Hirsch (2018) reported a reading time of a privacy policy of 73 seconds.
4.88 Other studies also suggest that some consumers believe that a privacy policy means that their privacy is protected as the default (Turow et al, 2007; Martin, 2015). That is when these consumers see the term ‘privacy policy’ they believe that their personal information will be protected and, in particular, the website will not share their personal information. This suggests that the term ‘privacy policy’ has the capacity to be misleading and influence consumers against reading privacy policies.
4.89 We discuss the length and complexity of privacy policies in the section later in this chapter on possible barriers to effective engagement, but it is clear from this evidence that the ordinary person does not spend a lot of time reading terms and conditions.
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182 Bakos, Y. Marotta-Wurgler, F. and Trossen, D. (2014), Does Anyone Read the Fine Print? Consumer Attention to Standard Form Contracts. The Journal of Legal Studies 2014 43:1, 1-35. 183 Obar, J.A., and Oeldorf-Hirsch, A. (2018) The biggest lie on the Internet: ignoring the privacy policies and terms of service policies of social networking services, Information, Communication & Society. Evidence of engagement with privacy settings and controls at sign up
4.90 By privacy settings and controls, we mean the tools by which consumers can control or restrict the data which firms collect about them, such as whether or not they receive personalised advertising and what location information is collected about them.
4.91 On some platforms, when consumers sign up to the service, they are prompted to review these settings. From the data that the platforms were able to provide, it is clear that consumer engagement with privacy settings is very low at registration: very few consumers change their default settings at registration or within 30 days of registering.184
4.92 For example, Table 4.1 below sets out data received from Google, which indicates that only a very small percentage of consumers engage with privacy settings during account creation. The data indicates that, when consumers do engage during account creation, they are more likely to disable features than enable them.
Table 4.1: settings changed by Google’s UK consumers during the account creation process
| Privacy setting | Percentage of consumers who make this change during account creation | |----------------------------------------|---------------------------------------------------------------------| | [✓] | [0-5]% | | Enable location history | [0-5]% | | [✓] | [0-5]% | | Enable voice and audio activity | [0-5]% | | Disable ads personalisation | [5-10]% |
Source: Submitted to the CMA by Google in response to a request for information.
4.93 Further data from Google found that [5-10]% of consumers who had created an account within three months accessed their privacy settings or controls over a 28-day period.
4.94 Similar data from Facebook shows a low proportion of new users who registered and engaged with a setting or tool, as shown in Table 4.2.
Table 4.2: the number of new Facebook consumers who view a settings page or control within 30 days of creating an account
| Privacy setting or control | New users who registered over one year (04/18 to 03/19) and viewed a setting or tool within 30 days of creating an account | |----------------------------|--------------------------------------------------------------------------------------------------------------------------| | Facebook ad preferences | [0-5]% | | Facebook privacy check-up | [5-10]% |
Source: CMA calculations based on data submitted by Facebook in response to a request for information.
184 The data in the following tables have all been rounded to the first decimal point. Evidence of engagement with privacy settings and controls on an ongoing basis
4.95 Consumer engagement with privacy settings and controls appears to be slightly higher on an ongoing basis but remains low overall. Table 4.3 sets out data received from Google, and demonstrates that only a small number of consumers engage with their privacy settings or controls on an ongoing basis.(^{185})
Table 4.3: the percentage of Google’s UK consumers visiting privacy settings or controls over a 28-day period
| Privacy setting or control | Percentage of active UK consumers who visited the control or setting over a 28-day period(^{186}) | |--------------------------------------------|--------------------------------------------------------------------------------------------------| | Google Account (Data and Personalisation tab) | [0-5]% | | Privacy Checkup | [0-5]% | | My Activity | [0-5]% | | Ad Settings | [0-5]% | | Security Check-Up | [0-5]% | | About Me | [0-5]% | | Auto-Delete (Web & App Activity) | [0-5]% |
Source: Submitted to the CMA by Google in response to a request for information.
4.96 The data from Google also indicated that [5-10]% of active UK consumers had accessed at least one of the following: Privacy Checkup, Privacy Advisor, My Activity, Activity Controls, Ads Settings, Google Dashboard, Takeout, Google Account (Data and Personalisation Tab) or Privacy Policy.
4.97 Data from Facebook also indicates different levels of consumer engagement with different privacy settings and controls. We note that the data from Facebook covers one year whereas Google’s data follows a 28-day period. As a result, the two tables are not directly comparable with one another. We also note that in March 2018, it was widely reported that Cambridge Analytica had harvested personal data from millions of peoples’ Facebook profiles without their consent and used it for political advertising purposes. This is likely to mean that there was an increased focus on Facebook’s privacy settings and controls over the period covered by this table.
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(^{185}) The data in the following tables have all been rounded to the first decimal point.
(^{186}) The data for some settings were gathered over different 28-day periods. Table 4.4: the percentage of Facebook users who viewed a setting or control over one year
| Privacy setting or control | Percentage of UK consumers who viewed the setting or control over one year (04/18 to 03/19) | |----------------------------|------------------------------------------------------------------------------------------------| | Ad preferences | [0-5]% | | Privacy Checkup | [20-30]% | | Why Am I Seeing This Ad? Tool | [10-20]% |
Source: CMA calculations based on data submitted by Facebook in response to a request for information.
4.98 Facebook also submitted that as of 30 September 2019, [0-5]% of UK consumers have viewed the ‘Download Your Information’ tool in the past four years. Similarly, as of 31 July 2019, [5-10]% of UK consumers have viewed the ‘Access Your Information’ tool since the beginning of the year.
4.99 We note that more consumers engage with the privacy check-up tool on an ongoing basis than at sign-up. Facebook introduced this tool to ‘assist Facebook consumers to review and adjust their privacy settings’ and as such it is expected that engagement with this tool on an ongoing basis will be higher than at registration.
4.100 We recognise that these results are for only two online platforms (albeit the major ones) and that consumers may engage with policies or settings on other platforms differently. However, it is consistent with academic findings, that consumer engagement with privacy policies and settings in practice is lower than reported in consumer surveys. One reason for this is that it is commonly recognised that in participating in a survey, consumers often face a ‘social desirability bias’, that is, they have a tendency to answer questions in a manner that will be viewed favourably by others.
4.101 Evidence from consumer surveys also provides some indication as to why engagement may be low, although the evidence is mixed. As indicated above, on the one hand, in some surveys, consumers report that they find it easy to change their settings and yet at the same time, it is not clear that consumers find it easy to locate the privacy settings. This is discussed in more detail below in the section headed ‘Navigating to privacy settings’.
4.102 Even if consumers can locate the privacy settings, it is not clear that consumers understand the implications of using them. For example, Habib et al (2018) found that two thirds of participants overestimated the protection that ‘private browsing’ offers. A separate survey performed in 2018 found that
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187 Habib, H., Colnago, J., and Cranor, L.F. (2018). Away from prying eyes: analysing usage and understanding of private browsing. the description of ‘private browsing’ offered by major platforms did not clear up common misconceptions.\\textsuperscript{188}
4.103 The finding that consumer engagement with privacy settings is low is unsurprising. In the course of our work in other markets, consumer engagement has sometimes remained low despite the existence of strong financial incentives for consumers to participate actively (for example, by shopping around for a better broadband deal or switching energy supplier to avoid paying a loyalty penalty). In the online world of search and social media platforms, there is no direct financial incentive to prompt consumer engagement: consumers ‘pay’ for services, not with money, but with their data and attention. We might therefore expect engagement with privacy controls to be low except for those consumers for whom privacy is a top of mind issue.
4.104 In these circumstances, the default control settings implemented by the platforms will continue to apply to the collection and use of data for a majority of consumers.
\\textit{The privacy paradox}
4.105 Our finding that consumers say they are concerned about privacy but have low engagement with privacy settings and controls is consistent with findings in the academic literature. A number of academic articles (eg Acquisti (2004), Barnes (2006)) have pointed to the existence of a ‘privacy paradox’ in relation to the collection of data from consumers in online settings: that is, consumers say in surveys that they value their privacy and that are concerned about protecting it but behave in ways that contradict this stated preference.
4.106 There has been some debate about whether this is in fact a genuine paradox. For instance, given the central role that some services play in consumers’ lives, they may feel that there is little point engaging with privacy policies on the basis that they are presented as a ‘take it or leave it’ choice and an individual consumer is not in a position to negotiate over them. At the same time, other interpretations point out that the framing of choices by platforms and the exploitation of behavioural biases can have an important influence on consumers’ privacy decisions. In particular, consumers’ choices about privacy controls can be heavily influenced by factors such as the default settings (eg whether to allow ad personalisation or not), how the choice of privacy setting is presented and what language is used to describe the privacy setting. Experimental research has also found that where securing privacy requires additional effort or comes at cost of a less smooth user experience,
\\textsuperscript{188} Wu, Y., Gupta, P., Wei, M., Acar, Y., Fahl, S and Ur, B. (2018). \\textit{Your secrets are safe: how browsers’ explanations impact misconceptions about private browsing mode.} consumers were quick to abandon technology that would offer them greater protection (Athey et al, 2017).
4.107 In the next section we consider how platforms may exploit some of these aspects of consumer behaviour to induce consumers to make choices that result in them providing more data to platforms than they may otherwise be comfortable with.
Possible barriers to effective engagement
4.108 It is important that, for those consumers who would like to engage actively in this market, they are able to access and understand information easily and face low transaction burdens in the course of their engagement. In this section, we assess how choices are currently presented to consumers and set out the barriers to effective engagement that we have so far identified.
4.109 For those consumers who seek to engage, the way that choices are presented to them has a significant influence on what they choose. The Data Protection Commission, the supervisory authority for several platforms including Google and Facebook Ireland, notes that organisations can design their websites and use ‘branding, colour and font selections to highlight or emphasise certain options rather than others.’ They set out that design is important and by highlighting ‘Ok’ or ‘I agree’ buttons, consumers may overlook further information that may be less prominent, such as in grey text. These are typically referred to as ‘dark patterns’.
4.110 The use of dark pattern techniques can nudge consumers to making choices that are in the best interest of the platforms which maximise data collection, rather than their own preferences. To understand how information may affect consumers’ choices, we have considered:
- evidence on the power of default setting in these and other markets;
- what platforms claim about the nature of their service(s) and how they are funded by personalised advertising;
- the consumer experience at sign-up and click-wrap agreements;
- the presentation of terms and conditions; and
- how consumers navigate the controls available.
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189 Data Protection Commission (2019) Guidance Note: What should you be aware of online? Some common online risks. 4.111 We asked platforms if they undertook testing to assess to what extent their controls facilitate engagement on the part of users. We discovered that some platforms do carry out some testing of aspects of their privacy policies and privacy controls but they have not prioritised research to improve consumer control in this area. This finding is at odds with the extensive testing some platforms undertake in respect of other areas of their business. For example, Google ran over 650,000 experiments in 2018 when looking to make improvements to Google Search.190
The power of default settings
4.112 The power of default settings is an area of behavioural economics that has been well researched and is well-evidenced across a wide range of settings eg pension savings, medical insurance, food consumption etc. There is a general recognition that the presence of status quo bias means that individuals will often stick with the default choices they are presented with.
4.113 The Behavioural Insights Team, the NCC and Which? have pointed to the role that defaults have in terms of influencing consumers’ choices about sharing data with service providers suggesting that firms could be exploiting behavioural biases to get them to accept privacy-intrusive defaults (so called ‘dark patterns’).
4.114 There is some evidence that consumers have a preference for privacy-friendly default settings. Research carried out in 2019 by the US Stigler Center at Chicago-Booth University looked at the privacy and security practices of Facebook, Google, Amazon, and other platforms. They found that consumers would often – but not always – prefer and expect default provisions that enhanced their privacy and security.
4.115 We have therefore focussed our analysis on the default settings on platforms, and the controls available to consumers to change them. When referring to default setting, on platforms which purport to allow the consumer to give their active consent, we treat the settings which the consumer is invited to consent to, as the default settings. We turn to this in Chapter 6 and discuss possible interventions to ensure that settings are aligned with consumers’ preferences.
Long and complex terms and conditions
4.116 An understanding what data is collected and how it is processed, is imperative for consumers to make an informed choice about whether to share data and
190 How Google search works. with whom. We therefore considered the nature of the terms and conditions and how accessible they were.
4.117 We found that platforms’ terms and conditions were long and typically located in several places. As shown in Table 4.5, Bing had the longest set of terms and conditions, totalling 27,000 words, in two separate places on their platform. Table 4.5: Overview of social media platforms’ terms of service and privacy/data policies
| Terms/policies visible on front/main page? | Social Media | Search | DuckDuckGo | |------------------------------------------|--------------|--------|------------| | Facebook | Yes | Yes | No/ Unclear | | Snapchat | Yes | Yes | Yes | | Twitter | Yes | Yes | Yes | | Instagram | Yes | Yes | Yes | | Approx. length in Words | 9,300 in 3 parts | 13,300 in 2 parts | 6,500 | | Clickwrap | Yes | Yes | No | | | Yes | Yes | Yes | | | Yes | Yes | Yes |
Source: CMA analysis.
4.118 We do not think it reasonable for platforms to expect that consumers have read and understood all of these, often complex, terms before signing up to use a service.
4.119 Faced with this level of text on multiple platforms that may be used every day, it is not surprising to find that consumer engagement with privacy policies is low. A consistent finding in many surveys is that only a minority of consumers claim always to read privacy policies and academic research has also shown that very few consumers read privacy policies when signing up to an online service.202
4.120 When explaining the lack of engagement by consumers, a number of surveys and academic research have identified time as the predominant factor behind consumers’ disengagement with privacy policies. McDonald and Cranor (2008) estimated that a consumer would have to spend several weeks per year to read the privacy policies on each website they visited. Given that their research was conducted in 2007, this figure is likely to be much larger today given that the time spent on digital media has increased significantly since that research was carried out.203 At the same time we note that research by the Behavioural Insights Team indicates that telling customers how long a
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191 On desktop this is behind a pop-up encouraging the download of DuckDuckGo to Chrome. 192 Snap Inc. recently updated its Terms of Service and Privacy Policy, the updated policies becoming effective from 30 October 2019. 193 Instagram shares Facebook’s Data Policy but has its own Terms of Service and Platform Policy. 194 Google include 4 x short videos in their Privacy page and an alternative pdf page. 195 Bing figure based on the most relevant parts of Microsoft’s 32,000-word privacy and cookie statement (excluding products other than Bing) plus the 15,000-word legal statement. 196 DDG figure is not directly comparable – the 2,100 words are in its Privacy statement but much of the statement is DDGs commentary on how Search works and how they don’t collect information that others do. 197 The Google signup process breaks out permissions beyond a single ‘accept and use’ approach. 198 Note that Google can be used without creating an account, which would not involve a clickwrap agreement. 199 Creation of a Microsoft account includes a clickwrap agreement to Privacy and cookies statement and Services Agreement. Bing displays a Browsewrap agreement for cookies for non-logged in use. 200 Note that Bing can be used without creating an account, which would not involve a clickwrap agreement. 201 Note that it is not possible to create an account with DuckDuckGo so there are no terms and conditions to agree to which could form part of a clickwrap. 202 This finding mirrors what we found in our report the ‘Commercial use of consumer data’ (2015). 203 MacDonald, A. and Cranor L.F. (2008). The Cost of Reading Privacy Policies. A Journal of Law and Policy for the Information Society. privacy policy takes to read can actually then increase the opening rates for privacy policies by 105%.\\textsuperscript{204}
4.121 Even when consumers do click onto privacy policies, they do not necessarily engage with the policies in terms of taking the time to read them thoroughly. As noted earlier, the average visit to the Google privacy page was just 47 seconds. We note that some academic research has suggested that consumers may instead use different methods to assess whether or not to provide consent to online platforms.\\textsuperscript{205} This could include the use of proxy assurances, such as online reviews.
4.122 In summary, we found that terms and conditions are unreasonably long for consumers to read before signing up to services.
\\textit{Navigating to privacy settings}
4.123 For consumers to engage with the privacy settings that platforms provide they need to be able to locate them easily. We found that this was more straightforward with search engines than social media platforms, although the format varied according to the device.\\textsuperscript{206} As a minimum both Google and Bing displayed a small privacy link at the foot of each page. Selecting this provided the consumer with access to the available controls.
4.124 All of the social media platforms that we reviewed purported to provide consumers with easy access to their privacy settings, allowing them to adjust these as and when desired. However, we found that for all the social media platforms reviewed, it is not obvious how to access these settings and the settings themselves may only be visible after navigating through multiple menus.
4.125 For example, on the Facebook desktop website, we found that the Settings webpage can only be reached via a drop-down menu which appears only when a small downward arrow symbol in the options ribbon is clicked, as shown in the screenshots below.
\\textbf{Figure 4.2: Drop down menu button circled}
\\begin{figure}[h] \\centering \\includegraphics[width=\\textwidth]{facebook_drop_down_menu.png} \\end{figure}
\\textsuperscript{204} Behavioural Insights Team (2019). The behavioural science of online harm and manipulation, and what to do about it. An exploratory paper to spark ideas and debate.
\\textsuperscript{205} Whitely and Pujadas (2018). Report on a study of how consumers currently consent to share their financial data with a third party.
\\textsuperscript{206} Bing included a privacy option in a top-of-the-screen menu on mobile and desktop, while Google did this only on mobile. 4.126 In addition, even when a consumer has been able to navigate to the correct menu, they are often presented with multiple other settings, which serves to reduce the prominence of the location of the privacy settings. For example, on Facebook’s Settings Page, consumers are presented with links to 20 different tabs along the left-hand margin of the page, of which ‘Privacy’, leading to Facebook’s Privacy Settings and Tools is one.
4.127 The effect of making navigation towards privacy settings and the selection of alternative options to the default a multi-stepped and partially obfuscated process has been described as a ‘dark pattern’. By relying on the fact that consumers generally do not change default settings, platforms are able to maximise the number of consumers that will share the maximum amount of their personal information, to the benefit of the platform.
**Lack of clarity about the service(s) being offered to consumers**
4.128 We found that most platforms promoted the benefits of their service, rather than the nature of the exchange between the platform and the consumer. Clearly, it is important that consumers fully understand this exchange before they can make meaningful choices about whether or how to engage with a particular service. While information about the funding relationship could be found, it was not presented prominently to casual users of platforms and only rarely referred to as part of the account creation process.
4.129 Ofcom research shows that only a little over half of adults are aware that the major search engines offer their services at no monetary cost because they gain consumers’ attention and data, which they monetise through the sale of advertising. Starting at platforms’ homepages, we reviewed the way that Google, Bing, Facebook and Twitter explain their services and the nature of their funding models.
4.130 We found that:
- Google and Bing do not describe the functions of their service nor the funding relationship on their front pages. For Google, depending on whether viewing desktop or mobile version, selecting ‘How search works’ provided a series of information screens that included a link to a statement on funding. Consumers are also told that their data will be used for ads during the sign-up for an account although the explanation that ads fund the site requires additional clicks to reach it. The position with Bing was mixed. For those without an account, we found some limited information by navigating from an initial cookies statement through several links and screens. However, during the sign-up for an account, consumers are told just ahead of account creation that the site relies on advertising.
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207 For example by the Norwegian Consumer Council in ‘Deceived by Design’. 208 Ofcom Online Nation Report 2019 – p111. 209 How Google makes money. 210 ‘Advertising allows us to provide, support, and improve some of our products.’ 211 From Microsoft’s privacy information, selecting ‘Other Important Privacy information’, then selecting ‘Learn more’ then scrolling down several screens to reach ‘Advertising’. Facebook and Twitter both provide ‘tagline’ descriptions of their services on their front pages. Facebook’s Terms of Service include a statement on how services are funded. Twitter includes the information that ‘Advertising revenue allows us to support and improve our services’ which was reached by scrolling through several screens in the Privacy Policy. However, Twitter users are presented with an option to ‘Customize your [their] experience’ during the sign-up process and this includes whether or not to accept personalised ads based on information relating to them collected by Twitter ‘off-platform’. The explanation provided to consumers before making their choice includes the following disclaimer: ‘You will always see ads on Twitter based on your Twitter activity’, which is likely to suggest to consumers that advertising is important to Twitter although, again, this is not stated explicitly.
4.131 In April 2019, the Consumer Protection Cooperation Network, a collection of consumer protection authorities within the European Union, took collective action to secure a range of commitments from Facebook. The CPC was concerned that Facebook failed to clarify that their main source of revenue was based on the commercial use of consumers’ data in exchange of using Facebook’s service. In response to those concerns Facebook agreed to make clear that it does not charge for its services, but that consumers will be shown commercial content based on their profile and data and will in future explain its business model, including that it makes money by providing targeted advertising to traders using data from consumers’ profiles.
4.132 This is a positive step towards platforms clearly communicating the nature of the bargain to consumers and the basis on which they share data and receive personalised services. However, our initial view is that more can be done, throughout consumers’ use of these platforms, to reinforce that consumers are exchanging their attention and data in return for relevant advertising and free services.
Experience at sign-up and click-wrap agreements
4.133 A common theme in our review was the frequent use of click-wrap agreements. A click-wrap is a form of agreement where the consumer must agree to terms and conditions before they are able to use the service. Agreement forms the basis of the data the platform collects and the
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212 Facebook: ‘Facebook helps you connect and share with the people in your life’. Twitter: ‘See what’s happening in the world right now. Follow your interests – Hear what people are talking about – Join the conversation’.
213 From Twitter’s privacy policy, scroll down to ‘Additional information we receive about you’ and then ‘Advertisers and Other Ad Partners’.
214 European Commission and consumer authorities Facebook terms press-release. consumers’ acceptance of the terms and conditions. Click-wrap agreements are used by all the social media platforms we examined. As noted above, an account is not needed to use search engines so, while we noted some use of click wraps to create associated accounts, we do not discuss that in detail here.
Figure 4.5: Click-wrap agreements on: (left) Facebook’s desktop website; and (right) Snapchat
4.134 Figure 4.5 shows two examples of click-wrap agreements on social media platforms Facebook and Snapchat. For both, the page emphasises the information needed, but a statement appears in a smaller font size below stating that the consumer acknowledges they have read and agreed to the platforms’ terms and conditions and other policies (as applicable). For all the platforms considered, policies are available via hyperlinks. However, below this statement a prominent message is displayed in a large blue button, stating ‘Sign up’ (or an equivalent message) which must be clicked to continue the process.
4.135 For platforms which are either only accessible via a mobile app, or most likely to be accessed via a consumer’s mobile device, it is even more unlikely a consumer will read the relevant terms of service and privacy policies in full before agreeing to sign up. For these platforms, a consumer would either need to review the platform’s terms and privacy policy on the small screen of their mobile device or access them via a separate laptop or desktop computer for review there, whilst in the process of signing up. Examples of better practice
4.136 Our review of a sample of platforms did find elements of better practice. For example, guidance from the ICO on the presentation of privacy information includes discussion of the challenges of engaging consumers, balancing the amount of information provided, and ensuring that it is sufficiently prominent.215
4.137 Google’s approach to privacy information for logged-out consumers incorporates some of these. A clear ‘Privacy Reminder’ is displayed and, while it was concerning that this can be dismissed or ignored for three days, it does eventually require a response before the consumer can continue. When ‘Review’ is selected, the information provided is in short summaries with links to further detail.
Figure 4.6: Privacy reminder displayed on Google Search
Source: screenshot, Google.
4.138 We also noted that it was possible for platforms to adopt what should be helpful techniques such as layering information and simplifying language in ways which buried key information or made it too vague to be helpful.
4.139 We have heard from platforms that they work hard to ensure their services are easy to use and consumers are clear about what data they collect and the controls available. For example, Facebook emphasised that their terms and conditions have ‘been specifically designed to be clear’.216 As recommended by the European Data Protection Board, they said they adopted a layered
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215 ICO general guidance on GDPR – ‘how should we draft our privacy information. 216 Facebook’s response to the Statement of Scope, para 6.6. approach to their terms and conditions. Google also argued that they used ‘clear, plain language’ in their terms and conditions and we noted they used explanatory videos and infographics to communicate with its consumers, had periodically reminded consumers they could undertake a privacy check-up.217
4.140 We accept that it can be difficult for platforms to communicate a large amount of complex information to consumers, and we have seen some elements of good practice where platforms are clear about the bargain between them and consumers, present content in a visual as well as text format and use plain language. However, we did not find a platform that got all elements right and good practice was not consistent across all platforms. We return to this point in Chapter 6 and consider which elements of good practice can be embedded across all platforms.
4.141 More detail on platforms’ sign-up processes, terms and conditions, and navigation to privacy settings, can be found in Appendix F.
Data protection regulation and competition
4.142 As the preceding discussion makes clear, we strongly support effective regulation that puts consumers in control of their own data. In our study, however, we have heard some concerns that aspects of the design and interpretation of current data protection regulation risks creating competition concerns by unduly favouring the business model of large, vertically-integrated platforms over smaller, non-vertically-integrated publishers.
4.143 There are two aspects to these concerns in digital advertising markets:
- first, that large platforms may use privacy regulation such as GDPR as an excuse not to share data with third parties, thereby consolidating their own market position; and
- second, that the design of GDPR and its interpretation by data protection authorities makes it easier for large platforms to gain consent for data processing than smaller publishers, giving the former a strong competition advantage.
Behaviour of large platforms
4.144 The Furman Review made public that it had received concerns that GDPR was ‘enabling large digital companies to impose unduly strict compliance
217 Google’s response to our Statement of Scope, page 15. duties on smaller firms, serving to reinforce their own dominance in the process’. Similar concerns have been raised with us in the context of this study.
4.145 For example, the Daily Mail Group told us that ‘while the GDPR inter alia aimed at placing some limits on the way digital platforms collect and process personal data, these platforms turned this regulation to their advantage’ and the News Media Association submitted that publishers have struggled to resist attempts ‘by global tech companies to force unfair terms on them through the new consents regime’.
4.146 We have heard concerns that GDPR is being used as an excuse for vertically integrated firms to restrict rivals’ access to data and services, even when these do not obviously raise legitimate concerns under GDPR. We explore a number of these concerns in Chapter 5, including recent concerns that Google has removed time stamp data from bid requests, which may harm publishers’ ability to compete effectively in the open display market, and Google’s decision to prevent the DoubleClick user IDs being accessed by ad buyers, which may impede advertisers’ ability to make use of independent attribution modelling and cross-platform measurement of reach and frequency.
**Design and interpretation of GDPR**
4.147 We have also heard several concerns, particularly from publishers, that elements of the design and interpretation of GDPR have consolidated the strength of large vertically-integrated platforms. For example, Professor Damian Geradin submitted that that GDPR ‘effectively strengthened the position of the platforms on digital advertising markets to the detriment of other intermediaries, but also advertisers and publishers’, while the Daily Mail Group told us that GDPR has given Google the ‘freedom to do what they want with data collected through publishers, while threatening not to serve ads to any publishers which do not satisfactorily obtain consumers’ consent on their behalf’.
4.148 We note that, in principle, the GDPR makes gaining and managing consent within a ‘walled garden’ to deliver a particular purpose, either within an
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218 Furman Review (2019), Unlocking digital competition, paragraph 4.42 page 124. 219 DMG Media response to our Statement of Scope, page 4. 220 News Media Association response to our Statement of Scope, page 5. 221 Prof. Geradin response to our Statement of Scope, page 12. 222 DMG Media response to our Statement of Scope, page 12. undertaking, or group of undertakings in common control, an easier exercise than sharing data between undertakings to deliver the same purpose.
4.149 Large platforms who engage in ‘bundling’ consents, may therefore have an easier and simpler task in purporting to obtain valid consent from consumers to use their data for personalised advertising compared with intermediaries involved in the supply of display advertising in the open market.223
4.150 This may become more pronounced as the display advertising industry moves to address concerns raised by the ICO about how widely data is shared between firms in the open display market and whether current practices provide consumers the opportunity to provide meaningful consent or have visibility about what happens to their data given the number of firms involved. The ICO highlights in its RTB Update report that currently a single RTB request can result in personal data being processed by hundreds of organisations creating risks for transparency, fair processing, security and data sharing.224
4.151 The effect may be that large platforms such as Google and Facebook may find it easier to get valid consent for processing personal data for use in display advertising and share very little data with third parties, while the open display market involving multiple operators will face greater difficulties in securing consent for using the same data for the same purposes. This will create competitive advantages where data is used within firms compared to situations where the same data is used between firms.
4.152 This presents a fundamental challenge to the non-vertically integrated advertising business model used by newspapers and other online publishers. We have reviewed evidence that suggests that prohibiting publishers from serving personalised advertising in the open display market while allowing platforms to continue to offer personalised advertising would have a very significant impact on publishers’ revenue. For example, a recent experiment undertaken by Google indicates that UK publishers earned [between 50% to 65%] less revenue overall when they were unable to sell inventory using personalised advertising but competed against others who could.225
4.153 We recognise that these are challenging issues. We have had constructive interactions with ICO and the Irish DPC and will continue to engage with them
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223 We note the extent to which consent for different processing can in an individual case be appropriately aggregated or ‘bundled’ into a single consent process whilst remaining ‘valid’ is an important issue, for example recital 43 of the GDPR provides ‘Consent is presumed not to be freely given if it does not allow separate consent to be given to different personal data processing operations despite it being appropriate in the individual case’.
224 ICO update report into adtech & RTB, 20 June 2019.
225 This analysis is described in more detail in Appendix E: The role of data. in the second half of the study to explore potential ways forward that could both address legitimate data protection concerns while preserving effective competition in the open display market. In Chapter 6, we outline some potential ideas for further work in this area.
Initial findings
4.154 To get a fair deal from the use of their data, we think consumers need to be fully informed about what data is collected, how it is used, and find it easy to choose to accept or reject this or use alternative platforms that do not rely on their data. We found that there may be an imbalance in the relationship between platforms and consumers.
4.155 We note that consumers value relevant advertising and the monetisation of platforms, often through targeted advertising, is key to the provision of free, innovative services, which are a significant benefit for consumers. However, we consider that consumers are only able to judge whether this exchange is fair and meets their needs if they have enough information about how their data is used. Further, they are only able to act on this information if they have full control over their data, allowing them to withhold it and share it if they wish.
4.156 Our initial analysis has found that is not always the case. We found that:
- Most platforms we assessed served consumers with personalised advertising by default – we know that consumers are unlikely to change default settings. Recent research also suggests that consumers prefer defaults that enhance their privacy and security.
- Consumers have some controls over their data, but frequently platforms do not give them full control and some do not allow consumers to turn off personalised advertising.
- Consumers must engage with unreasonably long, complex, terms and conditions and must make several clicks to access their settings. Understandably, consumers rarely engage with these terms and when they do, they spend very little time reading them. It is unreasonable to expect ordinary consumers to read and understand these terms for every platform that they use.
- Consumer engagement with privacy policies and controls is low. And platforms do little by the way of systematic testing to measure this or test what would increase consumers’ engagement with these policies. Instead they rely on the fact that very few consumers alter the default settings in order to increase their ability to use personal data.
4.157 We recognise that consumers have a range of views and behaviours. There is a minority that want to engage with the detail of how their data is used, while the majority will likely stick with the default arrangements, even if they are inconsistent with their preferences. We want to ensure that any intervention in the market strikes the right balances between this range of preferences – protection for those that need it, and genuine effective choices for those that want to exercise them.
4.158 Effective competition in a market is crucial for securing good outcomes for consumers; equally high standards of consumer protection drive competition on things that matter to consumers. For example, we think that protecting consumers, increasing their trust in the market and offering them appropriate controls will increase their engagement with the market. In turn, we would expect this to provide incentives for platforms to design their services with consumers in mind as they will want to promote the benefits of data sharing.
4.159 As data protection law and its interpretation develops, we think all authorities and businesses can take steps to ensure that it does not harm consumers by negatively affecting competition, particularly by favouring incumbent firms that are vertically integrated or firms that offer a wide range of services so can obtain consent only once, in contrast to a single service provider.
4.160 In Chapter 6 we set out a range of options for possible interventions that could address the harms we have identified. 5. Competition in digital advertising
- Google has market power in search advertising. It has over 90% share of search advertising revenues. Its rivals face significant barriers to attracting advertisers, in addition to the barriers to building share on the consumer side.
- Facebook (including Instagram) accounts for nearly half of display advertising revenues and also has market power. It has a significant data advantage over smaller publishers, which both increases the value of its advertising inventory and creates additional barriers for its competitors to overcome.
- Online publishers such as newspapers sell their inventory through the open display advertising market. This market relies on a complex and opaque chain of intermediaries to auction advertising in real time. This ‘ad tech stack’ has been consolidating, and Google now holds a strong position at each level of the value chain. This raises two main sets of concerns:
- In acting simultaneously on behalf of publishers and advertisers, and on its own account, Google faces strong conflicts of interest.
- Google is able to leverage the market power from its 'owned and operated' advertising inventory into the open display market and make it harder for third-party intermediaries to compete.
- Advertisers and publishers face a lack of transparency over key aspects of market functioning, including the quality and effectiveness of advertising, the way auctions are carried out and prices determined, and the remuneration of intermediaries.
- We are concerned that advertisers and publishers are likely to be facing worse outcomes than in a more competitive market. This would result in advertisers paying higher prices, which feed through to higher consumer prices, or in a reduced ability of publishers to invest in valuable content.
Introduction
5.1 This chapter sets out our initial analysis of competition in the digital advertising market. Digital advertising plays a crucial role in funding online content – not just for large platforms such as Google and Facebook, but also for smaller publishers such as news websites and app providers. Consumers will benefit from competition in the digital advertising sector where this drives down costs to advertisers and hence consumers, and where content providers are able to use advertising to fund services that consumers value.
5.2 In the first six months of the market study we have sought to understand how digital advertising works and to identify the broad areas where the market might not be working well. We have focused on understanding the extent to which features of the digital advertising market might exacerbate the concerns about the large platforms’ market power and their control over personal data outlined in the previous chapters. We have also sought to understand how programmatic advertising technology works and assess potential concerns about competition between the intermediaries that supply this technology.
5.3 The chapter discusses our initial findings in relation to:
- the characteristics of digital advertising markets, including how advertisers buy digital advertising and the degree of substitution between different forms of advertising;
- search advertising, including Google’s position as the largest search advertising provider, and barriers to competition arising from features of the advertising side of the market;
- display advertising, including the market power of Facebook as the largest display advertising provider, and barriers to competition in digital display advertising;
- the open display segment of the display advertising market, including issues relating to lack of transparency and Google’s position in the ad tech stack; and
- broader issues arising from the relationship between platforms and publishers.
5.4 We conclude with a summary of our initial findings on this theme and indicate the areas that we expect to focus on in the second half of the study.
**Characteristics of digital advertising markets**
5.5 This section identifies the broad characteristics of digital advertising markets. It then summarises our initial understanding of how advertisers buy digital advertising and the degree of substitutability between different types of advertising. Finally, it sets out some of the possible implications of a lack of transparency.
**Types of digital advertising**
5.6 As set out in Chapter 2, there are three main types of digital advertising:
- Display advertising – where advertisers pay online companies to display advertising using a range of advertising content types shown within defined ad units on web pages or mobile apps; • Search advertising – where advertisers pay online companies to link their company website to a specific search word or phrase so that it appears in relevant search engine results; and
• Classified advertising – where advertisers pay online companies to list specific products or services on a specialised website serving a particular vertical market.
5.7 Within these types of advertising many further distinctions can be made. One of the key distinctions within display advertising is whether advertising content is in video or non-video format. There are also important differences in how display advertising is bought. Advertisers can choose to buy display advertising by making direct deals with media owners or using technology that enables the advertising to be bought via a real-time auction as the consumer opens the relevant web page. This technology can either be provided ‘in-house’ by the digital platform that is also the media owner, such as Google and Facebook, or by intermediaries.
5.8 We did not find that there was a consistent industry definition for what should be included within classified advertising. For the purposes of our study, we noted that there are a broad range of online platforms focused on specific sectors that provide the ability for advertisers to list specific products and services and the functionality for consumers to then make comparisons across these listings. Sectors where classified advertising is common include recruitment, ecommerce, consumer finance, travel, property and cars. We have considered the role of classified advertising previously in our Market Study on Digital Comparison Tools.226
5.9 Below we have focused on competition in search and display advertising. We have not looked in detail at classified advertising but have rather considered its possible role in providing competition to other forms of digital advertising.
**Demand for advertising**
**Advertiser decision making**
5.10 Decisions made by advertisers choosing digital advertising media tend to be data-driven using measurable indicators. Advertising campaigns are planned by first defining the business objectives and available budget to achieve these
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226 CMA (2017) Digital comparison tools market study. From the consumer’s perspective, classified advertising is very closely associated with digital comparison tools, defined by the CMA previously as ‘digital intermediary services used by consumers to compare and potentially to switch or purchase products or services from a range of businesses’. objectives. Advertisers, or commonly the media agencies advising them, will then determine a series of metrics, or key performance indicators (KPIs), relating to the outcomes the advertising campaign is hoping to achieve.
5.11 Typically, KPIs relate to either the impact of the advertising on brand awareness at one extreme or to driving specific consumer actions (e.g., sales or enquiries) at the other. Several advertisers and media agencies referred to the ‘marketing funnel’ or ‘purchase funnel’, which illustrates the mental steps along the consumer journey to making a purchase of a product or service – from awareness to consideration to purchase. At the top of the funnel, KPIs relate to improving the awareness of consumers that are ‘out-of-market’ and are not currently aware of the product or service. At the bottom of the funnel, KPIs relate to selling to those customers who are ‘in-market’, in that they may have expressed some preference for the product or service but have not yet bought it.
Figure 5.1: The purchase funnel
Choice of appropriate digital advertising inventory is largely based on optimising the outcomes of advertising on the KPIs being targeted. In order to assess this, advertisers or their agents need to be able to measure outcomes. This means that, in addition to the performance of media in meeting KPIs efficiently (at low-cost), principles of accountability(^{227}) and measurability(^{228}) are
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(^{227}) The ability to track and report back on the delivery of marketing investment against delivered media granular targeting.
(^{228}) The ability to report back on the success and effect on a client’s business at broad reach awareness campaigns and down to highly targeted performance media buys looking at online sales. also important in driving advertiser choice. At a high level, advertisers and their agents will choose the media that best meets their specific objectives but may face diminishing returns in each media channel they use.
5.13 In some cases, choice of inventory is driven by attributes that are exclusively available within a certain advertising channel. Certain channels may have access to inventory, data or technology that allows for the targeting of specific audiences not available elsewhere. Advertisers can also be motivated by various distinct factors in their choice of platforms, for example commercial agreements or restrictions due to the nature of their products (eg gambling, pharmaceuticals).
**Advertiser segmentation and multi-homing**
5.14 Larger, more sophisticated advertisers often use media agencies and technology tools to purchase inventory from multiple sources. The large five media agencies(^{229}) directly account for approximately one quarter of overall expenditure on digital advertising, though this is higher for display advertising (44%) than for search advertising (13%).(^{230})
5.15 Almost all the larger advertisers that responded to our questionnaire use a media agency and highlighted the following benefits of doing so:
- best practice advice and external expertise in designing campaigns and allocating budget across advertising channels;
- greater economies of scale and scope in resource requirements (manpower, technology and expertise); and
- preferred trading arrangements, eg volume discounts, negotiated by the agency.
5.16 In many cases media agencies are remunerated on a commission basis based on the amount spend by the advertiser (though sometimes on a fixed fee basis and sometimes with performance fees). In general, media agencies exploit their scale to negotiate volume rebates with media owners based on aggregate spend across the media agency. They typically then share these rebates proportionally with their advertising clients. However, media agencies have told us that their ability to negotiate discounts from the large digital advertising platforms (such as Google, Facebook and Amazon) is limited, as the vast majority of inventory is sold by auction and the large platforms tend
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(^{229}) Publicis, Interpublic, Dentsu Aegis, Omnicom, WPP.
(^{230}) CMA calculations based on data provided by suppliers and media agencies. See Appendix C for more detail. not to offer discounts. There are some opportunities to negotiate volume discounts from smaller platforms or media owners, particularly those that work on a fixed-price basis when selling to advertisers.
5.17 Larger advertisers told us that the benefits of using multiple platforms to purchase advertising from various sources was that this provided them with greater variety of audience and more flexibility in optimising targeting capability and cost effectiveness, allowing them to better achieve KPIs. Some advertisers also mentioned that a multi-platform approach avoided them being overly reliant on a single platform. Most suggested that while there were some issues in comparing advertising performance across platforms, these were not sufficient to stop them multi-homing.
5.18 Smaller, less sophisticated advertisers are less likely to multi-home across platforms or use media agencies, due to the proportionally greater transaction costs in doing so. Instead, they more commonly go directly to Google and Facebook due to their wide reach and their simple self-service interfaces, eg Google Ads or Facebook Ad Manager. This suggests that Google and Facebook may have a competitive advantage in competing for smaller advertisers.
5.19 Both Google and Facebook have very long tails of small advertiser clients. Expenditure of the median UK advertiser in 2018 on Google Search was only £[200-300] while the mean was £[16,000-17,000]. Expenditure of the median UK advertiser in 2018 on Facebook was only £[0-100] while the mean was £[500-1000]. Smaller advertisers account for a significant proportion of these platforms’ revenues. [15-20]% of Google’s 2018 UK search advertising revenues came from advertisers spending less than £100,000 and [30-40] % came from advertisers spending less than £1 million. About half of Facebook’s advertising revenue comes from smaller clients.
Supply of advertising inventory
5.20 Search advertising is the largest category of digital advertising, with total ad spend of £6.4 billion in 2018. Search advertising is sold predominately by two leading search engines, Bing and Google. Amazon also sells search advertising in the form of Sponsored Brands and Sponsored Products that appear in the search results on its ecommerce platform. However, Amazon’s search advertising differs from search advertising provided by search engines as it is only available to sellers on its platform.
5.21 Total spend in display advertising was worth £5.1 billion in the UK in 2018. About 60% of expenditure is made on owned and operated platforms, which typically provide social media to consumers. The largest of these platforms is Facebook, which owns both Facebook.com and Instagram. YouTube is the second largest and is owned by Google. Other platforms selling a smaller amount of display advertising include Snapchat, Twitter, Pinterest, TikTok, Verizon Media, LinkedIn and Amazon. 40% of ad spend is made through intermediaries used by advertisers to access many publishers of smaller scale (for example, suppliers of news media and app providers).
5.22 Google and Facebook are active in display advertising both through their owned and operated platforms (Facebook, Instagram, YouTube) and through activities providing various intermediation and technology services, which are discussed in more detail within our assessment of open display advertising.
**Substitutability between advertising media**
5.23 To inform our assessment of competition, we have considered substitutability between digital advertising and other more traditional forms of advertising, such as TV, and distinctions within digital advertising, such as between display, search and classified and, within display, between owned and operated and open channels and between video and non-video advertising.
5.24 We sought the views of advertisers and media agencies on how decisions to allocate budget between different types of media are made and what this implied for substitutability. The views of the large media agencies are of particular significance, given their role in acting on behalf of a wide range different advertising clients and buying across all types of advertising media. While media agencies said that substitutability between different media depends on the nature of each advertiser and the specific objectives of their campaign, both agencies and advertisers identified some areas where substitutability is likely to be more limited.
**Between digital advertising and traditional advertising media**
5.25 At a high level, the ability for advertisers to use data to target specific audiences online distinguishes it substantially from traditional advertising media. In the case of search advertising, advertisers can target audiences that have expressed intent through their search queries, and in display advertising, advertisers can use data gathered by online companies to target specific audiences.
5.26 We focused particularly on the extent to which video display advertising is substitutable with TV advertising (including Video on Demand), as this seems to be where similarities between digital advertising and traditional advertising media are greatest. Our discussions with media agencies and with TV media owners suggested that there is limited substitutability between the two, principally because the greater availability of data in online display advertising means that more specific audiences could be targeted than through TV. This means that advertisers would only find TV advertising to be substitutable with online display in certain circumstances.\\textsuperscript{231} TV advertising can be used for advertising campaigns with broad reach or where the desired audience can be defined by the context (ie TV programme) within which the audience is shown. Our understanding is that TV advertising is also unlikely to be an effective substitute for the long tail of smaller advertisers that use Google and Facebook. This is because TV advertising needs to be bought at some scale and providers tend not to offer such simple self-service interfaces for smaller advertisers as Google or Facebook.
5.27 Google and Facebook both submitted to us that they compete with a wide range of media owners, including those supplying traditional advertising media, such as TV. They suggested that the characteristics of the advertising products that are offered by TV and online are becoming closer. The view that TV advertising and online display advertising were likely to converge as TV made greater use of user data was shared by some stakeholders. However, there was not a suggestion that this change was likely to occur imminently.
\\textit{Between search and display}
5.28 We noted a consistent view that search and display advertising are unlikely to be substitutable in general. All media agencies and most advertisers told us that search and display advertising are not substitutable, mainly because they perform different roles within the customer purchase journey. Search is intent-based advertising designed to provide immediate answers to those consumers that have already shown interest in buying the product and are at the end of the purchase funnel (‘in-market consumers’), whereas display is suitable for raising brand awareness and reaching new audiences that might not yet have shown interest (‘out-of-market consumers’).
5.29 This distinction is reflected in the advertising KPIs that search and display are typically used to target. Almost all respondents suggested each had relative advantages in targeting different KPIs: display is considered more versatile and typically cheaper at driving reach and brand awareness objectives, while search is considered closer to the point of purchase and so better for targeting
\\textsuperscript{231} A minority of advertisers responding to our questionnaire identified TV as the closest substitute to Facebook. However, we noted that these advertisers were producers of fast-moving consumer goods (FMCG) and so likely to be interested in broader audiences and so benefit to a relatively lesser extent from the targeting of specific audiences and to a greater extent from lower TV prices. actions, conversions or sales. Some respondents mentioned that search and display advertising work well in tandem.
5.30 Most advertisers set budgets for search and display advertising independently and do not allocate them interchangeably. Some told us that they might switch budget from display to search when the campaign objectives change. Most advertisers told us that they had not changed their broad approach to allocating budget between search and display over the last few years. However, there were several recent instances mentioned by advertisers of budget being switched from display to search following analysis showing that display was not performing as well in terms of return on investment (ROI) and other KPIs.
5.31 The distinction between display and search was to a large extent reflected in the views we received from suppliers of digital advertising inventory and in their internal documents. However, several suppliers of display advertising inventory suggested that they also competed with Google Search, particularly due to its scale across the digital advertising sector as a whole. Google and Facebook identified each other as key competitors for advertising and also pointed to a wider set of online and offline competitors including TV advertisers, video streaming services and Amazon.
*Between classified and search advertising*
5.32 We have heard a consistent view from advertisers that classified advertising, or paid listings on sector-specific websites, is not a substitute for search advertising. Few advertisers that responded to our questionnaire use classified advertising, but those who do all said that classified and general search advertising are not substitutable but are rather used in tandem to achieve advertisers’ goals. This is because they target different points of the purchase funnel and can be used to reach different audiences. Search has a higher reach, is cheaper and is best used to achieve conversions for a wider audience that has demonstrated general intent, while classified is more expensive, has lower reach and is used to achieve conversions within a narrower audience that are engaged in actively researching specific products or services.
5.33 Notwithstanding these advertiser views, we have considered in more detail later in the chapter the competitive constraint that classified advertising may impose on Google, due to its importance in understanding the extent of Google’s market power. Between video and non-video display advertising
5.34 We received views that suggest limited substitutability between video and non-video advertising. Media agencies told us that decisions between video and non-video advertising were typically likely to be driven by the need to convey the advertiser’s message in the best way. These decisions were likely to be taken at an early stage of the planning process, driven by input from the creative agency. This would limit substitutability between video and non-video advertising.
Between owned and operated and open display advertising
5.35 Media agencies told us that similar advertising formats and audiences are available on owned and operated platforms and in open display advertising and that the targeting techniques available are also roughly the same. Consequently, advertisers would largely see these channels as substitutable and decisions would be driven by the ability of the inventory chosen to meet specific KPIs. Media agencies highlighted that there are some contextual differences that may affect consumer engagement with the advertising. Owned and operated platforms such as Facebook showed display advertising in the consumer’s news feed while open display advertising would typically be embedded in articles. However, advertisers would largely see owned and operated and open display advertising as substitutable in spite of these differences.
Overall view on substitutability between different media
5.36 The evidence we have gathered so far suggests that the competitive constraint imposed on search and display advertising by other forms of advertising is likely to be limited. Similarly, search and display advertising appear likely to impose little competitive constraint on one another. In our view, it is most appropriate for us to consider competition in search and display advertising separately from one another and from other forms of advertising. In the case of display advertising, it seems likely that a further segmentation between video and non-video advertising would also be appropriate, though we will look at this further during the rest of the study.
Lack of transparency
5.37 For there to be effective competition between suppliers of advertising inventory, advertisers need to be able to make informed choices about the inventory that they buy. Effective competition between intermediaries relies on both advertisers and publishers being able to make informed decisions on the channels through which they buy and sell. However, advertisers and publishers face a lack of transparency on several aspects of digital advertising needed for them to drive effective competition. For example, there may be a lack of transparency over:
- the quality and effectiveness of advertising;
- how auctions are carried out and how outcomes are determined; and
- how intermediaries acting on advertisers’ or publishers’ behalf are remunerated.
5.38 In many markets, attempts by suppliers to exploit a lack of transparency will often harm both the demand and the supply sides of the market, as it reduces the trust that customers place in the market. This creates a natural incentive for suppliers to act in a way that preserves their reputation. However, in the case of digital advertising this reputation mechanism may not be sufficient.
5.39 Advertising has some of the characteristics of an 'experience good' in that it is only possible to evaluate its quality and effectiveness after an advert has been shown to an audience. Many advertisers are small and micro-businesses or even individuals. This means they are likely to be relatively unsophisticated in their understanding of the market. The complexity of digital advertising makes it difficult for non-specialist advertisers and publishers to monitor and evaluate the effectiveness of advertising for themselves or make the rational, well-informed choices that drive effective competition. Moreover, it may not always be the case that the intermediaries used by advertisers and publishers to buy and sell inventory or to evaluate market outcomes have the right incentives to act in their customers’ best interests or the ability to access the data required to do their job.
5.40 The wide volume of data available in digital advertising goes some way to addressing the need on the part of advertisers to understand the effectiveness of their advertising. That is, in digital advertising buyers and sellers potentially have access to a range of data on everything from the interests of potential customers, the devices they use and their location at any point in time. This provides the ability to target audiences more precisely and so reduce the ‘wastage’ that is a feature of traditional advertising media such as TV. It
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232 In some respects, it could be argued that advertising has aspects of a ‘credence good’ in that even after an advert has been shown, it is difficult and costly to measure its effectiveness and the result may be imperfect. should also mean that the effectiveness of advertising can be monitored and assessed more accurately after it has been shown.233
5.41 However, the use of this data results in substantial complexity. The sale of digital advertising involves high volumes of transactions in real time with much of the buying and selling being carried out by automated trading programmes. Intermediaries and technology providers perform various functions to make this process work, such as running auctions to aggregate supply and demand, providing and analysing the data required for audience targeting and for verification and measurement of advertising outcomes. The complex way in which digital advertising is sold means that it is more difficult for individual advertisers to make an informed assessment of the effectiveness of advertising outcomes. Data is also unevenly distributed across market participants. This creates scope for outcomes to be misrepresented and for the incentives of advertisers and the intermediaries representing them to be misaligned.
5.42 We are aware of academic research which has raised concerns about the measurement of the effectiveness of some online advertising.234 Other research has also found that in spite of the information about the potential lack of effectiveness of brand search advertising being widely reported in the popular and business press, a majority of advertisers continued with ‘business as usual’, suggesting a substantial inertia of business practices. In addition, the research found that advertisers did not react to the information about the ease and benefits of running experiments to carry out their own testing of the effectiveness of their advertising.235
5.43 Platforms and intermediaries may have the incentive and ability to exploit the asymmetries of information and inertia on the part of advertisers in a number of ways. For instance, platforms with market power can take steps to reduce the degree of transparency in digital advertising markets, or refrain from taking steps to make it more transparent, forcing advertisers to rely on information and metrics provided by those platforms. Asymmetric access to information across suppliers may also create opportunities for exclusionary behaviour on the part of the large advertising platforms. The upshot of all of
233 More data about the delivery of advertising to individual consumers and their subsequent behaviour should improve the measurement of the financial return from different forms of online advertising. However, we are aware that some academic research has raised concerns about some of the methods used to measure this effectiveness of online advertising (eg Customer heterogeneity and paid search effectiveness: a large scale field experiment.), suggesting that there could be an over-reliance on the intermediate metrics that are available.
234 Blake, T., Nosko, C., and Tadelis, S. (2015) ‘Consumer Heterogeneity and aid search effectiveness: A large scale field experiment.’ Econometrica, Vo.83 (1) 1-26.
235 Rao, J., and Simonov, A. (2018). ‘Firms’ Reactions to Public Information on Business Practices: Case of Search Advertising’. these issues may be that competition is weakened. These issues are considered in more detail below within each of the digital advertising sectors we have looked at.
**Competition in search advertising**
5.44 This section sets out our initial findings on competition in search advertising. It covers:
- our understanding of the competitive process, including how advertisers choose between search engines and how search engines may respond to competition;
- evidence on market outcomes in search advertising, including market shares, prices and trends over time;
- the competitive constraints on search advertising from classified advertising or specialised search;
- barriers to entry and expansion; and
- how market power may be exploited.
5.45 Our initial findings are based on the views of advertisers and media agencies and of suppliers of search advertising. We have also sought evidence on market outcomes from suppliers of search advertising.
**Competitive process**
*How search advertising is sold*
5.46 In search advertising, advertisers bid to link their company website to specific keywords so that the links appear in relevant search engine results. In the vast majority of cases, advertisers will only pay when a consumer clicks on their link (cost-per-click), though in a small minority of cases they may choose to pay only for impressions.236
5.47 Search engines use second-price auctions to set prices for advertising inventory, where the price paid by the advertiser that wins the auction (and so the right to display the link in relevant search results) is determined in part by
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236 In other words, whenever the link appears in the search results, regardless of whether the consumer clicks on the link. the value of the second-highest bid. A key feature of the auctions used in search advertising is that outcomes are also determined by the relevance to the search query of the underlying content of the advertiser website to which the advertising links.\\textsuperscript{237} Search engines assess relevance directly and use this assessment to weight bids from different advertisers on a real-time, in-auction basis.
5.48 These weightings have a direct bearing on whether the advertiser’s link is displayed in search engine results at all for any given search and on the cost-per-click that the advertiser pays if the results are displayed. The price paid by the winning advertiser is equivalent to the bid that would have been required to match the second-highest bid, given the relative relevance weighting of the two bids. Higher relevance will mean the search engine places greater weight on the advertiser’s bid, with the result that its advertising is more likely to appear in search results and at a lower cost-per-click.
5.49 The quality adjustment process is one way that search engines can influence outcomes and prices – we discuss this in more detail later in the chapter. It can also improve relevance, which is a benefit to both consumers and advertisers as it means that search advertising is only shown to audiences that have expressed their interest in the relevant product or service through their search query.
\\textit{Demand for search advertising}
5.50 The complexity of the auction mechanism means that buying search advertising is a data-driven process that requires advertisers to make many granular decisions. These decisions include:
- \\textbf{Which keywords to bid for} – advertisers may often bid on thousands of keywords simultaneously. They choose which keywords to bid for based on their likely relative return on investment. Performance is typically measured in terms of the conversion rate, in other words the extent to which consumers that click on the advertising go on to make a purchase.
- \\textbf{How flexible to be with matching to those keywords} – advertisers can also choose from different matching functions that determine how these keywords are matched to consumer search queries. At one extreme, advertisers can specify that the keyword has to exactly match the search query, for example Google’s ‘Exact Match’ function. At the other extreme, the advertiser can rely on algorithmic matching provided by the search
\\textsuperscript{237} Both Google and Bing both refer to the ‘quality’ of the consumer experience when describing the relevance of search advertising. engine which links the keyword to similar search queries, for example Google’s ‘Broad Match’ function.
- **Which consumers to target** – advertisers often use data to target search advertising on specific audiences (for example by demographic or depending on whether they are an existing customer). Targeting more specific audiences can increase return on investment substantially and provide additional segmentations across which relative performance can be measured.
- **How much to bid** – in addition to choosing which keywords to bid for, advertisers also choose how much to bid for each keyword. As outcomes are determined by second-price auction, an advertiser’s bid does not directly determine how much it pays, but rather affects its ranking in the auction and consequently its ranking in the search results (and indeed whether it appears at all). Advertisers may delegate some of this decision-making to the search engine by using automated bidding tools. These tools automatically adjust an advertiser’s bid to optimise performance within their budget.
5.51 In approaching these decisions, advertisers attempt to optimise their expenditure on search advertising continuously over time, by setting their bids to allocate their expenditure to the keywords, search engines and target audiences where their return on investment is greatest. Often, they will use technology tools such as Google’s SA360 to automate this process. This provides the mechanism for competition between search engines to occur. If the return on investment from bidding for keywords on one search engine is greater than another, eg because the conversion rate is higher or the cost-per-click lower, advertisers will divert expenditure to bidding for keywords on that search engine.
*How search engines compete for advertisers*
5.52 Search engines are two-sided platforms that compete for both consumers and advertisers. Consequently, the main way in which search engines compete for advertisers is indirect, ie through attracting consumer attention. Search engines attract consumer attention through offering high-quality, relevant search results and then monetise this attention by offering the opportunity for advertisers to incorporate relevant advertising into these results.
5.53 Search engines also compete more directly for advertisers, through various mechanisms. They compete through the quality of interface offered to advertisers and through the use of data to offer more granular audience targeting and the measurement of advertising outcomes. As search advertising is targeted on keywords which relate to specific consumer search queries, audience targeting is incrementally less valuable than in display advertising. However, most advertisers and media agencies we contacted did use audience targeting to some extent. As search advertising is often used for achieving conversions, measurement of outcomes and attribution analysis is particularly important.238
5.54 While search engines use auctions rather than setting prices directly, we have identified various levers at their disposal to directly and indirectly influence advertising prices and conversion rates. Search engines determine the maximum number of ads that can be shown per search query, how these ads are presented, the way in which relevance is assessed, the level of reserve prices, and the way in which matching algorithms work. In some cases, they also determine advertisers’ optimum bidding strategy on their behalf. These levers collectively determine the extent to which advertising is shown at the expense of organic search results, while influencing which adverts are shown and the prices advertisers pay.
**Market outcomes in search advertising**
5.55 In addition to shares of consumer attention and search traffic described in Chapter 3, we have looked at evidence on various market outcomes in search advertising. This evidence and the supporting data are set out in more detail in Appendix C on market outcomes.
5.56 Figure 5.2 below shows that UK search advertising revenues have grown steadily over the last few years. Google’s revenues grew from £2.3 billion in 2010 to £6.0 billion in 2018, reflecting a compound annual growth rate of around 12%. Google has continued to account for more than 90% of search advertising revenues, an order of magnitude greater than its next closest rival, Bing. In our view this evidence strongly suggests that Google benefits from market power, particularly when interpreted in light of the scale advantages discussed in Chapter 3 and further below.
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238 See Appendix E for an explanation of advertising verification, measurement and attribution. 5.57 We have also looked at evidence from Google and Bing on average prices, or cost-per-click, from July 2016 to June 2019, split between prices charged for searches on desktop and prices charged for searches on mobile devices. This is shown in Figures 5.3 and 5.4 below. Average desktop prices are higher than mobile, perhaps because consumers are more likely to purchase higher value items or are more likely to complete purchases when using desktops. 5.58 We note that Google has achieved somewhat higher prices on average than Bing over the period. This is consistent with feedback from advertisers, most of whom suggested that Google tended to have higher prices than Bing for similar keywords. However, at this stage we interpret the evidence on relative pricing with some caution. In particular, we note that relative prices are likely to be driven by composition effects, notably:
- differences in search terms entered by consumers on either search engine;
- differences in conversion rates, either reflecting differences in the users of either search engine or differences in the ability of either search engine to target and track attribution; and
- differences in the population of advertisers using either platform, for example smaller advertisers may be more likely to single-home on Google.
5.59 We are not able, therefore, to conclude on the basis of this data alone whether Google has higher prices than Bing on a like-for-like basis. We will consider in the second half of the study whether we can produce a more like-for-like comparison of prices.
5.60 Finally, our analysis of market outcomes shows that there has been a substantial shift over time from advertising delivered to consumers on desktop to advertising delivered to consumers on mobile. This is consistent with other market reports we have seen and reflects the underlying increased usage of mobile devices. We note that this shift may benefit Google over its rivals, due to Google’s default status on nearly all mobile devices. The continuation of this trend would mean that Google is able to gain an increasing overall share of search queries and advertising revenues as well as gain an advantage over rivals from the data it can gather from mobile devices.
**Competitive constraint from specialised search**
5.61 Google submitted to us that it faces strong competition from a range of different ‘vertical search services’ (ie ‘specialised search services’) who specialise in paid listings in particular sectors, eg Amazon in retail and Booking Holdings in travel. Google told us that because consumers search (offline and online) for particular things, different competitive constraints are relevant to different query types. It said that [a small proportion] of search queries generate most of Google’s search revenues. These are commercial queries (eg shopping, credit cards, finance, travel, hotels, plumbers etc).
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239 For example, IAB UK & PwC Digital Adspend Study 2018. 240 These largely correspond to what we have described as ‘classified online advertising’ above. Specialised search services exist in each major commercial content category and Google competes with these services. Google also said that the pressure on it to innovate derives not just from competition in one category alone, but from the aggregate effect of competition across all categories.
5.62 However, the evidence we have reviewed so far suggests that, with the possible exception of Amazon, these specialised search providers do not impose a strong competitive constraint on Google, even in the sectors within which they specialise.
5.63 As noted above, the advertisers we have contacted so far during the study have been unanimous in their view that paid listings on classified sites are not substitutable for general search as the two are used for different purposes.
5.64 Further, we note that this issue has been looked at before in the context of the European Commission’s Google Shopping investigation, which considered whether specialised search services were in the same market as general search. It found the markets to be distinct for a range of reasons. Most notably, the Commission found that the two types of service operate as complements rather than substitutes as a substantial number of consumers access specialised search via general search rather than accessing them independently.
5.65 We note evidence that in most sectors it appears that the relationship between general search and specialised search services tends to be more vertical than horizontal in nature. In other words, rather than providing an alternative for consumers and advertisers using specialised search providers, it appears to a large extent that Google’s general search performs the function of a ‘gatekeeper’, through which consumers access specialised search. Google is a key source of consumer traffic for all the specialised search providers we have identified. This was highlighted by advertisers that responded to our questionnaire and is supported by Comscore data, which suggests (for desktop only) that a large proportion of traffic arriving on vertical search websites comes directly from Google websites.
5.66 In turn, it appears that a large proportion of Google’s revenues in sectors where vertical search providers are present comes from the vertical search providers themselves, rather than from advertisers choosing to advertise on general search as an alternative to vertical search.
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241 European Commission Decision AT39740 Google Search (Shopping), June 2017, paragraphs 166 to 177. 242 See Appendix C. Comscore MMX MP, Desktop only, Desktop aged 6+, August 2019, UK. 243 For example, we note that Google’s largest five customers of search advertising are all specialised search providers (Amazon, Booking, Expedia, Money Supermarket, Comparethemarket.com). 5.67 We note that some specialised search providers may be becoming more successful in generating their own traffic through promoting their brands and mobile apps, particularly as mobile usage has increased. However, in most cases they still appear to be heavily reliant on Google. For example, Booking Holdings has strong brands (Booking.com, Priceline, Kayak) and a large share of the online travel agency (OTA) market but still spends about half of its total global operating costs on performance marketing (primarily search advertising with Google).244
5.68 One notable possible exception to this is retail, where the evidence that Google competes directly with Amazon is more compelling. While Google is an important source of consumer traffic to Amazon (Amazon being one of Google’s largest search advertising customers) we note survey evidence that suggests Amazon is the preferred consumer starting point for product search.245 In addition, we note that Amazon is likely to have important competitive advantages from its broader role as an ecommerce channel (for example from its physical distribution network, its Prime membership and its first-party data built on its consumers’ shopping histories). The value of Amazon’s first-party data was stressed to us by media agencies and several advertisers from the retail sector.
5.69 However, even if Amazon imposes some competitive constraint on Google in relation to retail search advertising, this would only apply to advertising representing a minority of Google’s revenues in search. From IAB 2018,246 we note that 18% of search revenues are derived from the retail sector. Amazon may compete to some extent in other sectors defined in the IAB report, such as consumer electronics. However, collectively it appears unlikely that Amazon competes with Google in sectors exceeding one third of Google’s search advertising revenues.247
**Barriers to entry and expansion**
5.70 In order to sell search advertising, potential entrants need to be successful in attracting search queries from consumers. This means that the barriers to entry on the consumer side of the market, derived from the need for access to
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244 Booking Holdings, Form 10K 2018. 245 For example, a BloomReach Survey, ‘State of Amazon 2016’, September 23, 2016, found that Amazon is the preferred starting point for product search. The survey sought to determine where consumers begin their product searches and found that 55% of respondents reported Amazon, while 28% reported search engines and 16% reported retailers. 246 IAB UK & PwC Digital Adspend Study 2018. 247 The IAB report shows that the following sectors account for 36.5% of paid search revenues: Retail, Consumer electronics, Computers & software, Beauty, grooming & personal care, Toys & video games, Consumer goods. While Amazon is likely to compete in each of these categories to some extent, it is unlikely to impose a competitive constraint across all search terms in these categories. a search index, from economies of scale and scope in click-and-query data and from defaults as described in Chapter 3, are naturally also relevant to potential entrants wanting to supply search advertising.
5.71 In addition to these advantages from the consumer side of the market, Google appears to derive additional advantages on the advertising side of the market which create further barriers to entry. These advantages come from single-homing by (particularly smaller) advertisers, Google’s better data for targeting and better synchronisation with Google Analytics, and Google’s ability to influence advertiser behaviour through its ownership of the search intermediation tool SA360.
5.72 Transaction costs faced by advertisers in using multiple search engines appear likely to benefit Google and create a barrier to entry for smaller rivals. Most of the larger advertisers we contacted did not suggest there was a difficulty in multi-homing across multiple search engines and used tools such as SA360, or those provided by third parties such as Marin and Kenshoo, to do so. However, a minority of the larger advertisers who responded to our questionnaire choose to single-home as Google had a sufficiently large market share and reach to meet all their needs. We understand that many smaller advertisers choose to single-home, using the simple interface provided by Google Ads and benefiting from its broad reach. We intend to investigate this issue further in the second half of the study.
5.73 Access to demand from a significant proportion of advertisers that single-home may also provide Google with greater advertiser density, allowing it to run more competitive auctions that generate higher prices and more relevant ads. This is likely to be of particular benefit for more specific keywords relating to the ‘tail’ of less common search queries. These keywords (which for example might include more detail on product characteristics desired by the consumer) tend to be preferred by advertisers as they can allow for more specific targeting, resulting in higher conversion rates and returns on investment.
5.74 Google’s extensive first-party data is also likely to have substantial advantage over smaller rivals, creating a barrier to entry for potential rivals. Google’s first-party data means that advertisers can target search advertising on particular audiences (and have confidence in the composition of those audiences), allowing them to improve performance. Several advertisers highlighted Google’s first-party data as an advantage over Bing.
5.75 Advertisers also told us that Google had an advantage from better synchronisation with Google Analytics, allowing for better measurement and attribution of advertising performance than Bing. Microsoft told us that Google had additional advantages in measuring effectiveness from the prevalence of its online Tags and from its mobile data that allowed it to measure offline conversion in the form of store visits (in addition to deals it had negotiated with third parties such as credit card providers). It pointed to publicly available research indicating that Google tags (ie Google Analytics, Google Ads and Floodlight tags) cover about 88% of UK websites, whereas Microsoft’s tags cover less than 1% of UK websites. Given the importance of measured performance in driving advertisers’ decisions on how to allocate expenditure in search advertising, in our view it is highly likely that these advantages would create a barrier to entry for potential rivals.
5.76 In addition to these advantages, Microsoft further explained that Google Search also benefits from the relative interoperability between SA360, a tool used by many advertisers to automatically optimise expenditure across keywords and platforms, and Google Search compared to that between SA360 and Bing. Microsoft has stated that Google did this in two ways:
- Data on bids from Google Search is fed back to SA360 and combined with conversion data in real time, while bidding data from Bing comes back only periodically. This can make it appear to advertisers that Google Search is performing better on SA360 because conversion information for Google appears before Bing and automatic budget allocation rules will correspondingly allocate it more budget.
- New functionalities of Google Ads are introduced on SA360 quickly while Bing has often had to wait significant periods of time for innovations in the functionality of its search engine to be adopted by SA360.
5.77 We intend to investigate Microsoft’s concerns more fully in the latter part of the study.
**Exploitation of market power**
5.78 Search advertising prices are set by auction, based on the bids submitted by advertisers, rather than being set directly by the search engine. This raises an important question as to whether a search platform with market power has the ability to influence the prices that advertisers pay. Our current understanding is that search engines have several levers through which they can influence market outcomes such as the quantity of advertising and advertising prices.
5.79 A profit-maximising search engine has the incentive to maximise the revenues it earns from search advertising. It can earn greater revenues both by designing its auctions to more effectively extract economic rents from advertisers, driving higher advertising prices, and by selling more advertising at the expense of organic search results. The market power of Google’s search engine could allow it to use either of these mechanisms to increase search revenues.
5.80 Higher advertising costs may be passed on to consumers through the impact advertising costs have on competition in downstream markets. Higher advertising prices may be passed through directly to the prices of products bought by consumers in cases where search advertising is treated by advertisers as a variable cost relating to each product. Alternatively, where search advertising is treated by advertisers as a fixed cost required to enter the market, higher search advertising prices may raise barriers to entry for smaller rivals unable to afford access to search advertising. This will also indirectly raise downstream prices to final customers.
5.81 The following paragraphs explain ways in which Google could in principle apply its various levers to exploit market power. We have not as yet established to what extent these levers are employed in practice and will consider this in the second half of the study.
Advertising capacity and presentation
5.82 Google determines the overall limit on the number of advertisements that can appear in search results and how these advertisements are presented alongside organic search results.(^{248}) It could exploit market power by crowding out organic search results with more advertisements that are shown more prominently, or in a way that makes them less distinguishable from organic search results. We note some evidence that Google may have increased the number of ads appearing in certain search results over time.(^{249})
Reduced weighting on relevance compared to bid levels
5.83 Google could also affect the overall volume of advertising shown at the expense of organic search results through reducing the weight it places on the relevance of advertisements in its auctions compared to the level of bids. By setting lower Ad Rank Thresholds (the thresholds for the relevance required for advertising links to appear in the results) for some auctions,(^{250}) Google
(^{248}) Google currently allows a maximum of eight advertisements to appear on every SERP, four at the top of the page and four on the bottom of the page. These limits and the way search advertisements are presented have changed over time.
(^{249}) For example, Google ceased showing text ads in the sidebar on desktop and increased the limit on the number of ads appearing for ‘highly commercial queries’ from three to four in 2016. See Searchengineland.com: ‘FAQ: All About The Changes To Google’s Ad Layout On Desktop Search Results’.
(^{250}) Equivalently, Google could increase the quality score applied to bids. could monetise its search results to a greater extent at the expense of organic search results.
Setting of reserve prices and quality adjustments to extract rent
5.84 Google’s Ad Rank Threshold also acts as a reserve price, directly determining the price paid by advertisers when only one bid exceeds the threshold. This is the case in [the majority] of Google’s auctions, representing [a material proportion] of its revenues. In these cases, by setting a higher Ad Rank Threshold(^{251}) Google could increase the price paid by advertisers, thus extracting more economic rents.(^{252})
5.85 We note that Google sets the Ad Rank dynamically across each individual auction. This could allow it to set higher Ad Rank thresholds in auctions where only one bid is likely to exceed the threshold and lower Ad Rank thresholds in auctions where multiple bids are likely to exceed the threshold (in these cases allowing it to show more advertising at the expense of organic search as described above).
5.86 In auctions where there are multiple bidders that exceed the Ad Rank Threshold, the price paid by the winning bidder is determined by a function of the value of the second-highest bid and the quality adjustments Google makes to either bid. This may provide Google with flexibility to increase the price paid by the winning bidder, either by increasing the quality adjustment applied to the second bid or by reducing the quality adjustment applied to the first bid.
Matching algorithms and automated bidding
5.87 In addition to the quality adjustment process, there appear to be other mechanisms where there may be scope for Google to exploit market power. For example, we note that matching algorithms are used to match keywords to search queries and that Google Ads runs automated bidding to allocate advertiser budgets on their behalf. These mechanisms could give Google some flexibility in allocating advertiser bids across auctions and Google may face conflicts of interest in doing so. For instance, it may have the incentive to match keywords very broadly, potentially resulting in more advertising being shown in search results where it is less relevant to the user query.(^{253}) Google could also allocate bids across auctions in a way that raises prices for other
(^{251}) But below the advertiser’s quality adjusted bid (Ad Rank). (^{252}) Equivalently, Google could lower the quality adjustment applied to bids. (^{253}) AdHawk Blog: 7 Default Settings in AdWords That Lower Your ROI. advertisers, taking advantage of the second-price auction format. These mechanisms may allow it to better extract economic rents from advertisers.
**Leveraging of market power into other markets**
5.88 Finally, it appears that Google may be able to exploit its market power in general search by leveraging it into other related services. This includes specialised search. Google has launched downstream specialised search services, such as Google Shopping and Google Flights. Search advertising is a key source of traffic for downstream 'specialised search' markets, such as price comparison sites or online travel agents. Google has the potential to exploit this through self-preferencing in how specialised search is presented alongside general search results or through diverting search engine traffic away from rivals. We note that the European Commission found Google to have abused its dominant position in general search, through self-preferencing of Google Shopping. One online travel comparison site raised concerns in response to our statement of scope about how changes to Google’s search algorithm have reduced its visibility in organic search results.
5.89 Google may also be able to leverage its market power in search into the open display market. Smaller advertisers often choose to single-home to minimise transaction costs. Advertisers that wish to single-home have a strong incentive to use Google Ads as they can use it to access Google search advertising and YouTube inventory as well as the open display market. This is discussed in more detail later in the chapter.
**Evidence of exploitation of market power**
5.90 As Google has held its very high market share in search advertising in the UK for at least the last decade, there is no recent direct evidence of the impact of Google’s market power on market outcomes relative to the counterfactual of a more competitive market. That said, our analysis of Google’s profitability is consistent with exploitation of market power. Google’s global returns on capital in search are likely to be well over 40%, well above its cost of capital. We also note that some advertisers have suggested that prices on Google have risen over time (especially in relation to branded terms). Others have told us that the monetisation of Google’s search results has increased
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254 Google could allocate an advertiser’s bid to an auction where it becomes the second-highest bid. While this does not directly affect this advertiser as they do not win the auction, it could raise the price another advertiser pays.
255 See Appendix D for more detailed analysis of Google’s profitability. over time as a greater volume of advertising is shown at the expense of organic search, particularly for searches on mobile devices.
5.91 The lack of transparency around Google’s auction processes makes it very difficult for market participants to observe whether Google is exploiting market power in the ways indicated above. This makes it more difficult for them to respond to Google’s behaviour. Several advertisers have raised concerns about the transparency of Google’s search advertising auctions. Some advertisers have also expressed the concern that prices to advertise on their own brand names have risen substantially but that there is no transparency as to why this is the case. Others have suggested that Google may have incentives to penalise rivals that it competes with elsewhere, for example in specialised search, or publishers that it competes with in the sale of display advertising.
Initial findings on search advertising
5.92 The evidence we have reviewed so far suggests that Google has substantial market power in search advertising.
5.93 Google has had very high and stable shares of supply in search advertising in the UK of over 90% for at least the last ten years.
5.94 The evidence we have reviewed so far does not suggest that many specialised search providers impose a strong competitive constraint on Google, even in the sectors within which they specialise. One notable possible exception to this is retail, where the evidence that Google competes directly with Amazon is more compelling. However, even if Amazon imposes some competitive constraint on Google, this would only apply to a minority of Google’s revenues in search.
5.95 Search advertising is subject to significant barriers to entry that limit the actual or potential competitive constraint faced by Google. Barriers to entry on the consumer side of the market, derived from the need to create a search index, from economies of scale and scope in click-and-query data and from defaults as described in Chapter 3, also apply to potential entrants wanting to supply search advertising.
5.96 In addition to these advantages from the consumer side of the market, Google appears to derive additional advantages on the advertising side of the market which create further barriers to entry. These advantages come from single-homing by (particularly smaller) advertisers, Google’s better first-party data for targeting and attribution, better synchronisation with Google Analytics and Google’s ability to influence advertiser behaviour through its ownership of the search intermediation tool SA360.
5.97 The market power of Google’s search engine could allow it to exploit market power both by designing its auctions to more effectively extract economic rents from advertisers, driving higher advertising prices, and by selling more advertising at the expense of organic search results. Higher advertising costs are likely to be passed on to advertisers’ final customers through the impact these costs have on competition in the downstream markets where advertisers compete.
5.98 We think that any interventions to remedy this situation would need to focus primarily on addressing the sources of Google’s market power on the consumer side of the market, but there is also a case for intervention in relation to features of the advertising market that reinforce Google’s market power. We consider the potential interventions in the next chapter.
**Competition in display advertising**
5.99 This section sets out our initial findings on competition in display advertising. We consider competition between suppliers of display advertising at a high level, including between owned and operated platforms and publishers who sell via the open display market. Issues specific to the open display advertising sector are covered in the following section.
5.100 This section covers:
- our understanding of the competitive process, including how advertising is sold, how advertisers choose between suppliers of display advertising and how suppliers compete;
- evidence on market outcomes in display advertising, including market shares, prices and trends over time;
- closeness of competition between platforms in display advertising;
- transparency of advertising outcomes;
- barriers to entry and expansion; and
- how market power may be exploited. Competitive process
How display advertising is sold
5.101 At a high level, the display advertising sector can be segmented into two channels: owned and operated platforms and the open display market. Owned and operated platforms typically provide social media, which they use to attract consumer attention and create advertising inventory, which they sell to advertisers using proprietary interfaces. They gather data on these consumers to enable advertisers to target specific audiences.
5.102 In the open display market, many publishers of smaller scale (for example, suppliers of news media and app providers) also attract consumer attention through providing content. However, they sell advertising inventory in an open market in competition with other publishers using a complex chain of intermediaries, who often run real-time auctions and typically supply the data used for audience targeting. The open display market is described in more detail later in the chapter.
5.103 In both these channels advertising is either sold using technology to allocate inventory using real-time auctions, or through direct deals. Direct deals can either be hosted using the same programmatic advertising technology used to run auctions or alternatively can be organised directly between the advertiser and publisher. Stakeholders have told us that the vast majority of display advertising inventory is now sold using programmatic technology.
5.104 Many of the auctions used in programmatic advertising are pure price-based auctions, where inventory is sold to the highest bidder. Some social media platforms, including Facebook, will also adjust the ranking of bids according to relevance.
Demand for display advertising
5.105 Advertiser choice in display advertising is primarily driven by the objective of targeting increased brand awareness for specific audiences. KPIs for display advertising tend to be focused on the reach achieved with a specific audience group. This means that the use of data to identify target audiences is key for display advertising.
5.106 Media agencies and advertisers have told us that advertisers are generally agnostic in their choice across different platforms that sell display advertising and between using owned and operated platforms and the open display market. Rather, decisions are made primarily based on effectiveness of meeting KPIs against cost. However, we understand that some smaller advertisers that do not use media agencies may prefer to rely solely on Google or Facebook’s ad buying platforms.
**How suppliers of display advertising compete for advertisers**
5.107 Compared to search advertising, in which advertising is shown when relevant to a specific search query, in display advertising user data plays a much more significant role in providing the ability for advertisers to target specific audiences. Consequently, access to valuable user data that enables more granular audience targeting is a key dimension of competition. In addition, suppliers can compete directly for advertisers through the quality of the advertising interface and associated technology.
5.108 Suppliers of display advertising also have flexibility in the extent to which they monetise consumer attention through the creation of advertising inventory. They have direct control over the quantity of advertising shown or ‘ad load’. Suppliers of display advertising face a trade-off in deciding on how much inventory to create. A higher ‘ad load’ may mean greater immediate financial reward. However, this can come at the expense of the consumer experience to some extent. Unlike search advertising, which is shown in response to specific consumer queries, display advertising is typically unwanted by consumers. This suggests there may be a greater imperative for publishers of display advertising to limit the quantity of advertising shown so as not to harm the consumer experience.
**Market outcomes in display advertising**
5.109 In addition to the market outcomes on the consumer side in social media described in Chapter 3, we have looked at evidence on various market outcomes in display advertising. This evidence and the supporting data are set out in more detail in Appendix C on market outcomes.
5.110 The fragmented nature of the open display market and the fact that advertising is sold via intermediaries makes the estimation of overall expenditure shares in display advertising difficult. Our preliminary estimates, shown in Figure 5.5, suggest that Facebook (including Instagram) is by far the largest supplier, with a share of [40-50%] of advertising expenditure. Facebook has considerably greater scale than the second largest supplier, YouTube, which has [5-10%] of advertising expenditure. In our view this evidence suggests that Facebook is likely to have market power. 5.111 As noted above, it seems likely that a segmentation between video and non-video formats is appropriate given that many advertisers would have limited ability to substitute between the two. As shown in Figures 5.6 and 5.7 below, Facebook (including Instagram) has a [50%-60%] share of video advertising (£[1-1.1] billion revenues in 2018) and a [40%-50%] share of non-video advertising (£[1.3-1.6] billion revenues in 2018). YouTube is the second largest supplier in video display advertising with a [15%-20%] share of expenditure. We estimate that the open display market accounts for around [20%-25%] of video and [45%-50%] of non-video display advertising. Our analysis also shows that there has been a significant move over the last three years towards video advertising, which is taking an increasing share of overall expenditure. 5.112 We have also looked at trends in average advertising prices, as measured by cost per thousand advertising impressions (CPM) for the larger owned and operated platforms, including Facebook, YouTube, Instagram and another social media platform. This is shown in Figure 5.8 below. It shows that prices for Facebook’s core platform have been increasing over the last three years and are significantly higher on average than other platforms. However, we interpret this analysis with some caution as relative price differences can be driven by composition effects (for example between mobile versus desktop... and video versus non-video) similarly to search advertising. We intend to look at this further in the second half of our study.
Figure 5.8: Monthly cost per impression (£, CPM), for selected display advertiser platforms, from January 2016 to July 2019
Source: CMA analysis of parties’ data.
Closeness of competition between platforms in display advertising
5.113 Most advertisers told us that they used a range of platforms to buy display advertising and that different platforms had different relative advantages in achieving advertising KPIs. The platforms most commonly mentioned and ranked highest were Facebook, Google DV360 (Google’s demand side platform for purchasing advertising in open display) and Twitter. Several advertisers mentioned YouTube and the Video-on-Demand offerings of ITV, Channel 4 and Sky, and a few mentioned Amazon, Snapchat, Pinterest and other demand side platforms for purchasing advertising in open display.
5.114 Advertisers and media agencies were consistent in what they saw as the relative advantages and disadvantages of different platforms. Facebook and Google (DV360 and YouTube) were consistently identified as benefiting from greater reach and ability to target specific audiences, allowing advertisers to generate greater return on investment from using these platforms. Advertisers also highlighted various disadvantages of these platforms from a lack of transparency: in the case of Facebook relating to viewability, measurement of advertising outcomes and brand safety, and in the case of Google relating to transparency over its auctions and concerns about fraud and brand safety.
5.115 Advertisers submitted that some rival platforms had idiosyncratic relative advantages. Twitter was highlighted by several advertisers as being especially effective for direct customer engagement and reactive advertising. Snapchat was highlighted for the flexibility of its creative assets and Amazon for its first-party data and for its proximity to the point of sale.
5.116 Rivals similarly saw Google and Facebook as the strongest competitors in display advertising. All of the display advertising rivals we contacted identified Facebook as a competitor and most of these platforms specified that Facebook was one of their top two competitors. These businesses also identified Google as a major competitor, some referring to its ownership of YouTube, and some also referring to its search advertising or its total scale across digital advertising as a whole.
5.117 While all of the platforms identified Facebook and Google as their closest competitors, this does not imply that they impose a significant competitive constraint on Google and Facebook. For example, LinkedIn noted that competition was asymmetric as while Facebook and Google compete with LinkedIn for most of its advertising revenue, LinkedIn only competes for a small subset of Facebook and Google’s advertising revenue. Google and Facebook also identified each other as key competitors for advertising, but also a wider set of competitors including TV advertisers, Video on Demand and Amazon.
5.118 Facebook suggested its strength was in making the advertising experience as easy as possible for advertisers to use so that even small advertisers can use it.
5.119 Google’s internal documents comprehensively cover its competitors and show that Google does not focus solely on one part of digital advertising supply chain. For example, Google pays particular attention to Facebook and Amazon. Google submitted several reports monitoring Facebook and some documents benchmarking YouTube’s ads against Facebook. Amazon was often identified as having growth potential in advertising.
5.120 Facebook’s internal documents cover a range of rivals. All the rivals are differentiated from Facebook, but they all compete for consumer attention, advertising, or both. The competitors which are monitored most frequently are Google, YouTube, Pinterest, Twitter and Snapchat. Other rivals Facebook monitors include Amazon, traditional TV and smaller platforms, who are monitored less frequently.
5.121 Overall, the views of advertisers, media agencies and suppliers support that Facebook has market power in display advertising. However, they also suggest that Google is likely to be Facebook’s closest competitor. Both Google and Facebook benefit from greater scale and access to user data than their rivals. Both platforms face a degree of competition from a range of sources. While Google’s and Facebook’s internal documents suggest that they are likely to be each other’s closest competitors, a number of other competitors are also mentioned.
**Transparency of advertising outcomes**
5.122 To make informed choices that can drive competition, advertisers need to be able to measure advertising outcomes to assess effectiveness and verify quality, accounting for factors such as viewability, brand safety and ad fraud. Access to the necessary underlying data on advertising outcomes in a form that facilitates these assessments is key.
5.123 Several advertisers and agencies commented on the lack of common definitions and standard industry metrics across different search and social media platforms. For instance, different definitions of audiences can mean that data from different platforms is not directly comparable. This makes it difficult to aggregate estimates of reach and frequency across multiple platforms. It can also make it difficult to manage frequency caps and re-targeting and avoid duplication in the course of an advertising campaign.
5.124 Some advertisers raised concerns about restrictions on the third-party verification of advertising on inventory owned and operated by Google and Facebook. Responses indicated that although both Google and Facebook do work with a number of ‘approved’ third-party verification providers, they restrict access to detailed consumer level data in respect of verification for the advertising inventory they own and operate. Other display advertising platforms reported that they do allow advertisers to use tracking tags for third-party verification of impressions served on their advertising inventory. Without access to the underlying raw data and the ability to have full independent verification, there was a perception on the part of advertisers and agencies that Google and Facebook were able, in effect, to ‘mark their own homework’ in respect of the effectiveness of their own advertising inventory.
5.125 In their responses both Facebook and Google referred to the fact that the way in which they compile data – for instance, on the viewability of impressions on their inventory – meets industry standards and is subject to external audit. Google also argued that it had reviewed the way in which it worked with third parties ahead of the implementation of GDPR. As a result, it had restricted the number of third-party measurement providers that it was able to support on Google Search and YouTube and had stopped accepting other third-party tracking pixels post GDPR.256
5.126 Several advertisers have highlighted to us their previous experience of incidents in relation to the verification of viewability and brand safety in digital advertising. For instance, there have been issues with the misreporting of viewability on the Facebook platform257 and with brand safety on YouTube.258
5.127 We are also aware of concerns about the level of ad fraud in relation to digital advertising, with a number of large scale, systematic frauds being discovered.259
5.128 There are a wide range of estimates of the overall scale of fraud in relation to online advertising. However, a number of stakeholders referenced the most recent report by White Ops and the American Association of National Advertisers (ANA),260 which estimated that the global scale of losses from ad fraud would fall from $6.5bn in 2017 to $5.8 billion in 2019 despite estimates that digital ad spending had increased by just over 25% over the same time period. It found three main factors which contributed to this projected decline in ad fraud:
- The use of ads.txt to help publishers create lists of authorized media sellers.261 This had worked to reduce desktop spoofing to the lowest levels recorded in the history of the report.
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256 We note that Google has introduced the Ads Data Hub option which does enable a degree of matching of Google event-level ad campaign data with advertisers’ reporting data to improve attribution and advertising efficiency in a way that protects end-users’ privacy. However, some industry stakeholders told us that this process can be time-consuming and so does not provide real-time feedback to advertisers.
257 For instance, in 2016 Facebook acknowledged that it has over-reported the average watch time metric for videos. It was estimated that the extent of the overstatement was between 60-80 per cent. In 2017, it was revealed that videos that were loaded on Facebook’s mobile site continued to play even after they were scrolled out of view, leading Facebook to charge advertisers for the background views. Facebook refunded advertisers in full. Source: Marketingland.com, ‘FAQ: Everything Facebook has admitted about its measurement errors’.
258 In 2017, a number of large advertisers were reported as having pulled their advertising off YouTube in response to concerns that their adverts were being shown alongside videos promoting extremist and terror groups. Source: AdWeek, Sep 2019, ‘As 2020 Election Nears, Twitter Bots Have Only Gotten Better at Seeming Human’.
259 In 2017, Adform reported that it had uncovered the ‘Hyphbot’ bot network which was estimated to be one of the largest bot networks discovered. Source: Wall Street Journal ‘Fake-ad operation used to steal from publishers is uncovered’.
260 Bot Baseline report, White Ops and the American Association of National Advertisers (ANA) published in May 2019.
261 Ads.txt stands for Authorised Digital Sellers. It is a method that allows publishers to publicly declare the companies they authorize to sell their digital inventory. It can thus provide advertisers with more confidence that they are buying authentic inventory. The text file can be updated to provide for flexibility over time. • It had become more expensive and less efficient to buy sophisticated bot traffic. Efforts by the Trustworthy Accountability Group (TAG) and their Certified Against Fraud program, coupled with groups working together to dismantle botnets, had drastically reduced both the supply and the demand for traffic from vendors that are caught selling bot traffic.
• More digital advertising was being sold through platforms that had built-in fraud prevention measures.
5.129 Responses from advertisers and agencies also indicated that the level of ad fraud in the UK was estimated to be relatively low. For instance, a number of responses indicated that the scale of ad fraud was estimated to be less than 2% of impressions.
5.130 Respondents were also aware of the main industry initiatives by the IAB, JICWEBs and others aimed at addressing brand safety and fraud issues, and many respondents were also active members of those industry bodies. At the same time, some agencies also reported that such initiatives were not yet fully mature and so there was work still to be done.
5.131 As indicated above, a lack of transparency can undermine the functioning of a market. That is, if advertisers cannot be sure that the advertising inventory they are buying is authentic or that the agents they are trading with are legitimate, then that lack of transparency would undermine trust in an industry. Again, it is not clear that reputational incentives would prove sufficient to address this concern.
5.132 However, the responses to our information requests indicate that ad fraud is acknowledged as an industry-wide challenge and an issue that requires industry-wide solutions to address it. There is also a perception that ad fraud is more of a risk in relation to the open display market because of a long tail of smaller publisher sites.
5.133 Large platforms – such as Google and Facebook – do appear to be engaging with industry initiatives to combat ad fraud eg in terms of seeking industry accreditation for their fraud prevention processes and systems.
5.134 However, aside from engaging with measures to tackle ad fraud directly, there remain concerns that the large platforms could do more to improve transparency for advertisers and intermediaries. By restricting full independent verification of their own inventory, Facebook and Google have engineered a degree of opacity into the buying and selling of their own advertising inventory. Advertisers have to rely on the information provided by Google and Facebook. This could weaken competition or potentially result in advertisers over-paying for the advertising inventory supplied by Google and Facebook relative to other sources of supply.
5.135 In a similar vein, some advertisers expressed the concern that they have to rely on the information on fraudulent impressions provided by platforms. That is, they were not told why impressions were considered to be fraudulent and were not in a position to validate any adjustment or refunds implemented by the platforms. This suggests that there could be scope for greater transparency in relation to the reporting of ad fraud. However, it is not clear to us at this stage how much appetite there is in the industry for this: we are aware that if platforms reveal too much about how ad fraud is detected, that could actually assist those parties seeking to perpetrate ad fraud. We would welcome further views on this.
**Barriers to entry and expansion**
5.136 Suppliers have identified several barriers that need to be overcome for a provider to be able to effectively compete in display advertising. The barriers to entry and expansion identified fall into the following categories:
- economies of scale;
- network effects in accessing consumer attention;
- accessing user data; and
- incumbency advantages.
**Economies of scale**
5.137 There are several inputs required to support a display advertising platform. In particular, investments need to be made in technology, such as developing a website/app and back-end functionality to support the platform and technical equipment (eg servers); facilities, such as offices; and equipment and marketing, such as launch and brand awareness campaigns. The investments and fixed costs required to develop and maintain these inputs are likely to give rise to economies of scale. Economies of scale create a cost advantage for larger rivals over smaller potential entrants, giving rise to barriers to entry.
5.138 Facebook submitted that no minimum scale is required for entrants to compete effectively. Facebook submitted that its income statements indicate that while it experienced some economies of scale in its early years, its costs have grown at a faster rate than its user base over the last decade (from 2009-2018). This suggests that, in aggregate, any economies of scale which Facebook has benefited from appear to have been largely exhausted in its early years of development.
5.139 However, in our view, this evidence does not suggest that no minimum scale is required, for several reasons. The two-sided nature of Facebook’s platform and the associated dynamics this implies suggest that, in considering the extent to which it benefits from economies of scale, it may not be appropriate to simply focus on how Facebook’s user numbers and costs change from year to year.
5.140 While user growth on Facebook has decelerated significantly, its advertising revenues per user have continued to grow substantially (albeit at a somewhat decreasing rate) as it has further monetised its platform to benefit from historic investments on the consumer side. We also note that Facebook’s current costs may partly reflect investments it is currently making to further enhance the consumer experience and enter new markets in the future. Facebook submits that it did generate economies of scale in its earlier stages, which is most relevant for assessing the prospects of a potential entrant. Further, other platforms told us that significant scale is needed for an entrant to be viable in the long term.
Access to consumer attention
5.141 The need for suppliers of display advertising to first grow their user base in order to gain access to consumer attention and data mean that the most important barriers to entry are faced on the consumer side of the market. Several suppliers of display advertising told us that the way to enter display advertising was to first offer a compelling platform which captures consumer attention. Therefore, generating an innovative or engaging product or service for consumers is the first barrier that needs to be overcome. To maintain the attention of consumers, platforms then need to offer improvements to their consumer product position or to offer personalised relevant content. As described in Chapter 3, the consumer services relevant for supporting digital advertising, such as social media, are typically characterised by strong network effects. These network effects result in very high barriers to entry that also restrict competition in display advertising.
Access to consumer data
5.142 The academic literature as well as the evidence we have collected to date show that consumer data has a significant value to advertisers in that it allows them to better target audiences. Access to higher quality or more granular data allows for more precise targeting of more specific audiences. Granular data is particularly valuable when combined with high reach among different audience types using the platform, as this allows for relatively large numbers of very specific audiences to be targeted. These factors can allow platforms with better data to sell their advertising inventory at higher prices. This creates a substantial competitive advantage for Google and Facebook, both of which have access to much richer and higher quality datasets and benefit from much greater scale and reach than their rivals.
5.143 This view was largely confirmed by advertisers and media agencies. Several told us that Google and Facebook offer more granular personalised targeting compared to other platforms. Google offers in-depth targeting options, driven by its unique and vast sources of data. Facebook has the advantage of offering the ability to target specific audiences based on demographic characteristics, interests and location. Some advertisers also singled out Facebook’s remarketing capability. Facebook’s scale allows it to reach a large proportion of advertisers’ known customers, using the advertiser’s first-party data.
5.144 The ability to show effectiveness of advertising is another important driver of advertisers’ decisions on how to allocate their advertising expenditure across publishers and platforms. Google and Facebook tags are widely available on advertiser websites. This enables a more sophisticated analysis of attribution because they are more easily able to track a consumer’s journey across the internet and provide a single source for the data. A number of responses indicated that Google and Facebook had a competitive advantage in respect of their access to consumer data and an ability to track consumers’ behaviour across different websites and measure attribution across their own inventory more accurately.
5.145 The use of data both for better targeting of relevant audiences and in measuring performance is of direct benefit to advertisers. However, the inability for smaller platforms and publishers to access equivalent user data to Google and Facebook may raise barriers to entry, as it reduces the ability for these rivals to compete on a level playing field and realise the full value of their advertising inventory.
5.146 Suppliers of display advertising told us that consumer data was a key input required to target audiences. The more data and the higher the quality of the data a platform holds the better equipped it is to provide advertisers with exactly what they want. The majority of these platforms offer free analytics tools and metrics to advertisers to create and tailor content and to analyse campaign effectiveness of ads.
5.147 However, rival platforms did not suggest that accessing consumer data was an insurmountable barrier to entry. Some submitted that monitoring consumers on their platform provides enough data to compete effectively, where sufficient activity can be tracked across different consumers. Generating scale on the consumer side of the platform is particularly important because effective analysis of this data is heavily dependent on gaining enough scale in user-generated content.
5.148 Based on the above, it appears that the ability to access consumer data is likely to be closely tied to competition for consumer attention. This adds to the importance of barriers to entry from network effects in the consumer services relevant for supporting digital advertising.
**Incumbency advantages**
5.149 As discussed in Chapter 3, there have been several recent examples of entry by display advertising platforms. However, with the possible exception of Instagram, we note that these platforms are yet to reach a very significant scale in the supply of display advertising. This raises the question of whether these platforms may face barriers to expanding to a scale sufficient to impose a material competitive constraint on Facebook.
5.150 Barriers to expansion may arise from the need to compete aggressively for consumers to build scale and benefit from consumer side network effects before monetising the platform. Current rivals to Facebook are likely to be limited in their ability to monetise through digital advertising, as this may hamper their ability to compete effectively on the consumer side. This dynamic is supported by Facebook’s earlier experience of competing with Myspace. As noted in Chapter 3, Facebook has submitted that its early success in competing with Myspace was due to Myspace’s focus on maximising advertising revenue, to the detriment of the consumer experience. By contrast, Facebook reached a much larger scale of users and consequently benefited to a greater extent from consumer-side network effects before it started to monetise through display advertising.
**Exploitation of market power**
5.151 Our view at this stage is that the dynamics in the display advertising market create the incentive for Facebook to exploit its market power on the consumer side of the platform – by extracting large amounts of data from consumers. This exploitation by Facebook of consumers is then rewarded in the digital advertising market through higher prices paid for its advertising inventory.
5.152 Facebook’s large scale may be sufficient to create an incentive for it to exploit market power through limiting the overall quantity of advertising inventory it supplies, thus increasing overall market prices relative to a more competitive We note that the need to maintain a high-quality consumer experience already creates an incentive for Facebook to limit its quantity of advertising inventory to some extent. However, market power may create the incentive to restrict the quantity of advertising further than would be the case in a more competitive market. Similar to search, higher advertising costs are likely to be passed on to advertisers’ final customers through the impact these costs have on competition in the downstream markets where advertisers compete.
5.153 Facebook’s auctions in display advertising are second-price auctions that include adjusting bids for quality. These adjustments can be a benefit to both consumers and advertisers as they reduce the extent to which advertising is shown to consumers that do not want to see it. In a similar way to Google in search, Facebook could influence the prices that advertisers pay through how it adjusts bids for quality, allowing it to extract more economic rent from advertisers.263
5.154 In principle, Facebook could also extract rents from advertisers by raising its reserve prices. However, [ ].
5.155 Similar to Google in search, our analysis of Facebook’s profitability is consistent with exploitation of market power. It shows that Facebook’s global returns on capital are also likely to be over 40%, well above its cost of capital.264
**Initial findings on display advertising**
5.156 The evidence we have reviewed so far suggests that Facebook has market power in display advertising. Our current estimates suggest that Facebook (including Instagram) is by far the largest supplier of display advertising, accounting for [40-50%] of advertising expenditure. Facebook has considerably greater scale than the second largest supplier, YouTube, which has [5-10%] of advertising expenditure.
5.157 Display advertising is subject to significant barriers to entry that limit the actual or potential competitive constraint faced by Facebook. The need for suppliers of display advertising to first grow their user base in order to gain access to consumer attention and data mean that the most important barriers to entry
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262 This differs to search advertising where the exploitation of market power implies selling more advertising at the expense of organic search results (which advertisers would otherwise benefit from for free).
263 The price paid by the winning bidder is determined by the ‘total value’ of the second-highest bidder, which includes the quality and relevance adjustments Facebook makes to either bid. This may provide Facebook with flexibility to increase the price paid by the winning bidder, either by increasing the quality adjustment applied to the second bid or reducing the quality adjustment applied to the first bid.
264 See Appendix D for more detailed analysis of Facebook’s profitability. are faced on the consumer side of the market. As mentioned in Chapter 3, potential entrants face barriers to entry from network effects.
5.158 There have been several recent examples of entry by platforms offering display advertising. However, these platforms are likely to be limited in their ability to monetise through digital advertising, as this may hamper their ability to compete effectively on the consumer side. Their smaller scale means that they are likely to have stronger incentives than Facebook to further increase their scale of users and benefit from network effects. This may create a barrier to them expanding their supply of digital advertising to a scale large enough to impose a material competitive constraint on Facebook.
5.159 The inability for smaller platforms and publishers to access equivalent user data to Facebook may also create barriers to entry and expansion, as it reduces the ability for these rivals to compete on a level playing field and realise the full value of their advertising inventory through targeted advertising and provision of attribution and measurement services.
5.160 Our view at this stage is that Facebook has an incentive to exploit its market power on the consumer side of the platform – by extracting large amounts of data from consumers. This exploitation by Facebook of consumers would be then rewarded in the digital advertising market through higher prices paid for its advertising inventory.
5.161 Facebook’s large scale may also create an incentive for it to exploit market power through increasing overall market prices to advertisers relative to a more competitive market.
5.162 In light of these findings, our initial view is that there is a case for intervention to address the source of Facebook’s power on the consumer side of the market (notably resulting from network effects) and to limit its ability to exploit consumers through excessive extraction of data. There may also be a case for intervention in relation to features of the advertising market that reinforce Facebook’s market power. The range of potential interventions on these issues are discussed in the next chapter.
The open display market
5.163 This section sets out our initial views on issues in the open display market. It sets out:
- a summary of how digital advertising intermediation works and the main players in the intermediation chain; • our preliminary analysis of competition at different levels of the intermediation chain;
• concerns that a lack of transparency in the intermediation chain might lead to worse outcomes for advertisers and publishers;
• vertical integration and concerns about whether it can lead to conflicts of interest and whether the platforms (notably Google) can leverage their market power from ‘owned and operated’ advertising into ad tech; and
• possible implications of privacy concerns and the data protection legal framework for the open display market.
5.164 A detailed explanation of how this part of the market functions can be found in Appendix H.
How digital advertising intermediation works
5.165 Digital advertising intermediation is a highly complex industry.265 This section provides a high-level summary of its working. The following description reflects our current understanding, based on extensive engagement and discussions with industry participants. We welcome scrutiny of and feedback on it.
5.166 Many publishers of online content monetise the services they provide, at least in part, through digital advertising. Some of their advertising space (or inventory) is sold through direct deals between the publisher and specific advertisers or media agencies. However, most digital advertising (80% in 2017 according to the IAB) is now sold ‘programmatically’.266 The defining feature of programmatic buying is that the decision on whether to buy a particular impression is made in real time, making use of information not only about the environment (eg webpage) in which the ad will appear, but also about the internet user in front of whom the ad will be placed.
5.167 In order to make programmatic trading possible, a complex ecosystem has emerged, including a range of intermediaries between advertisers and
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265 This section deals with intermediation in display advertising. The European Commission, in the context of its Google Search (AdSense) case, has defined a market for online search advertising intermediation, where intermediaries provide search adverts to publishers whose websites have a search function embedded. The European Commission found Google to have a dominant position in that market and to have abused it by imposing a number of restrictive clauses in contracts with third-party websites which prevented Google’s rivals from placing their search adverts on these websites (see the Press release). We do not analyse the market for online search advertising intermediation in this report.
266 In Internet Advertising Bureau UK, 2017 IAB / PwC Digital Adspend Study, page 72. publishers – the so called ‘ad tech stack’. A simplified version of the intermediation chain is provided in Figure 5.9 below.
Figure 5.9: Simplified scheme of the intermediation chain
Source: CMA.
5.168 On the demand side, the main participants in the ecosystem include:
- Advertisers – interested in serving ads to consumers, their aim can be increasing consumers’ awareness of their brands or inducing a direct response (eg a purchase) from consumers seeing the ad. Advertisers’ aims affect their preferences over which consumers to target with the advertising campaign.267
- Media agencies – often used by large advertisers to plan and deliver an advertising campaign. Media agencies can offer in-house trading desks, which provide the technical expertise to execute programmatic media buying. Media agencies and their trading desks charge advertisers a percentage of their media spend or in proportion to amount of work performed.
- Demand-side platforms (DSPs) – provide a platform that allows advertisers and media agencies to buy advertising inventory from many sources. DSPs bid on impressions based on the buyer’s objectives and on data about the consumers. DSPs usually charge advertisers a percentage of their media spend.
5.169 On the supply side, the main participants include:
- Publishers – operate websites or apps and want to monetise their services selling digital advertising.
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267 Advertisers use advertiser ad servers to store the ads, deliver them to publishers, and keep track of this activity. • Supply-side platforms (SSPs) – provide the technology to automate the sale of digital inventory. They allow real-time auctions by connecting to multiple DSPs, collecting bids from them and performing the function of exchanges. They can also facilitate more direct deals between publishers and advertisers. SSPs are typically remunerated through a revenue share agreement with publishers.
• Publisher ad servers – manage the publisher’s inventory and are responsible for the decision logic underlying the final choice of which ad to serve, based on the bids received from different SSPs and the direct deals agreed between the publisher and advertisers. Publisher ad servers typically charge publishers a fee based on the volume of advertising processed.
5.170 The advertising ecosystem also includes further participants involved in the provision and management of data and in advertising analytics:
• Data suppliers – A wide range of companies provide data that can be used to augment the user data already possessed by advertisers and publishers and enhance the ability to target advertising to specific types of audiences.
• Data management platforms (DMPs) – allow other participants along the value chain (advertisers, DSPs, SSPs and publishers) to manage and analyse their data, integrate it with third-party data, and use it to create audiences that can be used for targeting purposes.
• Advertising analytics – services used by advertisers to measure the performance and impact of advertising campaigns.
5.171 In a typical real-time transaction, when a consumer opens a webpage (or navigates through an app), an automated process is put in motion through which
• Multiple SSPs receive ad requests for the advertising space available on the web page. In turn, SSPs send bid requests to multiple DSPs.
• DSPs evaluate the advertising opportunity based on the objectives of the campaigns of all their customers (advertisers and media agencies) and automatically generate bids to be sent to SSPs.
268 Advertising exchanges used to be separate from SSPs. The two functions, however, have largely been merged into the same operators. SSPs then rank the bids received based on price and on priority levels that may have been set by the publisher, and send the winning bid to the publisher.
Finally, the publisher ad server compares the bids received, together with any pre-existing direct deals between the publisher and specific advertisers, and decides which ad is to be served on the webpage.
5.172 SSPs can submit their bids into the publisher ad server in several different ways.
- SSPs can be ranked by a publisher according to their expected bids and be called by the publisher ad server sequentially, with the next SSP being asked for a bid only if the previous one had not bought the impression (sometimes known as the ‘waterfall’). If an SSP is vertically integrated with the publisher ad server, it may have the possibility to submit its bid first, using the highest expected bid from the other SSPs as a floor price.
- SSPs can be called and submit their bids simultaneously, before the publisher ad server is called, if the publisher uses a ‘header bidding’ solution. Header bidding began to be widely adopted in 2015 as a mechanism to increase competition between SSPs and generate higher revenues for publishers.
- A publisher ad server can provide an alternative mechanism to allow SSPs to submit bids simultaneously. Google Ad Manager, the most widely used publisher ad server, has offered such a service, initially called Exchange Bidding and recently renamed as Open Bidding, since 2018.
**Competition in digital advertising intermediation**
5.173 The following paragraphs provide an overview of competition among DSPs, SSPs and publisher ad servers and include our initial estimated shares of supply of some of the main providers. We also briefly discuss vertical integration along the intermediation chain and the efficiencies it can generate.
5.174 Our main findings can be summarised as follows:
- In recent years, the industry has been consolidating, with supply increasingly concentrated in a small number of large providers at each level of the value chain.
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269 So-called because SSPs are contacted by the consumer’s browser executing code in the webpage’s header. • Concentration is particularly high at the publisher ad server level, where, based on submissions from industry stakeholders, we believe Google is likely to have a share of supply above 90%.
• There appears to be more competition at DSP and SSP level, although Google has significant shares in these markets as well (50-70% of the value of ads purchased through DSP, 40-60% of the value of ads sold through SSPs).²⁷⁰
• There has been a growing trend towards vertical integration, driven partly by efficiency reasons and partly by pressures resulting from privacy concerns and recent changes in data regulation (eg the implementation of the GDPR). Vertical integration may also have anti-competitive motivations, as discussed in a subsequent section.
**DSPs**
5.175 There are many DSPs operating in the UK. Some of the largest include Google’s DV360 and Google Ads, The Trade Desk, Xandr DSP, Amazon DSP and Criteo.
5.176 Advertisers and media agencies told us they decide what DSPs to use mostly based on two types of consideration:
• the advantages derived from a DSP’s access to exclusive inventory, use of exclusive data, or integration with other services offered by the same provider; and
• the technical sophistication, customisation and level of support of the DSP services themselves.
5.177 Based on advertisers’ submissions, the strength of some DSPs, such as Google’s DV360 and Amazon DSP, appears to be mainly based on access to data and inventory, while other DSPs, such as Xandr and The Trade Desk, are considered relatively stronger on technology and service.
5.178 While larger advertisers and media agencies often use multiple DSPs across advertising campaigns, typically a single DSP is used for a given campaign,
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²⁷⁰ We include Google AdX, Google Ad Sense and Google AdMob in our definition of SSPs and Google DV360 and Google Ads in our definition of DSPs. Share estimates at SSP and DSP levels have been computed based on data from the intermediaries we received information from. As our coverage is not complete, Google shares may be over-estimated. as this allows to manage frequency caps over the entire campaign and facilitates audience management and reporting.
**SSPs**
5.179 SSPs can be broadly divided into two groups: generalist SSPs, such as Google AdX (part of Google Ad Manager), Index Exchange, OpenX, PubMatic, Rubicon Project and Xandr SSP; and specialist providers, such as TripleLift, Sharethrough and Teads, which specialise in particular ad formats such as native display or video.
5.180 SSPs need to attract both sellers (publishers) and buyers (DSPs, and ultimately advertisers) to their platform. They operate in a two-sided market which exhibits indirect network effects: on the one hand, advertisers are more willing to work with platforms that have higher access to supply, in order to achieve their goals at scale; on the other hand, companies which are able to work with many advertisers (or DSPs) can provide publishers with greater demand, which is one of the main factors publishers look at when deciding which SSPs to work with. The strength of network effects, however, may be limited by the fact that both DSPs and publishers tend to work with multiple SSPs.
**Publisher ad servers**
5.181 The market for publisher ad serving appears to be very concentrated. Based on submissions from industry stakeholders, we estimate that Google Ad Manager may account for more than 90% of all the display ads served in the UK. Several publishers described Google Ad Manager as the global market leader and superior to other ad servers. Other providers include Xandr and Smart, but their presence as publisher ad servers in the UK market appears to be marginal.
5.182 Publishers typically single-home on one ad server, although it is possible to have a secondary ad server in addition to the main one. This appears to be the solution adopted by some publishers whose primary ad server is not Google Ad Manager in order to have access to Google’s demand.
5.183 Publishers generally told us that switching ad server is a complex and lengthy process which takes several months to complete and involves significant risks of revenue loss. We consider this issue in more detail later in the chapter. Vertical integration and efficiencies
5.184 Several operators in the advertising intermediation ecosystem provide more than one service along the value chain. One industry participant told us that vertical integration has become the preferred method for rapid growth in the advertising industry. The largest companies are either acquiring smaller companies along the supply chain or building extensions of their own platform stack into new parts of the supply chain. Recent examples include FreeWheel’s expansion from ad serving into SSP through the acquisition of StickyAds in 2016; Adobe’s expansion into the DSP market through the acquisition of TubeMogul in 2017; and Amazon’s launch of a header bidding solution in 2018.
5.185 The case of Google is noteworthy because not only does it operate along the entire value chain, but it also has the largest shares of supply among providers at each level of the chain.
Figure 5.10: Google’s roles in advertising intermediation
Source: CMA. Note: We include Google AdX, Google Ad Sense and Google AdMob in our definition of SSPs and Google DV360 and Google Ads in our definition of DSPs. Share estimates at SSP/Exchange and DSP levels have been computed based on data from the intermediaries we received information from. As our coverage is not complete, Google shares may be over-estimated.
5.186 Google’s presence across the ad tech chain was initially driven by a series of acquisitions, as set out in Box 5.1. While Google’s suite of products has developed significantly over time, it is notable that Google integrated a number of existing products rather than developing its position organically. Box 5.1: Google’s acquisitions in ad tech
We have been told that Google’s most significant acquisitions in ad tech include:
- **DoubleClick (April 2007)** – Publisher ad server and ad exchange; formed the basis of Google’s ad server and AdX (now Google Ad Manager).
- **AdMob (November 2009)** – Technology for serving ads on apps; formed the basis of Google’s AdMob product.
- **Invite Media (June 2010)** – Media buying optimization technology for the display advertising market; evolved into Google’s main DSP product, Google DV360.
- **AdMeld (June 2011)** – Supply Side Platform; integrated into Google AdX.
- **Adometry (May 2014)** – Analytics and attribution provider; integrated into Google Analytics to provide improved attribution services.
Google has also made more recent acquisitions in the ad tech space, including mDialog, Directr, Toro and Famebit.
5.187 Vertical integration, especially between DSPs and SSPs, can give rise to technical efficiencies. The main ones relate to cookie matching and latency.
- DSPs and SSPs associate each consumer with a cookie ID. As cookie IDs are specific to each company, if the DSP and SSP are operated by different companies a process of cookie matching is required in order for the DSP to identify the relevant consumer information to associate to a given impression. This process is prone to failure and, according to one ad intermediation provider, can result in approximately 30% failed matching. This inefficiency is avoided when the same company operates both the DSP and the SSP.
- After an SSP sends bid requests, DSPs have a time limit to submit their bids. Latency can therefore result in a bid being received too late and therefore being excluded from the SSP’s auction. If the same company operates both the SSP and the DSP, it can locate them close by, reducing the time needed for information to travel between the two.
5.188 Despite the efficiency benefits, vertical integration could raise concerns if it led to conflicts of interest or to risks of anti-competitive foreclosure. We consider these issues later in the chapter. Lack of transparency in the intermediation chain
5.189 Many stakeholders that we spoke to, both on the advertiser and publisher sides of the market, commented on the lack of transparency in the digital advertising sector. This is partly a function of the technical characteristics of programmatic advertising where advertising is displayed in real time to a given consumer, making it difficult to verify exactly when an advert has been seen and by whom. The lack of transparency is exacerbated in the open display market, where publishers and advertisers rely on intermediaries to manage the process of real-time bidding and ad serving but cannot observe directly what the intermediaries are doing or, in some cases, how much they are being charged at different points in the supply chain.
5.190 One symptom of this lack of transparency is the significant degree of uncertainty around the average ratio between the amount that publishers receive for their inventory and the amount that advertisers pay, as discussed in Chapter 2 and in Appendix C on market outcomes.
5.191 Lack of transparency and asymmetric information can lead to inefficient outcomes – for example, advertisers may be reluctant to purchase advertising if they are unsure whether it will ultimately be viewed by a consumer. However, in some cases we would expect market participants to have a shared interest in trying to overcome the problem – for example, by investing in technology to improve ad verification. Therefore, we have focused on assessing whether there might be situations where the interests of different market participants are not well aligned and where a lack of transparency might be exploited by platforms with market power. We currently consider that the main concerns relate to the transparency of fees paid to different intermediaries and the opportunity for ‘arbitrage’.
5.192 Market participants typically do not have visibility of the fees charged along the entire supply chain and are concerned that this limits their ability to make optimal choices on how to buy or to sell inventory, reducing competition among intermediaries. In particular:
- Publishers have complained about lack of visibility of fees to intermediaries used by advertisers (DSPs, DMPs etc), reducing their ability to negotiate directly with advertisers. This may limit the competitive pressure faced by DSPs.
- Some advertisers and agencies have expressed a concern about not being able to observe the fees that SSPs charge to publishers. Given that publishers decide which ad should be served based on net bids, visibility of these fees could make it easier for buyers to select the cheapest path to secure specific inventory and for DSPs to decide where to bid. This may limit the extent of competition between SSPs.
5.193 In the context of an intermediation process characterised by the presence of sequential auctions, lack of transparency may give rise to rent-seeking behaviour and arbitrage opportunities, ie the possibility for an intermediary (SSP or DSP) to buy impressions at one price and sell them at a higher one, without its customers being aware of this ‘hidden fee’.
5.194 Some stakeholders have expressed the concern that some SSPs, after running an auction among DSPs, may charge the winning DSP the amount of its bid but submit a lower bid to the next stage, keeping the difference for themselves. While some SSPs have publicly announced that they are no longer adopting these practices, stakeholders believe that other SSPs may still do it.
5.195 A similar concern was expressed in relation to Google Ads. Google Ads, which in the open display market operates as a DSP, runs an internal second-price auction among advertisers. While the winning bidder is charged by Google Ads an amount corresponding to the second-highest bid received by Google Ads, the amount that Google Ads bids into SSPs may be different, as Google Ads optimises the bid to achieve a high probability of winning the impression without overpaying for it. Some publishers have expressed their concern that the difference between what advertisers pay and what publishers receive from Google Ads may be substantial. This could be the case, for example, if Google Ads’ internal auction were ‘thicker’ than the subsequent auction, or if advertisers using Google Ads had higher value for the inventory, owing to superior targeting capabilities allowed by the use of Google’s data.271 Google has provided us an initial estimate of the difference. We will investigate this further in the second part of the study.
5.196 Google’s high share of supply and market power as a publisher ad server may also allow it to increase arbitrage opportunities. Some publishers have expressed the concern that recent changes in how Google Ad Manager works reduce their ability to respond to what they perceive as the capture of significant rents by intermediaries. These publishers used to set higher floor prices for some DSPs in order to force them to submit higher bids and limit their ability to extract rents. However, Google Ad Manager has recently
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271 In the case of Google Ads, assessing the difference between what advertisers pay and the bids that Google Ads submits is complicated by the fact that advertisers are often charged on a pay-per-click basis, while the bids submitted into the exchanges are on a cost-per-mille (cost per 1000 impressions) basis. eliminated the possibility to set different floor prices for different sources of demand.\\textsuperscript{272}
5.197 These hidden fees would result in lower revenue for publishers, therefore reducing their incentives to invest in content, to the detriment of final consumers.\\textsuperscript{273} The current structure of the market, along with the lack of transparency that exists, appears to create both the incentives and ability for some market participants to charge hidden fees. We will be exploring the extent to which these concerns occur in practice in the second half of our study, and we invite stakeholders to submit any evidence or views on this subject in response to our consultation.
**Vertical integration, conflicts of interest and leveraging**
5.198 Vertical integration can allow intermediaries to realise technical efficiencies to the benefit of advertisers and publishers. At the same time, vertical integration can also give rise to conflicts of interest and allow companies with market power at one stage of the value chain to leverage it in other parts of the industry, potentially foreclosing competing providers.
5.199 The core concern is that, where a firm controls intermediaries on both the ‘buy’ and ‘sell’ side of the market, it may act on behalf of the two counterparties to a commercial transaction, thus creating actual and/or perceived conflicts of interest. When operating on behalf of the publisher, such a firm might have an incentive to favour bids coming through its own advertiser-side intermediaries, rather than necessarily those that are best for the publisher. When operating on the buy-side, it might have an incentive to channel an advertiser’s spend to its publisher clients, rather than to the publishers that are best for the advertiser.
5.200 Given the lack of transparency over fees and bids through the intermediation chain, there might be legitimate concerns about any operator having positions on both the buy and sell side of the market, whether or not that operator is in fact acting other than in its clients’ best interests. Equity research company Arete suggested that programmatic advertising had similar characteristics to financial markets, because of the real-time nature of the bidding and complexity of the intermediation chain and products. We agree that there are analogies between the two and that there is a case for considering general
\\textsuperscript{272} Google told us that under the newly introduced unified first-price auction per-buyer floor are less relevant.
\\textsuperscript{273} It is also possible that the reduction in content generation may result in a reduced volume of quality ad space, leading to higher advertising prices. Increased advertising costs can then be expected to be, at least in part, passed on to consumers through higher prices for the goods and services sold by the advertisers. rules on all market participants to mitigate potential conflicts of interest, similar to those that exist in financial markets.
5.201 However, the concerns about conflicts are greater where firms have market power at certain points in the intermediation chain, because publishers or advertisers will have less ability to switch away from intermediaries with market power, even if they have concerns about potential conflicts of interest. Moreover, vertical integration can enable players with market power at one point in the chain to leverage it into other points, making it harder for independent players at each stage to compete.
5.202 In particular, concerns have been raised that Google, which is present along the entire intermediation chain, may be able to leverage various sources of market power and exploit its position on both sides of the market. Based on our initial discussions with stakeholders, we have identified four main areas of potential concern about Google’s behaviour:
- using its market power in inventory and data to advantage its own DSP services (Google Ads and DV360);
- channelling Google Ads demand through Google’s SSP (AdX) and limiting the integration of AdX with rival publisher ad servers;
- self-preferencing between Google’s publisher ad server and AdX; and
- self-preferencing between Google’s DSP and SSP.
5.203 The following paragraphs first summarise Google’s sources of market power which are relevant to the open display market, and then describe the various concerns in more detail, outlining the evidence we have received on whether these practices are taking place and on their potential effects.
Google’s sources of market power
5.204 We concluded earlier in this chapter that Google has substantial market power in search advertising. In display advertising, while Google’s owned and operated inventory is currently smaller than that controlled by Facebook, the value of advertising on its YouTube platform corresponds approximately to [10-25]% of the value of open display advertising in the UK; in video advertising, the value on YouTube is [60-80]% of that of the entire open market. Google also has exclusive access to a large amount of user data that can be used for targeted advertising and for measuring advertising outcomes, collected through its consumer-facing services and through its advertising analytics products. Moreover, the availability of log-in data allows Google to identify all the computers and mobile devices associated with a user, associating all the data about the user to a single user ID.
5.205 In addition, Google has a very high share of supply for publisher ad serving in the UK, likely in excess of 90%. The number of alternative providers has decreased recently with OpenX, Open Ad Stream, and Verizon Media deciding to stop providing a publisher ad server product.
5.206 Google’s position in publisher ad serving is strengthened by the presence of substantial barriers to switching. Most publishers responding to our information requests submitted that switching to another ad server is a technically complex process because of how deeply integrated an ad server is into a publisher’s systems. The process would be costly and take several months to complete. In addition to the direct costs of switching, there are operational risks and the possibility of demand losses resulting from the transition. For example, the time and effort that the publisher would need to invest in familiarising itself with the new ad server and learning strategies to optimise revenues on the new system would hamper its ability to innovate to maximise its revenues. Moreover, publisher ad servers typically do not support the transfer of data between them. Loss of historical data after the switch makes accurate inventory forecasting impossible, which can result in either over or underselling.
Google’s ability to use its market power in inventory and data to advantage its own DSP services
5.207 The first set of concerns is that Google uses the importance for advertisers of its owned and operated inventory and the richness of its data for targeted advertising to strengthen its position as a DSP provider in open display.
5.208 As discussed above, Google has access to very rich user data. These data allow Google to create detailed audiences, which are made available for targeting in open display only through Google’s own DSP services (DV360 and Google Ads). In addition, advertisers can buy YouTube inventory programmatically only through Google’s DSPs. This affects advertisers’ choice of DSP for non-Google inventory as well, because a single DSP is typically used for a given campaign. Using a single DSP gives advertisers the ability to manage frequency across the entire campaign, making sure that the same ad is not served too frequently to the same consumer. Therefore, if an advertiser wants to include YouTube in a campaign, it has a strong incentive to use Google’s DSP for the entire campaign.
5.209 The effectiveness of this strategy is confirmed by submissions we received from advertisers in relation to DV360, which is used by larger advertisers and media agencies to buy display advertising. Every respondent to our information request used DV360, although in many cases they also used other DSPs, depending on the campaign. All those advertisers who had decided to use a single DSP across all their campaigns chose DV360. Based on advertisers’ submissions, the main reasons for choosing DV360 include the use of Google’s proprietary data and affinity audiences, and exclusive access to YouTube inventory, in addition to its integration with the rest of Google’s ad stack and its access to a large advertising inventory across the internet.
5.210 We heard three main counterarguments from Google:
- Having an advantage in terms of data or inventory is not unique to Google. For example, Facebook and Amazon have extensive user data that can be used for targeting purposes and make it available to advertisers only through their platforms; they also control, especially in the case of Facebook, a large advertising inventory on their consumer-facing platform. However, Facebook has a limited presence in the open display market, and Amazon is currently a much smaller competitor to Google as a DSP (although it is growing rapidly).
- Although YouTube inventory has not been available on AdX, and therefore not accessible to non-Google DSPs, since 2016, even before that third-party DSPs accounted for [a small percentage] of spend on YouTube. YouTube mobile inventory was never available to third-party DSPs, nor was TrueView inventory, which is sold using proprietary algorithms and pricing models different from the real-time bidding model used by DSPs bidding into AdX. However, the fact that YouTube inventory was only available on a restricted basis even before 2016 does not remove the potential concerns about the impact on current market conditions of the tying of YouTube inventory to Google’s DSP.
- Some other DSPs have been able to attract advertisers by investing on their technology and providing a more customised service and easier integration of advertisers’ own data. However, these appear to be significantly smaller than Google, and have told us that one of the main
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274 Our analysis indicates that DV360 has a larger share of supply than any non-Google DSPs (see Appendix C). 275 TrueView allows users to skip an ad after five seconds, and the advertiser behind a TrueView ad is only charged if the user watches the full ad or 30 seconds, whichever is shorter. 276 Google introduced the programmatic buying of TrueView inventory through DV360 in response to advertiser demand. Google told us that launching this in a manner that protected consumer privacy was a resource intensive and technically complex endeavour, which took almost three years to accomplish. barriers they face is the ability of Google to tie its inventory into its DSP services.
5.211 Finally, Google may be also able to leverage its market power in search inventory into display advertising. Google Ads is the main route through which advertisers, especially smaller ones, buy Google’s search inventory. The importance of search inventory for advertisers makes Google Ads an extremely popular buying platform. Advertisers using Google Ads for their search campaigns can easily extend the scope of their campaigns to display advertising. Indeed, Google Ads includes both Search and Display Network by default when an advertiser sets up a campaign on Google Ads. Moreover, Google Ads makes it extremely easy for small advertisers to build a display ad, offering a free tool for creating it and even providing pre-made images that can be added to text ads. All this makes it very attractive for smaller advertisers to use Google Ads not only for search, but also for display advertising on third-party websites. As a result, Google Ads constitutes an important source of demand for publishers.
Links between Google Ads, Google AdX and Google’s publisher ad server
5.212 The second set of concerns is that Google has made it difficult to access its advertiser demand (especially from Google Ads) through alternative publisher ad servers, thereby increasing its market power in ad serving and making it difficult for other providers to compete on the merits.
5.213 Demand from advertisers for third-party display inventory through Google Ads is overwhelmingly channelled through Google’s own exchange, AdX (now part of Google Ad Manager). Between September 2018 and August 2019, the aggregate value of the impressions won by Google Ads through AdX was [several] times that of impressions won through other third-party exchanges. This suggests that publishers place a high premium on being able to access AdX demand.
5.214 In turn, it is difficult for publishers to efficiently access AdX demand from a non-Google ad server. Although AdX can receive requests from, and submit bids to, other ad servers, its demand cannot be easily placed in real-time competition with that from other SSPs. Unless an SSP is vertically integrated with the publisher ad server, the only way for it to compete with other SSPs with real-time bids is through a header bidding solution (or, if a publisher uses Google Ad Manager, through Google’s Open Bidding). AdX, however, does
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277 AdHawk Blog: 7 Default Settings in AdWords That Lower Your ROI. 278 See Google Display Network, ‘Build your ads’ 279 Our current estimate of Google Ads’ share of supply is reported in Appendix C. not participate in header bidding. As a result, if the publisher uses a non- Google ad server, AdX would compete with an ‘expected’ price, rather than with an actual bid. This system is inefficient for the publisher.
5.215 While other publisher ad servers may provide a technical solution to integrate AdX demand, this is not as efficient as header bidding and presents several limitations. An ad server provider told us that the only way publishers using its ad server can benefit from Google Ads demand is to first run an auction of all non-Google demand and, then, to dynamically call an ad unit in Google Ad Manager, setting a floor price equal to or higher than the price returned from the auction for all non-Google demand. Google will then run its own auction. This process is highly inefficient. The main issue is around latency, as the publisher has to wait for two separate auctions to complete in sequence. Latency degrades the customer experience of the publishers’ users, and risks loss of revenue if the impression is lost due to the delay in serving an ad. The process also increases costs, because the publisher has to pay ad serving fees to both the main ad server provider and Google. This system also potentially gives Google a ‘last look’ advantage, as Google knows the winning price of the non-Google demand before it runs its auction. Finally, this is a technically complex set-up that requires significant effort by both the publisher and the ad server provider to implement and maintain.
5.216 Google told us that its decision not to participate in header bidding was due to several reasons, including the fact that header bidding increases latency and harms consumer experience, the lack of transparency about what header bidders actually pay, and the impossibility of ensuring that impressions sold via header bidding are sold in compliance with data protection laws.
5.217 The effect of linking Google Ads demand to AdX and AdX to Google’s publisher ad server is to increase the barriers publishers face in switching from Google to a different ad server, reducing competition in ad serving. The main concern some publishers expressed around switching to a non-Google ad server was not related to the costs and risks discussed above, but to the risk of not being able to access demand from AdX, and therefore from Google Ads, in an efficient manner.
5.218 In addition, linking Google Ads demand – where Google may be able to extract a significant rent – with the publisher ad server may provide Google with a greater incentive to foreclose rival providers along the intermediation chain.
- First, this link may allow Google to soften rivals’ ability to compete. Google could implement such a strategy by credibly committing to price aggressively on the ad serving market, leading to the exit of competitors or depriving them of economies of scale. In this regard, we have been told that Google has implemented a very aggressive sales strategy for its publisher ad server, charging very low prices for ad serving and, in some cases, offering guaranteed media spend to publishers signing up to Google Ad Manager. We will explore these concerns in the second part of the study.
- Second, Google has an incentive to degrade the quality of rival providers, by favouring its own intermediation services, so that rivals are less attractive to publishers, making a foreclosure strategy less expensive to implement. In the following paragraphs, we explain how Google may have historically favoured, and may still be favouring, its own SSP.
**Self-preferencing between Google’s publisher ad server and AdX**
5.219 A third area of concern is that Google may be able to use its position as the largest publisher ad server to favour its own demand from AdX.
5.220 Historically, and at least until the most recent changes to how Google Ad Manager operates, AdX had an advantage over other SSPs when Google’s publisher ad server was used. The nature of this advantage changed through the years as a result of the evolution of the intermediation ecosystem; this is discussed in Appendix H.
5.221 Google has recently announced its decision to change how its publisher ad server works, introducing a unified first-price auction in which the winning header bidding SSP, the DSPs bidding into AdX, and SSPs participating in Open Bidding will take part. As part of this transition, Google has made the policy decision to remove AdX’s ability to observe the bids submitted by header bidding SSPs before running its own auction, the so-called ‘last look’ advantage. While this decision should lead to a fairer competition between different SSPs, some publishers told us that the bidding information they receive from Google Ad Manager does not allow them to effectively verify that the auction is conducted fairly. Google still has the incentive to favour its own services and some other changes introduced with the move to a unified auction may still give AdX an advantage, as we discuss below.
5.222 Publishers typically measure the value of their SSPs based on the incremental revenue driven by each provider. Doing so requires the ability to compare the winning bids received from an SSP with the second-highest bids received for the same impressions: the higher the difference, the higher the value of that SSP for the advertiser. Following recent changes in the bidding data that Google Ad Manager provides to publishers, it will no longer be possible for them to compare the performance of non-Google SSPs versus AdX, ie comparing the winning bid from a non-Google SSP with the bid received from AdX. As a result, SSPs will find it increasingly difficult to demonstrate how they add value for publishers, while publishers will have less incentive to sustain the costs of integrating non-Google SSPs through header bidding.
5.223 In relation to this change, Google told us that the data files that include AdX non-winning bids were only made available in August 2017 as an ‘alpha’ feature, giving buyers the option to opt out of sharing their bid data with publishers. The possibility to opt out was removed with the transition to unified auction. This, however, required Google to eliminate the possibility to link non-winning bids to specific impressions, and therefore to individual consumers. The restriction was also prompted by consumer privacy considerations.
5.224 Google has also introduced a new piece of information that Google Ad Manager will send to AdX and to Open Bidders after an auction is completed – the ‘minimum bid to win’. These bidders will receive information on the minimum bid that would have allowed them to win an auction. Google told us that this benefits buyers by allowing them to improve the competitiveness of their bid; in turn, the increased demand-side transparency and bid accuracy benefits publishers by improving auction competition, which drives publisher revenues. While this information cannot be used to bid on the same auction, as it is provided ex-post, it is useful for training bidding algorithms in future auctions. This information is provided to SSPs bidding through Open Bidding but cannot be provided to those bidding through header bidding, as Google Ad Manager does not know the identity of header bidders. As a result, it provides an incentive for non-Google SSPs to use Open Bidding rather than header bidding. When using Open Bidding, however, SSPs are charged an additional fee, placing them at a disadvantage compared to AdX.
Self-preferencing between Google’s DSP and SSP
5.225 The fourth area of concern is that Google could potentially be favouring its own SSP by preferring it when DV360 decides where to submit its bids. As publishers typically work with multiple SSPs, DSPs receive multiple bid requests related to the same ad opportunity. While there is currently no way to efficiently de-duplicate such requests, some DSPs have developed systems to reduce the volume of bid requests that reach them, reducing the costs they have to sustain to listen to the bid stream and respond to bid requests. It is therefore possible that a company operating a DSP may favour its own vertically integrated SSP when deciding where to bid. One advertiser told us that the activity reports it receives from DV360 show that it heavily relies on AdX. However, Google told us that DV360 submits a bid for each bid request with a suitable impression according to the parameters set by the advertiser. Moreover, we note that there are efficiency reasons why a DSP would tend to buy impressions from its vertically integrated SSP more often than from other SSPs. As discussed earlier in this section, when the DSP and the SSP are operated by the same company, they use the same user identifier, eliminating the loss of data due to failed cookie matching. In addition, the low level of latency in the communications between the DSP and SSP means that the bid submitted by the DSP will always reach the SSP before the auction closes, unlike with third-party SSPs.
On the other hand, these technical efficiencies, in the context of the issues discussed above – Google’s market power in ad serving and the preferential treatment of AdX by Google’s publisher ad server – provide a further advantage for DV360 over competing DSPs, in addition to those already discussed above. When Google’s ad server is used by the vast majority of publishers and AdX has an advantage compared to other SSPs when bidding into it, a DSP like DV360 which does not suffer from loss of data or latency when bidding into AdX becomes an even more attractive option for advertisers.
Potential impacts of privacy concerns and data protection legislation
As discussed in Chapter 4, one of the overarching concerns highlighted by market participants was the potential impact of privacy concerns and data protection legislation (including GDPR) on how the open display market might develop. We heard two broad areas of concern:
- first, that the GDPR might lead to continuing consolidation of the display advertising market within vertically integrated ‘walled gardens’ and make it harder for independent intermediaries to compete with the likes of Google in the open display market; and
- second, that GDPR and privacy concerns have been used to justify a reduction in sharing of data with other market participants including publishers, which exacerbates the concerns about lack of transparency in the market.
Impact on competition in the open display market
Programmatic advertising relies on an extensive chain of data flows. When publishers make a bid request, advertisers and DSPs attempt to match a publisher’s user ID with their own data about the individual in order to provide personalised advertising. Figure 5.11 illustrates the typical flows of data between parts of the open advertising chain.
Figure 5.11: Example flows of data in open real-time bidding (browser impression)
5.230 There are relatively few transfers of personal data between different entities for a transaction conducted entirely within a vertically integrated platform because the platform can make use of its own data on the individual in order to provide personalised advertising – ie the data flows remain within the ‘walled garden’. By contrast, third-party intermediaries in the open display market rely on being able to match different sources of third-party data, for example by using cookie-matching.
5.231 The ICO has stated that, due to the provisions of the PECR, which provide specific rules regarding the use of cookies and similar technologies, consent is required for the processing of personal data in bid requests, and that in practice consent is also the most appropriate lawful basis for other processing. Where personalisation does not involve processing activities to which PECR applies, legitimate interests may also be considered on a case by case basis. The ICO’s Update Report into Adtech and RTB also stated that in the current ecosystem it is not possible for consumers to provide valid consent to the processing of their personal data (including special category data such as political opinions, religious beliefs and data relating to health). This is due to PECR’s requirements and also because of the nature of the processing. The data may be shared with an unknowable (from the perspective of the consumer) and large number of parties, with unknowable controls and security measures. This means that the consumer would never be fully informed about what happens to their data and would not be able to exercise their rights over that data.
5.232 For reasons discussed in detail in Appendix H, it is challenging for intermediaries that do not offer user-facing services to obtain consent. At the extreme, this could mean that third-party intermediaries would need to radically reduce the number of other parties they shared a consumer’s personal data with to a level the consumer could realistically understand so as to give valid consent to targeted personalised advertising. This would increase, potentially very significantly, the data advantage of the large platforms that have their own rich sources of first-party user data. We expect that this in turn would increase the competition concerns in the open display market outlined above.
Reduction in data sharing by the platforms
5.233 We have also heard concerns that data protection legislation is being used by the platforms to justify moves to limit the amount of data that is shared with other market participants. Examples of decisions that have led to such data limitations include:
- Google’s decision to remove time stamp data from bid requests – previously publishers could attempt to match their own information on advertising impressions with advertiser-side data by using the time stamp of the impression as a common identifier of that consumer. We were told that Google has recently made the time stamp information less precise, so that publisher and advertiser-side data on a consumer can no longer be matched. Publishers have told us that this reduces their ability to understand financial flows across the ad tech chain.
- Google’s decision to prevent the DoubleClick user IDs being accessed by ad buyers – the DoubleClick ID pulls together data from the company’s various ad and consumer-facing products around a unique user ID associated with the DoubleClick cookie. It allowed ad buyers to pull data out of DoubleClick Campaign Manager (now part of the Google Marketing Platform) for reporting on ad performance and ad attribution. Although advertisers can now access reporting, attribution and measurement insights using Google Ads Data Hub, they cannot export the data. Google indicated that the DoubleClick ID could be tied to sensitive information like user search histories and could violate the strict data privacy requirements of GDPR. Ad buyers have suggested that stripping out the DoubleClick ID cuts off visibility to user activity within the DoubleClick ecosystem, which made it almost impossible to compare ad performance between ads purchased through the Google ad tech stack and ads purchased through other intermediaries. Advertisers have also suggested that the change made independent ad attribution much more difficult.
5.234 It is not clear whether these examples go beyond the requirements of data protection legislation. However, they illustrate a basic tension between privacy concerns about the sharing of personal data and the desire of market participants to gain access to additional information on consumers to both to target advertising to the right people and to evaluate how effective their adverts are in respect of particular consumers, in order to be able to compete more effectively with the large platforms. We discuss some potential interventions in Chapter 6 which may reduce, but not completely remove, the trade-off between user privacy, activities that contribute to the efficiency of the digital advertising market (behavioural targeting, verification and measurement), and the ability of market participants to compete effectively with the large platforms.
**Initial findings on open display**
5.235 The evidence we have reviewed so far suggests that lack of transparency on fees is a significant issue in the open display market. This may limit the extent of competition between SSPs, reduce the competitive pressure faced by DSPs, and give rise to rent-seeking behaviour and arbitrage opportunities. The outcome would be lower revenue for publishers, leading to a reduced incentive for them to invest in content, to the detriment of final consumers.
5.236 Moreover, the evidence suggests that, in recent years, the intermediation ecosystem has been going through a process of consolidation and vertical integration. While vertical integration can generate technical efficiencies to the benefit of both advertisers and publishers, it can also give rise to conflicts of interest and allow companies with market power at one stage of the value chain to leverage it in other parts of the industry, potentially foreclosing competing providers.
5.237 Specific concerns have been raised about Google, which is present along the entire intermediation chain. Google may be able to exploit its position on both sides of the market and to leverage its market power in search advertising, its advantages with respect to user data and its control over a large own-and-operated display inventory to strengthen its position in advertising intermediation. In particular, Google: • may be able to use the importance for advertisers of its owned and operated inventory and the richness of its data for targeted advertising to strengthen Google’s position as a DSP provider;
• has made it difficult to access its advertiser demand (especially from Google Ads) through alternative publisher ad servers, thereby increasing its market power in ad serving and making it difficult for other providers to compete on the merits;
• may be able to use its position as the largest publisher ad server to favour demand from its own SSP; and
• may also favour its own SSP by preferring it when its DSPs decide where to submit their bids.
5.238 Privacy concerns and the application of GDPR are likely to have a significant impact on the market, reinforcing the trend towards vertical integration and potentially increasing the data advantage of the large platforms that have their own sources of first-party user data, making it harder for third parties to compete. These trends could exacerbate the existing competition concerns.
5.239 Refer to Appendix H for a more detailed explanation of how intermediation in open display advertising operates. Potential interventions to tackle our concerns about transparency and conflicts of interest are set out in the Chapter 6.
The relationship between large digital platforms and publishers
5.240 The previous section discussed the issues faced by publishers when they sell digital advertising via intermediaries in competition with walled gardens. In this section we examine the other relationships publishers have with Google and Facebook.
5.241 Publishers of online content rely on Google and Facebook to host content or for referrals of traffic to their online properties, which they can then monetise by displaying advertising to these visitors. However, online publishers consider that they face an imbalance of bargaining power with Google and Facebook, which disadvantages their businesses in a number of ways.
5.242 This section draws on evidence we have received from a number of large publishers of online content aimed at a UK audience.280 These submissions
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280 Guardian News and Media, Independent News and Media, Reach UK, Daily Mail, The Telegraph, Reach plc, Sky, Vice. JPI Media and eBay. come from a range of publishers including traditional news publishers – who have transitioned from print-based distribution of content towards either a mix of print and online distribution or solely online distribution – and ‘digital-first’ publishers.
5.243 Below we first set out the various relationships publishers have with Google and Facebook and then our preliminary analysis of the potential imbalance in bargaining power between publishers and these platforms.
**Relationships between publishers and large digital platforms**
5.244 Publishers typically identified Google and Facebook as being by far the most important digital platforms for their businesses. Apple, in its role as a supplier of a large mobile operating system and its Apple News service, was also mentioned as being important by a number of publishers, but its importance was generally rated as being significantly below that of Google and Facebook.
**Publisher business models**
5.245 Publishers describe employing three broad types of business model to monetise their digital properties. The type of digital business model affects how the publisher generates revenues and how it interacts with Google and Facebook. Broadly the three types of business model are:
- Subscription based – where the prime focus of the publishers is to turn an engaged audience into paying subscribers;
- Traffic/digital advertising based – where the main goal is to drive traffic towards the publisher’s webpages and monetise this in the form of targeted digital advertising displayed to visitors; and
- Monetisation of content on posted third-party platforms – publishers post content on third-party platforms, usually social media, and use the monetisation tools made available by those platforms – such as the sharing of advertising revenues – to generate revenue.
5.246 In practice, most of the publishers blend some aspects of all three of these business models and depend to a significant degree on Google and Facebook for the success of their business models.
**Interaction with Google’s consumer-facing services**
5.247 Online publishers interact with the consumer-facing services of Google in a number of ways. 5.248 The most important interaction is with Google Search, which is a very significant referrer of traffic to online publisher websites both via organic and, to a lesser extent, paid search results. Prominence in the organic results of relevant Google searches is considered extremely important by online publishers. As a result, significant resources are devoted to optimising the positioning of web pages in Google search results (an activity known as search engine optimisation – SEO). In addition, almost all publishers we spoke to told us that they engage in paid search activity to increase the prominence of their web pages in Google search results.
5.249 YouTube was also considered very important for their businesses: all of the publishers we received submissions from reported that they post content on YouTube. Their aims in doing so are threefold: firstly, to drive traffic back to their websites; secondly, to generate awareness to their content and brand; and thirdly, to generate revenue via YouTube advertising and, to a lesser extent, subscriptions.
5.250 Publishers of content on YouTube can be eligible for a share of advertising revenue on YouTube if the content meets certain standards and a threshold number of views is passed. Where this is the case, YouTube sells advertising, displayed at the beginning (pre-roll) and during (in-stream) of publisher content. Publishers told us that they receive around 55% of any consequent advertising revenue. In some cases, publishers can arrange for their directly sold advertising to appear alongside their content. In addition, content publishers have the option to earn revenue from subscriptions.
5.251 One other aspect of Google’s consumer-facing services that is considered very important by publishers is Accelerated Mobile Pages (AMP). AMP is a publishing format for mobile devices that enables the fast loading of content in browsers. In order to enable fast page loading, AMP employs an optimised and restricted version of the code used to build web pages, and web pages are cached within the AMP ecosystem. As pages are cached, usually by Google, consumers remain within the Google ecosystem whilst browsing an AMP page.
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281 For search items considered to have ‘news intent’, Google Search may also present the consumer with a ‘Top Stories’ carousel sourced from news results that Google crawls and places in a separate index to its standard search index. Results delivered via the separate ‘news’ and ‘video’ tabs can also be important sources of traffic for online publishers.
282 See Google.com ‘How to earn money on YouTube’.
283 This means that pages are effectively pre-loaded to the AMP system to enable faster upload to the consumer device. See how ‘AMP pages are cached’.
284 There are two currently operators of AMP caches, Google and Bing. Content publishers do not choose which cache to use, as this is selected by the platform’s themselves such as Google. 5.252 Publishers told us that they need to put web pages in AMP format, because they think that gives them greater prominence in mobile search results. In particular, it was noted that only AMP pages will appear in the ‘Top Stories’ carousel that are shown in the results of searches with ‘news intent’. Publishers considered that, for the most part, AMP pages operated in a similar way to their regular mobile web pages. However, as is discussed in more detail below, they have concerns around restrictions on their ability to monetise these pages and their ability to access data generated from consumers’ interaction with them.
5.253 Another Google consumer-facing service that was mentioned by several publishers was the Google News website and app. However, its importance was considered to be much lower than that of Google Search and YouTube. Google News collects information from other online publishers and presents it to consumers as a collated, curated product. In principle, publishers are eligible for a share of any advertising revenue for ads that appear alongside their content, but Google does not currently display advertising on Google News.
Interaction with Facebook’s consumer-facing services
5.254 Facebook is another key source of consumer traffic for publishers. Publishers post content on their own Facebook pages with the aim of generating awareness of their content and brand and of referring traffic back to their websites and apps. Publishers report that they have little or no opportunity to directly monetise what might be termed standard content on their Facebook pages.
5.255 Facebook’s News Feed is another key source of traffic. To post content in Facebook’s News Feed, a number of publishers put their web pages in into Facebook’s Instant Articles (IA) format. Similar to AMP, IA is a publication format that has been designed to allow mobile pages to load faster, but in the case of IA it is only in use on the Facebook mobile app. Publishers receive a [majority] share in advertising revenue generated by Facebook from adverts that appear alongside their IAs. They also have the option to insert their own
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285 Consumers are presented with news stories collated under a series of categories such as ‘Top Stories’, ‘For You’ and ‘Your Local News’. Stories are presented as a headline, usually with a hyperlink back to the source website, although some content may be viewed within Google News itself.
286 The News Feed is the constantly updating list of stories in the middle of a consumer’s home page, including status updates, photos, videos, links, app activity and likes from people, pages and groups the consumer follows on Facebook.
287 Facebook states that Instant Articles load 10 times faster than standard mobile web articles and that consumers read 20 per cent more Instant Articles on average and are 70 per cent less likely to abandon an Instant Article than a standard mobile web article. directly sold advertising alongside their IA and, where they do this, they receive 100% of the advertising revenue.\\textsuperscript{288}
5.256 Several publishers also post content on Facebook’s video hosting service Facebook Watch, although several considered that doing so was not worth their while, given the effort required. Where they post content of Facebook Watch, publishers may be eligible for a share of advertising revenue where the content meets certain standards and a threshold of views is surpassed, and they receive approximately 55% of any revenue for advertising displayed alongside their content.\\textsuperscript{289}
**Google and Facebook as a source of traffic for publishers**
5.257 We have analysed website traffic data from a number of large publishers.\\textsuperscript{290} This data shows that in 2018 and 2019 these publishers relied on Google and Facebook properties for around between 36% and 38% of total traffic to their websites, see Table 5.1 below.
| Year | All traffic | Website traffic from Google, Facebook and Direct visits\\textsuperscript{291} | Desktop/Laptop | Mobile | |------|-------------|-------------------------------------------------|----------------|--------| | | Google | Facebook | Direct | Google | Facebook | Direct | Google | Facebook | Direct | | 2019 | 25% | 13% | 43% | 26% | 4% | 55% | 25% | 17% | 38% | | 2018 | 26% | 10% | 44% | 29% | 4% | 52% | 25% | 14% | 40% |
Source: CMA analysis of publisher data
5.258 Based on publisher submissions in 2018 and 2019 (up until June) the average proportions of traffic to their websites that were referred via Google properties was 26% and 25% respectively (for 2019 min was 8% and max was 57%). Referrals from Facebook properties were responsible on average for 10% of website visits in 2018 and 13% in 2019 (for 2019 min was 2% and max was 47%). Direct website visits were the most important source of traffic with 44% of visits being direct in 2018 and 43% being direct in 2019 (for 2019 min was 6% and max was 57%). Other visits come from what are termed ‘other third-party referrals’, for example referrals from Snapchat or Instagram.
\\textsuperscript{288} See Facebook.com ‘Monetise your Instant Articles with Audience Network’. \\textsuperscript{289} See Facebook.com ‘About rules for monetisation’. \\textsuperscript{290} This analysis includes traffic data for the following websites: The Independent, The sun, The Times, The Daily Mail, The Telegraph, Reach PLC websites, Sky websites, and all Vice websites. \\textsuperscript{291} Other visits come from what are termed ‘other third-party referrals’ for example referrals from Snapchat or Instagram. The balance of bargaining power between online publishers and Google and Facebook
5.259 Publishers have told us that they view Google and Facebook as ‘must have’ partners. This is primarily due to a substantial proportion of the traffic referred to their websites coming from Google and Facebook properties and a degree of reliance on prominence on Google and Facebook properties for content discovery and brand awareness.
5.260 As a consequence of this reliance on Google and Facebook for traffic, publishers told us that they suffer from an imbalance of bargaining power when dealing with these platforms. This was an issue that was also raised as part of the Cairncross Review, which concluded that ‘Google and Facebook also increasingly control the distribution of publishers’ content online’ and that as a consequence ‘these platforms can impose terms on publishers without needing to consult or negotiate with them’.292
5.261 This potential imbalance of bargaining power has led to publishers expressing a number of concerns about how their relationships with Google and Facebook result in them being disadvantaged. The most significant of these are explained below.
Unexpected and unexplained changes to search algorithms
5.262 Most publishers expressed some concern about unexpected and unexplained changes to Google and Facebook search algorithms, most notably in relation to Google Search and Facebook News Feed. Specific examples of several algorithm changes which significantly impacted website traffic were mentioned, including:
- Facebook’s announcement on 18 January 2018 that from that day its News Feed ranking algorithm would prioritize ‘meaningful interactions’ from friends and family over content from brands.293 This change had the impact of deprioritising content from some online content publishers in the News Feed ranking of many Facebook users.
- Google’s 3 June 2019 core search algorithm update announced a change being implemented the following day which resulted in a step change in the daily traffic arriving at many news websites via Google Search. Some
292 See page 57 ‘The Cairncross Review: A sustainable Future for Journalism’ February 2019. 293 See Hootsuite blog, April 2018, ‘How the Facebook algorithm works and how to make it work for you’. sites saw an increase in daily traffic arriving via Google Search, but others saw significant decreases.\\textsuperscript{294,295}
5.263 Publishers have argued that a reduction in website traffic resulting from an algorithm change has a direct financial consequence for their business in the form of lost opportunities to monetise these visits through advertising. Furthermore, they told us that sudden, unexplained and significant algorithm changes make planning and financial decision-making more complicated and can lead to significant, potentially wasteful, expenditure on understanding these opaque algorithms and optimising content to appear high up in the rankings.
5.264 Publishers broadly are of the view that they do not get sufficient warning of algorithm changes or sufficient explanation of their impact or of what they might do to mitigate any loss of traffic. A number of publishers have suggested that there should be a role for a regulator to monitor and report on the main Google and Facebook search ranking algorithms.
5.265 Whilst some publishers feel very strongly about algorithmic transparency and considered it to be of critical importance to their businesses, for others it was less of an issue and was viewed more as a consequence of doing business with Google and Facebook which they have, to a degree, grown used to.
5.266 Whilst publishers have a number of issues with the approach taken by Google and Facebook to updating their algorithms, we note that there are legitimate reasons for regularly updating search algorithms as these are central to improving the consumer experience of Google and Facebook properties. There are also arguments to support the idea that too much transparency regarding these algorithms might be counter-productive as providing too much information might allow businesses to effectively ‘game’ the algorithm by knowingly drafting or changing content to increase their rankings.
\\textit{Use of Publisher content for ‘free’}
5.267 Publishers provide content into the Google and Facebook ecosystems in three main ways: firstly, by posting content on their social media platforms, such as Facebook’s main site and YouTube; secondly, through hyperlinks and short explanatory ‘snippets’ of content that appear within Google’s organic search ranking pages; and thirdly when utilising the publication formats AMP and IA.
\\textsuperscript{294} See Google SearchLiaison update 2 June 2019. \\textsuperscript{295} See Searchengineland.com update 6 June 2019. 5.268 Some publishers argue that Google and Facebook effectively ‘free ride’ on content produced by third-party publishers and that this includes professionally produced content – whether that be breaking news, analysis, features, entertainment or sport, produced by publishers under their editorial responsibility and legal liability. They argue that, without this, Google and Facebook would attract less traffic to their platforms and would consequently generate less advertising and have fewer opportunities to collect valuable user data.
5.269 Some publishers have also argued that there is an increasing tendency for content to be consumed within the Google and Facebook ecosystems without clicking through to the source websites. A European Commission report in 2016 reported that 47% of UK individuals surveyed said that when they access the news via news aggregators, online social media or search engines, they most often browse and read the main news of the day without clicking on links to access the whole articles.296
5.270 A couple of publishers referenced a recent study by the News Media Alliance (NMA). This estimated that Google receives $4.7 billion in revenue from News Publishers’ Content worldwide in 2018.297 The methodology of this study is however limited298 and, as Google pointed out in response, ‘the overwhelming number of news queries do not show ads’299 and no advertising is currently displayed on Google News.
5.271 Publishers have also mentioned that, while they consider that Google and Facebook benefit significantly from using their content, they cannot always easily monetise content that is hosted on Google and Facebook properties. As we note above, publishers do not benefit from advertising that is placed next to ‘standard’ Facebook content. Publishers can benefit from advertising revenue that is generated from their own content posted on YouTube, Facebook Watch and through IA. However, several publishers have suggested that the mechanism by which they receive the remuneration is opaque and that any revenues they receive are limited. Publishers have also suggested that their ability to monetise content hosted on AMP is significantly reduced when compared to their standard mobile web pages. One of the reasons suggested for this was that AMP does not currently support client-
296 ‘Internet users’ preferences for accessing content online’, European Commission, Flash Eurobarometer 437 (March 2016), page 33. 297 See News Media Alliance, June 2019, ‘New Study Finds Google Receives an Estimated $4.7 Billion in Revenue from News Publishers’ Content’. 298 It takes an estimate stated by a Google executive for news related revenue in 2008 ($100m) and simply extrapolates this to 2018 by assuming that Google revenue from news represents that same proportion of total revenue from Google properties in 2018 as it did in 2008. 299 As referenced in New York Times article, 9 June 2019. side header bidding and that, whilst a form of server-side header bidding is supported, the number of partners they are able to integrate into this is limited to five or less.300
5.272 Google and Facebook have previously argued that they do not receive third-party content for free from online publishers, but that in fact the publishers receive a significant volume of web traffic in return for their content. In response to the NMA study, Google stated that ‘Google News and Google Search drives over 10 billion clicks to publishers’ websites, which drives subscriptions and significant ad revenue’.301 In a submission to the EU, as part of its development of the EU Copyright Directive, Google submitted research that it said showed that News publishers in the EU benefited significantly in financial terms from traffic referred to their websites by third parties (including Google Search).
5.273 One potential development in this area is the EU Copyright Directive,302 which was approved in April 2019. The Directive provides media businesses with rights governing the online use of their content by information society service providers (which would include digital platforms). However, it explicitly states that this right shall not apply to the ‘acts of hyperlinking’ and ‘in respect of the use of individual words or very short extracts of a press publication’.
5.274 Publishers were sceptical that the Directive would have any material effect of their ability to negotiate with Google and Facebook over the use of their content even if it were to be adopted into UK law. Although one noted that, in principle, it could enable publishers to negotiate licensing agreements for the distribution of journalism through search and social platforms with market power, the prevailing views were that either its impact was highly uncertain or that there would be very little impact. Particular points of concern were that implementation of the Directive would lead to less content appear on these platforms or that publisher would have little choice but to enter into licencing agreements with the platform for no remuneration in return.
Giving up of valuable user data without reciprocation
5.275 Google and Facebook are able to collect and use individual data from consumers who interact with content on the publisher platform. Often the use of Google and Facebook analytics services by a publisher leads to the placing of a cookie when the service is accessed or a pixel on the publisher website. In addition, if content is consumed within the AMP or IA publication of formats,
300 See: Github.com ‘AMP Real time config’. 301 As referenced in Guardian article, 10 June 2019, ‘Google made $4.7bn from news sites in 2018, study claims’. 302 See EU Copyright Directive. then the consumer remains in the Google or Facebook ecosystem and, therefore they have access to data on the consumer interaction. Google and Facebook are able to use this data to develop their services, to deliver targeted digital advertising and improve their ability to undertake ad analytics including ad attribution.
5.276 Publishers do not have access to the same level of data on consumer interaction with their own content, when hosted on Google and Facebook properties. Publishers report that they generally receive data that is very aggregated and anonymised, which they cannot match to their own first-party data to create consumer profiles across domains. Publishers expressed specific concerns about this with regard to Facebook, IA and YouTube. Publishers told us that the reason why data is only provided in an aggregated and anonymised form is generally stated as being due to privacy.
5.277 One impact of this ability of Google and Facebook to observe consumer interaction on many publisher sites is to reinforce the advantages they have over most other online publishers in offering targeted advertising due to their greater access to online data. In particular, this reinforces Google’s and, to a lesser extent, Facebook’s ability to track consumers across different web domains.
5.278 There is also the possibility that access to data on consumer interactions on many publisher sites may undermine the value of that data to the publishers themselves. Access to this data by Google, may lead to it being used for targeting by Google ad tech companies for ads on sites other than the original publisher website. Therefore, data on a publishers’ unique audience may be ‘commoditised’ and used to target ads on cheaper sites and apps, which might undermine the value of advertising inventory on a publisher’s own website.
**GDPR**
5.279 A further example of the imbalance of bargaining power, cited by several publishers, was the approach taken by Google to updating its terms and conditions shortly before the introduction of GDPR. At the beginning of May 2018, just weeks before the GDPR came into effect, Google released its updated online T&Cs, to cover changes to its advertising services. The terms describe Google as a co-controller of data for certain of their advertising
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303 This is much less of an issue with AMP where publishers report that they are able track the interactions of individual consumers although some have commented that they have difficulty matching this to their own first-party data.
304 A paper by Engelhardt and Narayanan (2016) ‘Online Tracking: A 1-million-site Measurement and Analysis’ suggests that Google is able to track 75%+ of web domains and Facebook around 25% of web domains. products and require publishers to gain consumers’ consent on Google’s behalf to gather and utilise their data. Publishers consider that these changes were made in a non-negotiable way and that they had no choice but to accept this update to the T&Cs.
**Initial findings on relationship between platforms and publishers**
5.280 We have found that publishers frequently depend on large platforms as a significant gateway to consumers – for example through Google Search or the Facebook news feed. This can give platforms significant bargaining power over some publishers.
5.281 Manifestations of this relationship between publishers and platforms include:
- Changes in the platforms’ search or ranking algorithms can have significant impacts on publishers’ traffic, and ultimately their revenues.
- Platforms are able to use publishers’ content to increase their attractiveness to consumers, and to monetise part of the value of that content through the sale of advertising.
- In some cases, publishers have to give data to the platforms as a condition for gaining access to consumers. This data can help the platforms to increase the value of their advertisers, and in some cases might also help the platforms in establishing their own additional consumer-facing services.
5.282 In Chapter 6 we consider potential interventions which might help prevent platforms from being able to unfairly exploit their bargaining position with respect to publishers.
**Initial findings**
5.283 Our initial analysis outlined in this chapter suggests that competition in digital advertising is driven primarily by competition for consumers’ attention and data. Advertisers are attracted to online platforms and publishers that reach a large volume of consumers and can target advertising at individuals for whom their advertising is particularly salient. Where platforms have market power on the consumer side, this enables them to increase their rate at which they monetise consumer attention, either by increasing the volume of advertising or by increasing advertising prices, leading to worse outcomes for consumers.
5.284 Digital advertising is distinguished from traditional advertising in how data is used both to target specific audiences and to measure outcomes. Advertiser choice is data-driven using measurable KPIs that broadly range from awareness to performance. The complexity of this process results in some transparency issues that could weaken competition or create potential for outcomes to be misreported.
5.285 Although all forms of advertising compete for consumer attention to some extent, advertisers use different forms of advertising for different purposes. Within digital advertising, search, display and classified advertising serve distinct purposes, with only limited substitutability between them. There is also a distinction within display advertising between video and non-video advertising. This means that platforms that control a significant share of a particular type of advertising inventory are able to exercise a degree of market power over advertisers.
5.286 Google has significant market power in search advertising. It has a very large share of search advertising revenues, reflecting its high share of searches on the consumer side. Other search engines face significant barriers to attracting advertisers, in addition to the barriers to building share on the consumer side. Google is viewed as a ‘must have’ channel for search advertising given its scale, and there are incentives for advertisers (particularly smaller advertisers) to single-home. Google is also able to use its access to data across a large proportion of the internet to provide higher-quality analytics and attribution services which increases the value of the advertising in a way that is very hard for other smaller search providers to compete with. These factors are reflected in the higher revenues per user that Google is able to earn relative to its competitors.
5.287 In display advertising, there are a large number of online publishers and apps selling inventory to advertisers. However, a significant majority of advertising revenues go to a small number of platforms. Facebook and Instagram jointly account for nearly half of display advertising revenues, and YouTube (owned by Google) is also a significant seller of video advertising. The large platforms have a significant data advantage over smaller competitors and publishers, which both increases the value of their advertising inventory and creates additional barriers for their competitors to overcome. As with search advertising, there are also incentives for smaller advertisers to single-home. As a result, the largest platforms are able to exercise significant market power over advertisers.
5.288 Other online publishers wishing to monetise their content through advertising have to sell inventory through the open display advertising market. This market relies on a complex chain of intermediation to auction advertising in real time and provide data for audience-targeting. The market has been consolidating largely through acquisitions over time, partly driven by efficiency reasons, and more recently by concerns about the privacy implications of transferring data on consumers between third parties. As a result, there now appears to be significant concentration at several levels, with a continuing trend towards consolidation.
5.289 Google has a particularly strong position in the ad tech stack. This raises two main sets of concerns. First, Google’s position as a provider of advertising intermediation services to both publishers and advertisers creates a conflict of interest, which is exacerbated by the lack of transparency in the market. Second, Google may be able to leverage the market power from its ‘owned and operated’ advertising inventory into the open display market, both extending its market power and protecting its core position in search advertising and data. As a result, we are concerned that publishers are likely to face worse outcomes than in a more competitive market.
5.290 We are continuing to carry out evidence-gathering and analysis on many of the issues highlighted in this chapter, so we would expect these interim findings to evolve during the study. In particular, we are carrying out further work in the following areas:
- further evidence-gathering to better understand advertiser behaviour, including differences between large and small advertisers and the degree of single-homing vs. multi-homing;
- more detailed analysis of money flows within the ad tech stack; and
- further analysis of advertising outcomes and the potential effects of market power.
6. Potential Interventions
- The evidence we have seen at this stage strongly supports the case for the development of a pro-competitive regulatory regime for online platforms funded by digital advertising, as envisaged by the Furman Review.
- An enforceable code of conduct would be a valuable regulatory tool in helping to address some of the concerns we have identified in the consumer-facing and digital advertising markets. As envisaged by the Furman Review, the code would apply to online platforms with strategic market status; our initial view is that this would include Google and Facebook. Overarching principles within a code could relate to: ‘fair trading’; ‘open choices’; and ‘trust and transparency’.
- Potential interventions to tackle the source of Google’s market power in search include third-party access to click-and-query data, and mechanisms for determining the default search engine on devices and browsers.
- In social media, potential remedies to tackle the source of Facebook’s power relate to increasing its interoperability with other platforms.
- We are considering options that would give consumers greater control over their data, including the ability to turn off personalised advertising and still receive the same service. We are also considering a fairness by design duty on platforms to ensure that they do not use defaults and choice architecture to unduly influence consumers’ decisions.
- We are considering a range of options to tackle the conflicts of interest and lack of transparency in the intermediated market for display advertising. These range from requiring greater transparency to various forms of separation of Google’s intermediation activities in the open display market.
- We recognise that several of these would be major interventions and therefore need careful consideration. We are seeking views from stakeholders on the costs and benefits of these potential remedies.
Introduction
6.1 In this chapter we present our initial views on potential regulatory interventions (also referred to as remedies) that could address the concerns identified in the previous chapters. The options discussed here draw on views and proposals put to us by stakeholders during the first half of the study. They also build on the proposals set out in the Furman Review for a stronger ex ante regulatory regime to govern the behaviour of online platforms, but take the discussion beyond high level principles to assess which specific interventions might be required in the markets within the scope of the study. 6.2 We have identified a range of concerns that are likely to require some form of intervention, but we have not yet reached a final view on them, or on the need for any specific intervention. Rather, our aim in this chapter is to highlight potential interventions for consultation, and to seek the views of stakeholders on the case for, and appropriate form of, these interventions. This will inform the conclusions we reach at the time of the final report, including on the appropriate next steps.
6.3 To support this chapter we have produced a series of appendices in which we consider the potential interventions in more detail, and seek views from stakeholders on a range of issues including: whether the intervention in question would be effective in addressing the concerns identified in this report; whether the costs of the intervention would likely outweigh the benefits; and how the intervention should be designed to minimise costs and maximise benefits.305
6.4 The chapter discusses the following:
- an overview of our approach to interventions in this area, based on the development of a robust pro-competitive regulatory regime;
- our initial views on a potential code of conduct to govern the behaviour of platforms with strategic market status;
- options for potential interventions to promote competition in search and social media, addressing the issues identified in Chapter 3;
- options for potential interventions to give consumers greater control over, and protection in relation, to the use of their data, addressing the issues identified in Chapter 4; and
- options for potential interventions to promote competition and improve transparency in digital advertising markets, addressing the issues identified in Chapter 5.
Overview: development of a pro-competitive regulatory regime
6.5 The work we have carried out in the study to date has strengthened the view we expressed in our statement of scope that there is a strong argument for
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305 These remedy appendices are: I: Potential practices to be tackled through a code of conduct; J: Potential interventions in general search; K: Potential interventions in social media; L: Potential approaches to improving personal data mobility; and M: Potential interventions in digital advertising. the development of an ex ante regulatory regime to regulate the activities of online platforms funded by digital advertising.
6.6 This would be a ‘pro-competitive’ regulatory regime, in that its objectives would be: to encourage competition by overcoming barriers to entry and expansion and thus tackling sources of market power; and to protect both competition and consumers where online platforms have a position of market power, by governing their behaviour to ensure they act fairly (and in particular, do not engage in exploitative or exclusionary practices).
6.7 While we have an open mind at this stage on the merits of some of the specific interventions that might be contained within it, we think that such a regime would be an important complement to our existing antitrust tools. In view of the fast-moving nature of the markets we have reviewed and the number and complexity of the issues arising within them, our view is that ex post enforcement is not sufficient to protect competition but needs to be bolstered with stronger and clearer ex ante rules.
6.8 Alongside addressing the specific concerns that we have identified in digital advertising markets and the consumer-facing services that are financed through digital advertising, we have aimed to inform the broader debate about the need to regulate the behaviour of large online platforms. In this context, our study supports the high-level positions set out in the Furman Review and the Stigler Center Review earlier this year, both of which called for stronger ex ante rules to address the competition concerns arising from the increasingly important role that large online platforms play in the economy.
6.9 In the UK specifically, we have aimed to support the government’s response to the Furman Review and its broader thinking on the case for regulating online platforms. While our study covers a subset of online platforms (those funded by digital advertising) these include some of the largest global platforms, and this focus has allowed us to explore concerns and potential interventions in more depth. As noted in our statement of scope, we believe that recommendations for government legislation in this area are likely to be one of the most valuable outcomes of our work. We will engage with the newly-elected government to understand its perspective on these issues in the second half of the study.
306 Furman Review (2019), Unlocking digital competition. 307 Stigler Center (2019), Committee for the Study of Digital Platforms: Report by the Market Structure and Antitrust Subcommittee. 6.10 Internationally, we have also engaged extensively with competition authorities in several countries in the first half of our study, many of whom are considering similar challenges to those we have identified in this study. These have included authorities in the US, Australia, Germany, Japan, Netherlands, France and Spain. Given the fact that many of the issues we are considering are international in nature, we believe that it is highly desirable – particularly for any significant interventions that would have a major impact on a platform’s business model – that there is a broad consensus on the case for intervention. We hope that this study will help contribute to such a consensus.
**Elements of the regulatory regime**
6.11 The interventions that we assess in this chapter fall into two broad categories:
- principles and rules to govern the behaviour of platforms with market power, taking the form of an enforceable code of conduct; and
- interventions to address specific concerns relating to market power, lack of transparency and conflicts of interest, to promote competition and to protect consumers.
6.12 These two categories of intervention have distinct functions. The first category of intervention comprises rules to govern the behaviour of firms that enjoy a position of market power. Its intention is to address the harmful effects that can arise from the exercise of market power, rather than tackling the underlying causes. It would focus on changing the behaviour of online platforms that enjoy market power through the use of an enforceable code of conduct for platforms with strategic market status (SMS), as envisaged by the Furman Review. The principles set out in this code would target concerns that we have identified across themes 1 to 3.
6.13 The second category of intervention would aim to address specific concerns that we have identified within the markets we have reviewed, and in particular
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308 The FTC established a digital platform taskforce earlier this year, the DOJ is reviewing the practices of market-leading online platforms and a collection of US State Attorney Generals have initiated investigations into each of Google and Facebook.
309 The ACCC has recently completed a market study into digital platforms, including effects on digital advertising.
310 The Bundeskartellamt is currently undertaking a sector inquiry into market conditions in online advertising.
311 The Secretariat of the Headquarters for Digital Market Competition has recently been established in Japan.
312 The Netherlands Authority for Consumers and Markets is currently undertaking work in relation to online choice architectures for consumers.
313 The Autorité de la concurrence published an Opinion in 2018 on data processing in the online advertising sector. The Autorité is also currently considering a complaint in this market.
314 The Comisión Nacional de los Mercados y la Competencia is currently undertaking a market study into online advertising. address sources of market power, by tackling issues on both the demand and supply side of those markets. These include a number of types of intervention suggested by the Furman Review – in particular, data-related remedies including the provision of third-party access to data, giving customers control of their data and measures to increase interoperability – as well as remedies not directly considered by the Review, including structural measures. Many of these would be very significant interventions, the costs and benefits of which would need to be considered very carefully. We consider the case for these interventions under each of themes 1 – 3 below.
6.14 At a high level, an important benefit of behavioural interventions as enshrined in the code is that they allow for considerable flexibility in tackling problems as they arise, which is an important consideration in the rapidly-changing digital advertising markets that we have reviewed. In contrast, the benefit of interventions falling into the second category is that they provide for the possibility of solving problems at source, reducing the need for ongoing and costly regulatory controls. However, these interventions could change the nature of competition in fundamental ways, and close attention would need to be paid to the potential costs and unintended consequences of such measures.
6.15 In principle, elements of the second category of intervention could be implemented alongside the code, or considered only once the code has been up and running for a period of time. We would welcome views on this, and ask questions about the sequencing of interventions in Chapter 8.
**Institutions and legal powers**
6.16 All of the interventions that we consider in this chapter would need some form of regulatory body to implement them. This is consistent with the findings of the Furman Review, which called for a Digital Markets Unit to be created in the UK, and the Stigler Center Review, which called for the creation of a Digital Authority in the US.
6.17 At this stage in our study, we have focused our assessment on the case for potential new regulatory functions rather than on which institutions might discharge those functions. Accordingly, in the rest of this chapter, we use the term ‘regulator’ to refer to the body empowered to implement the regulatory functions we are considering. We note that this regulator could be a new or an existing institution, or that regulatory functions could be assigned across several bodies. We expect to give further consideration to the question of institutional design in our final report and would welcome any views from stakeholders on this question. 6.18 Any regulator would need to have legal powers to enforce both the provisions of the code and any specific remedies to address sources of market power. We anticipate that any such powers will need to be assigned through primary legislation and in this study we are looking to inform the scope and direction of such legislation. We note that the CMA already has powers to impose some of the interventions discussed in this chapter, in the context of a market investigation. In Chapter 7 we consider the case for launching a market investigation in the near term, to address the concerns we have identified.
**Code of conduct for online platforms with strategic market status**
6.19 As noted above, the Furman Review proposed that the behaviour of online platforms with market power should be governed by a pro-competitive code of conduct. The code would set out principles or rules to govern the behaviour of platforms with strategic market status (SMS), requiring them to act in a way that ensures that consumers and businesses dealing with them are fairly treated and vigorous competition can take place.
6.20 Our initial view is that such a code has the potential to address several of the concerns that we have identified in both consumer-facing and digital advertising markets. In this section we:
- assess the case for the use of a code as a complement to existing enforcement tools in addressing the concerns we have identified;
- consider the criteria for identifying the firms that the code should apply to; and
- consider the principles or rules that could be set out in the code and how these relate to the concerns we have identified in the study to date.
**The case for a code**
6.21 On the basis of the work we have carried out so far, our initial view is that an enforceable code of conduct as set out above would be a valuable regulatory tool in helping to address the concerns we have identified in the consumer-facing and digital advertising markets.
6.22 In principle, a code could have a number of advantages over existing ex post enforcement:
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315 We discuss the notion of SMS and its potential application to platforms funded by digital advertising later on in this chapter. • The markets we have reviewed are extremely fast moving and dynamic, and harm to competition can occur rapidly. A code could therefore be helpful in changing behaviour much more rapidly than is possible through existing antitrust tools, where there is either a risk of harm to competition or of an adverse effect on consumers.
• A code would allow action in respect of concerns which might fall short of the test of breaching competition law but might nevertheless have an adverse effect on customers through weakening competition.316
• A code of conduct, which would be subject to consultation, could provide increased certainty over what represents acceptable behaviour of the platforms when interacting with consumers and competitors.317
• The markets we have reviewed are highly complicated, both from a technical perspective and (in the open display market) in terms of market structure. It may therefore be beneficial to have a dedicated regulator (or regulators) to enforce the code, as this body will be able to develop its expertise over time.
• A code could be a valuable tool in improving transparency and hence trust in the market. The regulator enforcing the code could be given powers to audit and scrutinise the workings of opaque algorithms and to investigate concerns around conflicts of interest or discriminatory treatment of some customers. This would potentially address much of the opacity and lack of trust which has developed in the markets we have reviewed.
6.23 Introducing a code would also create costs, particularly for those platforms subject to the code, which would need to comply with reporting requirements and with investigations. The code might also require large firms to implement new measures to be able to demonstrate compliance, or new systems to be able to demonstrate that customers are being treated equally. And there is a risk that changes brought about through the code of conduct may introduce inefficiencies into platforms’ operations.
6.24 Based on our review to date, we consider that there are a number of potentially problematic practices in consumer-facing and digital advertising markets that could be investigated under the code with likely improvements both to competition and trust. A regulator ordering a change of behaviour
316 This is particularly important in the open display digital advertising market, where we have found that potential harm can take the form of a range of practices that in combination may lead to material harm. See Chapter 5 for further discussion of this.
317 Again, this maybe particularly helpful in new, fast-moving digital markets, where there is less of a corpus of relevant past cases from which to draw precedents. under the code would need to assure itself that there were sufficient benefits to outweigh the costs on a case-by-case basis, having regard to the evidence.
6.25 In our view, a code of conduct operating along the lines set out above would not preclude competition enforcement in appropriate circumstances. Such enforcement would still be appropriate in cases of egregious or repeated anti-competitive behaviour, serving as a deterrent against such behaviour in the future. Competition or consumer enforcement remains a potential outcome from this study.
6.26 We note that a substantial number of stakeholders have indicated to us, both in responses to the statement of scope and in subsequent interactions, that they are in support of the establishment of a code, highlighting the benefits identified above. We would welcome further views from stakeholders on this topic as part of the consultation on the interim report.
**Which firms would the code apply to?**
6.27 At this stage, based on the analysis carried out in the first half of the study, our view is that the code should apply to a small number of platforms around which potential competition concerns arising from their behaviour are likely to be most significant.
6.28 The notion of ‘strategic market status’ (SMS) was introduced by the Furman Review to define the category of firms to which the code of conduct would apply. SMS is not explicitly defined in the report. It is described variously as a position of enduring market power/control over a strategic gateway market with the consequence that the platform enjoys a powerful negotiating position resulting in a position of business dependency.
6.29 We note that the approach to SMS designation will be considered by government as part of the process of responding to the Furman Review, and that this process will take account of the characteristics of a broader range of online platforms than we have considered in this study. We have, however, given some consideration to how SMS might be defined in the case of platforms funded by digital advertising, drawing on our own analysis and the high-level principles in the Furman Review.
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318 Several stakeholders told us that the code of conduct should curtail platforms’ self-preferencing and leveraging behaviour. Both Match Group and Daily Mail also called for algorithmic transparency, with the Daily Mail arguing that platforms currently impose significant changes without proper warning, explanation or means of redress.
319 Furman Review (2019), Unlocking digital competition, page 5. The report proposes that a code of conduct ‘would be applied only to particularly powerful companies, those deemed to have ‘strategic market status.’”
320 Ibid. 6.30 Our initial view is that the following criteria provide a useful starting point for assessing whether a digital platform should be considered to have SMS and hence be subject to the code of conduct:
- the platform has enduring market power over a relevant market;
- the platform acts as an important gateway for businesses to access a significant portion of consumers; and
- businesses depend on the platform to access users on ‘other’ side of the market.
6.31 Evidence likely to be relevant in making this assessment for platforms funded by digital advertising include: share of consumer time spent on the platform; level of reach of consumers; share of digital advertising revenues; control over the rules or standards which apply in the market, and the ability to obtain and control unique data that is applicable outside the market.
6.32 Our initial view is that both Google and Facebook would likely be considered to have SMS against these criteria. Google has had around 90% or more of the search market for over 10 years, as well as having a share of over 90% in the key ad server market. It has a reach of over 90% of UK internet users and various businesses depend on Google for accessing these consumers – both advertisers wanting to secure conversions and newspapers and content providers seeking traffic. It has unrivalled access to data through its consumer services, tags on third-party websites and Android devices.
6.33 Facebook has a reach of 85% of UK internet users, and over 75% of the time spent on social media for a number of years, and a share of over 40% of the display advertising market. It also has extensive access to data – as discussed in Chapter 5, advertisers have told us that only Facebook is able to provide the targeting of advertising that is most valuable for certain campaigns. Facebook also has an important role in driving consumer traffic to content providers.
6.34 We note that other platforms may be considered to have SMS when considering their role in other markets outside the scope of this study.
6.35 Our initial view is that SMS status would apply to the corporate group as a whole, with obligations under the code applying to the markets in which the firm has market power and adjacent markets, in which that market power can
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321 See Figure C.2 of Appendix C. Comscore MMX MP, Total Digital Audience, Desktop aged 6+, Mobile aged 13+, June 2019, UK. 322 Comscore MMX MP, Total Digital Audience, Desktop aged 6+, Mobile aged 13+, July 2015 – June 2019, UK. be leveraged, but that there would be an opportunity to consider some limitation on the scope of the obligations under the code where the firm operates in clearly distinct markets. The regime would need to build in a mechanism such that SMS designations can be reviewed, and candidates for new SMS designations can be assessed, within a reasonable timescale.
6.36 **We welcome views on this broad approach to identifying the scope of the code of conduct for platforms funded by digital advertising.**
**Content of the code**
6.37 Our initial view is that the code should take the form of high-level principles rather than detailed and prescriptive rules. Given the complex and rapidly-changing nature of the markets within scope and the issues we have identified, there is a risk that overly prescriptive rules would soon become redundant or fail to anticipate important new developments. It is likely, however, to be necessary for the regulator to issue periodic guidance to help with interpretation.
6.38 In the markets that we have reviewed in this study, the code could seek to address concerns relating to a range of different relationships between SMS platforms, consumers and business users, including:
- advertisers’ and publishers’ relationships with platforms in relation to buying and selling digital advertising;
- publishers’ and content providers’ relationships with platforms as a gateway for hosting content and accessing consumers via the platform;
- business users’ relationships with platforms where they are providing services via platforms but which could also compete with the platforms’ own service offerings (for example, price comparison sites or online travel agents); and
- consumers’ direct interactions with platforms (eg using a search engine or accessing a social media page)
6.39 In practice, the content of the code could differ between platforms, and it may be appropriate to consult on the content of the code at the time of SMS designation. At a high level, however, our current view is that, for platforms funded by digital advertising, the key provisions of the code could be summarised in the form of three overarching principles: ‘fair trading’; ‘open choices’; and ‘trust and transparency’. In the following sections, we set out our initial views on the key components of each of these principles. **Fair trading**
6.40 The principle of fair trading would require the SMS platform to trade on fair and reasonable terms for services where they are an unavoidable trading partner as a result of their market position. In effect, this principle is intended to address concerns around the potential for exploitative behaviour on the part of the SMS platform.
6.41 In practice, the principle for fair trading could entail a number of requirements such as:
- a requirement that both prices and non-price terms should be objectively justifiable, for example that customers should not be required to provide data to platforms which are not necessary for satisfaction of the contract;
- a ‘fairness by design’ obligation in relation to the design of consumer consents to data use and choice architecture (as discussed in the next section); and
- a requirement that contracts should not put any unreasonable restrictions on how users use the services.
**Open choices**
6.42 The principle of open choices would be intended to require the SMS platform to allow users to choose freely between elements of the platform’s services and those offered by competitors. This principle is intended to address the potential for exclusionary behaviour on the part of the SMS platform. There are likely to be two main domains in which this principle is important: contractual terms and commercial behaviour; and technical standards and interoperability.
6.43 In relation to contractual terms, this principle could include requirements:
- not to bundle services in markets where the SMS platform has market power with services in competitive markets, or where they are sold together to offer comparable terms for the bundled and separate services;
- not to impose restrictions on customers’ ability to use other providers that compete with the SMS platform; and
- to avoid other forms of self-preferencing behaviour – for example, ensuring that search and ranking algorithms do not preference the platform’s own services above those of competitors; and ensuring that consumers are given a neutral choice between services operated by the platform and those of competitors.
6.44 In relation to technical standards, this principle would seek to ensure that the SMS platform allows third parties to interoperate with the platform’s essential inputs, and complies with common standards. This could include requirements:
- to design core services to be interoperable, eg through APIs, at a cost-based price which is objectively justifiable, with reasonable endeavours to manage privacy or technical concerns;
- not to withhold, withdraw, or deprecate APIs or otherwise change them in a way which has a material adverse effect on users without (i) sufficient consultation and (ii) objective justification for the change;
- to comply with common standards where these are developed by independent third parties and approved by a suitable regulatory body; and
- to ensure that any standards developed by the platforms themselves are interoperable, and do not favour the platforms’ other businesses.
Trust and transparency
6.45 The principle of trust and transparency is designed to ensure that SMS platforms provide sufficient information to users, including both consumers and businesses which transact with the platform, so that they understand how the platform operates and how decisions that affect them are made. Users should also have confidence that decisions are being made fairly and according to publicly-stated criteria.
6.46 This principle could include:
- a requirement to explain the operation of search and ranking algorithms and advertising auctions and to allow audit and scrutiny of their operation by the regulator;
- a requirement to give fair warning about changes to the operation of algorithms where these are likely to have a material effect on users, and to explain the basis of these changes;
- a requirement that platforms provide clear information to consumers about the services they receive and the data the platform takes in return, in a format which can realistically be read and understood; • a requirement that platforms are transparent about fees they charge; and
• a requirement for large firms to agree to reasonable requests to access certain data on a fair, reasonable and non-discriminatory basis, subject to GDPR and IP rights, where that data is unmatchable as a result of their market power.
How do these principles relate to the specific concerns we have identified?
6.47 In Appendix I we explain how the principles set out above relate to some of the concerns we have identified in Chapters 3 to 5. This is summarised in Table 6.1 below, which identifies a range of practices that could be investigated under each of the three main principles. The practices set out in Table 6.1 cover a range of different relationships between platforms, consumers and business users, including advertisers and publishers, reflecting the multi-sided nature of these markets.
6.48 We are not drawing any conclusions about the outcome of any investigation of these practices under the code. In some cases, there may be efficiency arguments for the practices in question, for example. Rather, our objective is to demonstrate that:
• there is a wide range of concerns across the markets we have reviewed;
• the number and complexity of issues are such that antitrust alone is unlikely to be sufficient to resolve them; and
• there is therefore a robust case in practice for the establishment of a code. Table 6.1: Concerns we have heard in the study that could be investigated under the code
| Principle | Example of concern that could be investigated | |-----------|-----------------------------------------------| | **Principle 1: Fair trading.** Platforms offer services on fair terms: including pricing, non-price terms, requirements to share data, and any restrictions on how customers can use the services. | **Data gathering from business customers:** Concerns that some platforms require access to publishers’ data and other customers’ data, in some cases without sharing that data with the publisher (Chapter 5).\
**Consumer data extraction:** Concerns that social media platforms use choice architecture to nudge consumers into giving away data and gives insufficient choice to consumers over personalised advertising (Chapter 4).\
**Unfair balance of power:** Concerns that publishers do not have reasonable levels of control or flexibility over how they choose to sell their own inventory and present content on platforms (Chapter 5). | | **Principle 2: Open Choices** Platforms which operate across multiple markets should offer consistent terms across the markets to allow consumers and business customers a fair choice between their own services and their competitors.\
As part of supporting more effective competition in markets, platforms should offer open APIs or interoperability with their core services. | **Bundling competitive services with ‘must have’ services:** Concerns that platforms bundle core services with services in more competitive markets (eg Google ad server and SSP) and fail to inter-operate properly with alternatives (Chapter 5).\
**Unfair restrictions on competitors:** It appears that platforms impose restrictions that impede companies’ ability to compete eg syndication (Chapter 3).\
**Self-preferencing / undue prominence to own products:** Within the open display market, concerns that Google sets the rules for the auction in Ad Manager in a way that favours its own sources of advertising demand (Chapter 5).\
**Restrictions on interoperability:** Concerns that platforms restrict interoperability and degrade APIs to competitors. For example, Facebook has in the past imposed restrictions on the use of APIs, by not allowing them to be used for competing services (Chapter 3). | | **Principle 3: Trust and Transparency** Platforms should provide sufficient information to users, both consumers and businesses which transact with the platform. Platforms should be open and transparent in how they operate their core services. | **Changing how core services work without due notice:** Concerns that platforms change their algorithms without warning in a way that can materially affect publishers and retailers that rely on the platforms (Chapter 5).\
**Lack of transparency in digital advertising:** Concerns that platforms do not provide sufficient data for advertisers to test against fraud and understand what they are getting for their money, or to publishers to understand bid behaviour and effectively commercialise content (Chapter 5).\
**Conflicts of interest:** Google and some other intermediaries operate on buy and sell side of multiple auctions, leading to concerns around hidden fees for both advertiser and publisher customers (Chapter 5).\
**Encouraging consumers to share too much data:** There are concerns that platforms do not make it easy enough for consumers to understand and control what data they are agreeing to share (Chapter 4). | Enforceability of the code
6.49 The code would give a regulator the power to order firms to comply with its findings following an investigation into a breach of the code. The regulator would be able to carry out own-initiative investigations, with powers of audit, scrutiny and transparency. It would also have a key role in hearing complaints and resolving disputes between industry players under the code. Where appropriate, the regulator would publish reports on its work and the industry more generally.
6.50 It would be important for the code to be directly enforceable by the regulator so that there is a strong deterrent to breaching the code and urgent issues can be dealt with. The regulator would therefore need the power to investigate effectively – this may include the power to:
- compel information from SMS firms (and other industry players where necessary to fulfil the code’s objectives);
- suspend decisions of SMS firms pending the result of an investigation, including the imposition of interim measures;
- block decisions of SMS firms at the end of an investigation; and
- appoint a monitoring trustee to monitor and oversee compliance by an SMS firm.
6.51 We would be interested to hear views on whether the regulator would need to be able to direct SMS firms to implement, or reverse, measures for the purpose of fulfilling the objectives of the code. We would also be interested to hear views on whether a breach of orders under the code should be subject to other sanctions such as financial penalties (and if so, what impact that might have on the speed and effectiveness of the regime, including any appeal process).
6.52 We would expect that there would be a right of appeal by the SMS firm or other materially-affected person against decisions of the regulator, but that this could be applied in a much more timely manner and to a different standard than applies for competition enforcement, as the objectives of the code would be undermined if its enforcement was not timely. Relationship with other initiatives
6.53 We note that the broad content of the code suggested above covers a number of the areas of concern set out in Cairncross Review into the sustainability of journalism. The Review set out a proposal for codes of conduct to rebalance the relationship between online platforms and publishers, subject to the oversight of a regulator, covering a range of areas including transparency over fees and ranking algorithms and forewarning of significant changes to algorithms. While our study has not focussed explicitly on the sustainability of journalism, there is an overlap between the proposed provisions of the code set out above and the proposal for multiple codes in relevant digital markets under the Cairncross Review. Government may therefore wish to note these synergies with the potential code of conduct set out above in considering how to take forward this element of the Review’s recommendations.
Other rules applying to SMS platforms
6.54 Other rules and regulations not explicitly covered by the code could apply to SMS platforms.
6.55 The interaction between a code for SMS platforms and the UK mergers regime was considered by the Furman Review. As recommended by the Furman Review, we are currently updating our own Merger Assessment Guidelines to better reflect our understanding of how digital markets function and recent practice in our assessment of mergers, including in the digital space. We are also continuing to reflect on, and to put into practice where appropriate, the learnings identified in the report we commissioned from the economic consultancy, LEAR on the ex-post assessment of previous digital merger investigations. We will keep under review whether there is a case for requesting changes to our existing merger control tools for companies designated as having SMS, or whether a parallel regime for acquisitions undertaken by such companies would be appropriate.
6.56 In addition, aspects of some of the potential interventions set out below, designed to address sources of market power, could be designed with reference to SMS. We note where this is the case in the discussion below.
Interventions to address specific concerns under themes 1 to 3
6.57 As discussed above, our initial view is that a code of conduct would bring benefits in the markets within this review, by helping to avoid behaviour on the part of platforms with SMS that might harm competition and consumers. 6.58 We have also considered a number of interventions that are designed to address specific concerns that we have identified under themes 1 to 3 of the study. These include, particularly in relation to themes 1 and 3, potential interventions to address sources of market power directly, by overcoming barriers to entry and expansion to increase competition. These largely draw on proposals that have been put to us by stakeholders in the course of the study, and include a number of types of intervention suggested by the Furman Review – in particular, data-related remedies – as well as remedies not directly considered by the Review, including structural measures.
6.59 We recognise that several of these would be major interventions, which have the potential to change the nature of competition substantially, and therefore need careful consideration. We are seeking views from stakeholders on the potential costs and benefits of these remedies, as well as on which, if any, of these remedies should be implemented as a priority either by the CMA or by a regulatory body in the future.
6.60 In this section we summarise the main interventions we are considering, to address the issues set out in Chapters 3 to 5 respectively. This summary is supported by Appendices I to M, which provide further details.
**Potential interventions to address market power in general search**
6.61 As explained in Chapter 3, we have found that the ability of general search engines to compete with Google is constrained by the need to overcome a number of barriers to entry and expansion, on both the supply and the demand side of the market.
6.62 On the supply-side, to produce independent search results, search engines must overcome: economies of scale in crawling and indexing; and scale advantages with respect to the number of search queries and the information gained from consumers’ interaction with search. Google and Microsoft are the only two providers that undertake English-language web-crawling and indexing at a scale that can support a competitive search engine in the UK, and the greater scale of English-language queries seen by Google is likely to support its ability to deliver more relevant search results compared to its competitors, especially in relation to uncommon and fresh queries.
6.63 On the demand side, Google is the default search engine for most search entry points in the UK. These default arrangements harm competing search engines’ ability to access consumers and are consistently described by these parties as the most significant barrier to growing their userbase, monetising their operations and improving the quality of their search results. Finally, other search engines including Yahoo Search, DuckDuckGo and Ecosia access organic search results and adverts through negotiated agreements with Bing (in most cases) or Google. Both Google and Bing place restrictions on these search engines, such as how they can present search results to consumers. This makes it harder for these competitors to differentiate themselves and innovate, for example in developing their own algorithms or in approaches to presenting search results to consumers.
**Third-party access to click and query data**
Rival search engines have suggested that Google should be required to provide click and query data to third-party search engines to allow them to improve their search algorithms, thus helping to overcome Google’s scale advantages.
Our initial view is that this intervention has the potential to overcome the data advantages that Google has on account of having a much larger userbase. In particular, it should allow rival search engines to provide more relevant searches to fresh and tail queries and could in principle lead to a situation in which several search engines are able to compete on relevance even for unusual queries.
However, there are significant challenges with such an intervention, which may radically change the nature of competition in the general search market. Google has expressed the concern that this remedy would create risks to consumers' privacy and potentially lead to a situation in which inappropriate parties could gain access to the data for the purposes of gaming Google’s algorithm. We would welcome views on whether this intervention could be implemented in way that avoided these risks.
Further, the impact of this intervention on dynamic incentives needs to be given careful consideration. There is a risk, if an extensive range of data is required to be shared with third parties in a way that reveals aspects of Google’s algorithm, that this will reduce Google’s incentives to innovate and improve its algorithm. Our initial view is that the overall effect on competition is likely to be dependent on a number of factors, including the specific type of data to be shared (query data alone, click and query data, or click and query data and search results) and whether third parties are required to pay for access. We would welcome views on these issues.
**Mechanisms for determining the default search engine on devices and browsers**
We have been struck by the very substantial payments that are made to be the default search engine on browsers and devices and the significant impact being the default search engine appears to have on consumer take up. Several stakeholders told us that Google’s control over Android defaults and its ability to pay more than its rivals to be the default on browsers such as Safari is one of the most significant barriers to entry and expansion in general search. We have heard two broad proposals to address these barriers.
6.70 The first proposal we have heard is that there should be some form of restriction or limit on the ability of Google to buy default positions and/or a restriction on the ability of device manufacturers and browsers to sell defaults. Given the importance of defaults in search, such a restriction would be a major change in the sector. While this intervention may radically improve other search engines’ ability to gain customers and in turn improve their algorithms, this would need to be weighed against any potential consumer harm arising from such restrictions, and the possible impacts on the costs of devices.
6.71 The second proposal concerns a potential requirement to offer choice screens to consumers on devices and browsers and rules regarding their design. We are aware that Google has recently introduced choice screens on all new Android phones and tablets in Europe, following the European Commission’s Android case. There have been concerns around the design and implementation of these choice screens, including concerns that Google auctions slots to be on the choice screen and unduly restricts the number of slots to maximise its revenues from the auction. We have heard several proposals intended to restrict Google’s ability to extract rent from these choice screens, including the use of non-monetary criteria to allocate slots and, more generally, greater involvement from a regulator in the design of choice screens. We have also heard proposals to extend the requirement to offer choice screen beyond Android devices.
6.72 We would welcome stakeholders’ views on all these issues.
Syndication agreements
6.73 Some parties have suggested that Google should be subject to obligations to supply syndicated search results on FRAND terms, and that such terms should also apply to Bing when syndicating to much smaller search engines. We welcome views on the effect this would be expected to have on competition, and on how terms should be set, including whether prices could be set at a level that is low enough to provide an incentive to enter the market but high enough to reward providers of search results and maintain the incentive for third parties to develop their own web index. 6.74 These three potential interventions are likely to interrelate with one another. For instance, if a choice screen led to rival search engines receiving sufficiently high levels of search click and query data, then it may be the case that a data access remedy would no longer be required or proportionate. Another example could be that if provision of access to the web-index and search click and query data is successful at reducing the reliance of smaller search engines on syndication from Google and Bing, there may be no need to impose obligations on the form of such agreements. **We therefore welcome views on the interdependencies of these remedies and whether a gradual, stepped approach to their introduction would be more appropriate, or conversely, whether these remedies would only be effective if rolled out together, as a package.**
6.75 See Appendix J for a more detailed consideration of these potential interventions, and a list of specific consultation questions.
**Potential interventions to address market power in social media**
6.76 We have found that Facebook appears to be subject to limited direct competition from close substitutes in the social media sector. Rather, successful entry in this sector over the last ten years has tended to be characterised by the development of more specialised consumer services that are clearly differentiated from Facebook.
6.77 The CMA is aware of calls for Facebook and Instagram (and possibly also WhatsApp) to be structurally separated, with the purpose of incentivising these large social platforms to compete with one another for user attention and for Instagram to challenge the market power of Facebook. Such an intervention, in principle, might lead Instagram to compete more closely with Facebook for users, and lead to greater choice for advertisers in social display advertising. The high degree of interoperability that currently exists between Facebook and Instagram could also be retained to the benefit of users. However, we recognise that a forced separation would also have significant costs and complexity, and it could lead to a loss in efficiencies for users.
6.78 As discussed in Chapter 3, Facebook faces limited competitive threat due to the strong network effects that it enjoys and which act as a barrier to expansion for its rivals in respect of services which are directly comparable to those of Facebook. Therefore, there is a risk that the structural separation of Facebook and Instagram would only deliver short-term benefits, with the market eventually tipping back to one supplier. However, users would at least enjoy the benefits of competition in the meantime, and other remedies such as interoperability measures could be brought into force to reduce the risk, and adverse consequences, of tipping. 6.79 A forced separation of Facebook and Instagram would clearly be a significant step to take, and it would require careful consideration. If other measures, such as the interoperability measures discussed in the rest of this section, are not successfully implemented, then it may be necessary to consider separation of Facebook.com and Instagram. We welcome views on this.
6.80 One way of achieving greater competition between social media platforms would be through increased interoperability with Facebook’s large network of users. Interoperability requirements enable the positive network effects stemming from large userbases to extend to other platforms. We are considering the extent to which increased interoperability would improve outcomes in this sector and whether any specific features or functionalities should be subject to interoperability requirements.
6.81 Since interoperability involves some form of standardisation, there is a cost to mandating interoperability (potentially in terms of reduced innovation and variety in respect of the functionality that is standardised) as well as a benefit. Reflecting this, most stakeholders that we have spoken to in the first half of the study, including challenger social media platforms, have not supported so-called ‘full protocol interoperability’ in which all the functionality of social media platforms would be made interoperable. There has, however, been support for specific functions being made interoperable.
6.82 In principle, the case for interoperability is greater in respect of functionality which is both directly helpful in overcoming identified network effects and yet not highly innovative (or not recently innovative). We are interested in hearing views as part of this consultation as to which elements of functionality would be strong candidates for interoperability against these criteria.
6.83 In particular, we are interested in views on whether Facebook should be required to interoperate specific features of its current network with existing competitors, and if so which features or functions should be made interoperable and how this would increase competition amongst social media platforms. For instance, forms of interoperability which have been suggested are:
- the ability to identify and make contact with friends or other potential contacts from other social platforms;
- the ability to post content across several platforms simultaneously;
- the ability to view posts from friends on other social platforms; • the ability to consolidate and view updates across social platforms, allowing consumers to search for content across their aggregated services in real-time; and
• the engage with content by commenting or 'liking' it.
6.84 An illustration of a maximalist approach to social media interoperability, encompassing all the functionalities described above, is set out in Figure 6.1. We note that any increased interoperability will need to balance the potential to increase direct competition to Facebook in social media services against any adverse effects, as well as its overall impact on incentives to invest and innovate in this sector. We seek views on the size both of these potential beneficial effects and costs. 6.85 We are also seeking views on whether there should be limits on Facebook’s ability to impose restrictions on competitors’ use of the interoperable features. We note that Facebook may wish to restrict competitors’ ability to develop services that compete directly with Facebook. For example, it has previously included a clause in its Developer Policy, which stated: ‘Add something unique to the community. Don’t replicate core functionality that Facebook already provides’. This clause was removed in
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323 We have sought to illustrate content interoperability by designing a fabricated social media platform, Huddlr, which contains fictitious usernames and posts. The penguin images and social media platform logos were obtained from Google Images. 2018, but similar clauses in the future could undermine the objectives of any interoperability remedy.
6.86 A further intervention we wish to consider is **whether past API access should be restored**. Facebook has told us that it operates a largely open source environment which has incentivised innovation by enabling developers to build complementary services based on the social network’s existing systems. However, an interoperability remedy could seek also to facilitate the development of directly competing services. We understand that Facebook recently scaled back APIs which used to enable consumers to invite their friends to other applications or enable the cross-posting of content across platforms. We have been told that these deprecations have harmed competition in these markets, and we are interested in whether or how this level of access could or should be restored;
6.87 Finally, regarding the scope of any interoperability remedies, we are interested in views as to whether any rules requiring interoperability should be applied to Facebook only, or to other existing social media platforms. Potential new entrants would benefit from broader interoperability from social media platforms which have reached a scale which is large, albeit smaller than Facebook, particularly in terms of digital advertising revenue from social media.
6.88 See Appendix K for a more detailed consideration of these potential interventions, and a list of specific consultation questions.
**Potential interventions to give consumers greater control over their data.**
6.89 In Chapter 4, we identified a number of factors that undermine consumer control over the use of their data. These include: restricted choices, with some platforms not allowing consumers to turn off personalised advertising, and difficulties in exercising choice, due to defaults that nudge consumers into accepting data extraction, and the complexity and length of privacy policies. Consumer engagement with privacy policies and controls is correspondingly low.
6.90 In this section, we set out potential interventions designed to give consumers greater control over their data. By empowering consumers, most of these interventions should serve both to promote competition and protect privacy. We welcome views from a wide range of stakeholders on the case for these interventions, and the impact they might be expected to have.
6.91 We note that there is a wide range of existing regulation in respect of personal data, including the GDPR and PECR, which are enforced by the ICO in the UK and the DPC for some multinational platforms including Google and Facebook which have their main establishment in Ireland. In the context of this regulatory landscape, the interventions discussed below could take a variety of forms, including:
- engagement with the ICO, DPC or (and indeed the courts who ultimately decide these questions) regarding the interpretation of existing legislation and prioritisation of enforcement action;(^{324});
- recommendations to the UK government to legislate to strengthen the current regulatory regime;(^{325}) and
- direct action by the CMA using the order making powers available to it through a market investigation.
6.92 For each of the main interventions discussed below, we consider which of these forms would be most appropriate. The potential interventions relate to five main areas:
- giving consumers a choice over personalised advertising;
- changing defaults for personalised advertising on SMS platforms;
- imposing a fairness by design duty on all platforms with an additional duty on SMS platforms to ensure they test the design of their services;
- designing regulations that work for small, as well as large, companies; and
- options for the future: data mobility and privacy-preserving technologies.
**Giving consumers a choice over personalised advertising on all platforms**
6.93 We noted in Chapter 4 that several social media platforms, including Facebook, do not give consumers full control over their data by allowing them to turn off personalised advertising. Rather, accepting personalised advertising is a condition of using the platform. We have considered whether platforms should provide consumers with more control over the use of their
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(^{324}) We note however that the European law on which PECR is based, the ePrivacy Directive, is not subject to the GDPR’s consistency mechanism for any issue that is governed by its specific rules.
(^{325}) Recital 10 to the GDPR notes that ‘this Regulation does not exclude Member State law that sets out the circumstances for specific processing situations, including determining more precisely the conditions under which the processing of personal data is lawful.’ data, by giving them a choice over whether to receive personalised advertising or not.
6.94 We would welcome views on whether all platforms should be required to give consumers an option to use their services without requiring in return the use of consumers’ data for personalised advertising. In practice, this would mean that the consumer could go to their settings on the platform and turn off personalised advertising.
6.95 Under such an approach, platforms would still be able to offer advertising as a precondition of using the service – this intervention would not allow consumers to turn off advertising altogether. If consumers chose not to receive personalised advertising, they would instead receive other non-personalised advertising, such as contextual advertising based on the content they are viewing.
6.96 To strengthen the control that consumers have, we are also seeking views on the principle that irrespective of whether or not a consumer has turned off personalised advertising the core service they receive will be the same, with only the nature of the advertising content being varied.
6.97 A further important question in considering such an intervention is whether platforms should be able to offer incentives to consumers to accept personalised advertising, such as offers, reward schemes, payments or a reduced number of ads. Our initial view is that it is important that platforms do have the ability to offer such incentives, as this provides a mechanism by which consumers can benefit more fully in the value of their data and attention, and in turn, this may encourage greater consumer engagement in the future and promote competition. There should be no detriment for consumers who choose not to receive personalised advertising, meaning that such incentives should not affect the core service being provided.
6.98 We recognise that this would be a significant intervention for those companies that do not offer such a choice currently, and we would need to think carefully though the implications of such a change. In particular, there may be significant financial implications for platforms, given the evidence discussed in Appendix E that suggests that targeting with consumer data can have a substantial impact on the value of inventory, and would need to be weighed up against the privacy and control-related benefits of the intervention.326 This
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326 See the discussion in Appendix E of a recent experiment undertaken by Google, which found that disabling personalised advertising for publishers (when others were able to use personalised advertising) decreased financial impact would be driven in large part by the proportion of consumers who would choose to opt in to personalisation, and we would be interested to see any evidence that may shed light on this question.\\textsuperscript{327}
6.99 Facebook told us that personalised advertising leads to a better consumer experience as it leads to more relevant advertising that the consumer is more likely to find genuinely useful. It therefore argued that restricting personalised advertising may lead to consumer harm. We agree that many people may prefer personalised to purely contextual advertising, and may therefore not choose to turn off personalised advertising – but we do not consider this to be a strong argument for restricting consumers’ ability to choose.
6.100 Our current view is that such an intervention, if introduced, should apply to all platforms, including notably the four social media platforms, Facebook, Instagram, Snapchat and Twitter, which, as noted in Chapter 4, do not currently provide a choice to consumers over whether to accept personalised advertising. To date, we have not yet considered whether a similar obligation should apply to publishers, such as newspapers, and will consider this in the second half of the market study. We also welcome views on whether the choice to turn off personalised advertising should apply more broadly.
6.101 We have also considered the legal context for this type of intervention. As discussed in Chapter 4, our initial view is that requiring consumers’ have control over whether their data is used for personalised advertising is consistent with the emerging interpretation of GDPR that ‘consent’ is the appropriate lawful basis to process personal data for personalised advertising. We have, for example, noted that there is an open statutory investigation by the DPC into ‘whether Facebook has discharged its GDPR obligations in respect of the lawful basis on which it relies to process personal data in the context of behavioural analysis and targeted advertising on its platform’.\\textsuperscript{328}
6.102 Enforcement and the appeals process through the courts may, therefore, establish in the coming years that GDPR requires consumers to be in control of whether their personal data is processed for personalised advertising, as proposed under this potential intervention.
6.103 However, in the same way that we consider there is a role for ex ante regulation in this space alongside competition law, we think there may be
\\textsuperscript{327} In Chapter 4, we noted that some consumers value relevant advertising and some are concerned by it, so we would expect consumers to make different choices over whether to accept personalised advertising.
\\textsuperscript{328} DPC Annual Report 25 May-31 December 2018, page 50, table ‘Multinational Technology Companies Statutory Inquiries commenced 25 May-31 December 2018. good reasons for providing clarity now that consumers must be given this control, by having the choice not to have their data used for personalised advertising whilst still receiving the core service. This could be set out in UK legislation, and enshrined in an enforceable code of conduct or another instrument.\\textsuperscript{329} We welcome views on these issues.
\\textit{Changing default settings for personalised advertising for SMS platforms}
6.104 We have also considered whether SMS platforms should have additional duties to ensure that consumers are making fully informed choices about personalised advertising.
6.105 \\textbf{We welcome views on whether SMS platforms should be prevented from using personalised advertising by default}, but instead be required to present consumers with a clear and open choice up front – with a ‘yes’ and ‘no’ option available – on whether to accept data collection for personalised advertising purposes.
6.106 Under this approach, the choice screen or upfront notice would require consumers to make a choice about the collection and use of their data for personalised advertising, and platforms could not serve personalised advertising until the consumer had actively clicked ‘yes’. These rules would apply to SMS platforms, ensuring that all consumers on SMS platforms made active choices over the use of their data for personalised advertising. Consumers could also receive periodic reminders about their choices.
6.107 Where large platforms rely on consumer consent, we think there is a sound basis for holding SMS firms to a high standard in terms of securing consent from consumers which is ‘freely given and informed’. Since SMS firms have market power, there are likely to be circumstances in which consumers have little meaningful choice of whether to use the platform, resulting in an imbalance of power between controller and consumers, necessitating special measures to ensure consent is ‘freely given’.\\textsuperscript{330} However these rules to give consumers control over their data by default would apply to all large platforms, irrespective of whether or not they currently rely on another basis for processing personal data, such as contract, as discussed above.
6.108 As shown in Figure 6.2, under such an approach, if a consumer selected ‘yes’ they would receive personalised advertising, periodic reminders about their choice so they remain aware that they are receiving personalised advertising,
\\textsuperscript{329} The GDPR provides for industry led codes of conduct and certification mechanisms subject to the approval of the data protection supervisory authority. These mechanisms offer an alternative to legislation.
\\textsuperscript{330} We note that the ICO in its \\textit{detailed consent guidance}, explains ‘Freely given consent will also be more difficult to obtain in the context of a relationship where there is an imbalance of power’, pointing to recital 43. and have an easy way to change their choice and turn it off. Alternatively, if a consumer selected 'no', no data about them would be used for personalised advertising and they would continue to receive non-personalised advertising, such as contextual advertising. They will receive the same level of service and have an easy way to change their choice and turn personalised advertising on.
Figure 6.2: Example choice architecture for personalised advertising
![Choice Architecture Diagram]
Source: CMA.
**Imposing a ‘fairness by design’ requirement on all platforms**
6.109 For consumers to have genuine control over their data, they must not only have a choice in principle as to whether to provide or withhold access to it – they must also find it easy to exercise that choice freely in practice. We have seen in Chapter 4 how platforms use defaults, choice architecture and other behavioural nudges to encourage consumers to provide consent for the use of data. We have seen in particular the power of defaults in these markets: where consumers are presented with a more prominent option, ie a form of default option, then the majority tend to choose that default option and do not amend their settings.
6.110 To ensure that consumers have genuine control over their data, we have considered whether an intervention is required to ensure that platforms do not nudge consumers into decisions that they may not have made if given a free choice or make it difficult for them to exercise choices, such as placing controls in obscure places on the platform and/or several clicks away. 6.111 In principle, and as set out in Chapter 4, there are many dimensions of choice architecture that could be adjusted to help consumers make the right choices, including the use of defaults, the prominence given to choices to accept or decline data use, ease of access to privacy controls and the length and ease of understanding of privacy policies.331
6.112 For many of these dimensions, there is an active debate within the data protection community about which option is ‘best’ for facilitating informed consent. For example, in relation to the question of ‘bundled’ consents, we think it is likely that consumers will find it easier to consent once for an appropriate variety of linked data purposes rather than many times. However, we note this practice is potentially in tension with the principle that consent should be ‘specific’ (which would imply that multiple, more granular, consents should be sought).
6.113 In the light of these uncertainties, we think that, rather than making prescriptive rules on each of these dimensions, which may soon become redundant and/or lead to unintended consequences, a better approach would be to set out high level principles that platforms would be required to implement.
6.114 Our initial view, therefore, is that there is a good argument for introducing an overarching ‘fairness by design’ duty on platforms in the design of their data collection practices to complement the GDPR ‘data protection by design’ duty.332 This would put a duty on platforms to ensure fairness in the design of data collection processes (including by facilitating informed consent by consumers) and would allow early intervention by a regulator / consumer authority to ensure that the duty is adhered to ex ante at the design stage rather than purely ex post enforcement (as under current consumer protection powers).
6.115 It would be for the relevant regulator to set the high-level basis of compliance with this principle. Options include:
- ‘neutrality’ (the presentation of choices to consumers in a neutral way, so as to avoid bias);
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331 Appendix G provides a summary of the implications of academic research and survey data for the design of choice architecture to facilitate consumer engagement and choice.
332 The data protection by design provisions of the GDPR are set out in Article 25. Fairness by design would be intended to complement the GDPR data protection by design provision and that the potential interplay between the two concepts will be further explored in the next half of the study. • ‘minimising friction’ (making it easy to access controls and change them); and
• ‘engagement and understanding’ (seeking to ensure that customers understand and are comfortable with the options available to them on an ongoing basis).333
6.116 Our initial view is that a fairness by design duty along these lines could apply to all platforms. To date, we have not yet considered whether a similar obligation should apply to publishers, such as newspapers, and will consider this in the second half of the market study.
6.117 In addition to the overall fairness by design duty, we also welcome views on whether platforms with SMS should have an additional requirement to trial and test the choice architecture they adopt. The results of such rigorous testing could be reviewed by the appropriate regulator to ensure that the design and choice architecture used is fully informed by rich evidence on how consumers behave. As noted in Chapter 4, we were surprised to find out how little testing is done by platforms in relation to consumer control over data and use of privacy settings, which stands in stark contrast to the very extensive trialling done on a daily basis in other parts of the business. This intervention would address this gap, by using the analytical capabilities and huge reserves of data available to platforms to empower and protect consumers.
6.118 At this stage, we think that such an intervention should apply to platforms with SMS status and the rules could therefore form part of the code of conduct. This is partly on proportionality grounds – since the costs of extensive trialling and testing may be disproportionate for small platforms and publishers. In addition, as noted above, since SMS firms have market power, there are likely to be circumstances in which consumers have little meaningful choice of whether to use the platform, resulting in an imbalance of power between controller and consumers. This provides a justification for special measures to ensure ‘freely given consent’ for SMS platforms.
Designing regulations that work for small as well as large companies
6.119 As noted in Chapter 4, we have heard concerns that aspects of the design and interpretation of current data protection regulation risks creating competition concerns by unduly favouring the business model of large,
333 This could also include a requirement to help educate consumers about the use of their data in a manner agreed by the appropriate regulator. vertically-integrated platforms over smaller, non-vertically-integrated publishers.
6.120 For example, we have observed that the GDPR may incentivise firms that operate services which rely on using a consumer’s personal data at different levels of the supply chain to vertically integrate. We have heard concerns that a vertically integrated firm, or a conglomerate firm, can much more easily secure consent from the consumer of personal data for multiple purposes through a single process which is then applied across its businesses to combine and process personal data. Smaller, non-vertically-integrated competitors have told us this approach creates a competitive disadvantage for them, since they require granular, specific and informed consent for each step. We have seen evidence of integration in this market.
6.121 Further, we have heard concerns that the GDPR potentially raises a fundamental question about the lawfulness of processing within the current disaggregated open display market on which many publishers depend, since it relies on an individual consenting to share data with a large number of organisations at once, and such consent cannot be considered to be freely given and informed.
6.122 We are mindful that the GDPR, and the data protection authorities responsible for enforcing it, have a duty to protect consumers’ privacy. However, we think it is very important for competition and data protection authorities to consider jointly the interface between consumer, competition and data protection law, as this is likely to produce the best outcomes for consumers in assessing conduct with overlaps across these regimes. Such cooperation is particularly important at the current time, when the interpretation and practical application of GDPR is still evolving.
6.123 We have had constructive engagement in this study with the ICO, and it is in this context that we offer some views on factors that we think should be taken into account when deciding how to prioritise enforcing the GDPR. We would welcome comments on these initial views.
6.124 In relation to the concerns about the current open display market, we welcome the pragmatic approach that the ICO has taken to date on this topic, reflecting the importance of this market for newspapers and other content providers. We also recognise the security concerns arising from the sharing of data between multiple firms and think that DPAs could facilitate and enable appropriate sharing of data between firms by prioritising support for the development of codes of conduct\\textsuperscript{334} and certification regimes\\textsuperscript{335} under the GDPR which would facilitate the secure sharing of a consumer’s personal data.
6.125 For example, with this infrastructure in place, a consumer would be able to choose to use a publisher website, having seen that the advertising consent option has (for example) an established quality mark, and provides that the named advertising providers are all members of an effective certification regime which complies with a recognised GDPR compliant code of conduct.
6.126 Such a system would reduce the benefits to a firm from vertically integrating: the perceived incentives in the market may be quite different once this GDPR infrastructure is in place, particularly if enabled in a pro-competitive manner.
6.127 In the medium term we think it would also be helpful if DPAs, the EDPB and the European Commission were open to exploring the extent to which mechanisms, at application, browser, system or device level, can be supported or adopted to give effective control to consumers, by balancing the need for specific, informed and granular consent, against the risk of consent fatigue. We think this could in principle both benefit consumers and ensure neutrality in respect of larger and smaller firms seeking data.
6.128 An example of this sort of approach is in the Commission’s original draft of the proposed ePrivacy Regulation\\textsuperscript{336} and the accompanying impact assessment, which observed that ‘end-users are overloaded with requests to provide consent’, and intended to ‘empower end-users’ via ‘centralising consent’. The draft proposal called for a ‘Regulation [which] enhances end-user’s control by clarifying that consent can be expressed through appropriate technical settings’:
\\begin{quote} Article 9(2) ‘where technically possible and feasible, … , consent may be expressed by using the appropriate technical settings of a software application enabling access to the internet.’\\textsuperscript{337} \\end{quote}
6.129 These are intended as illustrative examples of interpreting GDPR and adopting an approach to prioritising enforcement which seeks to achieve consistency between different business models in the market, which in the
\\textsuperscript{334} Article 40 GDPR. We note that steps are already underway in this respect. \\textsuperscript{335} Article 43 GDPR. \\textsuperscript{336} ePrivacy Explanatory Memorandum. \\textsuperscript{337} We note that this builds on the existing approach provided for in the ePrivacy Directive, but considers effective implementation of the type of approach to give application, browser, system or device level controls, to address consent fatigue may provide mechanisms to give more effective control to consumers. long term will help give consumers greater choice and keep them in control. We welcome views from stakeholders on these points.
Options for the future: data mobility and privacy-enhancing technologies
6.130 Finally, we consider two contrasting future developments that could help protect privacy, increase competition and ensure that consumers can benefit to a greater extent from the value of their data. These are: mechanisms for increasing data mobility, which would allow consumers to share the data that platforms hold on them with other platforms; and privacy-enhancing technologies, which would reduce the extent of data collection for digital advertising by shifting a significant proportion of the data processing to the device itself.
6.131 Both of these approaches have promise, but neither have yet taken off at scale. In this section we describe each approach, set out the potential benefits and explain what regulatory action may need to be taken to encourage their adoption. We welcome views from stakeholders on the case for pursuing either or both of these approaches, and whether these approaches may be usefully combined.
- Data mobility
6.132 GDPR is not only about data protection. Article 20 of the GDPR introduces a new right of data portability, which allows for data subjects to receive the personal data that they have provided to a data controller, and to transmit this data to another data controller without hindrance.
6.133 The Furman Review recommended that its proposed Digital Market Unit should pursue a related concept of personal data mobility where this will deliver greater competition and innovation. It said that personal data mobility would ‘give consumers greater control of their personal data so they can choose for it to be moved or shared between the digital platform currently holding it and alternative new services.’ The Review noted that ‘Open Banking has shown the potential for data mobility to provide new opportunities to compete and innovate in this way.’
6.134 There have been some attempts to implement versions of data mobility in the markets within our scope, notably through an initiative called the Data Transfer Project (DTP), a joint exercise between Google, Facebook, Microsoft, Apple and Twitter to allow individuals to move their data between
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338 Unlocking Digital Competition, Report of the Digital Competition Expert Panel, p9. 339 Data Transfer Project. online service providers whenever they want. Further information about the Project is set out in Box 6.1 below and Appendix K.
6.135 We welcome this initiative, as it should help consumers do a variety of useful things, such as transferring photos from a social media platform to a photo book service or transferring music playlists. However, given the current use cases proposed by the DTP, we think the initiative on its own is unlikely to be transformative at improving competition.
**Box 6.1: Data Transfer Project**
The Data Transfer Project (DTP) was launched in 2018, with the stated aim of creating an open-source, service-to-service data portability platform so that all individuals across the web could easily move their data between online service providers, in a seamless, direct, user-initiated manner.
The contributors to the DTP include both Google and Facebook, as well as other large digital platforms such as Microsoft, Twitter and Apple. These contributors have stated that they consider data portability and interoperability to be central to innovation and that this initiative will facilitate competition, empowering individuals to try new services and switch between suppliers.
The DTP has sought to illustrate its potential benefits with some illustrative case studies such as:
- Transferring photographs from a social network to a photo printing service;
- Moving music playlists from one streaming service to another; and
- Transferring loyalty card data between retailers.
Stakeholders’ views on the DTP as well as our initial assessment of the possible effectiveness of the DTP, and data mobility more generally, at improving competition within social media, are provided in Appendix K.
6.136 We have considered other proposals for more radical forms of data mobility in digital advertising markets, that have the potential to give consumers greater control over the use of their data and a greater share in its value. In particular, we have considered proposals put to us about products such as Personal Information Management services (PIMs) and Personal Data Stores (PDS) which may improve privacy protection and also enhance competition in the provision of services which rely on data to be effective.
6.137 The different ways in which this approach to data mobility could work are set out in detail in Appendix L, but at a high level, it would enable the consumer to instruct a platform or an intermediary to share the information held on them with either the publisher of a site they were visiting or with an intermediary. The consumer would instruct the intermediary to share some or all of that data with parties they had specified, for specified purposes and for a set period of time, and for which the consumer would receive monetary or other incentives. The intermediary would create a consent dashboard for the consumer enabling them to vary or revoke their consents whenever they chose to do so. This could therefore form part of a long-term solution to the problem of consent fatigue.
6.138 We have engaged with a variety of PIM businesses, which in principle could play a comparable function to the new banking intermediaries using Open Banking, and mirror the ongoing development in the utility sectors of services which negotiate good deals on customers’ behalf. However, it seems to us that these services have a long way to go to be commercially viable.
6.139 There are a number of reasons for this and a potential role for regulation in addressing these issues. First, Article 20 of the GDPR states that the right to data portability applies to personal data provided to the controller by the data subject, and therefore does not cover ‘inferred’ or ‘derived’ data – whilst the GDPR as a whole applies to derived and inferred data where it is personal data, the specific right in Article 20 does not (for example, regarding ‘derived’ data, an individual could make a subject access request but not a portability request). These data sharing requirements may therefore need to be strengthened.
6.140 Second, the PIM may find it difficult to create the right incentives for advertisers and consumers to participate: consumers would be unlikely to sign up unless advertiser-funded incentives were available, but advertisers would be unlikely to use a PIM until sufficient customers had joined. Some of the regulatory changes we have discussed above may start to create stronger awareness of the value of their data among consumers and stronger incentive to engage in such initiatives in the future.
6.141 There is also a potential role for a future regulatory body in providing certain safeguards which support confidence and data security for approved intermediaries, then it is an area where innovation could develop. We discuss these services further in Appendix L. We would welcome views on whether this form of data mobility has merit in principle, and what if any form of regulatory intervention is required to support it.
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340 See the ICO website. Privacy-enhancing technologies
6.142 In the current system, data generated by consumers can be used to track their identities across online and offline activities, serve individually targeted ads, and measure how these ads affect their behaviour. For these purposes, data gathered from consumers’ devices is processed remotely by various actors in the supply chain.
6.143 Privacy-enhancing technologies (PETs) are a class of technologies that seek to mitigate privacy risks associated with the collection, transfer, and analysis of data, while still allowing for useful results to be obtained from said data. PETs encompass a wide range of approaches, with different degrees of maturity and applicability.
6.144 One particular type of PET, client-side (or on-device) PETs, seek to shift a significant proportion of the data processing to the device itself, reducing the amount and granularity of the information that gets transferred away from it. In this way, the ability of ad tech actors to identify and profile individual consumers during their online activity is potentially curtailed. Nevertheless, these approaches preserve some of the ability for advertisers to provide ads that are targeted to consumers’ interests. The fundamental difference is that a higher proportion of the processing (e.g., assigning consumers to segments or matching impressions to ads) happens on the device, rather than remotely.
6.145 The attraction of these approaches in principle is that they can potentially be implemented without compromising the free ad-supported model that underlies a significant proportion of online content creation by publishers, while reducing the need of large-scale data collection, storage, and resale with digital advertising, which can constitute a significant challenge to privacy.
6.146 A version of this approach has been proposed by Brave, which recently launched a new advertising platform that operates on top of Brave browser. The platform pushes to the consumer’s devices both a catalogue of ads and a targeting model, which is used to decide which ads from the catalogue are to be shown. In this way, no data about the consumer’s identity or browsing habits leaves the device. Consumers are rewarded with 70% of the gross ad revenue, in the form of ‘Basic Attention Tokens’. These tokens can be transferred by consumers to publishers and content creators of their choice.
6.147 To achieve roll out of these approaches at scale, there may be a case for regulatory intervention to facilitate coordination around an appropriate set of privacy-preserving standards. In particular, since most proposed privacy-preserving approaches in digital advertising are implemented in browsers, having these technologies rolled out by default in commonly used browsers and devices would provide a powerful incentive for publishers and advertisers to adhere. This could potentially be directly mandated as a standard.
6.148 There is a possibility that many of the functions of a PIMS provider (discussed above in the section on data mobility) may be performed on-device, and thus combining the features of both PIMS and privacy-enhancing technologies.
6.149 Again, we would welcome views on whether the potential costs and benefits of client-side privacy-enhancing approaches (or indeed, other types of PETs that are applicable to online platforms and digital advertising), and whether any regulatory intervention is desirable to facilitate their development.
6.150 See Appendix L for a more detailed consideration of these potential interventions, and a list of specific consultation questions.
Potential interventions to address concerns around transparency, conflicts and market power in digital advertising markets
6.151 As set out in Chapter 5, our initial view is that Google and Facebook’s market power in the sale of their own advertising inventory could lead to worse outcomes for advertisers in search and display advertising respectively, ultimately leading to worse outcomes for consumers. The main sources of this market power appear to come from barriers to entry and expansion on the consumer side in search and social media. We have set out above the possible ways that these barriers might be addressed. However, Chapter 5 also identified specific features of the digital advertising market which might exacerbate the concerns about outcomes for advertisers and publishers.
6.152 In the open display market, we noted Google’s strong position stemming from its access to advertising inventory and user data, combined with its very high share of supply in publisher ad serving and other parts of the ad tech chain. This leads to potential concerns about:
- conflicts of interest between Google’s role on the buy and sell sides of the open display market;
- its ability to exploit lack of transparency in costs and fees in advertising intermediation to increase returns; and
- the potential for Google to leverage its market power from its owned and operated advertising inventory into the open display market and to foreclose potential competitors in advertising intermediation.
6.153 We also noted specific concerns from publishers about lack of transparency over fees in the open display market. This may limit the extent of competition between SSPs, reduce the competitive pressure faced by DSPs, and lead to publishers earning lower overall revenues from selling their advertising inventory.
6.154 More generally, we identified a series of broader issues relating to lack of transparency and the data advantages of the large platforms which could limit competition in digital advertising:
- the large platforms’ processes for auctioning inventory are not transparent and there is limited ability to independently verify the effectiveness of advertising because of lack of access to data; and
- the data advantages of the large platforms in targeting advertising means they can monetise their content much more effectively than other platforms/publishers, increasing their market power.
6.155 We expect that a code of conduct as discussed above may in the short-term be the most effective way to address some of these problems. It could require platforms to trade on fair and reasonable terms, including a reasonable transfer of data to and from the platforms. In the open display market, the code of conduct could require platforms not to prefer their own customers over third parties who use other intermediaries. A code of conduct could also resolve disputes about how Google runs its ad tech auctions, for example requiring Google’s auctions to give equal treatment to Google and third-party exchanges.
6.156 However, a potential limitation of a code of conduct is that it may not restrict all of Google and Facebook’s incentives to exploit the market position that they have built up to their own advantage. A code of conduct can set rules that restrict certain behaviours, but in a fast moving and very complex market such as digital advertising it may be difficult for the regulator to monitor every change that is made by the incumbents.
6.157 We therefore consider in this section the case for additional interventions, over and above a code of conduct, designed to tackle directly the lack of transparency and conflicts of interest that we have observed. We consider first potential separation remedies and then remedies to improve transparency.
**Options for the separation of integrated platforms**
6.158 One of the more intrusive remedies available to competition authorities and regulators is to require vertically integrated firms to separate their businesses to address competition problems that arise from operating in multiple markets. The idea of ‘breaking up’ the large tech firms has been highlighted in some submissions to us, as a way to limit the effects of market power across the multiple markets in which they operate.
6.159 Separation, and particularly ownership separation, has the potential to deliver significant benefits in markets where one large player is able to affect the proper working of competition across a number of markets. In such circumstances, separation can be most effective where it can be used to re-establish a more effective competitive process, which can bring new products to consumers and lower prices to businesses.
6.160 We have considered the case for interventions to separate aspects of the businesses of large integrated platforms, encompassing a range of options from accounting and management separation to full ownership separation. We are aware that the threshold for such interventions is high and that we need to think very carefully about the likely costs and benefits arising from them. Our aim in surfacing these options now is to attract views from a range of affected stakeholders on these questions.
6.161 We have received several representations that there is a strong case for separating aspects of Google’s vertically integrated business in the intermediated open display market. This is an area where our analysis suggests that there are material conflicts of interest arising from Google’s position on several sides of the market and where we have heard a range of concerns from market participants about Google’s incentive and ability to leverage its market power to undermine competition. Accordingly, this has been the main focus of our assessment.
6.162 Recognising that conflicts of interest in the intermediated open display market are not limited to Google, we have also considered whether separation might also be appropriate where other firms operate in conflicting parts of the value chain, such as those operating both demand-side and supply-side platforms.
6.163 We are seeking views on the potential benefits and costs of the following interventions, which represent different forms of separation in the intermediated display market:
- whether Google should be required to separate its publisher ad server or operate this service independently;
- whether Google and other platforms operating both a DSP and an SSP should be required to separate these activities to avoid a conflict of interest; and • whether Google should be required to separate the operations of its advertising business from certain aspects of its data businesses.
6.164 These are illustrated in Figure 6.3.
Figure 6.3: Potential separation options in the intermediated display market
Source: CMA.
6.165 In relation to the first of these options, we understand that Google Ad Manager has a share of supply of over 90% for publisher ad serving. Publishers tell us that Google uses its publisher ad server to exercise control over the auction process for intermediated display advertising and favour its own businesses. The potential benefit of separation would be to address this conflict of interest and associated self-preferencing behaviour, strengthening competition in the intermediated market. There would also be potential costs, arising from the loss of efficiency gains from Ad Manager integration.
6.166 More broadly, if Google were required to establish a separated and independent publisher ad server, it is likely that this would change the competitive dynamics in this part of the ad tech value chain quite substantially. Publishers told us that Ad Manager (which currently integrates ad server and exchange functions) is a high quality product, which compares well with other ad servers in terms of reporting and integration with demand. We have also heard that there are some benefits in the integration of ad server and exchange functions in Google Ad Manager, including operational efficiencies, more effective yield management and reduced impression loss. The consequences of a separation involving Ad Manager for how publishers procure advertising would therefore need to be carefully assessed.
6.167 A further option for addressing concerns around conflicts of interest in publisher-facing services would be to require separation of SSP and DSP services. Google operates its SSP and DSP services together and determines the rules of multiple auctions in a way which works for both its SSP and DSP businesses, as do some other ad tech intermediaries. Both customers and competitors have suggested this may represent a conflict of interest, as the SSP and DSP should be acting independently, in the interests of publishers and advertisers respectively. The benefit of separation here would be to address the conflict of interest and potential for arbitrage behaviour arising from it, while we would also need to consider potential efficiency losses from separation.
6.168 Finally, the analytics parts of Google’s business could in principle be separated from the rest of Google’s advertising business. Currently, Google has a competitive advantage over third-party advertising firms because it has access to more data than any of its competitors, gathering data through its user-facing services, Android and its analytics businesses including Google Tags. Separating Google’s analytics business from its other activities could help to address these competitive advantages and also deal with a number of concerns relating to conflicts and a lack of independent verification of outcomes in the market.
6.169 At this stage, this appears to be the most challenging option for separation, given the extent of integration of these aspects of Google’s business. As an alternative, and subject to privacy considerations, Google might be required to offer analytics services to third parties on comparable terms. A remedy which required Google to provide access to certain data where only Google currently has access would need careful design, but if it could be made to work, it could be positive for competition and innovation in digital advertising.
6.170 There are multiple forms of separation, each of which could apply to the above options. Full ownership separation (‘divestiture’) is the strongest form of separation, which requires the owner of the common businesses to first separate and then sell one of the businesses to be separated. This remedy is sometimes used in merger control and has the advantage of being clear-cut and requiring no ongoing regulatory supervision. Where separation is expected to result in a significant increase in dynamic competition and innovation, divestiture is most likely to achieve these benefits. However, we are conscious that a remedy of this type would be likely to have significant impacts on other markets outside the UK and may need to be coordinated with other authorities internationally.
6.171 Operational separation, sometimes called ring-fencing, is a less intrusive version of separation, which requires firms to put in place measures which ensure that different businesses operate independently. This could include internal measures such as separate management responsibility, separate incentives, requirements to trade at arms-length, or even physical separation of different activities. Under operational separation, there would be no obligation to divest either of the separate businesses, and operational separation therefore relies on a common owner having limited ability to control the behaviour of the separated businesses that it owns. Operational separation is sometimes used by utility regulators seeking to ensure that incumbent businesses do not favour their own businesses operating in competitive markets. A more limited form of ring-fencing is also used in markets such as financial services, where there are legal requirements on buy-side and sell-side operations to act independently.
6.172 Our initial view is that operational separation may be feasible in respect of Google’s ad server or SSP businesses, which we understand already both trade with both Google’s own digital advertising businesses and third-party digital advertising intermediaries. An operational separation would include a requirement on Google to treat these internal and external digital advertising businesses consistently. In practice would require ongoing monitoring and evaluation by a regulatory body, and there would be challenges in designing the operational separation. In particular, defining a form of operational separation and a definition of equivalent treatment between Google’s own businesses and third parties may be difficult. It is likely that operational separation would need a combination of regulatory oversight and also some changes in how Google operates to be truly effective.
6.173 A more limited form of separation is accounting separation, which is designed to ensure that the separated entities are required to report as if they were independent firms, with the intention that it would also encourage the firms to act independently. Accounting separation is normally imposed alongside other remedies such as mandatory access or operating separation. We expect that accounting separation could be required if we or a future regulatory body were
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341 The ‘structural separation’ which Ofcom requires BT to apply to Openreach represents a strong form of operational separation including the separation of Openreach into a different legal entity.
342 In legal terms this could be a requirement to not unduly discriminate between Google’s own businesses and third parties. to implement the operational separation or access requirements which we have identified in this section.
6.174 We would welcome views on each of these options and on the appropriate timescales for any interventions. For example, we would welcome views on whether we should consider separation options in the near term, or only once the code of conduct has been in place for a sufficiently long time to establish whether it is sufficient for dealing with the concerns we have identified.
Access to inventory
6.175 One of the issues identified by a wide range of stakeholders was that an additional advantage Google has in digital advertising intermediation is that it has preferential access to its own inventory. A number of participants have expressed concerns about Google’s decision to offer its YouTube inventory only through its own DSP, which also participates in the intermediated display and video digital advertising markets.
6.176 An effective code of conduct could address most of the issues that we are aware of relating to Google’s inventory. It could address concerns that Google does not offer comparable access to third parties when it auctions this inventory in the open market. The code of conduct might not however address the concern that Google does not offer YouTube inventory at all in the intermediated market, even though the display and video advertising on YouTube is comparable to those on other publishers’ websites. Until 2016, Google offered at least some of its YouTube inventory to third-party intermediaries. We welcome views on whether Google could be required to offer access to some or all of its YouTube inventory on reasonable request to third-party DSPs.
Interventions addressing a lack of transparency in digital advertising
6.177 We are also considering the case for specific interventions to address the concerns that digital advertising markets do not work well because there is insufficient transparency for advertisers and publishers. Some of these could be particular obligations on SMS platforms to comply with rules, where there is evidence that their behaviour is driving the lack of transparency, while others might apply to all firms.
6.178 We would welcome views on the following interventions, drawing on views we have heard in the first half of the study:
(a) A requirement to provide transparency over fees charged for intermediary services. Both publishers and advertisers have raised concerns that there is an ‘ad tech tax’ imposed by intermediaries which is hidden by the existence of multiple auctions and the lack of evidence linking what is paid by advertisers for digital advertising to what is received by publishers. A rule requiring all intermediaries to disclose evidence as to the fees that they extract from the process of buying and selling digital advertising could enhance trust and transparency in the sector;
(b) **A requirement to apply a consistent transaction ID for each digital advertising transaction** to allow more effective monitoring and verification. Advertisers have said they are frustrated by the challenges involved in identifying what they are buying when they purchase digital advertising, how they can be sure that advertising is properly verified and not fraudulent, and how they can assess the return on investment for what they are buying. In turn, publishers have expressed concerns at recent moves to reduce the transparency of bid data. We understand there are a number of initiatives to move towards industry standards in respect of transaction IDs, and welcome views on whether these could be made to work across the sector;
(c) **A requirement to provide sufficient data to allow for effective ad verification and attribution analysis.** We are told that some platforms and other intermediaries do not provide enough data to advertisers or publishers to properly understand the effectiveness of ad campaigns. Platforms may be able to provide extensive information about attribution, but will not provide the underlying data to allow the advertisers or intermediaries acting on their behalf to interpret that information. A rule which specified what data should be provided, at least by SMS platforms, may improve trust in the information which is provided on the effectiveness of different forms of digital advertising;
(d) **Sharing of bid data with publishers.** Google Ad Manager is the ad server for the large majority of publishers. We have heard concerns about the level and quality of information provided to publishers relating to bids for inventory, and the fact that this has recently been reduced. While there are some competition concerns to be considered, in principle, a requirement to provide better quality data to market participants could improve both trust in the outcomes of the auction process and the ability of publishers to plan their approach to managing and monetising future digital advertising inventory. We are seeking views on what data it is reasonable to expect Google and other intermediaries to share with the publishers of digital advertising. 6.179 While the above interventions would involve the provision of data to market participants, we have also considered whether in some cases, notably where the provision of data would raise privacy, competition or fraud concerns, trust might be increased through allowing a regulator to carry out scrutiny on behalf of market participants.
6.180 Such an approach might be taken to the operation of auctions, for example, which, as discussed in Chapter 5, create concerns relating to a lack of transparency about how digital advertising is sold and at what price. A regulatory body might be able to audit the processes followed by both platforms and intermediaries. We welcome views on the feasibility of an effective auditing regime for the process followed in undertaking auctions of digital advertising.
6.181 We would welcome views on whether the above improvements to transparency are technically and commercially feasible, and desirable, both from the perspective of privacy and competition. If so, we seek views on whether industry should be able to agree standards to provide additional transparency, or whether an enforceable set of rules or standards should be applied by a regulatory body.
6.182 See Appendix M for a more detailed consideration of these potential interventions, and a list of specific consultation questions.
**Initial findings**
6.183 In this chapter, we have explained why we consider there to be a strong argument for the development of an ex ante regulatory regime to govern the activities of large online platforms funded by digital advertising.
6.184 Our initial view is that an enforceable code of conduct has a number of advantages over ex post enforcement and would be a valuable tool in helping to address the competition concerns we have identified in consumer-facing and digital advertising markets.
6.185 We have considered criteria that could be used to assess whether a digital platform that is funded by digital advertising should be considered to have SMS, and hence be subject to the code of conduct. At this stage, we consider that Google and Facebook would likely be considered to have SMS against these criteria.
6.186 Our initial view is that these platforms should be subject to three overarching principles: **fair trading**, which would require the SMS platform to trade on fair and reasonable terms for services where they are an unavoidable trading partner as a result of their market position; open choices, which would be intended to require the SMS platform to allow users to choose freely between elements of the platform’s services and those offered by competitors; and trust and transparency, designed to ensure that SMS platforms provide sufficient information to users, including both consumers and businesses which transact with the platform.
6.187 This chapter also sets out certain specific interventions that have the potential to address the sources of market power, lack of transparency and conflicts of interest in search, social media and digital advertising markets. These include data access remedies, interventions to increase interoperability, measures to give consumers greater control over their data and separation remedies. We recognise that some of these interventions would be very significant and would need to be considered very carefully.
6.188 We have an open mind regarding the merits of these potential regulatory interventions, some of which are explored in further detail within Appendices I-M, which also contain a number of consultation questions. We welcome views on these specific proposals, as well as responses to the key questions set out in Chapter 8 of our interim report. 7. Views on a market investigation reference
7.1 Since issuing our market study notice on 3 July 2019, we have received five representations from parties for us to make a market investigation reference (MIR).
7.2 We are therefore required to consult on a proposal within six months of launching the study (by 2 January 2020) on whether to make a market investigation reference. The timing of this interim report is a result of that requirement. We are required to publish our decision on whether to launch a market investigation in our final report, which we must publish on or before 2 July 2020.
7.3 We received representations to make a MIR from:
- a UK media company;
- an online platform;
- Dr Ryan and Dr Lynksey;
- The News Media Association; and
- Privacy International.
7.4 These representations are summarised in Appendix B, which sets out the key points made by stakeholders in response to our statement of scope. These five stakeholders have raised different concerns that they wish to see addressed through a market investigation. For example, the News Media Association told us it would like a market investigation to ensure that publishers earn a fair return for their content, whereas Privacy International told us it would like an investigation to include the aim of strengthening the enforcement of consumers’ rights against abusive practices.
7.5 The CMA can make a market investigation reference when:
- the findings of a market study give rise to reasonable grounds for suspecting that a feature or combination of features of a market or markets in the UK prevents, restricts or distorts competition;(^{343}) and
______________________________________________________________________
(^{343}) Section 131, Enterprise Act 2002. • a market investigation reference appears to be an appropriate and proportionate response.
7.6 We have published the following four criteria that we consider as part of any decision:344
• the scale of the suspected problem is such that a reference would be an appropriate response (ie that the adverse effect on competition is likely to be significant based on the size of the market, the proportion of the market that is affected and the persistence of the market features);
• there is a reasonable chance that appropriate remedies would be available;
• it would not be more appropriate to address the concerns through undertakings in lieu of a reference (UILs); and
• it would not be more appropriate to address the competition issues through alternative powers available to the CMA or through the powers of sectoral regulators.
7.7 We have drawn the scope of our market study broadly, covering a wide range of related markets, so that we can better understand the full range of challenges and concerns that arise in relation to online platforms that are funded by digital advertising, and the relationships between these issues. There are, therefore, several individual markets that could in principle be reviewed through a market investigation.
7.8 Based on our initial findings, as well as the representations made by the parties above, we believe there are reasonable grounds for suspecting that features of the following markets could be restricting or distorting competition in the UK:
• the open display advertising market, with a focus on the lack of transparency, Google’s market power and the conflicts of interest Google faces at several parts of its vertically integrated chain of intermediaries;
• general search and search advertising, with a focus on barriers to entry and expansion arising from Google’s scale advantages in data and Google’s payments to be the default search engine on devices and browsers; and
344 Guidance about the making of references under Part 4 of the Enterprise Act, OFT 511, paragraph 2.1. • social media and display advertising, with a focus on the network effects enjoyed by Facebook and the lack of interoperability between Facebook and rival services.
7.9 Given the size and value of these individual markets, and the number of consumers affected by them, a market investigation would appear to be a proportionate response. Some of the potential interventions we discussed in the previous chapter could be implemented through the order making powers available to the CMA within a market investigation.
7.10 For example, order making powers could be used to introduce increased interoperability in social media, or third-party access to click and query data in search, or changes to the arrangements for determining the default search engine on browsers and devices. We could in principle also use them to make one-off interventions to tackle the structural issues within the open display advertising market.
7.11 We therefore consider a decision on whether to propose a market investigation in any or all of these areas to rest primarily on whether it is the most appropriate mechanism for assessing the issues and delivering the required outcomes.
7.12 We said in our statement of scope that we see recommendations to government as the most likely outcome of the study, as we did not ‘expect that a “one-off” intervention by the CMA, such as could be achieved through a market investigation, would be sufficient to provide a sustainable long-term framework for the sector.’(^{345}) This reflected the fast-evolving nature of concerns in these markets, suggesting that an ongoing regulatory regime would be more appropriate. Although it is a finely balanced judgement, we continue to hold this view and have concluded that we should consult on not making a market investigation reference at this stage. There are three key factors behind our current thinking.
7.13 First, the government has been committed to regulatory reform in this area. If this remains the case, we believe there are good prospects that any recommendations coming from our study would be implemented in practice.
7.14 Our judgement is that a market investigation reference is not at this stage the most appropriate way forward in either of general search and search advertising, or social media and display advertising. Two of the main potential interventions that we have identified within these two areas would be specific applications of the Furman Review proposals for data remedies, which it said
(^{345}) CMA (2019), Online platforms and digital advertising market study – statement of scope. should be implemented and overseen by the proposed Digital Markets Unit. Given that the government has committed to the setting up of the Digital Markets Unit, and to regulatory reform more broadly in relation to online platforms, covering a wider range of issues than those we have considered in this study, we think that it is better to inform the development of that regulatory regime through recommendations rather than risk cutting across it through a major intervention at this stage.
7.15 The Furman Review did not study the open display advertising market in any detail, recommending instead that we conduct this market study. It is therefore less clear whether the interventions proposed by the Furman Review could, if taken forward by government, be implemented in such a way that would effectively tackle the structural issues we have surfaced. However, there is a case for reviewing the scope and potential impact of a new ex ante regime – and in particular a code of conduct, which would attempt to address the concerns arising from the exercise of market power – before deciding to take forward more intrusive measures.
7.16 Second, the concerns we have identified regarding online platforms such as Google and Facebook are a truly global antitrust challenge facing governments and regulators. Therefore, in relation to some of the interventions we are considering, and in particular any significant structural remedies, such as those involving ownership separation, we need to be pragmatic about what changes could efficiently be pursued unilaterally by the UK.
7.17 This is an important factor behind our proposal not to make a market investigation reference into the open display advertising market at this stage. We have been engaging extensively with our international counterparts, and have made significant progress in identifying areas of shared interest and common understanding. We will continue this work with the aim of developing a coordinated position and response. We hope that the government can assist us in driving forward this programme of international cooperation to the fullest extent possible.
7.18 Third, we still have considerable work to do to understand the nature and extent of the issues in the market, and what the appropriate range of remedies might be to address them. We hope to test our initial findings through this consultation, gather more evidence through the second half of the study, and come to more precise judgements in our final report. At this stage we cannot confidently say which set of interventions should be taken forward,
346 PM speech opening London Tech Week, June 2019. and so the most appropriate mechanism for implementation is similarly unclear.
7.19 **Based on these three factors, we are not minded to propose a market investigation reference at this stage.** Our preferred approach to tackling the problems we have identified continues to be through recommendations to government for regulatory reform.
7.20 We will revisit this conclusion in the light of consultation responses that we receive, our assessment of market developments including through continued engagement with our international partners, and the UK government’s emerging position on regulatory reform in this area.
7.21 We would like to receive views from a broad range of parties on this proposed way forward. 8. **Next steps**
8.1 This document provides an update on the progress we have made to date in this market study. It sets out our initial findings on a wide range of potential concerns within each of our three themes, including on:
- barriers to entry and expansion in general search and social media markets;
- consumers’ control over collection of their personal data; and
- concerns around transparency, conflicts of interest and market power in digital advertising markets.
8.2 Going forwards, we want to gather more evidence to test and refine our thinking in these areas, and to identify which are the most appropriate interventions for tackling these issues. This consultation is an important first step in that process.
**This consultation**
8.3 We are using this consultation to gather views and information from stakeholders on the following five topics:
- our understanding of the markets within our scope;
- our initial findings and concerns under each theme;
- the merits and challenges of the potential interventions identified;
- the case a market investigation; and
- the further work we propose to do over the second half of the study.
8.4 The key questions we have under each topic are set out in Box 9.1.
**Box 9.1: Our key questions**
**Our understanding of the markets within our scope**
1. Do you agree with our descriptions of general search services and social media service, as set out in Chapters 2 and 3?
2. Do you agree with our explanation of the different forms of digital advertising, as set out in Chapter 5?
3. Do you agree with our explanation of how the intermediated open display market operates, as set out in appendix H?
4. Do you agree with our understanding of the role of data, as set out in Appendix E?
Our initial findings and concerns under each theme
5. Do you agree with our analysis and findings in relation to competition in search and social media, as set out in Chapter 3?
6. Do you agree with our analysis and findings in relation to consumer control over data, as set out in Chapter 4?
7. Do you agree with our analysis and findings in relation to competition in digital advertising, as set out in Chapter 5?
The merits and challenges of the potential interventions identified
08. Do you agree with our assessment of the merits of a code of conduct for large online platforms funded by digital advertising?
09. Do you agree with the range of possible practices we have identified that could be considered under such a code of conduct?
10. Have we identified the appropriate range of potential interventions to address the sources of market power for Google and Facebook?
11. Have we identified the appropriate range of remedies to improve consumers’ control over their data?
12. Have we identified the appropriate range of remedies to address conflicts of interest and a lack of transparency in digital advertising markets?
13. We have set out a number of specific questions relating to the potential interventions, which are discussed in the following appendices:
I: Potential practices to be tackled through a code of conduct J: Potential interventions to address market power in general search K: Potential interventions to address market power in social media L: Potential interventions to improve personal data mobility M: Potential interventions in digital advertising markets
Do you have any views on the more specific questions in these documents?
14. Do you have any views about the appropriate sequencing of the remedies we have identified?
Market investigation 15) Do you agree with our assessment of the potential candidates for a market investigation, and what are your views on the merits of each?
16. Do you agree with our proposal not to make a market investigation reference at this stage?
17. Do you support recommendations to government as an effective route to implementing interventions in these areas?
**Further work we propose to do over the second half of the study**
18. Do you agree we have identified the right areas for further work in the second half of the study (set out below), and are there any significant gaps?
______________________________________________________________________
**How to respond**
8.5 To respond to this consultation, please email or post your submission to:
**Email:** [email protected]
**Post:** Online Platforms Market Study Competition and Markets Authority 25 Cabot Square London E14 4QZ
8.6 Please respond by no later than 5pm on 12 February 2020.
8.7 For transparency and to inform public debate, we intend to publish all responses we receive. In providing responses:
- Please supply a brief summary of the interests or organisations you represent, where appropriate.
- Please consider whether you are providing any material that you consider to be confidential, and explain why this is the case. Please provide both a confidential and non-confidential version of your response.
8.8 If you are an individual (ie you are not representing an organisation), please indicate whether you wish for your response to be attributed to you by name or published anonymously.347
______________________________________________________________________
347 An explanation of how we will use the information provided to us is set out in the annex to our statement of scope. The next six months
Further work
8.9 During the second half of the study, we will focus on obtaining further evidence on specific issues to develop our assessment, as well as continuing to review the evidence we have obtained, and progressing our assessment of the potential interventions. Specific areas for further and more detailed analysis that we have identified include:
- market outcomes in search, social media, and digital advertising markets;
- fees and revenues in the open display advertising value chain;
- the characteristics, objectives, and behaviour of advertisers;
- the interaction between controls over data at the platform level and those at the device or browser level;
- the controls given to consumers over the use of their data by publishers;
- the ability of platforms to influence auction outcomes;
- the merits of each potential intervention, and the risks and challenges to implementing them, including practices most suited to inclusion within a code of conduct to govern online platforms with a strategic market status.
8.10 In addition to reviewing the responses we receive to this interim report, we will gather more evidence through continued engagement with stakeholders, further requests for information from parties, and remain open to conducting or commissioning targeted research.
Our final report
8.11 We will publish our final report by 2 July 2020, which will include a decision on whether we will make a market investigation reference.
8.12 It will set out our findings on the extent of competition faced by the largest online platforms funded by digital advertising, and on the extent of concerns in the markets within which they operate. It will also include our conclusions on the most appropriate interventions to solve the range of issues we identify. As indicated in Chapter 6 of this document, we currently expect this to include a number of recommendations to government for regulatory reform.
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} |
ecb045cec47e79d60f5b05316653b9933a49639c | Internal Audit Report
2017-18 Onboarding Process
June 2018
To: Interim Assistant Chief Executive Strategic HR Lead Operations Director (CSG) Strategic HR Director (CSG) Operations Director (CSG) Business Manager (CSG) Service Analyst (CSG) Inspection and Improvement Lead, Family Services
From: Senior Audit Executive
We would like to thank management and staff of CSG & LBB for their time and co-operation during the course of the internal audit.
Cross Council Assurance Service Executive Summary
| Assurance level | Number of recommendations by risk category | |-----------------|------------------------------------------| | Limited | Critical | High | Medium | Low | Advisory | | | - | 1 | 3 | - | 1 |
Scope
Onboarding is the process by which the most suitable new starters are recruited and integrated into the established culture and operations of the Council to optimise the achievement of the Council’s objectives.
As part of the Ofsted Improvement Plan the target timescale for recruitment within Family Services (FS) is 60 working days from conditional offer to employee start date. This review will focus on the assessment of control processes from the decision to recruit until the induction of new Council starters.
Summary of findings
Pre-employment checks for starters are undertaken on a timely basis. There is also a sound system in place to ensure that all starters commence their employment with the Council within 60 days of Conditional Offer Letter being sent.
FS Recruitment adheres to a controlled and centralised process, that is driven by performance management. All information gathered during the various stages of FS recruitment are retained in a clear and concise manner by CSG HR.
We identified the following issues as part of the audit:
- **New Starter Induction (Finding 1, High)** – We were unable to confirm attendance at Induction training for 14/19 (74%) of our sample of new starters. Non-attendance for induction sessions is not alerted to the responsible line managers. A ‘Site Welcome Pack’ for new starters, prepared by the Estates Facilities Management team and covering key areas including fire emergency health and safety procedures, is not communicated to new starters.
- **Interview and Selection Process (Finding 2, Medium)** – Declaration forms are not always signed and sent to HR, as per the Recruitment and Selection Policy. Evaluation forms are not regularly completed during interviews and sent to HR for retention.
- **Evaluation: Performance Management (Finding 3, Medium)** - Key dates for various stages of the evaluation process are not always recorded by HR. Performance measurement of the timeliness of the evaluation process is currently not in place outside of Family Services.
- **Pre-employment checks (Finding 4, Medium)** - Documents retained by the Council are not always date/time stamped to confirm that originals were seen.
**Advisory Finding:**
We were unable to verify that all new starters within our sample had their IT needs met upon their start date. We suggest that management:
- Request data relating to IT set-up from new starters, i.e. whether IT set-up had been achieved for starters at start date.
- Communicate negative trends where applicable to CSG IT colleagues to drive improvements in the IT set-up process within the recruitment process.
## 2. Findings, Recommendations and Action Plan
| Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | 1. | **New Starter Induction (Operating effectiveness):**\
All new starters are invited to attend Corporate Starter Induction (CSI) training by the CSG Learning and Development (LD) Officer once they have started.\
We selected 15 Council starters (both FS and non-FS) and 4 Family Services new starters (recruited as part of the campaign) from January-December 2017 to ensure that they had attended CSI training.\
We were unable to confirm attendance for 10/15 (67%) new starters, and 4/4 (100%) new starters in Family Services (FS). The names could not be located on attendance sheets provided by the CSG LD Officer for our review. CSG LD indicated that there was no monitoring of attendance beyond the initial invites and recording on attendance sheets, so non-attendance would not be escalated/alerted to the relevant Council line managers to ensure that starters attended CSI training later.\
Attendance sheets for 2017-18 CSI training sessions were not retained consistently, in line with the Council’s retention policy.\
Our review has also found that a ‘Site Welcome Pack’ for new starters is available on the Intranet. This pack is customised for different sites, for instance NLBP and Barnet House and has been created by the Facilities Management Team to induct starters on key areas such as Display Screen Equipment and fire emergency health and safety procedures, recycling processes, the escalation of building issues and IT contact details. The Pack is currently not being circulated to new starters as line managers were unaware that the documentation was available.\
**Note 1:** Since the start of the audit, the Learning and Development team have returned to the Council as an in-house team and are no longer part of CSG. | If starters are not inducted properly within set timeframes then there is a risk that the starter may not understand and comply with the Council’s policies, processes and practices and statutory requirements thereby failing to become fully competent in their jobs and the working environment at the earliest stage.\
If new starters are not properly inducted then this could give rise to underperformance resulting in dismissals or capability processes which can be time consuming, costly and have a negative impact on service delivery. | **High** | **Corporate Induction Training:**\
a) Induction training attendance records will be retained for referral in line with the Council’s Records Retention and Disposal Policy [updated June 2014], 2 years in terms of paragraph 3.6.18\
b) A protocol will be agreed between CSG HR and LBB so that HR BPs will follow up non-attendance. The data will be provided by LBB LDO.\
**Recruitment and Selection Training:**\
c) The Learning and Development Officer will build a segment into the quarterly Managerial recruitment & selection training which specifies that managers are responsible for ensuring that employees attend the corporate induction and should monitor attendance.\
**Welcome Site Pack:**\
d) LBB will agree a protocol in conjunction with CSG for ensuring that new employees are made aware of the relevant Site Welcome Pack (created and managed by CSG Estates-Facilities Management) when commencing their employment with the Council | **HR Consultant**\
Learning and Development Officer | | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | 2. | **Interview and Selection Process (Operating Effectiveness)** Recruitment Declaration Form | If the interview and selection process is biased, then the process will fail to identify the most suitable candidate, thereby selecting a candidate with sub-optimal skill sets for the role. If the candidate evaluation process is not objective, then there could be a risk of discrimination leading to reputational damage and financial penalties associated with failure to comply with statutory requirements. If the candidate evaluation process is not undertaken, then there could be a risk of discrimination leading to reputational damage and financial penalties associated with failure to comply with statutory requirements or the recruitment of the sub-optimum candidate. | Medium | a) LBB will update and simplify the policy and guidance framework in relation to recruitment and onboarding. Responsible officer: Strategic HR Lead Target date: 20 September 2018
b) As part of action a) the Recruitment and Selection Policy will be reviewed and updated. LBB will update Paragraph 5.2 to emphasize that all officers and panel members involved in a specific recruitment and selection process should formally declare/confirm the existence or absence of any close/family relationships, as defined, by completing the Recruitment Declaration Form in full. The Policy will also make reference to the Interview Assessment Form to encourage a consistent approach across the Council. Responsible officer: Strategic HR Lead Target date: 20 September 2018\
c) A recruitment process map, defining the roles and responsibilities between CSG HR and LBB will be developed and communicated to those involved in a recruitment process. For example, |
- **Interview and Selection Process (Operating Effectiveness)** Recruitment Declaration Form
The Recruitment and Selection Policy (March 2016) states that if a member of staff is a close relative, a friend, an acquaintance, a Councillor or have had any form of relationship either present or past with a job candidate, the relationship must be declared to the relevant Assistant Director or Director and the member of staff must not be involved in any related recruitment and selection decisions, for example interview and evaluation processes.
All members of the interview panel are required to complete a “Recruitment Declaration Form” (RDF) to state that there is no close family relationship between them and the applicants. The form should be sent to CSG HR.
We selected 15 Council starters from January-December 2017 to ensure that RDF had been completed consistently. We found that:
- For 9/15 (60%) cases, HR confirmed that managers on the interview panel did not sign and send them a declaration form prior to conducting the interview.
- For 6/15 (40%) cases, RDF documentation had not been provided to us for review at the date of the draft report, including the 4/4 cases in Family Services.
We tested a further 4 starters in FS who were employed as part of the Recruitment Campaign called Bouncebackability, a specific campaign running from October 2017 until March 2018 to drive recruitment in FS as part of the OFSTED improvement plan. We found that none (0/4) RDF had been sent to HR by recruiting managers, confirming a lack of awareness of the relevant policy. We also found that there was no process for CSG HR to proactively prompt recruiting managers to submit RDFs.
**Note 2:** Following the transfer of the L&D function back to LBB, the recruitment and selection training is being redesigned to... | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | ensure it best meets the needs of recruiting managers and will be reinstated during Q2. | | | the process map will define the responsibility for the completion of the recruitment declaration form and the retention of the documentation relating to the evaluation and scoring (for instance, the candidates’ evaluation forms). This is part of the Vacancy Filler recruitment system implementation which is underway and is due to be completed at the end of August. However, managers will still be responsible for retaining recruitment documentation. | | | **Candidate evaluation forms sheets (Operating effectiveness):** | | | | | | The TAS Shortlisting and Interview Guidance states that evaluations for candidates processed through TAS – the E-recruitment system used by CSG HR to manage recruitment exercises – must be recorded in TAS by the recruiting manager and interview panel members. Interview questions are created in the system and panel members score interview responses to arrive at a recruitment decision. Apprentice and Family Service recruitments are currently not managed through TAS. For all recruitment undertaken outside of TAS candidate evaluations should therefore be retained and sent to the appropriate HR Business Partner by the recruiting manager. We selected 15 Council starters from January-December 2017 to ensure that evaluation forms had been completed We found that: | | | | | | - 8/15 (60%): Candidate evaluation forms had not been provided for our review at the date of the draft report | | | | | | - 1/15 (7%): Candidate evaluation forms were completed by the interview panel however had not been sent to HR for their records. We also selected a further 4 starters within Family Services who were employed as part of the Recruitment Campaign. We found that 3/4 (75%) candidate evaluation was completed and sent to HR as expected. However: | | | | | | - 1/4 (25%): Evaluation forms had not been provided for our review at the date of the draft report so Internal Audit were unable to confirm whether candidate evaluation forms were completed for this FS starter | | | | | | Responsible officer: Strategic HR Director, CSG | | | | | | **Target date:** End of September 2018 | | | | | | **Recruitment and Selection Training:** | | | | | | d) The Learning and Development Officer will build a segment into the quarterly Managerial recruitment & selection training to reiterate that all officers and panel members involved in a specific recruitment and selection process should formally declare/ confirm the absence of any close/family relationships. | | | | | | e) Managers will not be involved in any stage of the recruitment and selection process if they do not attend the Recruitment and Selection training. | | | | We also identified that there were no controls in HR to prompt the recruiting manager to submit the completed candidate evaluation/scoring sheets where applicable.
**Policies and procedures**
There is an Interview Assessment Form available on the Intranet for referral to guide recruiting managers on scoring and assessment of interview candidates. Recruiting managers interviewed however were not aware of the form and the form was not used widely. The Council’s “Recruitment and Selection” policy available on the Intranet also did not specifically refer to the Interview Assessment Form as we would have expected.
**General:**
Council management noted the need to consolidate, update and simplify the policy and guidance framework in relation to recruitment and onboarding, currently available on the Council’s intranet.
| Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | 3 | **Evaluation: Performance Management (Operating Effectiveness):** Non-Family Services (NFS) There were no formal targets for NFS recruitment. Evaluation Process timescale: We tested a combined total of 19 starters to identify the total amount of days it took from closing date of advert/shortlisting date to the date conditional offer letter was sent to the new starter. Out of the 19 starters, we were able to retrieve information for only 10 and the results were as follows: | If evaluation processes are not undertaken on a timely basis then there is a risk of lost opportunities to recruit the most suitable and competent candidates as they may secure employment elsewhere, of current and future substandard or sub-optimum service delivery and thus, a negative candidate experience leading to LBB not being perceived as an employer of choice. | **Medium** | a) CSG HR will capture performance data covering the end to end onboarding process for Non-Family Services recruitments and measure actual performance for a sample of starters to identify trends and take action where necessary.\
Note: We understand that this will be introduced alongside the introduction of the new e-recruitment system ‘Vacancy Filler’.\
b) Onboarding performance measures for the KPI ‘Time to Hire’, e.g. target timescales for each stage of the process, will be introduced and | | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | | | | monitored to improve the recruitment process, end to end. | | | | | | Responsible officer: | | | | | | Strategic HR Director | | | | | | Target date: | | | | | | TBC- depends on contract negotiations |
In accordance with the Non-Standard Indicator, derived from the Recruitment Project Brief used by Family Services, an average of 8 days should be taken from advert closing/shortlisting date to the day conditional offer (evaluation process) is sent. Only 1 (10%) out of the 10 starters’ evaluation process met this criterion.
While delays may be attributable to areas of the HR process which are the responsibility of Council staff, Internal Audit’s view is that CSG has some responsibility for ensuring the smooth running of the HR process end to end and that introduction of related performance measures may support improvements in the recruitment process, end to end.
The latest outturn (Q2 of 17/18) of the HR Output Specification ‘All HR KPI 19’ – ‘User satisfaction with HR Service’ had failed, | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | confirming in our view the need to strengthen the performance management of the HR service. | | | | | 4. | **Pre-employment checks (Operating Effectiveness)** | If retained copies of documents are not individually date/time stamped by a staff member of HR, **then** there is a risk that the he/she did not see the original documents, leading to the possibility of candidates using fraudulent documents (such as qualification certificates) to secure employment at the Council. | Medium | a) CSG HR will instruct staff to sign and date starter identification documentation to confirm that the original documents had been inspected and the date of the inspection for referral where necessary.
b) CSG HR will confirm that the proof of identification checks and references have been completed for the 2 starters that had not been provided at the date of the draft report.
**Responsible officer:**\
Strategic HR Director\
**Target date:**\
We believe we have already implemented this but will follow up and confirm by Mid July | | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | **Performance measures: Timeliness of pre-employment checks:** | | | | | | We calculated the time it took from Conditional offer to start date for 15 non-Family Services starters. We found that: | | | | | | - 1/15 (7%) starter: Starter commenced work 78 days after conditional offer was sent even when all the pre-employment checks were undertaken on time. This exceeds the 60-day target required for Family Services starters. This example was where an individual was on 3 months’ notice. | | | | | | - 3/15 (20%) starters: Data to calculate the actual timeframes from conditional offer to start was not available for calculation. | | | | | | Our checks for Family Services timeframes confirmed that the 60-day target was achieved for 4/4 (100%) starters. | | | | | | Monthly reports in regards with CSG HR meeting the 60-day recruitment target criterion is sent by Lucy Bailey (CSG HR Operations Director) to Yogita Popat (Quality Improvement Manager), to claim the £250 fee, per new starter in FS. | | | |
## Appendix 1: Definition of risk categories and assurance levels in the Executive Summary
| Risk rating | Definition | |-------------|------------| | **Critical** | Immediate and significant action required. A finding that could cause: | | • Life threatening or multiple serious injuries or prolonged work place stress. Severe impact on morale & service performance (e.g. mass strike actions); or | | • Critical impact on the reputation or brand of the organisation which could threaten its future viability. Intense political and media scrutiny (i.e. front-page headlines, TV). Possible criminal or high profile civil action against the Council, members or officers; or | | • Cessation of core activities, strategies not consistent with government’s agenda, trends show service is degraded. Failure of major projects, elected Members & Senior Directors are required to intervene; or | | • Major financial loss, significant, material increase on project budget/cost. Statutory intervention triggered. Impact the whole Council. Critical breach in laws and regulations that could result in material fines or consequences. | | **High** | Action required promptly and to commence as soon as practicable where significant changes are necessary. A finding that could cause: | | • Serious injuries or stressful experience requiring medical many workdays lost. Major impact on morale & performance of staff; or | | • Significant impact on the reputation or brand of the organisation. Scrutiny required by external agencies, inspectorates, regulators etc. Unfavourable external media coverage. Noticeable impact on public opinion; or | | • Significant disruption of core activities. Key targets missed, some services compromised. Management action required to overcome medium-term difficulties; or | | • High financial loss, significant increase on project budget/cost. Service budgets exceeded. Significant breach in laws and regulations resulting in significant fines and consequences. | | **Medium** | A finding that could cause: | | • Injuries or stress level requiring some medical treatment, potentially some workdays lost. Some impact on morale & performance of staff; or | | • Moderate impact on the reputation or brand of the organisation. Scrutiny required by internal committees or internal audit to prevent escalation. Probable limited unfavourable media coverage; or | | • Significant short-term disruption of non-core activities. Standing orders occasionally not complied with, or services do not fully meet needs. Service action will be required; or | | • Medium financial loss, small increase on project budget/cost. Handled within the team. Moderate breach in laws and regulations resulting in fines and consequences. | | **Low** | A finding that could cause: | | • Minor injuries or stress with no workdays lost or minimal medical treatment, no impact on staff morale; or | | • Minor impact on the reputation of the organisation; or | | • Minor errors in systems/operations or processes requiring action or minor delay without impact on overall schedule; or | | • Handled within normal day to day routines; or | | • Minimal financial loss, minimal effect on project budget/cost. |
| Level of assurance | Definition | |-------------------|------------| | **Substantial** | There is a sound control environment with risks to key service objectives being reasonably managed. Any deficiencies identified are not cause for major concern. Recommendations will normally only be Advice and Best Practice. | | **Reasonable** | An adequate control framework is in place but there are weaknesses which may put some service objectives at risk. There are Medium priority recommendations indicating weaknesses but these do not undermine the system’s overall integrity. Any Critical recommendation will prevent this assessment, and any High recommendations would need to be mitigated by significant strengths elsewhere. | | **Limited** | There are a number of significant control weaknesses which could put the achievement of key service objectives at risk and result in error, fraud, loss or reputational damage. There are High recommendations indicating significant failings. Any Critical recommendations would need to be mitigated by significant strengths elsewhere. | | **No** | There are fundamental weaknesses in the control environment which jeopardise the achievement of key service objectives and could lead to significant risk of error, fraud, loss or reputational damage being suffered. | Appendix 2 – Analysis of findings
| Area | Critical | High | Medium | Low | Total | |-------------------------------------------|----------|------|--------|-----|-------| | | D | OE | D | OE | D | OE | D | OE | | | Role definition and publication | - | - | - | - | - | - | - | - | - | | Evaluation process | - | - | - | - | 1 | - | - | 1 | | | Pre- employment and role specific checks | - | - | - | - | 1 | - | - | 1 | | | New starter set up | - | - | - | - | - | - | - | - | - | | New starter induction | - | - | 1 | - | - | - | - | 1 | | | Performance management | - | - | - | 1 | - | - | - | 1 | | | Total | - | - | 1 | - | 3 | - | - | 4 | |
Key:
- Control Design Issue (D) – There is no control in place or the design of the control in place is not sufficient to mitigate the potential risks in this area.
- Operating Effectiveness Issue (OE) – Control design is adequate; however, the control is not operating as intended resulting in potential risks arising in this area.
Timetable
| Terms of reference agreed: | Fieldwork commenced: | Fieldwork completed: | Draft report issued: | Management comments received: | Final report issued: | |---------------------------|----------------------|----------------------|----------------------|-------------------------------|---------------------| | 26th January 2018 | 5th February 2018 | 26 April 2018 | 30 May 2018; 18 June 2018 | 22 June 2018 and 3 July 2018 | 6 July 2018 |
## Appendix 3 – Identified controls
| Area | Objective | Risks | Identified Controls | |-----------------------------|---------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Role definition and publication | The role requirements are correctly defined and the appropriate channels for vacancy marketing are used to ensure optimum outreach to increase the response rates from the most suitable potential candidates. Role definition and publication are undertaken within defined / agreed time scales to expedite completion of the recruitment process. | If the council fails to:
- identify the role requirements correctly
- advertise the role via the most appropriate and relevant channels\
then there is a risk that the most suitable candidate may not be attracted and recruited leading to sub-optimal delivery and potential over reliance on temporary staff and financial loss.\
If key recruitments tasks are not completed in a timely fashion then there is a risk of on-going substandard/sub-optimum service delivery and general management frustration/discontent while the post remains vacant. | 1. For council staff - when the department identifies a need for hiring for a role, the manager will liaise with CSG HR. The manager will ensure that there is a job description that is up to date (when needed, HR can assist with this).
2. The recruiting manager uses the TAS system to fill in various fields relating to the vacancy. Once all details regarding the advertisement of the vacancy is inputted by TAS, it will have to be approved by the:\
Senior Management\
Finance\
Human Resources\
And in that specific order as the approval from one, triggers the workflow to the next. Where TAS is not used, the S.M / Finance approval is received prior to completing the starter form to HR.
3. Family Services previously used TAS, however, they now advertise through their own Family Services website. FS Team liaise with HR who work alongside.
4. CSR HR advertises the vacancy on a variety of websites- also with the help of TMP (advertisement company) and other specialist recruitment agencies. | | Evaluation | There is an independent process. All conflicts of interest during interviews/selection are declared and taken into account to avoid bias. Council management undertakes the evaluation of candidates promptly in line with agreed timescales to expedite completion of the recruitment process. | | --- | --- | | | If the interview and selection process is biased, then the process will fail to identify the most suitable candidate, thereby selecting a candidate with sub-optimal skill sets for the role. | | | 1. For Non-FS, all applications are received by HR Belfast and forwarded to managers to shortlist. Once shortlisted, the candidates are invited to the interview. For FS, all applications are received by HR Barnet via a mailbox. The managers are sent the applications to shortlist. | | | 2. The interview panel members are required to sign a recruitment declaration form to state that they have no form of relationship either past or present, or is a close relative, friend or acquaintance of the candidate. | | | 3. During the interview, candidate evaluation forms are completed. The candidates are evaluated on a scoring basis. The candidate with the highest score is selected. This is then uploaded onto TAS, and where TAS is not used, it is sent to CSG HR to be retained. (Of 7/15 cases tested, evaluation forms had been completed and were retained/held in TAS) | | | 4. A Recruitment and New starter process document is available for FS to ensure that all processes are undertaken within set timelines. |
| Pre-employment and role specific checks | All required role specific pre-employment checks are undertaken, for example, DBS and HCPC checks where necessary as well as reference checks. Any delays in response of these checks are followed up by responsible members of HR staff. Related checks are completed in agreed timeframes. | | --- | --- | | | If pre-employment and role specific checks are not undertaken, then there is a risk that the most competent staff will not be recruited leading to sub-optimal delivery, non-adherence to policies and procedures, harm, and financial loss. | | | 1. Conditional offer letter is sent to the candidate, stating that the offer is subject to pre-employment checks | | | 2. Information on medical checks are sent along with the conditional offer letter, along with list of documentation the candidate needs to present before the Council. | | | 3. Certain documents are copied and retained after HR identifies the originals. | | | 4. Copies are signed and dated to confirm that originals were seen by the HR member of staff. | | New starter set up | If new starters are not set-up promptly in line with timeframes and correctly in their working environment, then there is a risk:
- Of delayed and sub-optimal service delivery and financial loss due to inefficiency.\
Of loss of capable staff and in the long term of Barnet Council not being considered an ‘employer of choice’ compromising future recruitment exercises through not being regarded as professional in their approach to recruitment. | 5. All relevant documents are copied and relevant prior to applying for a DBS check.
06. DBS checks are undertaken either in standard or enhanced form, depending on the level required for the role.
07. Requests for references are sent to two previous employers.
08. All HCPC certificates are identified. Checks are also done via the HCPC website to ensure that the registration status is valid. | 1. Manager logs a call on the IT self-service system to set up required equipment and log ins for the starter.
09. Manager ensures that any delays are followed up appropriately.
10. On the first day, starter has all equipment and log ins set up and ready to use.\
There are set-up performance measures for Family Services to drive timely IT set-up. | | New starter induction | All starters are inducted correctly and promptly into the organisation by line managers. Starters attend the appropriate corporate training. Local and corporate induction training attendance is recorded and monitored and non-attendance is followed up by the line manager. | If starters are not inducted properly within set timeframes then there is a risk that the starter may not understand and comply with the Council's policies, processes and practices, statutory requirements thereby failing to become fully competent in to their jobs and the working environment at the earliest stage. If new starters are not properly inducted then this could give rise to underperformance resulting in dismissals or capability processes which can be time consuming, costly and have a negative impact on service delivery. | 1. Information of all new starters are effectively passed onto the training provider.
11. Training provider ensures that all starters are invited to attend induction.
12. Attendance sheets are present on the day for attendees to sign.
13. Attendance sheets are examined to identify non-attendance. This is later alerted to the relevant line managers.
14. Line managers ensure that starters attended induction without delay. | Appendix 4 – Internal Audit roles and responsibilities
Limitations inherent to the internal auditor’s work
We have undertaken the review of Onboarding Process, subject to the limitations outlined below.
Internal control
Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.
Specifically, we will not:
The audit will not cover the onboarding process for new starters at Schools nor will it review arrangements relating to the implementation of the new recruitment system which is due to be introduced in early 2018/19.
Our assessment of controls is for the period specified only. Historic evaluation of effectiveness is not relevant to future periods due to the risk that:
- the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
- the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors
It is management’s responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry out additional work directed towards identification of consequent fraud or other irregularities. However, internal audit procedures alone, even when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as internal auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which may exist.
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d422ec958b028e74fc3abf66542859f2e5cdd3e1 | We would like to thank management and staff of CSG and LBB Commissioning for their time and co-operation during the course of the internal audit. Executive Summary
| Assurance level | Number of recommendations by risk category | |-----------------|------------------------------------------| | Limited | Critical | High | Medium | Low | Advisory | | | - | 2 | 2 | 2 | - |
Scope
Facilities Management is delivered at the Council through the Customer and Support Group (CSG), a contract between the Council and Capita. The Facilities Management Team provide a number of services within the CSG contract for the seven maintained sites within the Council estate (North London Business Park (Buildings 2 and 4), Barnet House, Hendon Town Hall, Oakleigh Road Depot, Friary House and Colinhurst House).
Facilities Management are responsible for a number of key tasks to support the delivery of this aspect of the CSG contract such as:
- **Resolving facilities incidents**: The Facilities Management Team respond to building issues regarding maintained sites. In October 2017 a new software package, FM Support Works, was implemented to support the logging, tracking and reporting of incidents and their resolution. Facilities management incident resolution times are monitored through KPI CSG/C25. In Q1, 2017/18 the KPI reported that 100% of reported incidents were resolved within target timeframes;
- **Budgets**: Facilities Management are responsible for monitoring the facilities management budget, which is circa £3 million per annum, on behalf of the Council and work with the Council to ensure that cost savings are identified and subsequently realised; and
- **Policies and procedures**: Facilities Management are responsible for ensuring that relevant policies and procedures are in place that clearly define the roles and responsibilities of key personnel in facilities management processes.
This audit reviewed the design and operating effectiveness of the key controls in place relating to the three key activities listed above.
Summary of findings
During our audit, we noted that a number of actions had been taken by CSG Estates to improve the work of the Facilities Management Team including:
- The Hornbill system went 'live' in October 2017 to support incident resolution and performance measurement;
- Regular reports of budget positions were included in Monthly CSG Estate Services Performance Reports to assist with oversight of budgetary position;
- The role of Facilities Manager had been filled with a permanent member of staff to support Facilities Management and reduce the risks associated with a single point of failure within the Team; and We also noted that management had identified improvements to be made regarding policies and process documents, such as the creation of welcome packs for new custodians and new officers to the Council. The Team has also recognised the need to upload policies in a central location within BarnetWork (the Council’s Intranet). We found evidence that management were working towards implementing these actions.
This audit has identified two high, two medium and two low risk findings.
We identified the following issues as part of the audit:
- **Data Quality – KPI CSG 25: Incident Resolution (finding 1, ‘high’ risk rating)** – The Facilities Management Team report on incident resolution through KPI CSG 25 (Incident Resolution). This is the only KPI in place specifically regarding Facilities Management, which was forecast to spend £6.4m in 2017/18. We noted that where the outturn is under 100% the Council is entitled to a service credit.
We noted the following issues:
- The KPI definition requires for jobs to be categorised according to resolution time; however, we found that there was no definition of reporting categories and their agreed rectification times. All requests in 2017 were reported as requiring a resolution in 48 hours.
- Management confirmed that incidents could be placed on ‘hold’ when there is a delay outside the control of Facilities Management but we noted there was no definition or clear expectation of reasons to place incidents on hold.
- We selected 11 jobs which were completed in October and November 2017 and found that:
- 1/11 (9%) incidents were reported as closed but had not been resolved in February 2018. Management confirmed that this incident requires the input of the Landlord which is outside CSG’s control but this issue had been escalated with them. We found there is no agreed protocol in place for resolving issues with the Landlord;
- 1/11 (9%) requests related to a potential health and safety issue regarding a chair. Although this job was resolved in under an hour which suggested that jobs were being prioritised, it had not been escalated to a higher priority and was classed as a ‘P4’ which required resolution within 48-hours; and
- 1/11 (9%) requests required the procurement of materials and required two people to be present at the site. We found that the job was placed on hold for 19 days. Management confirmed that some of this delay was due to a key member of staff being on annual leave which delayed the acquisition of parts and two officers not being available to complete the job.
- **External contractors (finding 2, ‘high’ risk rating)** - We noted the following issues:
- We found that there was a lack of audit trail linking incidents raised on Hornbill with Permit to Work (PtW) forms and subsequent Purchase Order (PO) numbers and invoices raised by contractors. This meant that in some instances we were unable to confirm controls were operating as expected. We were informed that standard practice for resolving incidents using external contractors is to raise a purchase order for £250, which is approved by the CSG Estates Team. The contractor attends the site and subsequently raises an invoice for the correct amount, in line with a schedule of works. We considered that there was the potential for work to be agreed by CSG Estates without a detailed knowledge of the final cost to the Council.
We selected five jobs which required the use of an external contractor:
- For 4/5 (80%) there was no evidence to support Facilities Management approval of invoices to confirm that goods and services has been received prior to payment in four cases; and
- For 1/5 (20%) jobs we could find evidence of two invoices which were for the same amount (£124.00) and same job completed date in addition to many similar details within narrative fields. Whist we found Facilities Management approval to pay one of the invoices, due to the lack of audit trail between jobs raised on Hornbill and invoices we were unable to conclusively state whether payment had been made twice for the same job.
We were informed that payments over £250 require the authorisation of a suitable Approver but for one payment of £368.94, it was identified that no evidence to confirm the relevant Project Manager approved goods and services had been received prior to payment.
Budget monitoring (finding 3, ‘medium’ risk rating) – During the time of our fieldwork we noted that the Facilities Management managed budget for 2017/18 was £3.87m but in December 2017 was forecast to spend £4.91m (an overspend of 27%).
Roles and responsibilities: During our review, we found there was a lack of clarity regarding the named Budget Holders and Budget Managers, whether budgets were monitored using Integra BDM and roles and responsibilities in approving works/invoices and the monthly budget monitoring process. This led to confusion when we made requests for evidence and conflicting views on the design and operating effectiveness of the controls in place, requiring additional audit resource to complete the review.
Budget Monitoring Process: We were informed by Management that the Estates budget monitoring process does not occur within the Integra BDM module, but that the following monthly budget monitoring cycle process was in place. We were informed that:
- CSG Operations sends the Client Lead for Estates a spreadsheet containing the actuals and forecasts for financial year to date;
- The CSG Operations Manager and the Client Lead for Estates meet to discuss the spreadsheet and its contents. Any discrepancies between forecast and actual are discussed along with the identification of savings. There is an expectation that the Head of Estates and Head of Building Services will attend the meeting quarterly; and
- Actions arising from the meeting are compiled circulated to the attendees.
We selected three months from the financial year of 2017/18 and sought to verify that the budget monitoring was happening in line with the expectations described to us above. We found that:
- For 1/3 (33%) months we considered that the Budget Monitoring was not completed in line with expectations described to us. Whilst we found evidence of the CSG Operations Manager and CSG Finance meeting to discuss the Annual Work Plan we were informed this impacted on the Building Services budget rather than Facilities Management. We also saw evidence to confirm forecast versus actual being reported in the Monthly Estates Services Report. However, we could not be supplied with evidence of what was discussed at the meeting, involvement of the Council or if any actions were raised as a result of the meeting.
- **Identification and monitoring of savings**: We considered that improvements could be made to the controls in place to document and support regular monitoring of budgets and devising a systematic and coordinated approach to identifying savings and monitoring them being achieved.
- **Policies and Procedure Documents (finding 4, ‘medium’ risk rating)** - We noted the following issues:
- **Policies in Place**: We selected seven areas of the output specification (Schedule 1) of the CSG contract and asked to inspect the procedure documents in place for these areas. We also reviewed other procedures referred to within these documents. We found that there were significant errors within some of the documents, for example:
- The Facilities Management Welcome Starter Pack for New Employees for North London Business Park showed the fire evacuation point as Barnet House;
- There was no Facilities Management Welcome Starter Pack for Oakleigh Road Depot;
- Fire and Bomb Evacuation Procedures only covered North London Business Park and Barnet House;
- Dynamic Lockdown Procedures only covered Barnet House and Hendon Town Hall.
We also found that some policies were not freely available to on the intranet, had not been reviewed recently or in-line with their review date and documents were not in place for each building within the Managed/Maintained Estate.
- **Notifying customers when incidents are placed on ‘hold’ (finding 5, ‘low’ risk rating)**. Management confirmed that the Hornbill system has the necessary functionality for Facilities Management to use Hornbill to manually contact requesters when a ‘hold’ has been placed on their job. At the time of fieldwork Management confirmed this functionality was not routinely used.
- **Expenses (finding 6, ‘low’ risk rating)**. Management informed us that expenses relating to the procurement of materials are approved by a senior manager in CSG and subsequently reclaimed through a monthly report to the Head of Estates, LBB. Facilities Management confirmed that only two expenses were reclaimed within the six months to January 2018 with a total sum of £104.03. We found that whilst there was evidence of CSG management approving expenses, spreadsheets provided to the Council to reclaim the funds did not document the sums to be reclaimed.
**Notes:**
**Out of Hours Work**: During fieldwork, it came to light through our discussions with Management that work is completed outside office hours where there is a pressing issue with the Facilities (i.e. in an emergency). We were told that there was no rota in place to identify which member of the Facilities Management Team would be available to deal with issues or would be ‘on-call’ to ensure a response. Most calls are received by the Acting Facilities Manager; however, Management confirmed that only one member of staff had a requirement in their job description to receive out-of-hours calls. Whilst out of the scope of our audit, we considered that management should review the procedures in place to ensure there is effective cover and clear reporting lines for out-of-hours contact and ensure there is not a single point of failure if a key member of the Facilities Team is not available. **CHAPS payments:** We completed an analysis of payments made through Facilities Management cost codes and identified one CHAPS payment that had been made on 9 May 2017 for £2868. The payment was to WMF United Kingdom Limited, a catering equipment specialist. The Council’s agreed approach is that CHAPS payments should only be made in exceptional circumstances so for emergencies or for payments that could not have been foreseen and settlement via Accounts Payable will incur significant additional costs or reputational damage to the Council due to payment delays. We considered that a payment to a catering specialist was not an exceptional circumstance and could not be provided with evidence to assure us that the payment in May 2017 was an emergency.
**Facilities Management Welcome Packs for New Employees:** We found that there was no routine mechanism for ensuring new employees at the Council were given a starter pack that had been designed by Facilities Management to make new employees aware of many protocols relating to Building and Facilities Management. Management confirmed that it is the responsibility of CSG HR not Estates, to ensure that new starters have sight of the packs. This is raised as a finding within our review of the Council’s Onboarding processes, currently at the draft report stage.
## 2. Findings, Recommendations and Action Plan
| Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | 1. | **Data Quality – KPI CSG 25: Incident Resolution - (Control Design and Operating Effectiveness)**<br>The Facilities Management Team report on incident resolution through KPI CSG 25 (Incident Resolution). Whilst the Estates Team as a whole report on 13 KPIs this is the only one which relates to Facilities Management. The KPI is reported as a percentage of jobs completed within the appropriate reporting category (e.g. Emergency 30 mins, Urgent 4 hours, etc) divided by the total number of jobs received in each category. We noted that where the outturn is less than 100% the Council is entitled to a service credit. In October of 2017/18 an outturn of 100% was reported.<br>The Council has a Data Quality Policy to support the collection and use of data within the organisation. The five key principles underpinning the policy are that data is:<br>1. **Accurate and complete**<br>The Hornbill system went ‘live’ in October 2017 to support incident resolution and KPI performance measurement. Management confirmed that for October the KPI was measured using data collected within Hornbill but some incidents were resolved outside of the system whilst the system was being embedded and therefore not all incidents would be logged in Hornbill and incorporated into the KPI outturn. We were therefore unable to ascertain the completeness of the reported outturn for KPI EST25 for October.<br>Management confirmed that from November all jobs would be logged in Hornbill and therefore reported in the KPI outturn.<br>2. **Reliable**<br>We reviewed the KPI and processes in place and considered improvements could be made regarding the data quality of the outturn with respect to reliability.<br>- **Request Categories:** The KPI definition sheets held by the Council’s Performance Team states that jobs must be completed as in-line with the agreed reporting category. We could not find any further information to define reporting categories and agreed rectification times. We found that all requests in October 2017 were reported as requiring a resolution in 48 hours. | **If responsible officers do not know the correct KPI definition and do not follow the appropriate arrangements consistently and correctly for KPI collation and reporting, then KPI information may not be reported correctly and timely for appropriate decision making.**<br>**If the KPI reported outturn is not accurate then the Council may not be able to scrutinise the performance of the Facilities Management function, including applying service credits where necessary and reaching a view as to the value for money being provided by the service.** | **High** | **Agreed actions:**<br>a) Management will draft expectations regarding KPI CSG 25 (Incident Resolution) to define:<br>- Expectations to ensure completeness of data;<br>- Reporting categories and expected resolution time;<br>- Criteria for jobs being marked as pending or ‘on hold’ and any approval which should be sought from LBB<br>- When jobs should be reported as resolved and closed out on Hornbill; and<br>- Steps to be taken by management to ensure that data quality is reliable, for example verifying data within the outturn and/or reviewing the progress of jobs, including those which have been placed on hold for long periods of time.<br>**Responsible officer:**<br>Acting Facilities Manager, CSG<br>**Target date:** 22 June 2018<br>b) The draft document will be presented to and agreed by the Head of Estates | | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | - | Placing requests on hold: Management confirmed that requests can be placed on ‘hold’ when there is a delay outside of the control of Facilities Management, for example when an external contractor is required or delivery of a part is needed. When Officers place a request on hold they can choose the length of ‘hold’ time. We found there was no agreed definition of what constituted a reasonable reason for putting incidents on ‘hold’ or an agreed approach for the length of time a request would be placed on ‘hold’. We selected 4 jobs which were placed on ‘hold’ and found that one job was held as management were on leave so parts could not be ordered from a supplier. We were informed this job was also delayed as FM staff were not available to complete it in a timely manner. We considered these reasons were within the control of the Facilities Management team which would not warrant putting the job ‘on hold’ for the purposes of KPI reporting. We selected 11 jobs which were completed in October and November 2017 and found that: | If incidents are delayed unnecessarily then issues may not be rectified in a timely manner resulting in dissatisfaction with the service provided by the Facilities Management Team. | If the KPI is reported incorrectly or in line with data quality principles the the | Responsible officer: Acting Facilities Manager, CSG Head of Estates, LBB Target date: 29 June 2018 | | - | 1/11 (9 %) incidents were reported as closed but had not been resolved. The incident related to an access card not working. Management confirmed that this job required the input of the Landlord which is outside Facilities Management control. The incident was therefore closed out in Hornbill. We considered that the incident should have been placed on ‘hold’ until it had been sufficiently rectified. Management confirmed the issue has been escalated with Comer but there is no agreed protocol in place for resolving issues with Comer. The issue regarding access cards was not rectified at the time of issuing this report in March 2018. | | | c) The KPI will be updated as a result Responsible officer: Acting Facilities Manager, CSG Commercial Performance and Development Manager, LBB Target date: 30 September 2018 | | - | 1/11 (9 %) requests related to a potential health and safety issue regarding a chair. Although this job was resolved in under an hour suggesting that work had been prioritised, it had not been escalated to a higher priority within Hornbill and was classed as a ‘P4’ which required resolution within 48-hours; and | | | d) CSG will review and formalise their existing escalation procedures with the Landlord (COMER). Responsible officer: Director of Estates, CSG Target date: 29 June 2018 | | - | 1/11 (9 %) requests required the procurement of materials and required two people to be present at the site to conduct the work safely. We found that the job was placed on hold for 19 days. Management confirmed that some of this delay was due to a key member of staff being on annual leave which delayed the acquisition of parts and two officers not being available to complete the job. | | | e) The escalation procedures will then be enacted regarding the ongoing issue with swipe card access Responsible officer: Director of Estates, CSG | | 3. | Timely – No issues noted. | | | | | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | 4. | Accessible and transparent – No issues noted. | | | | | 5. | Relevant – No issues noted. | | | | | | See Appendix 3 for a detailed breakdown of our findings. | | | |
2. **External contractors (Control Design and Operating Effectiveness)**
a) **Permit to Work Forms**
The contractor completes a ‘Permit to Work’ form when they first attend the site. The form is signed by the contractor to ensure that he or she has taken all the safety precautions and read the site rules.
We noted that the Permit to Work form does not contain a field for Custodians to log the Hornbill job reference number or PO number. This would ensure there is a full audit trail between the form and incidents being reported on Hornbill or payments being made to contractors.
We selected five incidents where a contractor attended the Managed/Maintained Estate to complete the service request. We noted that:
- For 3/5 (60 %) requests we could not be provided with evidence to confirm the Permit to Work form had been completed for the job.
**If contractors do not complete a Permit to Work form then the Facilities Management team will not be able to demonstrate that key health and safety requirements have been met before and after completing work.**
**If management approval is not sought or granted before payments are made then payments may be High**
**Agreed Action:**
a) Contractors will not commence work before a Permit to Work Form has been completed and is held on file.
**Responsible officer:**
Acting Facilities Manager, CSG
**Target date:** 22 June 2018
b) The Permit to Work form will be updated to include a requirement for Custodians to insert the job reference number from Hornbill.
**Responsible officer:**
Acting Facilities Manager, CSG
**Target date:** 22 June 2018 | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | b) | Raising of Purchase Orders and Payment of Invoices relating to external Contractors | made for work not completed, is of an inadequate standard or has already been paid for. | | Target date: Implemented | | | We were informed that where external contractors attend the site, these are typically done by approved contractors, unless the work is outside the scope of their abilities in which case a new procurement will be undertaken. The Facilities Manager requests that a purchase order is raised for an initial sum of £250 which is subsequently approved by the Head of Building Services, CSG or Head of Estates, CSG. The contractor then attends the site and an invoice is subsequently submitted to CSG Estates. We considered that there was a potential that CSG could commit the Council to expenditure by agreeing to work without an oversight of costs before an invoice is submitted, especially if it exceeds the original amount of the purchase order. During fieldwork, we were informed that if the invoice is under £250 then a member of the Property and Facilities Support Team pay the invoice but for those of £250 or over the Acting Facilities Manager approves the invoice before it is paid by the Property and Facilities Support team. We found that during Q3 of 2017/18, 57 invoices were received relating to Facilities Management with an estimated cost of £15,579. 24 out of the 57 had an estimated amount of less than £250. We found that there were no clear processes in place to ensure that the Facilities Management Team had oversight of payments under £250. Management confirmed to us that approval can take place verbally but this results in a lack of audit trail and therefore we were unable to verify that approval had, been granted. We also found that there was no clear audit trail to reconcile jobs raised on Hornbill with corresponding Purchase Orders and Invoices. We selected five jobs within Hornbill which required a contractor to attend the Managed/Maintained Estate to complete the service request. We noted that: | If invoices cannot be easily linked to the job raised then there will not be sufficient audit trail in the event of a query. | | | | - For 3/5 (60 %) service requests we could not effectively match purchase order numbers or invoices to jobs within Hornbill. | | | | | - For 1/5 (20%) jobs we could find evidence of two invoices which were for the same amount (£124.00) and same job completed date in addition to many similar details within narrative fields. Due to the lack of audit trail between jobs raised on Hornbill and invoices we were unable to conclusively state whether payment had been made twice for the same job. We noted that payment for one of the invoices was approved by the CSG Estates team. | | | | c) | Management will: | | | | | - Ensure there is an effective and full audit trail from Hornbill through to purchase orders, invoices and payments made for incident responses. | | | | | - Ensure there are sample checks completed on jobs under £250 by the Facilities Management Team to ensure the jobs are completed correctly and have not been paid for previously. | | | | | - Ensure there is a schedule in place which states named Officers which can request work as well as approve invoices of certain values. | | | | | - Ensure that there is there is oversight of work costing £250 before an invoice is raised by the contractor. | | | | | The approach will be documented and held on file. | | | | | Responsible officer: Acting Facilities Manager, CSG | | | | | Target date: 22 June 2018 | | | | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | - For 4/5 (80%) we could not be supplied with Facilities Management approval that the goods and services had been received before payment was made. We were provided with a list of 9 invoices which had been paid between Oct and Dec of 2017 to RGE, a vetted external contractor frequently used by the Facilities Management Team. Only one invoice was for over £250 (£368.94) but we could not be provided with evidence of Facilities Management approval to pay this invoice, in-line with the expectations described to us. We therefore considered there was an opportunity to review the processes in place regarding the ordering and payment of works to ensure there was controls trails in place to ensure there is effective oversight and monitoring of works orders. | d) | Medium | The Council and CSG Estates will agree a documented approach as described above. Responsible officers: Head of Estates, LBB Director of Estates, CSG Target date: 22 June 2018 | | | | e) | | Management will investigate whether a duplicate payment was made for £124 and if so pursue reimbursement from the supplier. Responsible officer: Acting Facilities Manager, CSG Target date: 22 June 2018 | | | | f) | | The Council and CSG will consider whether this recommendation is applicable to other budgets within CSG Estates. Responsible officers: Head of Estates, LBB Director of Estates, CSG Target date: 22 June 2018 | | 3. | **Budget Monitoring (Control Design and Operating Effectiveness)** | If budgets are not monitored regularly then inappropriate spend may not be | Medium | Agreed actions: a) Management will produce a protocol which clearly outlines the | | | a) Roles and Responsibilities | | | | During the Audit, we found there was a lack of clarity regarding:
- The names of Budget Holders and Budget Managers for Facilities Management budgets
- At different times of the audit we were informed that the Budget Holder was the Head of Estates (LBB) or the Interim Acting Head of Facilities Management (CSG) and the Budget Manager was Director of Estates (CSG) or the Operations Manager (CSG).
- The use of the Integra BDM module
- There was a lack of clarity regarding whether the BDM module was used to support monthly budget monitoring.
- Monthly Budget Monitoring processes:
- During the audit, we were informed that the meetings between CSG Operations and the Client Lead for Estates happen monthly, and also given conflicting information that there is no need for monthly meetings as the actuals do not differ from the forecasts.
- Involvement of the Acting Facilities Manager
- We found there was a lack of clarity regarding the expected involvement of the Acting Facilities Manager in the Budget Monitoring Process.
We also noted there was a lack of clarity regarding roles and responsibilities in approving invoices prior to payment.
**b) Monthly Budget Monitoring Cycle**
The usual budget monitoring process at the Council involves the monthly submission, review and approval of budget forecasts within the Integra BDM module; however, we were informed that budget monitoring lies outside Integra BDM for the Estates managed budgets.
We were informed that the forecast for 2017/18 was approved in August 2017 but since there is a monthly forecast monitoring cycle which involves the following process:
- CSG Operations send the Client Lead for Estates a spreadsheet containing the actuals and forecasts for financial year to date.
| Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | During the Audit, we found there was a lack of clarity regarding: | identified and appropriate action to address over or under-spends cannot be taken in a timely manner. | Budget Monitoring process and expectations. This will include: | Budget Monitoring process and expectations. This will include: | | | - The names of Budget Holders and Budget Managers for Facilities Management budgets | If budgetary savings are not identified and subsequently achieved then the service may incur unnecessary expenditure and face budgetary pressure | - Names/Job titles of the Budget Holder and Budget Manager; | - Names/Job titles of the Budget Holder and Budget Manager; | | | - At different times of the audit we were informed that the Budget Holder was the Head of Estates (LBB) or the Interim Acting Head of Facilities Management (CSG) and the Budget Manager was Director of Estates (CSG) or the Operations Manager (CSG). | | - Roles and responsibilities in the Budget Monitoring process of all involved parties, including the frequency tasks will take place; and | - Roles and responsibilities in the Budget Monitoring process of all involved parties, including the frequency tasks will take place; and | | | - The use of the Integra BDM module | | - How savings will be routinely captured outside the forecast setting process and how actions will be tracked so that savings are realised. | - How savings will be routinely captured outside the forecast setting process and how actions will be tracked so that savings are realised. | | | - There was a lack of clarity regarding whether the BDM module was used to support monthly budget monitoring. | | Responsible officers: | Responsible officers: | | | - Monthly Budget Monitoring processes: | | Head of Estates, LBB | Director of Estates, CSG | | | - During the audit, we were informed that the meetings between CSG Operations and the Client Lead for Estates happen monthly, and also given conflicting information that there is no need for monthly meetings as the actuals do not differ from the forecasts. | | Target date: 22 June 2018 | Target date: 22 June 2018 | | | - Involvement of the Acting Facilities Manager | | b) Management will ensure that the budget monitoring cycle takes place monthly and evidence of all meetings and actions are kept on file. | b) Management will ensure that the budget monitoring cycle takes place monthly and evidence of all meetings and actions are kept on file. | | | - We found there was a lack of clarity regarding the expected involvement of the Acting Facilities Manager in the Budget Monitoring Process. | | Responsible officer: Director of Estates, CSG | Responsible officer: Director of Estates, CSG | | | | | Target date: 22 June 2018 | Target date: 22 June 2018 | | | | | c) The Council and CSG will consider whether this | c) The Council and CSG will consider whether this | The CSG Operations Manager and the Client Lead for Estates meet to discuss the spreadsheet and its contents. Any discrepancies between forecast and actual are discussed along with the identification of savings. There is an expectation that the Head of Estates and Head of Building Services will attend the meeting quarterly; and actions arising from the meeting are compiled and circulated to the attendees.
We selected three months from the financial year of 2017/18 and found that:
- For 1/3 (33%) months we could not find evidence of the budget monitoring cycle happening as discussed.
**c) Savings**
We asked management to confirm the arrangements in place regarding the identification and delivery of savings. We were informed that savings are identified when forecasts are agreed with LBB at the start of the year, with any further possible savings incorporated into the forecast which is then monitored throughout the year via the Budget Management Cycle. Whilst we considered this as reasonable at a high level, we also considered improvements could be made to monitor specific savings against specific different aspects of the budget throughout the year and set and follow up on actions to ensure their delivery.
**d) Other CSG Budgets**
We were informed that the budget monitoring cycle for all of CSG Estates follows a similar approach as described for the Facilities Managed Budget. We noted that there was a forecast overspend in the Managed/Maintained buildings of £1.99m and considered that Management should consider whether this finding recommendation is applicable to other budgets within CSG Estates.
| Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | - The CSG Operations Manager and the Client Lead for Estates meet to discuss the spreadsheet and its contents. Any discrepancies between forecast and actual are discussed along with the identification of savings. There is an expectation that the Head of Estates and Head of Building Services will attend the meeting quarterly; and actions arising from the meeting are compiled and circulated to the attendees. | | | recommendation is applicable to other budgets within CSG Estates. | | | - For 1/3 (33%) months we could not find evidence of the budget monitoring cycle happening as discussed. | | | Responsible officers: | | | | | | Head of Estates, LBB | | | | | | Director of Estates, CSG | | | | | | **Target date:** 22 June 2018 |
| 2017/2018 Budget | 2017/2018 Forecast | Variance (Budget versus Forecast) | |------------------|-------------------|----------------------------------| | Managed Budgets | £3,870,339 | £4,491,552 | - £621,213 |
### Policies and Procedure Documents (Operating Effectiveness)
#### a) Policies in place (Operating Effectiveness)
Schedule 1 of the CSG contract (the Output Specification) contains the services to be delivered by the Facilities Management Team. We selected seven service areas and asked to inspect policy and procedure documents for these areas. We also inspected the documents referred to within these policies.
We found that there were significant errors within some of the documents, for example:
- The Facilities Management Welcome Starter Pack for New Employees for North London Business Park showed the fire evacuation point as Barnet House;
- There was no Facilities Management Welcome Stater Pack for Oakleigh Road Depot;
- Fire and Bomb Evacuation Procedures only covered North London Business Park and Barnet House; and
- Dynamic Lockdown Procedures only covered Barnet House and Hendon Town Hall.
We also noted other issues:
- We found instances of reference to policies which were:
| Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | Additional Security | £500,000 | £377,991 | £122,009 | | | Rents (Not Managed Budget) | 0 | £1,436,953 | - £1,436,953 | | | General Misc. | 0 | £55,456 | - £55,456 | | | Managed/Maintained Buildings | £4,370,339 | £6,361,953 | - £1,991,613 | |
See Appendix 3 for a detailed breakdown of our findings.
**If policies and procedures are not available or not communicated to relevant staff then there is a risk that activity may be undertaken inappropriately or inconsistently resulting in required outcomes not being achieved.**
**If policies and procedures do not refer officers to the appropriate role/team where applicable then decisions or responsibilities may**
**Medium**
**Agreed Action:**
(a) Management will undertake a review of the policies and procedures and ensure that, where relevant, documents:
- Cover the whole of the Managed/Maintained Estate;
- Clearly contain an issue date and a date at which they will be reviewed; and
- Are in-date and not past review dates.
**Responsible officer:**
Acting Facilities Manager, CSG.
For CCTV Policy: Community Safety Manager, LBB
Information Management Officer, LBB
**Target date:** | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | | o Not available on BarnetWork, the staff intranet (for example the General Site Security Access Procedure); and o Superseded by other policies (for example the Physical Security Policy referred to the Violent or Threatening Procedures document but we were informed this has been superseded by the Violence at Work policy) - Facilities Management procedure documents which were held on BarnetWork were held in a variety of locations and were not on one central page. Having all documents located in one place would assist staff in being able to swiftly locate and refer to them when needed; and - When verifying that procedure documents were still in place we found that some policies: o Had not been reviewed in-line with their review date (for example the CCTV policy had not been reviewed since May 2016 and had been due for review in May 2017); o Had not been updated for a considerable period of time (for example the Violence at Work policy was dated January 2009 and it was not clear when the document was scheduled for review); and o Did not contain either an issue or review date (for example the Facilities Management Custodian Starter Pack for Barnet House). | be discharged by personnel without the prerequisite knowledge or experience resulting in required outcomes not being achieved | 30 September 2018 | (b) The Council’s Communications Team and CSG Estates will work together on agreeing an approach to ensure that all documents are available on Barnet Works and are held within a central location. **Responsible officers:** Internal Communications & Engagement Manager, LBB Acting Facilities Manager, CSG. **Target date:** 30 September 2018 |
See Appendix 3 for a detailed breakdown of our findings.
| 5 | **Notifying customers when incidents are placed on ‘hold’ (Control Design)** Management confirmed that the Hornbill system has the necessary functionality to contact Requestors when there is a change to their request, for example, when a job is placed on hold, but this is not routinely used by Facilities Management staff. | If Customers are not made aware that jobs are put on ‘hold’ then duplicate jobs may be raised or there may be dissatisfaction with the Facilities Management Team | Low | **Agreed Action:** Management will review the mechanisms in place to ensure that all Customers are made aware when their requests have been paused or delayed. **Responsible officer:** Acting Facilities Manager, CSG. **Target date:** Implemented |
See Appendix 3 for a detailed breakdown of our findings. | Ref | Finding | Risks | Risk category | Agreed action | |-----|---------|-------|---------------|---------------| | 6 | **Expenses (Control Design)** | If Council evidence of approval for expenses is not kept on file then it may not be able to demonstrate that the reimbursed monies were validly spent on Facilities Management materials. | Low | **Agreed Action:** Submissions to the Council will include a line documenting expenses that have been incurred. **Responsible officer:** Finance Manager, CSG **Target date:** Implemented |
CSG Management informed us that expenses for Facilities Management Staff (e.g. mileage) are reclaimed from Capita and are not reclaimed from the Council through any other mechanism. However, CSG Management informed us that expenses relating to the procurement of materials are loaded into Concur (the system used to approve expenses by CSG Estates), approved by a senior manager in CSG and subsequently reclaimed through a monthly report to the Head of Estates, LBB.
Facilities management confirmed that only two expenses were reclaimed within the six months to January 2018 with a total sum of £104.03.
See Appendix 3 for a detailed breakdown of our findings.
### Appendix 1: Definition of risk categories and assurance levels in the Executive Summary
| Risk rating | Definition | |-------------|------------| | **Critical** | Immediate and significant action required. A finding that could cause: | | • Life threatening or multiple serious injuries or prolonged work place stress. Severe impact on morale & service performance (e.g. mass strike actions); or | | • Critical impact on the reputation or brand of the organisation which could threaten its future viability. Intense political and media scrutiny (i.e. front-page headlines, TV). Possible criminal or high profile civil action against the Council, members or officers; or | | • Cessation of core activities, strategies not consistent with government’s agenda, trends show service is degraded. Failure of major projects, elected Members & Senior Directors are required to intervene; or | | • Major financial loss, significant, material increase on project budget/cost. Statutory intervention triggered. Impact the whole Council. Critical breach in laws and regulations that could result in material fines or consequences. | | **High** | Action required promptly and to commence as soon as practicable where significant changes are necessary. A finding that could cause: | | • Serious injuries or stressful experience requiring medical many workdays lost. Major impact on morale & performance of staff; or | | • Significant impact on the reputation or brand of the organisation. Scrutiny required by external agencies, inspectorates, regulators etc. Unfavourable external media coverage. Noticeable impact on public opinion; or | | • Significant disruption of core activities. Key targets missed, some services compromised. Management action required to overcome medium-term difficulties; or | | • High financial loss, significant increase on project budget/cost. Service budgets exceeded. Significant breach in laws and regulations resulting in significant fines and consequences. | | **Medium** | A finding that could cause: | | • Injuries or stress level requiring some medical treatment, potentially some workdays lost. Some impact on morale & performance of staff; or | | • Moderate impact on the reputation or brand of the organisation. Scrutiny required by internal committees or internal audit to prevent escalation. Probable limited unfavourable media coverage; or | | • Significant short-term disruption of non-core activities. Standing orders occasionally not complied with, or services do not fully meet needs. Service action will be required; or | | • Medium financial loss, small increase on project budget/cost. Handled within the team. Moderate breach in laws and regulations resulting in fines and consequences. | | **Low** | A finding that could cause: | | • Minor injuries or stress with no workdays lost or minimal medical treatment, no impact on staff morale; or | | • Minor impact on the reputation of the organisation; or | | • Minor errors in systems/operations or processes requiring action or minor delay without impact on overall schedule; or | | • Handled within normal day to day routines; or | | • Minimal financial loss, minimal effect on project budget/cost. |
| Level of assurance | Definition | |-------------------|------------| | **Substantial** | There is a sound control environment with risks to key service objectives being reasonably managed. Any deficiencies identified are not cause for major concern. Recommendations will normally only be Advice and Best Practice. | | **Reasonable** | An adequate control framework is in place but there are weaknesses which may put some service objectives at risk. There are Medium priority recommendations indicating weaknesses but these do not undermine the system’s overall integrity. Any Critical recommendation will prevent this assessment, and any High recommendations would need to be mitigated by significant strengths elsewhere. | | **Limited** | There are a number of significant control weaknesses which could put the achievement of key service objectives at risk and result in error, fraud, loss or reputational damage. There are High recommendations indicating significant failings. Any Critical recommendations would need to be mitigated by significant strengths elsewhere. | | **No** | There are fundamental weaknesses in the control environment which jeopardise the achievement of key service objectives and could lead to significant risk of error, fraud, loss or reputational damage being suffered. | Appendix 2 – Analysis of findings
| Area | Critical | High | Medium | Low | Total | |-----------------------------|----------|------|--------|-----|-------| | | D | OE | D | OE | D | OE | D | OE | | | Resolving Facilities Incidents | - | - | 1 | - | 1 | - | 2 | | | | Budgets | - | - | 1 | 1 | 1 | - | 2 | | | | Policies and procedures | - | - | - | - | 1 | - | 2 | | | | Total | - | - | 2 | 2 | 2 | - | 6 | | |
\*Includes two findings relating to control design and operating effectiveness
Key:
- Control Design Issue (D) – There is no control in place or the design of the control in place is not sufficient to mitigate the potential risks in this area.
- Operating Effectiveness Issue (OE) – Control design is adequate; however, the control is not operating as intended resulting in potential risks arising in this area.
Timetable
| Terms of reference agreed: | Fieldwork commenced: | Fieldwork completed: | Draft report issued: | Management comments received: | Final report issued: | |---------------------------|----------------------|----------------------|----------------------|-----------------------------|---------------------| | 29 November 2017 | 29 November 2017 | 19 March 2018 | 23 March 2018 | 13 June 2018 | 25 June 2018 |
## Appendix 3 – Identified controls
| Area | Objective | Risks | Identified Controls | |-----------------------------|---------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------| | Resolving Facilities Incidents | All incidents logged in relation to Facilities Management (FM) building services are carried out in an efficient and timely manner and in accordance with agreed timescales. The FM Support Works software used to log and monitor facilities management incidents supports incident resolution and the reporting of KPI CSG/C25. | If Facilities Management incidents are not identified captured and resolved then the conditions of the buildings may deteriorate and the health and safety of the buildings and their occupants may be compromised. There may also be dissatisfaction with the FM service. | **KPI CSG C25 (Incident Resolution)**<br>The Facilities Management Team report on incident resolution through KPI CSG 25 (Incident Resolution). The KPI is reported as a percentage of jobs completed within the appropriate reporting category (e.g. Emergency 30 mins, Urgent 4 hours, etc) divided by the total number of jobs received in each category. In October of 2017/18 an outturn of 100% was reported against this KPI. **Control Design Issue**<br>- We found there was no documented guidance or agreement to define expectations regarding the reporting categories as per the KPI definition sheet. At the time of fieldwork 119 jobs had been reported and all had been given a ‘P4’ rating which required a 48-hour closure medium.<br>- We were informed that jobs were placed ‘on hold’ but found there was no consistent explanation regarding what constituted a reasonable ‘pause’ reason and length, with officers able to pause jobs for an indeterminate length of time.<br>**See Finding 1.** | | Hornbill System | Staff report facilities incidents via the Hornbill system which became operational in October 2017. The system is accessed through BarnetWork, the LBB intranet, and allows staff to raise facilities management requests as well as report issues for rectification. A document - Barnet Estates Self-Service User Guide - has been produced to assist staff in logging requests using the Hornbill system. Members of the Facilities Management Team review the request to ensure it has been correctly been completed by the customer. Where necessary they the Team can reprioritise the priority number. Each priority number has a specified time limit, under which the job should be completed to meet the KPI obligation (for example, P4 has an expected resolution time of 48 hours) | | Facilities Management attend the site and consider whether the job can be completed themselves or require an external contractor to be used. The Facilities Management Team with the necessary permissions within Hornbill can place tasks on 'pause' where the incident will be delayed due to factors considered outside the control of the Team (for example, a contractor is required or the Team await the delivery of parts). Only staff with the necessary permissions can pause jobs but they can be paused for any length of time.
Where a job is placed on hold the Facilities Team can put in a narrative within the system for the requestor to view when the log into Hornbill. Alternatively, an email can be sent to the requestor via Hornbill.
Once jobs are resolved, they are closed within Hornbill by the Facilities Management Team
Control Design Issue
- Managements confirmed that the Hornbill system has the necessary functionality to ensure that Requestors are contacted when pause has been put on an incident; however, at the time of fieldwork we could not find evidence of Faculties Management contacting requestors when jobs were placed on hold; and.
- We found there was no consistent explanation regarding what constitutes a reasonable ‘pause’ reason and length.
Operating Effectiveness Issues
We selected 11 jobs within Hornbill from September and October and noted the following issues:
- 1/11 (9 %) incident was reported as closed but had not been resolved. The incident related to an access card not working. Management confirmed that this job required the input of the Landlord and is therefore outside the control of Facilities Management and was closed on Hornbill. We considered that the incident should have been placed on hold until it was able to be sufficiently rectified. Management confirmed the issue has been escalated with Comer but there is no agreed protocol in place for agreeing resolutions with the landlord. The issue was raised on 29/11/2017 but had not been rectified at the end of January 2018.
- 1/11 (9 %) related to a potential health and safety issue regarding a chair. Although this job was resolved in 0.6 hours, it had not been escalated to a higher priority and was classed as a ‘Priority 4’ incident which required 48-hour turnaround time.
- 1/11 (9 %) related to a request which required the procurement of materials and required two people to be present at the site. We found that the job was placed on hold for 19 days. Management confirmed that some of this delay was due to a key member of staff being on annual leave which delayed the acquisition of parts and two officers not being available to complete the job.
Note: The Hornbill system went 'live' in October 2017 and, at the time of our fieldwork, had only been implemented for under two months. We have therefore been able to verify how embedded the system is in the long-term.
See Findings 1 and 5.
External contractors – authorisation of payments
Where an external contractor needs to attend the site, these are typically done by approved contractors. The Facilities Manager requests that a purchase order is raised for an initial sum of £250 which is later approved by the Head of Building Services or Head of Estates,
The contractor completes a 'Permit to Work' form when they attend the site. The form is signed by the contractor to ensure that he has taken all the safety precautions and read the site rules.
The contractor raises an invoice. If the invoice is under £250 then a member of the Property and Facilities Support pay the invoice. For involves of £250 or over the Acting Facilities Manager approves the invoice before it is paid on Integra.
Control Design Issue
- We considered that there was no routine oversight of payments under £250 by the Facilities Management Team after the invoice had been raised.
- We found that there was no clear audit trail to reconcile jobs raised on Hornbill with corresponding Purchase Orders and Invoices.
Operating Effectiveness Issue
We selected five jobs within Hornbill which required a contractor or attend the Managed/Maintained Estate to complete the service request. We noted that:
- For 3/5 (60 %) service requests we could not effectively match purchase orders numbers or invoices to jobs within Hornbill;
- For 1/5 (20 %) jobs we could find evidence of two invoices which were for the same amount and same job completed date in addition to many similar details within narrative fields. Due to the lack of audit trail between jobs raised on Hornbill and invoices we were unable to conclusively state whether payment had been made twice for the same job; and
- For 4/5 (80%) we could not be supplied with evidence of Facilities Management approval to pay the invoice.
We were provided with a list of 9 invoices which had been paid between Oct and Dec of 2017 to RGE, an external contractor frequently used by the FM team. Only one job was over £250. We could not be provided with Facilities Management approval to pay this invoice, in-line with expectations described to us.
See Finding 2.
External contractors - Permit to Work Form
The contractor completes a 'Permit to Work' form when they attend the site. The form is signed by the contractor to ensure that he has taken all the safety precautions and read the site rules.
Control Design Issue
- We found that there was no clear audit trail to reconcile jobs raised on Hornbill with Permit to Work forms.
Operating Effectiveness Issue
We selected five in which a contractor attended the Managed/Maintained Estate to complete the served request. We noted that:
- For 3/5 (60 %) requests we were provided with Permit to Work forms but the date written on the form did not reconcile with the date the job was closed on Hornbill. We considered this could be due to us not being supplied the correct Permit to Work form or the job had been closed on Hornbill before the work had been completed.
See Finding 2. | Budgets | Effective budget monitoring is in place to identify under and over-spends. Management identify budgetary savings and take subsequent action to ensure they are realised. | | --- | --- | | **If the budgets are not monitored regularly then inappropriate spend may not be identified and appropriate action to address over or under-spends cannot be taken in a timely manner.** | | **If budgetary savings are not identified and subsequently achieved then the service may incur unnecessary expenditure and face budgetary pressure.** |
**Budget Monitoring Cycle**
Management confirmed that there is a monthly budget monitoring cycle in place.
- CSG send the Client Lead for CSG Estates a spreadsheet containing the actuals and budgets for financial year to date.
- The CSG Operational Manager and the Client Lead for CSG Estates (meet to discuss the spreadsheet and its contents. Any discrepancies between budget and actual are discussed along with any identification for potential savings. There is an expectation that the Head of Estates, LBB, and Head of Building Services, CSG, attend the meeting quarterly.
- The CSG Operations Manager and/or Client Lead for CSG Estates compiles a list of actions resulting from the meeting and circulates these to attendees
- Monthly Estates Service Performance Reports contains a section on managed budgets which documents a breakdown of budget, forecasts and any variance for the financial year to date.
**Control Design Issue**
- We found there was a lack of clarity regarding the formal identification of Budget Holders and Budget Managers for Facilities Management. At different times of the audit we were informed that the Budget Holder was the Head of Estates (LBB) or the Interim Acting Head of Facilities Management (CSG) and the Budget Manager was Director of Estates (CSG) or the Operation Manager (CSG).
**Operating Effectiveness Issue**
We selected three months within 2017/18 (September, November and January of financial year 2017/18) and asked to see evidence to ensure that that monthly budget monitoring was happening in line with our expectations.
- For 1/3 (33 %) months we could not be supplied with evidence of budgets versus actuals being collated and forwarded to the budget holders;
- For 1/3 (33 %) months we could not find evidence of CSG meeting with the Client Lead for CSG Estates meeting with the CSG Operations Manager; and
- For 1/3 (33 %) months we could not be supplied with evidence of any actions being raised as a result of the meeting.
See Finding 3. | Policies and procedures | If policies and procedures are not in place or are unclear then there is a risk that activity may be undertaken inappropriately or inconsistently resulting in required outcomes not being achieved and the objectives of the Schedule 1 (Output Specification)) of the CSG contract contains a set of Facilities Management services which are to be provided by the Service Provider (CSG). Policies and procedures are formulated by the Facilities Management Team and approved. Where applicable they are uploaded onto BarnetWork, the Employee Portal, for Staff to access and refer to when necessary. For policies which do not require all Barnet staff to have access to as the intended audience is Barnet staff, policies and process documents are accessible through the Facilities Management shared drive or circulated by email to the Facilities Management Team. Policies and process documents are updated when required, (e.g. the documents require an annual review or when new systems and/or processes become operational). Operating Effectiveness Issues We chose seven areas from the output specification and asked to see evidence of the policies and procedures in place to support delivery of the Customer Support Group contract. | |---|---| | If expense reimbursements are made inappropriately then budget overspends may occur and impact on service provision | Expenses We were informed that expenses from Facilities Management Staff (e.g. mileage) are reclaimed from Capita and the Acting Facilities Manager confirmed that these are not reclaimed from the Council through any mechanism. Expenses relating to procurement of materials are reclaimed by loading into Concur (the system used to approve expenses by CSG Estates). There is then approval a senior manager in CSG and the monies subsequently reclaimed through an end of year to report to the Client Lead of CSG Estates and included as an end of year ‘true up’ (payment to CSG). Facilities management confirmed that only two expenses were reclaimed from Facilities Management budgets within the six months to January 2018 with a total sum of £104.03 Control Design Weakness - Management confirmed that the expenses were included in figures which were presented to the Head of Building Services but the level of detail in the report did not allow for the clear identification of the £104.03. See Finding 6. | effectively to officers including new starters and agency staff
Policies and procedures detail the responsibilities of key personnel in operations
Council may not be realised.
If policies and procedures are not available or not communicated to relevant staff then there is a risk that activity may be undertaken inappropriately or inconsistently resulting in required outcomes not being achieved.
If policies and procedures do not refer officers to the appropriate role/team where applicable then decisions or responsibilities may be discharged by personnel without the prerequisite knowledge or experience resulting in required outcomes not being achieved.
We found that where polices and procedure document were available on the intranet but found them located in three different locations on the intranet and considered they should be kept on one page to ensure that staff can easily access all the required documents.
We also noted the following issues within the table below.
| Area | Detailed Findings | |-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------| | Security Services - Static | We were informed that this area was detailed in the following policies: | | | - **Physical Security Policy.** The policy contains a list of 12 further polices within the appendix. We noted the following issues: | | | o 3/12 (25%) policies did not cover the whole of the Managed/Maintained estate | | | ▪ General Site Security Access Procedures only covered procedures for North London Business Park (NLBP) and Barnet House (BH); | | | ▪ Dynamic Lockdown Procedures only covered BH and Hendon Town Hall (HTH); and | | | ▪ Fire and Bomb Evacuation Procedures only covered NLBP and BH. | | | o 4/12 (33%) policies were past their review date or issued a substantial time ago | | | ▪ The Violence at Work policy was dated January 2009. We considered the policy should be reviewed and up-issued due to the length of time which has passed; | | | ▪ The General Site Security Access Procedure was last updated in 2013. We considered the policy should be reviewed and up-issued due to the length of time which has passed; | | | ▪ The CCTV policy which is issued by the Information Management Team was due for review in May 2017 but had not been updated; and | | | ▪ The Dynamic Lockdown Procedures did not have any date of issue. | | | o 2/12 (17%) policies could not be found on BarnetWork, the Council’s intranet pages. These documents were: | | | ▪ The General Site Security Access Procedure; and | | | ▪ The Starter, Movers and Leavers Procedure | | | o 1/12 (8%) policies referred to the incorrect name of a document: | | Fire Management | - **Facilities Management Custodian Starter Pack.** We noted the following issues:\
o The pack is only designed for custodians operating in BH and does not incorporate details about the other Managed/Maintained estate sites. Management confirmed that the Starter Pack was recently formulated for BH but would now be adapted for the other Managed/Maintained estate sites; and\
o The pack does not have an issue date confirming when it is due for review.
- **General Site Security Policy.** We noted the following issues:\
o The policy only referred to NLBP and BH;\
o The document was last updated in 2013. We considered the policy should be reviewed and up-issued due to the length of time which has passed; and\
o The policy was not available on BarnetWork, the London Borough of Barnet staff intranet.
- **Facilities Management Welcome Pack for New Employees.** There is a pack for NLBP, BH, HTH, Mill Hill (MH) but not Oakleigh Depot (OD). We noted the following issues:\
o The pack for NLBP needs a refresh as it currently shows the evacuation point as BH; and\
o There is no welcome back for Oakleigh Depot (OD)
- **Facilities Management Custodian Starter Pack.** The pack contains a list of fire wardens, weekly fire alarm test procedures and fire evacuation policies as well as custodian responsibility in the event of a fire. We noted the following issues:\
o The pack is only designed for custodians operating in BH and does not incorporate details about the other Managed/Maintained estate sites. Management confirmed that the Starter Pack was recently formulated for BH but would now be adapted for the other Managed/Maintained estate sites; and\
o The pack does not have an issue date or date to confirm when it will be due for review; and | | Reactive repairs and maintenance | We were informed that this area was detailed in the following policies: | |----------------------------------|---------------------------------------------------------------------| | | - **The Term Maintenance Contract 2014-2017.** The document defines actions to be taken by all reactive repairs contractors. We noted the following issue: | | | o The policy is dated 2014 – 2017 and could be considered as out of date during our fieldwork in early-2018. Management confirmed that the policy was current but there will be a retendering of contractors in 2018 at which point the policy will be updated to reflect any changes resulting. | | | - **Facilities Management Custodian Starter Pack.** The pack documents actions to be taken by Custodians when there a reactive repair or maintenance is required. We noted the following issues: | | | o The pack is only designed for custodians operating in BH and does not incorporate details about the other Managed/Maintained estate sites. Management confirmed that the Starter Pack was recently formulated for BH but would now be adapted for the other Managed/Maintained estate sites; and | | | o The pack does not have an issue date confirming when it is due for review. |
| Recyclable Waste | We were informed that this area was detailed in the following policies: | |------------------|---------------------------------------------------------------------| | | - **Facilities Management Custodian Starter Pack.** We noted the following issues: | | | o The pack is only designed for custodians operating in BH and therefore only contains collection points for BH, not other Managed/Maintained estate buildings | | | o The pack does not have an issue date confirming when it is due for review. | | | - **Facilities Management Welcome Pack for New Employees.** We noted the following issued: | | | o The document refers to the old incident resolution website, not the Hornbill system which became operational in October 2017. |
- **Poster campaign and First Team updates.** We found evidence of a poster campaign which was distributed to staff as well as First Team weekly email updates which documented actions to be taken by Employees regarding recycling.
| Car Parking | We were informed that there was only a requirement for parking policies at NLBP and BH and were supplied with parking policies for both sites. We noted the following issues: | |-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | - We considered the Facilities Management Welcome Pack for New Employees should be updated to included reference to the relevant parking policies. |
| Goods in | Management confirmed the Goods Facility is no longer operational within NLBP and all other sites within the Managed/Maintained estate do not require one. | |----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | For NLBP goods are delivered to Reception and a sign-ion sheet documents delivery and collection of packages. As such management confirmed a formal policy was not required. We considered this reasonable. |
| Statutory testing and inspection | Facilities Management staff confirmed that the only areas of statutory testing and inspection they are responsible for Portable Application Testing and communication with the Landlord, Comer Homers to ensure jobs are completed. This is outlines in the Output Specification under PS016 and BS002 and, therefore, an additional policy was not required. | |---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | We accepted this as being reasonable |
See Finding 4. Appendix 4 – Internal Audit roles and responsibilities
Limitations inherent to the internal auditor’s work We have undertaken the review of Facilities Management subject to the limitations outlined below.
Internal control Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.
Future periods Our assessment of controls is for the period specified only. Historic evaluation of effectiveness is not relevant to future periods due to the risk that:
- the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
- the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors It is management’s responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry out additional work directed towards identification of consequent fraud or other irregularities. However, internal audit procedures alone, even when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as internal auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which may exist.
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aa898b9bce0ab2b63c0de9c99d935c9967d2371c | Internal Audit Report
Key Financial Controls Payroll (non-schools) March 2018
To: Chief Executive Interim Assistant Chief Executive HR Strategic Lead Interim Director of Resources Head of Finance
Copied to: Finance Director, CSG Operations Director, CSG HR Director, CSG Operations Director, CSG HR Assistant Director of Finance, CSG HR Team Leader, CSG Payroll Team Manager, CSG
We would like to thank management and staff of the CSG Payroll and Finance teams for their time and co-operation during the course of the internal audit.
Cross Council Assurance Service
# Table of Contents
1. Executive Summary .................................................. 2
2. Summary of results and assurance ratings ......................... 3
3. Detailed operating effectiveness results .......................... 4
4. Control design recommendations .................................. 13
5. Follow-up on 2016/17 control design recommendation .......... 15
Appendix A: Definition of risk categories and assurance levels in the Executive Summary 18 Appendix B: Background and context ................................ 19 Appendix C: Internal Audit roles and responsibilities ............... 20
1. Executive Summary
Introduction The review of key financial controls has been agreed in the Internal Audit and CAFT Plan 2017-18.
Background & context As part of this review we confirmed and updated our prior year understanding of the key controls operating within Barnet’s key financial systems to ensure that our work is up to date and relevant. We then devised an overarching programme of testing across the different systems and processes to give assurance on the effectiveness of these key controls.
This report summarises the audit work undertaken covering the period from 1 February 2017 to 31 December 2017 over non-schools’ payroll.
Our work has now been completed in line with the Terms of Reference. We have found that the control environment has deteriorated in the period, with control operating exceptions noted in eight areas (three in 2016/17) and control design exceptions noted in four areas (two in 2016/17).
This report consists of the following sections:
- **Part 1**: Executive Summary – provides background and context to the report.
- **Part 2**: Summary of Results - sets out an overview of the number of findings and assurance ratings for each individual system;
- **Part 3**: Detailed Operating Effectiveness Results - explains in detail the exceptions we found for each test area where we found non-compliance with the intended controls;
- **Part 4**: Control Design Recommendations - highlights the areas where the design of controls could be improved to enhance the control environment or to improve efficiency; and
- **Part 5**: Follow up on 2016/17 control design recommendations - sets out in detail a control design issue raised in 2016/17 and confirms if the recommendation has been implemented.
2. Summary of results and assurance rating
| Department | Overall Opinion 2017/18 | Overall Opinion 2016/17 | Direction of Travel | Number of controls tested | Controls where operating exceptions were found | Control design exceptions found | Comments | |---------------------|-------------------------|-------------------------|---------------------|---------------------------|-----------------------------------------------|--------------------------------|--------------------------------------------------------------------------| | Non-schools’ payroll | Limited | Reasonable | | 11 | 8 | 3 | 4\* 2 |
*The two control design issues noted in the previous period have not yet been fully resolved.* 3. Detailed operating effectiveness results
1. Non-schools Payroll
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|--------------------------------------------------------------------------------|------------|-------------------| | P1 | Payroll reconciliation between payroll and GL (control performed by the Finance team) | 2 | Control Operating Effectiveness – Medium Risk | | | Reconciliations are performed on a monthly basis. They are performed by an appropriate member of the finance team and reviewed by a senior member of the finance team. | 100% | We requested a sample of two reconciliations performed between 1 February 2017 and 31 December 2017 (the reconciliations for August and December 2017). We were informed that due to staffing pressures, this did not take place on a monthly basis during 2017/18. A reconciliation between payroll and the general ledger is carried out as part of year end finance processes. |
Management Response and Agreed Action:
Management will reinstitute a monthly process for 2018/19 to ensure that the payroll system and general ledger are reconciled and any discrepancies are investigated in a timely manner.
Responsible Officer:
Payroll Team Manager
Target date:
31/07/2018 | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | P2 | Reconciliation of payment runs to BACS listings | 1 50% | **Control Operating Effectiveness – Low Risk**\
We requested a sample of two reconciliations performed between 1 February 2017 and 31 December 2017 (the reconciliations for August and December 2017). We identified the following exceptions:
- 1/2 (50%) of BACS secondary authorisations viewed was not dated, and as such we were unable to tell whether this authorisation took place in a timely manner.\
An additional issue was identified, as the reconciliation process usually includes agreeing BACS listings through Control Total Reports to the final BACS transmission amount. In December 2017, the Control Total Report was not produced. This has been raised as an exception under control P8.\
**Agreed Actions:**\
The process notes within the monthly payroll processing runsheet will be updated to mandate that preparers and reviewers both sign and date the reconciliation documentation to demonstrate timely reconciliation of the payment run to the BACS listings.\
**Responsible Officer:**\
Payroll Team Manager\
**Target date:**\
31/07/2018 | | P3 | Starter form | 3 12% | **Control Design and Operating Effectiveness – Medium Risk**\
A sample of 25 starter forms processed between 1 February 2017 and 31 December 2017 were tested. We identified the following exceptions:
- 2/25 (8%) starters had starter forms which were prepared and authorised by the same person. As a result, there was no segregation of duties in place around these starter requests. In both cases, the authoriser was the relevant budget holder.
- 1/25 (4%) starters had no starter form relating to the period of employment under review. The individual had previously been employed by Barnet and had re-joined in the same post, however there was a five-month period in between where they had not been a Council employee. A starter form should exist for each discrete period of employment. The HR business partner for the service area provided email evidence that a form had been requested, however as the form was to be returned to the HR Admin inbox rather to the HR business partner, there was no mechanism in place for non-completion to be identified or followed up on. See control design finding in section 4 below.\
**Agreed Actions:** | | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | | | 1. | The new starter form will be amended to explicitly require two different signatories to demonstrate segregation of duties around preparation and approval of new starter requests and ensure that no forms can be processed without evidence of this. | | | | 2. | A starter form will be retrospectively created relating to the individual in our sample who did not have a new starter form. |
**Responsible Officer:** Payroll Team Manager
**Target Date:** 31/08/2018 | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | P4 | Leaver form | 4 | **Control Operating Effectiveness – Medium Risk**<br>A sample of 25 leavers between 1 February 2017 and 31 December 2017 were tested. We identified the following exceptions:<br>• 3/25 (12%) leaver forms were completed and authorised after the leaving date. No overpayments to these leavers were noted.<br>• 1/25 (4%) leaver form was undated. As such, it cannot be confirmed whether the request and authorisation occurred before or after the individual’s leaving date.<br>These exceptions are because managers in the Council have not followed procedure. The exceptions are thus outside of the payroll team’s control, as the payroll team cannot action leavers until they are notified.<br><strong>Agreed Actions:</strong><br>1. Management will remind staff of the importance of submitting leaver forms prior to the leaving date.<br>2. As agreed in the Non-Schools Payroll audit in June 2017, CSG Management will report on the instances of late Leaver Form submissions and the financial impact of these late submissions to Council management.<br>3. Management will consider the introduction of sanctions for managers who are unable to demonstrate that there was a valid reason not to send a form in prior to the leaving date (e.g. the employee left without giving notice). This could be linked to managers’ corporate objectives around managing budgets.<br><strong>Responsible Officer:</strong><br>Payroll Team Manager<br><strong>Target Date:</strong><br>31/08/2018 | | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | P5 | Standing data form | 1 4% | **Control Operating Effectiveness – High Risk**<br>A sample of 25 changes to standing data processed between 1 February 2017 and 31 December 2017 were tested. This sample included ten movers’ forms, nine changes to bank details and six salary/hours changes. We identified the following exception:<br>• 1/25 (4%) of bank details changes were not supported by documentation. An amendment to bank details was made so that a severance payment with a value of £6,630 would be made to a relative of the employee, however this amendment was requested by the relative rather than the employee. There was no evidence that the employee had confirmed this request, or that there was Power of Attorney in place which would allow the relative to make this request on their behalf.<br><br>**Agreed Actions:**<br>Written guidance around changes to standing data will be developed (see finding P13), which will highlight that no changes can be made to bank or address details without the explicit, written agreement of the individual concerned, or their legal proxy. The process of drafting the guidance will include consideration of whether the existing controls are sufficiently robust. If control weaknesses are noted, additional controls will be put in place to strengthen the process.<br><br>**Responsible Officer:**<br>Payroll Team Manager<br><br>**Target Date:**<br>31/08/2018 | | P6 | System access | Not tested – control design issue identified | **Control Design – Medium Risk**<br>The control design issue identified during 2016/17 has not been remedied and we were not able to test the operation of this control. See section 5 of this report for details. | | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | P7 | Exception reports | 0 | No exceptions noted. | | | The system generated exception report indicating unusual payments (i.e. excessively large payments, multiple payments made to the same employee, etc.) is investigated and resolved prior to payment distribution on a monthly basis. Monthly checks are done by administrators, team leader and payroll manager. | | | | P8 | Control total reports | 1 | Control Operating Effectiveness – Low Risk | | | The system generated control total report showing cumulative amount payable to third parties (e.g. HMRC, give as you earn, pension) is prepared each month and compared to payments made and the general ledger. | 50% | 1/2 (50%) of control total report reconciliations requested had not been performed. The December 2017 control total report was not available to review and management confirmed that one had not been produced. We confirmed that the January 2018 report could be agreed back to the November 2017 report and that no discrepancies were noted. As such there was no financial impact on the Council as a result of this omission. | | | | | Agreed Actions: | | | | | The process notes within the monthly payroll processing runsheet will be updated to mandate that the Control Total report for each month is saved within the payroll team's shared drive. | | | | | Responsible Officer: | | | | | Payroll Team Manager | | | | | Target Date: | | | | | 31/08/2018 | | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | P9 | Overtime payments | Not tested – control design issue identified | **Control Design – Medium Risk**<br>The control design issue identified during 2016/17 has not been remedied and we were not able to test the operation of this control. See section 5 of this report for details. | | P10 | Sick Pay | Not tested – control design issue identified | **Control Design – Medium Risk**<br>A control design issue has been identified relating to this control. See section 4 below for details. | | P11 | Holiday Pay | Not tested | The control covering holiday pay adjustments within the terms of reference for this review does not operate as described. The only circumstances in which pay is adjusted relating to holidays are when people leave the organisation and are paid in lieu of untaken holiday, or have their final pay adjusted to reflect where they have taken more holiday than they are entitled to. The total value of pay in lieu of holiday in 2017/18 was £119,615. Given the fact that unusually large payments would be identified and investigated through the exception reporting process (control P7), management do not consider holiday pay adjustments to be a key payroll control. | | Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | P12 | Overpayments | 3 | **Control Operating Effectiveness – Medium Risk**<br> We requested a sample of five overpayments between 1 February 2017 and 31 December 2017, with a value of £13,635. The total value of known overpayments in the period was £98,103. We identified the following exceptions:<br> - 1/5 (20%) of overpayments were not chased within three months of the notification date of the overpayment and had not yet been repaid at the date of audit. This overpayment had a value of £3,371.<br> - 1/5 (20%) of overpayment chaser letters requested a repayment amount that did not agree to the amount owed (there was a difference of £388 between the two figures). The full amount was received and as a result there was no monetary impact.<br>We were also provided with evidence that one overpayment which did not form part of our sample with a value of £1,854 was absorbed by the budget holder as it was due to an error on the part of HR/payroll and they did not feel that it was fair to require repayment from the former member of staff. No evidence was provided to demonstrate that payroll staff verified that this was a legitimate and approved write-off or that the budget holder had the authority to make this decision before closing the chasing process for this debt. In addition, no evidence was provided that the Council’s HR Lead had been alerted that an error had been made by HR/payroll that had a financial impact on the Council.<br><br>**Agreed Actions:**<br> 1. LBB will agree a clear documented approach for chasing debt and follow this in all cases.<br> 2. Debt chasing letters will be completed using blank templates, rather than by rolling forward earlier letters, to avoid errors in the amount of repayment being sought.<br> 3. Where overpayments are not recoverable and this is due to HR/payroll errors, a clear agreement will be reached on where the cost of any losses should be borne.<br> 4. Council management will establish, in conjunction with the Council’s S151, its position for recovery of overpayments and write-offs. CSG will include reporting of any overpayments and the recovery progress in monthly performance reporting.<br><br>**Responsible Officer:**<br>Payroll Team Manager and Strategic HR Lead<br><br>**Target Date:**<br>30/09/18 | | P13 | Policies and procedures | 58% | Control Operating Effectiveness – Medium Risk | |-----|-------------------------|-----|---------------------------------------------| | | Policies and procedures are reviewed regularly to ensure they are accurate, complete and kept up to date. Policies and procedures are clearly documented and communicated to staff. | | Management provided us with the following policy and procedure documentation: | | | | | - Monthly payroll processing runsheet | | | | | - Unified Reward Policy | | | | | - Absence Management Policy | | | | | All of these had been updated within the last two years. These documents covered or referred to 5/12 (42%) controls tested: | | | | | - P2 – BACS reconciliation | | | | | - P7 – exception reporting | | | | | - P8 – control totals | | | | | - P9 – overtime payments | | | | | - P10 – sick pay | | | | | 7/12 (58%) of the controls reviewed at audit were not covered by the policies and process documents provided: | | | | | - P1 - reconciliation between payroll and general ledger | | | | | - P3 – starters | | | | | - P4 – leavers | | | | | - P5 – changes to standing data | | | | | - P6 – systems access to Core | | | | | - P11 – holiday pay | | | | | - P12 - overpayments | | | | | **Agreed Actions:** | | | | | Existing policies and process documents relating to Payroll will be reviewed by the Council and updated to reflect the current legislative context and practice at the Council. Where areas are identified which are not covered by current policies and procedures, management will create process notes to ensure that the Council’s approach to payroll can be clearly communicated to staff and continuity of practice can be maintained in the event of staff turnover. All policies will be reviewed on an annual basis and updated if necessary. | | | | | **Responsible Officer:** | | | | | Payroll Team Manager | | | | | **Target Date:** | | | | | 31/08/2018 |
### 4. Control design recommendations identified March 2018
| Control Ref | Detailed finding | Agreed Action | |-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | P3 | **Payroll – new starter forms**\
On occasion, the addition of new individuals to payroll is expedited to meet payroll deadlines for the month without a new starter form having been received. A form should still be created for all new starters and all new starter forms should be returned to the HR Admin inbox. As this process is usually used to trigger the addition of a new staff member to payroll, if a staff member has already been added to payroll there is no mechanism to identify non-completion of the new starter form. | Management will enforce the requirement that no new starters are added to payroll unless a new starter form has been received. This will apply to last minute additions to payroll where exceptions have historically been made and no exceptions will be tolerated in future. |
| Risk | Responsible Officer | Target date | |---------------------------------------------------------------------|---------------------------|-------------| | In the absence of the formal new starter process being carried out, people may be added to payroll without formal authorisation by budget holders, and key information about staff members may not be held within the system. | Payroll Team Manager | 31/07/2018 | | Control Ref | Detailed finding | Agreed Action | |-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | P10 | **Payroll – sick pay**\
Sick leave should be authorised by managers within Core. Evidence should be retained to demonstrate authorisation. There is no consistent mechanism for retention of sickness certification documentation across departments. Payroll are not consistently able to access underlying sickness certification documentation signed off by managers, and as a result they are not able to verify the accuracy of sick leave dates within Core.\
CSG Payroll management confirmed that at the moment there is no facility for Managers to upload evidence directly to Core. Managers are responsible for the record keeping in relation to absence and as such may therefore keep records at a local level. Some choose to send documents to HR, but this is not required. | Management will require all sick leave documentation to be sent to HR to ensure that supporting evidence for sick leave is retained centrally and an audit trail can be maintained. |
| Risk | Responsible Officer | Target date | |------|---------------------|-------------| | In the absence of underlying sick leave documentation, sickness payments may be made on the basis of inaccurate or incorrectly certified information and management may not be able to gain assurance over the accuracy of information provided through Core. | Strategic HR Lead | 30/09/18 |
## 5. Follow-up on 2016/17 control design recommendation
| P6 | **Payroll - system access to Core – Medium Risk** | |----|--------------------------------------------------| | | We reviewed a report of employees who have access to Core, the Council’s payroll system. The report was dated 1 February 2017 and showed the last login date for each user along with their access rights. The payroll system access report is not regularly reviewed to ensure that access has only been granted to appropriate members of staff. Management stated that the Service Delivery Manager (Non-schools’ payroll) had undertaken an exercise in October 2016 following the recommendation in the prior year report. However, the Service Delivery Manager has left and evidence of the review could not be provided. Currently this procedure is not assigned to anyone. The system access report obtained during the audit showed 36 open users. The Operations Director stated that at the time of the audit these users’ access rights were appropriate based on their roles and responsibilities. This finding was raised in the previous year but there is no evidence to confirm that the risk has been addressed. | | | There is a risk that users have inappropriate access rights and are able to make unauthorised changes to the payroll system which could result in fraud, financial loss or employee dissatisfaction. | | | Payroll system access reports, showing all employees who have access to Core, will be run on a periodic basis and reviewed by the service to ensure that access is only granted to appropriate members of staff and where necessary access to the system has been removed. An audit trail of this review will be retained. A new Monthly User Report will be produced that confirms every new starter and leaver in the month on the Barnet Contract and that access rights to Core have been appropriately updated. |
### Follow-up work performed – 2017/18
We requested evidence to demonstrate that a quarterly user access report is sent to each team involved with payroll processing for review and amendment. Management were unable to provide us with evidence that this had happened for the periods requested (covering August and December 2017) and as such we were not able to confirm the operation of this control. Management confirmed that the reviews had happened, however they stated that the relevant emails had been archived before the date of audit. They were able to show us emails relating to a user access review which took place in February 2018. This demonstrated that the action agreed in 2016/17 around retaining an audit trail of user reviews has not been consistently implemented.
Management did not provide evidence of the monthly user reports covering starters and leavers which were agreed as an action in 2016/17.
### Conclusion
**Partially implemented**
**Agreed Actions:**
Payroll system access reports, showing all employees who have access to Core, will be run on a periodic basis and reviewed by the service to ensure that access is only granted to appropriate members of staff and where necessary access to the system has been removed. An audit trail of this review will be retained.
A new Monthly User Report will be produced that confirms every new starter and leaver in the month on the Barnet Contract and that access rights to Core have been appropriately updated.
**Revised Implementation date:** 31/08/2018
**Responsible Officer:** Payroll Team Manager | Detailed finding 2016/17 | Risk | Agreed action | |--------------------------|------|---------------| | **P9 Payroll - Overtime payments – Medium Risk** | Payroll process inappropriate or fraudulent overtime payments that have not been approved by the appropriate manager resulting in financial loss to the Council. | a) Both CSG management and Council management will investigate the possibility of creating a more automated process using the Core HR Portal that ensures all payments for overtime hours worked have been approved by the line manager and payroll have oversight of this to ensure that only appropriate overtime payments are processed.\
b) Finance will run overtime reports to highlight who has received overtime payments to identify any unexpected or unusual overtime payments. Exceptions will be reported back to payroll. |
Overtime payments should be authorised in line with the scheme of delegation prior to payment. Evidence should be retained to demonstrate authorisation. Overtime payments between 1 October 2016 and 31 January 2017 amounted to £386,461.
The overtime payments process is currently very manual. There is no consistent mechanism of recording, authorising and progressing overtime for payment across departments. Generally, we found:
- An officer will complete an overtime sheet detailing the overtime worked and the line manager will sign this as approved; and
- These forms are then sent to an employee within the department in question for them to collate the overtime into one spreadsheet. This spreadsheet is then sent to the payroll team to be processed. There is no independent review of the spreadsheet against what the managers have approved and so there is a risk that inappropriate and unauthorised overtime payments are stated on the spreadsheet due to error or fraud.
As a result of the above process the payroll team do not see who originally authorised the overtime and are unable to check it was appropriately authorised by an officer with prerequisite delegated authority.
CSG management have stated that the functionality exists within the Core HR Portal for submitting and approving overtime.
Payroll management stated that finance review a monthly report showing how much overtime has been paid and to whom. This is a potential way for unusual overtime payments to be identified and challenged. However, there is no evidence that demonstrates these reports have been run monthly, scrutinised and the exceptions fed back to payroll. Management also stated that revenue budgetary monitoring will partially mitigate the risk by helping management to identify unusual payments or material changes in payroll.
______________________________________________________________________
**Follow-up work performed – 2017/18**
We requested evidence to demonstrate that the issues identified at audit in 2016/17 had been remedied. Management confirmed that it is now possible to approve overtime within Core, however system users confirmed that there is an issue within the process which means that overtime which is not approved within a short window of time disappears from the system and has to be re-entered into Core. This overtime can then end up being recognised in the incorrect period. Due to this issue, Core is not currently being used to process overtime payments by all service areas. As such, the first recommendation is deemed not to have been fully implemented.
**Conclusion**
**Partially implemented**
**Agreed Actions:**
a) A workshop will be carried out with service areas which are not currently processing overtime through Core to ensure that barriers to use of the system are understood and that mitigating actions can be identified. The total value of overtime payments in 2017/18 amounted to £1,061,687.
Monthly exception reports (P7) are carried out which will identify variances of over £100, including overtime payments, for investigation. This is deemed to be an adequate control in this area and the second recommendation is deemed to have been implemented.
| b) A subsequent plan will be discussed and agreed with the Council to mandate a standardised control process across the Council for overtime. **Revised Implementation date:** 30/09/2018 | |---| | **Responsible Officer:** Payroll Team Manager |
### Appendix A: Definition of risk categories and assurance levels in the Executive Summary
| Risk rating | Definition | |-------------|------------| | **Critical** | Immediate and significant action required. A finding that could cause: | | • Life threatening or multiple serious injuries or prolonged work place stress. Severe impact on morale & service performance (e.g. mass strike actions); or | | • Critical impact on the reputation or brand of the organisation which could threaten its future viability. Intense political and media scrutiny (i.e. front-page headlines, TV). Possible criminal or high profile civil action against the Council, members or officers; or | | • Cessation of core activities, strategies not consistent with government’s agenda, trends show service is degraded. Failure of major projects, elected Members & Senior Directors are required to intervene; or | | • Major financial loss, significant, material increase on project budget/cost. Statutory intervention triggered. Impact the whole Council. Critical breach in laws and regulations that could result in material fines or consequences. | | **High** | Action required promptly and to commence as soon as practicable where significant changes are necessary. A finding that could cause: | | • Serious injuries or stressful experience requiring medical many workdays lost. Major impact on morale & performance of staff; or | | • Significant impact on the reputation or brand of the organisation. Scrutiny required by external agencies, inspectorates, regulators etc. Unfavourable external media coverage. Noticeable impact on public opinion; or | | • Significant disruption of core activities. Key targets missed, some services compromised. Management action required to overcome medium-term difficulties; or | | • High financial loss, significant increase on project budget/cost. Service budgets exceeded. Significant breach in laws and regulations resulting in significant fines and consequences. | | **Medium** | A finding that could cause: | | • Injuries or stress level requiring some medical treatment, potentially some workdays lost. Some impact on morale & performance of staff; or | | • Moderate impact on the reputation or brand of the organisation. Scrutiny required by internal committees or internal audit to prevent escalation. Probable limited unfavourable media coverage; or | | • Significant short-term disruption of non-core activities. Standing orders occasionally not complied with, or services do not fully meet needs. Service action will be required; or | | • Medium financial loss, small increase on project budget/cost. Handled within the team. Moderate breach in laws and regulations resulting in fines and consequences. | | **Low** | A finding that could cause: | | • Minor injuries or stress with no workdays lost or minimal medical treatment, no impact on staff morale; or | | • Minor impact on the reputation of the organisation; or | | • Minor errors in systems/operations or processes requiring action or minor delay without impact on overall schedule; or | | • Handled within normal day to day routines; or | | • Minimal financial loss, minimal effect on project budget/cost. |
| Level of assurance | Definition | |-------------------|------------| | **Substantial** | There is a sound control environment with risks to key service objectives being reasonably managed. Any deficiencies identified are not cause for major concern. Recommendations will normally only be Advice and Best Practice. | | **Reasonable** | An adequate control framework is in place but there are weaknesses which may put some service objectives at risk. There are Medium priority recommendations indicating weaknesses but these do not undermine the system’s overall integrity. Any Critical recommendation will prevent this assessment, and any High recommendations would need to be mitigated by significant strengths elsewhere. | | **Limited** | There are a number of significant control weaknesses which could put the achievement of key service objectives at risk and result in error, fraud, loss or reputational damage. There are High recommendations indicating significant failings. Any Critical recommendations would need to be mitigated by significant strengths elsewhere. | | **No** | There are fundamental weaknesses in the control environment which jeopardise the achievement of key service objectives and could lead to significant risk of error, fraud, loss or reputational damage being suffered. | Appendix B: Background and context
As part of this review we confirmed and updated our prior year understanding of the key controls operating within Barnet’s key financial systems to ensure our work is up to date and relevant. We then devised an overarching programme of testing across the different systems and processes to give assurance on the effectiveness of these key controls.
CAM is the process of on-going testing of key controls to assess whether they are operating effectively, and to flag areas and report transactions that appear to circumvent control parameters. We use a combination of manual testing and data mining tools to extract data from the IT system, using pre-determined parameters to check that controls are operating as designed.
CAM helps to provide regular and timely assurance over the financial systems and informs our opinion of the adequacy and effectiveness of these systems at the year end. Our testing under continuous auditing and monitoring provides the following benefits:
- Gives management assurance over the operation of key controls during the year;
- Control weaknesses can be addressed during the year rather than after the year end; and
- The administrative burden on management is reduced when compared with a full system review, in areas where there is sufficient evidence that key controls are operating effectively.
This approach has been agreed as part of the 2017/18 Internal Audit programme and developed in consultation with the owners and operators of the relevant systems. The controls we have tested have been identified through a combination of industry knowledge, historic audit findings and workshops with the key contacts and system owners. All controls have been identified using a risk-based approach. Appendix C – Internal Audit roles and responsibilities
Limitations inherent to the internal auditor’s work We have undertaken the review of Key Financial Controls - Payroll, subject to the limitations outlined below.
Internal control
Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.
Future periods
Our assessment of controls is for the period specified only. Historic evaluation of effectiveness is not relevant to future periods due to the risk that:
- the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
- the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors
It is management’s responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry out additional work directed towards identification of consequent fraud or other irregularities. However, internal audit procedures alone, even when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as internal auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which may exist.
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9d433a4bcd4c6cbf159bacfe50c40612c93d1e40 | Internal Audit Report
Key Financial Controls Accounts Payable and Accounts Receivable December 2017
To: Deputy Chief Executive Director of Finance Head of Finance Finance Manager
Copied to: Operations Director, CSG Finance Director, CSG Assistant Director of Finance, CSG Head of Exchequer Services, CSG
Cross Council Assurance Service
# Table of Contents
1. Executive Summary ........................................... 2
2. Summary of results and assurance ratings .................. 3
3. Detailed operating effectiveness results .................... 4
4. Control design recommendations ............................ 13
5. Follow-up on 2016/17 control design recommendations .... 16
Appendix A: Definition of risk categories and assurance levels in the Executive Summary 17 Appendix B: Background and context .......................... 18 Appendix C: Internal Audit roles and responsibilities ........ 19
1. Executive Summary
Introduction The review of key financial controls has been agreed in the Internal Audit, CAFT and Risk Management Plan 2017-18. This review focused on key controls in place across a number of financial systems that are integral to the Council's day to day operation.
Background & context As part of this review we confirmed and updated our prior year understanding of the key controls operating within Barnet's key financial systems to ensure our work is up to date and relevant. We then devised an overarching programme of testing across the different systems and processes to give assurance on the effectiveness of these key controls.
This report summarises the audit work undertaken under Phase 1 of the 2017/18 Key Financial Systems audits, covering the period from 1 April 2017 to 31 October 2017 across the following areas:
- Accounts Payable;
- Accounts Receivable;
Pensions Administration has been subject to a full risk-based review in December 2017. Council Tax and NNDR have been reported separately as part of Phase 1.
Our work has now been completed in line with the Terms of Reference.
This report consists of the following sections:
- **Part 2**: Summary of Results - sets out an overview of the number of findings and assurance ratings for each individual system;
- **Part 3**: Detailed Operating Effectiveness Results - explains in detail the exceptions we found for each test area where we found non-compliance with the intended controls;
- **Part 4**: Control Design Recommendations - highlights the areas where the design of controls could be improved to enhance the control environment or to improve efficiency; and
- **Part 5**: Follow up on 2016/17 control design recommendations - sets out in detail a control design issue raised in 2016/17 and confirms if the recommendation has been implemented.
## 2. Summary of results and assurance ratings
| Number | Department | Overall Opinion 2017/18 | Overall Opinion 2016/17 | Direction of Travel | Number of controls tested | Controls where operating exceptions were found | Control design exceptions found | Total exceptions found | |--------|---------------------|-------------------------|-------------------------|---------------------|---------------------------|-----------------------------------------------|--------------------------------|------------------------| | 1. | Accounts Payable | Limited | Reasonable | | 8 | 1 | 1 | 2 | 0 | 3 | 1 | | 2. | Accounts Receivable | Reasonable | Reasonable | | 8 | 2 | 1 | 1 | 2 | 3 | 3 |
### 3. Detailed operating effectiveness results
#### 1. Accounts Payable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | AP1 | Reconciliation between Accounts Payable (AP) and General Ledger (GL) | 0 | No exceptions identified. | | | Reconciliations are performed between AP and GL which are reviewed and authorised. | | | | AP2 | Three-way match is performed | 0 | No exceptions identified. | | | Three-way match is performed: Automated three-way match, between Purchase Order (PO) or e-form payment request, goods receipt and invoice is completed before payment is made. | | | | | There is an approved scheme of delegation that informs the limits set in Integra. | | | | | Purchase orders are approved in line with the scheme of delegation. | | | | AP3 | Manual payments/Non-PO payments: | 0 | No exceptions identified. | | | An e-form is created and approved in line with the scheme of delegation. | | | | | Manual payments are made in accordance with the approved criteria set out in procedure documents (e.g. Emergency payments, one off payments to suppliers). | | | | AP4 | Potential Duplicate payments | N/A | Control design – High Risk | | | Automated controls are built into the system to mitigate duplicate payments. This includes identifying where attempts are made to progress duplicate invoice numbers for payment. | | | | | We discussed the automated controls within Integra to prevent duplication of invoice details. Because these controls rely on data being entered correctly, they have historically not been very successful at automatically detecting duplicates, and although there are other | | |
### 1. Accounts Payable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | | | | secondary management do not consider them of sufficient robustness to prevent the processing of duplicate invoices. | | | | | Every two years CAFT (Corporate Anti-Fraud Team) co-ordinate the relevant service uploads data to the Cabinet Office for the NFI data matching exercise. In relation to a ‘duplicate payments’ match the Accounts Payable team upload the requested data from Integra directly to the NFI portal which results in the Cabinet Office sending matches back that relate to possible duplications. However, a high volume of potential matches are received from the NFI making it difficult to identify any true duplicate payments and CAFT have found that the high number of false duplicates identified make it uneconomical to investigate these transactions. Due to the same data issues, the Accounts Payable team have not been able to perform their own review of data to identify duplicate invoices submitted for payment. | | | | | **Agreed Actions:** | | | | | 1) CSG Finance will investigate the introduction of third-party software or fit for purpose automated controls will be built into the system to identify, report and prevent duplicate payments. This will include identifying where attempts are made to progress duplicate invoice numbers for payment and a formal exception reporting and resolution process. | | | | | 2) Working with relevant stakeholders, including Commissioning Group Finance, CAFT, CSG procurement and delivery units, a data cleanse of Integra vendor data will be performed to ensure that the data is of an appropriate quality to successfully support the automated controls (1) and also the NFI and/or other data matching exercises- including in house exercises. These actions (1) and (2) will be completed well in advance of the next NFI data uploads in September 2018 | | | | | **Responsible Officers:** | | | | | Head of Exchequer Services, CSG |
Note: there are no detective controls, outside of the annual National Fraud Initiative (NFI) data matching exercise, to identify potential duplicate payments made. The service relies on the system alerting them to duplicates.
## 1. Accounts Payable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | | | | **Target Date:** | | | | | 31/07/2018 | | **AP5** | **New supplier form** | | No exceptions identified. | | | A new suppliers form is completed which is signed by an appropriate individual. E-forms have been introduced as an alternative method for the creation of suppliers. Access to supplier standing data is restricted, controlled and monitored to ensure only limited people can add new suppliers and segregation is enforced. | | 0 | | **AP6** | **Supplier bank account amendments** | | No exceptions identified. | | | A supplier bank account changes form is completed with evidence of the new account details attached. Access to supplier standing data is restricted, controlled and monitored to ensure only limited people can amend supplier standing data and segregation is enforced. | | 0 |
## 1. Accounts Payable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | AP7 | BACs Reconciliation | 25/100% | **Control operating effectiveness – High risk**<br>Out of a sample of 25 BACS runs 25 exceptions were found. Each BACS run is prepared by the AP team and then sent to the Capita Group Payments team who confirm the total amount paid by email. While management were able to provide the confirmation emails from Capita, they were not able to provide us with evidence of the preparation of the BACS report or evidence that the BACS amount has been agreed to the confirmation email so we have been unable to confirm appropriate segregation of duties.<br><br>**Agreed Actions:**<br>1) *We will retain evidence of the preparation of each BACS run to ensure that there is an audit trail to demonstrate appropriate segregation of duties.*<br><br>**Responsible Officers:**<br>Head of Exchequer Services, CSG<br><br>**Target Date:**<br>30/4/2018 |
### 1. Accounts Payable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | AP8 | Policies, Procedures and Process notes | Control design – Medium risk | All policies and procedures are held in hard copy within a physical folder within the AP team work area at the Council. The majority of Accounts Payable processing is undertaken remotely in Sussex and Darlington; management should ensure all policies and procedures are uploaded to an appropriate shared drive so employees have remote access to all relevant documents. **Agreed Actions:**
1. *We will ensure that up to date procedure and process documents are made available to all relevant CSG and Capita staff.*
**Responsible Officers:**
Head of Exchequer Services, CSG
**Target Date:**
31/03/2018 |
## 2. Accounts Receivable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | AR1 | Reconciliation | | No exceptions identified. | | | Reconciliations are performed on a regular basis between Accounts Receivable (AR) and the General Ledger (GL). They are performed by an appropriate member of the finance team and reviewed by a senior member of the finance team. | 0 | | | AR2 | Invoice request | | No exceptions identified. | | | There is segregation of duties between invoicing and recording payments which is enforced within Integra. | 0 | | | AR3 | Unallocated receipts account | | Control design – High risk | | | Unallocated money received is placed in an account and investigated on a timely basis. | 25 | 100% | | | The Cashbook Team investigate the unallocated monies but because they do not directly deal with accounts receivable, their investigations are limited to scanning relevant bank statements and following up individual items with the AR team. Items which can’t be traced are left in the suspense account until a debtor calls the Council to query why the Council believes it has not paid its debt. In many cases this does not happen and items are not cleared. A sample of 25 unallocated receipts within the suspense account (total value £559k on 18/12/17) were checked for timely investigation: In 19/25 (76%) of cases, there was no record indicating that the unallocated receipts had been investigated at all. In 6/25 (24%) of cases, while there was some investigation of unallocated receipts this was not followed up or resolved. Therefore, testing was inconclusive and no assurance obtained. | | | | | Agreed Actions: | | 1) We will remind Cashbook officers of the importance of |
### 2. Accounts Receivable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | | | | investigating unallocated debtor amounts using account numbers in Integra, on a monthly basis. | | | | | 2) We will remind Accounts Receivable officers of the importance of supporting cashbook in investigating unallocated debtor amounts using their existing knowledge of debtors. | | | | | 3) We will discuss the possibility of introducing a monthly joint exercise between Cashbook and Accounts Receivable officers to clear off outstanding unallocated debtors in a timely manner. | | | | | **Responsible Officer:** | | | | | Head of Exchequer Services, CSG | | | | | **Target Date:** | | | | | 30/4/2018 |
| AR4 | Refund | Refund requests should be agreed to the original transaction and then reviewed and authorised in line with the allocated limits. | No exceptions identified. |
| AR5 | Credit notes | Credit note requests should be agreed to the original transaction and then authorised in line with the allocated limits. | No exceptions identified. |
## 2. Accounts Receivable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | AR6 | Aged debt chasing | | **Control operating effectiveness** | | | An aged accounts receivable report is generated on a regular basis. Overdue debts are investigated and follow the set chasing method dictated by the type of debt and the age of the debt. | | A sample of 25 aged debtor items between 1 April 2017 and 31 October 2017 was checked for appropriate investigation. We found: | | | | | - In 4/25 (16%) cases, the aged debtor items had not been investigated in accordance with the relevant chasing method. | | | | | **Agreed Actions:** | | | | | 1) *We will remind accounts receivable officers of the importance of chasing overdue debtor items in line with the standard debt recovery procedure.* | | | | | **Responsible Officer:** | | | | | Head of Exchequer Services, CSG | | | | | **Target Date:** | | | | | 31/03/2018 |
## 2. Accounts Receivable
| Control Ref | Control Tested | Exceptions | Exception details | |-------------|----------------|------------|-------------------| | AR7 | Authorisation of write offs | 2 | Control operating effectiveness\
AR write offs happen on an annual basis as part of the year end AR process. We reviewed a sample of 25 write offs from 2016/17 and noted two exceptions:
- In 1/25 (4%) cases, there was no preparer signature on the form so segregation of duties could not be confirmed. No preparation date was given so it could not be determined whether authorisation was performed after preparation.
- In 1/25 (4%) cases the date of preparation of the write-off form was not stated, so it could not be determined whether authorisation was performed after preparation.\
Agreed actions
1. We will remind accounts receivable officers of the importance of signing and dating the write off request forms.\
Responsible Officer:\
Head of Exchequer Services, CSG\
Target Date:\
31/03/2018 | | AR8 | Policies and procedures | 0 | No exceptions identified. |
Policies and procedures are reviewed regularly to ensure they are accurate, complete and kept up to date. Policies and procedures are clearly documented and communicated to staff.
### 4. Control design recommendations identified in Phase 1 2017/18
| Control Ref | Detailed finding | Agreed action | |-------------|------------------|---------------| | **High risk** | | | | AP4 | **Accounts Payable – Potential Duplicate Payments**<br>We discussed the automated controls within Integra to prevent duplication of invoice details. Because these controls rely on data being entered correctly, they have historically not been very successful at automatically detecting duplicates, and although there are other secondary controls management do not consider them of sufficient robustness to prevent the processing of duplicate invoices.<br><br>Every two years CAFT (Corporate Anti-Fraud Team) co-ordinate the relevant service uploads data to the Cabinet Office for the NFI data matching exercise. In relation to a ‘duplicate payments’ match the Accounts Payable team upload the requested data from Integra directly to the NFI portal which results in the Cabinet Office sending matches back that relate to possible duplications. However, a high volume of potential matches are received from the NFI making it difficult to identify any true duplicate and CAFT have found that the high number of false duplicates identified make it uneconomical to investigate these transactions. Due to the same data issues, the Accounts Payable team have not been able to perform their own review of data to identify duplicate invoices submitted for payment. | 1) CSG Finance will investigate the introduction of third-party software or fit for purpose automated controls will be built into the system to identify, report and prevent duplicate payments. This will include identifying where attempts are made to progress duplicate invoice numbers for payment and a formal exception reporting and resolution process.<br><br>2) Working with relevant stakeholders, including Commissioning Group Finance, CAFT, CSG procurement and delivery units, a data cleanse of Integra vendor data will be performed to ensure that the data is of an appropriate quality to successfully support the automated controls (1) and also the NFI and/or other data matching exercises- including in house exercises.<br><br>These actions (1) and (2) will be completed well in advance of the next NFI data uploads in September 2018. |
| Risk | Responsible Officer | Target date | |------|---------------------|-------------| | There is a risk that duplicate payment requests for the same invoice will be paid leading to financial loss to the Council, which may not be able to recover these monies. | Head of Exchequer Services, CSG | 31/7/2018 | | Control Ref | Detailed finding | Agreed Action | |-------------|------------------|---------------| | High risk | | | | AR3 | **Control design – High risk**<br>The Cashbook Team investigate the unallocated monies but because they do not directly deal with accounts receivable, their investigations are limited to scanning relevant bank statements and following up individual items with the AR team. Items which can’t be traced are left in the suspense account until a debtor calls the Council to query why the Council believes it has not paid its debt. In many cases this does not happen and items are not cleared.<br>A sample of 25 unallocated receipts within the suspense account (total value £559k on 18/12/17) were checked for timely investigation:<br>In 19/25 (76%) of cases, there was no record indicating that the unallocated receipts had been investigated at all.<br>In 6/25 (24%) of cases, while there was some investigation of unallocated receipts this was not followed up or resolved.<br>Therefore, testing was inconclusive and no assurance obtained. | 1) **We will remind Cashbook officers of the importance of investigating unallocated debtor amounts using account numbers in Integra, on a monthly basis.**<br>2) **We will remind Accounts Receivable officers of the importance of supporting cashbook in investigating unallocated debtor amounts using their existing knowledge of debtors.**<br>3) **We will discuss the possibility of introducing a monthly joint exercise between Cashbook and Accounts Receivable officers to clear off outstanding unallocated debtors in a timely manner.** |
| Risk | Responsible Officer | Target date | |------|---------------------|-------------| | There is a risk that monies coming in to the Council remain unallocated. Therefore, debts remain open and the Council incurs a cost to recover the funds inappropriately and potentially damages relationships with customers or residents. | Head of Exchequer Services, CSG | 30/4/18 |
## 5. Follow-up on 2016/17 control design recommendations
| Detailed finding – January 2017 | Management Response | |---------------------------------|---------------------| | **1. Unallocated receipts account**<br>We confirmed with the Income and Cashier Manager that the investigation and allocation of monies within the unallocated payments control account had not occurred in the period subject to testing. This was attributed to staff turnover and an alternative officer not being nominated to perform the control. Therefore, we could not evidence that there had been appropriate review and investigation of the items within it. | An officer has been appointed and the performance of this control has been allocated accordingly and is now in operation. |
| Follow-up work performed – December 2017 | Conclusion | |------------------------------------------|------------| | While there have been some changes to the operation of this control, which now sits with the Cashbook team (see AR4 above for details), we noted that in practice the control was not operating effectively and monies within the unallocated payments account had not been investigated or allocated effectively in the period under review. | Partially implemented<br>Agreed actions: see AR4 above. |
| Detailed finding – January 2017 | Management Response | |---------------------------------|---------------------| | **2. Refunds**<br>We confirmed with the Income and Cashier Manager that the AR team do not have the appropriate system functionality to enable oversight of the refunds processed to allow for appropriate and effective monitoring. For example, the team is unable to review who has processed or authorised refunds issued. We were, therefore, unable to evidence that refunds were appropriately reviewed and authorised prior to payment. | Management will seek to resolve system access or system functionality issues to enable the AR team to review whether refunds have been appropriately reviewed and authorised prior to payment through the Integra User Group. |
| Follow-up work performed – December 2017 | Conclusion | |------------------------------------------|------------| | In the course of our testing (see AR4) management were able to demonstrate who had reviewed and authorised refunds. Management now have the appropriate system functionality to enable oversight of refunds. | Implemented. |
### Appendix A: Definition of risk categories and assurance levels in the Executive Summary
| Risk rating | Definition | |-------------|------------| | **Critical** | Immediate and significant action required. A finding that could cause: | | • Life threatening or multiple serious injuries or prolonged work place stress. Severe impact on morale & service performance (e.g. mass strike actions); or | | • Critical impact on the reputation or brand of the organisation which could threaten its future viability. Intense political and media scrutiny (i.e. front-page headlines, TV). Possible criminal or high profile civil action against the Council, members or officers; or | | • Cessation of core activities, strategies not consistent with government’s agenda, trends show service is degraded. Failure of major projects, elected Members & Senior Directors are required to intervene; or | | • Major financial loss, significant, material increase on project budget/cost. Statutory intervention triggered. Impact the whole Council. Critical breach in laws and regulations that could result in material fines or consequences. | | **High** | Action required promptly and to commence as soon as practicable where significant changes are necessary. A finding that could cause: | | • Serious injuries or stressful experience requiring medical many workdays lost. Major impact on morale & performance of staff; or | | • Significant impact on the reputation or brand of the organisation. Scrutiny required by external agencies, inspectorates, regulators etc. Unfavourable external media coverage. Noticeable impact on public opinion; or | | • Significant disruption of core activities. Key targets missed, some services compromised. Management action required to overcome medium-term difficulties; or | | • High financial loss, significant increase on project budget/cost. Service budgets exceeded. Significant breach in laws and regulations resulting in significant fines and consequences. | | **Medium** | A finding that could cause: | | • Injuries or stress level requiring some medical treatment, potentially some workdays lost. Some impact on morale & performance of staff; or | | • Moderate impact on the reputation or brand of the organisation. Scrutiny required by internal committees or internal audit to prevent escalation. Probable limited unfavourable media coverage; or | | • Significant short-term disruption of non-core activities. Standing orders occasionally not complied with, or services do not fully meet needs. Service action will be required; or | | • Medium financial loss, small increase on project budget/cost. Handled within the team. Moderate breach in laws and regulations resulting in fines and consequences. | | **Low** | A finding that could cause: | | • Minor injuries or stress with no workdays lost or minimal medical treatment, no impact on staff morale; or | | • Minor impact on the reputation of the organisation; or | | • Minor errors in systems/operations or processes requiring action or minor delay without impact on overall schedule; or | | • Handled within normal day to day routines; or | | • Minimal financial loss, minimal effect on project budget/cost. |
| Level of assurance | Definition | |-------------------|------------| | **Substantial** | There is a sound control environment with risks to key service objectives being reasonably managed. Any deficiencies identified are not cause for major concern. Recommendations will normally only be Advice and Best Practice. | | **Reasonable** | An adequate control framework is in place but there are weaknesses which may put some service objectives at risk. There are Medium priority recommendations indicating weaknesses but these do not undermine the system’s overall integrity. Any Critical recommendation will prevent this assessment, and any High recommendations would need to be mitigated by significant strengths elsewhere. | | **Limited** | There are a number of significant control weaknesses which could put the achievement of key service objectives at risk and result in error, fraud, loss or reputational damage. There are High recommendations indicating significant failings. Any Critical recommendations would need to be mitigated by significant strengths elsewhere. | | **No** | There are fundamental weaknesses in the control environment which jeopardise the achievement of key service objectives and could lead to significant risk of error, fraud, loss or reputational damage being suffered. | Appendix B: Background and context
As part of this review we confirmed and updated our prior year understanding of the key controls operating within Barnet’s key financial systems to ensure our work is up to date and relevant. We then devised an overarching programme of testing across the different systems and processes to give assurance on the effectiveness of these key controls.
Continuous Audit Methodology (CAM) is the process of on-going testing of key controls to assess whether they are operating effectively, and to flag areas and report transactions that appear to circumvent control parameters. We use a combination of manual testing and data mining tools to extract data from the IT system, using pre-determined parameters to check that controls are operating as designed. Phase 1 of the programme covered 4 systems in 2017/18 for a testing period of 01/04/2017 – 31/10/2017, which were all tested previously as part of CAM phase 1 in 2016/17:
- Accounts Payable
- Accounts Receivable
- Council Tax
- NNDR
Council Tax and NNDR have been reported separately.
CAM helps to provide regular and timely assurance over the financial systems and informs our opinion of the adequacy and effectiveness of these systems at the year end. Our testing under continuous auditing and monitoring provides the following benefits:
- Gives management assurance over the operation of key controls during the year;
- Control weaknesses can be addressed during the year rather than after the year end; and
- The administrative burden on management is reduced when compared with a full system review, in areas where there is sufficient evidence that key controls are operating effectively.
This approach has been agreed as part of the 2017/18 Internal Audit programme and developed in consultation with the owners and operators of the relevant systems. The controls we have tested have been identified through a combination of industry knowledge, historic audit findings and workshops with the key contacts and system owners. All controls have been identified using a risk-based approach. Appendix C – Internal Audit roles and responsibilities
Limitations inherent to the internal auditor’s work
We have undertaken the review of Key Financial Controls, subject to the limitations outlined below.
Internal control
Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.
Future periods
Our assessment of controls is for the period specified only. Historic evaluation of effectiveness is not relevant to future periods due to the risk that:
- the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
- the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors
It is management’s responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry out additional work directed towards identification of consequent fraud or other irregularities. However, internal audit procedures alone, even when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as internal auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which may exist.
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0a21b753bd3e509533dbeb71dd06b770c6f16275 | Internal Audit Report
MENORAH HIGH SCHOOL FOR GIRLS 13 July 2017
To: Chair of Governors Headteacher
Copied to: Education and Skills Director Commissioning Director (Children and Young People) School Finance Services Manager (Finance Service) Local Authority Appointed Governor Clerk to Governors
We would like to thank management and staff of Menorah High School for Girls for their time and co-operation during the course of the internal audit.
Cross Council Assurance Service Executive Summary
| Assurance level and Direction of Travel | Number of actions by risk category | |----------------------------------------|-----------------------------------| | Limited | Critical | High | Medium | Low | Advisory | | | - | 1 | 8 | 1 | - |
Background and Scope
The audit of Menorah High School for Girls was carried out as part of the planned School audits for 2017-18. The audit review covered the period April 2016 to June 2017.
Menorah High School for Girls is a Voluntary Aided school with 247 pupils on role aged between 11 and 18 years of age. The School budgeted expenditure for 2017/18 is £1,957,145 with employee costs of £1,659,360 (85% of budgeted expenditure).
The School entered the state sector in April 2016. Prior to this it was an independent school. It has not been inspected by Ofsted. This is the first audit by the Local Authority.
The aim of the audit is to provide assurance on key areas of financial management. The review covered all major systems within the school to ensure compliance with the Scheme for Financing Schools and the Barnet Financial Guide for Schools, including Barnet Contract Standing Orders for Schools.
The scope of the audit included assessment of the following:-
- adequacy of accounting, financial and other controls;
- compliance with established plans and procedures;
- the integrity and reliability of financial and other information;
- whether assets and other interests of the Council are properly safeguarded; and
- whether the use of resources achieves value for money.
In addition to the above, a review of the ‘Schools Financial Values Standard’ (SFVS) self-assessment was conducted to ensure that the self-assessment has been completed in line with requirements. The standard has been designed to assist schools in managing their finances and to give assurance that they have secure financial management in place. Summary of findings
The table provided in Appendix 2 lists the areas audited and the number of recommendations in each area. Definitions of audit assurance levels and risk ratings for the issues identified are provided in Appendix 1.
As part of the audit we were able to give ‘Limited’ Assurance to the school, noting one high, eight medium priority, and one low priority issue as part of the audit:
- **Governance**— The financial management policy and procedures document should be updated and approved by Governors to include delegated financial responsibilities, agreed procedure when using of the school credit card, and reference to Barnet’s Contract Standing Orders for Schools. (Finding one, medium rated);
- **Governance**— The website should be updated to comply with the requirement to publish Governor Details and the Register of interests. (Finding two, medium rated);
- **Budget Monitoring**— The school should set a well-informed and balanced budget each year, including income from Governors if appropriate to reimburse the school funds for costs incurred in the provision of Jewish studies. Committed expenses should be included on Budget monitoring reports. (Finding three, medium rated);
- **Purchasing**— Purchase order forms were not completed for all relevant expenses. These costs are not recorded as a committed expense, and this procedure has not been agreed by the Governors. Procedures when using the school credit card should be reviewed, documented and agreed by Governors to ensure a complete audit trail, separation of duties and proof of receipt of goods. Delivery notes should always be signed. (Finding four, high rated);
- **Contracts**— A signed contract was not available for the security contract. There was no evidence of review of the cleaning contract. Contract specification details for the cleaning contract were not available in school for referral where necessary for contract monitoring purposes. (Finding five, medium rated);
- **Banking and Petty cash**— The school has entered into a finance contract. This is not allowed in the Scheme for financing schools. The school should seek approval for the credit card. Identified posting errors on the bank reconciliation should be cleared on a timely basis. (Finding six, medium rated);
- **Taxation**— The school should seek advice to confirm the correct treatment of VAT. (Finding seven, medium rated);
- **Assets**— The IT inventory was not found to be complete. No dates of purchase, supplier or cost of purchase were noted on the inventory. (Finding eight, medium rated).
- **Pupil Premium**— Pupil premium income and expenditure was not accurately reported and disclosed. (Finding nine, medium rated); Following our ‘Schools Financial Values Standard’ (SFVS) self – assessment review we were able to confirm that there were no major discrepancies in judgements noted, however, although the School has responded with ‘Yes’ or ‘N/A’, in the areas outlined below, it is the opinion of audit that this area has either not been met, or met ‘In-Part’ (refer also to Appendix 3 below):
**A5**: Are business interests of governing body members and staff properly registered and taken into account so as to avoid conflicts of interest? - The school has answered ‘Yes’, but there was no evidence of review of business interests of staff.
**D21**: Are there adequate arrangements in place to guard against fraud and theft by staff, contractors and suppliers? - The school has answered ‘Yes’, but refer to Findings (Purchasing/Assets), which should be addressed to ensure procedures are as robust as possible.
**D23**: Does the school have an accounting system that is adequate and properly run and delivers accurate reports? - The school has answered ‘Yes’, but refer to audit findings (purchasing) where it is noted that purchase orders are not entered as a committed expense.
**D25**: Does the school have an appropriate business continuity or disaster recovery plan, including an up-to-date asset register and adequate insurance? - The school has answered ‘Yes’, but the asset register was not found to be complete.
## 2. Findings, Recommendations and Action Plan
| Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|------------------| | 1. | **Governance**<br>**Objective** – To ensure the responsibilities of the governing body, its committees, the head teacher and staff are clearly defined and limits of delegated authority established; and that management, organisation and arrangements are adequate and effective leading to sound financial decisions. | There is a risk to the effective financial management of the School if, in the absence of an up to date Financial Management and Procedures Policy, Governing Body members and key staff are not able to fulfil their responsibilities consistently. | **Medium** | **Actions:**<br>The Financial Management Policy and Credit card policy will be reviewed and updated with reference to the Barnet Schools Financial Guide. Procedures in school will be reviewed to ensure that the separation of duties is embedded in processes. | | | **Finding** - A review of the current Financial Management Policy and Procedures document found that it does not fully reflect the following:<br>The Governing Body is required to consider the extent to which it wishes to delegate its financial powers to committees, Headteacher and staff. The details of the financial responsibilities and procedures must be set out in the Financial Management Policy;<br>The Governing Body must authorise specific posts to examine, verify and certify invoices and any other payment vouchers or accounts and make them responsible for this having regard to the necessary separation of duties in the ordering and payments process;<br>The Financial Management Policy should state that the school abides by the authority’s Contract Standing Orders for Schools;<br>The Financial Management Policy should refer to the school credit card policy, and the current procedures in place to prevent loss through fraud or misuse; | | | **Responsible officer:**<br>School Business Manager<br><br>**Target date:**<br>Spring 2017/2018 | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | 2. | **Governance**<br>Objective – To ensure the Governors have complied with statutory disclosure requirements.<br>Finding – Governors have a statutory duty to publish on their website their register of interests. The register should set out the relevant business interests of governors and details of any other educational establishments they govern. The register should also set out any relationships between governors and members of the school staff including spouses, partners and relatives. Information on Governors on the website should also include the term of office and the body which appoints them.<br>Although Governors were listed on the website, insufficient information was included to comply with the statutory requirement. | If Governors do not publish their register of interests on their website in a transparent manner for wider scrutiny and challenge, where appropriate, then there is a risk that inaccuracies in registers, if applicable, may not be identified and corrected and Governors may incorrectly take part in decisions in which they have a personal interest.<br>Governing bodies should make it clear in their code of conduct that this information will be published on their governors and, where applicable, their associate members. Any governor failing to reveal information to enable the governing body to fulfil their responsibilities may be in breach of the code of conduct and as a result be bringing the governing body into disrepute. In such cases the governing body should consider suspending the governor. | Medium | Actions:<br>The Governor Details and Register of Interest will be updated on the school website.<br>Responsible officer:<br>School Business Manager<br>Target date:<br>Autumn 2017/2018 | | 3. | **Budget Monitoring**<br>Objective – To ensure that the School carries out regular monitoring of income and expenditure against agreed budgets, providing effective financial management.<br>Finding – Included in the 2016/17 budget under I13 ‘Governor income’ is a figure of £413,470. The school teaches Jewish Studies within the school timetable. Direct staff costs are met by the Foundation Trust, but this contribution to the school budget assumes that an element of the cost of administrative and premises staff, premises costs, administrative supplies, and professional services | The budget may not be adequately controlled and monitored resulting in budget overspends or fraud going undetected. The Governing Body may not be able to discharge its responsibility for effective budget monitoring and control, if accurate and timely information is not provided as required. | Medium | Actions:<br>The School will set a well-informed and balanced budget each year, including income from the Governors if appropriate to reimburse the school funds for full costs incurred in the provision of Jewish studies. These amounts should be quantified and authorised. Committed costs should be included in monitoring reports to allow effective budget monitoring. | are attributable to the delivery of Jewish Studies. There was no information available to confirm the basis of calculation of amounts to be reimbursed by governors, and no confirmation of how actual costs should be reimbursed and paid on a regular basis. No committed expenses were recorded in the budget monitoring report. Evidence was provided at the audit that Budget Vs Actual reports were presented to Finance Governors, however, without committed expenses.
| Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|------------------| | | | | | Responsible officer: | | | | | | School Business Manager | | | | | | Target date: | | | | | | Spring 2017/2018 |
4. **Purchasing**
**Objective** – To ensure that the School’s purchasing, tendering and contracting arrangements achieve value for money
**Finding** – A review of current purchasing arrangements found:
a) The school is not preparing purchase order forms for all items ordered in school. These costs are not recorded as a committed expense, and accurate budget monitoring is not possible.
b) Purchase orders that have been prepared do not comply with the Barnet Financial Guide for schools in that they do not have unique sequential numbers. No audit trail is available to allow an item to be traced from ordering through to payment of the invoice.
c) During our review of paid invoices it was noted that delivery notes had not been signed to confirm quality and quantity of goods received.
d) The school has a school credit card issued to the School Business Manager that is used to purchase school supplies online. The card is noted in the Finance Policy, however, written procedures are not sufficiently detailed to comply with the financial guide for schools section 5.5 – and do not include provision for separation of duties between purchasing, authorising and accounting officers.
There is a risk:
i) That goods and services may be purchased which are not in line with School requirements;
ii) Payments could be made by the School without receiving the goods/services, in the absence of proper verification of receipt;
**Actions:**
The school will ensure that a purchase order is raised for all relevant goods and services and this is approved by an authorised signatory. This expenditure should then be entered as a commitment to the accounting system, prior to the order being placed.
The school will introduce a clear separation of duties to ensure that the same officer is not responsible for authorising the purchase order, invoice and bank payment for the same purchase.
Delivery notes will be signed to evidence checking of goods received. These will be filed with purchase orders and invoices in a systematic manner.
The School will review the credit card policy and use of the school credit cards to ensure that all purchases are reviewed and executed in accordance with requirements as approved within the School’s Financial Management Policy and Procedures document, ensuring at all times that a separation of duties exists between purchase order request, purchase order approval and online payment by credit card, sufficient budget | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | | | | | is available, a record is kept of delivery to the school and that approved purchase orders and credit card order authorisation forms are retained for each purchase for independent review and scrutiny where necessary. | | | | | | **Responsible officer:** School Business Manager | | | | | | **Target date:** Autumn 2017/2018 | | 5. | **Contracts** | | | **Medium** | | | **Objective** – To ensure that the School’s purchasing, tendering and contracting arrangements achieve value for money | | | **Actions:** Signed contracts will be retained for referral where necessary. | | | **Finding** – A signed contract could not be found in school for the security contract. Annual contract value £50,000. Although a signed ‘Agreement for cleaning services’ was held in school – this referred to a ‘cleaning specification’ which was not available for referral, for example should the school wish to scrutinise and challenge specific delivery. Annual cleaning contract value £29,000. | | | For procurement exercises, quotes will be obtained and evaluated in line with ‘Contract standing order for schools.’ Records of quotes and evaluations will be retained for referral and scrutiny. Minutes of meetings will include consideration by governors of quotations for the renewal/procurement of any relevant contract, in order to ensure that there is clear and visible evidence of a fair and transparent selection process. | | | | | | **Responsible officer:** School Business Manager | | | | | | **Target date:** Spring 2017/2018 | | 6. | **Banking and Petty cash** | | | **Medium** | | | **Objective** – To ensure that the school has adequate control over its funds, with regular arrangements for reconciling bank and cash balances. | | | **Actions:** The school will not enter into finance agreements without the appropriate approval from the Secretary of State. The school will apply to the local authority for approval to use a credit card in school. The school will correct errors on the Bank | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | | agreement with Close Brothers Premium Finance to pay the policy with interest in instalments. The Scheme for financing schools section 3.7 states that Governing Bodies may borrow monies, (which includes finance leases) only with the written permission of the Secretary of State. There was no evidence of such permission being granted | There is a risk of penalties by HM Revenue and Customs if the school fails to comply with VAT regulations. The local authority may issue a notice of concern to the governing body of any school where the school has failed to comply with any provision of the scheme for financing schools. | Medium | Actions: Regarding the payment of the legal fees and the related VAT, the school will seek advice from the local authority school finance department and reference to the Barnet Schools Financial Guide, section 8 (Taxation). The appropriate action will be taken to ensure compliance with the relevant statutory requirements. The school will retain VAT invoices as proof of the VAT claimed from HMRC. | | | b) There is a credit card in use in school. To comply with the Financial Guide section 5.5 the school should apply to the local authority for approval to use a credit card in school. There was no evidence of such authorisation being granted. They should approve procedures for use of the card including separation of duties between purchasing, authorising and accounting officers. | | | Responsible officer: School Business Manager | | | c) The bank reconciliation signed by the Headteacher and submitted to the local authority contains two unreconciled items which have been on the bank reconciliation for the last 12 months. The school confirmed that these are accounting entries to be reversed, but no attempt has been made to correct the Bank account balance. | | | Target date: Autumn 2017/2018 | | 7. | **Tax** | | | | | | **Objective** – To ensure that the school has arrangements to comply with the statutory requirement on taxation, including VAT and PAYE. | | | | | | **Finding** – A review of VAT invoices and returns identified: | | | | | | a) The school posted £31,000 legal fees in the accounting year from April 2016 to March 2017. A review of invoices established that a number of these related to professional fees in connection with the Voluntary Aided application. One of the invoices for £9,810 was dated prior to April 2016 when the school entered the state sector. Audit received confirmation from the Schools Finance Manager that Governors should pay the legal costs in connection with the Voluntary Aided application. This would mean that VAT was not recoverable by the School as the VAT invoices were not in their name. | | | | | | b) The school uses an independent firm of accountants to | | | | | | | | | | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | | provide payroll services. An annual fee of £6,250 is budgeted for the year, but valid VAT invoices could not be found at the audit to correspond to the monthly amount paid to the accountants. | Failure to maintain a complete and accurate inventory could result in the School failing to identify possible lost/missing equipment and having insufficient details to provide in the event of an insurance claim. | Medium | Actions: The Inventory will be updated with reference to the Barnet Schools Financial Guide, section 4.8 (Control of Assets) Responsible officer: School Business Manager Target date: Spring 2017/2018 | | 8. | **Assets**\
Objective - To ensure that the school has adequate controls and records to safeguard its valuable/moveable assets and items of inventory.\
Finding - A review of the school's IT inventory found that insufficient details were recorded to comply with the Financial Guide for schools (no note of date of purchase, supplier or cost). There was no evidence of annual review, or Governor authorisation of disposals. | | | | | 9. | **Pupil Premium**\
Objective - To ensure that the school is accurately recording and disclosing the amount of Pupil Premium income and expenditure.\
Finding – The amount of Pupil Premium income was received was low. We found that this had not been correctly identified in the local authority returns and the relevant disclosure was not made on the school website. The school should publish how the school spends its pupil premium funding and the effect this has had on the attainment of the pupils who attract the funding. Pupil premium income should be separately disclosed on the local authority return. | The school may suffer financial and reputational loss as a result of the pupil premium not being fully collected, recorded and appropriately utilised. | Medium | Actions: The school will seek advice to accurately record and disclose Pupil Premium income. An annual report of expenditure and performance will be available on the school website. Responsible officer: Head of Sen Target date: Autumn 2017/2018 |
## Appendix 1: Definition of risk categories and assurance levels in the Executive Summary
| Risk rating | Description | |-------------|-------------| | **Critical** | Critical issue where action is considered imperative. Action to be effected immediately. | | **High** | Fundamental issue where action is considered imperative to ensure that the School is not exposed to high risks, also covers breaches of legislation and policies and procedures. Action to be effected within 1 to 3 months. | | **Medium** | Significant issue where action is considered necessary to avoid exposure to risk. Action to be effected within 3 to 6 months. | | **Low** | Issue that merits attention/where action is considered desirable. Action usually to be effected within 6 to 12 months. |
| Level of assurance | Description | |-------------------|-------------| | **Substantial** | The standard of controls operating in the systems audited at the school is robust and provides substantial confidence that the school is protected from loss, waste, fraud or error. | | **Reasonable** | The standard of controls operating gives reasonable assurance that the school is protected from loss, waste, fraud or error but there may be areas which need to be strengthened to provide robust confidence in the system of internal control. | | **Limited** | The standard of controls is insufficient to give confidence that the school is protected from loss, waste, fraud or error. Prompt attention needs to be given to strengthening one or more areas of the control system before sufficient confidence is provided. | | **No** | The standard of controls is poor and places the school in potential danger of loss from waste, loss, fraud or error. Urgent attention needs to be given by management to addressing weaknesses identified in the audit. | Appendix 2 – Areas audited and analysis of findings
| Area | Critical | High | Medium | Low | Advisory | |-------------------------------|----------|------|--------|-----|----------| | Governance | | | | 2 | | | Financial Planning | | | | | | | Budget Monitoring | | | | 1 | | | Purchasing | | | | 1 | | | Contracts | | | | | | | Income | | | | | | | Lettings | | | | | | | Banking & Petty Cash | | | | 1 | | | Payroll | | | | | | | Tax | | | | 1 | | | Voluntary Funds | | | | | | | Assets | | | | 1 | | | Insurance | | | | | | | Data Security | | | | | | | Pupil Premium | | | | 1 | | | Safeguarding\* | | | | | | | Schools Financial Values Standard | | | | 1 | |
\*Scope limited to confirmation as to whether the school has completed a Safeguarding audit tool and whether any issues were noted over its Single Central Record
**Timetable**
| Audit agreed: | Fieldwork commenced: | Fieldwork completed: | Draft report issued: | Management comments received: | Final report issued: | |---------------|----------------------|----------------------|----------------------|-------------------------------|----------------------| | 8 March 2017 | 26 June 2017 | 27 June 2017 | 6 July 2017 | 13 July 2017 | 13 July 2017 |
## Appendix 3 – Review of Schools Financial Values Standard 16/17
| LIST OF QUESTIONS | SCHOOL RESPONSE | AUDIT CONCLUSION FOLLOWING REVIEW OF COMMENTS AND EVIDENCE | |-------------------|-----------------|----------------------------------------------------------| | **A: The Governing Body and School Staff** | | | | 1. In the view of the governing body itself and of senior staff, does the governing body have adequate financial skills among its members to fulfil its role of challenge and support in the field of budget management and value for money? | Yes | Agreed | | 2. Does the governing body have a finance committee (or equivalent) with clear terms of reference and a knowledgeable and experienced chair? | Yes | Agreed | | 3. Is there a clear definition of the relative responsibilities of the governing body and the school staff in the financial field? | Yes | Agreed | | 4. Does the governing body receive clear and concise monitoring reports of the school’s budget position at least three times a year? | Yes | Agreed | | 5. Are business interests of governing body members and staff properly registered and taken into account so as to avoid conflicts of interest? | Yes | In Part – Business Interests forms were not signed by staff | | 6. Does the school have access to an adequate level of financial expertise, including when specialist finance staff are absent, eg on sick leave? | Yes | Agreed | | 7. Does the school review its staffing structure regularly? | Yes | Agreed | | 8. Have your pay decisions been reached in accordance with a pay policy reflecting clear performance criteria? | Yes | Agreed | | 9. Has the use of professional independent advice informed part of the pay decision process in relation to the headteacher? | Yes | Agreed | | **B: Setting the Budget** | | | | 10. Is there a clear and demonstrable link between the school’s budgeting and its plan for raising standards and attainment? | Yes | Agreed | | 11. Does the school make a forward projection of budget, including both revenue and capital funds, for at least three years, using the best available information? | Yes | Agreed | | 12. Does the school set a well-informed and balanced budget each year (with an agreed | Yes | Agreed | and timed plan for eliminating any deficit)?
| | | |---|---| | 13. Is end year outturn in line with budget projections, or if not, is the governing body alerted to significant variations in a timely manner, and do they result from explicitly planned changes or from genuinely unforeseeable circumstances? | N/A | Agreed |
**C: Value for Money**
| | | |---|---| | 14. Does the school benchmark its income and expenditure annually against that of similar schools and investigate further where any category appears to be out of line? | N/A | Agreed | | 15. Does the school have procedures for purchasing goods and services that both meet legal requirements and secure value for money? | Yes | Agreed | | 16. Are balances at a reasonable level and does the school have a clear plan for using the money it plans to hold in balances at the end of each year? | N/A | Agreed | | 17. Does the school maintain its premises and other assets to an adequate standard to avoid future urgent need for replacement? | Yes | Agreed | | 18. Does the school consider collaboration with others, eg on sharing staff or joint purchasing, where that would improve value for money? | Yes | Agreed | | 19. Can the school give examples of where it has improved the use of resources during the past year? | Yes | Agreed |
**D: Protecting Public Money**
| | | |---|---| | 20. Is the governing body sure that there are no outstanding matters from audit reports or from previous consideration of weaknesses by the governing body? | N/A | Agreed | | 21. Are there adequate arrangements in place to guard against fraud and theft by staff, contractors and suppliers (please note any instance of fraud or theft detected in the last 12 months)? | Yes | Refer to Findings/Recommendations Purchasing/Assets, | | 22. Are all staff aware of the school’s whistleblowing policy and to whom they should report concerns? | Yes | Agreed | | 23. Does the school have an accounting system that is adequate and properly run and delivers accurate reports, including the annual Consistent Financial Reporting return? | Yes | Purchase orders are not entered onto the system as a committed expense | | 24. Does the school have adequate arrangements for audit of voluntary funds? | Yes | Agreed | | 25. Does the school have an appropriate business continuity or disaster recovery plan, including an up-to-date asset register and adequate insurance? | Yes | In Part – Asset register is not complete | Appendix 4 – Internal Audit roles and responsibilities
Limitations inherent to the internal auditor’s work We have undertaken the review of Menorah High School, subject to the limitations outlined below.
Internal control Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.
Future periods Our assessment of controls is for the period specified only. Historic evaluation of effectiveness is not relevant to future periods due to the risk that:
- the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
- the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors It is management's responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry out additional work directed towards identification of consequent fraud or other irregularities. However, internal audit procedures alone, even when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as internal auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which may exist.
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81267136e9c9b8edc4e062396fe3eeb5bcd7e024 | Internal Audit Report
ST PAUL’S CE PRIMARY SCHOOL (N11) 19 March 2018
To: Chair of Governors Headteacher
Copied to: Education and Skills Director Strategic Director (Children and Young People) School Finance Manager (Finance Service) Local Authority Appointed Governor Clerk to Governors
Contact: Internal audit
We would like to thank management and staff of St Paul’s School for their time and co-operation during the course of the internal audit. Executive Summary
| Assurance level and Direction of Travel | Number of actions by risk category | |----------------------------------------|-----------------------------------| | Limited | Critical | High | Medium | Low | Advisory | | | - | 1 | 5 | 2 | - |
Background and Scope
The audit of St Paul’s School was carried out as part of the planned School audits for 2017-18. The audit review covered the period April 2016 to January 2018.
St Paul’s School is a Voluntary aided school with 221 pupils on role aged between 3 and 11 years of age. The School budgeted expenditure for 2017/18 is £1,333,696 with employee costs of £897,183 (67% of budgeted expenditure).
The School was assessed as ‘Good’ by OFSTED in March 2014.
A review of the five recommendations reported in the previous audit report dated 3 February 2014 found that three recommendations had been repeated (Income, After school club and Voluntary funds).
The aim of the audit is to provide assurance on key areas of financial management. The review covered all major systems within the school to ensure compliance with the Scheme for Financing Schools and the Barnet Financial Guide for Schools, including Barnet Contract Standing Orders for Schools.
The scope of the audit included assessment of the following:-
- adequacy of accounting, financial and other controls;
- compliance with established plans and procedures;
- the integrity and reliability of financial and other information;
- whether assets and other interests of the Council are properly safeguarded; and
- whether the use of resources achieves value for money.
In addition to the above, a review of the ‘Schools Financial Values Standard’ (SFVS) self-assessment was conducted to ensure that the self-assessment has been completed in line with requirements. The standard has been designed to assist schools in managing their finances and to give assurance that they have secure financial management in place. Summary of findings
The table provided in Appendix 2 lists the areas audited and the number of recommendations in each area. Definitions of audit assurance levels and risk ratings for the issues identified are provided in Appendix 1.
As part of the audit we were able to give ‘Limited’ Assurance to the school, noting one high, five medium and two low priority issues as part of the audit:
- **Governance**– The school does not have an up to date Financial Procedures Manual to accompany the recently approved Financial Scheme of Delegation. (Finding one, low rated);
- **Purchasing**– Procedures when using the school credit cards should be reviewed, documented and agreed by Governors to ensure a complete audit trail, separation of duties and proof of receipt of goods. Delivery notes should always be signed. (Finding two, medium rated);
- **Contracts**– A signed contract was not available in school for the cleaning contract. No evidence of review of the cleaning contract. Evidence was not retained to confirm compliance with Contract Standing orders for schools when entering into agreements for leased photocopiers. (Finding three, medium rated);
- **Income**– Record keeping for breakfast club income received into the school should be reviewed and updated to comply with the financial guide for schools. Adequate records should be maintained to provide a complete record of payments to date and outstanding debts. A system should be created where a regular review of income is undertaken by a senior member of staff. (Finding four, medium rated);
- **Lettings**– The school should have an up to date signed agreement with regular users of the school premises, stating that they agree to the terms and conditions of hire. Administration arrangements should be adequate and effective. (Finding five, medium rated);
- **Voluntary funds**– The accounting records for the voluntary fund were not available at the audit. It could not be confirmed that the account had been closed subsequent to the last internal audit visit and the balance transferred to the school’s delegated budget. (Finding six, high rated);
- **Assets**– The IT inventory was not found to be complete. No evidence of annual review or Governor Authorisation of disposals. (Finding seven, medium rated).
Following our ‘Schools Financial Values Standard’ (SFVS) self – assessment review we were able to confirm that there were no major discrepancies in judgements noted, however, although the School has responded with ‘Yes’ or ‘N/A’, in the areas outlined below, it is the opinion of audit that this area has either not been met, or met ‘In-Part’ (refer also to Appendix 3 below):
**A5**: Are business interests of governing body members and staff properly registered and taken into account so as to avoid conflicts of interest? - The school has answered ‘Yes’, but there was no evidence of review of business interests of office staff.
**C14**: Does the school benchmark its income and expenditure annually against that of similar schools and investigate further where any category appears to be out of line? - The school has answered ‘Yes, but there was no evidence in school that this was completed annually.
**D20**: Is the governing body sure that there are no outstanding matters from audit reports or from previous consideration of weaknesses by the governing body? - The school has answered ‘Yes’, but three findings from the previous audit have been repeated (Income, After school club and Assets)
**D21**: Are there adequate arrangements in place to guard against fraud and theft by staff, contractors and suppliers? - The school has answered ‘Yes’, but refer to Finding (Purchasing/Income/Voluntary funds/Assets), which should be addressed to ensure procedures are as robust as possible. D24: Does the school have adequate arrangements for audit of voluntary funds? - The accounting records for the Amenities account were not available at the audit.
D25: Does the school have an appropriate business continuity or disaster recovery plan, including an up-to-date asset register and adequate insurance? – The school has answered ‘Yes’, but the asset register was not found to be complete.
## 2. Findings, Recommendations and Action Plan
| Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | 1. | Governance | There is a risk to the effective financial management of the School if, in the absence of an up to date Financial Management and Procedures Policy, Governing Body members and key staff are not able to fulfil their responsibilities consistently. | Low | Actions: The school will approve a Financial Procedures Manual to accompany the Financial Scheme of Delegation. Responsible officer: Headteacher/Governors Target date: Summer term 2018 | | | Objective – To ensure the responsibilities of the governing body, its committees, the head teacher and staff are clearly defined and limits of delegated authority established; and that management, organisation and arrangements are adequate and effective leading to sound financial decisions. | Finding – The school has recently approved a Financial Scheme of Delegation which includes reference to the schools’ Financial Procedures Manual’. The school previously held a Financial Management Policy and Procedures document for internal use, but this has not been kept up to date. No other Financial Procedures Manual was available in school. | | | | | Finding – The school has recently approved a Financial Scheme of Delegation which includes reference to the schools’ Financial Procedures Manual’. The school previously held a Financial Management Policy and Procedures document for internal use, but this has not been kept up to date. No other Financial Procedures Manual was available in school. | | | | | 2. | Purchasing | There is a risk: i) That goods and services may be purchased which are not in line with School requirements; ii) Payments could be made by the School without receiving the goods/services, in the absence of proper verification of receipt; | Medium | Actions: The School will approve a credit card policy and use of the school credit cards to ensure that all purchases are reviewed and executed in accordance with requirements as approved within the School’s Financial Procedures Manual, ensuring at all times that a separation of duties exists between purchase order request, purchase order approval and online payment by credit card, sufficient budget is available, a record is kept of delivery to the school and that approved purchase orders and credit card authorisation forms are retained for each purchase for independent review and scrutiny where necessary. When the Headteacher’s credit card is used, purchases will be countersigned by the Chair of Governors. Delivery notes will be signed to evidence checking of goods received. These will be | | | | Objective – To ensure that the School’s purchasing, tendering and contracting arrangements achieve value for money | Finding – a) The school has school credit cards issued to the Headteacher and Deputy Headteacher that are used to purchase school supplies online. The school credit card policy could not be found during the audit visit. A review of school procedures found that a purchase log was prepared, but this did not allow for separation of duties between purchasing and authorising officer. Confirmation of receipt of goods was not always recorded for credit card purchases. Supplementary guidance issued by the Schools Finance Manager in November 2016 states that where the Headteacher is making the purchase using a credit card, approval for the purchase will be required from the Chair of Governors. This approval was not recorded for purchases made by the former Headteacher. | | | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | b) | During our review of paid invoices it was noted that delivery notes had not been signed to confirm quality and quantity of goods received. | There is a risk that the school may not be seen to be: - Achieving 'value for money'; - Demonstrating that it has acted in a fair and transparent manner when selecting contracts for works and services. Without a formally signed contract confirming acceptance of terms and conditions by all parties, there is a risk that disputes may not be resolved correctly. | Medium | Actions: Signed contracts will be retained for referral where necessary. For procurement exercises, quotes will be obtained and evaluated in line with 'Contract standing order for schools.' Records of quotes and evaluations will be retained for referral and scrutiny. Minutes of meetings will include consideration by governors of quotations for the renewal/procurement of any relevant contract, in order to ensure that there is clear and visible evidence of a fair and transparent selection process. Responsible officer: Headteacher/Governors/Office staff Target date: Next Contract Renewal | | 3. | **Contracts**\
**Objective** – To ensure that the School’s purchasing, tendering and contracting arrangements achieve value for money\
**Finding** – A signed contract could not be found in school for the cleaning contract. Annual contract value £16,500. There was no evidence that alternative quotes had been sought, or any documented review of performance for the cleaning contract. The school has a number of photocopier lease contracts. Although the school advised that a value for money exercise had been undertaken, paperwork was not retained, and there was no evidence of Governor approval where the contract entered into was in excess of £10,000. | | | | | 4. | **Income**\
**Objective** – To ensure that all income due to the school is identified, collected, receipted, recorded and banked promptly and that, administration arrangements are adequate and effective.\
**Finding** – | There is a risk of errors, financial loss and possible fraud or misappropriation of income, in the absence of; -Independent checks to confirm amounts banked agree to source records; | Medium | Actions: Strict income controls and procedures will be put in place to ensure effective financial management. Independent checks should be carried out to verify amounts banked agree to source records. These checks should be visibly evidenced. Reference: | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | a) | Our review of the income system found that attendance records are kept for the breakfast club run by members of staff. Although amounts were seen to be banked, we were unable to evidence reconciliations of the register/receipt record to the amounts that had been paid into the bank. The Financial Guide for schools requires that documentation retained is structured and formal – which will aid considerably in the absence of key staff. It is recommended that the school documents systems, procedures, duties and responsibilities for requesting and recording income from breakfast club. The school should maintain a complete record of payments to date and outstanding debts in a format which is easily updated and visibly reviewed by a senior member of staff on a regular basis. | -Clear audit trails and records for all income due/received. | The Barnet Schools Financial Guide, section 7 (Income collection and administration) | Responsible officer: Headteacher/Office staff | | b) | Detailed records are kept in school to record receipt of money received for school meals. The school advised that two members of staff were involved in checking money banked, but there was no evidence of this check retained for audit purposes. There was no regular documented review of outstanding debts on a regular basis by a senior member of staff. (2016/7 Pupil paying meal income was £23,320.) | | | | | 5. | **Lettings** | | | | | **Objective** – To ensure that all income due from lettings to the school is identified, collected, receipted, recorded and banked promptly and that, administration arrangements are adequate and effective. | | | | | | **Finding** - The school premises are used by external providers. No letting policy was available at the audit. No invoices for lettings were seen to be raised although regular amounts were banked from one user of school premises. The school provided a service agreement document dated July 2017 for use of the premises by KidFit Coaching Services who run an afterschool activity club and Holiday club for ten weeks of the school holidays. The Service agreement provided income to the school £1,200, but the | | | | | | | There is a risk that without formal approval from the Governing Body and comprehensive agreements, disputes and misunderstandings may occur without any point of reference by which to resolve them. | | | | | | There is a risk of errors, financial loss and possible fraud or misappropriation of income, in the absence of; | | | | | | -Independent checks to confirm amounts banked agree to source records; | | | | | | -Clear audit trails and records for all income due/received. | | | | | | | Medium | | | | | | | Actions: | | | | | | The Lettings procedures will be reviewed with reference to the Barnet Schools Financial Guide, section 7.9 (Lettings Policy and Administration). | | | | | | Governors will agree a lettings policy, and formal invoicing procedures will be agreed. | | | | | | All outstanding money to the school will be collected from users of the school premises. | | | | | | Responsible officer: Headteacher/Governors/Office staff | | | | | | Target date: Summer term 2018 | | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|-----------------| | | school were unable to confirm if this amount had been invoiced or received. | | | | | 6. | **Voluntary Funds**\
**Objective** – The audit objective was to ensure that voluntary funds are administered as rigorously as public funds.\
**Finding** – At the date of the last audit in February 2014 it was noted that the school was operating an Amenities account. The audit report stated that the funds had not been audited on an annual basis, and the level of accountability and stewardship was not the same standard as for the School’s delegated budget. In February 2014 the school agreed to close the Amenities account. Due to staff changes in school, records after August 2010 could not be found during the audit visit. | Failure to apply the same standards of financial accounting, which apply to income and expenditure for the school’s delegated budget, could lead to misuse of funds and loss of revenue to the School. | High | **Actions:**\
The school will continue investigations with the support of the Schools Finance Support Service and Governors to locate missing paperwork. If the accounting records are located by the school, then the school will submit audited accounts to Governors in accordance with the Financial Guide for schools section 10. If the accounting records cannot be located by current staff, then the school will obtain records from the school bankers to establish that the Amenities account was closed, and the destination of the final balance. This information will be presented to Governors\
**Responsible officer:**\
Headteacher/Governors/Office staff\
**Target date:** Summer term 2018 | | 7. | **Assets**\
**Objective** - To ensure that the school has adequate controls and records to safeguard its valuable/moveable assets and items of inventory.\
**Finding** - A review of the school’s IT inventory, found that insufficient details were recorded to comply with the Financial Guide for schools (no note for all assets of cost or date of purchase.) There was no evidence of annual review, or Governor approval of disposals | Failure to maintain a complete and accurate inventory could result in the School failing to identify possible lost/missing equipment and having insufficient details to provide in the event of an insurance claim. | Medium | **Actions:**\
The Inventory will be updated with reference to the Barnet Schools Financial Guide, section 4.8 (Control of Assets). Annual check will be completed and Governors will approve disposals.\
**Responsible officer:**\
Headteacher/Governors/Caretaker | | Ref | Finding | Risks | Risk category | Agreed action(s) | |-----|---------|-------|---------------|------------------| | | | | | **Target date:** Summer term 2018 |
## Appendix 1: Definition of risk categories and assurance levels in the Executive Summary
| Risk rating | Description | |-------------|-------------| | **Critical** | Critical issue where action is considered imperative. Action to be effected immediately. | | **High** | Fundamental issue where action is considered imperative to ensure that the School is not exposed to high risks, also covers breaches of legislation and policies and procedures. Action to be effected within 1 to 3 months. | | **Medium** | Significant issue where action is considered necessary to avoid exposure to risk. Action to be effected within 3 to 6 months. | | **Low** | Issue that merits attention/where action is considered desirable. Action usually to be effected within 6 to 12 months. |
| Level of assurance | Description | |--------------------|-------------| | **Substantial** | The standard of controls operating in the systems audited at the school is robust and provides substantial confidence that the school is protected from loss, waste, fraud or error. | | **Reasonable** | The standard of controls operating gives reasonable assurance that the school is protected from loss, waste, fraud or error but there may be areas which need to be strengthened to provide robust confidence in the system of internal control. | | **Limited** | The standard of controls is insufficient to give confidence that the school is protected from loss, waste, fraud or error. Prompt attention needs to be given to strengthening one or more areas of the control system before sufficient confidence is provided. | | **No** | The standard of controls is poor and places the school in potential danger of loss from waste, loss, fraud or error. Urgent attention needs to be given by management to addressing weaknesses identified in the audit. | Appendix 2 – Areas audited and analysis of findings
| Area | Summary of Findings | |-------------------------------------------|---------------------| | Governance | Critical: 1 | | Financial Planning | | | Budget Monitoring | | | Purchasing | High: 1 | | Contracts | Medium: 1 | | Income | Low: 1 | | Lettings | Advisory: 1 | | Banking & Petty Cash | | | Payroll | | | Tax | | | Voluntary Funds | Critical: 1 | | Assets | High: 1 | | Insurance | Medium: 1 | | Data Security | Low: 1 | | Pupil Premium | Advisory: 1 | | Safeguarding\* | | | Schools Financial Values Standard | |
\*Scope limited to confirmation as to whether the school has completed a Safeguarding audit tool and whether any issues were noted over its Single Central Record
| Timetable | |-----------------------------------------------| | Audit agreed: 13 November 2017 | | Fieldwork commenced: 19 February 2018 | | Fieldwork completed: 20 February 2018 | | Draft report issued: 05 March 2018 | | Management comments received: 19 March 2018 | | Final report issued: 19 March 2018 |
## Appendix 3 – Review of Schools Financial Values Standard 17/18
| LIST OF QUESTIONS | SCHOOL RESPONSE | AUDIT CONCLUSION FOLLOWING REVIEW OF COMMENTS AND EVIDENCE | |----------------------------------------------------------------------------------|-----------------|------------------------------------------------------------| | **A: The Governing Body and School Staff** | | | | 1. In the view of the governing body itself and of senior staff, does the governing body have adequate financial skills among its members to fulfil its role of challenge and support in the field of budget management and value for money? | Yes | Agreed | | 2. Does the governing body have a finance committee (or equivalent) with clear terms of reference and a knowledgeable and experienced chair? | Yes | Agreed | | 3. Is there a clear definition of the relative responsibilities of the governing body and the school staff in the financial field? | Yes | Agreed | | 4. Does the governing body receive clear and concise monitoring reports of the school's budget position at least three times a year? | Yes | Agreed | | 5. Are business interests of governing body members and staff properly registered and taken into account so as to avoid conflicts of interest? | Yes | In Part – Business Interests forms were not signed by office staff | | 6. Does the school have access to an adequate level of financial expertise, including when specialist finance staff are absent, eg on sick leave? | Yes | Agreed | | 7. Does the school review its staffing structure regularly? | Yes | Agreed | | 8. Have your pay decisions been reached in accordance with a pay policy reflecting clear performance criteria? | Yes | Agreed | | 9. Has the use of professional independent advice informed part of the pay decision process in relation to the headteacher? | Yes | Agreed | | **B: Setting the Budget** | | | | 10. Is there a clear and demonstrable link between the school’s budgeting and its plan for raising standards and attainment? | Yes | Agreed | | 11. Does the school make a forward projection of budget, including both revenue and capital funds, for at least three years, using the best available information? | Yes | Agreed | | | | | |---|---|---| | 12. Does the school set a well-informed and balanced budget each year (with an agreed and timed plan for eliminating any deficit)? | Yes | Agreed | | 13. Is end year outturn in line with budget projections, or if not, is the governing body alerted to significant variations in a timely manner, and do they result from explicitly planned changes or from genuinely unforeseeable circumstances? | Yes | Agreed | | **C: Value for Money** | | | | 14. Does the school benchmark its income and expenditure annually against that of similar schools and investigate further where any category appears to be out of line? | Yes | In Part – no evidence of annual review | | 15. Does the school have procedures for purchasing goods and services that both meet legal requirements and secure value for money? | Yes | Agreed | | 16. Are balances at a reasonable level and does the school have a clear plan for using the money it plans to hold in balances at the end of each year? | Yes | Agreed | | 17. Does the school maintain its premises and other assets to an adequate standard to avoid future urgent need for replacement? | Yes | Agreed | | 18. Does the school consider collaboration with others, eg on sharing staff or joint purchasing, where that would improve value for money? | Yes | Agreed | | 19. Can the school give examples of where it has improved the use of resources during the past year? | Yes | Agreed | | **D: Protecting Public Money** | | | | 20. Is the governing body sure that there are no outstanding matters from audit reports or from previous consideration of weaknesses by the governing body? | Yes | In Part – three findings have been repeated | | 21. Are there adequate arrangements in place to guard against fraud and theft by staff, contractors and suppliers (please note any instance of fraud or theft detected in the last 12 months)? | Yes | Refer to Findings/Recommendations Purchasing/Income/Voluntary funds/Assets | | 22. Are all staff aware of the school’s whistleblowing policy and to whom they should report concerns? | Yes | Agreed | | 23. Does the school have an accounting system that is adequate and properly run and delivers accurate reports, including the annual Consistent Financial Reporting return? | Yes | Agreed | | 24. Does the school have adequate arrangements for audit of voluntary funds? | N/A | Records were not available at audit | | 25. Does the school have an appropriate business continuity or disaster recovery plan, including an up-to-date asset register and adequate insurance? | Yes | In Part – Asset register is not complete | Appendix 4 – Internal Audit roles and responsibilities
Limitations inherent to the internal auditor’s work We have undertaken the review of St Paul’s School, subject to the limitations outlined below.
Internal control Internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.
Future periods Our assessment of controls is for the period specified only. Historic evaluation of effectiveness is not relevant to future periods due to the risk that:
- the design of controls may become inadequate because of changes in operating environment, law, regulation or other; or
- the degree of compliance with policies and procedures may deteriorate.
Responsibilities of management and internal auditors It is management’s responsibility to develop and maintain sound systems of risk management, internal control and governance and for the prevention and detection of irregularities and fraud. Internal audit work should not be seen as a substitute for management’s responsibilities for the design and operation of these systems.
We endeavour to plan our work so that we have a reasonable expectation of detecting significant control weaknesses and, if detected, we shall carry out additional work directed towards identification of consequent fraud or other irregularities. However, internal audit procedures alone, even when carried out with due professional care, do not guarantee that fraud will be detected.
Accordingly, our examinations as internal auditors should not be relied upon solely to disclose fraud, defalcations or other irregularities which may exist.
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d2efdf42d64053235ea54a35e68be23365b55f1b | 1. Purpose
1.1 To update the Audit Committee on the Internal Audit activities of BDO.
2. Recommendations
2.1 It is recommended that the Audit Committee note: a) the Internal Audit Annual Report for 2019-20 b) the Internal Audit Follow Up Report as at August 2020 c) the Progress Report as at August 2020.
3. Issues of note
3.1 Report Background
BDO provide the Internal Audit Function for Northampton Borough Council, including the designated role of ‘Head of Internal Audit.
The attached reports from BDO outline the work they have undertaken and their view of the current position in respect of these audits and their associated observations and management actions.
The revised Internal Audit Plan for 2020-21 is provided in as separate report by the Chief Finance Officer. 3.2 Issues
Specific issues in respect of individual audits and response times are contained within the BDO reports attached as appendices.
4. Implications (including financial implications)
4.1 Policy
4.1.1 There are no policy implications associated with this report.
4.2 Resources and Risk
4.2.1 There are no resource or risks implications associated with this report.
4.3 Legal
4.3.1 There are no legal implications associated with this report.
4.4 Equality
4.4.1 There are no specific equality impacts relating to this report.
4.5 Consultees (Internal and External)
4.5.1 The reports have been shared with the Corporate Management Board and the Governance and Risk Manager.
4.6 Other Implications
4.6.1 None
5. Background Papers
5.1 Appendices: 5.1.1 Northampton Borough Council Annual Report 5.1.2 Northampton Borough Council Internal Audit Follow Up Report 5.1.3 Northampton Borough Council Progress Report
Gurpreet Dulay – NBC BDO Internal Audit Manager Stuart McGregor – Chief Finance Officer
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dc4638f629143f3a6eee03f2840d43baa344a154 | UK Trade & Investment
International Business Strategies, Barriers & Awareness Monitoring Survey 2011
Research Report
May 2011
JN: 4271 Contents
01. Executive Summary ........................................................................................................ 1 1.1 Introduction ............................................................................................................. 1 1.2 Summary Results .................................................................................................. 2
02. Introduction .................................................................................................................... 10
03. Research Objectives ..................................................................................................... 11
04. Methodology .................................................................................................................. 12 4.1 Coverage .............................................................................................................. 12 4.2 Sample Design ..................................................................................................... 12 4.3 Questionnaire Design .......................................................................................... 14 4.4 Fieldwork ............................................................................................................. 14 4.5 Analysis & Weighting .......................................................................................... 15 4.6 Core vs. Boost Sample – Profile Differences ..................................................... 19
05. Modes of Internationalisation ....................................................................................... 20 5.1 Modes Used ......................................................................................................... 20 5.2 Number & Type of Overseas Sites ....................................................................... 22 5.3 ‘Web Only’ Exporters .......................................................................................... 24 5.4 Importing .............................................................................................................. 26 5.5 Internationalisation Modes by Firm Profile ....................................................... 27 5.6 Number of Modes Used ....................................................................................... 31 5.7 Order of Setting Up Overseas Sites ..................................................................... 33 5.8 Reasons for Operating Overseas Sites ............................................................... 35
06. Profile ............................................................................................................................ 56 6.1 Age of Business .................................................................................................... 56 6.2 Size of Business (Employees) ............................................................................. 58 6.3 Size of Business (Turnover) ............................................................................... 60 6.4 Industry Sector ..................................................................................................... 62 6.5 Ownership ............................................................................................................ 64 6.6 Experience of Doing Business Overseas ............................................................ 65 6.7 Innovation ............................................................................................................. 83 6.8 Growth .................................................................................................................. 90 6.9 Business Planning ............................................................................................... 98 6.10 Customer Types .................................................................................................. 100 6.11 Profile of UKTI Users: Internationalisation Survey vs. PIMS ......................... 102
07. Awareness & Usage ....................................................................................................... 104 7.1 Awareness & Use of UKTI .................................................................................... 104 7.2 Awareness & Use of Business Link ..................................................................... 109
08. Drivers of Market ........................................................................................................ 112 8.1 Drivers of Market (Summary) ........................................................................ 112 8.2 Drivers of Market (Detailed) ........................................................................ 116
09. Barriers to Overseas Trade .................................................................................. 119 9.1 Barriers (Summary) ...................................................................................... 119 9.2 Barriers (Detailed) ...................................................................................... 135 9.3 The Role Of Overseas Sites In Avoiding Barriers ........................................ 148
10. Benefits of Doing Business Overseas ............................................................... 150 10.1 Benefits ...................................................................................................... 150 10.2 Impact on Product & Service Development .............................................. 158 10.3 Impact of Overseas Sites on UK Employment Levels .............................. 169
11. Opportunities in Emerging & Fast Growing Markets ...................................... 174 11.1 Opportunities in Emerging & Fast Growing Markets .............................. 174 11.2 Influence of Economic Downturn .............................................................. 179
12. Difficulties Accessing Finance .......................................................................... 182
13. Marketing Channels ............................................................................................ 185 13.1 Channels Used ............................................................................................ 185 13.2 Usefulness .................................................................................................. 188 13.3 Social Networking Sites ............................................................................. 191
Annex A – Markets Selected (For Drivers & Barriers Questions)
Annex B – Questionnaire
1. Executive Summary
1.1 Introduction
This research gathers evidence about trends in UK businesses’ international business strategies, barriers hindering such business, awareness and usage of UKTI, and related issues.
In terms of the specific research aims, the study was required to provide robust evidence to:
- Help understand the role of international market diversification in business development strategies;
- Identify drivers of geographical focus;
- Identify links between innovation, R&D and overseas business development, including links between innovation and mode of market entry;
- Understand the barriers encountered by UK businesses in seeking to develop overseas business, including the role of market entry mode in overcoming such barriers;
- Measure awareness and use of UKTI support;
- Identify the extent to which credit conditions and related issues are impacting on firms’ overseas business development;
- Provide evidence on the characteristics of users and non-users of UKTI.
This summary outlines the key findings from this study. Please note that all of the data in this report has been weighted by age of firm to reflect a disproportionate stratified sampling approach. 1.2 Summary Results
1.2.1 Internationalisation Modes
Firms were asked which of a number of internationalisation modes they had been involved in over the last five years (or were planning to do in the next year in the case of those that were not yet doing any business overseas(^1)).
| Table 1.2.1 Modes Of Internationalisation | |------------------------------------------| | **Total** | **UKTI Usage** | **UKTI User** | **Non-User** | | **Base** | 903 | 248 | 655 | | **Different Modes Used** | | | | | Selling direct | 87% | 88% | 86% | | - 'Web only' exporters | 4% | 1% | 5% | | Agents/distributors | 41% | 54% | 36% | | Contractual arrangements | 11% | 12% | 11% | | Overseas site | 11% | 17% | 8% | | - Manufacturing/assembly | 3% | 5% | 2% | | - Call centre | 1% | 0% | 1% | | - Sales/service delivery | 9% | 14% | 7% | | - R&D | 2% | 4% | 2% | | Importing | 56% | 64% | 52% | | **Number of Modes Used** | | | | | One | 63% | 48% | 68% | | Two | 27% | 36% | 24% | | Three | 8% | 13% | 7% | | Four | 2% | 3% | 1% |
The vast majority of internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. However, only around 1 in 10 are involved in other ‘contractual arrangements’ (such as licensing or franchising) or operate their own overseas sites.
A small minority of internationalising firms are ‘web only’ exporters, in the sense that they do not sell overseas through any other channel and do not use any other internationalisation modes (e.g. selling through agents and distributors).
Whilst the proportion selling direct is identical for users and non-users of UKTI services, the former are significantly more likely to sell through agents or distributors and operate their own overseas sites. The same is true of larger firms, innovative firms, those active in more overseas markets and those that plan to grow ‘substantially’ over the next 5 years.
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(^1) Please note that 61 of the 903 firms interviewed (7%) were not yet doing business overseas but qualified for the research on the basis that they were planning to do so in the next year. 1.2.2 Profile
The table below provides key profile information for internationalising firms, including comparisons between users and non-users of UKTI.
| Profile | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 903 | 248 | 655 | | Age | | | | | 0-5 years | 17% | 12% | 19% | | 6-10 years | 23% | 24% | 23% | | Over 10 years | 60% | 64% | 58% | | Size (employees) | | | | | 0-9 employees | 56% | 45% | 60% | | 10-249 employees | 40% | 47% | 36% | | 250+ employees | 3% | 7% | 2% | | Sector | | | | | Primary | 0% | 0% | 0% | | Production | 34% | 46% | 29% | | Construction | 1% | 1% | 2% | | Services | 64% | 53% | 69% | | Innovation | | | | | Innovative | 72% | 86% | 66% | | Innovative (alternative) | 47% | 64% | 40% | | IP active | 23% | 38% | 17% | | Overseas experience | | | | | Less than 2 years | 17% | 12% | 20% | | 2-10 years | 40% | 40% | 41% | | Over 10 years | 42% | 48% | 39% | | Number of markets | | | | | Up to 5 markets | 47% | 31% | 53% | | 6-10 markets | 20% | 24% | 18% | | Over 10 markets | 33% | 45% | 28% | | Growth objectives (next 5 years) | | | | | Grow substantially | 28% | 29% | 27% | | Grow moderately | 54% | 58% | 52% | | Same/smaller | 15% | 12% | 17% | | Business plan | | | | | Yes | 59% | 74% | 52% | | No | 38% | 25% | 43% |
In terms of their general characteristics, UKTI users have a slightly older and larger profile than non-users. They are also more likely to be operating in the production sector.
Perhaps the most notable differences between users and non-users of UKTI services are in the area of innovation. The former are significantly more likely to be classed as ‘innovative’ (by both definitions) and as ‘IP active’ (i.e. they hold some form of legal protection for any of their products or services).
UKTI users also tend to have been doing business overseas for longer and, more notably, operate in a significantly greater number of markets. They are also a little more ambitious in their growth objectives and are more likely to have a current business plan, suggesting that they take a more strategic approach to the development of their business. 1.2.3 Awareness & Usage of UKTI
Firms were asked whether they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas, and whether they had used either of these.
| Table 1.2.3 Awareness & Use of UKTI | |-------------------------------------| | **2011 Survey** | | **Base** | | Total | | 903 | | UKTI User | | 248 | | Non-User | | 655 | | **Aware (at least one)** | | 71% | | UK Trade & Investment or UKTI | | 53% | | Commercial services provided by embassies and consulates overseas | | 56% | | Used (at least one) | | 29% | | UK Trade & Investment or UKTI | | 22% | | Commercial services provided by embassies and consulates overseas | | 18% | | **2010 Survey** | | **2008 Survey** | | 902 | | 900 | | 68% | | 68% | | 51% | | 51% | | 53% | | 55% | | 27% | | N/A | | N/A | | N/A | | N/A |
There is some evidence to suggest that awareness of UKTI (including the services provided by overseas posts) has increased recently, from 68% in 2008 and 2010 to 71% currently. However, it should be noted that this apparent difference is not statistically significant. Similarly, there has been a slight (but not significant) rise in usage of UKTI, to 29%.
Awareness of the UK Trade & Investment name itself stands at 53%, slightly lower than the awareness levels seen for the commercial services provided by overseas posts. It is interesting to note that only 87% of UKTI users have actually heard of ‘UK Trade & Investment’ (i.e. 13% have used the services provided by overseas posts but not realised the link to UKTI).
Amongst non-users of UKTI overall awareness stands at 60%, indicating that there are a significant number of internationalising firms that could benefit from UKTI’s services but have never heard of the organisation.
Awareness and usage levels increase amongst larger firms and those with more experience of doing business overseas. It is also clear that innovative and IP active firms are more engaged with UKTI, with awareness and usage levels significantly higher amongst these groups. Awareness and usage of UKTI are particularly high amongst ‘innovative high growth’ firms (at 81% and 34% respectively), which is encouraging given that this is a key group for UKTI to reach. 1.2.4 Barriers to Overseas Trade
Firms were asked to identify the ‘most challenging’ overseas market in which they had done business over the last 5 years, and were then read out a number of potential difficulties and asked to indicate the extent to which they had encountered each one in this market. These were then combined into 7 summary barriers, and the table below shows the proportion of firms experiencing ‘significant’ difficulties with each one.
Table 1.2.4 Summary Barriers
| Base: All exporters | Total | UKTI Usage | |---------------------|-------|------------| | | | UKTI User | Non-User | | At least one significant barrier | 67% | 83% | 61% | | - Legal & regulatory barriers | 43% | 51% | 40% | | - Customs barriers | 24% | 30% | 21% | | - Contacts barriers | 33% | 46% | 27% | | - Information barriers | 16% | 18% | 14% | | - Resource barriers | 20% | 29% | 17% | | - Language & cultural barriers | 18% | 23% | 15% | | - Bias barriers | 19% | 26% | 16% | | No significant barriers | 33% | 17% | 39% |
Two-thirds of internationalising firms have experienced at least one significant barrier in their selected market, confirming that there is a clear need for external assistance to help firms overcome these barriers and successfully trade overseas. Reflecting the results from previous UKTI studies, legal and regulatory barriers and contacts barriers are highlighted as being the most prevalent issues (experienced by 43% and 33% of firms respectively).
UKTI users encounter more significant barriers than non-users, with 83% experiencing at least one, compared to just 61% of non-users. Users are more likely to encounter each of these types of barrier (although please note that this difference is not statistically significant for ‘information barriers’).
More experienced exporters, innovative and IP active firms and those using less advanced internationalisation modes (i.e. not just selling direct to customers) are all more likely to experience significant barriers to overseas trade. It is also clear that firms are more likely to encounter barriers when targeting high growth markets or other markets outside of the EEA.
Given that UKTI users are more likely to meet all of the above criteria (e.g. more experienced exporters, innovative, etc) the differences in the barriers experienced by users and non-users could just be a function of their different profile. However, when further analysis is conducted on a like-for-like basis by comparing firms that operate in the same number of markets and comparing those answering about the same ‘type’ of market (e.g. high growth), the difference between users and non-users is still very evident. This suggests that there is a ‘true’ distinction between users and non-users and that the increased likelihood of users reporting barriers is not just a result of UKTI users operating in a greater number of markets and/or more challenging markets. 1.2.5 Benefits of Doing Business Overseas
All firms were read out a number of possible benefits of doing business overseas and asked to indicate the extent to which each one applied to them. The table below shows the proportion benefiting significantly from each one.
Table 1.2.5.1 Summary Benefits
| Benefit | Total | UKTI Usage | |----------------------------------------------|-------|------------| | | Base | UKTI User | Non-User | | At least one significant benefit | 63% | 75% | 58% | | - Level of growth otherwise not possible | 41% | 56% | 36% | | - More fully utilising capacity | 36% | 49% | 31% | | - Exposure to new ideas | 31% | 41% | 27% | | - Increased lifespan of products/services | 30% | 35% | 28% | | - Improved profile or credibility | 44% | 57% | 39% | | No significant or moderate benefit | 19% | 9% | 23% |
The most widespread benefit of exporting is that it improves firms’ profile or credibility, followed by it enabling firms to achieve a level of growth otherwise not possible and allowing them to more fully utilise their existing capacity.
As well as encountering more barriers to their overseas development, it is clear that UKTI clients also experience consistently greater benefits from overseas trade, with 75% reporting at least one significant benefit compared to only 58% of non-users. This difference between users and non-users is evident for all of the individual benefits tested.
As might be expected, given that they have had more exposure to overseas business, long-term exporters and those in more markets are considerably more likely to have experienced each of the benefits. Internationalisation also seems to have more positive outcomes for innovative and IP active firms.
Firms with more ambitious growth objectives also report greater benefits, suggesting that the rewards generated from overseas business might be acting as a catalyst for their growth plans. Firms were also asked more specifically about the extent to which internationalisation impacts on product and service development activity.
Table 1.2.5.2 Impacts On Investment In Product/Service Development
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 903 | 248 | 655 | | Invest more time and money in NPD | 42% | 52% | 38% | | Increase money available for NPD | 41% | 52% | 37% | | Increase ROI in NPD | 48% | 61% | 43% |
There is clear evidence that internationalisation can increase the financial rewards of innovation activity, with approaching half of all firms reporting that doing business overseas has increased the return they receive from their investment in product or service development. Around two-fifths feel that doing business overseas has encouraged them to invest more resources in these activities, and a similar proportion believe that it has increased the money they have available to invest in innovation activities.
Those firms that operated their own overseas sites were asked whether this had had any impact on the number of people employed by their company in the UK.
Table 1.2.5.2 Impact Of Overseas Sites On UK Employment
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 903 | 248 | 655 | | Have less UK employees as result | 16% | 11% | 20% | | No change in UK employees | 61% | 60% | 63% | | Have more UK employees as result | 21% | 26% | 16% | | Don’t know | 2% | 3% | 1% | | Mean additional UK employees | +3.5 | +5.3 | +2.2 |
Overall, overseas sites appear to have a slight ‘net positive’ impact on UK employment levels, with 21% of firms indicating that they employ more people in the UK as a result and only 16% stating that they employ fewer. The mean impact is an additional 3.5 employees per firm.
This suggests that in many cases having an overseas site can improve the overall performance of the company and hence enable them to grow and employ more staff in the UK.
Interestingly, UKTI users are significantly more likely to highlight a positive effect on UK employment, with 26% employing more people as a result and only 11% employing fewer. In contrast, non-users are more likely to indicate that the overseas site has resulted in a reduction in UK staffing levels (although the mean impact for this group is still an additional 2 employees). 1.2.6 Opportunities in Emerging & Fast Growing Markets
Firms were read out a list of various emerging or fast growing markets and asked whether they were already doing business there, were very likely to do so in the next 2 years, quite likely to do so or unlikely to do so. They were also asked whether the economic downturn had prompted them to focus more attention on emerging or fast growing markets.
Table 1.2.6 Opportunities In Emerging & Fast Growing Markets
| | Total | UKTI Usage | Non-User | |--------------------------|-------|------------|----------| | | Base | 903 | 248 | 655 | | Likelihood of entering any emerging / fast growing markets in next 2 years | | | | | Already in | 46% | 59% | 40% | | Very likely | 15% | 16% | 14% | | Quite likely | 19% | 14% | 21% | | Unlikely | 20% | 10% | 24% | | Whether devoted more attention to emerging / fast growing markets as result of downturn | | | | | Yes | 28% | 39% | 24% | | No | 71% | 60% | 75% |
As seen above, a little under half (46%) of internationalising firms are already doing business in at least one of the emerging/fast growing markets, and most of the remainder feel that they are very or quite likely to do so in the next 2 years. UKTI users are more likely to be active in these markets (59%), and only 10% of this group feel that they are unlikely to be doing business in any fast growing markets in 2 years time (compared to 24% of non-users).
In terms of specific markets, Saudi Arabia and the UAE are felt to represent the best opportunities, closely followed by South Africa, China and India. Of the markets tested, firms were least enthusiastic about doing business in Mexico.
The likelihood of a firm trading in these fast growing markets increases with age, size and export experience. However, it is certainly not the case that these markets are only targeted by more established firms, as 36% of firms established up to 5 years, 40% of those with 0-9 employees, and 26% of those exporting for less than 2 years are already doing business in at least one of these areas.
Innovative firms, born global firms and those who plan to grow are also all significantly more likely to be doing business in fast growing or emerging markets.
The recent economic conditions have had some impact on the extent to which firms are targeting emerging and fast growing economies, with over a quarter of internationalising firms (28%) indicating that they have devoted more attention to these markets as a direct result of the downturn. This is more likely to be the case amongst UKTI users, innovative firms and those with growth aspirations. 1.2.7 Marketing Channels
All respondents were asked whether they used social networking sites and other website to obtain news or information that was relevant to their business, and were also asked whether they had attended any seminars, tradeshows or conferences in the past year. They were then asked to rate the usefulness of each of these channels (if they used them).
Table 12.7.1 Marketing Channels
| Channel | % using | % rating as useful (4-5 out of 5) | |-----------------------|---------|----------------------------------| | Base: All respondents / All using | 903 | 643, 308, 594 | | Websites | 71% | 62% | | Social networking | 32% | 38% | | Seminars, etc | 65% | 60% |
Approaching three-quarters of firms use websites to obtain news or information relevant to their business, and a third use social networking sites for business purposes. Around two-thirds have attended seminars, tradeshows or conferences in the past year.
In addition to the 32% of firms that used social networking sites, a further 17% were planning to start doing so in the next year. Younger firms, less experienced exporters, innovative firms and those planning for substantial growth were all more likely to either already use social networking sites or intend to do so in the next year. 2. Introduction
UK Trade & Investment (UKTI) commissioned this research in order to gather evidence about trends in UK businesses’ international business strategies, barriers hindering such business, awareness and usage of UKTI, and related issues.
The study was designed with a view to the results being used to help inform UKTI policy development and other aspects of UK Government policy relating to international trade and investment and the ability of British business to optimise opportunities in global markets.
The survey was intended to complement evidence already available from other surveys of UK business, in particular:
- The Community Innovation Survey, which is nationally representative of firms with at least 10 employees, and captures some evidence about international aspects of innovation activity, including international partnerships and other linkages, as well as export activity;
- UKTI’s Performance and Impact Monitoring Survey (PIMS) of businesses who have used UKTI trade services, which also captures some contextual evidence about overseas business experience and aspects of strategy;
- UKTI’s annual survey of exporters who have not used UKTI trade services, which gathers evidence about some aspects of overseas business strategy as well as evidence about barriers to overseas business and associated needs for external help.
The ‘International Business Strategies, Barriers & Awareness Monitoring Survey’ replaced the former annual UKTI awareness survey. It is undertaken on an annual basis, and this is the fourth wave conducted to date. Whilst the core content of the survey is kept consistent each year, there is variation in some of the topics covered. This ensures that annual monitoring with consistent data can be achieved where needed, as well as capturing data on a wider range of issues at less frequent intervals. 3. Research Objectives
In terms of the specific research aims, the study was required to provide robust evidence to:
- Understand the role of international market diversification in business development strategies, including its effects on revenue growth and resilience, profitability and return on investment in new product development;
- Identify drivers of geographical focus, including the role of business customers, and to track activity and interest in emerging and high growth markets;
- Understand links between innovation, R&D and overseas business development, including links between innovation and mode of market entry (e.g. exploring whether innovative firms are more likely to need help with issues related to outward investment or other less common internationalisation modes);
- Understand the barriers encountered by UK businesses in seeking to develop overseas business, both for new exporters and for firms seeking to enter new markets, and investigate how these differ across markets and the role played by market entry mode in helping overcome these barriers;
- Identify awareness and use of UKTI support;
- Identify and assess the extent to which credit conditions and related issues may be impacting on firms’ international business development, including their investment in R&D and innovation activities;
- Capture evidence about the characteristics of users and non-users of UKTI services, including innovation activity, scope of international business and modes of internationalisation employed.
This study built on the three previous survey waves, replicating the previous methodology so as to provide consistent year-on-year data, whilst developing the previous questionnaire to ensure that the 2011 objectives were fully addressed. 4. Methodology
The research was conducted via quantitative, CATI(^2) interviews, administered by a specialist team of business-to-business researchers with extensive experience of conducting similar studies with this type of audience.
4.1 Coverage
A total of 903 interviews were conducted with a random sample of firms involved in overseas business activities, covering the full range of internationalisation modes such as selling to overseas customers both directly and via agents or distributors, doing business overseas via licensing, franchising and other contractual agreements, and operating overseas sites. Whilst data was collected on import activity, only those firms also involved in other overseas business activities were selected for interview.
Whilst the majority of the sample (842 of the 903 interviews) were involved in at least one of these forms of internationalisation at the time of the interview, a small number (61) were not yet doing business overseas (although to be eligible for the study they had to indicate that they were planning to start in the next year). This latter group have been labelled ‘considerers’ in the analysis.
In addition to the random sample of 903 internationalising firms, an additional ‘boost’ of 100 interviews with firms that operated their own overseas sites was also conducted. The purpose of this was to enable more detailed and robust analysis to be conducted amongst this key sub-group. Only a relatively small minority of internationalising firms operate their own sites overseas (11%), with 94 of the firms covered in the main sample falling into this category. The boost interviews therefore increased the analysis base to 194 for this group.
4.2 Sample Design
The sampling approach differed for the ‘core’ sample of 903 internationalising firms and the additional ‘boost’ of 100 firms with overseas sites. Details of each approach are set out below:
4.2.1 Core Sample
Since one of the key objectives of this research was to ensure coverage of firms doing overseas business via the full range of modes, and not just simply exporting in the traditional sense, the sample frame was built from a random sample of UK businesses which was then screened to identify those engaged in overseas business. This approach had the further advantage of allowing the inclusion of ‘considerers’ in the research.
The initial sample frame was sourced from a Companies House-based list provided by Experian, with the sample stratified by age of firm. It was decided that a disproportionate sample design would be used, so that a robust number of interviews were conducted with 3 age groups of firms (those established up to 5 years, 6-10 years and over 10 years).
(^2) Computer Assisted Telephone Interviewing. In order that the incidence within the sample frame of firms eligible for interview (i.e. engaging in international business activity) was kept to within sensible limits, an approach was taken to the construction of the initial sample frame whereby a small number of industry sectors with a very low proportion of firms expected to be involved in overseas business activity were excluded. The exclusions were made on the basis of analysis of data from the Community Innovation Survey (CIS) on the incidence of exporting for individual industry sectors by age group(^3). The available data only enabled exclusions to be made at the level of 2-digit SIC codes, but a number of more detailed sub-sectors were also excluded based on both common sense and the research team’s experiences of the previous surveys and pilot sessions (e.g. sub-post offices, taxi firms, dispensing chemists, etc).
Whilst both users and non-users of UKTI were included in the research, the sample lists were screened against lists of firms participating in the most recent main PIMS and PIMS Follow-Up surveys so as not to over-burden businesses with too frequent research.
4.2.2 Boost Sample
Based on previous survey evidence, only around 2-3% of all UK firms operate overseas sites(^4). Taken in conjunction with an expected response rate of 20-25% for this type of survey, this meant that if the boost sample was to replicate the ‘freefind’ approach used for the core sample, a total of 20,000-25,000 individual firms would have to be contacted to achieve the 100 boost interview with firms that operate overseas sites. As a result, a more pragmatic and cost-efficient approach was employed, whereby a sample of UK firms known to have overseas sites was sourced from a commercial sample provider.
Initial ‘screening’ questions were included to ensure that these UK firms had responsibility for or control over the overseas site, rather than the overseas site just being the head office of their parent company or the premises of other group companies.
It should be noted that the boost sample is unlikely to be truly representative of all firms with overseas sites as certain types of firms (e.g. those with higher turnovers) are more likely to be included in these ‘bought in’ samples. Indeed, there are a number of significant profile differences between the firms with overseas sites that came through the boost sample and those that were picked up in the ‘freefind’ core sample. These differences are detailed later in this report.
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(^3) Based on analysis by Professor Richard Harris, University of Glasgow.
(^4) This estimate is based on c.20% of all UK firms being involved in overseas business, and around 10-12% of these operating their own overseas sites. 4.3 Questionnaire Design
Strong emphasis was placed on questionnaire design in the early stages of this project to ensure that the questionnaire was easily understandable, flowed logically, was of an acceptable length and was capable of delivering high quality data across all the areas necessary to answer the research objectives.
Given that some of the question areas had not been covered in previous studies, an initial qualitative piloting phase was undertaken to help test and inform the main questionnaire. This consisted of a total of 4 in-depth, less-structured interviews to ensure that the new question areas made sense to respondents and covered all of the pertinent issues.
Following this qualitative phase the quantitative questionnaire was revised where necessary, and then a full ‘live’ quantitative pilot was conducted on CATI. This took place over the course of 2 days and involved OMB executives and UKTI representatives listening to ‘live’ interviews conducted by the telephone research team. Based on this session, further changes were then made to the questionnaire script prior to the start of main fieldwork. A copy of the final questionnaire is appended to this report.
4.4 Fieldwork
Main fieldwork was conducted in January and February 2011, and interviews lasted an average of c.20 minutes.
The following table summarises the number of sample records selected for CATI, the number of records lost due to screening-out or incorrect contact details, and the number of interviews completed along with the associated response rate.
| Table 4.4 Sample Analysis | |---------------------------| | **Core sample** | **Boost sample** | | Selection for CATI | 20,979 | 900 | | - Unusable (no overseas business activity) | 13,951 | 475 | | - Unusable (contact details incorrect) | 2,896 | 85 | | Total useable sample | 4,132 | 340 | | Interviews achieved | 903 | 100 | | Response rate (%) | 22% | 29% | | Refusal rate (%) | 54% | 30% | 4.5 Analysis & Weighting
4.5.1 Analysis Approach
For the majority of the analysis in this report (e.g. ‘total’ figures, analysis by age, analysis by years exporting, etc) only the core sample has been included. The reason for this is that the core sample was based on a random sample of UK firms and hence provides a ‘true’ and representative picture of internationalising firms (and if the boost sample was included it would skew the data by over-representing firms with overseas sites).
4.5.2 Weighting
All of the core sample data has been weighted to account for the disproportionate nature of the sample design (i.e. the disproportionate sampling by age of firm). The weighting regime uses data from the 2007/8 Annual Small Business Survey on the age profile of UK exporters (displayed below), with the data weighted to the profile shown.
| Age profile of UK exporters (2007/8 ASBS) | Age profile of interviewed firms | Weighting | |------------------------------------------|---------------------------------|-----------| | Up to 5 years | 16.8% | 26.1% | 0.64 | | 5-10 years | 23.4% | 28.3% | 0.83 | | More than 10 years | 59.8% | 45.5% | 1.31 |
However, for all analysis of firms with overseas sites, the boost sample has been combined with those firms in the core sample that have an overseas site, as this enables more robust analysis of this group. This overseas sites data has not been weighted as there is no available information on the true profile of firms with overseas sites.
4.5.3 Base Size Descriptions
Under each chart in this report is a base description, which provides details of which firms the analysis is based on (e.g. All respondents, All exporters, etc), the number of firms included in the analysis, and the percentage falling into any categories that are not shown in the chart itself (e.g. ‘Don’t know/refused’ responses).
For example, the base description below indicates that analysis shows results for all firms that are exporting, the ‘total’ results in the chart are based on 842 firms, and 3% of these answered ‘don’t know’ to this particular question. It also shows that the ‘UKTI users’ results are based on 242 firms (1% of whom answered ‘don’t know’) and the ‘Non Users’ results are based on 600 firms (4% of whom answered ‘don’t know’)
Example Base: All exporters (Base, Don’t know) Total (842, 3%), UKTI Users (242, 1%), Non-Users (600, 4%) 4.5.4 Analysis Definitions
Throughout this report, sub-analysis has been provided by a number of variables relating to key business characteristics. The following provides details of how these variables have been defined.
| Innovative Firms | |------------------| | Firms have been defined as ‘innovative’ if they… | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product/service development | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years except firms established in the last 2 years |
| Innovative Firms (Alternative, Tighter Definition) | |--------------------------------------------------| | Firms have been defined as ‘innovative’ under the alternative, tighter definition if they … | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product or service development and at least some employees are involved in the development of scientific or technical knowledge not commonly available | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years and these are ‘new to the world’ or ‘new to the sector’ |
| IP Active Firms | |-----------------| | Firms have been defined as ‘IP Active’ if they… | | • Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas |
| Young, Technology Intensive Firms | |----------------------------------| | Firms have been defined as being ‘young, technology intensive’ if they… | | • Have been established for 5 years or less | | • And are classified as being innovative using the alternative (tighter) definition or are classified as IP active | Born Global Firms
Firms have been defined as being ‘born global’ if they...
- Have been established for 5 years or less
- And have been doing business overseas for as long as they have been established
Born Global Firms (Alternative, Tighter Definition)
Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they...
- Have been established for 5 years or less
- And have been doing business overseas for as long as they have been established
- And the proportion of turnover accounted for by overseas sales is over 25%
Growth – ASBS Definition
Firms have been classified as displaying ‘sustained growth’ if...
- Their employee numbers have grown over the last 3 years
- And, they are anticipating substantial growth over the next 5 year
Firms have been classified as displaying ‘contained growth’ if...
- Their employee numbers have grown over the last 3 years
- But, they are not anticipating substantial growth over the next 5 years
Firms have been classified as displaying ‘new growth’ if...
- Their employee numbers have not grown over the last 3 years including firms established in the last 3 years
- But, they are anticipating substantial growth over the next 5 years
Firms have been classified as displaying ‘no growth’ if...
- Their employee numbers have not grown over the last 3 years including firms established in the last 3 years
- And, they are not anticipating substantial growth over the next 5 years Growth – OECD Definition
Firms have been defined as ‘high-growth’ if…
- Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years
- And, they are less than 5 years old
Firms have been defined as ‘gazelles’ if…
- Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years
- And, they are less than 5 years old
4.5.5 Statistical Significance
Throughout this report, any differences between types of firm that are referred to as being ‘significant’ are statistically significant at the 95% level of confidence. In some cases apparent differences that are not statistically significant at this level have been highlighted, but made clear that they are not significant. 4.6 Core vs. Boost Sample – Profile Differences
As mentioned previously, there are a number of differences in the profile of firms with overseas sites between those that were part of the core sample and those that were part of the boost sample. These are detailed below:
Table 4.6.1 Profile Comparison
| Profile | Firms with overseas sites | Core sample (free-find) | Boost sample (bought-in) | |--------------------------|---------------------------|-------------------------|--------------------------| | Base | | 94 | 100 | | Age | | | | | \<2 years | 5% | 1% | | 2-5 years | 9% | 1% | | 5-10 years | 35% | 20% | | 10-20 years | 19% | 25% | | >20 years | 32% | 53% | | No. of employees | | | | | \<10 | 30% | 12% | | 10-49 | 43% | 35% | | 50-99 | 12% | 14% | | 100-249 | 7% | 16% | | 250+ | 9% | 22% | | Turnover | | | | | \<£500k | 19% | 3% | | £500k-£2m | 30% | 8% | | £2m-£10m | 19% | 19% | | £10m-£50m | 13% | 32% | | >£50m | 7% | 18% | | Sector | | | | | Production | 34% | 40% | | Services | 65% | 57% | | Ownership | | | | | UK | 71% | 76% | | Foreign/joint UK & foreign | 28% | 24% | | No. of overseas sites | | | | | None (considerer) | 11% | 0% | | 1 | 38% | 20% | | 2-5 | 32% | 40% | | 6-10 | 5% | 14% | | >10 | 13% | 26% | | Type of overseas sites | | | | | Manufacturing/assembly | 22% | 27% | | Call centre | 9% | 3% | | Sales/service delivery | 85% | 95% | | R&D | 19% | 7% | | No. of markets active in | | | | | None (considerer) | 11% | 0% | | 1 | 5% | 4% | | 2-5 | 20% | 7% | | 6-10 | 16% | 20% | | >10 | 47% | 69% |
As detailed above, firms from the boost sample tend to be older, larger, have more overseas sites and be active in a greater number of overseas markets. 5. Modes of Internationalisation
5.1 Modes Used
Firms were asked which of a list of overseas business activities they had been involved in over the last five years. Those not involved in any of these overseas activities were asked whether they were seriously considering starting to conduct overseas business via any of these routes in the next year, and only those responding positively to this question were invited to take part in the research. This group (the ‘considerers’) were asked to indicate which types of activities they were planning to become involved in.
The chart below shows usage (and consideration for ‘considerers’) of these overseas business activities.
Chart 5.1.1 Modes Of Internationalisation Used In Last 5 Years (Or Seriously Considering In Next Year For ‘Considerers’)
- Selling direct: 87%
- Selling through agents or distributors: 41%
- Licensing, franchising or contractual arrangements: 11%
- Operating overseas site: 11%
Base: All respondents (Base) – (903)
The vast majority of internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. However, only around 1 in 10 are involved in other ‘contractual arrangements’ (such as licensing or franchising) or operate their own overseas sites.
This is consistent with the picture seen in previous waves of this survey of internationalising firms.
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5 Please note that 61 of the 903 firms interviewed (7%) were not yet doing business overseas but were planning to do so in the next year. The table below shows separate analysis of internationalisation modes for firms that are already engaged in overseas business and those that are just planning to start in the next year (i.e. ‘considerers’).
Table 5.1.1 Modes Of Internationalisation – By Active Exporters & Considerers
| | Total | Status | |----------------------|-------|--------| | | | Active | Considerer | | Base | 903 | 842 | 61 | | Selling direct | 87% | 87% | 78% | | Agents/distributors | 41% | 42% | 31% | | Contractual arrangements | 11% | 11% | 20% | | Overseas site | 11% | 10% | 19% |
As seen above, firms that are just planning to start doing business overseas are comparatively less likely to be looking at selling direct or using agents, but are more inclined to be considering contractual arrangements or setting up their own overseas site. However, the low base of ‘considerers’ should be taken into account when interpreting these results. 5.2 Number & Type of Overseas Sites
As seen previously, 11% of firms operated their own overseas sites (or were planning to do so in the next year). These firms were asked to provide details of the main purpose of the site(s).
Most overseas sites are either distribution/sales offices or service delivery sites. However, a quarter of firms have production sites.
Firms with overseas sites were also asked to indicate how many sites it was that they had, with the following results. Please note that ‘considerers’ were not asked this question and have been excluded from the analysis below.
Over two-thirds of those firms with overseas sites have 2 or more of them, and a small minority (9%) operate in excess of 20 sites, suggesting that they are large multi-nationals. As mentioned previously, there were a number of differences between firms interviewed in the core sample (a representative sample of internationalising firms) and those interviewed in the boost sample (a ‘bought in’ sample of firms with overseas sites). This is particularly evident when it comes to the number and type of overseas sites that they operate, as set out below.
Table 5.2.2 Type of Overseas Sites – By Sample Type
| | 2011 Survey | | | 2010 Survey | | |----------------------|-------------|----------|----------|-------------|----------| | | Total | Core sample | Boost sample | Total | | | Base: All with/considering overseas sites | 194 | 94 | 100 | 121 | | | Manufacturing/assembly | 25% | 22% | 27% | 21% | | | Call centre | 6% | 9% | 3% | 7% | | | Distribution/sales | 76% | 66% | 86% | 64% | | | Service delivery | 46% | 50% | 42% | 57% | | | R&D | 13% | 19% | 7% | 27% | | | Don't know | 4% | 5% | 2% | 2% | |
Table 5.2.3 Number of Overseas Sites – By Sample Type
| | 2011 Survey | | | 2010 Survey | | |----------------------|-------------|----------|----------|-------------|----------| | | Total | Core sample | Boost sample | Total | | | Base: All with overseas sites | 184 | 84 | 100 | 115 | | | One | 30% | 43% | 20% | 41% | | | 2-5 | 38% | 36% | 40% | 37% | | | 6-10 | 10% | 6% | 14% | 11% | | | 11-20 | 11% | 10% | 13% | 3% | | | 21-50 | 7% | 4% | 9% | 3% | | | More than 50 | 3% | 1% | 4% | 4% | | | Don't know | 1% | 1% | 0% | 2% | |
As detailed above, firms in the boost sample tended to have a significantly greater number of overseas sites, with 80% having more than one such site compared to just 56% of firms in the core sample. When comparing on a ‘like-for-like’ basis between the 2011 core sample and the 2010 total sample (which did not include a boost), the profile in terms of number of overseas sites is very similar.
It also appears that firms in the boost sample are more likely to be operating distribution/sales sites, whereas those in the core sample are comparatively more likely to have R&D facilities overseas. Again, the profile of the core sample closely matches that of the 2010 sample in this respect. 5.3 ‘Web Only’ Exporters
Almost half of all internationalising firms (48%) only sell direct to customers when doing business overseas (i.e. they do not use agents, contractual arrangements or operate overseas sites). This group were asked whether they ever made overseas sales directly through their website and, if so, whether they only sold overseas through their website. The chart below summarises these results.
Chart 5.3.1 Web Sales (Firms That Only Sell Direct)
Approaching a third (31%) of those firms that only sell direct indicate that at least some of these sales are made through their website, and 8% rely solely on web sales.
As seen below, when applied to the total sample, this equates to 4% of all internationalising firms being ‘web only’ exporters. Non-users of UKTI are significantly more likely to only sell overseas through their website (5% compared to just 1% of users).
Table 5.3.1 Web Only Exporters – By UKTI Usage
| | Firms that only sell direct | All internationalising firms | |----------------------|----------------------------|-----------------------------| | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | **Base** | 432 | 90 | 342 | 903 | 248 | 655 | | ‘Web only’ exporters | 8% | 3% | 9% | 4% | 1% | 5% | The table below provides details of the sector profile of ‘web only’ exporters, in comparison to internationalising firms as a whole. Please be aware of the low base size for ‘web only’ exporters when interpreting these results.
Table 5.3.2 Web Only Exporters – Sector Profile
| Sector | All internationalising firms | ‘Web only’ exporters | |---------------------------------------------|------------------------------|----------------------| | Base | 903 | 36 | | A – Agriculture, hunting & forestry | 0% | 0% | | D – Manufacturing | 34% | 23% | | E – Electricity, gas & water supply | 0% | 0% | | F – Construction | 1% | 0% | | G – Wholesale & retail trade | 21% | 44% | | H – Hotels & catering | 0% | 0% | | I – Transport, storage & communication | 5% | 4% | | J – Financial intermediation | 5% | 2% | | K – Real estate, renting & business activities | 27% | 19% | | M – Education | 1% | 4% | | N – Health & social work | 0% | 0% | | O – Other community, social & personal service activities | 4% | 5% |
As might be expected, firms that do business overseas solely through their website are significantly more likely to be operating in the wholesale and retail sector. 5.4 Importing
Firms were also asked whether they imported any goods or services from overseas, and the chart below summarises these results.
Chart 5.4.1 Proportion That Have Imported Goods or Services in Last 5 Years
Over half of firms have imported in the last 5 years, and this is more likely to be the case amongst users of UKTI. However, please note that firms were not eligible to participate in the research purely on the basis of import activity, and they had to also be involved in one of the outward internationalisation modes to qualify for interview. 5.5 Internationalisation Modes by Firm Profile
This section provides more detailed analysis of the internationalisation modes used by firm characteristic (such as UKTI usage, size, innovation, etc).
As seen below, whilst users and non-users are equally likely to sell direct to customers overseas and use contractual arrangements, the former are more inclined to also use agents or distributors and operate their own overseas sites.
Table 5.5.1 Modes Of Internationalisation – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Selling direct | 87% | 88% | 86% | | - 'Web only' exporters | 4% | 1% | 5% | | Agents/distributors | 41% | 54% | 36% | | Contractual arrangements | 11% | 12% | 11% | | Overseas site | 11% | 17% | 8% | | - Manufacturing/assembly | 3% | 5% | 2% | | - Call centre | 1% | 0% | 1% | | - Sales/service delivery | 9% | 14% | 7% | | - R&D | 2% | 4% | 2% | | Importing | 56% | 64% | 52% |
Small firms with less than 10 employees are generally less likely to use agents/distributors, do business overseas through contractual and operate their own overseas sites. As might be expected, younger firms that have been established for no more than 5 years are also less likely to have overseas sites. Smaller and younger firms are also most likely to be ‘web only’ exporters.
Table 5.5.2 Modes Of Internationalisation – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Selling direct | 88% | 88% | 86% | 87% | 87% | 80% | 82% | 89% | | - 'Web only' exporters | 7% | 3% | 3% | 5% | 2% | 1% | 0% | 0% | | Agents/distributors | 37% | 38% | 43% | 37% | 45% | 58% | 43% | 49% | | Contractual arrangements | 12% | 15% | 9% | 9% | 13% | 18% | 11% | 9% | | Overseas site | 6% | 13% | 12% | 5% | 16% | 25% | 19% | 33% | | - Manufacturing/assembly | 0% | 2% | 3% | 1% | 4% | 7% | 0% | 22% | | - Call centre | 0% | 2% | 0% | 0% | 1% | 4% | 2% | 0% | | - Sales/service delivery | 5% | 12% | 9% | 4% | 13% | 23% | 19% | 24% | | - R&D | 0% | 2% | 3% | 1% | 3% | 9% | 6% | 9% | | Importing | 52% | 48% | 60% | 51% | 59% | 71% | 64% | 71% | As might be expected, the longer firms have been doing business overseas and the more markets they are in, the more likely they generally are to use each mode (although the exception to this is contractual arrangements which are slightly more widely used by firms that have only started doing business overseas in the last 2 years). In particular, experienced firms are notably more inclined to use agents and distributors, and they are also more likely to import. However, it is interesting to note that export experience appears to have little bearing on the likelihood of being a ‘web only’ exporter, suggesting that firms that fall into this category do not tend to develop alternative sales channels over time.
Table 5.5.3 Modes Of Internationalisation – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 198 | 415 | 287 | 441 | 174 | 279 | | Selling direct | 80% | 88% | 87% | 84% | 89% | 89% | | - ‘Web only’ exporters | 5% | 4% | 3% | 3% | 5% | 3% | | Agents/distributors | 36% | 37% | 47% | 30% | 42% | 57% | | Contractual arrangements | 14% | 11% | 10% | 9% | 10% | 14% | | Overseas site | 11% | 10% | 12% | 8% | 9% | 16% | | - Manufacturing/assembly | 3% | 2% | 3% | 2% | 2% | 5% | | - Call centre | 1% | 1% | 1% | 1% | 1% | 1% | | - Sales/service delivery | 10% | 8% | 10% | 6% | 7% | 14% | | - R&D | 1% | 2% | 3% | 1% | 1% | 5% | | Importing | 42% | 52% | 65% | 44% | 63% | 69% |
The following table provides analysis by whether or not firms are innovative or IP active (for the definitions of ‘innovative’ firms and ‘IP active’ firms used in this analysis, see Chapter 6.7). It is clear from the analysis below that innovative and IP active firms are more likely to be engaged in the less common internationalisation modes (i.e. agents, contractual arrangements and overseas sites). These types of firms are also more likely to import.
Table 5.5.4 Modes Of Internationalisation – By Innovation
| | Innovative | IP Active | |------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Selling direct | 88% | 86% | 87% | 92% | 85% | | - ‘Web only’ exporters | 3% | 4% | 4% | 2% | 4% | | Agents/distributors | 50% | 46% | 29% | 54% | 37% | | Contractual arrangements | 14% | 13% | 6% | 18% | 9% | | Overseas site | 15% | 13% | 5% | 19% | 8% | | - Manufacturing/assembly | 4% | 4% | 0% | 5% | 2% | | - Call centre | 1% | 1% | 0% | 1% | 1% | | - Sales/service delivery | 14% | 11% | 4% | 18% | 6% | | - R&D | 4% | 3% | 1% | 6% | 1% | | Importing | 62% | 62% | 41% | 67% | 52% | The table below provides analysis by firms’ growth objectives over the next 5 years, and also shows results separately for innovative, high growth firms (a key group for UKTI). This analysis suggests that those firms that are planning to grow are more likely to be involved in all of the internationalisation modes, with those expecting ‘substantial’ growth particularly likely to have overseas sites and be doing business overseas through contractual arrangements.
Table 5.5.5 Modes Of Internationalisation – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Selling direct | 80% | 88% | 89% | 89% | 85% | 87% | | - 'Web only' exporters | 3% | 4% | 3% | 4% | 3% | 4% | | Agents/distributors | 37% | 40% | 46% | 50% | 44% | 29% | | Contractual arrangements | 5% | 11% | 15% | 15% | 12% | 6% | | Overseas site | 7% | 9% | 19% | 21% | 10% | 5% | | - Manufacturing/assembly | 0% | 2% | 6% | 7% | 2% | 0% | | - Call centre | 1% | 1% | 1% | 1% | 1% | 0% | | - Sales/service delivery | 5% | 7% | 16% | 18% | 8% | 4% | | - R&D | 2% | 1% | 5% | 6% | 2% | 1% | | Importing | 48% | 59% | 57% | 61% | 62% | 41% |
The table below shows usage of the various different modes of internationalisation by firms’ growth, using the ASBS and OECD definitions (for full details of these definitions please refer to Chapter 6.9). There is some evidence that firms that are defined as growing under the ASBS definition (i.e. sustained, contained or new growth) are more likely to use agents and operate overseas sites.
Table 5.5.6 Modes Of Internationalisation – By Growth
| | ASBS Definition | OECD Definition | |-------------------|-----------------|-----------------| | | Sustained | Contained | New | No growth | High growth | Gazelles | | Base | 120 | 128 | 160 | 495 | 112 | 38 | | Selling direct | 93% | 86% | 85% | 86% | 94% | 95% | | - 'Web only' exporters | 3% | 1% | 4% | 4% | 4% | 3% | | Agents/distributors | 49% | 45% | 45% | 37% | 45% | 39% | | Contractual arrangements | 16% | 7% | 13% | 10% | 16% | 5% | | Overseas site | 20% | 12% | 18% | 7% | 18% | 5% | | - Manufacturing/assembly | 5% | 4% | 7% | 1% | 4% | 0% | | - Call centre | 2% | 1% | 1% | 1% | 2% | 0% | | - Sales/service delivery | 19% | 9% | 15% | 6% | 17% | 5% | | - R&D | 6% | 1% | 3% | 1% | 6% | 0% | | Importing | 59% | 63% | 56% | 53% | 51% | 61% | Analysis has also been provided by whether or not younger firms are ‘born global’ (i.e. have been conducting business overseas since they were established) or are defined as being ‘young, technology intensive’. For the definitions of these groups, please refer to Chapters 6.6.2 and 6.7.3 respectively.
As seen below, firms that are classified as ‘born global’ under the alternative, tighter definition are significantly more likely to use more advanced internationalisation modes (i.e. agents, contractual arrangements, overseas sites). They also appear less likely to be ‘web only exporters’ but are more likely to be importing goods and services from overseas.
Table 5.5.7 Modes Of Internationalisation – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 234 | 128 | 52 | 124 | 667 | | Selling direct | 88% | 91% | 87% | 92% | 86% | | - ‘Web only’ exporters | 7% | 6% | 2% | 6% | 3% | | Agents/distributors | 37% | 40% | 50% | 44% | 42% | | Contractual arrangements | 12% | 11% | 17% | 12% | 11% | | Overseas site | 6% | 6% | 6% | 4% | 12% | | - Manufacturing/assembly | 0% | 0% | 0% | 1% | 3% | | - Call centre | 0% | 0% | 0% | 0% | 1% | | - Sales/service delivery | 5% | 5% | 6% | 2% | 10% | | - R&D | 0% | 0% | 0% | 0% | 3% | | Importing | 52% | 61% | 73% | 59% | 57% | 5.6 Number of Modes Used
The chart below provides an analysis of the number of modes firms have been involved in the last five years (or are planning to do in the next year in the case of ‘considerers’). Please note that this analysis is based just on the ‘outward’ internationalisation modes and does not include importing.
Chart 5.6.1 Number Of Modes Of Internationalisation Used In Last 5 Years (Or Considering In Next Year For ‘Considerers’)
Approaching two-thirds of all internationalising firms (63%) are only using a single mode when doing business overseas, with only 1 in 10 involved in 3 or 4 different modes.
UKTI users are more likely to employ multiple approaches when doing business overseas, with 52% using more than one mode compared to only 32% of non-users. As seen below, this picture varies considerably across modes. In particular, those involved in some form of contractual arrangement or operating their own overseas site are much more likely to be involved in 3 or 4 different modes, suggesting that firms tend to adopt these approaches later in their international development.
Table 5.6.1 Number of Modes – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 784 | 363 | 105 | 194 | | One | 59% | 23% | 9% | 10% | | Two | 29% | 54% | 25% | 40% | | Three | 10% | 19% | 50% | 36% | | Four | 2% | 5% | 17% | 14% | 5.7 Order of Setting Up Overseas Sites
Those firms that operated their own overseas site(s) were asked when they set this up in relation to the various other modes of internationalisation. The chart below summarises these results, both at the total level and by the total number of modes firms are involved in.
Chart 5.7.1 When First Set Up Overseas Site (In Relation To Other Modes)
Half of all firms with overseas sites (51%) set up this site after selling overseas through one other mode. However, it is interesting to note that for a fifth of these firms, the first way in which they did business overseas was through establishing an overseas site. The table below presents this data in a different way, showing the various combinations of modes that firms used before setting up their first overseas site.
Table 5.7.1 Internationalisation Modes Used Before Setting Up Overseas Site
| Individual combinations | Firms with overseas sites | |--------------------------------------------------------------|---------------------------| | Base: All with overseas site | 184 | | Selling direct | 40% | | Selling direct & agents/distributors | 10% | | Agents/distributors | 8% | | Contractual arrangements | 3% | | Selling direct & agents/distributors & contractual arrangements| 3% | | Selling direct & contractual arrangements | 2% | | Agents/distributors & contractual arrangements | 1% | | Nothing (i.e. overseas site was first mode) | 20% | | Don’t know | 14% |
Summary
| Net: Sold direct before overseas site | 55% | | Net: Used agents/distributors before overseas site | 21% | | Net: Used contractual arrangements before overseas site | 9% | | Net: Overseas site was first mode used | 20% |
Over half of these firms (55%) sold direct before setting up their overseas site, a fifth used agents or distributors and around 1 in 10 used contractual arrangements.
The most common combination of mode(s) before setting up an overseas site was to just sell direct (40%), followed by selling direct and using agents (10%) and just using agents (8%). 5.8 Reasons for Operating Overseas Sites
5.8.1 Summary
Those firms that operated an overseas site, or planned to do so in the next year, were read out a number of possible reasons for doing so and asked how important each of these were to them on a 5 point scale (where 1 meant it was a ‘not at all important reason’ and 5 meant it was a ‘very important reason’).
Due to a combination of interview length constraints and relevance, the specific reasons tested differed depending on the type(s) of overseas site each firm operated. The table below sets out the various reasons for operating overseas sites that were tested, and which types of sites they were asked about.
Table 5.8.1.1 Reasons For Operating Overseas Site - Approach
| Reason | Manufacturing / Assembly | Call Centre | Distribution / Sales Office | Service Delivery | R&D | Base | |------------------------------------------------------------------------|--------------------------|-------------|------------------------------|------------------|-----|------| | Your overseas customers prefer you to have a local presence | ✓ | ✓ | ✓ | ✓ | ✓ | (194) | | It is the best way to access people with the specialist knowledge and skills you require | ✓ | ✓ | ✓ | ✓ | ✓ | (194) | | It enables you to overcome import restrictions, avoid import duties or gain other tax advantages | ✓ | ✓ | ✓ | ✓ | ✓ | (194) | | The technical nature of your products or services means that you need an ‘on the ground’ facility to provide customer support | ✓ | ✓ | ✓ | ✓ | ✓ | (194) | | Your competitors have sites in that market, so you decided to do the same | ✓ | ✓ | | | ✓ | (67) | | It enables you to access cheaper resources, such as cheaper wages or cheaper raw materials | ✓ | ✓ | | | ✓ | (67) | | It is the best way to build up strong working relationships with your customers in that market | ✓ | ✓ | ✓ | | ✓ | (192) | | It enables you to offer quicker response times for your customers | ✓ | ✓ | | | | (55) | | It reduces shipment costs | ✓ | | | | | (48) | | You always approach overseas markets by setting up an overseas site | ✓ | ✓ | | | | (182) | | You don’t want to reduce your profit margins by employing a ‘middle man’ | ✓ | ✓ | | | | (182) | | It is the best way to protect your intellectual property | ✓ | ✓ | ✓ | | ✓ | (193) | | It is the best way to ensure quality or customer service | ✓ | ✓ | | | ✓ | (182) | | It is the best way to get the necessary product development done for customers in that market | ✓ | | | | ✓ | (25) | The following table shows the proportion of firms rating each reason as important (i.e. scoring 4 or 5 on the 5 point scale).
Table 5.8.1.2 Reasons For Operating Overseas Site – By Type Of Site
| % rating as important reason (4-5 out of 5, where 1 is ‘not at all important’ and 5 is ‘very important’) | Type of Site | |-------------------------------------------------|--------------| | | Manufacturing / Assembly | Call Centre | Distribution / Sales Office | Service Delivery | R&D | | Base: All with/considering overseas sites | 48 | 11 | 148 | 89 | 25 | | Your overseas customers prefer you to have a local presence | 71% | 73% | 76% | 81% | 68% | | It is the best way to access people with the specialist knowledge and skills you require | 46% | 27% | 49% | 55% | 44% | | It enables you to overcome import restrictions, avoid import duties or gain other tax advantages | 25% | 36% | 14% | 19% | 24% | | The technical nature of your products or services means that you need an ‘on the ground’ facility to provide customer support | 60% | 64% | 61% | 61% | 52% | | Your competitors have sites in that market, so you decided to do the same | 48% | 45% | - | - | 32% | | It enables you to access cheaper resources, such as cheaper wages or cheaper raw materials | 58% | 55% | - | - | 36% | | It is the best way to build up strong working relationships with your customers in that market | 85% | - | 78% | 83% | - | | It enables you to offer quicker response times for your customers | 81% | 91% | - | - | - | | It reduces shipment costs | 46% | - | - | - | - | | You always approach overseas markets by setting up an overseas site | - | - | 22% | 21% | - | | You don’t want to reduce your profit margins by employing a ‘middle man’ | - | - | 36% | 46% | - | | It is the best way to protect your intellectual property | 35% | - | 36% | 39% | 24% | | It is the best way to ensure quality or customer service | - | - | 68% | 73% | - | | It is the best way to get the necessary product development done for customers in that market | - | - | - | - | 40% |
Overall, the most significant motivations for operating overseas sites relate to developing relationships with customers and better meeting their needs.
For firms with manufacturing or assembly sites, the key reasons are that it represents the best way of building relationships with overseas customers, it enables quicker response times and that customers prefer a local presence. A similar picture is seen for distribution/sales offices and service delivery sites, with ensuring quality or customer service also emerging as a major motivation for these firms. Please note that the low bases sizes for call centres and R&D facilities makes it difficult to draw firm conclusions in this respect, but it does seem that the main reasons for operating these types of sites are also customer-orientated.
It is interesting to note that relatively few firms are driven by a desire to overcome import restrictions, avoid duties or gain other tax advantages, although this is a slightly more significant motivation for production sites, call centres and R&D facilities.
The following tables provide further analysis of the motivations for operating overseas sites by firm profile. Please note that for all this sub-analysis, only reasons that were asked to more than 90% of respondents are included.
Table 5.8.1.3 Reasons For Operating Overseas Site – By UKTI Usage
| % rating as important reason (4-5 out of 5, where 1 is 'not at all important' and 5 is 'very important') | Total | UKTI Usage | |---|---|---| | | | UKTI User | Non-User | | Base: All with/considering overseas sites | 194 | 80 | 114 | | Overseas customers prefer a local presence | 75% | 78% | 74% | | Best way to access specialist knowledge and skills | 52% | 46% | 56% | | Overcome import restrictions, avoid import duties, tax advantages | 15% | 16% | 14% | | Need ‘on the ground’ support facility due to technical nature of products/services | 62% | 58% | 65% | | Best way to build strong working relationships with customers | 78% | 80% | 76% | | Always approach overseas markets by setting up site | 24% | 25% | 23% | | Don’t want to reduce profit margins by employing ‘middle man’ | 37% | 37% | 38% | | Best way to protect intellectual property | 36% | 34% | 37% | | Best way to ensure quality or customer service | 69% | 71% | 67% |
There are no statistically significant differences between users and non-users of UKTI, and for both groups the key motivations are to build stronger relationships with overseas customers, because customers prefer a local presence and because it is the best way to ensure quality or customer service. The table below provides similar analysis by age and size of firm.
Table 5.8.1.4 Reasons For Operating Overseas Site – By Age & Size
| % rating as important reason (4-5 out of 5) | Age (Years Trading) | Size (Number of Employees) | |-------------------------------------------|---------------------|---------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base: All with/considering overseas sites | | | | | | | | | | | 15 | 53 | 126 | 40 | 75 | 25 | 23 | 30 | | Overseas customers prefer a local presence| 73% | 74% | 76% | 65%| 75% | 92% | 70% | 80% | | Best way to access specialist knowledge and skills | 60% | 53% | 51% | 43%| 60% | 40% | 57% | 50% | | Overcome import restrictions, avoid import duties, tax advantages | 7% | 15% | 16% | 18%| 16% | 8% | 4% | 23% | | Need ‘on the ground’ support facility due to technical nature of products/services | 73% | 64% | 60% | 65%| 59% | 64% | 61% | 63% | | Best way to build strong working relationships with customers | 73% | 81% | 77% | 71%| 79% | 84% | 70% | 83% | | Always approach overseas markets by setting up site | 29% | 32% | 19% | 37%| 23% | 8% | 23% | 24% | | Don’t want to reduce profit margins by employing ‘middle man’ | 36% | 36% | 38% | 37%| 40% | 28% | 36% | 41% | | Best way to protect intellectual property | 47% | 29% | 37% | 44%| 36% | 20% | 35% | 40% | | Best way to ensure quality or customer service | 71% | 64% | 70% | 71%| 67% | 72% | 55% | 76% |
Although there appear to be some differences between firms established in the last 5 years and older firms, the low base size for the former group means that these apparent differences are not statistically significant. However, it is the case that firms that have been trading for less than 10 years are more likely to operate overseas sites because they ‘always approach overseas markets by setting up an overseas site’.
There are also no consistent differences by size of firms in terms of the reasons for operating overseas sites. The table below provides further analysis of the motivations for operating overseas sites by export experience (in terms of years exporting and number of markets firms are active in).
Table 5.8.1.5 Reasons For Operating Overseas Site – By Experience
| % rating as important reason (4-5 out of 5) | Years Exporting | Number of Markets | |--------------------------------------------|-----------------|------------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base: All with/considering overseas sites | 23 | 71 | 100 | 45 | 35 | 113 | | Overseas customers prefer a local presence | 78% | 73% | 76% | 76% | 74% | 75% | | Best way to access specialist knowledge and skills | 57% | 56% | 48% | 60% | 60% | 47% | | Overcome import restrictions, avoid import duties, tax advantages | 17% | 14% | 15% | 11% | 11% | 18% | | Need ‘on the ground’ support facility due to technical nature of products/services | 70% | 62% | 60% | 60% | 54% | 65% | | Best way to build strong working relationships with customers | 86% | 74% | 78% | 77% | 69% | 81% | | Always approach overseas markets by setting up site | 43% | 26% | 18% | 38% | 15% | 21% | | Don’t want to reduce profit margins by employing ‘middle man’ | 48% | 33% | 38% | 35% | 38% | 38% | | Best way to protect intellectual property | 61% | 23% | 39% | 39% | 26% | 38% | | Best way to ensure quality or customer service | 71% | 59% | 75% | 63% | 53% | 76% |
Once again, the low base sizes (particularly for recent exporters) should be considered when interpreting the above data. However, even when this is taken into account, less experienced exporters that have been doing business overseas for less than 2 years or are active in no more than 5 markets are significantly more likely to have decided to set up an overseas site because this is how they always approach overseas markets.
Interestingly, firms that have been exporting for less than 2 years are also significantly more likely to have decided to set up an overseas site because it is the best way to protect their intellectual property. However, it should be noted that there is no difference in this respect by the other measure of export experience (number of markets firms are doing business in).
There is also some indication that long-term exporters (doing business overseas for more than 10 years) and those that are active in more than 10 markets are less likely to view overseas sites as being the best way to access the specialist knowledge or skills they require. However, it should be noted that this difference is not statistically significant. The table below provides further analysis of the motivations for operating overseas sites by the various measures of firms’ innovation levels.
Table 5.8.1.6 Reasons For Operating Overseas Site – By Innovation
| % rating as important reason (4-5 out of 5) | Innovative | IP Active | |-------------------------------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | **Base: All with/considering overseas sites** | 118 | 165 | 29 | 87 | 99 | | Overseas customers prefer a local presence | 76% | 78% | 62% | 78% | 73% | | Best way to access specialist knowledge and skills | 51% | 54% | 41% | 46% | 57% | | Overcome import restrictions, avoid import duties, tax advantages | 16% | 17% | 3% | 23% | 9% | | Need ‘on the ground’ support facility due to technical nature of products/services | 63% | 62% | 59% | 62% | 61% | | Best way to build strong working relationships with customers | 81% | 78% | 75% | 80% | 75% | | Always approach overseas markets by setting up site | 23% | 23% | 29% | 19% | 28% | | Don’t want to reduce profit margins by employing ‘middle man’ | 35% | 38% | 36% | 48% | 27% | | Best way to protect intellectual property | 37% | 34% | 48% | 43% | 32% | | Best way to ensure quality or customer service | 71% | 70% | 61% | 69% | 69% |
Although they are not statistically significant, there is some evidence that innovative firms (by either definition) are more likely to operate overseas sites because their customers prefer a local presence, it is the best way to access specialist knowledge and skills, it helps avoid import duties or provides tax advantages, and it is the best way to ensure quality and customer service.
In contrast, non-innovative firms appear more likely to operate overseas sites simply because they always approach overseas markets in this way. Somewhat surprisingly, they are also more likely to feel that having an overseas site is the best way to protect their intellectual property (although as with all of these apparent differences, this is not statistically significant). However, it should be noted that the opposite is true for IP active firms, who are more likely to operate an overseas site to help protect their intellectual property than is the case for non-IP active firms.
There are other several significant differences between IP active and non-IP active firms, with the former more inclined to establish overseas sites to overcome import restrictions and duties and because they do not wish to reduce their profit margins by employing a ‘middle man’. 5.8.2 Overseas Customers Prefer Local Presence
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because their overseas customers prefer a local presence.
Chart 5.8.2.1 Your Overseas Customers Prefer You To Have A Local Presence
Three quarters of firms indicated that being able to have a local presence was an important motivation for operating their overseas site (i.e. scored 4-5 out of 5), with almost half claiming that this was a ‘very important’ reason. 5.8.3 Access Specialist Knowledge & Skills
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it was the best way to access the specialist knowledge and skills they required.
Chart 5.8.3.1 It Is The Best Way To Access People With The Specialist Knowledge & Skills You Require
Just over half of firms felt that one of the key reasons for operating an overseas site was that it enabled them to access specialist knowledge and skills. 5.8.4 Avoid Import Restrictions/Duties or Gain Tax Advantages
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it enabled them to overcome import restrictions, avoid import duties or gain other tax advantages.
Chart 5.8.4.1 It Enables You To Overcome Import Restrictions, Avoid Import Duties Or Gain Other Tax Advantages
Only 15% of firms indicated that this was an important reason for operating an overseas site (i.e. scored 4-5 out of 5), and well over half claimed that this had not motivated them at all. 5.8.5 Need ‘On The Ground’ Customer Support
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because the technical nature of their products or services meant that they needed an ‘on the ground’ facility to provide customer support.
Chart 5.8.5.1 The Technical Nature Of Your Products Or Services Means That You Need An ‘On The Ground’ Facility To Provide Customer Support
Approaching two-thirds of firms indicated that a key motive for establishing their overseas site was because they needed to be able to deliver customer support in the market, due to the technical nature of their products or services. Over a third felt that this was a ‘very important’ factor in their decision. 5.8.6 Competitors Have Sites In Market
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because their competitors also had sites in that market. Please note that this question was only asked to those operating a manufacturing site, call centre or R&D facility.
Chart 5.8.6.1 Your Competitors Have Sites In That Market, So You Decided To Do The Same
Opinion was fairly evenly divided amongst these firms when it came to the extent that they were motivated by competitors also having sites in the market, with 45% indicating this was an important reason (i.e. 4-5 out of 5) but 42% claiming it had very little or no influence on their decision (i.e. 1-2 out of 5). 5.8.7 Access Cheaper Resources
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it enabled them to access cheaper resources. Please note that this question was only asked to those operating a manufacturing site, call centre or R&D facility.
Chart 5.8.7.1 It Enables You To Access Cheaper Resources, Such As Cheaper Wages Or Cheaper Raw Materials
Just over half of firms with manufacturing sites, call centres or R&D facilities indicated that accessing cheaper resources was a key factor in their decision to establish this site. 5.8.8 Build Customer Relationships
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it was the best way to build up strong working relationships with their customers. Please note that this question was only asked to those operating a manufacturing site, sales/distribution site or service delivery site.
Chart 5.8.8.1 It Is The Best Way To Build Up Strong Working Relationships With Your Customers In That Market
Around three-quarter of these firms felt that the opportunity to build stronger relationships with customers has been an important factor in their decision to operate an overseas site, and only 4% believed that this had had no bearing on their decision. 5.8.9 Quicker Response Times
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it enabled them to offer quicker response times for their customers. Please note that this question was only asked to those operating a manufacturing site or call centre.
Chart 5.8.9.1 It Enables You To Offer Quicker Response Times For Your Customers
Amongst firms with overseas manufacturing sites or call centres, the ability to provide quicker response times to customers is clearly an important factor, with 82% describing this as an important reason (i.e. 4-5 out of 5).
Please note the low base sizes when comparing results between users and non-users of UKTI (26 and 29 respondents respectively). 5.8.10 Reduced Shipment Costs
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it reduced their shipment costs. Please note that this question was only asked to those operating a manufacturing site.
Chart 5.8.10.1 It Reduces Shipment Costs
Whilst almost half of firms with overseas manufacturing sites (46%) indicated that reduced shipment costs has been an important driver in the decision to establish this site, a similar proportion (42%) claimed that this had little or no influence on their decision (i.e. scored 1-2 out of 5).
Please note the low base sizes when comparing results between users and non-users of UKTI (26 and 22 respondents respectively). 5.8.11 Standard Approach
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because they always approached overseas markets in this way. Please note that this question was only asked to those operating a sales/distribution site or service delivery site.
Chart 5.8.11.1 You Always Approach Overseas Markets By Setting Up An Overseas Site
A significant minority of firms (24%) operate an overseas site because this is the way that they always do business overseas. However, well over half (57%) indicated that this has little or no bearing on their decision (i.e. scored 1-2 out of 5). 5.8.12 Avoid ‘Middle Man’
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because they did not want to reduce their profit margins by employing a ‘middle man’. Please note that this question was only asked to those operating a sales/distribution site or service delivery site.
Chart 5.8.12.1 You Don’t Want To Reduce Your Profit Margins By Employing A Middle Man
Although 37% of firms operating overseas sales or service delivery sites indicated that one of the key reasons for this was to retain profit by not employing a middle man (such as an agent or distributor), the same proportion felt that this had very little influence on their decision (i.e. scored 1-2 out of 5). 5.8.13 Protect Intellectual Property
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it was the best way to protect their intellectual property. Please note that this question was only asked to those operating a manufacturing site, sales/distribution site, service delivery site or R&D facility.
Chart 5.8.13.1 It Is The Best Way To Protect Your Intellectual Property
Over a third of firms viewed intellectual property protection as a significant reason for operating an overseas site (i.e. scored 4-5 out of 5). However, approaching half of firms with overseas sites indicated that this had little or no influence on them (i.e. 1-2 out of 5). 5.8.14 Quality & Customer Service
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it was the best way to ensure quality or customer service. Please note that this question was only asked to those operating a sales/distribution site or service delivery site.
Chart 5.8.14.1 It Is The Best Way To Ensure Quality Or Customer Service
Having an overseas sales or service delivery site is generally seen as beneficial in terms of ensuring quality or customer service, with over two-thirds of these firms indicating that this was an important reason for operating their site. 5.8.15 Product Development
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms were motivated to operate an overseas site because it was the best way to get the necessary product development done for customers in that market. Please note that this question was only asked to those operating an R&D facility.
Chart 5.8.15.1 It Is The Best Way To Get The Necessary Product Development Done For Customers In That Market
Perhaps surprisingly, only two-fifths of firms with an overseas R&D facility indicated that they were motivated by this being the best way to undertake the product development required for customers in that market. This suggests that for many of these firms there are other factors driving their decision and, as seen previously, the most widespread reasons for operating R&D facilities were because customers prefer a local presence and to enable an ‘on the ground’ customer support facility.
Please be aware that this analysis is based on just 25 firms that operate R&D sites (12 users and 13 non-users), so caution should be exercised when interpreting these results. 6. Profile
6.1 Age of Business
The chart below shows the profile of internationalising firms in terms of their age. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.1.1 When Business Established – By UKTI Usage
As detailed earlier, the overall sample frame for this study was stratified by age to ensure robust coverage of firms aged up to 5 years, firms aged 5-10 and firms more than 10 years old. The data was then weighted to the known profile of internationalising firms (based on data taken from the Annual Small Business Survey), and the overall profile of firms reflects this.
Overall, the age profile of UKTI users and non-users is very similar, although the former are slightly older (with 40% established more than 20 years compared to 32% of non-users). The table below shows this age data by firm size (measured via number of employees).
Table 6.1.1 When Business Established – By Size Of Firm
| Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |----------------------------|-----|-------|-------|---------|------| | Base | 536 | 251 | 45 | 31 | 23 | | Within the last 2 years | 6% | 2% | 1% | 2% | 2% | | 2-5 years ago | 17% | 7% | 4% | 2% | 0% | | 5-10 years ago | 27% | 22% | 16% | 9% | 0% | | 10-20 years ago | 30% | 24% | 15% | 14% | 9% | | More than 20 years ago | 20% | 45% | 64% | 74% | 89% |
Unsurprisingly, larger firms tend to be older than their smaller counterparts. However, it should be noted that a significant proportion of the smallest internationalising firms (with less than 10 employees) have been established for a considerable time (30% for between 10 and 20 years and 20% for over 20 years). 6.2 Size of Business (Employees)
The chart below shows the size profile of firms, measured via their number of employees. Analysis has been provided at the total level, and by UKTI users and non-users.
The majority of internationalising firms are relatively small in terms of staff numbers, with over half having less than 10 employees and most of the remainder having less than 50 employees. This reinforces the importance of considering the needs of smaller firms when formulating policy in the area of trade support.
UKTI users tend to be slightly larger than non-users, with 54% and 38% respectively having 10 or more employees. The table below shows firm size analysed by age.
Table 6.2.1 Number of Employees – By Age Of Firm
| Age (Years Trading) | Up to 5 | 6-10 | Over 10 | |---------------------|---------|------|---------| | Base | 236 | 256 | 411 | | Less than 10 | 77% | 65% | 46% | | 10-49 | 17% | 28% | 34% | | 50-99 | 2% | 4% | 8% | | 100-249 | 1% | 2% | 6% | | 250 or more | 0% | 0% | 5% | | Don’t know/refused | 3% | 2% | 1% |
Once again, the correlation between age and size of firm is highlighted. However, it should be noted that approaching half of the well-established internationalising firms (i.e. those trading for over 10 years) still have less than 10 employees. 6.3 Size of Business (Turnover)
The chart below shows the size profile of firms as measured by their annual turnover. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.3.1 Annual Turnover – By UKTI Usage
Over a third of internationalising firms have fairly modest turnovers of no more than £500,000, and only around 1 in 10 report sales in excess of £10million.
As was the case with employee numbers, UKTI users are also slightly larger in financial terms, with 31% reporting a turnover in excess of £2million compared to only 20% of non-users. The table below shows firm turnover analysed by both age and number of employees.
Table 6.3.1 Annual Turnover - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Up to £500,000 | 58% | 41% | 26% | 57% | 9% | 0% | 0% | 0% | | £500,000-£2million | 22% | 29% | 26% | 23% | 44% | 2% | 2% | 0% | | £2million-£10million | 7% | 10% | 18% | 6% | 25% | 48% | 16% | 9% | | £10million-£50million| 0% | 4% | 9% | 1% | 6% | 22% | 54% | 18% | | More than £50million | 0% | 1% | 4% | 0% | 0% | 9% | 14% | 40% | | Don't know/refused | 14% | 15% | 16% | 12% | 16% | 19% | 14% | 33% |
Unsurprisingly, there is a strong relationship between size measured by turnover and size measured by number of employees.
A similar relationship between turnover and age is also evident, with older firms more likely to have the larger turnovers of over £2million. However, it is certainly not the case that all older firms have large turnovers, with a quarter (26%) of those established more than 10 years reporting a turnover of £500,000 or less, and the same proportion (26%) reporting a turnover of between £500,000 and £2million. 6.4 Industry Sector
The chart below shows the profile of firms in terms of their industry sector, both at the total level and by UKTI usage. During the survey the data on sector was collected at the level of 1-digit SIC code, but for the purposes of this analysis it has been summarised into primary industries, production, construction and services.
Around two-thirds of internationalising firms are in the service sector, with almost all of the remainder operating in the production sector.
Interestingly, UKTI users are significantly more likely to operate in the production sector (46% vs. 29% of non-users), suggesting that these types of firms may have more need for export support. This data is fairly consistent with the main PIMS survey of UKTI users, which shows that 40% of users are in the production sector.(^6)
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(^6) PIMS 19-22 As seen below, there is some evidence that internationalising firms established over 10 years and those with at least 10 employees are more likely to be in the production sector than is the case for younger and smaller firms.
Table 6.4.1 Industry Sector - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Primary | 0% | 0% | 0% | 0% | 1% | 0% | 0% | 0% | | Production | 23% | 27% | 40% | 28% | 40% | 49% | 46% | 40% | | Construction | 1% | 1% | 2% | 0% | 4% | 0% | 0% | 0% | | Services | 76% | 72% | 57% | 71% | 55% | 51% | 54% | 60% | 6.5 Ownership
The table below provides an analysis of the ownership of firms in terms of whether they are domestically or foreign owned. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.5.1 Company Ownership – By UKTI Usage
The vast majority of internationalising firms are UK-owned, with only around 1 in 10 under foreign ownership (either wholly or partly). There is no difference between UKTI users and non-users in this respect.
As seen below, firms with 50 or more employees are considerably more likely to be foreign owned than their smaller counterparts.
Table 6.5.1 Company Ownership - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|--------|------|--------|-----|-------|-------|---------|------| | Base | | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | UK owned | | 93% | 93% | 87% | 95% | 88% | 62% | 69% | 69% | | Foreign owned | | 3% | 5% | 12% | 3% | 10% | 32% | 27% | 31% | | Joint UK & foreign owned | | 3% | 2% | 1% | 1% | 3% | 7% | 4% | 0% | 6.6 Experience of Doing Business Overseas
6.6.1 Number Of Years Doing Business Overseas
The chart below shows the experience profile of firms as measured by the length of time they have been involved in overseas business activity. Analysis has been provided at the total level, and by UKTI users and non-users.
As well as having a slightly older and larger profile than non-users, UKTI users also tend to be a little more experienced in overseas markets, with 75% having been doing business overseas for more than 5 years compared to 61% of non-users.
Only 2% of users are yet to start exporting (but planning to do so in the next year), compared to 7% of non-users. It should be noted that the main PIMS survey of UKTI users provides slightly different data in this respect, with 11% of users classified as ‘not yet exporting’(^7). However, this difference is likely to be due to the timing of the respective surveys in relation to when firms access UKTI support, with the PIMS survey conducted within 6 months of firms receiving support but the Internationalisation survey classifying firms as UKTI users if they indicate that they have used UKTI services in the past 5 years. As a result, the PIMS survey is likely to pick up some firms earlier in their overseas development (particularly if they are accessing support to help them start doing business overseas).
(^7) PIMS 19-22 The table below provides a comparison of the 2010 and 2011 Internationalisation survey results on export experience, and demonstrates that the profile has remained very consistent over time.
Table 6.6.1.1 Number Of Years Doing Business Overseas – Over Time
| | Total 2010 | Total 2011 | UKTI Users 2010 | UKTI Users 2011 | Non-Users 2010 | Non-Users 2011 | |----------------------|------------|------------|-----------------|-----------------|----------------|----------------| | **Base** | 902 | 903 | 235 | 248 | 667 | 655 | | Not yet exporting | 4% | 6% | 3% | 2% | 4% | 7% | | Less than 2 years | 12% | 12% | 8% | 10% | 13% | 12% | | 2-5 years | 20% | 17% | 16% | 13% | 21% | 19% | | 6-10 years | 25% | 23% | 30% | 27% | 24% | 22% | | 11-20 years | 20% | 22% | 20% | 22% | 21% | 22% | | More than 20 years | 17% | 20% | 22% | 25% | 16% | 18% | | Don't know/refused | 2% | 0% | 1% | 1% | 2% | 0% |
The following table below shows the 2011 survey data on the length of time firms have been involved in overseas business activity analysed by both size (measured by number of employees) and age.
Table 6.6.1.2 Number Of Years Doing Business Overseas - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | **Base** | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Not yet exporting | 14% | 6% | 3% | 8% | 5% | 0% | 2% | 0% | | Less than 2 years | 40% | 7% | 5% | 15% | 9% | 1% | 0% | 11% | | 2-5 years | 45% | 26% | 6% | 21% | 14% | 12% | 7% | 9% | | 6-10 years | 0% | 61% | 15% | 24% | 24% | 18% | 24% | 13% | | 11-20 years | 0% | 0% | 36% | 22% | 24% | 28% | 18% | 4% | | More than 20 years | 0% | 0% | 33% | 11% | 24% | 41% | 49% | 62% | | Don't know/refused | 0% | 0% | 1% | 0% | 1% | 0% | 0% | 0% |
Aside from the obvious fact that older firms have been doing business overseas for longer, the above analysis suggests when firms do internationalise they often do so reasonably early on. 45% of firms aged up to 5 years have been exporting for 2-5 years, 61% of firms aged 6-10 years have been exporting for 6-10 years, and 70% of firms aged over 10 years have been exporting for more than 10 years.
Similarly, there is a link between size and the length of time firms have been involved in overseas business activity, with smaller firms tending to have been involved in overseas business activity for a shorter period than the larger firms. 6.6.2 ‘Born Global’ Firms
Some younger firms have been classified as ‘born global’, based on whether they started doing business overseas from the outset. The details of the ‘born global’ definition, and the alternative tighter definition, are shown below.
| ‘Born Global’ Firms | |---------------------| | Firms have been defined as being ‘born global’ if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established | | Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established | | • And the proportion of turnover accounted for by overseas sales is over 25% |
The table below shows the proportions of firms classified as ‘born global’ via each of these definitions. Analysis has been provided based on all respondents and based just on younger firms.
| Table 6.6.2.1 Born Global Firms – By UKTI Usage | |-----------------------------------------------| | | All firms | Firms aged up to 5 years | | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 903 | 248 | 655 | 234 | 46 | 188 | | Born Global | 9% | 6% | 10% | 55% | 57% | 55% | | Born Global (alternative) | 4% | 3% | 4% | 22% | 30% | 20% | | Up to 5 years old but not Born Global | 8% | 5% | 9% | 45% | 43% | 45% | | Over 5 years old | 83% | 89% | 81% | - | - | - |
Overall, 9% of firms are classified as being ‘born global’ under the main definition and 4% under the tighter, alternative definition (equating to 55% and 22% respectively when based just on firms established in the last 5 years).
On the face of it, it looks as if UKTI users are less likely to be ‘born global’ than non-users (6% and 10% respectively). However, this is down to the slightly older profile of UKTI users, with this group containing fewer firms aged 5 years or less. When the analysis is based just on young firms, it is clear that UKTI users are equally likely to be classified as ‘born global’ by the main definition and appear more likely to be ‘born global’ under the alternative tighter definition (although it should be noted that this difference is not statistically significantly due to the low base sizes). As seen below, amongst firms established in the last 5 years, it appears that those with 10 or more employees are more likely to be ‘born global’.
Table 6.6.2.2 Born Global Firms – By Size (Up to 5 Years Old Only)
| | Firms aged up to 5 years | |--------------------------------|--------------------------| | | 0-9 emps | 10+ emps | | Base | 180 | 46 | | Born Global | 52% | 68% | | Born Global (alternative) | 22% | 27% | | Up to 5 years old but not Born Global | 48% | 32% | 6.6.3 Intermittent Exporters
As an additional indicator of export activity, firms were also asked whether they had made overseas sales every year since they started exporting or whether there had been some years with no overseas sales. Please note that this question was only asked to firms that had been doing business overseas for at least 2 years.
Chart 6.6.3.1 Whether Made Overseas Sales Every Year Since Starting Exporting – By UKTI Usage
Over a fifth of internationalising firms are ‘intermittent’ exporters, in the sense that they have not consistently made overseas sales since they started exporting. Whilst this is less likely to be the case amongst users of UKTI, a significant minority have still dipped in and out of overseas business. As seen below, smaller firms are more likely to be intermittent exporters. Interestingly, the same is true of older firms although this may be down to the fact that they tend to have been exporting for longer and hence have had a greater chance of experiencing a year without any overseas sales.
Table 6.6.3.1 Whether Made Overseas Sales Every Year Since Starting Exporting - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|--------|------|---------|-----|-------|-------|---------|------| | Base: All exporting 2 years or more | | 107 | 222 | 376 | 389 | 211 | 44 | 30 | 20 | | Some years with no overseas sales | | 13% | 23% | 22% | 26% | 18% | 14% | 9% | 10% | | Overseas sales every year | | 86% | 76% | 77% | 73% | 81% | 85% | 91% | 90% | | Don't know | | 1% | 1% | 1% | 1% | 1% | 2% | 0% | 0% |
Unsurprisingly, firms that are active in fewer markets are more likely to have experienced interruptions to their overseas business.
Table 6.6.3.2 Whether Made Overseas Sales Every Year Since Starting Exporting - By Number of Markets
| Number of Markets | Up to 5 | 6-10 | Over 10 | |-------------------|--------|------|---------| | Base: All exporting 2 years or more | 281 | 158 | 258 | | Some years with no overseas sales | 39% | 21% | 4% | | Overseas sales every year | 60% | 79% | 94% | | Don't know | 1% | 0% | 1% |
The table below shows these results separately for ‘web only exporters’ (please refer to Section 5.3 for details). Whilst it was hypothesised that this group might be more likely to also be intermittent exporters, due to the less engaged nature of their overseas business, this does not appear to be the case (although the low base size for web only exporters should be taken into account).
Table 6.6.3.3 Whether Made Overseas Sales Every Year Since Starting Exporting - By Web Only Exporters
| Total (all firms) | Web only exporters | |-------------------|--------------------| | Base: All exporting 2 years or more | 705 | 24 | | Some years with no overseas sales | 22% | 25% | | Overseas sales every year | 78% | 75% | | Don't know | 1% | 0% | 6.6.4 Number Of Markets
The chart below shows the number of overseas markets firms have done business in over the last 5 years. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.6.4.1 Number of Markets Done Business in During Last 5 Years – By UKTI Usage
Over half of internationalising firms have done business in more than five markets over the last five years, with a third indicating that they are active in more than 10.
Users of UKTI clearly have more overseas experience in this respect, with 45% having done business in more than 10 markets compared to only 28% of non-users. As seen below, the number of markets firms operate in tends to increase in line with age and size.
Table 6.6.4.1 Number of Markets Done Business in During Last 5 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|--------|------|---------|-----|-------|-------|---------|------| | Base | | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | None | | 14% | 6% | 3% | 7% | 5% | 0% | 0% | 0% | | One | | 13% | 11% | 8% | 11% | 8% | 0% | 4% | 4% | | 2-5 | | 33% | 33% | 31% | 35% | 28% | 17% | 27% | 16% | | 6-10 | | 17% | 18% | 21% | 20% | 22% | 16% | 16% | 18% | | More than 10 | | 22% | 30% | 36% | 25% | 36% | 63% | 54% | 60% | | Don’t know/refused | | 1% | 2% | 0% | 1% | 0% | 4% | 0% | 0% |
Firms were also asked whether they expected the number of markets they were doing business in to increase, decrease or stay the same over the next 3 years.
Chart 6.6.4.2 Whether Number of Markets Will Increase, Decrease or Stay the Same Over Next 3 Years – By UKTI Usage
Almost half of firms expect to expand into more markets over the next 3 years, with only a very small minority (3%) expecting a decline in this respect. Users of UKTI are significantly more ambitious in terms of their plans for market entry, with almost two-thirds expecting to expand into new markets over the next 3 years, compared to just two-fifths of non-users.
The table below shows the expected change in number of markets, analysed by both age and size.
Table 6.6.4.2 Whether Number of Markets Will Increase, Decrease or Stay the Same Over Next 3 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|-----|-------|-------|---------|------| | Up to 5 | 236 | 536 | 251 | 45 | 31 | 23 | | 6-10 | 256 | 44% | 48% | 55% | 57% | 76% | | Over 10 | 411 | 41% | 42% | 43% | 41% | 20% | | Not yet exporting | 14% | 7% | 5% | 0% | 0% | 0% | | Increase | 58% | 44% | 48% | 55% | 57% | 76% | | Stay the same | 26% | 41% | 42% | 43% | 41% | 20% | | Decrease | 1% | 3% | 3% | 2% | 0% | 0% | | Don't know/refused | 1% | 4% | 3% | 2% | 0% | 2% |
Although older firms tend to be active in a greater number of markets, it is younger firms that are more positive in terms of their growth plans, with 58% of firms established in the last 5 years expecting to enter new markets, compared to less than half of older firms.
Interestingly, a different picture is seen when it comes to size of firm, with larger firms more likely to anticipate an increase in the number of markets they operate in over the next 3 years. 6.6.5 Regions
The chart below shows the experience profile of firms as measured by the regions in which they have done business over the last 5 years. Analysis has been provided at the total level, and by UKTI users and non-users.
Table 6.6.5.1 Regions Currently Doing Business In – By UKTI Usage
| Regions | Total | UKTI Usage | |--------------------------|-------|------------| | | Base | UKTI User | Non-User | | | 903 | 248 | 655 | | Europe | 86% | 90% | 84% | | North America | 53% | 62% | 50% | | South & Latin America | 28% | 32% | 26% | | Middle East & Africa | 50% | 63% | 45% | | Asia Pacific | 51% | 67% | 45% | | Not yet exporting | 6% | 2% | 7% | | Don't know | 0% | 1% | 0% |
The vast majority of internationalising firms are doing business in Europe, and around half are operating in North America, the Middle East/Africa and the Asia Pacific region. However, only around a quarter are active in South or Latin American markets.
UKTI users are more likely to be doing business in each of these regions. Linked to this, they tend to be active in a significantly greater number of regions, with 25% doing business in all 5 regions of the world, compared to 16% of non-users. As seen below, the older and larger a firm is the more geographic areas they tend to be operating in.
Table 6.6.5.2 Regions Currently Doing Business In - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Regions | Number of Regions | |---------------------|-----------------------------|---------|-------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | None/not exporting | One | Two | Three | Four | Five | Don't know | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | 14% | 30% | 18% | 15% | 10% | 12% | 1% | | Europe | 75% | 84% | 90% | 82% | 90% | 97% | 100% | 91% | 14% | 30% | 18% | 15% | 10% | 12% | 1% | | North America | 43% | 54% | 56% | 50% | 57% | 58% | 51% | 71% | 6% | 26% | 20% | 18% | 16% | 13% | 0% | | South & Latin America| 16% | 23% | 32% | 22% | 33% | 41% | 30% | 49% | 3% | 21% | 18% | 19% | 15% | 13% | 0% | | Middle East & Africa| 36% | 44% | 57% | 45% | 56% | 65% | 49% | 76% | 7% | 20% | 15% | 17% | 13% | 14% | 0% | | Asia Pacific | 42% | 46% | 56% | 44% | 61% | 65% | 52% | 78% | 5% | 17% | 15% | 19% | 17% | 14% | 0% | | Not yet exporting | 14% | 6% | 3% | 7% | 5% | 0% | 0% | 0% | 14% | 30% | 18% | 15% | 10% | 12% | 1% | | Don't know | 1% | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% |
OMB Research Ltd 2011 Internationalisation Report – D3 75 6.6.6 Proportion Of Turnover Accounted For By Overseas Sales
The chart below shows firms' experience as measured by the proportion of their turnover that is accounted for by overseas sales. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.6.6.1 Proportion Of Turnover Accounted For By Overseas Sales – By UKTI Usage
In line with the fact that they have generally been doing business overseas for longer and operate in more markets, users of UKTI also report that a significantly greater proportion of their turnover is accounted for by overseas sales than is the case for non-users. Interestingly, there are no clear or consistent differences by age or size of firms in terms of the proportion of turnover accounted for by overseas sales. It is worth noting that a significant minority of young and small firms are extremely reliant on exports, with 19% of firms established in the last 5 years and 21% of those with less than 10 employees indicating that overseas sales account for more than half of their revenues.
Table 6.6.6.1 Proportion Of Turnover Accounted For By Overseas Sales - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|-----|-------|-------|---------|------| | Up to 5 | 236 | 536 | 251 | 45 | 31 | 23 | | 6-10 | 256 | 411 | | | | | | Over 10 | | | | | | | | Base | | | | | | | | Zero | 16% | 9% | 6% | 3% | 5% | 0% | | Less than 10% | 38% | 41% | 42% | 41% | 33% | 35% | | 11%-25% | 15% | 14% | 12% | 11% | 14% | 25% | | 26%-50% | 8% | 14% | 12% | 11% | 13% | 25% | | 51%-75% | 12% | 11% | 11% | 11% | 12% | 18% | | More than 75% | 7% | 9% | 11% | 10% | 8% | 13% | | Don't know/refused | 3% | 6% | 6% | 4% | 8% | 6% |
Table 6.6.6.1 Proportion Of Turnover Accounted For By Overseas Sales - By Age & Size Firms were also asked whether they expected the proportion of turnover accounted for by overseas sales to increase, decrease or stay the same over the next 3 years.
Chart 6.6.6.2 Whether Proportion of Turnover Accounted for by Overseas Sales will be Higher, Lower or Same in a Year's Time – By UKTI Usage
Overall, 41% of firms expect overseas sales to become more important to their business over the next year, with only 6% anticipating that they will account for a lower proportion of turnover than they do currently. This mirrors the results on whether firms expect to increase the number of market they operate in, when 48% thought that this would be the case and only 3% felt that the number of markets they operated in would decline (as seen in section 6.6.4).
UKTI users are more ambitious in their plans for overseas growth, with 50% expecting an increase in the proportion of turnover coming from overseas sales compared to just 37% of non-users. The table below demonstrates that there are no significant differences by age or size of firms in this respect.
Table 6.6.6.2 Whether Proportion of Turnover Accounted for by Overseas Sales will be Higher, Lower or Same in a Year’s Time - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|-----------------------------|--------|------|---------|-----|-------|-------|---------|------| | Base | | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Not yet exporting | | 14% | 6% | 3% | 7% | 5% | 0% | 0% | 0% | | Higher | | 43% | 45% | 39% | 38% | 41% | 56% | 48% | 53% | | About the same | | 34% | 38% | 50% | 45% | 48% | 36% | 47% | 38% | | Lower | | 8% | 7% | 5% | 8% | 4% | 7% | 0% | 4% | | Don't know/refused | | 2% | 5% | 2% | 2% | 3% | 2% | 6% | 4% | 6.6.7 Internal Expertise
Internationalising firms were also asked a number of questions to establish the level of overseas experience they had amongst staff in their business. They were first asked whether any of their staff had significant experience of doing business overseas before they joined the firm and, if so, whether this experience related to business contacts or expertise. They were also asked whether any of the company owners, partners or directors were born overseas.
Table 6.6.7.1 Internal Overseas Expertise – By UKTI Usage
| | Total | UKTI Usage | | | |--------------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Whether employ staff with previous overseas experience | | | | | | Yes | 29% | 37% | 26% | | - Business contacts | 22% | 31% | 19% | | - Expertise in doing business overseas | 27% | 36% | 23% | | No | 70% | 61% | 74% | | Don't know | 1% | 1% | 1% | | Whether any owners, partners or directors were born overseas | | | | | | Yes | 25% | 24% | 26% | | No | 72% | 74% | 72% | | Don't know | 2% | 2% | 2% |
Overall, 29% of firms employ staff that gained significant overseas experiences while working elsewhere, and in most cases this experience relates to both contacts and expertise. UKTI users are significantly more likely to have this type of internal resource.
A quarter of firms indicated that one or more of their owners, partners or directors was born overseas, and there is no difference between users and non-users in this respect. As seen below, larger firms are much more likely to have employees with previous export experience, which is unsurprising given that they have a greater number of staff. They are also more likely to have overseas-born owners, partners or directors. However, there is no difference in these areas by age of firm.
Table 6.6.7.2 Internal Overseas Expertise - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Whether employ staff with previous overseas experience | | | | Yes | 32% | 30% | 28% | 24% | 29% | 47% | 48% | 60% | | - Business contacts | 26% | 23% | 21% | 17% | 21% | 40% | 43% | 56% | | - Expertise in doing business overseas | 30% | 28% | 25% | 21% | 29% | 47% | 37% | 60% | | No | 68% | 69% | 71% | 76% | 69% | 50% | 49% | 40% | | Don't know | 0% | 1% | 1% | 0% | 2% | 3% | 4% | 0% | | Whether any owners, partners or directors were born overseas | | | | Yes | 29% | 26% | 24% | 23% | 23% | 45% | 36% | 40% | | No | 70% | 73% | 73% | 76% | 75% | 50% | 54% | 47% | | Don't know | 1% | 1% | 3% | 1% | 2% | 5% | 11% | 13% | The table below compares the profile of firms that have overseas-born owners, partners or directors and those that do not.
Table 6.6.7.3 Profile – By Whether Have Overseas Born Senior Management
| Profile | Overseas-Born Owners, Partners or Directors | |--------------------------------|---------------------------------------------| | | Yes | No | | **Base** | 233 | 652 | | **Age** | | | | 0-5 years | 20% | 16% | | 6-10 years | 24% | 24% | | Over 10 years | 57% | 60% | | **Size (employees)** | | | | 0-9 employees | 50% | 58% | | 10-249 employees | 43% | 38% | | 250+ employees | 5% | 2% | | **Sector** | | | | Primary | 0% | 1% | | Production | 26% | 36% | | Construction | 1% | 2% | | Services | 73% | 61% | | **Ownership** | | | | UK | 67% | 98% | | Foreign/joint UK & foreign | 33% | 2% | | **Innovation** | | | | Innovative | 74% | 71% | | Innovative (alternative) | 50% | 46% | | IP active | 28% | 21% | | **Overseas experience** | | | | Less than 2 years | 18% | 17% | | 2-10 years | 33% | 43% | | Over 10 years | 48% | 39% | | **Number of markets** | | | | Up to 5 markets | 43% | 48% | | 6-10 markets | 23% | 19% | | Over 10 markets | 33% | 32% | | **Growth objectives (next 5 years)** | | | | Grow substantially | 35% | 25% | | Grow moderately | 54% | 54% | | Same/smaller | 8% | 18% | | **Internationalisation modes used** | | | | Selling direct | 87% | 87% | | Agents/distributors | 46% | 40% | | Contractual arrangements | 16% | 9% | | Overseas sites | 29% | 9% |
As would be expected, firms with overseas-born members of their senior management team are considerably more likely to be foreign owned. They also tend to be slightly larger and are more likely to have been doing business overseas for in excess of 10 years, although there is no difference in the number of markets they are active in.
Whilst there is no difference in the proportion defined as innovative between firms with overseas-born senior management and those without, the former are more likely to be IP active. It is also the case that they are more inclined to do business overseas through contractual arrangements or via their own overseas sites. They also have more ambitious growth objectives. 6.7 Innovation
6.7.1 ‘Innovative’ Firms
Information on the engagement of employees in R&D and new product or service development activity, externally commissioned product or service development and sales of new products and services has been used to classify firms as either ‘innovative’ or ‘non-innovative’. The details of the ‘innovative’ definition, and the alternative tighter definition, are shown below.
| ‘Innovative’ Firms | |-------------------| | Firms have been defined as ‘innovative’ if they… | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product/service development | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years except firms established in the last 2 years |
Firms have been defined as ‘innovative’ under the alternative, tighter definition if they …
| • Have more than one employee engaged in R&D activity and more than one employee engaged in new product or service development and at least some employees are involved in the development of scientific or technical knowledge not commonly available | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years and these are ‘new to the world’ or ‘new to the sector’ |
The table below shows the proportions of firms classified as ‘innovative’ via each of these definitions. Comparative results have also been provided for UKTI users from the main PIMS surveys.
| Table 6.7.1.1 Innovative Firms – By UKTI Usage | |-----------------------------------------------| | | Total | UKTI Usage | UKTI Users (PIMS 19-22) | | | | UKTI User | Non-User | | | Base | 903 | 248 | 655 | 4057 | | Innovative | 72% | 86% | 66% | 83% | | Innovative (alternative) | 47% | 64% | 40% | 63% |
Approaching three-quarters of internationalising firms are classified as being innovative by the main definition, although this falls to 47% when the tighter, alternative definition is employed.
UKTI users are significantly more likely to be innovative than non-users, irrespective of which definition is used. Results for users are very consistent with those from the main PIMS surveys, demonstrating that the Internationalisation survey provides a good representation of UKTI users. The table below shows the proportion of firms classified as being innovative, analysed by both age and size.
Table 6.7.1.2 Innovative Firms - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Innovative | Innovative (alternative) | |---------------------|-----------------------------|------|------------|-------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Innovative | 66% | 75% | 72% | 66% | 78% | 82% | 84% | 93% | | Innovative (alternative) | 46% | 48% | 46% | 44% | 47% | 54% | 50% | 71% |
It is clear that the larger a firm is (in terms of employee numbers), the more likely it is to be innovative. There is also some evidence that firms established for at least 6 years are also more likely to be engaged in innovation activities. 6.7.2 IP Active Firms
Firms were asked to indicate whether or not they hold any patents or trademarks, either in the UK or overseas, for any of their products or services. This data has then been used to create a measure of ‘IP active’ firms, as detailed below.
| ‘IP Active’ Firms | |-------------------| | Firms have been defined as ‘IP Active’ if they… | | • Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas |
If they held any IP protection, firms were also asked whether this related to the UK or overseas countries. The table below shows the proportions of firms classified as ‘IP active’, as well as details of the specific type of IP protection held, whether it relates to the UK or overseas markets, and whether firms have any triadic patents.
Table 6.7.2.1 IP Protection – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 903 | 248 | 655 | | **IP Active** | | | | | Yes (IP active) | 23% | 38% | 17% | | No | 75% | 61% | 81% | | Don’t know | 2% | 1% | 2% | | **Type of IP Protection** | | | | | Patents | 10% | 20% | 7% | | Trademarks | 14% | 22% | 11% | | Other IP protection | 7% | 12% | 5% | | Not IP active | 77% | 62% | 83% | | **Geographical Coverage of IP Protection** | | | | | UK only | 5% | 7% | 4% | | Overseas only | 1% | 2% | 1% | | Both | 17% | 29% | 12% | | Not IP active | 77% | 62% | 83% | | **Triadic Patents** | | | | | Yes | 3% | 5% | 2% | | No | 97% | 95% | 98% |
Just under a quarter of internationalising firms have applied for or obtained some form of legal protection for any of their products or services, and are therefore defined as being IP active. The most common form of IP protection is trademarks, closely followed by patents, and the majority of those with IP protection indicate that this covers both the UK and some overseas markets. Only a very small minority of firms (3%) hold triadic patents.
______________________________________________________________________
8 A patent held for the same product or innovation in the USA, Europe and Japan. Reflecting the fact that they are more likely to be defined as innovative, UKTI users are also significantly more likely to be IP active. They are more likely to hold each type of IP protection, and are also more likely to have IP protection in overseas markets.
As seen below, smaller firms with less than 10 employees are least likely to be IP active. However, there is little difference in this respect by age of firm.
Table 6.7.2.2 IP Protection - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | IP Active | Type of IP Protection | Geographical Coverage of IP Protection | Triadic Patents | |---------------------|-----------------------------|-----------|-----------------------|---------------------------------------|-----------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | Yes (IP active) | No | Don’t know | Patents | Trademarks | Other IP protection | Not IP active | UK only | Overseas only | Both | Not IP active | Yes | No | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | 20% | 23% | 24% | 16% | 29% | 49% | 36% | 31% | 8% | 8% | 12% | 7% | 11% | 20% | 25% | 27% | | | | | | | | | | | 80% | 75% | 74% | 84% | 69% | 50% | 62% | 51% | 0% | 2% | 2% | 0% | 2% | 2% | 2% | 18% | | IP Active | | | | | | | | | 80% | 77% | 76% | 84% | 71% | 51% | 64% | 69% | 8% | 4% | 5% | 4% | 7% | 7% | 7% | 4% | | No | | | | | | | | | 97% | 97% | 97% | 98% | 98% | 95% | 96% | 91% | 3% | 3% | 3% | 2% | 2% | 5% | 4% | 9% | | Don’t know | | | | | | | | | 97% | 97% | 97% | 98% | 98% | 95% | 96% | 91% | 3% | 3% | 3% | 2% | 2% | 5% | 4% | 9% | Firms that operate their own overseas sites and those involved in contractual arrangements overseas (such as licensing, franchising or joint ventures) are most likely to hold IP protection.
Table 6.7.2.3 IP Protection - By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 784 | 363 | 105 | 194 | | IP Active | | | | | | Yes (IP active) | 24% | 30% | 38% | 45% | | No | 74% | 68% | 61% | 51% | | Don’t know | 1% | 2% | 2% | 4% | | Type of IP Protection | | | | | | Patents | 11% | 15% | 17% | 23% | | Trademarks | 15% | 17% | 24% | 32% | | Other IP protection | 8% | 8% | 9% | 10% | | Not IP active | 76% | 70% | 62% | 55% | | Geographical Coverage of IP Protection | | | | | | UK only | 6% | 4% | 3% | 3% | | Overseas only | 1% | 1% | 1% | 4% | | Both | 17% | 25% | 33% | 38% | | Not IP active | 76% | 70% | 62% | 55% | | Triadic Patents | | | | | | Yes | 3% | 5% | 8% | 8% | | No | 97% | 95% | 92% | 92% | 6.7.3 Young, Technology Intensive Firms
Some firms have been classified as ‘young, technology intensive’, and the details of this definition are shown below.
| ‘Young, Technology Intensive’ Firms | |-------------------------------------| | Firms have been defined as being ‘young, technology intensive’ if they… | | • Have been established for 5 years or less | | • And are classified as being innovative using the alternative (tighter) definition or are classified as IP active |
The table below shows the proportions of firms classified as ‘young, technology intensive’. Analysis has been provided based on all respondents and based just on younger firms.
Table 6.7.3.1 Young, Technology Intensive Firms – By UKTI Usage
| | All firms | Firms aged up to 5 years | |----------------------|-----------|--------------------------| | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 903 | 248 | 655 | 234 | 46 | 188 | | Young tech intensive | 9% | 9% | 9% | 53% | 77% | 47% | | Up to 5 years old but not young tech intensive | 8% | 3% | 10% | 47% | 23% | 53% | | Over 5 years old | 83% | 89% | 81% | - | - | - |
Overall, 9% of all internationalising firms are classified as being ‘young, technology intensive’, which equates to 53% of those established in the last 5 years.
Looking at the analysis based on all firms, it appears as if UKTI users and non-users are equally likely to be ‘young, technology intensive’. However, this is a function of the slightly older age profile of UKTI users, and when the analysis is based just on firms aged 5 years or less then it becomes very clear that UKTI users are significantly more likely to be ‘young, technology intensive’ (77% vs. 47% of non-users).
As seen below, amongst firms established in the last 5 years, there is no difference in the proportion of ‘young, technology intensive’ firms by number of employees.
Table 6.7.3.2 Young, Technology Intensive Firms – By Size (Up to 5 Years Old Only)
| | Firms aged up to 5 years | |----------------------|--------------------------| | | 0-9 emps | 10+ emps | | Base | 180 | 46 | | Young tech intensive | 53% | 55% | | Up to 5 years old but not young tech intensive | 47% | 45% | 6.8 Growth
6.8.1 Past Growth
Firms that had been in existence for at least three years were asked whether the number of people they currently employed was higher, lower or about the same than it had been three years ago. The chart below shows firms’ past growth profile, as determined by growth in employee numbers.
Chart 6.8.1.1 Whether Employee Numbers are Higher, Lower or Same as 3 Years Ago – By UKTI Usage
Just over a quarter of internationalising firms indicate that their employee numbers are higher than they were 3 years ago, but this is largely off-set by the 22% reporting that staffing levels have reduced over this time.
UKTI users are significantly more likely than non-users to report growth over the last 3 years, although similar proportions of both groups have become smaller over this period. To provide another perspective on past growth, firms were also asked whether, compared to this time three years ago, their turnover was higher, lower or about the same. The chart below shows firms’ past growth profile, as determined by growth in turnover.
Chart 6.8.1.2 Whether Turnover is Higher, Lower or Same as 3 Years Ago – By UKTI Usage
The picture in terms of turnover growth over the last 3 years is more positive than that based on employee numbers, with 44% of internationalising firms indicating that turnover has increased compared to 24% reporting a decline.
As well as demonstrating stronger growth in employee numbers, UKTI users have also out-performed non-users when it comes to turnover. The table below provides further analysis of the levels of both employee and turnover growth in the last 3 years.
Table 6.8.1.1 Employee & Turnover Growth in Last 3 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Employee Growth | Turnover Growth | |---------------------|-----------------------------|-----------------|-----------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Higher | 23% | 36% | 24% | 19% | 41% | 33% | 19% | 47% | | Same | 21% | 45% | 46% | 48% | 32% | 34% | 34% | 36% | | Lower | 4% | 19% | 28% | 20% | 23% | 31% | 41% | 18% | | Est. in last 3 years| 52% | 0% | 0% | 12% | 4% | 1% | 3% | 2% | | Don't know | 0% | 0% | 1% | 0% | 0% | 0% | 4% | 0% | | Higher | 32% | 55% | 44% | 36% | 55% | 62% | 51% | 57% | | Same | 7% | 19% | 22% | 21% | 15% | 17% | 21% | 27% | | Lower | 7% | 23% | 29% | 28% | 22% | 14% | 18% | 9% | | Est. in last 3 years| 52% | 0% | 0% | 12% | 4% | 1% | 3% | 2% | | Don't know | 2% | 3% | 4% | 3% | 4% | 5% | 7% | 4% |
There is no clear picture by age or size in terms of the proportion of firms that have grown over the last 3 years (in either employee or turnover terms). However, it does seem that older firms and larger firms are more likely to have reduced their employee numbers. Older firms are also more likely to report a decline in turnover over this period. 6.8.2 Future Growth
All firms were asked their opinions on their future growth, assessing their business as a whole. The chart below shows firms' growth objectives for the next five years.
Chart 6.8.2.1 Growth Objectives For Business Over Next 5 Years – By UKTI Usage
Whilst the majority of firms indicated that they expect to grow, most felt that this growth would be 'moderate' rather than 'substantial'.
UKTI users are significantly more likely to be planning growth (86% vs. 80% of non-users), but there is no difference in the proportion expecting 'substantial' growth. However, as seen earlier in this report, there are other indications that UKTI users are more dynamic in terms of their growth ambitions, with users significantly more likely to predict an increase in the number of markets they are doing business in and to predict an increase in the proportion of their turnover accounted for by overseas sales over the next 3 years. The table below provides a comparison with the 2010 Internationalisation Survey, and with the most recent PIMS surveys of users and non-users.
Table 6.8.2.1 Growth Objectives For Business Over Next 5 Years – Over Time
| | UKTI Users | Non-Users | PIMS Non-Users 2011 | |----------------------|------------|-----------|---------------------| | | 2011 Int Survey | 2010 Int Survey | PIMS 19-22 | 2011 Int Survey | 2010 Int Survey | PIMS Non-Users 2011 | | Base | 248 | 235 | 4057 | 655 | 667 | 300 | | Grow substantially | 29% | 31% | 42% | 27% | 23% | 25% | | Grow moderately | 58% | 55% | 47% | 52% | 59% | 53% | | Stay the same | 11% | 10% | 6% | 13% | 14% | 16% | | Become smaller | 1% | 1% | 1% | 3% | 2% | 3% | | Don’t know | 2% | 2% | 4% | 4% | 2% | 3% |
For users of UKTI, there has been a slight (but not statistically significant) decline in the proportion of firms expecting ‘substantial’ growth since the 2010 survey, and a corresponding increase in the proportion anticipating ‘moderate’ growth.
Whilst these results appear to contradict the PIMS user data, which reported that 42% of users expect ‘substantial’ growth, this is likely to be linked to the timing of the interviews in relation to when firms received UKTI support. The PIMS survey takes place c.6 months after firms access support, and it is likely that in some cases this support is driving firms’ growth predictions. In contrast, in the Internationalisation survey firms are defined as UKTI users if they have received UKTI support at any point in the last 5 years, so this ‘recent support’ impact is less likely to be a factor.
Amongst non-users of UKTI there has been a slight increase in the proportion expecting ‘substantial’ growth, but this apparent difference is not statistically significant. There has also been a corresponding decline in those predicting ‘moderate’ growth. The non-users figures are consistent with those collected in the PIMS Non-User survey.
The table below shows firms’ expectations in respect of future growth analysed by both age and size and demonstrates that young firms have the most ambitious growth objectives. However, there is no clear picture in this respect by size of firm.
Table 6.8.2.2 Growth Objectives For Business Over Next 5 Years - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|----------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Grow substantially | 47% | 35% | 19% | 26% | 30% | 31% | 32% | 27% | | Grow moderately | 45% | 52% | 57% | 53% | 54% | 58% | 56% | 69% | | Stay the same | 5% | 9% | 16% | 15% | 11% | 10% | 7% | 0% | | Become smaller | 0% | 2% | 4% | 3% | 2% | 0% | 0% | 0% | | Don’t know | 3% | 2% | 4% | 3% | 4% | 0% | 4% | 4% | 6.8.3 Innovative High Growth Firms
The survey data on innovation activity and growth objectives has been combined in the analysis to identify ‘innovative high growth firms’, as this is a key group for UKTI to target.
The table below provides analysis of the combined innovative and growth data, analysed at the total level and by UKTI usage.
Table 6.8.3.1 Innovation & Growth Objectives – By UKTI Usage
| | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Innovative & expect | 23% | 27% | 22% | | substantial growth | | | | | Innovative & expect | 40% | 50% | 36% | | moderate growth | | | | | Innovative & expect | 8% | 9% | 8% | | no growth or negative | | | | | growth | | | | | Non-innovative | 28% | 14% | 34% |
Overall 23% of internationalising firms are defined as being ‘innovative high growth’, with this rising slightly to 27% amongst UKTI users. However, it should be noted that 22% of those firms that do not use UKTI are still in this critical category, confirming that there are many ‘innovative high growth’ internationalising firms that UKTI are not yet reaching.
As seen below, older firms that have been established for more than 10 years are significantly less likely to be classified as ‘innovative high growth’. While there is little difference by size of firm in this respect, there is some evidence that firms with less than 10 employees are least likely to fall into this category.
Table 6.8.3.2 Innovation & Growth Objectives – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |--------------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Innovative & expect | 35% | 32% | 16% | 21% | 26% | 28% | 28% | 27% | | substantial growth | | | | | | | | | | Innovative & expect | 28% | 38% | 45% | 36% | 43% | 49% | 47% | 67% | | moderate growth | | | | | | | | | | Innovative & expect | 3% | 4% | 11% | 9% | 9% | 5% | 9% | 0% | | no/negative growth | | | | | | | | | | Non-innovative | 34% | 25% | 28% | 34% | 22% | 18% | 16% | 7% | 6.8.4 Growth (ASBS & OECD Definitions)
Further analysis of growth has been carried out, seeking to replicate, as far as is possible with the data available, an analysis of growth conducted for the Annual Small Business Survey (ASBS). For this analysis firms have been divided into four ‘growth categories’, taking account of both past and future growth. Furthermore, additional analysis has also been conducted seeking to replicate the OECD categories of growth (‘high growth’ firms and ‘gazelles’). Details of both these approaches are set out below.
| Growth – ASBS Definition | |--------------------------| | Firms have been classified as displaying ‘sustained growth’ if… | | • Their employee numbers have grown over the last 3 years | | • And, they are anticipating substantial growth over the next 5 years | | Firms have been classified as displaying ‘contained growth’ if… | | • Their employee numbers have grown over the last 3 years | | • But, they are not anticipating substantial growth over the next 5 years | | Firms have been classified as displaying ‘new growth’ if… | | • Their employee numbers have not grown over the last 3 years including firms established in the last 3 years | | • But, they are anticipating substantial growth over the next 5 years | | Firms have been classified as displaying ‘no growth’ if… | | • Their employee numbers have not grown over the last 3 years including firms established in the last 3 years | | • And, they are not anticipating substantial growth over the next 5 years |
| Growth – OECD Definition | |--------------------------| | Firms have been defined as ‘high-growth’ if… | | • Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years | | • And, they are less than 5 years old | | Firms have been defined as ‘gazelles’ if… | | • Their employee numbers have grown by more than 75% over the last 3 years except firms established in the last 3 years | | • And, they are less than 5 years old | The table below provides analysis of growth under both the ASBS and OECD definitions.
Table 6.8.4.1 Growth (ASBS & OECD Definitions) – By UKTI Usage
| | Total | UKTI Usage | | | | | | | |------------------|-------|------------|----------|----------|----------|----------|----------|----------| | | | UKTI User | Non-User | | | | | | | Base | 903 | 248 | 655 | | | | | | | **ASBS Growth** | | | | | | | | | | Sustained growth | 12% | 17% | 10% | | | | | | | Contained growth | 15% | 21% | 12% | | | | | | | New growth | 16% | 12% | 17% | | | | | | | No growth | 57% | 50% | 60% | | | | | | | **OECD Growth** | | | | | | | | | | High growth | 11% | 14% | 10% | | | | | | | Gazelles | 3% | 3% | 2% | | | | | |
By the ASBS definition, 43% of internationalising firms are displaying growth (either sustained, contained or new). UKTI users do appear more likely to be growing, although the data suggests that they are less likely than non-users to be demonstrating ‘new growth’.
Based on the OECD categories, 11% of internationalising firms are classed as ‘high growth’ and just 3% as ‘gazelles’. There are no statistically significant differences between users and non-users in this respect.
The table below provides further analysis by age and size.
Table 6.8.4.2 Growth (ASBS & OECD Definitions) - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | | | | | | | |------------------|---------------------|----------------------------|----------|----------|----------|----------|----------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | **ASBS Growth** | | | | | | | | | | Sustained growth | 15% | 20% | 8% | 9% | 18% | 16% | 3% | 17% | | Contained growth | 9% | 16% | 16% | 10% | 23% | 18% | 16% | 27% | | New growth | 32% | 15% | 11% | 17% | 12% | 16% | 29% | 10% | | No growth | 44% | 49% | 64% | 64% | 47% | 51% | 53% | 47% | | **OECD Growth** | | | | | | | | | | High growth | 16% | 17% | 8% | 11% | 14% | 8% | 3% | 3% | | Gazelles | 16% | 0% | 0% | 3% | 2% | 2% | 0% | 0% |
Using the ASBS growth categories, firms that have been established more than 10 years and those with less than 10 employees are more likely to be exhibiting ‘no growth’. Older firms are also less likely to be classified as ‘high growth’ by the OECD definition. 6.9 Business Planning
Firms were asked to indicate whether or not they had a current, written business plan, with the following results.
Chart 6.9.1 Whether Have a Current, Written Business Plan
UKTI users appear to be more strategic in their approach than non-users, with three-quarters having a current written business plan compared to only around half of non-users.
As seen below, the larger the firm the more likely they are to have a plan. However there is no difference by age of firm in this respect.
Table 6.9.1 Whether Have a Current, Written Business Plan - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | | | | | | | | | | Yes | 58% | 61% | 58% | 50% | 67% | 74% | 73% | 91% | | No | 39% | 36% | 38% | 49% | 27% | 18% | 22% | 0% | | Don't know | 3% | 3% | 4% | 1% | 6% | 8% | 5% | 9% | Those firms that had a business plan were also asked to specify the time period that it covered, with the following results. Please note that this analysis is just based on those firms that had a plan.
Table 6.9.2 Period Covered By Business Plan – By UKTI Usage
| | Total | UKTI Usage | | | | | | | |----------------------|-------|------------|----------|----------|----------|----------|----------|----------| | | | UKTI User | Non-User | | | | | | | Base: All with business plan | 531 | 186 | 345 | | | | | | | The next year | 24% | 24% | 24% | | | | | | | 2 years | 13% | 10% | 15% | | | | | | | 3 years | 24% | 25% | 23% | | | | | | | Up to 5 years | 29% | 31% | 27% | | | | | | | Up to 10 years | 3% | 3% | 3% | | | | | | | More than 10 years | 1% | 1% | 1% | | | | | | | Don’t know/refused | 6% | 6% | 7% | | | | | |
As detailed above, it is very rare for business plans to cover a period greater than 5 years. Interestingly, a quarter of business plans are very short term in their focus, only covering the next 12 months.
Although users of UKTI are more likely to have a business plan, amongst those that do there is no real difference between users and non-users in terms of the length of time that the plan covers.
As seen below, there are no consistent differences by age or size of firm when it comes to the period covered by their business plans, although there is some suggestion that smaller firms with less than 50 employees tend to plan less far ahead.
Table 6.9.3 Period Covered By Business Plan - By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | | | | | | | |----------------------|---------------------|-----------------------------|----------|----------|----------|----------|----------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base: All with plan | 137 | 157 | 237 | 276 | 171 | 33 | 22 | 21 | | The next year | 20% | 26% | 24% | 28% | 25% | 11% | 10% | 24% | | 2 years | 18% | 14% | 12% | 17% | 11% | 9% | 8% | 10% | | 3 years | 31% | 22% | 22% | 24% | 20% | 19% | 48% | 20% | | Up to 5 years | 26% | 31% | 28% | 26% | 31% | 47% | 26% | 22% | | Up to 10 years | 1% | 2% | 4% | 2% | 4% | 3% | 5% | 0% | | More than 10 years | 0% | 1% | 1% | 2% | 0% | 0% | 0% | 0% | | Don’t know/refused | 5% | 5% | 8% | 2% | 9% | 11% | 3% | 24% | 6.10 Customer Types
Firms were asked to indicate whether their overseas customers were businesses or individuals (i.e. consumers). Those firms that sold to overseas businesses were asked whether these business customers were the ‘end users’ of their products or services or whether they were part of the supply chain (i.e. they sold the products on to others, in either the same or modified form). This data has been combined with the other data on customer types to provide details of the proportion of internationalising firms selling direct to end users and selling into supply chains. These results are detailed below.
Table 6.10.1 Customer Types – By UKTI Usage
| Customer Types | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Customer Types | | | | | Businesses | 50% | 62% | 45% | | Individuals | 10% | 3% | 13% | | Both | 33% | 32% | 34% | | Other | 1% | 1% | 1% | | Don’t know | 0% | 1% | 0% | | Not exporting/no overseas sales| 6% | 2% | 7% | | Summary | | | | | End users | 70% | 72% | 69% | | Supply chain | 58% | 69% | 54% | | Don’t know | 1% | 1% | 1% | | Not exporting/no overseas sales| 6% | 2% | 7% |
The majority of internationalising firms (83%) sell to overseas businesses, either exclusively or as well as selling to individuals. Interestingly, it seems that UKTI users are more likely to sell to businesses (94% vs. 79% of non-users).
Overall, 70% of internationalising firms sell directly to end users and a slightly lower proportion (58%) selling into overseas supply chains (with around a third of firms doing both). UKTI users are slightly more likely to be selling into supply chains. Older business established for more than 5 years are slightly more likely to be selling to overseas businesses, and the same is true of firms with more than 10 staff. Older firms are also more likely to sell to both end users and into overseas supply chains. There is also some evidence that small firms are less likely to sell into supply chains.
Table 6.10.2 Customer Types – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|-----|-------|-------|---------|------| | Up to 5 | 236 | 536 | 45 | 31 | 23 | | 6-10 | 256 | 251 | 45 | 31 | 23 | | Over 10 | 411 | 536 | 45 | 31 | 23 |
Customer Types
| Customer Types | Businesses | Individuals | Both | Other | Don't know | Not exporting/no overseas sales | |----------------|------------|-------------|------|-------|------------|--------------------------------| | | 42% | 8% | 35% | 1% | 0% | 14% | | | 55% | 7% | 32% | 0% | 0% | 6% | | | 50% | 12% | 34% | 0% | 0% | 3% | | | 46% | 13% | 33% | 0% | 0% | 7% | | | 52% | 7% | 35% | 1% | 1% | 5% | | | 67% | 1% | 30% | 1% | 0% | 0% | | | 57% | 4% | 39% | 0% | 0% | 0% | | | 62% | 4% | 29% | 4% | 0% | 0% |
Summary
| Summary | End users | Supply chain | Don't know | Not exporting/no overseas sales | |---------|-----------|--------------|------------|--------------------------------| | | 62% | 54% | 0% | 14% | | | 73% | 54% | 1% | 6% | | | 71% | 62% | 1% | 3% | | | 73% | 52% | 0% | 7% | | | 64% | 64% | 0% | 5% | | | 68% | 76% | 0% | 1% | | | 62% | 84% | 0% | 4% | | | 78% | 64% | 0% | 0% |
Firms that sell direct are comparatively more likely to only sell to individuals overseas (rather than businesses), but this is still only the case for a small minority of these firms. Those firms that use agents or distributors overseas are most likely to be selling into supply chains.
Table 6.10.3 Customer Types – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 784 | 363 | 105 | 194 |
Customer Types
| Customer Types | Businesses | Individuals | Both | Other | Don't know | Not exporting/no overseas sales | |----------------|------------|-------------|------|-------|------------|--------------------------------| | | 51% | 52% | 47% | 63% | 5% | 5% | | | 11% | 5% | 3% | 5% | 1% | 1% | | | 33% | 38% | 35% | 25% | 1% | 1% | | | 0% | 1% | 3% | 1% | 0% | 0% | | | 0% | 0% | 1% | 1% | 0% | 0% | | | 5% | 4% | 10% | 6% | 5% | 4% |
Summary
| Summary | End users | Supply chain | Don't know | Not exporting/no overseas sales | |---------|-----------|--------------|------------|--------------------------------| | | 72% | 58% | 1% | 5% | | | 67% | 73% | 2% | 4% | | | 64% | 63% | 3% | 10% | | | 68% | 52% | 2% | 6% |
| | 68% | 52% | 2% | 6% | 6.11 Profile of UKTI Users: Internationalisation Survey vs. PIMS
The Internationalisation Survey involves interviewing a random sample of UK firms that are involved in (or seriously considering) overseas business, and as such it includes both users and non-users of UKTI’s services. UKTI also have a wealth of information on users from the on-going Performance & Impact Monitoring Survey, which involves contacting c.1,000 supported firms every quarter. The table below provides a comparison of key profile variables from the two surveys.
Table 6.11.1 Profile of UKTI Users – Internationalisation Survey vs. PIMS
| UKTI Users | Internationalisation Survey 2010 | PIMS 19-22 | |------------|----------------------------------|------------| | Base | 248 | 4057 | | Age | | | | 0-5 years | 12% | 25% | | 6-10 years | 24% | 17% | | Over 10 years | 64% | 58% | | Size (employees) | | | | 0-9 employees | 45% | 39% | | 10-249 employees | 47% | 45% | | 250+ employees | 7% | 12% | | Sector | | | | Primary | 0% | 0% | | Production | 46% | 40% | | Construction | 1% | 2% | | Services | 53% | 58% | | Innovation | | | | Innovative | 86% | 83% | | Innovative (alternative) | 64% | 63% | | IP active | 38% | 38% | | Overseas experience | | | | Less than 2 years | 12% | 25% | | 2-10 years | 40% | 33% | | Over 10 years | 48% | 41% | | Growth objectives (next 5 years) | | | | Grow substantially | 29% | 42% | | Grow moderately | 58% | 47% | | Same/smaller | 12% | 7% | | Business plan | | | | Yes | 74% | 75% | | No | 25% | 22% |
In terms of their physical profile, UKTI users interviewed in PIMS tend to be slightly younger than those interviewed in the Internationalisation Survey. However, the sector profile is identical for both groups and the size profile is also similar.
PIMS users are more likely to be new to exporting and to have more ambitious growth objectives. Both of these differences are likely to be due to the PIMS research covering firms that have received support in the last 6 months, but the Internationalisation Survey classifying firms as ‘users’ if they have received support in the last 5 years. As such, the PIMS survey is more likely to include firms that are accessing support to help them start exporting. Similarly, PIMS is also more likely to capture firms that are actively seeking to grow at the time of the interview (and are using UKTI services to help achieve this), whereas the UKTI users identified in the Internationalisation Survey may have passed that stage some years ago and now be less dynamic in their approach. 7. Awareness & Usage
7.1 Awareness & Use of UKTI
All firms were asked whether, prior to the interview, they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas. If so, they were also asked whether they had used either of these. The table below provides details of awareness and usage levels, at the total level and by UKTI usage.
| Base | Total | UKTI Usage | |------|-------|------------| | | | UKTI User | Non-User | | Aware (at least one) | 903 | 248 | 655 | | - UK Trade & Investment or UKTI | 71% | 100% | 60% | | - Commercial services provided by embassies and consulates overseas | 53% | 87% | 39% | | Used (at least one) | 29% | 100% | 0% | | - UK Trade & Investment or UKTI | 22% | 76% | 0% | | - Commercial services provided by embassies and consulates overseas | 18% | 63% | 0% |
Overall, around 71% of internationalising firms had heard of either UKTI or the services provided by overseas posts. Awareness of the UKTI name stands at only 53%, with a marginally higher awareness level (56%) recorded for the services provided by overseas posts, indicating that a significant number of firms who knew of the posts’ services were still unaware of UKTI itself.
Over a quarter of firms (29%) claim to have used UKTI. However, it should be noted that this figure may under-represent UKTI usage as the respondent interviewed may not be aware that this is the case (e.g. if the firm used UKTI before the respondent joined the firm, or if a different site/department has used UKTI). That said, it is also possible that UKTI users are over-represented in the sample due to the effect of response bias, as the survey was positioned as being on behalf of UKTI so those firms with a prior relationship with the organisation may have been more willing to take part in the research.
UKTI ‘users’ were defined as those that have used either UKTI services or the commercial services provided by British embassies and consulates overseas. It is interesting to note that only 87% of UKTI users have actually heard of ‘UK Trade & Investment’ itself, meaning that 13% have used the services provided by overseas posts but not realised the link to UKTI. Although awareness amongst non-users stands at 60%, this does mean that there are a significant number of internationalising firms that could benefit from UKTI’s services but have never heard of the organisation.
It is also worth noting that in addition to the 18% of firms that had received support from overseas embassies or consulates, a further 1% indicated that they had attempted to do so but were not given any help. The table below provides details of awareness and usage levels over time. Please note that it is not possible to provide comparable usage data from 2008 due to questionnaire changes, and there is also no data on usage of UKTI and overseas posts specifically from either the 2008 or 2010 survey.
Table 7.1.2 Awareness & Use of UKTI – Over Time
| | Internationalisation Survey | |----------------------|----------------------------| | | 2008 | 2010 | 2011 | | **Base** | 900 | 902 | 903 | | Aware (at least one) | 68% | 68% | 71% | | - UK Trade & Investment or UKTI | 51% | 51% | 53% | | - Commercial services provided by embassies and consulates overseas | 55% | 53% | 56% | | Used (at least one) | N/A | 27% | 29% | | - UK Trade & Investment or UKTI | N/A | N/A | 22% | | - Commercial services provided by embassies and consulates overseas | N/A | N/A | 18% |
Having remained constant at 68% in 2008 and 2010, there is some evidence that awareness of UKTI has increased in 2011 (to 71%), although it should be noted that this rise is not statistically significant. It seems that this rise in awareness is driven by a combination of increased knowledge of UKTI itself and increased knowledge of the services provided by overseas posts, both of which have seen a small (but not statistically significant) rise since 2010.
Reflecting the situation with awareness, the data suggests that the proportion of internationalising firms actually using UKTI services has also risen over the last year, although again this apparent increase is not statistically significant.
As seen below, awareness and use of UKTI increases amongst firms with more employees. Awareness also rises amongst older firms, but there is no difference in usage by this criteria.
Table 7.1.3 Awareness & Use of UKTI – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | **Base** | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Aware | 65% | 71% | 73% | 70% | 71% | 76% | 79% | 84% | | - UKTI | 58% | 54% | 51% | 51% | 54% | 56% | 54% | 76% | | - Posts | 43% | 52% | 62% | 54% | 56% | 69% | 65% | 80% | | Used | 29% | 30% | 31% | 23% | 34% | 34% | 34% | 58% | | - UKTI | 15% | 23% | 23% | 17% | 27% | 26% | 27% | 36% | | - Posts | 12% | 17% | 20% | 13% | 23% | 27% | 14% | 53% | As might be expected, the longer a firm has been doing business overseas and the more markets they operate in, the more likely they are to have heard of UKTI and to have used their services. That said, over a fifth (22%) of firms that have been doing business overseas for more than 10 years and a quarter (25%) of those operating in more than 10 markets are still not aware of UKTI.
Table 7.1.4 Awareness & Use of UKTI – By Experience
| Years Exporting | Number of Markets | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | |-----------------|-------------------|-------------------|------------|---------------|--------|------|-------------| | Base | | 198 | 415 | 287 | 441 | 174 | 279 | | Aware | | 63% | 68% | 78% | 67% | 77% | 75% | | - UKTI | | 50% | 52% | 55% | 48% | 52% | 60% | | - Posts | | 47% | 50% | 67% | 50% | 64% | 61% | | Used | | 19% | 28% | 33% | 19% | 34% | 40% | | - UKTI | | 14% | 23% | 24% | 15% | 25% | 30% | | - Posts | | 12% | 16% | 23% | 10% | 21% | 28% |
There is a similar correlation between the number of regions firms are doing business in and the likelihood of them being aware of, and using, UKTI. Encouragingly, 60% of firms that are not yet exporting (i.e. are not currently doing business in any overseas regions) are still aware of UKTI or the services provided by overseas posts.
Table 7.1.5 Awareness & Use of UKTI – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |-------------------------------------|------|-----|-----|-------|------|------| | Base | 61 | 224 | 168 | 164 | 126 | 157 | | Aware | 60% | 66% | 73% | 73% | 72% | 78% | | - UKTI | 47% | 43% | 58% | 54% | 53% | 61% | | - Posts | 40% | 49% | 57% | 61% | 56% | 66% | | Used | 10% | 16% | 32% | 32% | 36% | 38% | | - UKTI | 7% | 11% | 26% | 24% | 29% | 28% | | - Posts | 7% | 12% | 13% | 20% | 24% | 28% |
There is also clear evidence that innovative and IP active firms are more engaged with UKTI, with both awareness and usage levels higher amongst these groups.
Table 7.1.6 Awareness & Use of UKTI – By Innovation
| Innovative | Yes (alternative) | Yes | No | Yes | No | |------------|-------------------|-----|----|-----|----| | Base | 421 | 643 | 260| 204 | 685| | Aware | 80% | 75% | 61%| 83% | 68%| | - UKTI | 65% | 59% | 38%| 71% | 48%| | - Posts | 63% | 59% | 49%| 67% | 53%| | Used | 39% | 34% | 14%| 47% | 23%| | - UKTI | 31% | 27% | 8% | 38% | 17%| | - Posts | 26% | 21% | 10%| 33% | 14%| As seen below, awareness and usage of UKTI also appears to be linked to firms’ growth objectives, with those firms that predict growth over the next 5 years (particularly ‘substantial’ growth) more likely to have heard of the organisation and used its services. Awareness is highest amongst innovative high-growth firms (81%), which is encouraging given that this is a key group for UKTI.
Table 7.1.7 Awareness & Use of UKTI – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | Stay same | Mod. growth | Sub. growth | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Aware | 64% | 70% | 77% | 81% | 73% | 61% | | - UKTI | 40% | 53% | 64% | 67% | 55% | 38% | | - Posts | 52% | 55% | 60% | 63% | 58% | 49% | | Used | 24% | 31% | 30% | 34% | 35% | 14% | | - UKTI | 14% | 24% | 23% | 26% | 27% | 8% | | - Posts | 17% | 19% | 19% | 21% | 21% | 10% |
Awareness and usage also tends to increase slightly amongst firms using less ‘traditional’ or more advanced internationalisation modes (i.e. not just selling direct), and is highest for those operating overseas sites and using agents or distributors.
Table 7.1.8 Awareness & Use of UKTI – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 784 | 363 | 105 | 194 | | Aware | 72% | 79% | 75% | 78% | | - UKTI | 54% | 65% | 65% | 64% | | - Posts | 57% | 62% | 55% | 62% | | Used | 29% | 37% | 32% | 41% | | - UKTI | 23% | 29% | 30% | 30% | | - Posts | 18% | 25% | 18% | 32% | Those firms that had received support from UKTI itself (rather than through an overseas post) were asked to give details of the type of assistance received. Firms that had either only received support from an overseas post and non-users of UKTI were asked whether, to the best of their knowledge, anyone in their firm had ever visited the UKTI website. These results are shown in the charts below.
Chart 7.1.1 Type of UKTI Support Used (UKTI users except those just using posts)
- Visited the UKTI website: 59%
- Received one-to-one support from an ITA: 61%
- Attended an event or overseas mission: 55%
- Received any other type of support: 43%
Base: All using UKTI exc. just using posts (Base, Don't know) (190, 3%)
Chart 7.1.2 Usage of UKTI Website (Non-users & those just using posts)
- Yes: 14%
- No: 85%
Base: All not using UKTI inc. those just using posts (Base, Don't know) (713, 1%)
As seen above, amongst UKTI users there is a fairly even split between those visiting the website, receiving one-to-one support and attending events or missions.
In addition to the 59% of UKTI users that have visited the website, a further 14% of non-users (or those just accessing support from an overseas post) have also done so. When this data is combined, it means that 24% of all internationalising firms have visited the UKTI website. 7.2 Awareness & Use of Business Link
All firms were also asked whether they had heard of Business Link and whether they had used their services. Those that had not used Business Link were also asked whether they expected to do so in the future. The table below provides a summary of awareness and usage levels. Please note that in the interests of interview length, firms that operated overseas sites were not asked any of the questions relating to Business Link.
Table 7.2.1 Awareness & Use of Business Link – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | Base: All exc. overseas sites | 809 | 210 | 599 | | Aware of Business Link | 80% | 89% | 77% | | Used Business Link | 54% | 71% | 48% | | Not used but expect to| 7% | 4% | 8% |
Awareness of Business Link amongst internationalising firms stands at 80%, with just over half having used the service (54%). Only 7% of firms indicate that they have not used Business Link but expect to do so in the future. Awareness and usage levels are significantly higher amongst UKTI users, suggesting that firms who are open to external support are likely to access this from a number of different sources.
Although it is not statistically significant, there is some suggestion that larger firms are less likely to have heard of or used Business Link, and usage also appears to be slightly lower amongst firms that have been established for more than 10 years.
Table 7.2.2 Awareness & Use of Business Link – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | |---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base: All exc. overseas sites | 223 | 223 | 363 | 508 | 211 | 34 | 24 | 15 | | Aware of Business Link | 82% | 83% | 79% | 84% | 76% | 82% | 72% | 60% | | Used Business Link | 57% | 57% | 52% | 54% | 58% | 51% | 50% | 20% | | Not used but expect to| 10% | 4% | 7% | 8% | 5% | 7% | 4% | 7% |
As seen below, there are no major differences in Business Link usage by internationalisation mode, although firms that use agents or distributors do appear slightly more likely to have heard of and used the service.
Table 7.2.3 Awareness & Use of Business Link – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base: All exc. overseas sites | 709 | 319 | 74 | - | | Aware of Business Link | 81% | 85% | 78% | - | | Used Business Link | 54% | 60% | 48% | - | | Not used but expect to | 8% | 8% | 7% | - | Those firms that had used Business Link were asked to give details of how this support had been delivered. As detailed below, the most common channel was face-to-face, closely followed by website and then telephone contact.
Chart 7.2.1 Business Link Support Channels Used (Business Link Users)
- Through their website: 55%
- Over the telephone: 49%
- At a face-to-face meeting with an advisor: 59%
- Other: 6%
Base: All using Business Link (Base, Don't know) (442, 2%)
Those firms that had not used Business Link but were planning to do so in future were asked to specify their preferred method of obtaining this help or support. As set out below, half of these firms indicated that website was their preferred option, rather than direct contact through face-to-face meetings or over the telephone.
Chart 7.2.2 Preferred Channel For Business Link Support (Business Link Non-Users)
- Through their website: 51%
- Over the telephone: 16%
- At a face-to-face meeting with an advisor: 25%
- Other: 8%
Base: All not using Business Link but planning to do so (Base, Don't know) (59, 0%) 8. Drivers of Market
8.1 Drivers of Market (Summary)
For the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
- Firms that were just considering overseas business were asked to select the country they were ‘likely to do business in first’
- Firms that operated overseas sites were asked to restrict their market choice to one of the markets where they had a site
For full details of the markets selected by users and non-users of UKTI, please refer to Annex A.
Once the market had been selected, firms were read out 3 possible reasons for deciding to focus on that market, and asked to indicate the extent to which each one applied to them (using a 5 point scale, where 5 meant it was ‘completely applicable’ and 1 meant it was ‘not at all applicable’). The possible reasons tested were as follows:
- “You had received an approach or enquiry from someone in <MARKET>”
- “There was someone within your company who already had experience of <MARKET>”
- “An existing customer that you were already doing business with requested that you start doing business in <MARKET>”
The table below shows the proportion of firms giving a score of 4 or 5 out of 5 for each of these reasons for doing business in the market in question. This analysis also includes the overall proportion influenced by ‘existing networks’ (i.e. someone in the firm with prior experience or in response to a request from an existing customer).
| Reason | Total | UKTI Usage | |---------------------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Any significant motivation | 76% | 77% | 76% | | - Received an approach | 57% | 55% | 57% | | - Staff with market experience | 26% | 27% | 25% | | - Existing customer request | 30% | 29% | 30% | | - Net: Existing networks | 45% | 46% | 45% | | No significant motivations | 24% | 23% | 24% |
The majority of firms (57%) indicated that a key motive for entering the market was reactive, in the sense that they were responding to an approach/enquiry from someone in that market. However, 45% were significantly motivated by existing networks, with similar proportions indicating that this was staff with previous market experience and requests from existing customers.
There is no difference in the market entry motivations of UKTI users and non-users. As seen below, there are also no consistent (or significant) differences by age or size of firm.
Table 8.1.2 Drivers of Market – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | |---------------------|---------------------------|-----|-------|-------|---------|------| | Up to 5 | 236 | 536 | 251 | 45 | 31 | 23 | | 6-10 | 256 | 79% | 74% | 79% | 74% | 77% | | Over 10 | 411 | 52% | 51% | 47% | 52% | 44% | | Any significant motivation | 75% | 79% | 74% | 79% | 74% | 77% | | - Received an approach | 54% | 62% | 51% | 47% | 52% | 44% | | - Staff with market experience | 31% | 28% | 22% | 33% | 21% | 18% | | - Existing customer request | 30% | 29% | 33% | 33% | 28% | 27% | | - Net: Existing networks | 46% | 45% | 47% | 55% | 39% | 36% | | No significant motivations | 25% | 21% | 26% | 27% | 23% | 42% |
There are also no apparent differences in this respect by the number of years firms have been exporting or the number of markets they operate in, and it is clear that reactive reasons (i.e. responding to an approach from a potential customer) play an important role in the market choice of all firms, irrespective of their overseas experience.
Table 8.1.3 Drivers of Market – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 198 | 415 | 287 | 441 | 174 | 279 | | Any significant motivation | 74% | 79% | 74% | 76% | 80% | 74% | | - Received an approach | 57% | 57% | 56% | 57% | 58% | 56% | | - Staff with market experience | 29% | 28% | 22% | 28% | 21% | 25% | | - Existing customer request | 28% | 31% | 29% | 30% | 32% | 28% | | - Net: Existing networks | 46% | 48% | 42% | 47% | 43% | 43% | | No significant motivations | 26% | 21% | 26% | 24% | 20% | 26% | Interestingly, non-innovative and non-IP active firms are more likely to target a market in response to a request from an existing customer. However, IP active firms are more likely to have entered the market because they have staff with previous experience of doing business there.
Table 8.1.4 Drivers of Market – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Any significant motivation | 78% | 75% | 80% | 80% | 75% | | - Received an approach | 57% | 56% | 58% | 55% | 57% | | - Staff with market experience | 27% | 26% | 25% | 33% | 23% | | - Existing customer request | 28% | 27% | 36% | 27% | 31% | | - Net: Existing networks | 46% | 44% | 50% | 50% | 44% | | No significant motivations | 22% | 25% | 20% | 20% | 25% |
Firms that were ‘born global’ (particularly under the tighter, alternative definition) are more likely to be influenced to enter a new market by their existing networks. Young technology intensive firms, on the other hand, are comparatively more likely to be responding to an approach from someone in that market.
Table 8.1.5 Drivers of Market – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | | Base | 234 | 128 | 52 | 124 | 667 | | Any significant motivation | 75% | 77% | 75% | 78% | 76% | | - Received an approach | 55% | 52% | 48% | 61% | 57% | | - Staff with market experience | 31% | 36% | 48% | 34% | 24% | | - Existing customer request | 29% | 37% | 42% | 27% | 30% | | - Net: Existing networks | 46% | 54% | 62% | 48% | 45% | | No significant motivations | 25% | 23% | 25% | 22% | 24% |
As seen below, there is little difference in the market entry motivations of firms targeting high growth, EEA or other markets.
Table 8.1.6 Drivers of Market – By Market Type
| | Market | |----------------------|--------| | | High Growth | EEA | Other | | Base | 227 | 326 | 350 | | Any significant motivation | 78% | 78% | 73% | | - Received an approach | 57% | 58% | 55% | | - Staff with market experience | 23% | 30% | 23% | | - Existing customer request | 33% | 30% | 28% | | - Net: Existing networks | 46% | 48% | 42% | | No significant motivations | 22% | 22% | 27% | As might be expected, firms where any of the senior management team were born overseas are more likely to be motivated by existing staff experience, suggesting that these links and local knowledge can influence decisions about which markets to target.
Table 8.1.7 Drivers of Market – By Overseas-Born Senior Management
| | Overseas-Born Owners, Partners or Directors | |-------------------------------|---------------------------------------------| | | Yes | No | | **Base** | 233 | 652 | | Any significant motivation | 77% | 76% | | - Received an approach | 53% | 58% | | - Staff with market experience| 39% | 21% | | - Existing customer request | 32% | 29% | | - Net: Existing networks | 54% | 42% | | No significant motivations | 23% | 24% | 8.2 Drivers of Market (Detailed)
8.2.1 Received An Approach
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms felt that they were motivated to enter the market because they received an approach by someone in the market.
Chart 8.2.1.1 You Had Received An Approach Or Enquiry From Someone In <Market>
Approaching half of all internationalising firms indicated that this reason was 'completely applicable' to them, scoring 5 on the 5-point scale, and 72% felt that it applied to at least some extent (i.e. 2-5 out of 5). 8.2.2 Staff With Experience
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms felt that they were motivated to enter the market because they already had staff with experience of the market.
Chart 8.2.2.1 There Was Someone Within Your Company Who Already Had Experience Of <Market>
Just over a third of firms (36%) felt that this reason applied to at least some extent (i.e. 2-5 out of 5), with 20% indicating that it was a ‘completely applicable’ reason for choosing to target the selected market (i.e. 5 out of 5). 8.2.3 Request From Existing Customer
The chart below shows the full distribution of ratings on the 5-point scale for the extent to which firms felt that they were motivated to enter the market because an existing customer that they were already doing business with requested that they do so.
Chart 8.2.2.1 An Existing Customer That You Were Already Doing Business With Requested That You Start Doing Business In <Market>
Around two-fifths of internationalising firms (42%) indicated that they were motivated to at least some extent (i.e. 2-5 out of 5) by an existing customer. Approaching a quarter stated that this was a ‘completely applicable’ reason (i.e. 5 out of 5). 9. Barriers to Overseas Trade
9.1 Barriers (Summary)
As mentioned previously, for the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
- Firms that were just considering overseas business were asked to select the country they were ‘likely to do business in first’
- Firms that operated overseas sites were asked to restrict their market choice to one of the markets where they had a site
For full details of the markets selected by users and non-users of UKTI, please refer to Annex A.
Firms were then read out 11 potential barriers that they might have faced when trying to develop their business in the selected market, and asked to indicate the extent to which each one had been a difficulty (using a 5 point scale, where 5 meant it had been ‘extremely difficult’ and 1 meant it had ‘not been at all difficult’). The barriers tested were as follows:
- Dealing with legal or tax regulations or standards in < MARKET >
- Protecting your intellectual property
- Ensuring you get paid and enforcing contracts
- Dealing with customs procedures or paperwork
- Identifying who to make contact with in the first instance or finding a suitable partner
- Establishing an initial dialogue with prospective customers or business partners in < MARKET >
- Building relationships with key influencers or decision-makers
- Obtaining basic information about doing business in < MARKET >
- Finding the necessary management time to devote to doing business in < MARKET >
- Negotiating the culture and language
- A preference on the part of customers in < MARKET > for doing business with firms from < MARKET >
Please note that all analysis in this section of the report is based just on firms that were already doing business overseas (i.e. ‘considerers’ have been excluded). The table below shows the proportion of firms experiencing each barrier to a significant extent (i.e. scoring 4 or 5 out of 5 for the extent to which it was a difficulty). Details of the full distribution of scores are shown in Section 9.2.
Table 9.1.1 Individual Barriers – By UKTI Usage
| Base: All exporters | Total | UKTI Usage | Non-User | |---------------------|-------|------------|----------| | | 842 | 242 | 600 | | Dealing with legal or tax regulations and standards | 25% | 33% | 21% | | Dealing with customs procedures and paperwork | 24% | 30% | 21% | | Ensuring you get paid and enforcing contracts | 22% | 22% | 22% | | Finding the necessary management time to devote to doing business in <market> | 20% | 29% | 17% | | Identifying who to make contact with in the first instance | 20% | 30% | 16% | | Building relationships with key influencers or decision makers | 19% | 28% | 16% | | Preference on part of customers for doing business with firms from <market> | 19% | 26% | 16% | | Negotiating the language and culture | 18% | 23% | 15% | | Establishing an initial dialogue with prospective customers or partners in <market> | 17% | 24% | 15% | | Obtaining basic information about doing business in <market> | 16% | 18% | 14% | | Protecting your intellectual property | 14% | 18% | 12% |
The most widely experienced barriers all relate to the formalities and bureaucracy of doing business overseas, with 25% having significant problems with legal or tax regulations, 24% with customs procedures and 22% with getting paid.
UKTI users are consistently more likely to report each of the barriers than non-users (with the exception of ensuring payment/enforcing contracts), and it be that the experience of encountering these difficulties prompted them to contact UKTI.
However, at this stage it should be remembered that respondents were asked to talk about the ‘most challenging’ market that they had done business in, and this is likely to be contributing towards this difference between users and non-users. UKTI users tend to have been doing business overseas longer, be operating in more markets and are more likely to be doing business in high growth markets. As such, UKTI users would appear to have a higher chance of having encountered a particularly ‘challenging’ market which involves significant barriers. Generally, firms that operate overseas sites and do business through licensing, franchising or other contractual arrangements are most likely to report each of the types of barrier.
Table 9.1.2 Individual Barriers – By Modes Used In Selected Market
| Modes Used In Market | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | Base: All exporters | 644 | 263 | 45 | 153 | | Dealing with legal or tax regulations and standards | 24% | 28% | 34% | 48% | | Dealing with customs procedures and paperwork | 25% | 26% | 31% | 41% | | Ensuring you get paid and enforcing contracts | 23% | 22% | 37% | 29% | | Finding the necessary management time to do business in <market> | 20% | 21% | 28% | 31% | | Identifying who to make contact with in the first instance | 19% | 24% | 32% | 22% | | Building relationships with key influencers or decision makers | 19% | 22% | 32% | 24% | | Customer preference for doing business with firms from <market> | 18% | 22% | 24% | 29% | | Negotiating the language and culture | 17% | 23% | 36% | 24% | | Establishing an initial dialogue with prospective customers or partners | 17% | 19% | 19% | 18% | | Obtaining basic information about doing business in <market> | 17% | 16% | 19% | 18% | | Protecting your intellectual property | 13% | 17% | 23% | 20% | The 11 individual barriers firms were prompted with have been summarised further as outlined below.
| Barriers - Summary | |--------------------| | Firms have been defined as perceiving significant ‘legal & regulatory’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with legal or tax regulations or standards in <MARKET> | | • Or, Protecting your intellectual property | | • Or, Ensuring you get paid and enforcing contracts | | Firms have been defined as perceiving significant ‘customs’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with customs procedures or paperwork | | Firms have been defined as perceiving significant ‘contacts’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Identifying who to make contact with in the first instance or finding a suitable partner | | • Or, Establishing an initial dialogue with prospective customers or business partners in <MARKET> | | • Or, Building relationships with key influencers or decision-makers | | Firms have been defined as perceiving significant ‘information’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Obtaining basic information about doing business in <market> | | Firms have been defined as perceiving significant ‘resource’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Finding the necessary management time to devote to doing business in <MARKET> | | Firms have been defined as perceiving significant ‘language & cultural’ barriers if the scored 4 or 5 on a 5-point scale for… | | • Negotiating the language & culture | | Firms have been defined as perceiving significant ‘bias’ barriers if they scored 4 or 5 on a 5-point scale for… | | • A preference on the part of customers in <MARKET> for doing business with firms from <MARKET> | The table below shows the proportions of firms scoring against each of these summary categories as well as an analysis of the number of individual barriers experienced to a significant extent.
Table 9.1.3 Summary Barriers – By UKTI Usage
| Types of Barriers | Total | UKTI Usage | |-----------------------------------|-------|------------| | | | UKTI User | Non-User | | Base: All exporters | 842 | 242 | 600 | | Legal & regulatory barriers | 43% | 51% | 40% | | Customs barriers | 24% | 30% | 21% | | Contacts barriers | 33% | 46% | 27% | | Information barriers | 16% | 18% | 14% | | Resource barriers | 20% | 29% | 17% | | Language & cultural barriers | 18% | 23% | 15% | | Bias barriers | 19% | 26% | 16% |
| Number of Barriers | | UKTI User | Non-User | |----------------------------------|-------|-----------|----------| | At least one significant individual barrier | 67% | 83% | 61% | | - One | 17% | 19% | 16% | | - Two | 13% | 13% | 12% | | - Three | 12% | 16% | 11% | | - Four or more | 25% | 35% | 21% | | No significant barriers | 33% | 17% | 39% |
As has been the case in past UKTI studies, legal and regulatory barriers and contacts barriers are highlighted as being the most important, experienced by 43% and 33% of firms respectively in their selected market.
Overall, two-thirds of firms report experiencing at least one significant barrier in their selected market (which, it should be noted, is the ‘most challenging market’ they have done business in). A quarter of firms have encountered significant difficulties with four or more of the individual barriers, suggesting there is a clear need for some form of external assistance to help firms overcome these barriers and successfully trade in overseas markets.
UKTI users clearly come across more significant barriers than non-users, with 83% experiencing at least one, compared to just 61% of non-users. Users are more likely to encounter each of the barrier types (although please note that this difference is not statistically significant for ‘information barriers’). Older firms are slightly less likely to have experienced any significant barriers when doing business overseas. There are no consistent differences by size of firm in this respect, but smaller firms are slightly more likely to experience information barriers.
Table 9.1.4 Summary Barriers – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base: All exporters | |---------------------|-----------------------------|---------------------| | Up to 5 | 204 | 241 | | 6-10 | 241 | 397 | | Over 10 | 491 | 238 | | 0-9 | 238 | 45 | | 10-49 | 45 | 31 | | 50-99 | 31 | 23 | | 100-249 | | | | 250+ | | |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | Up to 5 | 42% | 22% | 27% | 15% | 23% | 13% | 17% | | 6-10 | 40% | 24% | 32% | 14% | 20% | 14% | 18% | | Over 10 | 45% | 24% | 34% | 16% | 20% | 20% | 20% | | 0-9 | 42% | 21% | 32% | 17% | 20% | 16% | 17% | | 10-49 | 46% | 26% | 37% | 15% | 18% | 18% | 20% | | 50-99 | 41% | 26% | 28% | 10% | 22% | 28% | 23% | | 100-249 | 36% | 31% | 23% | 12% | 23% | 28% | 27% | | 250+ | 56% | 42% | 27% | 13% | 38% | 38% | 38% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | Up to 5 | 65% | 18% | 15% | 13% | 19% | 35% | | 6-10 | 61% | 15% | 9% | 11% | 25% | 39% | | Over 10 | 70% | 18% | 13% | 14% | 27% | 30% | | 0-9 | 65% | 16% | 12% | 14% | 22% | 35% | | 10-49 | 69% | 16% | 13% | 11% | 29% | 31% | | 50-99 | 70% | 16% | 4% | 13% | 31% | 30% | | 100-249 | 68% | 20% | 16% | 7% | 25% | 32% | | 250+ | 82% | 22% | 13% | 9% | 38% | 18% |
There is no evidence that barriers decline as firms become more experienced overseas, and in fact it appears that they actually increase (although this is likely to be partly a function of the fact that firms focussed on their ‘most challenging’ market, and experienced firms have done business in more markets).
Table 9.1.5 Summary Barriers – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base: All exporters | 137 | 415 | 287 | 380 | 174 | 279 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | Less than 2 years | 38% | 23% | 23% | 11% | 23% | 12% | 10% | | 2-10 years | 39% | 22% | 32% | 15% | 22% | 15% | 19% | | Over 10 years | 48% | 25% | 36% | 18% | 18% | 22% | 21% | | Up to 5 | 37% | 14% | 25% | 13% | 18% | 13% | 16% | | 6-10 | 47% | 33% | 37% | 17% | 24% | 17% | 23% | | More than 10 | 49% | 31% | 40% | 19% | 22% | 25% | 20% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | Less than 2 years | 59% | 14% | 16% | 12% | 17% | 65% | | 2-10 years | 65% | 17% | 14% | 12% | 22% | 71% | | Over 10 years | 71% | 18% | 10% | 13% | 30% | 71% | | Up to 5 | 60% | 19% | 13% | 11% | 17% | 60% | | 6-10 | 72% | 15% | 13% | 19% | 25% | 72% | | More than 10 | 74% | 16% | 12% | 11% | 35% | 74% | As seen below, firms that are active in only one overseas region are significantly less likely to have experienced any barriers. There is some evidence that the likelihood if experiencing customs, contacts and language & cultural barriers increases as firms become active in more regions.
Table 9.1.6 Summary Barriers – By Number of Regions
| Number of Overseas Regions Active In | One | Two | Three | Four | Five | |--------------------------------------|-----|-----|-------|------|------| | Base: All exporters | 224 | 168 | 164 | 126 | 157 |
Types of Barriers
| Types of Barriers | One | Two | Three | Four | Five | |-------------------|-----|-----|-------|------|------| | Legal & regulatory| 38% | 41% | 44% | 54% | 42% | | Customs | 15% | 18% | 28% | 32% | 29% | | Contacts | 23% | 33% | 34% | 37% | 39% | | Information | 14% | 15% | 17% | 17% | 17% | | Resource | 15% | 27% | 22% | 22% | 17% | | Language & cultural| 15% | 11% | 20% | 19% | 24% | | Bias | 16% | 22% | 20% | 17% | 20% |
Number of Barriers
| Number of Barriers | One | Two | Three | Four | Five | |--------------------|-----|-----|-------|------|------| | At least one barrier| 58% | 69% | 70% | 72% | 70% | | - One | 20% | 19% | 16% | 15% | 16% | | - Two | 11% | 14% | 14% | 13% | 11% | | - Three | 9% | 14% | 16% | 12% | 11% | | - Four or more | 18% | 22% | 24% | 32% | 32% | | No significant barriers | 42% | 31% | 30% | 28% | 30% |
Interestingly, innovative and IP active firms report more barriers to overseas trade. This difference is true of all the barrier types except information barriers.
Table 9.1.7 Summary Barriers – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base: All exporters | 393 | 608 | 234 | 196 | 633 |
Types of Barriers
| Types of Barriers | Yes | No | Yes | No | |-------------------|-----|----|-----|----| | Legal & regulatory| 48% | 37%| 53% | 40%| | Customs | 28% | 18%| 29% | 22%| | Contacts | 37% | 25%| 40% | 31%| | Information | 17% | 16%| 18% | 15%| | Resource | 25% | 13%| 28% | 18%| | Language & cultural| 20% | 15%| 22% | 16%| | Bias | 21% | 15%| 21% | 19%|
Number of Barriers
| Number of Barriers | Yes | No | Yes | No | |--------------------|-----|----|-----|----| | At least one barrier| 72% | 57%| 76% | 64%| | - One | 17% | 18%| 17% | 17%| | - Two | 11% | 11%| 11% | 13%| | - Three | 12% | 10%| 9% | 14%| | - Four or more | 32% | 19%| 40% | 21%| | No significant barriers | 28% | 43%| 24% | 36%| Interestingly, firms with substantial growth aspirations are more likely to encounter significant barriers, suggesting that they are most in need of external assistance.
Table 9.1.8 Summary Barriers – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | Stay same | Mod. growth | Sub. growth | | Base: All exporters | 99 | 441 | 256 | | | 218 | 390 | 234 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | | 38% | 18% | 23% | 12% | 9% | 16% | 9% | | | 43% | 23% | 31% | 14% | 20% | 19% | 20% | | | 50% | 30% | 41% | 20% | 27% | 18% | 22% | | | 53% | 32% | 42% | 19% | 27% | 19% | 22% | | | 42% | 23% | 33% | 14% | 21% | 18% | 19% | | | 37% | 18% | 25% | 16% | 13% | 15% | 15% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 53% | 14% | 12% | 11% | 16% | 47% | | | 68% | 20% | 11% | 12% | 25% | 32% | | | 75% | 13% | 16% | 14% | 33% | 25% | | | 77% | 13% | 14% | 16% | 33% | 23% | | | 68% | 19% | 13% | 12% | 25% | 19% | | | 57% | 18% | 11% | 10% | 19% | 43% |
As seen below, firms demonstrating growth via the ASBS definitions (and particularly ‘sustained’ growth), and those classified as ‘high growth’ or ‘gazelles’ by the OECD definitions, are more likely to have experienced barriers to their overseas development.
Table 9.1.9 Summary Barriers Modes Of Internationalisation – By Growth
| ASBS Definition | OECD Definition | |-----------------|-----------------| | Sustained | Contained | New | No growth | High growth | Gazelles | | Base: All exporters | 114 | 124 | 142 | 462 | 104 | 34 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | | 47% | 30% | 42% | 23% | 27% | 16% | 24% | | | 40% | 24% | 42% | 15% | 18% | 24% | 24% | | | 53% | 31% | 39% | 18% | 27% | 20% | 20% | | | 40% | 20% | 26% | 14% | 18% | 16% | 16% | | | 54% | 22% | 48% | 22% | 28% | 21% | 27% | | | 50% | 15% | 35% | 18% | 24% | 6% | 21% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 79% | 16% | 16% | 16% | 30% | 21% | | | 73% | 22% | 8% | 15% | 27% | 27% | | | 72% | 10% | 15% | 13% | 35% | 28% | | | 62% | 18% | 12% | 11% | 21% | 38% | | | 81% | 15% | 15% | 17% | 34% | 19% | | | 79% | 21% | 21% | 24% | 15% | 21% | Young firms that are defined as being ‘born global’ under the alternative, tighter definition are more likely to experience barriers than other firms.
Table 9.1.10 Summary Barriers – By Born Global & Young, Tech Intensive
| Types of Barriers | Up to 5 years old | Over 5 years old | |----------------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base: All exporters | 202 | 128 | 52 | 110 | 638 | | Legal & regulatory | 42% | 43% | 50% | 49% | 43% | | Customs | 21% | 22% | 21% | 25% | 24% | | Contacts | 28% | 31% | 40% | 30% | 34% | | Information | 15% | 13% | 13% | 17% | 16% | | Resource | 23% | 22% | 25% | 26% | 20% | | Language & cultural | 13% | 15% | 17% | 16% | 18% | | Bias | 16% | 18% | 23% | 22% | 19% |
Number of Barriers
| At least one barrier | 65% | 67% | 73% | 68% | 68% | | - One | 18% | 22% | 23% | 15% | 17% | | - Two | 15% | 11% | 10% | 15% | 12% | | - Three | 13% | 14% | 13% | 15% | 12% | | - Four or more | 18% | 20% | 27% | 24% | 26% | | No significant barriers | 35% | 33% | 27% | 32% | 32% | It is also apparent that firms that sell directly to overseas customers are less likely to come across significant barriers than those adopting alternative modes. Generally, those using contractual arrangements and operating overseas sites are most likely to report each of the types of barrier.
Table 9.1.11 Summary Barriers – By Modes Used In Selected Market
| Modes Used In Market | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | Base: All exporters | 644 | 263 | 45 | 153 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------------|--------------------|---------|----------|-------------|----------|---------------------|------| | | 44% | 25% | 32% | 17% | 20% | 17% | 18% | | | 45% | 26% | 37% | 16% | 21% | 23% | 22% | | | 50% | 31% | 48% | 19% | 28% | 36% | 24% | | | 59% | 41% | 35% | 18% | 31% | 24% | 29% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 67% | 18% | 13% | 13% | 24% | 33% | | | 70% | 12% | 12% | 14% | 32% | 30% | | | 80% | 17% | 3% | 15% | 45% | 20% | | | 78% | 12% | 10% | 14% | 41% | 22% |
There is clear evidence that high growth and ‘other’ markets involve more significant barriers than those in the European Economic Area, and this is true for all types of barrier except resource barriers and bias barriers. However, approaching two-thirds of firms that were focussing on EEA market still experienced significant barriers.
Table 9.1.12 Summary Barriers – By Market Type
| Market | High Growth | EEA | Other | |-----------------|-------------|-----|-------| | Base: All exporters | 212 | 296 | 334 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------------|--------------------|---------|----------|-------------|----------|---------------------|------| | | 51% | 33% | 40% | 15% | 21% | 25% | 17% | | | 36% | 14% | 26% | 13% | 19% | 17% | 20% | | | 45% | 27% | 34% | 18% | 21% | 13% | 18% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 72% | 14% | 11% | 14% | 33% | 28% | | | 61% | 18% | 12% | 11% | 20% | 39% | | | 69% | 18% | 14% | 12% | 25% | 31% | The table below provides further analysis of the barriers experienced by firms’ motivations for trying to enter that particular market. Please note that the motivation categories are based on those scoring 4-5 out of 5 for each one (i.e. indicating that it was a significant motivation).
Table 9.1.13 Summary Barriers – By Market Entry Motivations
| Significant Motivations | Received approach | Staff with experience | Existing customer request | Net: Existing networks | No sig. motivations | |-------------------------|-------------------|-----------------------|---------------------------|-----------------------|---------------------| | Base: All exporters | 488 | 224 | 259 | 390 | 187 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|---------------------|------| | | 44% | 25% | 30% | 16% | 18% | 17% | 17% |
Number of Barriers
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|---------|----------------|-------------------------| | | 67% | 19% | 13% | 10% | 25% | 33% |
Interestingly, there is no evidence that firms that enter a particular market due to having existing networks in place (i.e. staff experience or in response to a request from an existing customer) are any less likely to experience barriers when doing so. Overall 68% of this group experienced at least one significant barrier, a similar level to that seen for those who received an approach or enquiry from someone in the market and for those that did not indicate any significant market entry motivations.
Even when looking at the individual types of barrier, there are no clear or consistent differences by market entry motivations. The table below provides comparative analysis of the barriers experienced between firms that have overseas-born members of the senior management team and those that do not. While it might be expected that this would help avoid potential barriers due to better knowledge of the language or culture, local connections, etc there is no evidence that this is the case and in fact firms with overseas-born members of the management team appear to experience more barriers. However, it should be noted that for these questions firms were asked to focus on their ‘most challenging’ overseas market, so it is very possible that the markets where members of the senior management team were born were not identified as the most challenging one.
Table 9.1.14 Summary Barriers – By Overseas-Born Senior Management
| Types of Barriers | Overseas-born owners, partners or directors | | |----------------------------|---------------------------------------------|---| | | Yes | No | | Base: All exporters | 214 | 610| | Legal & regulatory | 50% | 41%| | Customs | 27% | 22%| | Contacts | 38% | 31%| | Information | 17% | 15%| | Resource | 22% | 20%| | Language & cultural | 23% | 15%| | Bias | 27% | 16%|
| Number of Barriers | | |----------------------------|---| | At least one barrier | 74% | 65% | | - One | 17% | 17% | | - Two | 11% | 13% | | - Three | 14% | 12% | | - Four or more | 32% | 23% | | No significant barriers | 26% | 35% |
As detailed earlier in this report (Section 6.6.7), firms with overseas-born members of their ownership/management team tend to have been exporting for longer, are more inclined to do business through contractual arrangements and via their own overseas sites, are more likely to be IP active and have more ambitious growth objectives. All of these characteristics are associated with a greater likelihood of experiencing barriers, which may explain the differences between this group and those without any overseas-born senior management. The table below provides analysis of the barriers experienced by individual market. Please note that it has only been possible to provide this analysis for markets selected by at least 30 respondents.
Table 9.1.15 Summary Barriers – By Individual Market
| Market | China | France | Germany | India | Ireland | UAE | USA | |-----------------|-------|--------|---------|-------|---------|-----|-----| | Base: All exporters | 46 | 61 | 48 | 43 | 32 | 34 | 132 |
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|---------------------|------| | | 51% | 40% | 47% | 21% | 26% | 40% | 22% | | | 34% | 14% | 33% | 10% | 22% | 26% | 34% | | | 18% | 9% | 16% | 11% | 21% | 21% | 23% | | | 65% | 33% | 41% | 9% | 20% | 20% | 16% | | | 51% | 7% | 23% | 12% | 11% | 2% | 21% | | | 34% | 16% | 11% | 14% | 18% | 4% | 4% | | | 41% | 22% | 16% | 13% | 24% | | |
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|----------|----------------|-------------------------| | | 75% | 6% | 8% | 12% | 49% | 25% | | | 57% | 7% | 7% | 15% | 29% | 43% | | | 59% | 19% | 19% | 7% | 13% | 41% | | | 79% | 22% | 7% | 20% | 30% | 21% | | | 66% | 40% | 5% | 12% | 9% | 34% | | | 63% | 13% | 16% | 4% | 30% | 37% | | | 67% | 22% | 10% | 16% | 20% | 33% |
Based on the above analysis, there are significant variations in the type and extent of barriers experienced in different markets. China and India appear to be the most challenging markets, with at least three-quarters of the firms selecting these markets reporting at least one significant barrier.
With the exception of bias barriers, the proportion of firms experiencing each barrier was significantly higher than the norm in China. In particular, customs barriers, contacts barriers and language/cultural barriers are particularly prevalent in this market.
Legal and regulatory issues are a very significant issue in India, with 65% reporting a significant difficulty in this respect (compared to 43% across all markets). It is also clear that initiating and building relationships can also be a major problem in India, with 41% reporting significant difficulties with contacts barriers. Similarly, contacts barriers are also widespread amongst firms trying to do business in the UAE.
Interestingly, bias barriers (i.e. where firms in an overseas market demonstrate a preference for doing business with other firms from their own market) seem to be a particularly large problem in France, and this is consistent with the 2010 survey results. As seen below, in every type of market UKTI users are still more likely to report significant barriers than non-users. This suggests that there is a ‘true’ distinction between users and non-users and the increased likelihood of users reporting barriers is not just because they are more likely to be in challenging high growth markets.
Table 9.1.16 Summary Barriers – By Market Type & UKTI Usage
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 76 | 136 | 63 | 233 | 103 | 231 | | Legal & regulatory | 63% | 44% | 33% | 36% | 53% | 41% | | Customs | 42% | 27% | 14% | 14% | 32% | 24% | | Contacts | 50% | 35% | 39% | 22% | 48% | 27% | | Information | 11% | 17% | 16% | 12% | 26% | 15% | | Resource | 27% | 18% | 39% | 13% | 24% | 19% | | Language & cultural | 25% | 26% | 27% | 15% | 19% | 10% | | Bias | 19% | 17% | 29% | 18% | 29% | 13% |
Number of Barriers
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | At least one barrier | 86% | 64% | 77% | 57% | 84% | 62% | | - One | 16% | 13% | 26% | 16% | 17% | 19% | | - Two | 15% | 9% | 9% | 13% | 15% | 13% | | - Three | 19% | 11% | 10% | 12% | 16% | 10% | | - Four or more | 36% | 31% | 32% | 16% | 35% | 20% | | No significant barriers | 14% | 36% | 23% | 43% | 16% | 38% |
Similarly, when the analysis compares users and non-users that are active in similar numbers of markets, there is still clear evidence that UKTI users are more likely to report significant barriers.
Table 9.1.17 Summary Barriers – By Number of Markets & UKTI Usage
| Types of Barriers | Up to 5 markets | 6-10 markets | More than 10 markets | |-------------------|-----------------|--------------|----------------------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 75 | 305 | 56 | 118 | 109 | 170 | | Legal & regulatory | 38% | 36% | 57% | 42% | 55% | 45% | | Customs | 17% | 13% | 38% | 30% | 34% | 28% | | Contacts | 38% | 22% | 55% | 28% | 48% | 34% | | Information | 17% | 12% | 21% | 14% | 17% | 19% | | Resource | 37% | 13% | 32% | 19% | 21% | 22% | | Language & cultural | 16% | 12% | 24% | 13% | 26% | 24% | | Bias | 23% | 14% | 35% | 16% | 23% | 18% |
Number of Barriers
| Number of Barriers | Up to 5 markets | 6-10 markets | More than 10 markets | |--------------------|-----------------|--------------|----------------------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | At least one barrier | 77% | 56% | 88% | 64% | 84% | 68% | | - One | 24% | 18% | 17% | 15% | 18% | 15% | | - Two | 15% | 12% | 10% | 14% | 13% | 11% | | - Three | 12% | 10% | 19% | 19% | 16% | 8% | | - Four or more | 26% | 15% | 42% | 17% | 36% | 34% | | No significant barriers | 23% | 44% | 12% | 36% | 16% | 32% | The tables below show analysis of barriers within each of the 3 market types by age (in the first table) and overseas experience (in the second table). Whilst the differences are generally not statistically significant, it does appear that firms established over 10 years and those exporting for over 10 years are more likely to experience barriers in high growth and ‘other’ markets.
Table 9.1.18 Summary Barriers – By Market Type & Age
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | | Base: All exporters | 53 | 58 | 101 | 74 | 78 | 144 | 77 | 105 | 152 |
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 70% | 69% | 74% | 62% | 55% | 63% | 64% | 60% | 74% | | - One | 13% | 10% | 16% | 22% | 18% | 17% | 18% | 16% | 19% | | - Two | 13% | 9% | 12% | 11% | 12% | 13% | 19% | 8% | 15% | | - Three | 23% | 10% | 13% | 9% | 15% | 10% | 10% | 9% | 14% | | - Four or more | 21% | 40% | 34% | 20% | 10% | 23% | 16% | 28% | 26% | | No significant barriers | 30% | 31% | 26% | 38% | 45% | 37% | 36% | 40% | 26% |
Table 9.1.19 Summary Barriers – By Market Type & Experience
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | | Base: All exporters | 33 | 101 | 78 | 57 | 145 | 93 | 47 | 169 | 116 |
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 61% | 72% | 76% | 54% | 61% | 63% | 65% | 64% | 75% | | - One | 13% | 12% | 17% | 12% | 20% | 17% | 19% | 18% | 19% | | - Two | 13% | 12% | 10% | 14% | 16% | 8% | 21% | 13% | 13% | | - Three | 18% | 17% | 10% | 6% | 11% | 14% | 15% | 10% | 15% | | - Four or more | 18% | 31% | 38% | 22% | 15% | 25% | 11% | 25% | 28% | | No significant barriers | 39% | 28% | 24% | 46% | 39% | 37% | 35% | 36% | 25% | When interpreting the data below, the extremely low base sizes for firms with 250+ employees should be taken into account. There are no consistent differences by size of firm within each market type, although small firms (0-9 employees) are less likely to have experienced barriers in ‘other’ markets.
Table 9.1.20 Summary Barriers – By Market Type & Size
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | 0-9 | 10-249 | 250+ | SME total | 0-9 | 10-249 | 250+ | SME total | 0-9 | 10-249 | 250+ | SME total | | Base: All exporters | 112 | 91 | 7 | 203 | 179 | 107 | 6 | 286 | 200 | 116 | 10 | 316 |
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|-------------------|---------|----------|-------------|----------|---------------------|------| | | 49% | 51% | 71% | 50% | 39% | 34% | 9% | 37% | 41% | 50% | 70% | 44% | | | 28% | 37% | 43% | 32% | 14% | 15% | 9% | 14% | 23% | 29% | 60% | 26% | | | 41% | 40% | 43% | 40% | 25% | 28% | 18% | 26% | 34% | 36% | 20% | 35% | | | 17% | 14% | 14% | 15% | 15% | 12% | 0% | 14% | 20% | 16% | 20% | 18% | | | 23% | 18% | 29% | 21% | 20% | 16% | 27% | 19% | 17% | 23% | 50% | 20% | | | 27% | 24% | 29% | 25% | 14% | 22% | 27% | 17% | 11% | 16% | 10% | 13% | | | 19% | 14% | 29% | 17% | 18% | 24% | 18% | 20% | 15% | 24% | 20% | 18% |
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No sig. barriers | |--------------------|----------------------|-------|-------|----------|----------------|-----------------| | | 74% | 69% | 86% | 72% | 61% | 62% | 45% | 62% | 63% | 75% | 100% | 68% | | | 15% | 13% | 14% | 14% | 18% | 19% | 18% | 18% | 16% | 20% | 30% | 18% | | | 12% | 10% | 14% | 11% | 15% | 8% | 0% | 12% | 11% | 17% | 20% | 13% | | | 17% | 12% | 0% | 15% | 12% | 11% | 0% | 12% | 14% | 10% | 20% | 12% | | | 30% | 34% | 57% | 32% | 17% | 25% | 27% | 20% | 23% | 28% | 30% | 25% | | | 26% | 31% | 14% | 28% | 39% | 38% | 55% | 38% | 37% | 25% | 0% | 32% |
At the total level, there are no significant differences between production and service sector firms, either in the proportion experiencing any significant barriers or by the types of barriers encountered.
Table 9.1.21 Summary Barriers – By Market Type & Sector
| Types of Barriers | Total | High Growth | EEA | Other | |-------------------|-------|-------------|-----|-------| | | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | | Base: All exporters | 277 | 553 | 75 | 134 | 90 | 199 | 112 | 220 |
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|-------------------|---------|----------|-------------|----------|---------------------|------| | | 43% | 44% | 53% | 49% | 28% | 41% | 47% | 43% | | | 27% | 22% | 41% | 28% | 15% | 14% | 28% | 26% | | | 34% | 32% | 31% | 46% | 32% | 24% | 36% | 32% | | | 17% | 16% | 11% | 18% | 17% | 12% | 20% | 18% | | | 18% | 22% | 13% | 25% | 16% | 21% | 23% | 20% | | | 19% | 17% | 23% | 27% | 21% | 15% | 15% | 11% | | | 20% | 18% | 13% | 21% | 32% | 15% | 16% | 19% |
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|----------|----------------|-------------------------| | | 70% | 66% | 74% | 71% | 63% | 62% | 73% | 66% | | | 20% | 16% | 19% | 10% | 19% | 18% | 20% | 17% | | | 12% | 13% | 14% | 9% | 7% | 14% | 14% | 13% | | | 12% | 13% | 9% | 17% | 13% | 11% | 13% | 12% | | | 27% | 25% | 31% | 34% | 24% | 19% | 26% | 24% | | | 30% | 34% | 26% | 29% | 37% | 38% | 27% | 34% | 9.2 Barriers (Detailed)
9.2.1 Dealing With Legal Or Tax Regulations & Standards (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.1.1 Dealing With Legal Or Tax Regulations & Standards
Dealing with legal or tax regulations and standards is one of the most widespread barriers, with a quarter of firms (25%) experiencing it to a significant extent (i.e. 4 or 5 out of 5). Half of all internationalising firms (52%) reported at least some difficulties in this respect (i.e. 2-5 out of 5), with this significantly more likely to be the case amongst UKTI users. As seen below, firms that operated their own site in the market in question were by some distance the most likely to encounter problems with legal or tax regulations or standards.
Table 9.2.1 Individual Barriers – By Modes Used In Selected Market
| Modes Used In Market | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | Base: All exporters | 644 | 263 | 45 | 153 | | 5 – Extremely difficult | 13% | 14% | 9% | 24% | | 4 | 11% | 14% | 25% | 24% | | 3 | 15% | 14% | 16% | 14% | | 2 | 14% | 10% | 15% | 11% | | 1 – Not at all difficult | 45% | 44% | 32% | 23% | | Don’t know | 2% | 3% | 3% | 3% |
As seen above, 63% of firms with overseas sites had experienced at least moderate difficulties with legal or tax regulations or standards (i.e. 3-5 out of 5). In order to investigate this issue further, these firms were asked to give more details of the specific problems they had encountered, with the following results.
Chart 9.2.1.2 Specific Problems Experienced With Legal Or Tax Regulations & Standards (Overseas Sites Only)
- Setting up and registering a company in the market: 27%
- Obtaining planning permission or other permits relating to your site in the market: 13%
- Obtaining work permits or visas for your staff to relocate to the market: 10%
- Other legal or tax issues: 23%
- No problems with legal/tax regulations (1-2 out of 5): 37%
Base: All with site in market (Base, Don’t know) (153, 14%)
The most widespread issue encountered by firms with overseas sites relates to actually setting up and registering the company in an overseas market, with over a quarter of these firms indicating that this had been a barrier. Around 1 in 10 had experienced problems with planning permission or other permits and with obtaining visas or work permits. 9.2.2 Protecting Your Intellectual Property (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.2 Protecting Your Intellectual Property
Only 14% of firms reported a significant problem with protecting their intellectual property, meaning that it was the least widespread of the barriers tested. However, it is clearly still an issue to at least some degree for a large number of firms, with 39% indicating that they had experienced at least some difficulties in this respect (i.e. 2-5 out of 5). As seen below, firms that hold some form of IP protection are significantly more likely to highlight difficulties protecting their IP overseas, and this of course may have prompted them to obtain the IP protection.
Table 9.2.2 Protecting Your Intellectual Property – By IP Activity
| IP Active | Yes | No | |-----------|-----|----| | Base: All exporters | 196 | 633 | | 5 – Extremely difficult | 15% | 6% | | 4 | 9% | 5% | | 3 | 12% | 14% | | 2 | 15% | 11% | | 1 – Not at all difficult | 44% | 63% | | Don’t know | 4% | 2% |
However, it is interesting to note that around a third of those with no IP protection report some degree of difficulty in protecting their IP (i.e. give a score of 2-5 out of 5). Whilst this may suggest that these firms would benefit from adopting some form of IP protection, it could be that they have decided against doing this for reasons of costs, concerns about its effectiveness, etc. This hypothesis is consistent with the findings from recent UKTI qualitative research(^9), which found that the cost can often dissuade firms from obtaining IP protection (both in terms of the cost of obtaining it and the cost involved in enforcing it if there is an infringement).
(^9) An Investigation Into The Practices Of SMEs In Relation To Their IPP Practices, OMB Research, September 2010 9.2.3 Ensuring You Get Paid & Enforcing Contracts (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.3 Ensuring You Get Paid & Enforcing Contracts
Half of all internationalising firms (52%) reported at least some difficulty with getting paid and enforcing contracts, with 22% indicating it had been a significant difficulty (i.e. 4-5 out of 5). As with all the barriers, UKTI users were more likely to encounter this issue, although the proportion experiencing significant difficulties is similar for users and non-users. 9.2.4 Dealing With Customs Procedures & Paperwork (Customs Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.4 Dealing With Customs Procedures & Paperwork
Around a quarter of internationalising firms (24%) have experienced significant difficulties with customs procedures, making it one of the most widely reported of the barriers tested. Furthermore, 54% of firms have had at least some problems in this respect (i.e. score 2-5 out of 5), with this proportion increasing to 66% amongst UKTI users. 9.2.5 Identifying Who To Make Contact With In The First Instance (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.5 Identifying Who To Make Contact With In The First Instance
Just under half of all firms (48%) have experienced some level of difficulty with identifying initial contacts in their selected market, with a fifth (20%) judging this to have been a significant barrier (i.e. scoring 4-5 out of 5). The majority of UKTI users (62%) have experienced at least some problems with this issue, which is consistent with other survey data that shows that a need to access suitable contacts is one of the major reasons for using UKTI support. 9.2.6 Establishing An Initial Dialogue With Prospective Customers Or Partners (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.6 Establishing An Initial Dialogue With Prospective Customers Or Partners
Over half of firms (53%) have experienced some level of difficulty with establishing an initial dialogue with prospective customers or partners in the market in question, although only 17% indicated that this had been a significant problem (i.e. 4-5 out of 5). Once again, this was more likely to be an issue for UKTI users. 9.2.7 Building Relationships With Key Influencers Or Decision Makers (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.7 Building Relationships With Key Influencers Or Decision Makers
Approaching a fifth of firms (19%) reported significant difficulties building relationships with key influencers of decision makers in an overseas market, with this rising to 28% amongst UKTI users. Overall, the majority of internationalising firms (55%) indicated that they had experienced at least some problems in this respect (i.e. 2-5 out of 5). 9.2.8 Obtaining Basic Information About Doing Business In The Market (Information Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.8 Obtaining Basic Information About Doing Business In The Market
Although only 16% of firms indicated that obtaining basic information about an overseas market had been a significant problem (i.e. 4-5 out of 5), making this one of the least prevalent of the barriers tested, it should be noted that over half (53%) reported that they had experienced at least some difficulty in this respect. This highlights the need for an organisation such as UKTI to help fill these knowledge gaps, and the fact that UKTI users are more likely to report this barrier suggests that this is a major reason for firms to approach UKTI. 9.2.9 Finding The Necessary Management Time To Devote To Doing Business In The Market (Resource Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.9 Finding The Necessary Management Time To Devote To Doing Business In The Market
Lack of time and resources is clearly a hindrance to the development of overseas business for many firms, with 59% indicating that they have had some difficulties in this respect (and 20% claiming that it has been a significant problem in their selected market).
As seen in Section 9.1, this issue is not just confined to smaller firms and in fact a slightly higher proportion of larger firms (100+ employees) experience significant problems in this respect. Once again, users of UKTI are more likely to report this barrier, emphasising the importance of UKTI’s role in helping firms target their often limited resources most effectively. 9.2.10 Negotiating The Language & Culture (Language & Cultural Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.10 Negotiating The Language & Culture
Overall, 18% of all internationalising firms have experienced significant problems with the language or cultural differences in their chosen market, with almost half (47%) reporting at least some difficulty in this regard (i.e. 2-5 out of 5). Again, this barrier is more likely to have been experienced by UKTI users. 9.2.11 A Preference On The Part Of Customers In The Market For Doing Business With Other Firms From That Market (Bias Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 9.2.11 A Preference On The Part Of Customers In The Market For Doing Business With Other Firms From That Market
Around half (49%) of firms claim to have encountered bias issues to at least some extent (i.e. score 2-5 out of 5), with 19% indicating that it has been a significant barrier. As with all the barriers, UKTI users are more likely to have been affected in this way. 9.3 The Role Of Overseas Sites In Avoiding Barriers
It was hypothesised that having a site in an overseas market might reduce the likelihood of firms encountering certain barriers to doing business there. This was investigated for the following individual barriers:
- Dealing with legal or tax regulations or standards in < MARKET >
- Protecting your intellectual property
- Ensuring you get paid and enforcing contracts
- Building relationships with key influencers or decision-makers
- Negotiating the culture and language
- A preference on the part of customers in < MARKET > for doing business with firms from < MARKET >
Those firms that had an overseas site and had experienced no or only very minimal problems with the above barriers (i.e. scored 1-2 out of 5 for the extent to which they had been a difficulty), were asked whether having a site had helped them avoid these issues. The table below summarises these results.
Table 9.3.1 Extent That Having A Site In The Market Has Helped Avoid Barriers (Overseas Sites Only)
| Barrier | Dealing with legal or tax regulations and standards | Protecting your intellectual property | Ensuring you get paid and enforcing contracts | |------------------------------------------------------------------------|----------------------------------------------------|---------------------------------------|---------------------------------------------| | Base: All with site in market | 153 | 153 | 153 | | Yes, having a site in market has helped avoid problems with this | 21% | 27% | 27% | | No, having a site in market has not helped avoid problems with this | 10% | 35% | 18% | | Have experienced problems with this issue (3-5 out of 5) | 63% | 32% | 46% | | Don’t know | 6% | 6% | 8% |
| Barrier | Building relationships with key influencers or decision makers | Negotiating the language and culture | Customer preference for doing business with firms from own market | |------------------------------------------------------------------------|---------------------------------------------------------------|-------------------------------------|---------------------------------------------------------------| | Base: All with site in market | 153 | 153 | 153 | | Yes, having a site in market has helped avoid problems with this | 40% | 41% | 31% | | No, having a site in market has not helped avoid problems with this | 11% | 16% | 14% | | Have experienced problems with this issue (3-5 out of 5) | 44% | 39% | 44% | | Don’t know | 5% | 4% | 10% |
It appears that having a site in an overseas market can significantly reduce the risk of encountering difficulties with building relationships with overseas contacts and of experiencing problems with the language or culture. Two-fifths of firms felt that having a site had helped avoid problems with these issues. However, overseas sites are less effective at preventing difficulties with legal or tax regulations and standards, with only 21% of firms with a site claiming that this had helped avoid these sorts of issues.
This is consistent with the survey data on the specific types of legal and regulatory issues experienced by firms with overseas sites. The most widespread difficulty related to setting up and registering the company overseas, suggesting that the process of establishing an overseas site can actually cause some of these barriers. 10. Benefits of Doing Business Overseas
10.1 Benefits
All firms were read out 5 possible benefits of doing business overseas, and asked to indicate the extent to which each one applied to them, on a 5 point scale where 5 meant they had benefited ‘to a critical extent’ and 1 meant ‘to no extent’. Please note that firms that had not yet started doing business overseas but were planning to do so in the next year were asked to rate the extent to which they expected to benefit in each of these ways. The chart below summarises these results.
The most widespread benefit of exporting is that it improves firms’ profile or credibility, with 44% rating this as a significant benefit (i.e. scoring 4-5 out of 5) and only 21% indicating that this did not apply to them at all.
The next most common benefits were achieving a level of growth otherwise not possible and being able to more fully utilise existing capacity, which were rated as significant by 41% and 36% of internationalising firms respectively.
Although exposure to new ideas and increased commercial lifespan of products and services were the least widespread export benefits, they were still experienced to a significant extent by approaching a third of firms. The table below provides further analysis of UKTI users and non-users, showing the proportion of firms experiencing each benefit to a significant extent (4-5 out of 5) and to a moderate extent (3-5 out of 5).
Table 10.1.1 Benefits of Overseas Business – By UKTI Usage
| | Total | UKTI Usage | | | |--------------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | Growth | 41% | 56% | 36% | | Utilising capacity | 36% | 49% | 31% | | New ideas | 31% | 41% | 27% | | Increased lifespan | 30% | 35% | 28% | | Profile & credibility | 44% | 57% | 39% | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | Growth | 58% | 73% | 52% | | Utilising capacity | 57% | 69% | 53% | | New ideas | 52% | 63% | 47% | | Increased lifespan | 46% | 56% | 42% | | Profile & credibility | 69% | 80% | 65% | | Summary | | | | | At least one sig. benefit | 63% | 75% | 58% | | At least one mod. benefit | 81% | 91% | 77% | | No sig. or mod. benefit | 19% | 9% | 23% |
It is clear from this analysis that, although they encounter more barriers, UKTI clients also report consistently greater benefits from overseas trade, with 75% experiencing at least one significant benefit compared to 58% of non-users.
This difference between users and non-users is apparent for all of the individual benefits tested. As seen in the bottom table, long-term exporters and those in more markets are considerably more likely to have experienced each of the benefits, which is not surprising given they have had more opportunity to do so. There is some evidence to suggest that the likelihood of seeing significant export benefits also increases amongst larger firms, but this is likely to be linked to their greater export experience.
Table 10.1.2 Benefits of Overseas Business – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | |---------------------|-----------------------------|------|-----|-----|-----|-----|-----|----|----|----| | Up to 5 | | | | | | | | | | | | 6-10 | | | | | | | | | | | | Over 10 | | | | | | | | | | | | 0-9 | | | | | | | | | | | | 10-49 | | | | | | | | | | | | 50-99 | | | | | | | | | | | | 100-249 | | | | | | | | | | | | 250+ | | | | | | | | | | |
Proportion benefiting significantly (4-5 out of 5) from...
| Growth | 42% | 41% | 41% | 38% | 44% | 46% | 45% | 58% | | Utilising capacity | 33% | 36% | 37% | 33% | 39% | 45% | 37% | 49% | | New ideas | 31% | 29% | 31% | 29% | 30% | 35% | 21% | 67% | | Increased lifespan | 33% | 30% | 29% | 30% | 29% | 39% | 18% | 44% | | Profile & credibility | 44% | 44% | 45% | 39% | 48% | 64% | 52% | 67% |
Proportion benefiting moderately (3-5 out of 5) from...
| Growth | 58% | 54% | 60% | 55% | 61% | 68% | 63% | 71% | | Utilising capacity | 53% | 58% | 58% | 53% | 62% | 68% | 50% | 76% | | New ideas | 54% | 48% | 52% | 47% | 55% | 63% | 46% | 84% | | Increased lifespan | 47% | 47% | 46% | 43% | 51% | 56% | 32% | 62% | | Profile & credibility | 69% | 68% | 70% | 65% | 72% | 84% | 80% | 87% |
Summary
At least one sig. benefit | 61% | 59% | 64% | 60% | 63% | 79% | 59% | 84% | At least one mod. benefit | 81% | 80% | 81% | 79% | 82% | 88% | 84% | 96% | No sig. or mod. benefit | 19% | 20% | 19% | 21% | 18% | 12% | 16% | 4% |
Table 10.1.3 Benefits of Overseas Business – By Experience
| Years Exporting | Number of Markets | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | |-----------------|-------------------|-------------------|------------|---------------|--------|------|-------------| | Base | | 198 | 415 | 287 | 441 | 174 | 279 |
Proportion benefiting significantly (4-5 out of 5) from...
| Growth | 33% | 40% | 47% | 29% | 38% | 62% | | Utilising capacity | 31% | 32% | 43% | 25% | 39% | 52% | | New ideas | 31% | 28% | 32% | 25% | 28% | 41% | | Increased lifespan | 26% | 30% | 32% | 24% | 25% | 41% | | Profile & credibility | 44% | 41% | 48% | 32% | 42% | 63% |
Proportion benefiting moderately (3-5 out of 5) from...
| Growth | 52% | 53% | 66% | 45% | 56% | 79% | | Utilising capacity | 53% | 55% | 62% | 46% | 59% | 72% | | New ideas | 55% | 49% | 53% | 47% | 49% | 60% | | Increased lifespan | 45% | 45% | 48% | 37% | 42% | 62% | | Profile & credibility | 72% | 65% | 74% | 60% | 72% | 81% |
Summary
At least one sig. benefit | 58% | 58% | 69% | 51% | 61% | 80% | At least one mod. benefit | 80% | 79% | 84% | 74% | 83% | 90% | No sig. or mod. benefit | 20% | 21% | 16% | 26% | 17% | 10% | There is also a clear correlation between the number of overseas regions firms are active in and the extent to which they benefit from doing business overseas.
However, it is interesting to note that firms that are not currently in any overseas markets (i.e. not yet exporting) are anticipating a much higher level of benefit than that reported by most firms that are already internationalising. This might suggest that some of these firms have unrealistic expectations in respect to the potential impact of exporting on their business. That said, it is clear the many firms do experience this level and range of benefits, but the analysis suggests that this is more likely to happen when firms are active in more markets/regions (i.e. it may well take some time for these new exporters to see the level of benefit they are expecting).
In particular, firms that are not yet exporting are very likely to anticipate benefiting from exposure to new ideas, with 51% believing they will benefit to a significant extent from this. It may well be that some of these firms have already been exposed to new ideas during the process of preparing to start exporting (e.g. attending tradeshows, going on market visits, etc).
Table 10.1.4 Benefits of Overseas Business – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |-------------------------------------|------|-----|-----|-------|------|------| | **Base** | 61 | 224 | 168 | 164 | 126 | 157 | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | | | | Growth | 45% | 26% | 31% | 36% | 52% | 67% | | Utilising capacity | 38% | 25% | 30% | 34% | 41% | 55% | | New ideas | 51% | 18% | 27% | 29% | 30% | 45% | | Increased lifespan | 38% | 19% | 26% | 24% | 34% | 46% | | Profile & credibility | 58% | 32% | 35% | 39% | 51% | 64% | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | | | | Growth | 70% | 42% | 47% | 58% | 64% | 82% | | Utilising capacity | 68% | 43% | 52% | 55% | 65% | 74% | | New ideas | 73% | 39% | 51% | 51% | 47% | 65% | | Increased lifespan | 67% | 29% | 40% | 42% | 55% | 65% | | Profile & credibility | 85% | 56% | 66% | 68% | 76% | 81% | | Summary | | | | | | | | At least one sig. benefit | 78% | 47% | 54% | 63% | 66% | 83% | | At least one mod. benefit | 92% | 71% | 79% | 80% | 84% | 91% | | No sig. or mod. benefit | 8% | 29% | 21% | 20% | 16% | 9% | The following table provides analysis by the various innovation measures, and clearly demonstrates that innovative and IP active firms experience the greatest benefits from overseas trade.
This is illustrated by the fact that almost a third of non-innovative firms (31%) do not report any moderate or significant benefits from their overseas activity, compared to just 1 in 10 of those firms that are classified as being innovative by the alternative, tighter definition.
Table 10.1.5 Benefits of Overseas Business – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alt) | Yes | No | Yes | No | | **Base** | 421 | 643 | 260 | 204 | 685 | | **Proportion benefiting significantly (4-5 out of 5) from...** | | | | | | | Growth | 51% | 46% | 30% | 58% | 37% | | Utilising capacity | 45% | 40% | 28% | 51% | 32% | | New ideas | 40% | 35% | 20% | 46% | 25% | | Increased lifespan | 39% | 34% | 18% | 39% | 27% | | Profile & credibility| 56% | 49% | 33% | 61% | 39% | | **Proportion benefiting moderately (3-5 out of 5) from...** | | | | | | | Growth | 69% | 64% | 43% | 72% | 54% | | Utilising capacity | 67% | 63% | 44% | 71% | 53% | | New ideas | 62% | 58% | 34% | 68% | 46% | | Increased lifespan | 59% | 52% | 30% | 63% | 41% | | Profile & credibility| 80% | 74% | 57% | 83% | 65% | | **Summary** | | | | | | | At least one sig. benefit | 72% | 66% | 53% | 75% | 59% | | At least one mod. benefit | 90% | 85% | 69% | 89% | 78% | | No sig. or mod. benefit | 10% | 15% | 31% | 11% | 22% | As seen below, firms with more ambitious growth objectives also report greater benefits, suggesting that the benefits generated from overseas business might be acting as a catalyst for their growth plans.
Innovative high growth firms are particularly likely to experience significant export benefits, confirming that UKTI should be targeting this key subset of internationalising firms.
Table 10.1.6 Benefits of Overseas Business – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base | 102 | 473 | 280 | 232 | 411 | 260 |
Proportion benefiting significantly (4-5 out of 5) from...
| | Growth | Utilising capacity | New ideas | Increased lifespan | Profile & credibility | |----------------------|--------|--------------------|-----------|--------------------|-----------------------| | Growth | 33% | 29% | 22% | 20% | 36% | | Utilising capacity | 39% | 35% | 28% | 28% | 43% | | New ideas | 53% | 48% | 43% | 41% | 56% | | Increased lifespan | 55% | 50% | 44% | 43% | 58% | | Profile & credibility| 41% | 35% | 31% | 30% | 44% |
Proportion benefiting moderately (3-5 out of 5) from...
| | Growth | Utilising capacity | New ideas | Increased lifespan | Profile & credibility | |----------------------|--------|--------------------|-----------|--------------------|-----------------------| | Growth | 43% | 48% | 37% | 36% | 63% | | Utilising capacity | 60% | 58% | 51% | 45% | 69% | | New ideas | 68% | 65% | 65% | 59% | 78% | | Increased lifespan | 70% | 68% | 67% | 62% | 80% | | Profile & credibility| 61% | 60% | 54% | 48% | 72% |
Summary
| | At least one sig. benefit | At least one mod. benefit | No sig. or mod. benefit | |----------------------|---------------------------|---------------------------|-------------------------| | Growth | 55% | 74% | 26% | | Utilising capacity | 61% | 82% | 18% | | New ideas | 75% | 87% | 13% | | Increased lifespan | 77% | 88% | 12% | | Profile & credibility| 62% | 84% | 16% | | | 53% | 69% | 31% | As seen below, firms demonstrating ‘new’ or ‘sustained’ growth via the ASBS definitions (and particularly ‘new’ growth) are particularly likely to have experienced significant benefits from doing business overseas.
Table 10.1.7 Benefits of Overseas Business – By Growth
| | ASBS Definition | OECD Definition | |------------------------|-----------------|-----------------| | | Sustained | Contained | New | No growth | High growth | Gazelles | | Base | 120 | 128 | 160 | 495 | 112 | 38 | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | | | | Growth | 54% | 47% | 52% | 34% | 48% | 42% | | Utilising capacity | 51% | 34% | 46% | 31% | 46% | 37% | | New ideas | 41% | 31% | 44% | 24% | 38% | 21% | | Increased lifespan | 40% | 33% | 42% | 23% | 41% | 37% | | Profile & credibility | 55% | 52% | 57% | 37% | 50% | 50% | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | | | | Growth | 65% | 60% | 71% | 53% | 63% | 63% | | Utilising capacity | 64% | 56% | 66% | 54% | 60% | 45% | | New ideas | 63% | 47% | 66% | 46% | 57% | 45% | | Increased lifespan | 59% | 48% | 60% | 39% | 59% | 55% | | Profile & credibility | 78% | 72% | 78% | 64% | 74% | 76% | | Summary | | | | | | | | At least one sig. benefit | 72% | 63% | 77% | 56% | 68% | 61% | | At least one mod. benefit | 84% | 81% | 89% | 78% | 83% | 84% | | No sig. or mod. benefit | 16% | 19% | 11% | 22% | 17% | 16% | Firms that were classified as ‘born global’ using the alternative, tighter definition report consistently higher benefits and 88% of this group have experienced at least one significant benefit. This difference is particularly apparent when it comes achieving a level of growth otherwise not possible.
Interestingly, when the standard definition of ‘born global’; is used (i.e. based solely on when firms started exporting and not taking account of export turnover), there is no difference between ‘born global’ firms and other young firms that started doing business overseas at some point after they were established.
‘Young technology intensive’ firms also tend to experience greater benefits than other internationalising firms.
Table 10.1.8 Benefits of Overseas Business – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 234 | 128 | 52 | 124 | 667 | | Proportion benefiting significantly (4-5 out of 5) from... | | | | | | Growth | 41% | 45% | 73% | 54% | 41% | | Utilising capacity | 33% | 34% | 52% | 43% | 37% | | New ideas | 31% | 34% | 46% | 38% | 31% | | Increased lifespan | 33% | 34% | 56% | 44% | 29% | | Profile & credibility| 44% | 42% | 63% | 58% | 44% | | Proportion benefiting moderately (3-5 out of 5) from... | | | | | | Growth | 58% | 63% | 88% | 67% | 58% | | Utilising capacity | 53% | 52% | 75% | 60% | 58% | | New ideas | 54% | 55% | 71% | 61% | 51% | | Increased lifespan | 47% | 50% | 75% | 56% | 46% | | Profile & credibility| 69% | 69% | 85% | 77% | 69% | | Summary | | | | | | At least one sig. benefit | 61% | 61% | 88% | 73% | 63% | | At least one mod. benefit | 80% | 82% | 96% | 86% | 81% | | No sig. or mod. benefit | 20% | 18% | 4% | 14% | 19% | 10.2 Impact on Product & Service Development
All firms were asked whether their experiences of doing business overseas had led them to develop any new products/services or modify any existing ones, with the following results.
Well over half of internationalising firms (59%) reported some degree of impact on their product or service development activity, with 44% indicating that doing business overseas had prompted them to develop new products or services and 52% that it had encouraged them to change or modify existing products or services.
As seen below, UKTI users are significantly more likely to have introduced new or modified products or services as a direct result of their overseas activity.
Where the impact on product/service development related to changing or modifying existing products, in most cases this was felt to be a fundamental change rather than just cosmetic changes (such as packaging or translation), and this is true of both users and non-users.
| Table 10.2.1 Impact On Product/Service Development – By UKTI Usage | |---------------------------------------------------------------| | **Total** | **UKTI Usage** | | **Base** | **Total** | **UKTI User** | **Non-User** | | Develop new products/services | 903 | 248 | 655 | | Change/modify existing ones | 44% | 53% | 40% | | - Something cosmetic | 22% | 64% | 47% | | - Something more fundamental | 39% | 50% | 34% | | Neither | 41% | 29% | 45% | | Don’t know | 1% | 1% | 1% | Small firms with less than 10 employees are least likely to have developed or modified their products or services, but there is no difference in this respect by age of firm.
Table 10.2.2 Impact On Product/Service Development – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Develop new products/services | Change/modify existing ones | - Something cosmetic | - More fundamental | Neither | Don't know | |---------------------|-----------------------------|------|-------------------------------|-----------------------------|---------------------|-------------------|---------|------------| | | Up to 5 | 236 | 46% | 50% | 23% | 37% | 42% | 0% | | | 6-10 | 256 | 41% | 55% | 21% | 40% | 39% | 1% | | | Over 10 | 411 | 45% | 51% | 22% | 39% | 41% | 1% | | | 0-9 | 536 | 41% | 48% | 21% | 36% | 45% | 1% | | | 10-49 | 251 | 48% | 51% | 25% | 37% | 38% | 1% | | | 50-99 | 45 | 47% | 64% | 22% | 53% | 34% | 0% | | | 100-249 | 31 | 46% | 57% | 27% | 48% | 37% | 0% | | | 250+ | 23 | 58% | 80% | 22% | 67% | 16% | 4% |
As expected, innovative and IP active firms are significantly more likely to report an impact of overseas business on their product or service development activity.
Table 10.2.3 Impact On Product/Service Development – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Develop new products/services | 59% | 52% | 24% | 62% | 39% | | Change/modify existing ones | 66% | 61% | 27% | 73% | 45% | | - Something cosmetic | 27% | 27% | 11% | 31% | 20% | | - More fundamental | 54% | 46% | 20% | 58% | 33% | | Neither | 26% | 31% | 65% | 22% | 47% | | Don't know | 0% | 1% | 2% | 1% | 1% |
Firms with substantial growth aspirations are significantly more likely to have developed new products or services and made fundamental changes to existing ones. This might suggest that ambitious firms are more open to tailoring their offering to market requirements in order to help them realise their growth potential.
Table 10.2.4 Impact On Product/Service Development – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Innovative | Non innovative | | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Develop new products/services | 25% | 43% | 58% | 54% | 42% | 16% | | Change/modify existing ones | 29% | 52% | 65% | 61% | 51% | 21% | | - Something cosmetic | 13% | 23% | 29% | 21% | 19% | 8% | | - More fundamental | 19% | 37% | 53% | 49% | 38% | 16% | | Neither | 65% | 40% | 26% | 31% | 41% | 72% | | Don't know | 0% | 1% | 1% | 0% | 1% | 1% | Firms that are defined as ‘born global’ by the alternative definition are particularly likely to have developed new products/services or modified existing ones, and ‘young technology intensive’ firms are also more likely to have done so.
Table 10.2.5 Impact On Product/Service Development – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base | 234 | 128 | 52 | 124 | 667 | | Develop new products/services | 46% | 46% | 65% | 60% | 43% | | Change/modify existing ones | 50% | 49% | 63% | 61% | 52% | | - Something cosmetic | 23% | 27% | 33% | 31% | 22% | | - More fundamental | 37% | 37% | 48% | 47% | 39% | | Neither | 42% | 41% | 27% | 30% | 41% | | Don’t know | 0% | 0% | 0% | 0% | 1% |
Firms operating in the production sector are more likely to have introduced new products or services as a result of their overseas experiences, and to have made fundamental modifications to their existing offering.
Table 10.2.6 Impact On Product/Service Development – By Sector
| | Production | Services | |----------------------|------------|----------| | Base | 287 | 601 | | Develop new products/services | 50% | 41% | | Change/modify existing ones | 56% | 50% | | - Something cosmetic | 23% | 22% | | - More fundamental | 46% | 35% | | Neither | 34% | 44% | | Don’t know | 1% | 1% |
As seen below, firms with overseas sites and those doing business overseas through licensing, franchising or other contractual arrangements are most likely to report an impact on their product or service development activity (presumably linked to the fact that these modes are more likely to be used by innovative firms).
Table 10.2.7 Impact On Product/Service Development – By Modes Used
| | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |----------------------|----------------|---------------------|--------------------------|---------------| | Base | 784 | 363 | 105 | 194 | | Develop new products/services | 44% | 51% | 63% | 65% | | Change/modify existing ones | 51% | 61% | 74% | 71% | | - Something cosmetic | 22% | 29% | 28% | 37% | | - More fundamental | 38% | 46% | 59% | 59% | | Neither | 41% | 31% | 21% | 19% | | Don’t know | 1% | 1% | 0% | 1% | In cases where overseas business had influenced firms’ product/service development, firms were asked whether this development activity was designed for overseas customers, UK customers or both.
Chart 10.2.2 Geographic Focus Of Product/Service Development
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Overseas customers | 13% | 14% | 13% | | UK customers | 2% | 3% | 2% | | Both | 38% | 52% | 33% | | Overseas business has not prompted any product/service development | 40% | 30% | 45% | | Don’t know | 0% | 0% | 0% | | Not yet exporting | 6% | 2% | 7% |
In most cases where doing business overseas had influenced product or service development, this activity had been carried out with both the UK market and overseas markets in mind.
As seen below, this is true for both users and non-users of UKTI, although the former are more likely to report any impact on product/service development. As seen below, product/service development tended to be aimed at both UK and overseas customers for production and service sector firms.
Table 10.2.9 Geographic Focus Of Product/Service Development – By Sector
| Sector | Production | Services | |---------------------------------------------|------------|----------| | Base | 287 | 601 | | Overseas customers | 14% | 13% | | UK customers | 2% | 3% | | Both | 45% | 35% | | Overseas business has not prompted any product/service development | 35% | 43% | | Don’t know | 0% | 0% | | Not yet exporting | 3% | 7% |
Those firms that had undertaken product or service development activity specifically for overseas customers were asked why this had been done.
Chart 10.2.3 Reasons For Undertaking Product/Service Development For Overseas Customers
- To comply with regulations or legal requirements overseas: 19%
- To solve technical or practical issues relating to overseas countries: 33%
- To take account of different cultures or consumer preferences overseas: 24%
- In response to specific requests from overseas customers: 40%
- Not done any product/service development for overseas customers: 43%
Base: All respondents (Base, None of these, Don’t know, Not yet exporting) (903, 2%, 0%, 6%)
The main catalysts for undertaking this product or service development activity are specific requests from overseas customers and to solve technical/practical issues that are specific to the market(s) in question. This is consistent with the results from a recent UKTI qualitative study(^\\text{10}) that found that a key driver of innovation was demands from existing or prospective customers (e.g. to amend products to meet
(^{10}) Overseas Business Development Strategies For A Stormy Economic Climate, OMB Research, September 2009 their specific requirements). As seen below, results are also broadly comparable to those seen in the 2010 Internationalisation survey, although there is some evidence that slightly more firms are now carrying out product/service development to solve technical or practical issues relating to particular overseas markets.
Table 10.2.10 Reasons For Undertaking Product/Service Development For Overseas Customers – Over Time
| Reason | Internationalisation Survey | |------------------------------------------------------------------------|-----------------------------| | | 2010 | 2011 | | Base | 902 | 903 | | Comply with regulations etc | 16% | 19% | | Solve technical/practical issues | 25% | 33% | | Different cultures or preferences | 23% | 24% | | Customer requests | 37% | 40% | | None of these | 2% | 2% | | Not done product/service development for overseas customers | 48% | 43% | | Don’t know | 0% | 0% | | Not yet exporting | 4% | 6% |
Reflecting the fact that UKTI users are considerably more likely than non-users to be doing any product or service development activity for overseas customers, they are more likely to undertake innovation activity for each of these reasons.
Table 10.2.11 Reasons For Undertaking Product/Service Development For Overseas Customers – By UKTI Usage
| Reason | Total | UKTI Usage | |------------------------------------------------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Comply with regulations etc | 19% | 27% | 16% | | Solve technical/practical issues | 33% | 45% | 29% | | Different cultures or preferences | 24% | 34% | 20% | | Customer requests | 40% | 54% | 35% | | None of these | 2% | 2% | 2% | | Not done product/service development for overseas customers | 43% | 32% | 47% | | Don’t know | 0% | 0% | 0% | | Not yet exporting | 6% | 2% | 7% | As seen below, production sector firms are more likely than those in the service sector to undertake product or service development to solve technical issues encountered overseas and in response to requests from overseas customers.
Table 10.2.12 Reasons For Undertaking Product/Service Development For Overseas Customers – By Sector
| Sector | Production | Services | |---------------------------------------------|------------|----------| | Base | 287 | 601 | | Comply with regulations etc | 22% | 18% | | Solve technical/practical issues | 39% | 31% | | Different cultures or preferences | 26% | 24% | | Customer requests | 48% | 37% | | None of these | 2% | 2% | | Not done product/service development for overseas customers | 38% | 45% | | Don’t know | 0% | 0% | | Not yet exporting | 3% | 7% |
Firms were also asked a number of questions to ascertain the extent to which internationalisation impacts on investment in product and service development activity. These results are summarised below.
Chart 10.2.4 Impacts On Investment In Product/Service Development
- Prompted you to invest more time and money in product or service development: 42%
- Increased the amount of money you have available to invest in product or service development: 41%
- Increased the return on investment that you get from product or service development: 48%
Base: All respondents (Base, No product/service development) (903, 1%/2%/2%, 31%)
Internationalisation can clearly increase the rewards from innovation activity, with almost half of all firms (48%) reporting that doing business overseas has increased the return they have received from their investment in product or service development. Just over two-fifths believe that doing business overseas has encouraged them to invest more resources in these activities, and that it has enabled them to invest more money in product or service development activity. As seen below, users of UKTI are more likely to report all of these impacts, particularly the increased return on investment on product/service development activity.
Table 10.2.13 Impacts On Investment In Product/Service Development – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Invest more time and money in NPD | 42% | 52% | 38% | | Increase money available for NPD | 41% | 52% | 37% | | Increase ROI in NPD | 48% | 61% | 43% |
The younger a firm is, the more likely they are to have benefited by being able to invest more time and money in innovation activities as a result of doing business overseas. There are also some differences by firm size, with larger firms more likely to indicate that overseas business has increased the return on their product/service development investment and, to a lesser extent, benefit through being able to invest more resources in these activities.
Table 10.2.14 Impacts On Investment In Product/Service Development – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |--------------------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Invest more time and money in NPD | 49% | 43% | 39% | 39% | 42% | 45% | 50% | 49% | | Increase money available for NPD | 42% | 42% | 40% | 41% | 43% | 35% | 40% | 44% | | Increase ROI in NPD | 51% | 49% | 47% | 45% | 49% | 56% | 57% | 67% |
As might be expected, innovative firms and those that are IP active are significantly more likely to indicate that doing business overseas has increased the resources they devote to product/service development, the capital they have available for it and the return they receive.
Table 10.2.15 Impacts On Investment In Product/Service Development – By Innovation
| | Innovative | IP Active | |--------------------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Invest more time and money in NPD | 55% | 49% | 23% | 59% | 36% | | Increase money available for NPD | 55% | 48% | 22% | 56% | 37% | | Increase ROI in NPD | 65% | 58% | 24% | 65% | 43% | These impacts on product/service development investment are most likely to be experienced by firms with substantial growth objectives, and particularly innovative high growth firms.
Table 10.2.16 Impacts On Investment In Product/Service Development – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Invest more time and money in NPD | 20% | 40% | 59% | 62% | 43% | 23% | | Increase money available for NPD | 25% | 41% | 55% | 58% | 44% | 22% | | Increase ROI in NPD | 31% | 48% | 65% | 70% | 52% | 24% |
Firms defined as being ‘born global’ by the alternative, tighter definition and those that are ‘young, technology intensive’ are also more likely to report these product/service development benefits.
Table 10.2.17 Impacts On Investment In Product/Service Development – By Born Global & Young, Tech Intensive
| Up to 5 years old | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | |-------------------|-------|-------------|---------------------------|----------------------|------------------| | Base | 234 | 128 | 52 | 124 | 667 | | Invest more time and money in NPD | 49% | 48% | 69% | 62% | 40% | | Increase money available for NPD | 42% | 44% | 63% | 56% | 41% | | Increase ROI in NPD | 51% | 52% | 69% | 67% | 48% |
Interestingly, firms operating in the production sector are more likely to indicate that doing business overseas increases the money they have available for innovation activities and the return they see on their investment.
Table 10.2.18 Impacts On Investment In Product/Service Development – By Sector
| Sector | Production | Services | |--------|------------|----------| | Base | 287 | 601 | | Invest more time and money in NPD | 44% | 41% | | Increase money available for NPD | 49% | 37% | | Increase ROI in NPD | 54% | 46% | Firms involved in more advanced internationalisation modes (i.e. not just selling direct) are more likely to report these innovation benefits, and this is particularly true of those involved in contractual arrangements and operating their own overseas sites.
Table 10.2.19 Impacts On Investment In Product/Service Development – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |-----------------------------------|----------------|---------------------|--------------------------|---------------| | Base | 784 | 363 | 105 | 194 | | Invest more time and money in NPD | 42% | 47% | 66% | 63% | | Increase money available for NPD | 42% | 49% | 58% | 62% | | Increase ROI in NPD | 49% | 58% | 69% | 70% | 10.3 Impact of Overseas Sites on UK Employment Levels
Those firms that operated their own overseas sites were asked whether this had impacted on the number of people employed by their company in the UK. These results are summarised below.
Chart 10.3.1 If you had not set up your overseas site(s), do you think that the number of people currently employed by your business in the UK would be...?
- Higher than it is now: 16%
- The same as it is now: 61%
- Lower than it is now: 21%
Base: All operating overseas sites respondents (Base, Don't know) (184, 2%)
At the total level, overseas sites appear to have a slight ‘net positive’ impact on UK employment levels.
Overall, 21% of firms indicated that they would have fewer UK employees if they did not have their overseas site, so the site has enabled them to increase UK staff numbers (presumably by improving the firm’s performance and growth).
In comparison, 16% of firms stated that they would have more UK employees if they did not have their overseas site, suggesting that the overseas jobs have replaced UK jobs.
However, in the majority of cases, having an overseas site has no impact on the firm’s UK staff levels. Firms were also asked to indicate the percentage increase or decrease in UK employee numbers as a result of having their overseas site(s). These results are set out below, along with the mean impact on UK employee numbers, calculated by combining the percentage change in staff levels with the firm’s current UK employee levels.
Table 10.3.1 Impact Of Overseas Sites On UK Employment – By UKTI Usage
| Base: All with overseas sites | Total | UKTI Usage | |------------------------------|-------|------------| | | | UKTI User | Non-User | | Over 75% higher | 0% | 0% | 0% | | 51-75% higher | 1% | 0% | 1% | | 26-50% higher | 3% | 3% | 3% | | 11-25% higher | 4% | 3% | 6% | | Up to 10% higher | 8% | 6% | 10% | | The same as it is now | 61% | 60% | 63% | | Up to 10% lower | 8% | 10% | 7% | | 11-25% lower | 4% | 6% | 2% | | 26-50% lower | 4% | 4% | 5% | | 51-75% lower | 2% | 4% | 0% | | Over 75% lower | 3% | 3% | 3% |
Summary
| UK employees would be higher | 16% | 11% | 20% | | UK employees would be the same | 61% | 60% | 63% | | UK employees would be lower | 21% | 26% | 16% | | Don’t know | 2% | 3% | 1% |
Mean Impact
| Mean number of UK employees | 183 | 257 | 126 | | Mean additional UK employees as result of overseas site(s) | +3.5 | +5.3 | +2.2 |
Amongst UKTI users there is a clear positive impact of overseas sites on UK employment levels, with 26% indicating that they would have fewer UK employees without the site(s) and only 11% claiming that UK staff levels would be higher if they had not set up their overseas site(s). The mean impact is an additional 5 employees per firm.
In contrast, non-users of UKTI are slightly more likely to report a negative impact on UK employment (20%) than a positive one (16%). However, it should be noted that the mean impact is still positive for this group, at an additional 2 employees per firm. The table below provides further analysis of UKTI users and non-users by size of firm. Please note that the bases are quite low when analysing the data at this level, so caution should be exercised when interpreting these results.
Table 10.3.2 Impact Of Overseas Sites On UK Employment – By UKTI Usage & Size
| | UKTI Users | Non-Users | |----------------------|------------|-----------| | | 0-49 emps | 50+ emps | 0-49 emps | 50+ emps | | Base: All with overseas sites | 38 | 42 | 67 | 36 | | Summary | | | | | | UK employees would be higher | 11% | 12% | 22% | 17% | | UK employees would be the same | 66% | 55% | 61% | 64% | | UK employees would be lower | 21% | 31% | 16% | 17% | | Don't know | 2% | 2% | 1% | 2% | | Mean Impact | | | | | | Mean number of UK employees | 18 | 473 | 16 | 330 | | Mean additional UK employees as result of overseas site(s) | +0.9 | +9.2 | -0.3 | +7.2 |
Larger UKTI users are more likely to report a positive impact on UK employment and, unsurprisingly given their larger size, the mean number of jobs created is higher amongst this group.
The table below provides further analysis of UKTI users and non-users by size of firm. Please note that the bases are quite low when analysing the data at this level, so caution should be exercised when interpreting these results.
Table 10.3.3 Impact Of Overseas Sites On UK Employment – By Type Of Site
| | Manufacturing / Assembly | Call Centre | Distribution / Sales Office | Service Delivery | R&D | |----------------------|--------------------------|-------------|-----------------------------|------------------|-----| | Base: All with overseas sites | 46 | 10 | 141 | 85 | 24 | | Summary | | | | | | | UK employees would be higher | 20% | 10% | 18% | 19% | 25% | | UK employees would be the same | 57% | 60% | 59% | 58% | 29% | | UK employees would be lower | 20% | 30% | 21% | 20% | 46% | | Don't know | 4% | 0% | 2% | 4% | 0% | | Mean Impact | | | | | | | Mean number of UK employees | 183 | 142 | 213 | 154 | 137 | | Mean additional UK employees as result of overseas site(s) | +6.2 | +4.6 | +4.4 | +6.9 | +17.1 |
Setting aside the results for call centre and R&D sites due to the low base sizes, there is relatively little difference in the impact on UK employee numbers across the different types of overseas site. As well as assessing the impact on total UK employee numbers, firms with overseas sites were also asked whether having a site had had any impact on the number of degree-level staff employed in the UK. These results are summarised below.
Chart 10.3.2 If you had not set up your overseas site(s), do you think that the number of staff that you employ in the UK that have degree-level qualifications would be...
- Higher than it is now: 11%
- The same as it is now: 74%
- Lower than it is now: 11%
Base: All operating overseas sites respondents (Base, Don't know) (184, 3%)
Overall, there appears to be a neutral impact of overseas sites on the number of highly skilled staff employed, with 11% of firms indicating that they would employ more degree-level staff if they did not have an overseas site, but the same proportion believing that they would employ less.
As seen below, UKTI users are more likely to report a positive impact on degree-level employment but non-users are more likely to report a negative impact.
Table 10.3.4 Impact Of Overseas Sites On Number Of Degree-Level UK Employees – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base: All with overseas sites** | 184 | 80 | 104 | | UK degree-level employees would be higher | 11% | 9% | 13% | | UK degree-level employees would be the same | 74% | 70% | 77% | | UK degree-level employees would be lower | 11% | 16% | 8% | | Don't know | 3% | 5% | 2% | The table below provides further analysis of firms with overseas sites by the type of site(s) they operate. Please note that the bases are fairly low when analysing the data at this level, so caution should be exercised when interpreting these results.
Table 10.3.5 Impact Of Overseas Sites On Number Of Degree-Level UK Employees – By Type Of Site
| Type Of Overseas Site(s) | Manufacturing / Assembly | Call Centre | Distribution / Sales Office | Service Delivery | R&D | |--------------------------|--------------------------|-------------|-----------------------------|------------------|-----| | Base: All with overseas sites | 46 | 10 | 141 | 85 | 24 | | UK degree-level employees would be higher | 7% | 0% | 13% | 11% | 17% | | UK degree-level employees would be the same | 76% | 80% | 72% | 73% | 54% | | UK degree-level employees would be lower | 13% | 20% | 11% | 13% | 29% | | Don't know | 4% | 0% | 4% | 4% | 0% |
Overseas R&D sites are significantly more likely to lead to an increase in the number of degree-level staff in the UK. There are no other statistically significant differences by type of site. 11. Opportunities in Emerging & Fast Growing Markets
11.1 Opportunities in Emerging & Fast Growing Markets
Firms were asked to consider the extent to which they felt that there were opportunities for them in a number of emerging or fast growing markets. For each market, firms were asked to indicate whether they were already doing business there, were very likely to do so in the next 2 years, quite likely to do so or unlikely to do so.
Chart 11.1.1 Opinions On Opportunities In Emerging & Fast Growing Markets
Of these markets, it appears that Saudi Arabia and the UAE represent the best opportunity for internationalising firms, with 23% of firms already doing business there and a further 25% very or quite likely to do so in the next 2 years. This is closely followed by South Africa, India and China.
However, there appears to be comparatively little enthusiasm for doing business in Mexico, with just 13% of firms already active in this market and a further 14% indicating that they may enter it in the next 2 years. Results have been summarised as follows.
| Opportunities In Emerging & Fast Growing Markets - Summary | |-----------------------------------------------------------| | Firms have been defined as ‘already in’ if they... | | • Are already in at least one emerging/fast growing market | | Firms have been defined as being ‘very likely’ if they... | | • Are not already in any of the emerging/fast growing markets | | • But feel they are ‘very likely’ to do business in at least one in the next 2 years | | Firms have been defined as being ‘quite likely’ if they... | | • Are not already in any of the emerging/fast growing markets | | • Do not feel that they are ‘very likely’ to do business in any in the next 2 years | | • But feel they are ‘quite likely’ to do business in at least one in next 2 years | | Firms have been defined as ‘unlikely’ if they... | | • Are not already in any of the emerging/fast growing markets |
When the data is viewed in this way, it shows that approaching half (46%) of internationalising firms are already doing business in at least one of these emerging/fast growing markets. Most of the remainder feel that they are very or quite likely to enter at least one of these markets in the next 2 years.
Chart 11.1.2 Opportunities In Emerging & Fast Growing Markets (Summary)
- Already in: 46%
- Very likely: 15%
- Quite likely: 19%
- Unlikely: 20%
Base: All respondents (Base, Don't know) (903, 1%) As seen below, the majority of UKTI users are already in at least one of these markets, and only 10% feel that they are unlikely to enter one in the next 2 years. In contrast, a quarter of non-users are not in any emerging/fast growing markets and have no intention of entering any.
Table 11.1.1 Opportunities In Emerging & Fast Growing Markets (Summary) – By UKTI Usage
| | Total | UKTI Usage | | | | | | | |------------------|-------|------------|----------|----------|----------|----------|----------|----------| | | | UKTI User | Non-User | | | | | | | Base | 903 | 248 | 655 | | | | | | | Already in | 46% | 59% | 40% | | | | | | | Very likely | 15% | 16% | 14% | | | | | | | Quite likely | 19% | 14% | 21% | | | | | | | Unlikely | 20% | 10% | 24% | | | | | | | Don’t know | 1% | 0% | 1% | | | | | |
Older firms and larger firms are more likely to already be operating in emerging or fast growing markets. However, it is not the case that these markets are only targeted by more established firms, as the majority of firms in the youngest age band (established up to 5 years) and the smallest size band (0-9 employees) are either already doing business in at least one of these areas or feel that it is ‘very likely’ they will enter one in the next 2 years.
Table 11.1.2 Opportunities In Emerging & Fast Growing Markets (Summary) – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | | | | | | | |------------------|---------------------|-----------------------------|----------|----------|----------|----------|----------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Already in | 36% | 41% | 50% | 40% | 50% | 68% | 45% | 76% | | Very likely | 22% | 15% | 12% | 17% | 13% | 8% | 16% | 4% | | Quite likely | 24% | 22% | 17% | 20% | 18% | 14% | 28% | 16% | | Unlikely | 17% | 21% | 20% | 22% | 19% | 10% | 11% | 0% | | Don’t know | 0% | 1% | 1% | 1% | 1% | 0% | 0% | 4% | There is clear evidence that firms tend to enter fast growing markets later in their international life-cycle, with those that have been exporting longest significantly more likely to be operating in these markets. However, around a quarter of those that have been exporting for less than 2 years are already operating in these areas. Unsurprisingly, the more markets a firm is active in, the more likely they are to be doing business in one of these merging/fast growing markets.
Table 11.1.3 Opportunities In Emerging & Fast Growing Markets (Summary) – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 198 | 415 | 287 | 441 | 174 | 279 | | Already in | 26% | 41% | 58% | 21% | 48% | 80% | | Very likely | 23% | 15% | 11% | 14% | 24% | 10% | | Quite likely | 24% | 22% | 15% | 28% | 18% | 8% | | Unlikely | 26% | 21% | 16% | 36% | 10% | 2% | | Don't know | 1% | 1% | 0% | 1% | 0% | 0% |
Similarly, the more overseas regions a firm is active in, the more likely they are to be doing business in any of the emerging or fast growing markets.
Table 11.1.4 Opportunities In Emerging & Fast Growing Markets (Summary) – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |--------------------------------------|------|-----|-----|-------|------|------| | Base | 61 | 224 | 168 | 164 | 126 | 157 | | Already in | 0% | 12% | 31% | 53% | 76% | 84% | | Very likely | 41% | 10% | 17% | 18% | 14% | 8% | | Quite likely | 35% | 29% | 26% | 19% | 6% | 7% | | Unlikely | 21% | 48% | 26% | 9% | 4% | 0% | | Don't know | 2% | 2% | 0% | 0% | 0% | 1% |
There is some suggestion that emerging or fast growing markets are more attractive to innovative and IP active firms. However, even amongst non-innovative firms, half are either already in one of these markets or believe they are ‘very likely’ to enter one in the next 2 years.
Table 11.1.5 Opportunities In Emerging & Fast Growing Markets (Summary) – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Already in | 54% | 49% | 38% | 60% | 41% | | Very likely| 16% | 16% | 11% | 15% | 14% | | Quite likely| 19% | 19% | 21% | 15% | 21% | | Unlikely | 10% | 16% | 29% | 9% | 23% | | Don't know | 1% | 1% | 1% | 1% | 1% | Firms that are planning for growth over the next 5 years are more likely to already be operating in emerging or fast growing markets, which might suggest that their experiences in these markets are driving their growth ambitions.
Table 11.1.6 Opportunities In Emerging & Fast Growing Markets (Summary) – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non-innovative | |-------------------|---------------------|----------------| | Stay same | Moderate growth | Substantial growth | | Base | 102 | 473 | 280 | | Already in | 38% | 47% | 46% | | Very likely | 10% | 14% | 19% | | Quite likely | 21% | 19% | 20% | | Unlikely | 30% | 19% | 13% | | Don't know | 1% | 0% | 0% |
As might be expected, ‘born global’ firms (particularly via the alternative, tighter definition) are more likely to be in these markets than other young firms that internationalised at some point after they were established.
Table 11.1.7 Opportunities In Emerging & Fast Growing Markets (Summary) – By Born Global & Young, Tech Intensive
| Up to 5 years old | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | |-------------------|-------|-------------|---------------------------|-----------------------|------------------| | Base | 234 | 128 | 52 | 124 | 667 | | Already in | 37% | 48% | 56% | 41% | 47% | | Very likely | 22% | 15% | 15% | 27% | 13% | | Quite likely | 24% | 22% | 17% | 24% | 19% | | Unlikely | 17% | 15% | 12% | 7% | 20% | | Don't know | 0% | 1% | 0% | 1% | 1% |
As seen below, production sector firms are slightly more likely to be operating in fast growing or emerging markets than those in the service sector. In both cases the likelihood of being in these markets increases with export experience.
Table 11.1.8 Opportunities In Emerging & Fast Growing Markets (Summary) – By Sector & Experience
| Production Sector | Services Sector | |-------------------|-----------------| | Total | Total | | Years Exporting | Years Exporting | | Less than 2 | Less than 2 | | 2-10 | 2-10 | | Over 10 | Over 10 | | Base | 287 | 601 | | Already in | 52% | 43% | | Very likely | 15% | 14% | | Quite likely | 15% | 21% | | Unlikely | 17% | 21% | | Don't know | 1% | 1% | 11.2 Influence of Economic Downturn
Firms were asked whether the economic downturn had prompted them to focus more attention on emerging or fast growing markets. The table below shows the proportion indicating that this was the case, at the total level and by UKTI usage.
Table 11.2.1 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By UKTI Usage
| | Total | UKTI Usage | | | | | |------------------|-------|------------|----------|----------|----------|----------| | | Base | UKTI User | Non-User | UKTI User | Non-User | | Base | 903 | 248 | 655 | 28% | 39% | 24% | | Yes | 71% | 39% | 60% | 24% | 39% | 24% | | No | 1% | 1% | 1% | 1% | 1% | 1% |
Over a quarter of internationalising firms have responded to the poor economic climate by focussing more on emerging or fast growing markets, with this proportion rising to 39% amongst UKTI users.
As seen below, there is little difference in this respect by age or size of firm.
Table 11.2.2 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | | | | | | |---------------------|----------------------------|----------|----------|----------|----------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Yes | 29% | 27% | 28% | 27% | 28% | 30% | 32% | 44% | | No | 69% | 73% | 71% | 72% | 71% | 67% | 68% | 51% | | Don't know | 2% | 0% | 1% | 1% | 0% | 4% | 0% | 4% |
There is also little difference by export experience, although firms that are doing business in no more than 5 markets are less likely to indicate that the economic conditions have prompted them to devote more attention to fast growing/emerging markets.
Table 11.2.3 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Experience
| Years Exporting | Number of Markets | | | | | | |-----------------|-------------------|----------|----------|----------|----------|----------| | | Less than 2 years | 2-10 years | Over 10 years | Up to 5 | 6-10 | More than 10 | | Base | 198 | 415 | 287 | 441 | 174 | 279 | | Yes | 31% | 25% | 30% | 23% | 35% | 32% | | No | 67% | 75% | 69% | 76% | 65% | 67% | | Don't know | 2% | 0% | 1% | 1% | 0% | 1% | Innovative and IP active firms are significantly more likely to have increased their focus on emerging and fast growing markets as a result of the recent economic downturn and, as seen previously, these firms were also more likely to already be operating in these markets.
Table 11.2.4 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Innovation
| | Innovative (alternative) | IP Active | |----------------|--------------------------|-----------| | | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Yes | 36% | 32% | 17% | 37% | 26% | | No | 63% | 67% | 82% | 62% | 73% | | Don’t know | 1% | 1% | 1% | 1% | 1% |
Those firms that do not aspire to grow over the next 5 years are generally unlikely to have targeted emerging/fast growing markets as a result of the economic conditions, with only 12% indicating that this has been the case (compared to around a third of those with growth aspirations).
Table 11.2.5 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | Non-innovative | |----------------|-------------------|---------------------|----------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Yes | 12% | 30% | 35% | 36% | 30% | 17% | | No | 86% | 69% | 65% | 63% | 68% | 82% | | Don’t know | 2% | 1% | 0% | 0% | 1% | 1% |
Firms classified as being ‘born global’ by the standard definition are in fact no more likely to be devoting more attention to fast growing markets than other young firms. However, there is some indication that those defined as ‘born global’ via the alternative, tighter definition (whereby over 25% of their turnover has to come from overseas sales) are more likely to be doing so, although this difference is not statistically significant.
Table 11.2.6 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | Born global | Born global (alternative) | Young, tech intensive | | Base | 234 | 128 | 52 | 124 | 667 | 28% | 35% | 33% | | Yes | 29% | 29% | 35% | 33% | 28% | 29% | 35% | 33% | | No | 69% | 69% | 65% | 65% | 71% | 69% | 65% | 65% | | Don’t know | 2% | 2% | 0% | 2% | 1% | 2% | 0% | 2% | There is no difference by sector in terms of the proportion of firms that have devoted more attention to emerging or fast growing markets as a result of the economic downturn.
Table 11.2.7 Whether Devoted More Attention To Emerging & Fast Growing Markets As Result Of The Downturn – By Sector
| | Sector | | | |----------------|-----------------|----------|----------| | | Production | Services | | | Base | 287 | 601 | | | Yes | 29% | 28% | | | No | 70% | 71% | | | Don't know | 1% | 1% | | 12. Difficulties Accessing Finance
All firms were asked whether they had experienced any difficulties in accessing finance over the past 6 months and, if so, whether this had a negative impact on either the scale or scope of their overseas activities or the scale or scope of their product or service development activity.
Chart 12.3.1 Whether Difficulties Accessing Finance In Last 6 Months
A quarter of all internationalising firms claim to have experienced difficulties raising finance in the past 6 months. In most cases this has impacted on both their overseas activities and their product or service development.
As seen below, there has been a fairly dramatic rise in the proportion of firms having difficulty accessing finance, from just 15% in 2010 to 25% in 2011. On the face of it this appears surprising given that in 2010 the UK was in a recession. However, it may be because firms are now more positive about the economic outlook and are looking to expand, and hence more firms are actually seeking out external finance (which has led to an increase in the proportion having difficulty obtaining it).
Table 12.3.1 Whether Difficulties Accessing Finance In Last 6 Months – By UKTI Usage & Over Time
| | 2010 Survey | 2011 Survey | |----------------------|-------------|-------------| | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | **Base** | 902 | 235 | 667 | 903 | 248 | 655 | | **Yes** | 15% | 18% | 14% | 25% | 28% | 24% | | - Negative impact on | 9% | 13% | 8% | 17% | 17% | 17% | | overseas activities | | | | | | | | - Negative impact on | 10% | 13% | 9% | 18% | 19% | 18% | | product/service dev't| | | | | | | | **No** | 83% | 81% | 84% | 73% | 71% | 73% | | Don't know/refused | 2% | 1% | 2% | 3% | 2% | 3% | There is some evidence to suggest that UKTI users were more likely to have difficulty accessing finance in both 2010 and 2011, although it should be noted that these apparent differences are not statistically significant. As seen previously, UKTI users tend to have more ambitious growth objectives, so it may be that they are also more likely to have attempted to obtain finance.
As seen below, younger and smaller firms are significantly more likely to encounter problems raising finance.
Table 12.3.2 Whether Difficulties Accessing Finance In Last 6 Months – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Yes | Negative impact on overseas activities | Negative impact on product/service dev’t | No | Don’t know/refused | |---------------------|-----------------------------|-----|----------------------------------------|------------------------------------------|----|-------------------| | | Up to 5 | 6-10| Over 10 | 0-9 | 10-49| 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Yes | 34% | 28% | 21% | 27% | 26% | 16% | 11% | 9% | | - Negative impact on overseas activities | 24% | 20% | 14% | 20% | 17% | 6% | 7% | 4% | | - Negative impact on product/service dev’t | 25% | 23% | 15% | 22% | 17% | 4% | 7% | 9% | | No | 64% | 70% | 76% | 71% | 71% | 81% | 82% | 87% | | Don’t know/refused | 1% | 1% | 3% | 1% | 3% | 4% | 5% | 4% |
Firms that have been exporting for the least time and those in fewer markets are most likely to experience difficulties obtaining finance, and in the majority of cases this does have a negative impact on their overseas development.
Table 12.3.3 Whether Difficulties Accessing Finance In Last 6 Months – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | | < 2 years | 2-10 years | > 10 years | 0-5 | 6-10 | 10+ | 0 - 10% | 11 - 25% | 26 - 50% | 51% + | | Base | 198 | 415 | 287 | 441 | 174 | 279 | 442 | 122 | 106 | 186 | | Yes | 34% | 27% | 20% | 26% | 27% | 22% | 22% | 35% | 30% | 26% | | - Negative impact on overseas activities | 24% | 18% | 13% | 17% | 21% | 15% | 15% | 24% | 23% | 16% | | - Negative impact on product/service dev’t | 26% | 21% | 13% | 19% | 22% | 16% | 17% | 22% | 23% | 19% | | No | 64% | 71% | 77% | 71% | 71% | 75% | 75% | 65% | 70% | 70% | | Don’t know/refused | 2% | 2% | 3% | 3% | 2% | 2% | 3% | 0% | 0% | 4% | Innovative firms are also significantly more likely to have problems accessing finance than their non-innovative counterparts, and this clearly hampers their product and service development activity.
Table 12.3.4 Whether Difficulties Accessing Finance In Last 6 Months – By Innovation
| | Innovative | IP Active | |----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Yes | 32% | 27% | 20% | 29% | 24% | | - Negative impact on overseas activities | 22% | 19% | 12% | 20% | 17% | | - Negative impact on product/service dev't | 24% | 20% | 14% | 24% | 17% | | No | 66% | 70% | 78% | 70% | 74% | | Don't know/refused | 2% | 3% | 2% | 1% | 3% |
Interestingly, firms with substantial growth aspirations are most likely to experience difficulties accessing finance, suggesting that this could potentially be a barrier to the realisation of this growth. It is worth noting that 37% of the key group of ‘innovative high growth’ firms have had difficulties raising finance.
Table 12.3.5 Whether Difficulties Accessing Finance In Last 6 Months – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Yes | 14% | 24% | 34% | 37% | 22% | 20% | | - Negative impact on overseas activities | 6% | 17% | 26% | 28% | 15% | 12% | | - Negative impact on product/service dev't | 9% | 17% | 28% | 30% | 16% | 14% | | No | 83% | 73% | 64% | 62% | 74% | 78% | | Don't know/refused | 3% | 3% | 2% | 1% | 4% | 2% | 13. Marketing Channels
13.1 Channels Used
All respondents were asked whether they used social networking sites and other website to obtain news or information that was relevant to their business. As well as these online channels, respondents were also asked whether they had attended any seminars, tradeshows or conferences in the past year. The chart below summarises the penetration levels for each of these channels, and also provides comparative results from the 2010 Internationalisation Survey.
Chart 13.1.1 Proportion Using Each Channel For Business News/Information
Approaching three-quarters of firms use websites to obtain news or information relevant to their business. Slightly surprisingly, this represents a significant decline from the 82% recorded in 2010.
Around a third use social networking sites for business purposes, which is slightly up on the situation a year ago and may reflect the increasing popularity of sites such as LinkedIn.
Two-thirds of respondents had also attended seminars, tradeshows or conferences in the past year, a similar level to that seen a year ago. There is some evidence that younger firms are more likely to use social networking sites and other websites and also to attend seminars, conferences or tradeshows. There are less consistent differences by firm size, but it does appear that firms with more than 50 employees are more likely to attend events.
Table 13.1.1 Proportion Using Each Channel For Business News/Information – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Websites | Social networking | Seminars, etc | |---------------------|-----------------------------|----------|-------------------|---------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Websites | 76% | 70% | 69% | 72% | 68% | 77% | 67% | 58% | | Social networking | 45% | 37% | 26% | 32% | 30% | 39% | 36% | 22% | | Seminars, etc | 71% | 65% | 64% | 61% | 65% | 88% | 81% | 62% |
Interestingly, firms that are fairly new to overseas business are most likely to be using social networking sites for business purposes, suggesting that this could be an effective route to reaching firms at the point they are starting to develop overseas and hence may be in need of external guidance. There are no consistent differences in website usage by the various export experience measures, but firms that operate in more markets and have a higher proportion of their turnover accounted for by overseas sales are more inclined to attended seminars, conferences and tradeshows.
Table 13.1.2 Proportion Using Each Channel For Business News/Information – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | | < 2 years | 2-10 years | > 10 years | 0-5 | 6-10 | 10+ | 0 - 10% | 11 - 25% | 26 - 50% | 51% + | | Base | 198 | 415 | 287 | 441 | 174 | 279 | 442 | 122 | 106 | 186 | | Websites | 72% | 68% | 73% | 67% | 74% | 72% | 69% | 71% | 73% | 72% | | Social networking | 43% | 34% | 24% | 31% | 22% | 38% | 29% | 36% | 33% | 34% | | Seminars, etc | 67% | 63% | 66% | 58% | 74% | 70% | 61% | 71% | 71% | 71% |
As seen below, innovative and IP active firms are more likely to use each of these channels. This difference is particularly evident when it comes to attendance at seminars, tradeshows and conferences.
Table 13.1.3 Proportion Using Each Channel For Business News/Information – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Websites | 76% | 73% | 63% | 74% | 70% | | Social networking | 38% | 34% | 26% | 39% | 30% | | Seminars, etc | 75% | 70% | 52% | 82% | 60% | Generally, the more ambitious a firm’s growth objectives, the more likely they are to use each of these channels. Two-fifths of ‘innovative high growth’ firms currently use social networking sites for business purposes, suggesting that this may be an effective way of reaching this key subset of internationalising firms.
Table 13.1.4 Proportion Using Each Channel For Business News/Information – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non-innovative | |-------------------|---------------------|----------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | | | Base | 102 | 473 | 280 | 232 | 411 | 260 | | Websites | 60% | 73% | 75% | 76% | 72% | 63% | | Social networking | 19% | 31% | 41% | 40% | 31% | 26% | | Seminars, etc | 50% | 66% | 76% | 79% | 66% | 52% | 13.2 Usefulness
For each media channel used, respondents were asked to rate its usefulness as a source of news or information that is relevant to their business, using a 1-5 scale where 1 meant it was ‘not at all useful’ and 5 meant it was ‘extremely useful’. The chart below summarises these results, showing the proportion of respondents rating each source as ‘useful’ (i.e. 4-5 out of 5). Please note that this analysis is based just on those using each channel.
In terms of their usefulness as a source of business news or information, websites and events are seen as the most beneficial, with around three-fifths of those firms that use them giving a score of 4-5 out of 5 for their usefulness.
Although usage of social networking sites for business purposes has risen slightly over the last year, their perceived usefulness has fallen (with only 38% rating them as useful compared to 45% in 2010). As seen below, as well as being more likely to use social networking sites, younger firms also tend to see them as being more useful.
Table 13.2.1 Usefulness As A Source Of Business News/Information – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base: All using | Websites | Social networking | Seminars, etc | |---------------------|---------------------------|----------------|----------|------------------|--------------| | Up to 5 | | 106-179 | 65% | 47% | 58% | | 6-10 | | 95-180 | 61% | 41% | 54% | | Over 10 | | 107-284 | 62% | 32% | 62% | | 0-9 | | 188-394 | 62% | 39% | 59% | | 10-49 | | 81-170 | 59% | 40% | 59% | | 50-99 | | 17-39 | 69% | 31% | 63% | | 100-249 | | 11-25 | 78% | 25% | 49% | | 250+ | | 5-14 | 77% | 20% | 93% |
A similar situation is seen for recent exporters, who are more likely to view social networking sites as a useful business tool (as well as being more likely to use them). Firms operating in no more than 5 markets are also more positive about social networking sites. In contrast, more experienced exporters tend to be the most enthusiastic about seminars, conferences and tradeshows.
Table 13.2.2 Usefulness As A Source Of Business News/Information – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|-------------------|---------------| | < 2 years | 0-5 | 106-179 | | 2-10 years | 6-10 | 95-180 | | > 10 years | 10+ | 107-284 | | Base: All using | | 188-394 | | Websites | | 81-170 | | Social networking | | 17-39 | | Seminars, etc | | 11-25 | | | | 5-14 |
Although innovative and IP active firms are most likely to use social networking sites, amongst those that do there is no difference in their perceived usefulness between firms that are innovative/IP active and those that are not. However, the former are generally more positive about the usefulness of other websites and events.
Table 13.2.3 Usefulness As A Source Of Business News/Information – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base: All using | 171-327 | 235-477 | 73-166 | 85-166 | 219-483 | | Websites | 67% | 65% | 56% | 62% | 63% | | Social networking | 42% | 38% | 37% | 39% | 38% | | Seminars, etc | 64% | 62% | 50% | 68% | 56% | Generally, the greater a firm's growth ambitions the more likely they are to see each of these channels as being useful. This might suggest that growing forms have a greater need or appetite for external information.
Table 13.2.4 Usefulness As A Source Of Business News/Information – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Innovative | Non-innovative | | | Expect substantial growth | Other | | Stay same | 20-61 | 157-345 | 120-215 | 98-182 | 137-299 | 73-166 | | Moderate growth | 60% | 69% | 70% | 62% | 56% | | Substantial growth| 47% | 47% | 32% | 37% | | Base: All using | 26% | 33% | 47% | 32% | 37% | | Websites | 53% | 60% | 69% | 70% | 62% | | Social networking | 45% | 61% | 61% | 66% | 60% | | Seminars, etc | 45% | 61% | 61% | 66% | 60% | 13.3 Social Networking Sites
As seen previously, 32% of respondents indicated that they currently used social networking sites as a source of business information or news. Those that did not already use these sites for business purposes were asked whether they expected to do so in the next year.
Chart 13.4.1 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year
| | Yes | No | Don't know | |----------------|-----|----|------------| | Already use | 17% | 50%| 2% | | social networking sites for business news or information | 32% | Base: All respondents (Base) (903)
In addition to the 32% of respondents that already use social networking sites for business purposes, a further 17% plan to start doing so in the next year.
As seen below, as well as being more likely to currently use social networking sites, younger firms are also slightly more likely to start doing so in the next year.
Table 13.4.1 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | Yes | No | Don't know | Already use | |---------------------|-----------------------------|------|-----|----|------------|-------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-99 | 100-249 | 250+ | | Base | 236 | 256 | 411 | 536 | 251 | 45 | 31 | 23 | | Yes | 20% | 16% | 16% | 19% | 17% | 10% | 18% | 4% | | No | 33% | 45% | 56% | 47% | 52% | 46% | 42% | 73% | | Don't know | 1% | 2% | 2% | 2% | 1% | 5% | 5% | 0% | | Already use | 45% | 37% | 26% | 32% | 30% | 39% | 36% | 22% | Firms that have started exporting more recently are also more open to the idea of using social networking in the next year (as well as being more likely to already do so). There are no consistent differences in this respect by the number of markets firms are active in or their export turnover.
Table 13.4.2 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Experience
| Years Exporting | Number of Markets | % of Turnover | |-----------------|------------------|--------------| | < 2 years | 2-10 years | > 10 years | | Base | 198 | 415 | 287 | | Yes | 22% | 17% | 15% | | No | 35% | 46% | 59% | | Don't know | 0% | 2% | 2% | | Already use | 43% | 34% | 24% |
It appears that innovative firms have a greater appetite for social networking sites, with over half either using them already or planning to do so in the next year (compared to two-fifths of non-innovative firms).
Table 13.4.3 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 421 | 643 | 260 | 204 | 685 | | Yes | 17% | 18% | 14% | 18% | 17% | | No | 44% | 46% | 58% | 40% | 52% | | Don't know | 1% | 2% | 2% | 3% | 1% | | Already use| 38% | 34% | 26% | 39% | 30% |
Broadly speaking, the more ambitious a firm’s growth objectives are, the more likely they are to be using or planning to use social networking sites for business purposes.
Table 13.4.4 Whether Expect To Use Social Networking Sites For Business Purposes In The Next Year – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | Stay same | Innovative | | Moderate growth | Expect substantial growth | | Substantial growth| Other | | Base | 102 | 232 | 411 | 260 | | Yes | 14% | 19% | 17% | 14% | | No | 66% | 40% | 49% | 58% | | Don't know | 1% | 1% | 2% | 2% | | Already use | 19% | 40% | 31% | 26% | Annex A – Markets Selected (For Drivers & Barriers Questions)
For the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
- Firms that were just considering overseas business were asked to select the country they were ‘likely to do business in first’
- Firms that operated overseas sites were asked to restrict their market choice to one of the markets where they had a site
The table below gives details of the market selected by users and non-users of UKTI.
Table A.1 Market Selected – By UKTI Usage
| Country | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | USA | 15% | 18% | 14% | | France | 8% | 6% | 9% | | China | 6% | 8% | 5% | | Germany | 6% | 5% | 6% | | India | 5% | 8% | 4% | | United Arab Emirates | 4% | 5% | 4% | | Ireland (Republic) | 3% | 1% | 4% | | Russia | 3% | 4% | 2% | | Spain | 3% | 3% | 4% | | Africa | 2% | 2% | 2% | | Australia | 2% | 2% | 3% | | Holland | 2% | 1% | 2% | | Italy | 2% | 1% | 2% | | Japan | 2% | 3% | 1% | | Nigeria | 2% | 2% | 2% | | Poland | 2% | 2% | 1% | | Saudi Arabia | 2% | 2% | 2% | | Belgium | 1% | 0% | 1% | | Brazil | 1% | 0% | 1% | | Canada | 1% | 2% | 1% | | Czech Republic | 1% | 1% | 1% | | Denmark | 1% | 1% | 1% | | Egypt | 1% | 1% | 1% | | Finland | 1% | 1% | 1% | | Greece | 1% | 1% | 1% | | Country | Total | UKTI Usage | |-------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 903 | 248 | 655 | | Hong Kong | 1% | 1% | 1% | | Israel | 1% | 2% | 1% | | Kuwait | 1% | 1% | 1% | | Libya | 1% | 2% | 0% | | Malaysia | 1% | 0% | 1% | | Middle East (unspecified)| 1% | 1% | 1% | | Norway | 1% | 1% | 1% | | Portugal | 1% | 1% | 0% | | South Africa | 1% | 1% | 1% | | South Korea | 1% | 0% | 1% | | Sweden | 1% | 0% | 1% | | Switzerland | 1% | 0% | 1% | | Turkey | 1% | 2% | 1% | | Argentina | 0% | 1% | 0% | | Bangladesh | 0% | 1% | 0% | | Belarus | 0% | 1% | 0% | | Bulgaria | 0% | 1% | 0% | | Europe (unspecified) | 0% | 0% | 1% | | Iraq | 0% | 1% | 0% | | Kenya | 0% | 1% | 0% | | Latvia | 0% | 0% | 1% | | Malawi | 0% | 1% | 0% | | Malta | 0% | 1% | 0% | | Pakistan | 0% | 0% | 1% | | Romania | 0% | 0% | 1% | | Singapore | 0% | 1% | 0% | | Tanzania | 0% | 1% | 0% | | Thailand | 0% | 1% | 0% | | Tunisia | 0% | 1% | 0% | | Ukraine | 0% | 1% | 0% | Annex B – Questionnaire OMB RESEARCH LIMITED UKTI – International Business Strategies, Barriers & Awareness Survey 2011 Questionnaire January - March 2011
QUOTAS – CORE SAMPLE (900 INTERVIEWS): • 250 interviews with firms 0-5 years old • 250 interviews with firms 6-10 years old • 400 interviews with firms more than 10 years old • All quotas to run from questionnaire (S7)
QUOTAS – BOOST SAMPLE (100 INTERVIEWS): • 100 interviews with firms with overseas sites (no age quota)
SCREENER
ASK ALL Could I please speak to either the owner or someone responsible for your firm’s strategy in relation to overseas business?
Good morning/afternoon, my name is ... and I am calling on behalf of OMB Research, an independent market research agency. We have been commissioned by UK Trade & Investment and the Department for Business, Innovation & Skills (BIS) to conduct a survey of businesses on the topic of doing business overseas.
IF CORE SAMPLE IF NECESSARY We are interested in talking to firms who are either involved in any form of overseas business activity or who are seriously considering doing business overseas in the next year. This overseas business activity could include selling directly to customers based overseas, selling overseas through agents or distributors, licensing, franchising or joint venturing overseas, or operating your own overseas office or site.
IF BOOST SAMPLE We are interested in talking to UK firms who operate their own overseas offices or sites, in the sense that you have some responsibility or control over them from the UK.
SHOW FOR ALL INTERVIEWER NOTE - YOU MAY TAKE REFERRALS TO ANOTHER SITE WITHIN THE UK.
IF CORE SAMPLE INTERVIEWER NOTE – IF FIRM IS NOT CURRENTLY DOING BUSINESS OVERSEAS, BUT PLANNING DOING SO WITHIN THE NEXT YEAR CONTINUE WITH THE INTERVIEW ON THIS BASIS READ OUT TO ALL This research will cover areas such as your current and planned overseas activities, including the way you go about doing business overseas and any issues you may have faced. It will take around \<IF CORE SAMPLE 15-20 minutes / IF BOOST SAMPLE 20 minutes>, depending on your answers. It doesn't matter how much or how little overseas business you do – we're interested in speaking to a range of firms about their experiences.
AS NECESSARY UKTI is responsible for helping UK firms do business overseas. They want to find out more about how firms are going about overseas business and any difficulties they have. This will help UKTI develop the type of help they offer to UK firms.
AS NECESSARY We are able to offer all businesses taking part in this research an electronic link to a summary report of the research findings (which will be available later this year)
Is it convenient to speak to you now or would you prefer to make an appointment for another time?
ADD IF NECESSARY
- The research is being conducted under the Code of Practice of the Market Research Society, which means that all of the answers you give are strictly confidential and anonymous. Participation in this survey is voluntary.
- The responses of all organisations taking part will be combined into a statistical report
- Your organisation was selected at random from a list of UK businesses held by a commercial list broker
- If you wish to check that OMB Research is a bona fide market research agency, you can contact the Market Research Society on 0500 396999, or call James Murray at OMB Research on 01732 220582 or Heather Booth di Giovanni at UK Trade & Investment on 020 7215 4989.
OFFER EMAIL/FAX REASSURANCE IF NECESSARY
ASK ALL S1 – Can I confirm that you are one of the people best qualified to talk about your company's overseas business activity \<IF BOOST SAMPLE , including any overseas sites that you operate>?
INTERVIEWER NOTE: IF KNOW ALREADY THAT YOU ARE SPEAKING TO THE CORRECT PERSON THEN CODE YES AUTOMATICALLY
REFERRALS CAN BE TAKEN TO ANY UK SITE WHEN THE CONTACT FEELS THAT THERE IS SOMEONE WITHIN THE COMPANY BETTER PLACED TO ANSWER QUESTIONS ON THE TOPIC AREAS OUTLINED
Yes ................................................................. 1 No – take referral and being transferred .................... 2 No – take referral and arrange call back .................... 3 No – refused referral............................................. 4 ASK ALL S2a – Which of the following overseas business activities has your firm been involved in, over the last 5 years? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
AS NECESSARY: Please only include overseas sites if you have some responsibility or control over them from the UK. Do not include sites or companies operated by your parent company or other group companies.
Selling directly to overseas customers ........................................ 1 Selling to overseas customers through agents or distributors ....... 2 Licensing or franchising overseas, or other contractual arrangements such as joint ventures ......................................................... 3 Operating your own overseas site or office .................................. 4 (None of these) ........................................................................... 5 (Don’t know) ............................................................................... 6 – CLOSE
IF BOOST SAMPLE, CLOSE IF CODE 4 IS NOT SELECTED AT S2a
IF OVERSEAS SITE & AT LEAST ONE OTHER MODE (CODE 4 AT S2a AND (CODE 1, 2 OR 3 AT S2a)) S9a – And which of these ways of doing business overseas did your firm do first? Was it...? READ OUT. SINGLE CODE. CATI TO ONLY DISPLAY CODES SELECTED AT S2a
IF OVERSEAS SITE & AT LEAST TWO OTHER MODES (CODE 4 AT S2a AND ((CODES 1&2 AT S2a) OR (CODES 1&3 AT S2a) OR (CODES 2&3 AT S2a) OR (CODES 1, 2 & 3 AT S2a))) UNLESS CODES 5 OR 6 AT S9a S9b – And which did you do next? READ OUT AS NECESSARY. SINGLE CODE. CATI TO ONLY DISPLAY CODES SELECTED AT S2a BUT NOT SHOW CODE SELECTED AT S9a
IF OVERSEAS SITE & THREE OTHER MODES (CODE 4 AT S2a AND (CODES 1, 2 & 3 AT S2a)) UNLESS CODES 5 OR 6 AT S9a OR S9b S9c – And which did you do next? READ OUT AS NECESSARY. SINGLE CODE. CATI TO ONLY DISPLAY CODES SELECTED AT S2a BUT NOT SHOW CODES SELECTED AT S9a & S9b
Selling directly to overseas customers ........................................ 1 Selling to overseas customers through agents or distributors ....... 2 Licensing or franchising overseas, or other contractual arrangements such as joint ventures ......................................................... 3 Operating your own overseas site or office .................................. 4 (Started them all at the same time) ............................................. 5 (Don’t know) ............................................................................... 6
IF NONE AT S2a (CODE 5) S2b – Are you seriously considering starting to conduct overseas business via any of these routes in the NEXT YEAR?
Yes ............................................................................................. 1 No ............................................................................................... 2 - CLOSE (Don’t know) ............................................................................... 3 - CLOSE IF JUST CONSIDERING OVERSEAS BUSINESS (CODE 1 AT S2b) S2c – Which of the following overseas business activities are you planning to become involved in, in the next year? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
Selling directly to overseas customers ........................................ 1 Selling to overseas customers through agents or distributors .... 2 Licensing or franchising overseas, or other contractual arrangements such as joint ventures ................................................................. 3 Operating your own overseas site or office ................................ 4 (None of these) ........................................................................... 5 – CLOSE (Don't know) ............................................................................... 6 – CLOSE
IF ONLY SELL DIRECT (CODE 1 AT S2a & NOT CODES 2-5 AT S2a) S10a – And do you make any sales directly through your website when doing business overseas?
AS NECESSARY: By this I mean sales where the customer places an order on your website and you don't have any other direct contact with them other than sending email confirmation, etc.
Yes ............................................................................................. 1 No ............................................................................................... 2 (Don't know) ............................................................................... 3
IF SELL THROUGH WEBSITE (CODE 1 AT S10a) S10b – And do you only sell to overseas customers directly through your website, or do you sometimes get orders in other ways (e.g. over the phone, face to face, responding to tenders, etc)?
Only sell through the website ...................................................... 1 Use other ways as well ............................................................... 2 (Don't know) ............................................................................... 3
IF HAVE OVERSEAS SITE (CODE 4 AT S2a) S5b – How many overseas sites do you have? READ OUT
One................................................................................. 1 2-5 .................................................................................. 2 6-10 ................................................................................ 3 11-20 .............................................................................. 4 21-50 .............................................................................. 5 More than 50 .................................................................. 6 (Don't know) ........................................................................... 7 (Refused)................................................................................ 8 IF HAVE JUST ONE OVERSEAS SITE OR PLANNING OVERSEAS SITE (CODE 1 AT S5b OR (OR CODE 4 AT S2c & CODE 5 AT S2a))
S5c1 – < IF CODE 4 AT S2c & CODE 5 AT S2a & CODES 1, 2 OR 3 ALSO MENTIONED AT S2c You mentioned operating your own overseas office or site. > Would you say that the MAIN purpose of this site < IF CODE 1 AT S5b is IF CODE 4 AT S2c & CODE 5 AT S2a will be > …? READ OUT – AIM FOR SINGLE CODE BUT MULTI ALLOWED
IF HAVE MORE THAN ONE OVERSEAS SITE (CODES 2-8 AT S5b)
S5c2 – Thinking about all of your overseas sites, do any of these have the following purposes? READ OUT – CODE ALL THAT APPLY
- Manufacturing or assembly ......................... 1
- Call centre .................................................. 3
- Distribution or sales office ............................ 4
- Service delivery ......................................... 6
- Research, product or process development .... 7
- (Don’t know/None of these) ............................ 8 – CLOSE IF ONLY CODE 4 AT S2a/S2c ((S2a=4 & S2a=Not 1, 2 OR 3) OR (S2a=5 & S2c=4 & S2c=Not 1, 2 or 3))
ASK ALL
S6a – And can I just check, < IF CODES 1-4 AT S2a AND CODE 1 AT S5c other than from the manufacturing or assembly site that you’ve just mentioned > have you IMPORTED any goods or services over the last 5 years?
AS NECESSARY By importing I mean the buying in of goods or services from overseas suppliers.
- Yes ........................................................................................................ 1
- No ......................................................................................................... 2
- (Don’t know) ..................................................................................... 3
IF CODE 1 AT S6a
From now on, when I’m asking questions about your overseas business activity please DO NOT include importing \<IF S2a=4, other than through your own overseas site(s)> ASK ALL S7 – And can I just ask, how long ago was your business established in the UK? READ OUT – CLARIFY AS NECESSARY – THIS MEANS WHEN THE BUSINESS IN ITS CURRENT FORM STARTED TRADING AS NECESSARY – IF THE BUSINESS IS A SUBSIDIARY THIS REFERS TO THE SUBSIDIARY IN WHICH YOU WORK
Within the last year ......................................................... 1 Over 1, up to 2 years ago ................................................. 2 Over 2, up to 3 years ago .................................................. 3 Over 3, up to 4 years ago .................................................. 4 Over 4, up to 5 years ago .................................................. 5 Over 5, up to 10 years ago ............................................... 6 Over 10, up to 20 years ago ............................................. 7 Over 20 years ago .......................................................... 8 (Not yet trading) ............................................................... 9 (Don't know) ................................................................. 10 - CLOSE (Refused) ........................................................................ 11 – CLOSE
ASK IF ESTABLISHED 1-2 YEARS (CODES 1-2 AT S7) S7b – Can I just check, has your business actually started trading yet?
Yes ................................................................................. 1 No .................................................................................. 2 (Don't know) ................................................................. 3
ASK ALL H1b – Is the business UK or foreign-owned?
UK-owned ....................................................................... 1 Foreign-owned ............................................................... 2 (Joint UK and foreign-owned) ......................................... 3 (Don't know) ................................................................. 4
READ OUT IF FOREIGN OWNED (CODES 2-3 AT H1b) For the rest of this interview, please just answer about the firm where you work, and not your parent company or any other group companies. So when I ask about your overseas business, please just focus on the overseas activities of your UK firm. ASK ALL S8 – What is the main activity of the business? PROBE FULLY FOR INDUSTRY TYPE - IF MANUFACTURING WHAT TYPE OF MANUFACTURING, IF FINANCIAL SERVICES WHAT KIND AND SO FORTH
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just tell me the activity of your UK firm, not your parent company
A – Agriculture, hunting & forestry ............................................ 1 B – Fishing................................................................................ 2 C – Mining & quarrying ............................................................. 3 D – Manufacturing .................................................................... 4 E – Electricity, gas and water supply......................................... 5 F – Construction ....................................................................... 6 G – Retail, wholesale & repair of motor vehicles ....................... 7 H – Hotels and catering ............................................................. 8 I - Transport, storage and communication............................... 9 J - Financial intermediation (Finance) ....................................... 10 K - Real estate, renting & business activities ............................ 11 L - Public administration and defence ..................................... 12 M – Education ........................................................................... 13 N - Health and social work ....................................................... 14 O - Other community, social & personal service activities ....... 15 Other ...................................................................................... 96 (Don't know) ............................................................................. 97 (Refused).................................................................................. 98
CATI TO INSERT TIME MARKER SECTION A – OVERSEAS BUSINESS ACTIVITY
ASK IF CODES 1-4 AT S2a UNLESS NOT YET TRADING OR ESTABLISHED \<1 YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b)
A4 – And how long ago did your company start conducting business overseas? READ OUT AS NECESSARY
IF IMPORTER (CODE 1 AT S6a) AS NECESSARY: By this I mean when did you start selling overseas, so please do not include importing \<IF S2a=4, other than through your own overseas site(s)>.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
INTERVIEWER NOTE: IF RESPONDENT SAYS THEY’VE NOT YET STARTED DOING BUSINESS OVERSEAS THEN YOU NEED TO GO BACK TO S2a AND CHANGE TO ‘NONE OF THESE’ & THEN ASK S2b & S2c
CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO S7
Within the last year ................................................................. 1 Over 1, up to 2 years ago .......................................................... 2 Over 2, up to 3 years ago .......................................................... 3 Over 3, up to 4 years ago .......................................................... 4 Over 4, up to 5 years ago .......................................................... 5 Over 5, up to 10 years ago ......................................................... 6 Over 10, up to 20 years ago ...................................................... 7 Over 20 years ago ................................................................. 8 (Don’t know) ........................................................................... 10 (Refused) .............................................................................. 11
ASK IF EXPORTING MORE THAN 2 YEARS (A4=3-11)
A15 – Since this time, have you had overseas sales every year or have there been some years where you haven’t made any sales at all to overseas customers?
Overseas sales every year (since started doing business overseas) 1 Some years with no overseas sales ............................................. 2 (Don’t know) ........................................................................... 3 ASK IF CODES 1-4 AT S2a
G5 – Which of the following regions of the world have you done business in \<IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since your were established>? < IF IMPORTER (CODE 1 AT S6a) (but please DO NOT include countries that you have only imported from \<IF S2a=4 , unless this is from your own overseas site(s)>)> READ OUT. CODE ALL THAT APPLY
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just answer about the areas where your UK firm is doing business, but don’t include the activity of your parent company or any other group companies
Europe ............................................................................ 1 North America................................................................. 3 South America or Latin America ...................................... 4 The Middle East or Africa............................................... 6 Asia Pacific ..................................................................... 7 (Don’t know) .................................................................. 9
ASK IF CODES 1-4 AT S2a
A1b – How many overseas countries have you done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since your were established >, in any form < IF IMPORTER (CODE 1 AT S6a) (although please DO NOT include countries that you have only imported from\<IF S2a=4 , unless this is from your own overseas site(s)>)>? READ OUT
One................................................................................. 2 2-5 .................................................................................. 3 6-10 ................................................................................ 4 11-20 .............................................................................. 5 21-50 .............................................................................. 6 More than 50 .................................................................. 7 (Don’t know) .................................................................. 8 (Refused)........................................................................ 9
IF CODE 2 AT A1b
A2 – Which country was this? WRITE IN
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) ............................................................ (Don’t know) - CLOSE
ASK IF CURRENTLY EXPORTING (S2a=1-4)
G7 – Over the next 3 years do you expect the number of countries in which you do business to increase, decrease or stay the same?
Increase............................................................................. 1 Decrease ........................................................................... 2 Stay the same................................................................... 3 (Don’t know) .................................................................. 4 IF ONLY ACTIVITY IS A MANUFACTURING/CALL CENTRE OVERSEAS SITE (CODE 4 AT S2a & CODES 1 OR 3 AT S5c & NOT CODES 1-3 AT S2a) A5a – Can I just check, have you made any sales at all to customers in overseas countries in the last year?
Yes ................................................................. 1 No ........................................................................ 2 (Don't know) ...................................................... 3
ASK IF CODES 1-4 AT S2a EXCEPT CODES 2-3 (NO/DON'T KNOW) AT A5a OR NOT YET TRADING (CODE 9 AT S7 OR CODE 2 AT S7b) A5c – In the last financial year, approximately what percentage of your turnover was accounted for by overseas sales? <IF S2a=4 Please include sales made by the overseas sites or subsidiaries that you control from the UK.> READ OUT AS NECESSARY
IF CODE 3 AT S2a AS NECESSARY: Please include any fees received from overseas licensing or franchising deals.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
Up to 5% ................................................................. 1 6 - 10% ................................................................. 2 11 - 15% ............................................................... 3 16 – 25% ............................................................... 4 26 – 50% ............................................................... 5 51 – 75% ............................................................... 6 More than 75% ..................................................... 7 (No overseas sales) .............................................. 10 (Don't know) ....................................................... 8 (Refused) ............................................................ 9
ASK ALL EXCEPT CONSIDERS ONLY (S2a=5 & S2c=1-4) A5d – In a year's time, do you think that the percentage of your turnover accounted for by overseas sales will be higher than it is now, lower or about the same?
Higher ................................................................. 1 Lower ................................................................. 2 About the same .................................................. 3 (Don't know) ....................................................... 4 (Refused) ............................................................ 5
ASK ALL A17a – Is there anyone employed by your company who had significant experience of doing business overseas before they joined your firm?
Yes ................................................................. 1 No ................................................................. 2 (Don't know) ...................................................... 3 IF YES AT A17a A17b – And was this previous experience that they brought with them in terms of...? READ OUT – SINGLE CODE
Business contacts........................................................... 1 Expertise in doing business overseas............................ 2 Or both ........................................................................... 3 (None of these)................................................................ 4 (Don't know) ................................................................. 5
ASK ALL A7 - I’m going to read out some possible benefits of doing business overseas, and I’d like you to tell me whether \<IF EXPORTING (S2a=1-4) each one applies to your business / IF NOT EXPORTING (S2b=1) you would expect to benefit in these ways when you start doing business overseas>. So firstly...
ON EACH OF THE A7 SCREENS SHOW (AT TOP): \<IF EXPORTING (S2a=1-4) Has doing business overseas... / IF NOT EXPORTING (S2a=1) Do you think that doing business overseas will...>
ORDER OF STATEMENTS TO BE RANDOMISED
(a) \<IF S2a=1-4 Enabled / IF S2b=1 Enable> you to achieve a level of growth otherwise not possible? (b) \<IF S2a=1-4 Allowed / IF S2b=1 Allow> you to more fully utilise your existing capacity? (c) DELETED (d) \<IF S2a=1-4 Exposed / IF S2b=1 Expose> you to new ideas? (e) \<IF S2a=1-4 Increased / IF S2b=1 Increase> the commercial life span of any of your products or services? (f) \<IF S2a=1-4 Improved / IF S2b=1 Improve> your firms profile or credibility?
Yes ................................................................................. 1 No .................................................................................. 2 (Don't know) ................................................................. 3
ASK FOR EACH OF A7a-f THAT HAS BEEN A BENEFIT. ASK A8 DIRECTLY AFTER EACH A7 STATEMENT A8 - And to what extent do you feel that this \<IF S2a=1-4 has been / IF S2b=1 will be> a benefit of doing business overseas? Please give me a score of 1 to 5, where 1 means to no extent and 5 means to a critical extent. READ OUT AS NECESSARY
1 – To no extent.............................................................. 1 2 .................................................................................... 2 3 .................................................................................... 3 4 .................................................................................... 4 5 - To a critical extent .................................................... 5 (Don't know) ................................................................. 6 ASK ALL A9a – Overall, \<IF S2a=1-4 would you say that your experiences of doing business overseas have led / IF S2b=1 do you think that doing business overseas will lead> you to...? READ OUT. CODE ALL THAT APPLY.
Develop any new products or services.................................................................1 Make changes or modifications to any of your existing products or services.2 (None of these)..................................................................................................3 (Don't know) ......................................................................................................4
IF CHANGED PRODUCTS/SERVICES (CODE 2 AT A9a) C1d – < IF CODES 1-4 AT S2a Were these changes or modifications IF CODE 1 AT S2b Are you expecting these changes or modifications to be > ...? READ OUT - MULTICODE
Something cosmetic such as packaging or translation.... 1 Or something more fundamental......................................................... 2 (None of these).......................................................................................... 3 (Don't know) .............................................................................................. 4
IF CURRENTLY EXPORTING & DEVELOPED OR CHANGED PRODUCTS/SERVICES (S2a=1-4 & A9a=1-2) A9b – \<IF CODES 1 & 2 AT A9a Thinking about both the new products or services you’ve developed and the changes you’ve made to existing products or services, was this / IF JUST CODE 1 AT A9a OR JUST CODE 2 AT A9a And was this product or service development > designed specifically for overseas customers, UK customers or both?
Overseas ................................................................. 1 UK ........................................................................ 2 Both........................................................................ 3 (Don't know) .............................................................. 4
IF OVERSEAS (CODE 1 OR 3 AT A9b) A9c –And did you undertake this for any of the following reasons? READ OUT. CODE ALL THAT APPLY
To comply with specific regulations or legal requirements in overseas countries .. 1 To solve technical or practical issues that related to particular overseas countries 2 To take account of different cultures or consumer preferences overseas .......... 3 In response to specific requests from overseas customers.............................. 4 (None of these) .......................................................................................... 5 (Don't know) .............................................................................................. 6
IF HAVE NOT DEVELOPED OR CHANGED PRODUCTS/SERVICES (CODES 3-4 AT A9a) A9d – Can I just check, does your firm carry out or commission any product or service development? AS NECESSARY: This includes improving existing products or services as well as designing new products or services
Yes ........................................................................................................ 1 No........................................................................................................... 2 (Don't know) .......................................................................................... 3 ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A10 –\<IF S2a=1-4 Has doing business overseas prompted / IF S2b=1 Do you think that doing business overseas will prompt > you to invest more time or money in product or service development?
Yes ................................................................................. 1 No ................................................................................... 2 (Don't know) ................................................................... 3
ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A11 – And \<IF S2a=1-4 has doing business overseas increased / IF S2b=1 do you think that doing business overseas will increase > the amount of money you have available to invest in product or service development?
Yes ................................................................................. 1 No ................................................................................... 2 (Don't know) ................................................................... 3
ASK ALL EXCEPT NOT DOING PRODUCT/SERVICE DEVELOPMENT (I.E. ALL EXCEPT CODES 2-3 AT A9d)
A12 – And in your view, \<IF S2a=1-4 has doing business overseas increased / IF S2b=1 will doing business overseas increase > the return on investment that you get from your product or service development?
Yes ................................................................................. 1 No ................................................................................... 2 (Don't know) ................................................................... 3 ASK IF HAVE/PLANNING OVERSEAS SITE (CODE 4 AT S2a OR CODE 4 AT S2c)
A18 – You mentioned earlier that your business \<IF S5b=1 has an overseas site / IF S5b=2-8 has a number of overseas sites / IF S2c=4 is planning to set up an overseas site>. I'm now going to read out some possible reasons for operating an overseas site, and I'd like you to tell me how important each one is to your business. For each one, please give me a score of 1 to 5, where 1 means it is 'not at all important' and 5 means it is a 'very important reason' for having an overseas site.
So firstly... READ OUT. RANDOMISE ORDER
ON EACH OF THE A18 SCREENS (AT BOTTOM) AS NECESSARY How important is this as a reason for having your own overseas site?
INTERVIEWER NOTE: If respondent says it is not relevant or doesn't apply, then code as ‘1 – not at all important’
(a) Your overseas customers prefer you to have a local presence (b) Operating an overseas site is the best way to access people with the specialist knowledge and skills you require (c) Having an overseas site enables you to overcome import restrictions, avoid import duties or gain other tax advantages. (d) The technical nature of your products or services means that you need an 'on the ground' facility to provide customer support (e) IF S5c=1, 3 OR 7: Your competitors have sites in that market, so you decided to do the same (f) IF S5c=1, 3 OR 7: It enables you to access cheaper resources, such as cheaper wages or cheaper raw materials (g) IF S5c=1, 4, 6 OR 8: It is the best way to build up strong working relationships with your customers in that market (h) IF S5c=1 OR 3: It enables you to offer quicker response times for your customers (i) IF S5c=1: It reduces shipment costs (j) IF S5c=4, 6 OR 8: You always approach overseas markets by setting up an overseas site (k) IF S5c=4, 6 OR 8: You don't want to reduce your profit margins by employing a 'middle man' (l) IF S5c=1, 4, 6, 7 OR 8: It is the best way to protect your intellectual property (m) IF S5c=4, 6 OR 8: It is the best way to ensure quality or customer service (n) IF S5c=7: It is the best way to get the necessary product development done for your customers in that market
1 – Not at all important.................................................... 1 2 .................................................................................... 2 3 .................................................................................... 3 4 .................................................................................... 4 5 – Very important reason .............................................. 5 (Don't know) ................................................................... 6
CATI TO INSERT TIME MARKER SECTION C – DRIVERS OF MARKET
OVERALL B4 FILTER: IF DOING BUSINESS IN MORE THAN ONE MARKET (A1b=3-9)
IF NO OVERSEAS SITE (S2a=NOT4) B4 – Thinking now about all the overseas countries that you have done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since you were established >, which of these was the most challenging country to do business in? RECORD ONE COUNTRY ONLY
IF MORE THAN ONE OVERSEAS SITE (S2a=4 & S5b=2-8) B4 – Thinking now about all the overseas countries where you have an office or site, which of these has been the most challenging country to do business in? AS NECESSARY: Please only include countries where your overseas site is ultimately controlled from the UK. RECORD ONE COUNTRY ONLY
IF JUST ONE OVERSEAS SITE (S2a=4 & S5b=1) B4 – Thinking now about your overseas office or site, which country is this in? RECORD ONE COUNTRY ONLY
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) ............................................................ (Non/Don’t know/All equally challenging)
OVERALL B5 FILTER: IF NONE/DON’T KNOW AT B4 OR IF ONLY CONSIDERING EXPORTING (S2b=1)
IF NO OVERSEAS SITE (S2a=NOT4) OR JUST ONE OVERSEAS SITE (S2a=4 & S5b=1) B5 – Which overseas country \<IF B4=NONE/DK have you started doing business in most recently / IF S2b=1 are you likely to do business in first >? RECORD ONE COUNTRY ONLY
IF MORE THAN ONE OVERSEAS SITE (S2a=4 & S5b=2-8) B5 – Of those countries where you have an overseas site, which one have you started doing business in most recently? RECORD ONE COUNTRY ONLY
IF NOT SURE ASK RESPONDENT TO JUST CHOOSE ONE OF THE COUNTRIES THAT THEY DO BUSINESS IN (E.G. THE ONE THEY KNOW MOST ABOUT)
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) ............................................................
CATI TO ALLOCATE <MARKET> AS FOLLOWS:
- FROM B4: IF MORE THAN ONE MARKET (A1b=3-9) AND MARKET PROVIDED AT B4
- FROM B5: IF MORE THAN ONE MARKET (A1b=3-9) & NONE/DON’T KNOW AT B4
- FROM B5: IF ONLY CONSIDERING EXPORTING (S2b=1)
- FROM A2: IF ONLY ONE MARKET (A1b=2) READ OUT FOR ALL I'd like to ask you some questions now about your < IF S2a=1-4 experience of doing business in / IF S2b=1 plans in relation to > <MARKET>.
IF CODES 1-4 AT S2a UNLESS NOT YET TRADING OR ESTABLISHED \<1 YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b) OR UNLESS DOING BUSINESS OVERSEAS FOR \<1 YEAR (CODE 1 AT A4) C1a – How long has your firm been doing business in < MARKET >? READ OUT AS NECESSARY – CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO A4
IF IMPORTER (CODE 1 AT S6a) AS NECESSARY: Please do not include importing \<IF S2=4 , unless it is from your own site in this country>.
Less than a year ............................................................. 1 Over 1, up to 2 years ...................................................... 2 Over 2, up to 3 years ...................................................... 3 Over 3, up to 4 years ...................................................... 4 Over 4, up to 5 years ...................................................... 5 Over 5, up to 10 years .................................................... 6 Over 10, up to 20 years .................................................. 7 Over 20 years .................................................................. 8 (Don't know) ................................................................... 10 (Refused) ........................................................................ 11
ASK ALL C4 - Please can you tell me the extent to which each of the following applied to you when you were FIRST CONSIDERING doing business in <MARKET>.
Please give me a score of 1 to 5, where 1 means that it is not at all applicable and 5 means that it is completely applicable. So firstly...READ OUT – ROTATE BUT F TO ALWAYS COME DIRECTLY AFTER A
(a) You had received an approach or enquiry from someone in <MARKET> (c) There was someone within your company who already had experience of <MARKET> (f) An existing customer that you were already doing business with requested that you start doing business in <MARKET>
ADD TO SCREEN FOR EACH To what extent did that apply to you when you were FIRST CONSIDERING doing business in < MARKET >?
1 – Not at all applicable................................................... 1 2 .................................................................................... 2 3 .................................................................................... 3 4 .................................................................................... 4 5 – Completely applicable .............................................. 5 (Don't know) ................................................................... 6 ASK IF ONLY DONE BUSINESS IN ONE MARKET (CODE 2 AT A1b) OR IF ONLY USE ONE MODE (ONLY ONE OF CODES 1-4 SELECTED AT S2a)
B9 – Based on what you told me earlier about your overseas business, I believe that you do business in <MARKET> by...
CATI TO LIST ALL OF THE FOLLOWING THAT APPLY
IF S2a=1: Selling direct to customers. IF S2a=2: Selling through agents or distributors. IF S2a=3: Licensing, franchising or other contractual arrangements (such as joint ventures). IF S2a=4: Operating your own site or office in <MARKET>.
Is that correct or do you do business in <MARKET> in any different ways?
Yes – correct ................................................................. 1 No – use different ways ................................................. 2 (Don't know) ................................................................. 3
ASK IF DOING BUSINESS IN >1 MKT & USE MORE THAN 1 MODE (CODES 3-9 AT A1b & MORE THAN ONE OF CODES 1-4 SELECTED AT S2a) OR JUST CONSIDERING OVERSEAS BUSINESS (CODE 1 AT S2b) OR INFO WRONG AT B9 (CODE 2 AT B9)
B7 – In which of the following ways < IF S2a=1-4 have you done / IF S2b=1 are you planning to do > business in <MARKET>? READ OUT – CODE ALL THAT APPLY – DO NOT RANDOMISE
Selling directly to customers in <MARKET> ......................... 1 Selling through agents or distributors in <MARKET> ............. 2 Licensing, franchising or other contractual arrangements such as joint ventures................................................................. 3 Operating your own site or office in <MARKET> ................. 6 (None of these).................................................................. 7 (Don't know) .................................................................... 8
IF OVERSEAS SITE (CODE 6 AT B7)
B8a – Thinking about your site in <MARKET>, which of the following purposes < IF CODES 1-4 AT S2a does IF CODE 1 AT S2b will > it have...? READ OUT. CODE ALL THAT APPLY.
INTERVIEWER NOTE: IF THE FIRM HAS SEVERAL SITES IN THIS COUNTRY ASK THEM THE PURPOSE OF THEIR MOST IMPORTANT SITE
Manufacturing or assembly ......................... 1 Call centre ......................................................... 3 Distribution or sales office......................... 4 Service delivery ............................................. 6 Research, product or process development.... 7 (Don't know/None of these) ......................... 8 IF MORE THAN ONE PURPOSE (MORE THAN ONE CODE SELECTED AT B8a)
B8b – And which of these < IF CODES 1-4 AT S2a is IF CODE 1 AT S2b will be > the MAIN purpose of this site? READ OUT AS NECESSARY. SINGLE CODE.
CATI TO ONLY DISPLAY CODES SELECTED AT B8a (& DON'T KNOW)
- Manufacturing or assembly ......................... 1
- Call centre .................................................. 3
- Distribution or sales office ............................ 4
- Service delivery .......................................... 6
- Research, product or process development .... 7
- (Don't know/None of these) ............................ 8
MODE REFERENCES
M1 - Selling direct (B7=1 OR (S2a=1 & B9=1)) M2 - Selling through agents/distributors (B7=2 OR (S2a=2 & B9=1)) M3 – Licensing, franchising, other contractual (B7=3 OR (S2a=3 & B9=1)) M4 – DELETED M5 – DELETED M6 – Production site ((B7=6 & B8a=1) OR (S5c=1 & B9=1)) M7 – Call centre (B7=6 & B8a =3) OR (S5c=3 & B9=1)) M8 – Sales/service site (B7=6 & B8a =4-6) OR (S5c=4-6 & B9=1)) M9 – R&D site (B7=6 & B8a =7) OR (S5c=7 & B9=1)) M10 – Unknown site (B7=6 & B8a =8) OR (S5c=8 & B9=1)) M11 – Unknown mode (B7=7-8 OR B9=3)
IF M6, 7 OR 9 & NOT M8
C1b – Can I just check, < IF CODES 1-4 AT S2a does your IF CODE 1 AT S2b will this > site in < MARKET > sell any products or services directly to any customers in < MARKET >? READ OUT
- Yes ........................................................................................................ 1
- No ........................................................................................................ 2
- (Don't know) ..................................................................................... 3
CATI TO INSERT TIME MARKER SECTION E – BARRIERS
ASK IF CURRENTLY EXPORTING (S2a=1-4) E1 – I’m now going to read out a list of issues that you may have had to tackle when trying to develop your business in <MARKET>. For each one, please give me a score of 1 to 5 for the extent to which you feel that this has been a difficulty, where 1 means it has ‘not been at all difficult’ and 5 means it has been ‘extremely difficult’.
So firstly... READ OUT ROTATE LIST BUT ALWAYS ASK B, C & D IN ORDER
ON EACH OF THE E1 SCREENS (AT BOTTOM) AS NECESSARY To what extent has this been a difficulty in <MARKET> (where 1 means it has ‘not been at all difficult’ and 5 means it has been ‘extremely difficult’)
INTERVIEWER NOTE: If respondent says it is not relevant or doesn’t apply, then code as ‘1 – Not at all difficult’
(a) Obtaining basic information about doing business in <MARKET> (b) Identifying who to make contact with in the first instance < IF M2-3 or finding a suitable partner > (c) Establishing an initial dialogue with prospective < IF M1, M3, M8, M10, M11 OR YES AT C1b customers or > business partners in <MARKET> (d) Building relationships with key influencers or decision-makers (i) IF M1-3, M8, M10, M11 OR YES AT C1b: A preference on the part of customers in <MARKET> for doing business with firms from <MARKET> AS NECESSARY: For example, where customers in France prefer to buy from French companies rather than UK ones. (k) Finding the necessary management time to devote to doing business in <MARKET> (r) Dealing with legal or tax regulations or standards in <MARKET> (s) Negotiating the culture and language (t) Protecting your intellectual property (w) Ensuring you get paid and enforcing contracts (x) Dealing with customs procedures or paperwork
1 – Not at all difficult ....................................................... 1 2 .................................................................................... 2 3 .................................................................................... 3 4 .................................................................................... 4 5 – Extremely difficult ..................................................... 5 (Don’t know) ................................................................. 6 ASK IF OVERSEAS SITE (M6, 7, 8, 9 OR 10) & PROBLEMS WITH LEGAL & REG ISSUES (CODES 3-5 AT E1r)
E2 – You mentioned that you had experienced problems with legal or tax regulations in <MARKET>. Specifically, did you have difficulty with any of the following? READ OUT. CODE ALL THAT APPLY
Interviewer note: Please read out all 4 options and pause to let the respondent say yes or no after each one.
Obtaining work permits or visas for your staff to relocate to <MARKET> .................. 1 Setting up and registering a company in <MARKET> ............................................... 2 Obtaining planning permission or other permits relating to your site in <MARKET> 3 Other legal or tax issues (SPECIFY) ........................................................................ 95 (Don’t know) ............................................................................................................. 97
ASK IF OVERSEAS SITE (M6, 7, 8, 9 OR 10) & NO/MINIMAL PROBLEMS AT E1d, E1i, E1r, E1s, E1t, E1w or E1x (CODES 1-2 AT E1d OR E1i OR E1r OR E1s OR E1t OR E1w OR E1x)
E3 – Do you think that having your own site in <MARKET> has helped you avoid having problems with \<IF CODE 1 AT MORE THAN ONE OF E1d OR E1i OR E1r OR E1s OR E1t OR E1w OR E1x the following>...?
READ OUT. CATI TO ONLY SHOW STATEMENTS WHERE CODE 1 AT E1. ASK IN SAME ORDER AS AT E1.
ON EACH OF THE E3 SCREENS (AT BOTTOM) AS NECESSARY Do you think that having your own site in <MARKET> has helped you avoid problems with this?
(d) Building relationships with key influencers or decision-makers (i) A preference on the part of customers in < MARKET > for doing business with firms from < MARKET > (r) Dealing with legal or tax regulations or standards in < MARKET > (s) Negotiating the culture and language (t) Protecting your intellectual property (w) Ensuring you get paid and enforcing contracts
Yes, having a site in <MARKET> has helped avoid problems with this.. 1 No .......................................................................................................................... 2 (Don’t know) ........................................................................................................... 3
CATI TO INSERT TIME MARKER SECTION G – DIVERSIFICATION & EMERGING/FAST GROWING MARKETS
READ OUT TO ALL I'm now going to ask you about the extent to which you see there being opportunities for YOUR FIRM in some of the world's fast growing and emerging economies over the next 2 years.
ASK ALL G1 – For each of these countries please could you tell me whether you are already doing business there, you are very likely to, you are quite likely to, or you are unlikely to do business there in the next 2 years.
IF IMPORTER (CODE 1 AT S6a) AS NECESSARY: I'm interested in the likelihood of you selling to these countries, so please do not answer in relation to imports.
So firstly, ... DO NOT ROTATE ORDER
a) Russia b) Turkey c) South Africa d) Saudi Arabia or the United Arab Emirates e) Brazil f) Mexico g) China h) India i) India
AS NECESSARY Are you...?
Already doing business there........................................... 1 Very likely ....................................................................... 2 Quite likely ....................................................................... 3 Or, unlikely to do business there in the next 2 years ...... 4 (Don't know) .................................................................. 5
ASK ALL UNLESS ‘UNLIKELY’ (CODE 4) TO ALL OPTIONS AT G1 G4b – And has the economic downturn prompted you to devote more attention to any of the emerging or fast growing economies I've just mentioned?
Yes .................................................................................. 1 No ................................................................................... 2 (Don't know) ................................................................... 3 ASK ALL G10a – Over the last 6 months, has your business had any difficulties in obtaining finance, either from within the company or from external sources?
Yes ................................................................................. 1 No................................................................................... 2 (Don’t know) .................................................................. 3 (Refused)........................................................................ 4
IF DIFFICULTIES ACCESSING FINANCE (G10a=1) G10e – Have these difficulties obtaining finance had any negative impact on the scale or scope of your <IF S2b=1 planned> overseas activities? SINGLE CODE.
Yes ................................................................................. 1 No................................................................................... 3 (Don’t know) .................................................................. 4
IF DIFFICULTIES ACCESSING FINANCE (G10a=1) G10f – And have these difficulties obtaining finance had any negative impact on the scale or scope of your product or service development activity? SINGLE CODE.
Yes ................................................................................. 1 No................................................................................... 3 (Don’t know) .................................................................. 4
CATI TO INSERT TIME MARKER SECTION F – AWARENESS & NEEDS
I'd now like to ask you some questions about any sources of information or advice you are aware of that are available to help UK firms do business overseas.
ASK ALL F2 – Prior to this interview, had you heard of...? READ OUT
(a) UK Trade & Investment or UKTI (b) The commercial services provided by British embassies and consulates overseas
Yes ................................................................. ................ 1 No................................................................................... 2 (Don't know) ................................................................. 3
IF AWARE OF UKTI (CODE 1 AT F2a) F3a – And has your firm used any of UK Trade & Investment’s services?
Yes ................................................................. ................ 1 No................................................................................... 2 (Don't know) ................................................................. 3
IF AWARE OF POSTS (CODE 1 AT F2b) F3b – And has your firm obtained any business information or advice from any British embassies or consulates overseas?
AS NECESSARY: It doesn’t matter whether or not you had to pay for this, if you have received any information of advice then please answer yes.
Yes ................................................................. ................ 1 No................................................................................... 2 (Tried to but got no help).................................................. 4 (Don't know) ................................................................. 3
IF USED UKTI (CODE 1 AT F3a) F4a – Thinking about all the information or support your firm has received from UK Trade & Investment, have you...? READ OUT. CODE ALL THAT APPLY.
Visited the UKTI website .......................................................... 1 Received one-to-one support from a UKTI advisor ................. 2 Attended an event or overseas mission arranged by UKTI ...... 3 Received any other type of support from UKTI ...................... 4 (Don't know) ........................................................................ 5 IF AWARE OF UKTI BUT NOT USED (CODES 2-3 AT F3a) F4b – As far as you know, have you or anyone else in your firm ever visited the UK Trade & Investment website?
Yes ........................................................................................................... 1 No ........................................................................................................... 2 (Don't know) .......................................................................................... 3
ASK ALL EXCEPT OVERSEAS SITES (SKIP IF S2a=4 OR S2c=4) F2k – And has your firm used Business Link? IF NECESSARY: Business Link is a free business advice and support service, available online and through local advisors
Yes ........................................................................................................... 1 No ........................................................................................................... 2 (Don't know) .......................................................................................... 3
IF USED BL (CODE 1 AT F2k) F2m – Thinking about the information or support you have received through Business Link, was any of this provided...? READ OUT. CODE ALL THAT APPLY
Through their website .............................................................. 1 Over the telephone ................................................................. 2 At a face-to-face meeting with one of their advisors ................. 3 (Other) ..................................................................................... 4 (Don't know) ............................................................................ 5
IF NOT USED BL (CODES 2-3 AT F2k) F2j – Prior to this interview, had you heard of Business Link? IF NECESSARY: Business Link is a free business advice and support service, available online and through local advisors
Yes ........................................................................................................... 1 No ........................................................................................................... 2 (Don't know) .......................................................................................... 3
IF AWARE OF BL BUT NOT USED (F2j=1) F2l – Do you think your firm will use Business Link in future? READ OUT. SINGLE CODE
Yes ........................................................................................................... 1 No ........................................................................................................... 2 (Don't know) .......................................................................................... 5
IF NOT USED BL BUT PLAN TO IN FUTURE (CODE 1 AT F2l) F2n – What would be your preferred method of obtaining help or support from Business Link? Would it be...?
Through their website .............................................................. 1 Over the telephone ................................................................. 2 Face-to-face ............................................................................ 3 (Other) ..................................................................................... 4 (Don't know) ............................................................................ 5 CATI TO INSERT TIME MARKER I’d now like to ask you some questions about your business just to classify your answers for analysis purposes.
**ASK ALL**
**H2a – How many people are currently employed by your business in the UK?**
INTERVIEWER NOTE AS NECESSARY Please include both full and part-time staff.
Write in number (0+): (Don’t know) – PROMPT WITH RANGES (Refused)
**IF DON’T KNOW AT H2a**
**H2b – If you had to estimate, approximately how many people are employed by your business in the UK? READ OUT AS NECESSARY**
No employees................................................................. 1 1-4 ................................................................. 2 5-9 ................................................................. 3 10-19 ................................................................. 4 20-49 ................................................................. 5 50-99 ................................................................. 6 100-199 ................................................................. 7 200-249 ................................................................. 8 250-499 ................................................................. 9 500 or more ............................................................. 10 (Don’t know) ............................................................ 11 (Refused)................................................................. 12
**ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT S7 OR CODE 2 AT S7b**
**H2c – Compared to this time three years ago, would you say that the number of people employed by your company in the UK is now...? READ OUT**
Higher................................................................. 1 Lower................................................................. 2 Or, about the same as it was three years ago............. 3 (Don’t know) ............................................................ 4
**IF HIGHER (CODE 1 AT H2c) & FIGURE GIVEN AT H2a**
**H2d – How many people were employed by your business in the UK three years ago? READ OUT**
INTERVIEWER NOTE AS NECESSARY Please include both full and part-time staff.
Write in number (0+): (Don’t know) (Refused) IF DON'T KNOW/REFUSED AT H2d OR (HIGHER (CODE 1 AT H2c) & NO FIGURE GIVEN AT H2a I.E. DON'T KNOW/REFUSED)
H2e – Over the last three years would you say that the number of people employed by your company in the UK has...? READ OUT
- Increased by more than 75% .................................................... 1
- Increased by between 30-75% .................................................. 2
- Or, increased by less than 30% compared to 3 years ago ....... 3
- (Don't know) ............................................................................. 4
IF HAVE OVERSEAS SITE (CODE 4 AT S2a)
H19a – You mentioned earlier that you operate \<IF S5b=1 your own overseas site / IF S5b=2-8 a number of overseas sites>. If you had not set up \<IF S5b=1 this overseas site / IF S5b=2-8 these overseas sites>, do you think that the number of people currently employed by your business in the UK would be...? READ OUT. SINGLE CODE
- Higher than it is now ......................................................... 1
- Lower than it is now .......................................................... 2
- Or, about the same as it is now ....................................... 3
- (Don't know) ........................................................................ 4
IF UK EMPLOYEES WOULD BE HIGHER (CODE 1 AT H19a)
H19b Approximately how many more people would be employed by your business in the UK if you had not set up \<IF S5b=1 this overseas site / IF S5b=2-8 these overseas sites>? Would you have...? READ OUT. SINGLE CODE
- Up to 10% more UK employees ........................................ 1
- 11-25% more ................................................................. 2
- 26-50% more ................................................................. 3
- 51-75% more ................................................................. 4
- Over 75% more UK employees ...................................... 5
- (Don't know) ........................................................................ 6
- (Refused) ............................................................................ 7
IF UK EMPLOYEES WOULD BE LOWER (CODE 2 AT H19a)
H19c Approximately how much lower would your UK employee numbers be if you had not set up \<IF S5b=1 this overseas site / IF S5b=2-8 these overseas sites>? Would you have...? READ OUT. SINGLE CODE
- Up to 10% fewer UK employees ...................................... 1
- 11-25% fewer ................................................................. 2
- 26-50% fewer ................................................................. 3
- 51-75% fewer ................................................................. 4
- Over 75% fewer UK employees ...................................... 5
- (Don't know) ........................................................................ 6
- (Refused) ............................................................................ 7 IF HAVE OVERSEAS SITE (CODE 4 AT S2a)
H20a – And thinking about the types of people employed by your firm in the UK, if you had not set up \<IF S5b=1 this overseas site / IF S5b=2-8 these overseas sites>, do you think that the number of staff you employ in the UK that have degree-level qualifications would be...? READ OUT. SINGLE CODE
Higher than it is now ....................................................... 1 Lower than it is now ........................................................ 2 Or, about the same as it is now........................................ 3 (Don't know) ................................................................... 4
ASK ALL
H3b –< IF S7=NOT 1 & NOT 9 AND S7b=NOT 2 Can I just ask, what is the current annual turnover of your business? / IF S7=1 OR 9 OR S7b=2 What do you anticipate will be the turnover of your business in the first year of trading?> Would you say it is...? READ OUT
AS NECESSARY By this I mean your annual sales, income or receipts.
IF OVERSEAS SITE (CODE 4 AT S2a): AS NECESSARY: Please include sales from any overseas sites or subsidiaries that you control from the UK.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
£0 ................................................................................. 1 £100,000 or less ............................................................. 2 £100,001 - £500,000....................................................... 3 £500,001 - £2million ....................................................... 4 £2million - £10million ..................................................... 5 £10million - £50million ................................................... 6 More than £50million .................................................... 7 (Don't know) ................................................................... 8 (Refused)........................................................................ 9
ASK ALL EXCEPT CODES 1, 2, 3 & 9 AT S7 OR CODE 2 AT S7b
H3c – Compared to this time three years ago, would you say that your turnover is now ...? READ OUT
Much higher................................................................. 1 A bit higher ................................................................. 2 Lower........................................................................... 3 Or, about the same as it was three years ago............... 4 (Don't know) ............................................................... 5 ASK ALL UNLESS ESTABLISHED IN LAST TWO YEARS (I.E. NOT 1-2 OR 9 AT S7 & NOT CODE 2 AT S7b)
H7a – Have you introduced any new products or services over the last three years?
Yes ................................................................. 1 No ........................................................................ 2 (Don’t know) ..................................................... 3
ASK IF YES AT H7a
H7b - And are these new products or services... READ OUT - SINGLE CODE ADD AS NECESSARY: By completely new I mean that, to the best of your knowledge, they have not been introduced by anyone before you READ OUT – SINGLE CODE
Just new to your business................................................................. 1 New to your industry or sector......................................................... 2 Or, are they completely new to the world ........................................ 3 (Some are just new to the business and some are completely new) ...... 4 (Don’t know) .................................................................................. 5
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b
H4a – Approximately how many of your UK employees are engaged either wholly or partly in R&D activity? READ OUT AS NECESSARY
AS NECESSARY: By R&D I mean ‘research and development’
Zero ................................................................................ 1 One................................................................. 2 2-4 ........................................................................ 3 5-9 ........................................................................ 4 10-19 .................................................................. 5 20-49 .................................................................. 6 50-99 .................................................................. 7 100-199 ................................................................. 8 200-249 ................................................................. 9 250-499 ................................................................. 10 500 or more ............................................................ 11 (Don’t know) ............................................................ 12 (Refused)........................................................................ 13
ASK IF H4a IS CODES 2-11
H4b – Can I just check, are any of these employees involved in activities that could be described as ‘the development of scientific or technical knowledge that is NOT commonly available’?
Yes ................................................................. 1 No ........................................................................ 2 (Don’t know) ..................................................... 3 ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b OR CODE 1 AT H4a
H5 – And approximately how many of your UK employees are engaged either wholly or partly in new product or service development? READ OUT AS NECESSARY
Zero ................................................................................ 1 One................................................................................. 2 2-4 .................................................................................. 3 5-9 .................................................................................. 4 10-19 .............................................................................. 5 20-49 .............................................................................. 6 50-99 .............................................................................. 7 100-199 .......................................................................... 8 200-249 .......................................................................... 9 250-499 .......................................................................... 10 500 or more .................................................................... 11 (Don't know) ................................................................... 12 (Refused)........................................................................ 13
ASK ALL EXCEPT CODES 2, 3 OR 4 AT H7b OR (CODE 1 AT H4b & CODES 3-11 AT H4a & CODES 3-11 AT H5)
H6 – In the last year have you commissioned anyone external to your business to conduct any R&D or new product or service development activity for you?
Yes ................................................................................ 1 No ................................................................................... 2 (Don't know) ................................................................... 3
ASK ALL
H8b – Have you either applied for or obtained any patents, trademarks or other legal protection, either in the UK or overseas, for any of your products or services?
Yes ................................................................................ 1 No ................................................................................... 2 (Don't know) ................................................................... 3
IF IP PROTECTION (CODE 1 AT H8b)
N8e – And is this...? READ OUT. CODE ALL THAT APPLY
Patents .............................................................................. 1 Trademarks ...................................................................... 2 Or other legal protection ................................................. 3 (Don't know) ................................................................... 4 IF IP PROTECTION (CODE 1 AT H8b) H8c – And do these relate to the UK, overseas countries or both? SINGLE CODE
AS NECESSARY: Please include all patents, trademarks and other legal protection
UK ................................................................. 1 Overseas .......................................................... 2 Both ................................................................. 3 (Don’t know) .................................................... 4
IF OVERSEAS PATENTS (CODE 1 AT N8e & CODES 2-3 AT H8c) H8d – Does your firm hold any ‘triadic patents’, by which I mean you hold a patent in the US, EU and Japan for the same product or innovation?
INTERVIEWER NOTE: ONLY CODE YES IF SAME PATENT HELD IN ALL THREE MARKETS
Yes ................................................................. 1 No ................................................................. 2 (Don’t know) .................................................... 3 (Refused) ....................................................... 4
ASK ALL H9a – Can I just check, do you have a current, written business plan?
Yes ................................................................. 1 No ................................................................. 2 (Don’t know) .................................................... 3 (Refused) ....................................................... 4
IF BUSINESS PLAN (CODE 1 AT H9a) H9b – And what period does this business plan cover? READ OUT AS NECESSARY
The next year .................................................. 1 2 years .......................................................... 2 3 years .......................................................... 3 Up to 5 years .................................................. 4 Up to 10 years ............................................... 5 More than 10 years ........................................ 6 (Don’t know) .................................................. 7 (Refused) ....................................................... 8 ASK ALL EXCEPT ‘NOT YET TRADING’ (CODE 9 AT S7 OR CODE 2 AT S7b)
H10 – Thinking about your business as a whole, what growth objectives do you have for the business over the next FIVE years? Do you plan to…? READ OUT
- Remain the same size .................................................... 1
- Become smaller .............................................................. 2
- Grow moderately ............................................................ 3
- Grow substantially .......................................................... 4
- (Don’t know) ................................................................. 5
- (Refused) ........................................................................ 6
ASK IF CURRENTLY EXPORTING (S2a=1-4) UNLESS DO NOT SELL TO OVERSEAS CUSTOMERS (I.E. DO NOT ASK IF CODE 2 AT A5a)
H18a – Thinking about your overseas customers, are these…? READ OUT. SINGLE CODE
- Businesses ..................................................................... 1
- Individuals....................................................................... 2
- Or both ........................................................................... 3
- (Other) ............................................................................ 4
- (Don’t know) ................................................................... 5
ASK IF SELL TO BUSINESSES (CODES 1 OR 3 AT H18a)
H18b – And are the businesses that you sell to the ‘end users’ of your products or services or are they part of the supply chain? AS NECESSARY: By ‘part of the supply chain’ I mean that your business customers use or incorporate the products or services that they buy from you into their own products, which they then sell on.
- End users ....................................................................... 1
- Part of supply chain ....................................................... 2
- Both ................................................................................ 3
- (Don’t know) ................................................................... 4
ASK IF SELL TO BUSINESSES & FOREIGN OWNED (CODES 1 OR 3 AT H18a & CODES 2-3 AT H1b)
H18c – And do you sell to other firms within your group, firms that are not part of your group, or both? SINGLE CODE
AS NECESSARY: By ‘your group’ I mean your parent company and any other companies that they own
- Just to firms in the group................................................. 1
- Just to firms not in the group............................................ 2
- Both ................................................................................ 3
- (Don’t know) ................................................................... 4 ASK ALL H21 – As far as you are aware, were any of your company owners, partners or directors born overseas?
Yes ................................................................................. 1 No ..................................................................................... 2 (Don’t know) ................................................................. 3 (Refused) ........................................................................ 4
CATI TO INSERT TIME MARKER SECTION I – MARKETING
ASK ALL I1 – Finally, I'd just like to ask you a few questions about the types of media channels that you personally use and how useful these are to your business. So, do you get news or information that's relevant to your business from either of the following? READ OUT. CODE ALL THAT APPLY. DO NOT RANDOMISE ORDER
Social networking sites ................................................... 8 Other websites ................................................................ 9 (None of these) ............................................................... 10 (Don't know) ................................................................. 11
IF CODE 8 AT I1 I2h – And how useful are social networking sites as a source of news or information that is relevant to your business? Please answer on a scale of 1-5 where 1 is 'not at all useful' and 5 is 'extremely useful'.
1 – Not at all useful ......................................................... 1 2 ..................................................................................... 2 3 ..................................................................................... 3 4 ..................................................................................... 4 5 – Extremely useful ....................................................... 5 (Don't know) ................................................................. 6
IF CODE 9 AT I1 I2i – And how useful are other websites as a source of news or information that is relevant to your business? Please answer on a scale of 1-5 where 1 is 'not at all useful' and 5 is 'extremely useful'.
1 – Not at all useful ......................................................... 1 2 ..................................................................................... 2 3 ..................................................................................... 3 4 ..................................................................................... 4 5 – Extremely useful ....................................................... 5 (Don't know) ................................................................. 6
IF DO NOT USE SOCIAL NETWORKING (I1 IS NOT CODE 8) I3b – Do you expect to use any social networking sites for business purposes within the next year?
Yes ................................................................................. 1 No ................................................................................... 2 (Don't know) ................................................................. 3 ASK ALL I4 – During the last year, have you attended any business seminars, tradeshows or conferences?
Yes ........................................................................................................... 1 No ........................................................................................................... 2 (Don’t know) ..................................................................................... 3
IF CODE 1 AT I4 I5 – How useful do you find these events as a source of information or news that is relevant to your business? AS NECESSARY: Please answer on a scale of 1-5 where 1 is ‘not at all useful’ and 5 is ‘extremely useful’.
1 – Not at all useful ................................................................. 1 2 ............................................................................................. 2 3 ............................................................................................. 3 4 ............................................................................................. 4 5 – Extremely useful ............................................................... 5 (Don’t know) ..................................................................................... 6
CATI TO INSERT TIME MARKER ASK ALL H14 – That’s the end of the interview, thank you very much for taking part. Would you be willing to take part in any future UK Trade & Investment research on this topic? AS NECESSARY If you say ‘yes’ you can always decline at the time if it’s not convenient.
Yes ................................................................................. 1 No ................................................................................... 2 (Don’t know) ................................................................... 3
ASK ALL H17a - We will be producing a summary report of the results from this survey. Would you like us to send you an electronic link to this summary report? READ OUT ADD AS NECESSARY The report will be available later this year.
Yes ................................................................................. 1 No ................................................................................... 2 (Don’t know) ................................................................... 3
IF YES AT H17a H17b - Can I take your e-mail address? AS NECESSARY: This will only be used to email you a link to the report and will not be passed on to anyone else
INTERVIEWER NOTE: PLEASE MAKE SURE YOU RECORD THE EMAIL ADDRESS CORRECTLY, & READ IT BACK TO THE RESPONDENT TO CHECK SPELLINGS ETC
Yes (WRITE IN) .............................................................. 1 No ................................................................................... 2 (Don’t know) ................................................................... 3
IF YES AT H17a BUT RESPONDENT DOESN’T HAVE AN EMAIL ADDRESS H17c – Can I confirm your postal address then and we will send you a letter containing the internet address for the electronic report?
CATI TO INSERT TIME MARKER
ASK ALL H15 – Finally as proof of this interview please could I just confirm your business postcode? CATI TO DISPLAY POSTCODE IF AVAILABLE – AMEND IF MISSING OR INCORRECT
ASK ALL H16 – And may I take a note of your name?
STANDARD THANK & CLOSE
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1530ce55dbb90ee91d9e90b4cf66bd2054885934 | UK Trade & Investment
International Business Strategies, Barriers & Awareness Monitoring Survey 2012
Research Report
August 2012
JN: 4317
# Table of Contents
1. Executive Summary ........................................................................................................... 1\
1.1 Introduction ........................................................................................................ 1\
1.2 Summary Results .............................................................................................. 1
2. Introduction .................................................................................................................... 12
3. Research Objectives ....................................................................................................... 13
4. Methodology .................................................................................................................. 14\
4.1 Coverage ......................................................................................................... 14\
4.2 Sample Design ................................................................................................ 14\
4.3 Questionnaire Design ...................................................................................... 15\
4.4 Fieldwork ......................................................................................................... 15\
4.5 Analysis & Weighting ....................................................................................... 16
5. Awareness & Usage ....................................................................................................... 19\
5.1 Awareness & Use of UKTI ............................................................................... 19\
5.2 Awareness of the Intellectual Property Attaché Network .................................. 23
6. Profile ............................................................................................................................. 25\
6.1 Age of Business ............................................................................................... 25\
6.2 Size of Business (Employees) ......................................................................... 27\
6.3 Size of Business (Turnover) ............................................................................ 29\
6.4 Industry Sector ................................................................................................ 31\
6.5 Ownership ....................................................................................................... 33
7. Innovation & Product/Service Development ................................................................. 34\
7.1 Innovative Firms .............................................................................................. 34\
7.2 IP Active Firms ................................................................................................ 37\
7.3 Young, Technology Intensive Firms ................................................................. 40\
7.4 Innovative High Growth Firms ......................................................................... 41\
7.5 Planned Product & Service Development ....................................................... 42\
7.6 Geographical Focus of Product & Service Development ............................... 46\
7.7 Key Markets Driving Innovation ....................................................................... 50
8. Overseas Activity & Experience
8.1 Modes Used
8.2 Number & Type of Overseas Sites
8.3 Direct Web Sales
8.4 Importing
8.5 Internationalisation Modes by Firm Profile
8.6 Number of Modes Used
8.7 Export Experience
8.8 Intermittent Exporters
8.9 Proportion of Turnover Accounted for by Overseas Sales
8.10 ‘Born Global’ Firms
8.11 Number of Markets
8.12 Overseas Regions
8.13 Senior Management Experience
9 Business Growth & Overseas Strategy
9.1 Past Growth
9.2 Future Growth
9.3 How Growth Objectives Will Be Achieved
9.4 Management Strategy for Achieving Growth Objectives
9.5 Management Strategy for Developing Overseas Business
9.6 Business Planning
9.7 Expected Overseas Growth
9.8 Difficulties Accessing Finance
10. Emerging & Fast Growing Markets
10.1 Opportunities in Emerging & Fast Growing Markets
10.2 Reasons for Not Doing Business in Emerging & Fast Growing Markets
11. Overseas Business Risks
11.1 Attitude to Risk
11.2 Impact of Perceived Risks on Overseas Activity
11.3 Risk Perception of BRIC Markets 12. Market Entry Motivations & Preparations ............................................................. 123 12.1 Market Entry Motivations ............................................................................... 123 12.2 Market Entry Preparations ............................................................................. 129 13. Barriers to Overseas Trade .................................................................................. 133 13.1 Barriers (Summary) ....................................................................................... 133 13.2 Barriers (Detailed) ......................................................................................... 148 14. Marketing Channels ............................................................................................. 160 14.1 Usage & Usefulness ...................................................................................... 160 14.2 Social Networking Sites ................................................................................. 163
Annex A: Markets Selected ......................................................................................... 165 A.1 Most Recent Market ...................................................................................... 165 A.2 Most Challenging Market ............................................................................... 166 Annex B: Questionnaire .............................................................................................. 167
1. Executive Summary
1.1 Introduction
This research gathers evidence about trends in UK businesses’ international business strategies, barriers faced by internationalising firms, awareness and usage of UKTI, and related issues.
The data was collected through a quantitative telephone survey of 900 internationalising firms. The sample was structured to provide robust number of interviews with 3 business age groups (0-5 years, 6-10 years and over 10 years), and all data has been weighted by age of firm to account for the disproportionate stratified sampling approach.
1.2 Summary Results
1.2.1 Awareness & Usage of UKTI
Firms were asked whether they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas, and whether they had used either of these.
| Table 1.2.1.1 Awareness & Use of UKTI | |---------------------------------------| | **Base** | **Total** | **UKTI Usage** | | | | **UKTI User** | **Non-User** | | Aware (at least one) | 900 | 189 | 711 | | - UK Trade & Investment or UKTI | 70% | 100% | 61% | | - Commercial services provided by embassies and consulates overseas | 56% | 91% | 46% | | Used (at least one) | 24% | 100% | 0% | | - UK Trade & Investment or UKTI | 18% | 74% | 0% | | - Commercial services provided by embassies and consulates overseas | 15% | 65% | 0% |
Awareness of the UKTI name itself stands at 56%, with slightly lower awareness of the services provided by overseas posts (51%). Overall, 70% of internationalising firms had heard of either UKTI or the commercial services provided by overseas embassies and consulates, and approaching a quarter (24%) have used any UKTI or posts services.
Not all UKTI users have actually heard of ‘UK Trade & Investment’, with awareness currently at 91%. The remaining 9% have used the services provided by overseas posts but not realised the link to UKTI. Only 46% of non-users recognised the UKTI name, indicating that there are a significant number of internationalising firms that could benefit from UKTI’s services but have never heard of the organisation.
Awareness and usage levels increase amongst both larger and older firms and those with more experience of doing business overseas. It is also clear that innovative, IP active and growing firms are more engaged with UKTI, with awareness and usage levels significantly higher amongst these groups. As seen below, overall awareness (i.e. of either UKTI or posts services) has remained relatively steady over the past few years. However, the proportion of internationalising firms that have heard of the UKTI name itself has increased steadily over this period, from 51% in 2010 to 56% currently.
Table 1.2.1.2 Awareness & Use of UKTI – Over Time
| | Internationalisation Survey | |----------------------|-----------------------------| | | 2008 | 2010 | 2011 | 2012 | | **Base** | 900 | 902 | 903 | 900 | | Aware (at least one) | 68% | 68% | 71% | 70% | | - UK Trade & Investment or UKTI | 51% | 51% | 53% | 56% | | - Commercial services provided by embassies and consulates overseas | 55% | 53% | 56% | 51% | | Used (at least one) | N/A | 27% | 29% | 24% | | - UK Trade & Investment or UKTI | N/A | N/A | 22% | 18% | | - Commercial services provided by embassies and consulates overseas | N/A | N/A | 18% | 15% |
1.2.2 Business Profile
The table below provides a comparison of the key business characteristics of UKTI users and non-users.
Table 1.2.2.1 Business Profile
| Profile | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 900 | 189 | 711 | | Age | | | | | 0-5 years | 17% | 7% | 20% | | 6-10 years | 23% | 19% | 25% | | Over 10 years | 60% | 73% | 56% | | Sector | | | | | Production | 29% | 36% | 27% | | Services | 71% | 64% | 73% | | Size (employees) | | | | | 0-9 employees | 68% | 48% | 74% | | 10-249 employees | 30% | 45% | 25% | | 250+ employees | 3% | 6% | 1% | | Size (turnover) | | | | | Up to £500k | 45% | 30% | 49% | | £500k - £2m | 27% | 29% | 27% | | £2m - £10m | 13% | 19% | 12% | | Over £10m | 8% | 15% | 5% |
UKTI users tend to be older than non-users and are slightly more likely to be operating in the production sector. They are also significantly larger than non-users in terms of both employee numbers and annual turnover, although it should be noted that almost half of UKTI users still have less than 10 staff. 1.2.3 Innovation & Product/Service Development
One of the most notable differences between users and non-users of UKTI services is in the area of innovation. The former are significantly more likely to be classed as 'innovative' (by both definitions). UKTI users are also more inclined to obtain patents, trademarks or other legal protection for their products and services, and hence be defined as 'IP active'.
Table 1.2.3.1 Innovation Profile
| Profile | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 900 | 189 | 711 | | Innovation classifications| | | | | Innovative | 75% | 84% | 72% | | Innovative (alternative) | 46% | 57% | 43% | | IP active | 22% | 38% | 18% |
As seen below, UKTI users are significantly more likely to engage in some sort of product or service development over the next 3 years. They are also more likely to develop completely new products/services rather than just modifying existing ones.
Table 1.2.3.2 Planned Product and Service Development Activity
| Activity | Total | UKTI Usage | |--------------------------------------------------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 900 | 189 | 711 | | Anticipating product/service development activity in next 3 years | 78% | 87% | 76% | | - Develop new products/services | 64% | 74% | 61% | | - Make fundamental changes or modifications to existing products/services| 42% | 47% | 40% | | - Make more cosmetic changes or modifications to existing products/services| 42% | 49% | 40% | | Not anticipating product/service development activity in next 3 years | 21% | 13% | 24% | | Don't know | 0% | 1% | 0% | 1.2.4 Overseas Activity & Experience
Firms were asked which internationalisation modes they had been involved in over the last five years (or were planning to do in the next year in the case of those that were not yet doing any business overseas(^1)).
| Table 1.2.4.1 Internationalisation Modes | |------------------------------------------| | **Total** | **UKTI Usage** | | | **Base** | 900 | 189 | 711 | | **Different Modes Used** | | | | | Selling direct | 91% | 93% | 91% | | - ‘Web only’ exporters | 5% | 1% | 6% | | Agents/distributors | 40% | 58% | 35% | | Contractual arrangements | 15% | 23% | 13% | | Overseas site | 12% | 21% | 10% | | - Manufacturing/assembly | 3% | 7% | 2% | | - Call centre | 1% | 3% | 1% | | - Sales/service delivery | 11% | 18% | 8% | | - R&D | 4% | 7% | 3% | | Importing | 57% | 61% | 56% | | **Number of Modes Used** | | | | | One | 58% | 38% | 65% | | Two | 28% | 38% | 25% | | Three | 10% | 15% | 8% | | Four | 4% | 8% | 2% |
The vast majority of internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. Selling through contractual arrangements (e.g. licensing, franchising, etc) and operating overseas sites is less common, but a significant minority of firms still adopt these approaches.
A small minority of internationalising firms are ‘web only’ exporters, in the sense that they do not sell overseas through any other channel and do not use any other internationalisation modes.
In comparison to non-users, UKTI users are significantly more likely to sell through agents/distributors, use contractual arrangements and operate their own overseas sites. The same is true of larger firms, innovative firms, those active in more overseas markets and those that plan to grow ‘substantially’ over the next 5 years.
Over half of all internationalising firms (58%) are only using a single mode when doing business overseas, although UKTI users are more likely to adopt multiple approaches.
(^1) Please note that 68 of the 900 firms interviewed (8%) were not yet doing business overseas but qualified for the research on the basis that they were planning to do so in the next year. The table below provides details of the comparative overseas experience of UKTI users and non-users.
Table 1.2.4.2 Overseas Experience
| Profile | Total | UKTI Usage | | | |-------------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base | 900 | 189 | 711 | | Years exporting | | | | | | Less than 2 years | 16% | 11% | 18% | | 2-10 years | 46% | 37% | 48% | | Over 10 years | 38% | 51% | 34% | | Number of markets | | | | | | None (not yet exporting) | 6% | 5% | 6% | | 1-5 markets | 47% | 35% | 51% | | 6-10 markets | 20% | 17% | 21% | | Over 10 markets | 26% | 43% | 20% | | Overseas sales (proportion of total turnover) | | | | | | Up to 10% | 53% | 39% | 57% | | 11-25% | 15% | 18% | 13% | | 26-50% | 10% | 12% | 10% | | Over 50% | 18% | 25% | 16% |
Across all of the above measures, it is clear that UKTI users tend to have significantly greater overseas experience than non-users. They have been operating overseas for longer, they are typically active in more markets, and export sales account for a significantly greater proportion of their total turnover.
However, that is not to say that all UKTI clients are experienced exporters, with around 1 in 10 having been doing business overseas for less than 2 years. Furthermore, two-fifths are in 5 markets or less and a similar proportion indicate that overseas sales contribute less than 10% of their annual turnover. 1.2.5 Business Growth & Strategy
The table below provides details of the growth trajectory of internationalising firms and the extent to which they have strategies and plans in place for how their growth will be achieved.
Table 1.2.5.1 Business Growth & Strategy
| Profile | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 900 | 189 | 711 | | Past growth (last 5 years) | | | | | Grown substantially | 20% | 26% | 18% | | Grown moderately | 43% | 39% | 45% | | Remained same size | 20% | 21% | 20% | | Become smaller | 14% | 12% | 14% | | Future growth (next 5 years) | | | | | Grow substantially | 27% | 32% | 25% | | Grow moderately | 54% | 57% | 53% | | Remain same size | 15% | 10% | 17% | | Become smaller | 2% | 0% | 3% | | Management growth strategy | | | | | Very clear strategy | 43% | 45% | 43% | | Fairly clear strategy | 42% | 45% | 41% | | No clear strategy | 13% | 7% | 15% | | Current written business plan | | | | | Yes (or in development) | 52% | 67% | 47% | | No | 46% | 32% | 50% |
Approaching two-thirds of internationalising firms (63%) have grown over the past 5 years and over three-quarters (81%) anticipate further growth over the next 5 years, although in both cases this growth is more likely to be ‘moderate’ than ‘substantial’.
UKTI users appear to be more dynamic than non-users, in the sense that they are significantly more likely to report ‘substantial’ growth over the past 5 years and also more likely to be planning to grow over the next 5 years.
The vast majority of internationalising firms (85%) believe that their senior management team has at least a reasonably clear strategy in place for how they will achieve their growth objectives, and this is slightly more likely to be the case for UKTI users.
UKTI users also have a more formal approach to business planning, with two-thirds having a current written business plan compared to fewer than half of non-users. Firms were also asked a number of questions relating to the expected growth of their overseas operations and the associated strategies they had in place.
Table 1.2.5.2 Overseas Growth & Strategy
| Profile | Total | UKTI Usage | |----------------------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 900 | 189 | 711 | | **Number of overseas markets (next 3 years)**| | | | | Increase | 48% | 52% | 47% | | Stay the same | 47% | 44% | 48% | | Decrease | 4% | 3% | 4% | | **Exports as % of turnover (next 3 years)** | | | | | Higher | 47% | 53% | 44% | | About the same | 43% | 40% | 43% | | Lower | 7% | 5% | 8% | | **Management overseas strategy** | | | | | Very clear strategy | 29% | 38% | 26% | | Fairly clear strategy | 32% | 37% | 30% | | No clear strategy | 37% | 25% | 41% |
Internationalising firms tend to have a fairly positive outlook when it comes to the development of their overseas business, with approaching half expecting to enter new markets over the next 3 years and a similar proportion anticipating that export sales will become more important to their business (in terms of the proportion of turnover that they account for). Very few firms predict a decline in either of these areas.
Although UKTI users appear to be slightly more likely to anticipate growth in their overseas business, the differences are not particularly pronounced (and in the case of number of markets, the difference is not statistically significant).
The majority of firms (61%) report that their senior management team has at least a reasonably clear strategy for the development of their overseas business, although this is considerably lower than the 85% that had a clear strategy in place for the development of their business as a whole (as detailed on the previous page). UKTI users have a significantly greater strategic focus on their overseas development, with three-quarters having a management strategy in place (compared to 56% of non-users). 1.2.6 Emerging & Fast Growing Markets
Firms were read out a list of various emerging or fast growing markets and asked how likely they were to do business in each one over the next 2 years. If firms indicated that they were unlikely to enter one or more of these markets, they were asked for their reasons.
Table 1.2.6.1 Opportunities in Emerging & Fast Growing Markets
| Likelihood of entering any emerging / fast growing markets in next 2 years | Total | UKTI Usage | |---|---|---| | | Base: All firms | 900 | 189 | 711 | | Already in | 41% | 54% | 37% | | Very likely | 12% | 11% | 12% | | Quite likely | 23% | 21% | 24% | | Unlikely | 24% | 14% | 27% |
| Reasons for not considering emerging / fast growing markets | Total | UKTI Usage | |---|---|---| | | Base: All unlikely to enter a mkt | 784 | 160 | 624 | | Focussing on other countries | 60% | 71% | 57% | | Little or no demand | 55% | 48% | 57% | | Too difficult | 37% | 38% | 36% | | Never thought about it | 34% | 30% | 35% | | Too risky | 25% | 22% | 25% |
As seen above, two-fifths (41%) of internationalising firms are already doing business in at least one of the emerging/fast growing markets, and most of the remainder feel that they are very or quite likely to do so in the next 2 years. In terms of specific markets, the UAE, India and China are felt to represent the best opportunities, but firms are least enthusiastic about doing business in Mexico.
Over half of UKTI users are already in at least one of these markets and only 14% feel that they are unlikely to enter one. In contrast, over a quarter of non-users are not in any emerging/fast growing markets and have no intention of entering any.
The likelihood of a firm trading in fast growing markets also increases with age, size and export experience. However, it is certainly not the case that these markets are only targeted by more established firms, as around a third of firms established in the last 5 years and a third of those with 0-9 employees are already doing business in at least one of these countries.
When comparing results with previous waves of this survey, there appears to have been a general decline in the proportion of firms that are active in emerging and fast growing markets, down from a high of 48% in 2010 to 41% currently. This pattern is evident for both users and non-users of UKTI.
Most firms not targeting an emerging/high growth market indicate that this is because they are either focussing on other markets instead or there is little/no demand for their products and services. However, a significant minority highlighted the perceived difficulties and/or risks associated with doing business in these markets. 1.2.7 Overseas Business Risks
Firms were asked to assess their attitude to risk when doing business overseas. As detailed below, the majority of firms are willing to take calculated risks if the potential benefits are clear, and only 13% are entirely risk averse. There are no statistically significant differences in the attitude to risk between users and non-users of UKTI.
Table 1.2.7.1 Attitude to Risk
| | Total | UKTI Usage | |--------------------------------------|-------|------------| | | Base | UKTI User | Non-User | | It's never worth taking any risks | 13% | 9% | 14% | | It's sometimes worth taking risks providing the commercial benefits are clear | 62% | 63% | 62% | | To be a successful business you have to take risks | 24% | 27% | 23% |
Firms were also asked if they had been put off from doing business in a particular country because of various specific risks.
Table 1.2.7.2 Impact of Perceived Risks on Market Entry
| Proportion put off from entering a market due to the risk of... | Total | UKTI Usage | |---------------------------------------------------------------|-------|------------| | | Base | UKTI User | Non-User | | Not being paid in full or on time | 49% | 54% | 47% | | Political or economic instability | 37% | 45% | 35% | | Not seeing return on investment | 35% | 52% | 30% | | Bribery, corruption or organised crime | 32% | 44% | 29% | | IP Theft | 29% | 38% | 26% | | Safety or security of staff | 25% | 37% | 22% | | None of these | 30% | 18% | 33% | | Net: Put off by any risk | 70% | 83% | 67% |
Overall, 70% of firms have been put off from entering an overseas market due to one of the above risks. The risk of not being paid (in full or on time) is the most significant deterrent to overseas expansion, but all of the individual risks tested have a significant impact on the behaviour of internationalising firms, with at least 25% reporting that they have decided market entry because of each one. There is clear evidence that UKTI users are more likely to have abandoned their market entry plans due to the risks involved.
When asked specifically about the risks involved in the BRIC markets, firms were most concerned about doing business in Russia, with 59% describing it as very or fairly risky. This was followed by China (45%) and then Brazil and India (40% each). In each case, firms that were already doing business in these markets were much less concerned about the risks involved, suggesting that some firms are being deterred by a perception that these markets are high risk when the reality may not be as bad as they fear. 1.2.8 Barriers to Overseas Trade
Firms were asked to identify the ‘most challenging’ overseas market in which they had done business over the last 5 years, and were then read out a number of potential difficulties and asked to indicate the extent to which they had encountered each one in this market. These have been combined into 7 summary barriers, and the table below shows the proportion of firms experiencing ‘significant’ difficulties with each one.
Table 1.2.8.1 Summary Barriers
| Base: All exporters | Total | UKTI Usage | Non-User | |---------------------|-------|------------|----------| | | 832 | 178 | 654 | | At least one significant barrier | 57% | 72% | 52% | | - Legal & regulatory barriers | 37% | 43% | 35% | | - Customs barriers | 24% | 29% | 23% | | - Contacts barriers | 24% | 34% | 20% | | - Information barriers | 10% | 12% | 9% | | - Resource barriers | 15% | 19% | 14% | | - Language & cultural barriers | 16% | 20% | 14% | | - Bias barriers | 12% | 18% | 10% | | No significant barriers | 43% | 28% | 48% |
Over half of internationalising firms have experienced at least one significant barrier in their most challenging market, confirming that there is a clear need for external assistance to help firms overcome these barriers and successfully trade overseas. Reflecting the results from previous UKTI studies, legal and regulatory barriers prove the most common barrier experienced at 37%, but a quarter of firms have also encountered customs and contacts barriers.
UKTI users clearly come across more significant barriers than non-users, with 72% experiencing at least one, compared to just 52% of non-users. More experienced exporters, innovative firms and those using more advanced internationalisation modes (i.e. contractual arrangements and operating overseas sites) are all more likely to experience significant barriers to overseas trade. It is also clear that firms are more likely to encounter barriers when targeting high growth markets or other markets outside of the EEA.
Given that UKTI users are more likely to meet all of the above criteria (e.g. more experienced exporters, innovative, etc) the differences in the barriers experienced by users and non-users could simply be a function of their different profile. However, when further analysis is conducted on a like-for-like basis by comparing firms that operate in the same number of markets and comparing those answering about the same ‘type’ of market (e.g. high growth), the difference between users and non-users is still very evident. This suggests that there is a ‘true’ distinction between users and non-users and that the increased likelihood of the former reporting barriers is not just because they operate in a greater number of markets and/or more challenging markets. Interestingly, firms with ‘substantial’ growth aspirations are also more likely to encounter significant barriers, suggesting that they are most in need of external assistance to enable them to fulfil their growth ambitions. 2. Introduction
UK Trade & Investment (UKTI) commissioned this research in order to gather evidence about trends in UK businesses’ international business strategies, barriers faced by internationalising firms, awareness and usage of UKTI, and related issues.
The study was designed with a view to the results helping to inform UKTI policy development and other aspects of UK Government policy relating to international trade and investment and the ability of British business to optimise opportunities in global markets.
The survey was intended to complement evidence already available from other surveys of UK business, in particular:
- The Community Innovation Survey, which is nationally representative of firms with at least 10 employees, and captures some evidence about international aspects of innovation activity, including international partnerships and other linkages, as well as export activity;
- UKTI’s Performance and Impact Monitoring Survey (PIMS) of businesses who have used UKTI trade services, which also captures some contextual evidence about overseas business experience and aspects of strategy;
- UKTI’s annual survey of exporters who have not used UKTI trade services, which gathers evidence about some aspects of overseas business strategy as well as evidence about barriers to overseas business and associated needs for external help.
The ‘International Business Strategies, Barriers & Awareness Monitoring Survey’ replaced the former annual UKTI awareness survey. It is undertaken on an annual basis, and this is the fifth wave conducted to date. Whilst the core content of the survey is kept consistent each year, there is variation in some of the topics covered. This ensures that the survey provides consistent annual monitoring data where needed, but also captures data on other topical issues at less frequent intervals.
The 2012 survey provides new, interesting and robust evidence on:
- The extent to which firms have clear strategies in place – both for achieving their growth aims and for developing their overseas business
- The extent to which firms are looking to realise their growth ambitions by focussing on new or existing customers, markets and products/services
- The degree to which overseas expansion is affected by the perceived risks involved – with a particular focus on risk perceptions of the BRIC markets
- The reasons why firms are not attracted to high growth markets
- Whether certain markets are a key stimulus for innovation (and which ones)
It also continues to track the following key areas:
- Awareness and use of UKTI amongst internationalising firms
- Activity and interest in high growth markets
- Barriers to overseas development
- The business characteristics of UKTI users and non-users, including profile, growth, innovation and export experience/approach
3. Research Objectives
In terms of the specific research aims, the study was required to provide robust evidence to:
- Understand the role of international market diversification in business development strategies, including its effects on revenue growth and resilience, profitability and return on investment in new product development
- Track awareness of, and potential interest in, selected emerging and high growth markets
- Understand links between innovation, R&D and overseas business development, including links between innovation and mode of market entry, and the extent to which these may differ across markets
- Understand the barriers encountered by UK businesses in seeking to develop overseas business, including issues relating to intellectual property protection, both for new exporters and for firms seeking to enter new markets
- The survey should also seek to identify how these may vary across markets, and by the characteristics of the firm, such as by innovation, size and previous export experience
- Identify business needs for external help to overcome barriers and to address the knowledge and skill needs associated with developing overseas business, including issues related to exploiting and protecting intellectual property rights
- The survey should also seek to identify how these barriers and needs may vary by business size, innovation and previous export experience
- Identify awareness and use of UKTI support, including government support relating to the intellectual property issues associated with doing business overseas
- Capture evidence about the characteristics of users and non-users of UKTI services, including innovation activity, scope of international business and modes of internationalisation employed.
This study built on the four previous survey waves, replicating the previous methodology so as to provide consistent year-on-year data, whilst developing the previous questionnaire to ensure that the 2012 objectives were fully addressed. 4. Methodology
The research was conducted via quantitative CATI(^2) interviews, administered by a specialist team of business-to-business researchers with extensive experience of conducting similar studies with this type of audience.
4.1 Coverage
A total of 900 interviews were conducted with a random sample of firms involved in overseas business activities, covering the full range of internationalisation modes such as selling to overseas customers directly, selling through agents or distributors, doing business overseas via licensing, franchising and other contractual agreements, and operating overseas sites. Whilst data was collected on import activity, only those firms also involved in other overseas business activities were eligible for interview.
Whilst the majority of the sample (832 of the 900 interviews) were involved in at least one of these forms of internationalisation at the time of the interview, a small number (68) were not yet doing business overseas. However, to be eligible for the study these firms had to indicate that they were planning to start selling overseas in the next year.
4.2 Sample Design
Since one of the key objectives of this research was to ensure coverage of firms doing overseas business via the full range of modes, and not just simply exporting in the traditional sense, the sample frame was built from a random sample of UK businesses which was then screened to identify those engaged in overseas business. This approach had the further advantage of allowing the identification and inclusion of firms that were not yet exporting (but planning to start in the next year).
The initial sample frame was sourced from a Companies House-based list provided by Experian, with the sample stratified by age of firm. A disproportionate sample design was adopted in order that a robust number of interviews were conducted with 3 age groups of firms (0-5 years, 6-10 years and over 10 years).
In order that the incidence within the sample frame of firms eligible for interview (i.e. engaging in international business activity) was kept to within sensible limits, a small number of industry sectors where export propensity is very low were excluded from the initial sample frame. The exclusions were made on the basis of analysis of data from the Community Innovation Survey (CIS) on the incidence of exporting for individual industry sectors by age group(^3). The available data only enabled exclusions to be made at the level of 2-digit SIC codes, but a number of more detailed sub-sectors were also excluded based on both common sense and the research team’s experiences of the previous surveys and pilot sessions (e.g. sub-post offices, taxi firms, dispensing chemists, etc).
Both users and non-users of UKTI were included in the research, but the initial sample was screened against a list of firms that had been interviewed in the most recent main PIMS surveys so as not to over-burden businesses.
(^2) Computer Assisted Telephone Interviewing. (^3) Based on analysis by Professor Richard Harris, University of Glasgow. 4.3 Questionnaire Design
Strong emphasis was placed on questionnaire design in the early stages of this project to ensure that the questionnaire was easily understandable, flowed logically, was of an acceptable length and was capable of delivering high quality data across all the areas necessary to answer the research objectives.
Given that some of the question areas had not been covered in previous studies, an initial qualitative piloting phase was undertaken to help test and develop these questions. This consisted of a total of 4 in-depth, less-structured interviews to ensure that the new question areas made sense to respondents and covered all of the pertinent issues.
Following this qualitative phase the questionnaire was revised where necessary, and then a full ‘live’ quantitative pilot was conducted on CATI. This took place over the course of 2 days and involved OMB executives and UKTI representatives listening to ‘live’ interviews conducted by the telephone research team. Based on this session, further changes were then made to the questionnaire script prior to the start of main fieldwork. A copy of the final questionnaire is appended to this report.
4.4 Fieldwork
Main fieldwork was conducted between March and May 2012, and interviews lasted an average of c.20 minutes.
The following table summarises the number of sample records selected for CATI, the number of records lost due to screening-out or incorrect contact details, and the number of interviews completed along with the associated response rate.
| CATI SCREENING | | |-----------------------------------------------------|----------| | Selection for CATI | 13,384 | | - Unusable: No overseas business activity | 8,356 | | - Unusable: Other reason (e.g. contact details incorrect) | 2,107 |
| INTERVIEWS / RESPONSE RATES | | |-----------------------------------------------------|----------| | Total useable sample | 2,921 | | Interviews achieved | 900 | | Response rate (%) | 31% | | Refusal rate (%) | 46% | 4.5 Analysis & Weighting
4.5.1 Weighting
All of the core sample data has been weighted to account for the disproportionate nature of the sample design (i.e. the disproportionate sampling by age of firm). The weighting regime uses data from the 2007/8 Annual Small Business Survey on the age profile of UK exporters (displayed below), with the data weighted to the profile shown below.
| Age profile of UK exporters (2007/8 ASBS) | Age profile of interviewed firms | Weighting | |------------------------------------------|---------------------------------|-----------| | Up to 5 years | 16.8% | 28.1% | 0.60 | | 5-10 years | 23.4% | 28.3% | 0.83 | | More than 10 years | 59.8% | 43.6% | 1.37 |
4.5.2 Base Size Descriptions
Under each chart in this report is a base description, which provides details of which firms the analysis is based on (e.g. All respondents, All exporters, etc), the unweighted number of firms included in the analysis, and the percentage falling into any categories that are not shown in the chart itself (e.g. ‘Don't know/refused’ responses).
For example, the base description below indicates that the analysis is based on all firms that are currently exporting, the ‘total’ results in the chart are based on 832 firms, and 3% of these answered ‘don’t know’ to this particular question. It also shows that the ‘UKTI users’ results are based on 178 firms (1% of whom answered ‘don't know’) and the ‘Non Users’ results are based on 654 firms (4% of whom answered ‘don't know’)
Example Base: All currently exporting (Base, Don’t know) Total (832, 3%), UKTI Users (178, 1%), Non-Users (654, 4%)
4.5.3 Statistical Significance
Throughout this report, any differences between types of firm that are referred to as being ‘significant’ are statistically significant at the 95% level of confidence. In some cases apparent differences that are not statistically significant at this level have been highlighted, but made clear that they are not significant. 4.5.4 Analysis Definitions
Throughout this report, sub-analysis has been provided by a number of variables relating to key business characteristics. Some of these are constructed from a number of different survey questions, and the following provides details of how these variables have been defined.
| Innovative Firms | |------------------| | Firms have been defined as ‘innovative’ if they… | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product/service development | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years except firms established in the last 2 years |
| Innovative Firms (Alternative, Tighter Definition) | |--------------------------------------------------| | Firms have been defined as ‘innovative’ under the alternative, tighter definition if they … | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product or service development and at least some employees are involved in the development of scientific or technical knowledge not commonly available | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years and these are ‘new to the world’ or ‘new to the sector’ |
| IP Active Firms | |-----------------| | Firms have been defined as 'IP Active' if they… | | • Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas |
| Young, Technology Intensive Firms | |----------------------------------| | Firms have been defined as being ‘young, technology intensive’ if they… | | • Have been established for 5 years or less | | • And are classified as being innovative using the alternative (tighter) definition or are classified as IP active | Born Global Firms
Firms have been defined as being ‘born global’ if they...
- Have been established for 5 years or less
- And have been doing business overseas for as long as they have been established
Born Global Firms (Alternative, Tighter Definition)
Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they...
- Have been established for 5 years or less
- And have been doing business overseas for as long as they have been established
- And the proportion of turnover accounted for by overseas sales is over 25%
5. Awareness & Usage
5.1 Awareness & Use of UKTI
All firms were asked whether, prior to the interview, they had heard of either UK Trade & Investment or the commercial services provided by British embassies and consulates overseas. If so, they were also asked whether they had used either of these. The table below provides details of awareness and usage levels, at the total level and by UKTI usage.
Table 5.1.1 Awareness & Use of UKTI – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 900 | 189 | 711 | | Aware (at least one) | 70% | 100% | 61% | | - UK Trade & Investment or UKTI| 56% | 91% | 46% | | - Commercial services provided by embassies and consulates overseas | 51% | 90% | 39% | | Used (at least one) | 24% | 100% | 0% | | - UK Trade & Investment or UKTI| 18% | 74% | 0% | | - Commercial services provided by embassies and consulates overseas | 15% | 65% | 0% |
Overall, 70% of internationalising firms had heard of either UKTI or the commercial services provided by overseas posts. Awareness of the UKTI name stands at 56%, with a slightly lower awareness level (51%) recorded for the services provided by overseas posts.
Around a quarter of firms (24%) claim to have used UKTI (including the commercial services provided by overseas posts). This figure may under-represent UKTI usage as the respondent interviewed might not be aware that the firm has accessed UKTI support (e.g. if the firm used UKTI before the respondent joined the firm, or if a different site/department has used UKTI). That said, it is also possible that UKTI users are over-represented in the sample due to the effect of response bias, as the survey was positioned as being on behalf of UKTI so those firms with a prior relationship with the organisation may have been more willing to take part in the research.
UKTI ‘users’ were defined as those that have used either UKTI services or the commercial services provided by British embassies and consulates overseas. It is worth noting that only 91% of UKTI users have actually heard of ‘UK Trade & Investment’ itself, meaning that 9% have used the services provided by overseas posts but not realised the link to UKTI.
Awareness of the UKTI name amongst non-users stands at 46%, although 61% have heard of either UKTI or the services provided by overseas posts. This indicates that there are a significant number of internationalising firms that could benefit from UKTI’s services but have never heard of the organisation. The table below provides details of awareness and usage levels over time. Please note that it is not possible to provide comparable usage data from 2008 due to questionnaire changes, and there is also no data on usage of UKTI and overseas posts specifically from the 2010 survey.
Table 5.1.2 Awareness & Use of UKTI – Over Time
| | Internationalisation Survey | |----------------------|----------------------------| | | 2008 | 2010 | 2011 | 2012 | | **Base** | 900 | 902 | 903 | 900 | | **Aware (at least one)** | | | | | | UK Trade & Investment or UKTI | 68% | 68% | 71% | 70% | | Commercial services provided by embassies and consulates overseas | 51% | 51% | 53% | 56% | | **Used (at least one)** | | | | | | UK Trade & Investment or UKTI | N/A | 27% | 29% | 24% | | Commercial services provided by embassies and consulates overseas | N/A | N/A | 18% | 15% |
Awareness of the UKTI name has risen steadily since 2010 and now stands at 56%, although that is offset by a drop in awareness of posts services over the last year. There also appears to have been a decline in the proportion of firms using UKTI or the commercial services provided by overseas posts, down from 29% in 2011 to 24% currently.
As seen below, both awareness and usage of UKTI increases amongst older firms and those with more employees.
Table 5.1.3 Awareness & Use of UKTI – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | **Base** | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | **Aware (at least one)** | | | | | | | | | | UKTI | 60% | 70% | 73% | 66% | 75% | 83% | 94% | 69% | | Posts | 38% | 51% | 55% | 53% | 63% | 64% | 76% | 56% | | **Used (at least one)** | | | | | | | | | | UKTI | 10% | 20% | 29% | 17% | 32% | 50% | 57% | 23% | | Posts | 6% | 12% | 19% | 11% | 20% | 36% | 33% | 15% | As might be expected, the longer a firm has been doing business overseas the more likely they are to have heard of UKTI and to have used their services. That said, around a quarter (24%) of firms that have been doing business overseas for more than 10 years have not heard of UKTI. A broadly similar picture is seen by number of markets, with awareness and usage highest among firms with the most substantial global presence (i.e. active in more than 10 markets).
Table 5.1.4 Awareness & Use of UKTI – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Under 2 years | 2-10 years | Over 10 years | 0 | 1-5 | 6-10 | More than 10 | | Base | 200 | 448 | 248 | 68 | 438 | 178 | 211 | | Aware (at least one) | 60% | 69% | 76% | 62% | 66% | 66% | 84% | | - UKTI | 52% | 55% | 59% | 59% | 53% | 49% | 68% | | - Posts | 37% | 48% | 60% | 35% | 44% | 49% | 69% | | Used (at least one) | 16% | 19% | 31% | 19% | 17% | 20% | 39% | | - UKTI | 12% | 15% | 23% | 12% | 13% | 13% | 31% | | - Posts | 9% | 12% | 22% | 12% | 10% | 13% | 29% |
There is a similar correlation between the number of regions firms are doing business in and the likelihood of them being aware of, and using, UKTI. Encouragingly, 62% of firms that are not yet exporting (i.e. not currently doing business in any overseas regions) are still aware of UKTI or the services provided by overseas posts.
Table 5.1.5 Awareness & Use of UKTI – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |--------------------------------------|------|-----|-----|-------|------|------| | Base | 68 | 270 | 196 | 151 | 115 | 98 | | Aware (at least one) | 62% | 62% | 73% | 72% | 70% | 88% | | - UKTI | 59% | 47% | 58% | 59% | 56% | 73% | | - Posts | 35% | 42% | 53% | 56% | 52% | 67% | | Used (at least one) | 19% | 15% | 22% | 31% | 30% | 33% | | - UKTI | 12% | 10% | 14% | 28% | 20% | 27% | | - Posts | 12% | 9% | 13% | 19% | 24% | 22% |
There is also clear evidence that innovative and IP active firms are more engaged with UKTI, with both awareness and usage levels higher amongst these groups.
Table 5.1.6 Awareness & Use of UKTI – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 402 | 663 | 237 | 193 | 698 | | Aware (at least one) | 76% | 74% | 59% | 86% | 66% | | - UKTI | 61% | 59% | 47% | 73% | 52% | | - Posts | 57% | 55% | 39% | 63% | 47% | | Used (at least one) | 29% | 27% | 15% | 40% | 19% | | - UKTI | 23% | 20% | 9% | 32% | 13% | | - Posts | 20% | 17% | 10% | 22% | 14% | As seen below, awareness and usage of UKTI is highest among firms that plan to grow over the next 5 years (and particularly those expecting 'substantial' growth), which is encouraging given that this group are most likely to need assistance to achieve their growth ambitions. Awareness peaks amongst innovative high-growth firms (81%), which is encouraging given that this is a key group for UKTI.
Table 5.1.7 Awareness & Use of UKTI – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | | Base | 123 | 476 | 272 | 214 | 449 | 237 | | Aware (at least one) | 59% | 70% | 78% | 81% | 71% | 59% | | - UKTI | 44% | 56% | 65% | 67% | 56% | 47% | | - Posts | 45% | 51% | 57% | 59% | 53% | 39% | | Used (at least one) | 16% | 25% | 28% | 30% | 25% | 15% | | - UKTI | 10% | 19% | 21% | 23% | 19% | 9% | | - Posts | 10% | 17% | 17% | 18% | 17% | 10% |
Awareness and usage also tends to increase slightly amongst firms using less 'traditional' or more advanced internationalisation modes (i.e. not just selling direct).
Table 5.1.8 Awareness & Use of UKTI – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 817 | 355 | 135 | 108 | | Aware (at least one) | 71% | 76% | 81% | 82% | | - UKTI | 56% | 65% | 68% | 70% | | - Posts | 52% | 59% | 55% | 61% | | Used (at least one) | 24% | 34% | 36% | 40% | | - UKTI | 18% | 27% | 29% | 33% | | - Posts | 16% | 22% | 18% | 27% | 5.2 Awareness of the Intellectual Property Attaché Network
The UK government has recently established a network of Intellectual Property attachés based in China, India, Brazil and South East Asia, with the aim of strengthening advice and support on intellectual property protection and further developing trade for UK companies in these markets. Firms were asked whether they had heard of the UK Government’s Intellectual Property Attaché network, and results are summarised below.
Chart 5.2.1 Awareness of the Intellectual Property Attaché Network – By UKTI Usage
Overall awareness of this network is relatively low, at 8%, although it rises slightly amongst UKTI users. As might be expected, awareness of the Intellectual Property Attaché Network is highest among IP active firms, at 14%. Innovative firms are also more likely to have heard of the network.
Table 5.2.1 Awareness of Intellectual Property Attaché Network – By Innovation
| | Innovative | IP Active | |----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 402 | 663 | 237 | 193 | 698 | | Yes | 11% | 9% | 6% | 14% | 6% | | No | 89% | 91% | 93% | 86% | 94% | | Don’t know | 0% | 0% | 1% | 0% | 0% |
The network of Intellectual Property attachés are based in China, India, Brazil and South East Asia, but there is no strong evidence that awareness levels are higher amongst firms operating in these areas. Although awareness stands at 12% amongst firms doing business in South/Latin America, compared to an overall awareness figure of 8% for all internationalising firms, this difference is not statistically significant. 9% of firms doing business in Asia Pacific have heard of the network.
Table 5.2.2 Awareness of Intellectual Property Attaché Network – By Overseas Region
| Regions Doing Business In | Europe | North America | South/Latin America | Middle East/Africa | Asia Pacific | |---------------------------|--------|---------------|---------------------|--------------------|--------------| | Base | 759 | 405 | 167 | 349 | 385 | | Yes | 8% | 7% | 12% | 9% | 9% | | No | 92% | 88% | 90% | 91% | 91% | | Don’t know | 0% | 0% | 0% | 0% | 0% |
As seen below, awareness of the Intellectual Property Attaché Network is higher amongst firms that are doing business in China and Brazil, but if in fact lower than average for firms exporting to India (even though this is one of the markets where the attachés operate).
Table 5.2.3 Awareness of Intellectual Property Attaché Network – By Key Markets
| Markets Doing Business In | China | India | Brazil | |---------------------------|-------|-------|--------| | Base | 48 | 72 | 84 | | Yes | 13% | 5% | 14% | | No | 87% | 95% | 86% | | Don’t know | 0% | 0% | 0% | 6. Profile
6.1 Age of Business
The sample for this survey was stratified by age of firm to enable robust analysis to be conducted by 3 different age groups (firms established 0-5 years, 6-10 years and over 10 years). To account for this disproportionate sampling approach, the final data has been weighted back to the true age profile of internationalising firms (using data from the Annual Small Business Survey).
The table below provides details of the actual (unweighted) age distribution of sampled firms, the weighting regime applied, and the weighted proportion of firms in the final sample.
| No. of interviews | % of interviews (unweighted) | True profile of exporters (ASBS data) | Weight applied | % of interviews (Weighted) | |-------------------|-----------------------------|--------------------------------------|----------------|---------------------------| | Not yet trading | 2 | 0% | 17% | 0% | | Within the last 2 years | 86 | 10% | 17% | 6% | | 2-5 years ago | 165 | 18% | 23% | 11% | | 6-10 years ago | 255 | 28% | 23% | 23% | | 11-20 years ago | 176 | 20% | 60% | 27% | | More than 20 years ago | 216 | 24% | 60% | 33% | | Total | 900 | 100% | 100% | 100% |
As detailed above, young firms established in the last 5 years are over-represented in the sample for this survey, accounting for 28% of all interviews compared to 17% of all exporting firms, and as a result have been down-weighted by a factor of 0.60.
The same is true for firms established 6-10 years, although to a lesser extent, with this group being allocated a weight of 0.83. Conversely, older firms are under-represented in the sample and have been up-weighted by a factor of 1.37.
Please note that all results shown in this report have been weighted. The chart below shows the weighted profile of internationalising firms in terms of their age, at both the total level and by UKTI users and non-users.
Chart 6.1.1 When Business Established – By UKTI Usage
Overall, UKTI users have an older profile than non-users, with 44% and 30% respectively established for more than 20 years.
Unsurprisingly, larger firms tend to be older than their smaller counterparts. However, it should be noted that over half of the smallest internationalising firms (with less than 10 employees) have been established for more than 10 years.
Table 6.1.2 When Business Established – By Size of Firm
| Size (Number of Employees) | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |----------------------------|-----|-------|--------|------|---------| | Base | 644 | 192 | 46 | 17 | 882 | | Not yet trading | 0% | 0% | 0% | 0% | 0% | | Within the last 2 years | 7% | 3% | 2% | 0% | 6% | | 2-5 years ago | 13% | 6% | 5% | 3% | 11% | | 5-10 years ago | 27% | 21% | 4% | 0% | 24% | | 10-20 years ago | 29% | 24% | 27% | 6% | 27% | | More than 20 years ago | 23% | 46% | 61% | 91% | 31% | 6.2 Size of Business (Employees)
The chart below shows the size profile of firms, measured via their number of employees. Analysis has been provided at the total level, and by UKTI users and non-users.
The majority of internationalising firms are relatively small in terms of staff numbers, with two-thirds having less than 10 employees and most of the remainder having less than 50 employees. This reinforces the importance of considering the needs of smaller firms when formulating policy in the area of trade support.
UKTI users tend to be larger than non-users, with 52% and 26% respectively having 10 or more employees. The correlation between age and size of firm is again highlighted in the table below. However, it should be noted that over half of the well-established internationalising firms (i.e. those trading for over 10 years) still have less than 10 employees.
Table 6.2.1 Number of Employees – By Age of Firm
| Age (Years Trading) | Up to 5 | 6-10 | Over 10 | |---------------------|---------|------|---------| | Base | 253 | 255 | 392 | | 0 | 9% | 4% | 2% | | 1-9 | 75% | 74% | 57% | | 10-49 | 13% | 21% | 27% | | 50-99 | 2% | 1% | 4% | | 100-249 | 0% | 0% | 5% | | 250 or more | 0% | 0% | 4% | | Don't know/refused | 0% | 0% | 0% | 6.3 Size of Business (Turnover)
The chart below shows the size profile of firms as measured by their annual turnover. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.3.1 Annual Turnover – By UKTI Usage
Nearly half (45%) of internationalising firms have fairly modest turnovers of no more than £500,000. As was the case with employee numbers, UKTI users tend to be larger, with 34% reporting a turnover in excess of £2million compared to only 17% of non-users. Unsurprisingly, there is a strong relationship between turnover and employee numbers. Overall, 50% of SMEs have annual sales of less than £500,000.
A similar relationship between turnover and age is also evident. However, it is certainly not the case that all older firms have large turnovers, with over a third (36%) of those established more than 10 years reporting a turnover of £500,000 or less, and a slightly lower proportion (29%) reporting a turnover of between £500,000 and £2million.
Table 6.3.1 Annual Turnover - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Up to £500,000 | 67% | 51% | 36% | 63% | 8% | 2% | 0% | 50% | | £500,000-£2million | 21% | 28% | 29% | 25% | 44% | 6% | 0% | 28% | | £2million-£10million | 6% | 12% | 16% | 4% | 38% | 29% | 6% | 14% | | £10million-£25million | 1% | 0% | 5% | 0% | 4% | 27% | 12% | 3% | | £25million-£500million | 2% | 2% | 6% | 1% | 1% | 26% | 70% | 3% | | More than £500 million | 0% | 0% | 0% | 0% | 0% | 0% | 6% | 0% | | Don't know/refused | 3% | 6% | 8% | 7% | 6% | 10% | 6% | 7% | 6.4 Industry Sector
The chart below shows the profile of firms in terms of their industry sector, both at the total level and by UKTI usage. Please note that the sector classification was taken directly from the sample data (originating from Companies House) rather than being collected during the interview. As detailed earlier (Chapter 4.2), certain sectors were excluded from the sample frame because the proportion of firms within that sector that exported was extremely low, and this is why none of the interviewed firms were in either the primary or construction sectors.
Over two-thirds of internationalising firms are in the service sector. UKTI users are significantly more likely to operate in the production sector (36% vs. 27% of non-users), suggesting that production sector firms may have more need (or appetite) for export-related support. This data is extremely consistent with the main PIMS survey of recent UKTI users, which shows that 35% are in the production sector(^4).
(^4) PIMS 24-27 As seen below older and larger internationalising firms are more likely to be in the production sector.
Table 6.4.1 Industry Sector - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|----------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Production | 20% | 29% | 32% | 26% | 34% | 43% | 30% | 29% | | Services | 80% | 71% | 68% | 74% | 66% | 57% | 70% | 71% | 6.5 Ownership
The table below provides an analysis of the ownership of firms in terms of whether they are domestically or foreign owned. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 6.5.1 Company Ownership – By UKTI Usage
The vast majority of internationalising firms are UK-owned, with just under 1 in 10 under foreign ownership (either wholly or partly). There is some evidence that UKTI users are more likely to be wholly or partly foreign owned (15% vs. 7% of non-users).
As seen below, foreign ownership increases dramatically for larger firms. However, there is little difference by company age in this respect.
Table 6.5.1 Company Ownership - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | UK owned | 92% | 95% | 89% | 95% | 89% | 75% | 43% | 92% | | Foreign owned | 6% | 4% | 9% | 4% | 8% | 22% | 51% | 6% | | Joint UK & foreign owned | 2% | 2% | 2% | 21% | 3% | 2% | 6% | 2% | 7 Innovation & Product/Service Development
7.1 Innovative Firms
Survey data on the extent of firms’ engagement in R&D and new product/service development has been used to categorise them as either ‘innovative’ or ‘non-innovative’. The details of the ‘innovative’ definition, and the alternative tighter definition, are shown below.
| Innovative Firms | |------------------| | Firms have been defined as ‘innovative’ if they… | | • Have more than one employee engaged in R&D activity and more than one employee engaged in new product/service development | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years except firms established in the last 2 years |
Firms have been defined as ‘innovative’ under the alternative, tighter definition if they …
| • Have more than one employee engaged in R&D activity and more than one employee engaged in new product or service development and at least some employees are involved in the development of scientific or technical knowledge not commonly available | | • Or, have commissioned external R&D or new product/service development activity in the last year | | • Or, have introduced new products or services in the last 3 years and these are ‘new to the world’ or ‘new to the sector’ |
The table below shows the proportions of firms classified as ‘innovative’ via each of these definitions. Comparative results have also been provided for from the PIMS surveys.
| Table 7.1.1 Innovative Firms – By UKTI Usage | |---------------------------------------------| | **Total** | **UKTI Usage** | **PIMS Data** | | **Base** | **Total** | **UKTI User** | **Non-User** | **UKTI User** | **Non-User** | | **900** | **189** | **711** | **4419** | **300** | | **Innovative** | **75%** | **84%** | **72%** | **82%** | **63%** | | **Innovative (alternative)** | **46%** | **57%** | **43%** | **62%** | **33%** |
Three-quarters of internationalising firms are classified as being innovative by the main definition, although this falls to 46% when the tighter, alternative definition is employed. UKTI users are significantly more likely to be innovative than non-users, irrespective of which definition is used.
Results are broadly consistent with the PIMS evidence, particularly for users, demonstrating that the Internationalisation survey provides a good representation of UKTI users. It is clear that the following analysis that the larger a firm is (in terms of employee numbers), the more likely it is to be innovative. There is also some evidence that firms established for no more than 5 years are least likely to be engaged in innovation activities.
Table 7.1.2 Innovative Firms - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | 882 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Innovative | 65% | 80% | 75% | 72% | 76% | 88% | 100%| 74% | | Innovative (alternative) | 36% | 48% | 48% | 42% | 46% | 69% | 94% | 45% | 7.2 IP Active Firms
Firms were asked to indicate whether or not they had applied for or obtained any patents or trademarks, either in the UK or overseas, for any of their products or services. This data has then been used to create a measure of ‘IP active’ firms, as detailed below.
| ‘IP Active’ Firms | |-------------------| | Firms have been defined as ‘IP Active’ if they… | | • Have applied for or obtained any patents, trademarks or other legal protection for their products or services, either in the UK or overseas |
The table below shows the proportions of firms classified as ‘IP active’, as well as details of the specific type of IP protection held, whether it relates to the UK or overseas markets, and whether firms have any triadic patents5.
Table 7.2.1 IP Protection – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 900 | 189 | 711 | | **IP Active** | | | | | Yes (IP active) | 22% | 38% | 18% | | No | 76% | 62% | 81% | | Don’t know | 1% | 0% | 1% | | **Type of IP Protection** | | | | | Patents | 9% | 20% | 6% | | Trademarks | 15% | 27% | 11% | | Design Rights | 6% | 10% | 4% | | Other legal protection | 5% | 7% | 5% | | Not IP active | 78% | 62% | 82% | | **Geographical Coverage of IP Protection** | | | | | UK only | 6% | 5% | 6% | | Overseas only | 1% | 0% | 1% | | Both | 16% | 32% | 11% | | Not IP active | 78% | 62% | 82% | | Triadic Patents | 2% | 6% | 1% |
Just over a fifth of internationalising firms (22%) have applied for or obtained some form of legal protection for any of their products or services, and are therefore defined as being IP active. The most common form of IP protection is trademarks, followed by patents. The majority of those with IP protection indicate that this covers both the UK and some overseas markets.
______________________________________________________________________
5 A patent held for the same product or innovation in the USA, Europe and Japan. Reflecting the fact that they are more likely to be defined as innovative, UKTI users are also significantly more likely to be IP active (38% vs. 18% of non-users) and are more likely to hold each type of IP protection. They are also more likely to hold triadic patents (6% vs. 1% of non-users).
As seen below, the larger and older a firm is, the more inclined they are to obtain some form of IP protection.
Table 7.2.2 IP Protection - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|----------| | Up to 5 | 6-10 | Over 10 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | IP Active | | | | | | | | | | Yes (IP active) | 17% | 20% | 25% | 19% | 23% | 44% | 70% | 21% | | No | 81% | 79% | 74% | 81% | 76% | 51% | 30% | 78% | | Don't know | 1% | 0% | 1% | 1% | 1% | 5% | 0% | 1% | | Type of IP Protection| | | | | | | | | | Patents | 6% | 6% | 11% | 7% | 11% | 17% | 27% | 8% | | Trademarks | 10% | 16% | 16% | 12% | 18% | 31% | 22% | 14% | | Design Rights | 5% | 5% | 6% | 5% | 5% | 6% | 24% | 5% | | Other IP protection | 6% | 4% | 6% | 5% | 4% | 5% | 27% | 5% | | Not IP active | 83% | 80% | 75% | 81% | 77% | 56% | 30% | 79% | | Geographical Coverage of IP Protection | | | | | | | | | | UK only | 5% | 8% | 5% | 4% | 7% | 9% | 6% | 6% | | Overseas only | 1% | 2% | 1% | 1% | 0% | 0% | 0% | 1% | | Both | 11% | 11% | 19% | 12% | 16% | 35% | 63% | 15% | | Not IP active | 83% | 80% | 75% | 81% | 77% | 56% | 30% | 79% | | Triadic Patents | 3% | 3% | 3% | 2% | 1% | 7% | 6% | 2% | Firms that operate their own overseas sites and those involved in contractual arrangements overseas (such as licensing, franchising or joint ventures) are most likely to hold IP protection.
Table 7.2.3 IP Protection - By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 817 | 355 | 135 | 108 | | IP Active | | | | | | Yes (IP active) | 22% | 32% | 42% | 40% | | No | 77% | 66% | 56% | 57% | | Don’t know | 1% | 1% | 1% | 3% | | Type of IP Protection | | | | | | Patents | 9% | 15% | 21% | 21% | | Trademarks | 15% | 23% | 28% | 30% | | Other IP protection | 5% | 8% | 16% | 13% | | Not IP active | 78% | 68% | 58% | 60% | | Geographical Coverage of IP Protection | | | | | | UK only | 5% | 6% | 7% | 7% | | Overseas only | 1% | 1% | 1% | 2% | | Both | 16% | 25% | 34% | 31% | | Not IP active | 78% | 68% | 58% | 60% | | Triadic Patents | 2% | 4% | 8% | 8% | 7.3 Young, Technology Intensive Firms
Certain firms have been classified as ‘young, technology intensive’, and the details of this definition are shown below.
| ‘Young, Technology Intensive’ Firms | |-------------------------------------| | Firms have been defined as being ‘young, technology intensive’ if they… | | • Have been established for 5 years or less | | • And are classified as being innovative using the alternative (tighter) definition or are classified as IP active |
The table below shows the proportions of firms classified as ‘young, technology intensive’. Analysis has been provided based on all respondents and based just on younger firms.
Table 7.3.1 Young, Technology Intensive Firms – By UKTI Usage
| | All firms | Firms aged up to 5 years | |----------------------|-----------|--------------------------| | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 900 | 189 | 711 | 253 | 26 | 227 | | Young tech intensive | 7% | 5% | 8% | 41% | 63% | 38% | | Up to 5 years old but not young tech intensive | 10% | 3% | 12% | 59% | 38% | 62% | | Over 5 years old | 83% | 93% | 80% | - | - | - |
Overall, 7% of all internationalising firms are classified as being ‘young, technology intensive’, which equates to 41% of those established in the last 5 years. Looking at the analysis based on all firms, it appears as if UKTI users are slightly less likely to be ‘young, technology intensive’. However, this is a function of the older age profile of UKTI users, and when the analysis is based solely on firms aged 5 years or less then it becomes clear that UKTI users are in fact more likely to be ‘young, technology intensive’ (63% vs. 38% of non-users).
Amongst firms established in the last 5 years, there are no statistically significant differences in the likelihood of being a ‘young, technology intensive’ firm by number of employees.
Table 7.3.2 Young, Technology Intensive Firms – By Size
| | All firms | Firms aged up to 5 years | |----------------------|-----------|--------------------------| | | Total | 0-9 emps | 10+ emps | Total | 0-9 emps | 10+ emps | | Base | 900 | 644 | 255 | 253 | 213 | 40 | | Young tech intensive | 7% | 8% | 4% | 41% | 40% | 46% | | Up to 5 years old but not young tech intensive | 10% | 13% | 4% | 59% | 60% | 54% | | Over 5 years old | 83% | 79% | 92% | - | 213 | 40 | 7.4 Innovative High Growth Firms
The survey data on innovation activity and growth objectives has been combined in the analysis to identify ‘innovative high growth firms’, as this is a key group for UKTI to target.
The table below provides analysis of the combined innovative and growth data, analysed at the total level and by UKTI usage.
Table 7.4.1 Innovation & Growth Objectives – By UKTI Usage
| | Total | UKTI Usage | |--------------------------------|-------|------------| | | | UKTI User | Non-User | | Base | 900 | 189 | 711 | | Innovative & expect substantial growth | 22% | 28% | 20% | | Innovative & expect moderate growth | 40% | 47% | 39% | | Innovative & expect no growth or negative growth | 12% | 9% | 13% | | Non-innovative | 25% | 16% | 28% |
Overall 22% of internationalising firms are defined as being ‘innovative high growth’, with this rising slightly to 28% amongst UKTI users. However, it should be noted that 20% of those firms that do not use UKTI are still in this critical category, confirming that there are many ‘innovative high growth’ internationalising firms that UKTI are not yet reaching.
As seen below, older firms that have been established for more than 10 years are significantly less likely to be classified as ‘innovative high growth’. However, the proportion does increase amongst larger companies, indicating that firms that have been established for 10 years or less and have 10 or more employees are most likely to be ‘innovative high growth’.
Table 7.4.2 Innovation & Growth Objectives – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|----------------------------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | 882 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 21% | | Innovative & expect substantial growth | 30% | 28% | 17% | 19% | 26% | 25% | 37% | 21% | | Innovative & expect moderate growth | 30% | 40% | 44% | 37% | 44% | 56% | 57% | 40% | | Innovative & expect no/negative growth | 4% | 13% | 15% | 15% | 6% | 6% | 6% | 13% | | Non-innovative | 35% | 20% | 25% | 28% | 24% | 12% | 0% | 26% | 7.5 Planned Product & Service Development
All firms were asked about their plans for product and service development over the next three years. The chart below shows all respondents’ planned new activities.
Chart 7.5.1 Planned Product & Service Development Activity
- Develop any new products/services: 64%
- Make fundamental changes to existing products/services: 42%
- Make cosmetic changes to existing products/services: 42%
- None of these: 21%
Net: Anticipating any product/service development: 78%
Base: All respondents (Base, Don’t know) (900, 0%)
Over three-quarters (78%) of internationalising firms are planning some form of product or service development over the next 3 years, with most of these expecting to introduce new products or services (often in conjunction with making changes to their existing products/services).
As seen below, UKTI users are significantly more likely to engage in product/service development over the next 3 years, and are also more likely to develop new products/services rather than just modifying existing ones.
Table 7.5.1 Planned Product & Service Development Activity – By UKTI Usage
| | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | **Base** | 900 | 189 | 711 | | Develop new products/services | 64% | 74% | 61% | | Make fundamental changes or modifications to existing products / services | 42% | 47% | 40% | | Make more cosmetic changes or modifications to existing products / services | 42% | 49% | 40% | | None of these | 21% | 13% | 24% | | Don’t know | 0% | 1% | 0% | | **Net: Anticipating any product/service development activity** | 78% | 87% | 76% | As seen below, firms that simply sell direct to overseas customers are least likely to undertake product or service development activity in the next 3 years. There is also evidence that those operating overseas sites and those doing business overseas through licensing, franchising or other contractual arrangements are most likely to develop new products or services (rather than just modifying existing ones).
Table 7.5.2 Planned Product & Service Development Activity - By Mode
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------------------------------------------|----------------|---------------------|--------------------------|---------------| | Base | 817 | 355 | 135 | 108 | | Develop new products/services | 64% | 75% | 84% | 80% | | Make fundamental changes or modifications to existing products / services | 41% | 48% | 57% | 48% | | Make more cosmetic changes or modifications to existing products / services | 42% | 55% | 52% | 50% | | None of these | 21% | 13% | 7% | 9% | | Don't know | 0% | 0% | 1% | 2% | | Net: Anticipating any product/service dev’t activity | 78% | 87% | 92% | 89% |
Small firms with less than 10 employees are least likely to be planning new developments or modifications to their products or services, but there is no difference in this respect by age of firm.
Table 7.5.3 Planned Product & Service Development Activity – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|---------|------|---------|-----|-------|--------|------|----------| | Base | | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Develop new products/services | | 63% | 65% | 64% | 60% | 71% | 77% | 88% | 64% | | Make fundamental changes or modifications to existing products / services | | 43% | 45% | 40% | 39% | 43% | 55% | 61% | 41% | | Make more cosmetic changes or modifications to existing products / services | | 42% | 47% | 41% | 41% | 43% | 49% | 55% | 42% | | None of these | | 21% | 20% | 22% | 24% | 18% | 12% | 0% | 22% | | Don't know | | 0% | 0% | 1% | 0% | 0% | 5% | 0% | 0% | | Net: Anticipating any product/service dev’t activity | | 78% | 80% | 78% | 76% | 82% | 83% | 100% | 78% | As expected, innovative and IP active firms are significantly more likely to conduct product or service development over the next 3 years.
Table 7.5.4 Planned Product & Service Development Activity – By Innovation
| Innovative Activity | Innovative | IP Active | |---------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 402 | 663 | 237 | 193 | 698 | | Develop new products/services | 81% | 75% | 32% | 84% | 58% | | Make fundamental changes or modifications to existing products / services | 54% | 48% | 24% | 50% | 39% | | Make more cosmetic changes or modifications to existing products / services | 51% | 47% | 28% | 60% | 38% | | None of these | 9% | 13% | 46% | 6% | 26% | | Don’t know | 0% | 0% | 1% | 1% | 0% | | Net: Anticipating any product/service dev’t activity | 91% | 87% | 52% | 94% | 74% |
As detailed below, there are strong links between growth and innovation, with the likelihood of undertaking product or service development activity increasing amongst firms with more ambitious growth objectives. This suggests that firms are innovating to help achieve their growth aspirations, both through creating new products/services and by tailoring existing ones to meet market requirements.
Table 7.5.5 Planned Product & Service Development Activity – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base | 123 | 476 | 272 | 214 | 449 | 237 | | Develop new products/services | 46% | 63% | 81% | 85% | 71% | 32% | | Make fundamental changes or modifications to existing products / services | 30% | 40% | 54% | 56% | 44% | 24% | | Make more cosmetic changes or modifications to existing products / services | 28% | 41% | 57% | 60% | 42% | 28% | | None of these | 35% | 21% | 9% | 6% | 16% | 46% | | Don’t know | 0% | 0% | 1% | 0% | 0% | 1% | | Net: Anticipating any product/service dev’t activity | 65% | 78% | 90% | 94% | 84% | 52% | Analysis has also been provided by whether or not younger firms were ‘born global’ (i.e. have been conducting business overseas since they were established) or are defined as being ‘young, technology intensive’. The definition of ‘young, technology intensive’ firms has already been set out in Chapter 7.3, and for full details of the ‘born global’ classification please refer to Chapter 8.9.
Firms that are defined as ‘born global’ by the alternative, tighter definition are particularly likely to develop new products/services over the next 3 years. The same is true of ‘young technology intensive’ firms, with this group also more likely to plan on modifying their existing products/services.
Table 7.5.6 Planned Product & Service Development Activity – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base | 253 | 133 | 46 | 103 | 647 | | Develop new products/services | 63% | 62% | 78% | 74% | 64% | | Make fundamental changes or modifications to existing products / services | 43% | 40% | 37% | 52% | 41% | | Make more cosmetic changes or modifications to existing products / services | 42% | 44% | 41% | 50% | 43% | | None of these | 21% | 24% | 15% | 10% | 22% | | Don’t know | 0% | 1% | 0% | 0% | 0% | | Net: Anticipating any product/service dev’t activity | 78% | 75% | 85% | 90% | 78% |
As illustrated below, there is little difference in the product/service development plans of production and service sector firms.
Table 7.5.7 Planned Product & Service Development Activity – By Sector
| | Sector | |----------------------|--------| | | Production | Services | | Base | 249 | 651 | | Develop new products/services | 68% | 63% | | Make fundamental changes or modifications to existing products / services | 42% | 41% | | Make more cosmetic changes or modifications to existing products / services | 42% | 43% | | None of these | 21% | 22% | | Don’t know | 0% | 1% | | Net: Anticipating any product/service development activity | 79% | 78% | 7.6 Geographical Focus of Product & Service Development
As seen in the previous section, 78% of internationalising firms were expecting to undertake some type of product or service development activity over the next 3 years. These firms were asked whether this would be aimed at UK customers or overseas customers. Please note that all analysis in this section is based just on those planning product/service development activity in the next 3 years.
Chart 7.6.1 Geographical Focus of Product/Service Development Activity
As detailed above, the majority of firms that are planning product/service development activity over the next 3 years expect that this will be aimed at both UK and overseas customers (77%).
However, non-users are more likely to focus on the UK market (95% vs. 88% of users) and correspondingly less likely to target product/service development at overseas markets (79% vs. 91% of users).
Table 7.6.1 Geographical Focus of Product/Service Development – By UKTI Usage
| | Total | UKTI Usage | |--------------------------|-------|------------| | | | UKTI User | Non-User | | Base: All anticipating | 705 | 162 | 543 | | product/service dev't | | | | | UK Customers | 16% | 7% | 19% | | Overseas Customers | 5% | 10% | 3% | | Both | 77% | 81% | 76% | | Don't know | 2% | 2% | 2% | | Net: UK customers | 93% | 88% | 95% | | Net: Overseas customers | 82% | 91% | 79% | As seen below, firms using more advanced internationalisation modes are more likely to conduct product/service development for overseas customers than those that simply sell direct, with this particularly true of those operating overseas sites (97%). However, it should be noted that the vast majority of these firms are also planning innovation activity aimed at UK customers.
Table 7.6.2 Geographical Focus of Product/Service Development - By Mode
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base: All anticipating product/service dev’t | 641 | 307 | 125 | 97 | | UK Customers | 15% | 10% | 7% | 3% | | Overseas Customers | 5% | 8% | 7% | 13% | | Both | 78% | 81% | 84% | 84% | | Don’t know | 2% | 1% | 2% | 0% | | Net: UK customers | 93% | 91% | 91% | 87% | | Net: Overseas customers | 83% | 89% | 91% | 97% |
There is some evidence that the larger a firm is, the more likely they are to carry out product/service development activity targeted at overseas customers. However, there are no significant differences in this respect by age of firm.
Table 7.6.3 Geographical Focus of Product/Service Development – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|----------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base: All anticipating product/service dev’t | 198 | 203 | 304 | 489 | 160 | 39 | 17 | 688 | | UK Customers | 12% | 18% | 16% | 17% | 13% | 12% | 6% | 16% | | Overseas Customers | 4% | 1% | 7% | 4% | 9% | 0% | 6% | 5% | | Both | 81% | 79% | 76% | 75% | 78% | 88% | 88% | 77% | | Don’t know | 3% | 2% | 2% | 3% | 0% | 0% | 0% | 2% | | Net: UK customers | 93% | 97% | 91% | 93% | 91% | 100% | 94% | 93% | | Net: Overseas customers | 85% | 80% | 83% | 80% | 87% | 88% | 94% | 82% | Amongst those firms planning product/service development activity over the next 3 years, innovative and IP active firms are more likely to be doing this for overseas customers. Similar proportions of firms are expecting to carry out product/service development aimed at UK customers, irrespective of their innovation levels (although as seen earlier, innovative firms were much more likely to be planning any product/service development at all).
Table 7.6.4 Geographical Focus of Product/Service Development – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base: All anticipating product/service dev't | 365 | 573 | 132 | 181 | 517 | | UK Customers | 10% | 15% | 21% | 9% | 18% | | Overseas Customers | 5% | 5% | 6% | 6% | 5% | | Both | 82% | 78% | 72% | 82% | 75% | | Don't know | 2% | 2% | 1% | 3% | 2% | | Net: UK customers | 92% | 93% | 93% | 91% | 94% | | Net: Overseas customers | 87% | 83% | 78% | 88% | 80% |
As detailed below, there is little difference in the geographical focus of product/service development activity by the extent of firms’ growth ambitions.
Table 7.6.5 Geographical Focus of Product/Service Development – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------------|-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base: All anticipating product/service dev't | 78 | 368 | 246 | 201 | 372 | 132 | | UK Customers | 19% | 16% | 14% | 14% | 15% | 21% | | Overseas Customers | 5% | 5% | 6% | 4% | 5% | 6% | | Both | 75% | 77% | 77% | 79% | 78% | 72% | | Don't know | 1% | 2% | 2% | 3% | 2% | 1% | | Net: UK customers | 94% | 93% | 91% | 93% | 93% | 93% | | Net: Overseas customers | 80% | 82% | 83% | 83% | 83% | 78% | Firms that are defined as ‘born global’ by the alternative, tighter definition are most likely to be targeting their innovation activity at overseas customers.
Table 7.6.6 Geographical Focus of Product/Service Development – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |----------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | | Base: All anticipating product/service dev’t | 198 | 100 | 39 | 93 | 507 | | UK Customers | 12% | 9% | 5% | 6% | 16% | | Overseas Customers | 4% | 6% | 15% | 1% | 5% | | Both | 81% | 81% | 79% | 88% | 77% | | Don’t know | 3% | 4% | 0% | 4% | 2% | | Net: UK customers | 93% | 90% | 85% | 95% | 93% | | Net: Overseas customers | 85% | 87% | 95% | 89% | 82% |
As detailed below, there is little difference in this respect by sector.
Table 7.6.7 Geographical Focus of Product/Service Development – By Sector
| | Sector | |----------------------|--------| | | Production | Services | | Base: All anticipating product/service dev’t | 198 | 507 | | UK Customers | 15% | 16% | | Overseas Customers | 7% | 4% | | Both | 76% | 78% | | Don’t know | 2% | 2% | | Net: UK customers | 91% | 94% | | Net: Overseas customers | 83% | 82% | 7.7 Key Markets Driving Innovation
Those firms that expected to undertake product or service development activity over the next 3 years were asked if there were any specific countries which were more important than others in terms of being a stimulus for their innovation and product or service development. Please note that individual markets mentioned by more than 3% of firms have been shown in the analysis below.
Table 7.7.1 Key Markets Driving Innovation - By UKTI Usage
| Base: All anticipating product/service dev't | Total | UKTI Usage | |--------------------------------------------|-------|------------| | | | User | Non-User | | Yes | 705 | 162 | 543 | | - USA | 18% | 22% | 16% | | - Germany | 11% | 16% | 10% | | - UK | 11% | 12% | 11% | | - China | 9% | 14% | 8% | | - France | 8% | 6% | 8% | | - India | 5% | 6% | 4% | | - Spain | 4% | 3% | 5% | | - Australia | 4% | 8% | 3% | | - Netherlands | 4% | 6% | 3% | | - UAE | 4% | 7% | 3% | | No | 46% | 32% | 51% | | Don’t know | 2% | 2% | 2% |
Just over half of firms (52%) felt that certain markets were more critical than others in terms of being a stimulus for their innovation activity, with this more likely to be the case amongst UKTI users (66%).
The most widely identified market in this respect was the USA (18%), with Germany and China highlighted by around 1 in 10 firms. It is also interesting to note that although this survey was amongst internationalising firms, a significant proportion of these (11%) indicated that the UK was a key driver of their innovation activity. The table below provides similar analysis, but by firms’ growth objectives over the next 5 years.
Table 7.7.2 Key Markets Driving Innovation - By Growth Objectives
| Growth Objectives | Stay the same size | Moderate growth | Substantial growth | |-------------------|--------------------|-----------------|--------------------| | Base: All anticipating product/service dev't | 78 | 368 | 246 | | Yes | 42% | 49% | 63% | | - USA | 19% | 15% | 22% | | - Germany | 7% | 11% | 15% | | - UK | 5% | 12% | 13% | | - China | 6% | 9% | 10% | | - France | 6% | 5% | 13% | | - India | 4% | 5% | 4% | | - Spain | 2% | 4% | 6% | | - Australia | 2% | 4% | 7% | | - Netherlands | 5% | 3% | 5% | | - UAE | 0% | 3% | 7% | | No | 53% | 50% | 36% | | Don't know | 5% | 2% | 1% | 8. Overseas Activity & Experience
8.1 Modes Used
Firms were asked which of a list of overseas business activities they had been involved in over the last five years. Those not involved in any of these overseas activities were asked whether they were seriously considering starting to conduct overseas business via any of these routes in the next year, and only those responding positively to this question were invited to take part in the research. This group were asked to indicate which types of activities they were planning to become involved in.
The chart below shows usage (and plans for those not yet exporting) of these overseas business activities.
Chart 8.1.1 Modes of Internationalisation Used in Last 5 Years (Or planning in next year for those not yet exporting)
- Selling direct: 91%
- Selling through agents or distributors: 40%
- Licensing, franchising or contractual arrangements: 15%
- Operating overseas site: 12%
Base: All respondents (Base) – (900)
The vast majority of internationalising firms sell direct to businesses or individuals overseas, and two-fifths use agents or distributors. A significant minority also sell overseas through contractual arrangements or operate their own overseas site(s).
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6 Please note that 68 of the 900 firms interviewed (8%) were not yet doing business overseas but were planning to do so in the next year. The table below shows separate analysis of internationalisation modes for firms that are already engaged in overseas business and those that are not yet exporting but planning to start in the next year.
Table 8.1.1 Modes of Internationalisation Used – By Export Status (Or planning in next year for those not yet exporting)
| | Total | Exporting | |----------------------|-------|-----------| | | | Yes | No (planned in next year) | | Base | 900 | 832 | 68 | | Selling direct | 91% | 92% | 83% | | Agents/distributors | 40% | 39% | 58% | | Contractual arrangements | 15% | 14% | 34% | | Overseas site | 12% | 12% | 19% |
As seen above, firms that are not yet exporting but planning to embark on overseas business in the next year are less likely to be focussing on simply selling direct and more inclined to be considering less ‘standard’ modes such as contractual arrangements or setting up their own overseas site. 8.2 Number & Type of Overseas Sites
As seen previously, 12% of firms operated their own overseas sites (or were planning to do so in the next year). These firms were asked to provide details of the main purpose of the site(s).
Chart 8.2.1 Main Purpose of Overseas Sites
| Purpose | Percentage | |----------------------------------------------|------------| | Manufacturing or assembly | 27% | | Call centre | 10% | | Distribution or sales office | 60% | | Service delivery | 55% | | Research, product or process development | 30% |
Base: All with or considering overseas sites (Base, Don't know) – (108, 2%)
Most overseas sites are either distribution/sales offices or service delivery sites. Approaching a third are R&D facilities, and a slightly lower proportion are manufacturing or assembly sites.
The table below provides analysis by age of firm, and indicates that there are no consistent differences in this respect (particularly given the low bases sizes).
Table 8.2.1 Main Purpose of Overseas Sites – By Age
| Purpose | Age (Years Trading) | |----------------------------------------------|---------------------| | | Up to 5 | 6-10 | Over 10 | | Base: All with or considering overseas site(s) | 31 | 26 | 51 | | Manufacturing or assembly | 26% | 12% | 31% | | Call centre | 13% | 4% | 12% | | Distribution or sales office | 61% | 50% | 63% | | Service delivery | 42% | 54% | 59% | | Research, product or process development | 26% | 31% | 31% | | Don’t know | 0% | 4% | 2% | Firms with overseas sites were also asked to indicate how many sites they had, with the following results. Please note that those firms that were not yet exporting have been excluded from the analysis below.
Chart 8.2.2 Number of Overseas Sites
| Number of Sites | Percentage | |-----------------|------------| | One | 39% | | 2-5 | 34% | | 6-10 | 11% | | 11-20 | 4% | | 21-50 | 3% | | Over 50 | 5% |
Base: All with overseas sites (Base, Don’t know) – (94, 3%)
Around two-thirds of those firms with overseas sites have 2 or more of them, and a small minority (8%) operate in excess of 20 sites, suggesting that they are large multi-nationals.
As detailed below, older firms established for more than 10 years tend to have multiple overseas sites, with 66% having more than one.
Table 8.2.2 Number of Overseas Sites – By Age
| Age (Years Trading) | Up to 5 | 6-10 | Over 10 | |---------------------|---------|------|---------| | Base: All with overseas site(s) | 23 | 21 | 50 | | One | 57% | 62% | 30% | | 2-5 | 26% | 19% | 40% | | 6-10 | 9% | 10% | 12% | | 11-20 | 0% | 10% | 4% | | 21-50 | 4% | 0% | 4% | | Over 50 | 4% | 0% | 6% | | Don’t know | 0% | 0% | 4% | Those firms that specifically operated overseas manufacturing sites, call centres or R&D facilities were asked a series of questions to identify the types and locations of the customers they sold to. This was partly to establish whether any of these firms were solely using their overseas sites to produce goods for their UK business or other firms in their group (rather than using them to sell goods or services to overseas customers).
Table 8.2.3 Customer Types of Overseas Manufacturing, Call Centre & R&D Sites
| Base: All with a manufacturing, call centre or R&D site | Total | |--------------------------------------------------------|-------| | Internal customers (i.e. sites / companies affiliated to the firm) | 52% | | External customers in the UK | 52% | | External customers overseas | 79% | | - In the same market as the site | 71% | | - In other overseas markets | 68% | | Don’t know | 8% | | No external overseas sales from overseas site (i.e. only sell to internal customers or external UK customers) | 13% |
Half of these sites serve internal customers within their wider company and a similar proportion provide goods or services to external customers in the UK. However, the majority (79%) also sell to external overseas customers, and can therefore be seen as being part of the firm’s export operations.
A significant minority of these sites (13%) did not make any overseas sales to external customers, but all of the firms involved were also involved in other internationalisation modes (e.g. selling direct) and can therefore be classified as ‘true’ exporters. 8.3 Direct Web Sales
To understand the impact of the web on UK export activity, firms were asked whether they made any overseas sales directly through their websites and, if so, whether they only sold overseas through their website.
As seen above, 29% of internationalising firms make at least some sales through their websites. However, only a small minority (5%) are classified as ‘web only exporters’ on the basis that they do not make sales through any other channels or modes and solely rely on their online operation.
Interestingly, UKTI users are less likely to make any web sales when doing business overseas (24% vs. 31% of non-users), and only 1% of them are ‘web only exporters’. As seen below, the proportion of firms selling overseas through their websites is broadly similar, irrespective of how long they have been doing business overseas. However, less experienced exporters are more likely to be ‘web only exporters’.
Table 8.3.1 Direct Web Sales – By Export Experience
| Overseas Experience | Less than 2 years (exc. not yet exporting) | 2-10 years | More than 10 years | |---------------------|--------------------------------------------|------------|-------------------| | Base | 132 | 448 | 248 | | Any web sales | 30% | 35% | 27% | | - Only sell through website (web only exporters) | 11% | 7% | 2% | | - Sell through website & other channels/modes | 19% | 29% | 25% | | No web sales | 70% | 64% | 73% | | Don’t know | 0% | 0% | 0% |
The table below provides details of the sector profile of ‘web only’ exporters, in comparison to internationalising firms as a whole. As might be expected, firms that do business overseas solely through their website are significantly more likely to be operating in the wholesale and retail sector.
Table 8.3.2 Web Only Exporters – Sector Profile
| Sector Profile | Web only exporters | Not web only | |----------------|--------------------|--------------| | Base | 50 | 850 | | D – Manufacturing | 31% | 29% | | G – Wholesale & retail trade | 37% | 21% | | I – Transport, storage & communication | 8% | 7% | | J – Financial intermediation | 5% | 2% | | K – Real estate, renting & business activities | 17% | 35% | | O – Other community, social & personal service activities | 1% | 6% | 8.4 Importing
Firms were also asked whether they imported any goods or services from overseas, and the chart below summarises these results.
Chart 8.4.1 Proportion Importing Goods or Services in Last 5 Years – By UKTI Usage
Over half of firms have imported in the last 5 years, and there is no statistically significant difference between users and non-users of UKTI in this respect. Please note that firms were not eligible to participate in the research purely on the basis of import activity, and they had to also be involved in one of the outward internationalisation modes to qualify for interview. 8.5 Internationalisation Modes by Firm Profile
This section provides more detailed analysis of the internationalisation modes used by firm characteristic (such as UKTI usage, size, innovation, etc). Please note that those firms not yet exporting are included in this analysis, but the data relates to the modes they are planning to start using in the next year.
As seen below, whilst users and non-users are equally likely to sell direct to customers overseas, the former are more inclined to also use agents or distributors, use contractual arrangements and operate their own overseas sites.
Table 8.5.1 Modes of Internationalisation – By UKTI Usage
| | Total | UKTI Usage | |----------------------|-------|------------| | | Base | UKTI User | Non-User | | Selling direct | 91% | 93% | 91% | | - 'Web only' exporters | 5% | 1% | 6% | | Agents/distributors | 40% | 58% | 35% | | Contractual arrangements | 15% | 23% | 13% | | Overseas site | 12% | 21% | 10% | | - Manufacturing/assembly | 3% | 7% | 2% | | - Call centre | 1% | 3% | 1% | | - Sales/service delivery | 11% | 18% | 8% | | - R&D | 4% | 7% | 3% | | Importing | 57% | 61% | 56% |
Small firms with less than 10 employees are generally less likely to use each of the different modes, and are also less likely to import goods into the UK. However, they are more inclined to only sell overseas through their website (i.e. ‘web only’ exporters). There are less consistent differences by age of firm, although recently established businesses are less likely to use agents/distributors and to import.
Table 8.5.2 Modes of Internationalisation – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | All SMEs | |----------------------|---------------------|-----------------------------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | 882 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Selling direct | 89% | 91% | 92% | 89% | 95% | 100% | 85% | 91% | | - 'Web only' exporters | 7% | 6% | 4% | 7% | 1% | 0% | 0% | 5% | | Agents/distributors | 34% | 41% | 42% | 35% | 49% | 51% | 73% | 40% | | Contractual arrangements | 14% | 16% | 15% | 13% | 14% | 20% | 57% | 14% | | Overseas site | 12% | 10% | 13% | 8% | 16% | 34% | 39% | 12% | | - Manufacturing/assembly | 3% | 1% | 4% | 1% | 5% | 11% | 15% | 3% | | - Call centre | 2% | 0% | 2% | 0% | 2% | 7% | 12% | 1% | | - Sales/service delivery | 10% | 8% | 11% | 7% | 14% | 29% | 39% | 10% | | - R&D | 3% | 3% | 4% | 2% | 4% | 16% | 15% | 3% | | Importing | 47% | 59% | 59% | 53% | 62% | 74% | 70% | 57% | It might be expected that less experienced exporters would be less likely to use the more ‘advanced’ internationalisation modes. However, as seen in the table below, the proportion selling through contractual arrangements (e.g. licensing, franchising, etc) and operating overseas sites is in fact very similar, irrespective of the length of time firms have been doing business overseas.
The results by number of markets are more in line with what might be expected, with use of agents and distributors, contractual arrangements and overseas sites increasing as firms operate in more markets. The exception to this is those firms operating in no overseas markets (i.e. not yet exporting), but it should be noted that this group were asked about the modes they planned to start using in the next year.
Table 8.5.3 Modes of Internationalisation Used – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | Less than 2 years | 2-10 years | Over 10 years | 0 | 1-5 | 6-10 | More than 10 | | Base | 200 | 448 | 248 | 68 | 438 | 178 | 211 | | Selling direct | 87% | 91% | 93% | 83% | 91% | 90% | 94% | | - ‘Web only’ exporters | 7% | 7% | 2% | 0% | 6% | 5% | 6% | | Agents/distributors | 41% | 39% | 42% | 58% | 26% | 45% | 60% | | Contractual arrangements | 17% | 14% | 15% | 34% | 9% | 15% | 21% | | Overseas site | 13% | 9% | 15% | 19% | 7% | 11% | 21% | | - Manufacturing/assembly | 4% | 2% | 4% | 6% | 1% | 4% | 6% | | - Call centre | 1% | 1% | 2% | 1% | 0% | 0% | 4% | | - Sales/service delivery | 11% | 7% | 14% | 18% | 6% | 9% | 18% | | - R&D | 3% | 2% | 6% | 4% | 1% | 4% | 8% | | Importing | 42% | 57% | 63% | 37% | 50% | 65% | 68% |
It is clear from the analysis below that innovative and IP active firms are more likely to be engaged in the less common internationalisation modes (i.e. agents, contractual arrangements and overseas sites) and are more likely to import.
Table 8.5.4 Modes of Internationalisation – By Innovation
| | Innovative | IP Active | |-----------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 402 | 663 | 237 | 193 | 698 | | Selling direct | 91% | 91% | 92% | 91% | 91% | | - ‘Web only’ exporters | 5% | 5% | 5% | 4% | 6% | | Agents/distributors | 47% | 44% | 29% | 58% | 35% | | Contractual arrangements | 23% | 17% | 8% | 28% | 11% | | Overseas site | 18% | 14% | 8% | 22% | 9% | | - Manufacturing/assembly | 5% | 4% | 2% | 8% | 1% | | - Call centre | 2% | 2% | 0% | 4% | 0% | | - Sales/service delivery | 15% | 12% | 6% | 19% | 8% | | - R&D | 5% | 4% | 3% | 9% | 2% | | Importing | 64% | 61% | 45% | 67% | 54% | The analysis below demonstrates that firms that plan to grow over the next 5 years are significantly more likely to use modes other than just selling direct, and this is particularly true of those expecting ‘substantial’ growth.
Table 8.5.5 Modes of Internationalisation – By Innovation & Growth
| Growth Objectives | Innovation & Growth | Non innovative | |-------------------|---------------------|---------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | | Base | 123 | 476 | 272 | 214 | 449 | 237 | | Selling direct | 92% | 90% | 93% | 93% | 90% | 92% | | - ‘Web only’ exporters | 7% | 5% | 5% | 6% | 5% | 5% | | Agents/distributors | 29% | 39% | 49% | 50% | 42% | 29% | | Contractual arrangements | 8% | 15% | 20% | 22% | 16% | 8% | | Overseas site | 5% | 11% | 18% | 18% | 12% | 8% | | - Manufacturing/assembly | 1% | 3% | 5% | 5% | 3% | 2% | | - Call centre | 0% | 1% | 3% | 3% | 1% | 0% | | - Sales/service delivery | 4% | 10% | 15% | 16% | 11% | 6% | | - R&D | 2% | 3% | 5% | 6% | 3% | 3% | | Importing | 48% | 59% | 58% | 59% | 62% | 45% |
As seen below, firms that are classified as ‘born global’ under the alternative, tighter definition are more likely to use agents/distributers and operate their own overseas sites, but appear less likely to be ‘web only exporters’. ‘Young, technology intensive’ firms are more likely than other young firms to do business overseas through contractual arrangements.
Table 8.5.6 Modes of Internationalisation – By Born Global & Young, Tech Intensive
| | Up to 5 years old | Over 5 years old | |-------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | | Base | 253 | 133 | 46 | 103 | 647 | | Selling direct | 89% | 88% | 87% | 86% | 92% | | - ‘Web only’ exporters | 7% | 5% | 2% | 9% | 5% | | Agents/distributors | 34% | 40% | 59% | 43% | 42% | | Contractual arrangements | 14% | 14% | 17% | 21% | 15% | | Overseas site | 12% | 13% | 22% | 14% | 12% | | - Manufacturing/assembly | 3% | 5% | 13% | 5% | 3% | | - Call centre | 2% | 2% | 4% | 3% | 1% | | - Sales/service delivery | 10% | 11% | 17% | 13% | 11% | | - R&D | 3% | 5% | 9% | 16% | 4% | | Importing | 47% | 57% | 52% | 49% | 59% | 8.6 Number of Modes Used
The chart below provides an analysis of the number of modes firms have been involved in the last five years (or are planning to do in the next year in the case of those firms that are not yet exporting). Please note that this analysis is based just on the ‘outward’ internationalisation modes and does not include importing.
Chart 8.6.1 Number of Modes Used in Last 5 Years – By UKTI Usage (Or planning in next year for those not yet exporting)
Over half of all internationalising firms (58%) are only using a single mode when doing business overseas, although 14% are involved in 3 or 4 different modes.
UKTI users are considerably more likely to employ multiple approaches when doing business overseas, with 62% using more than one mode compared to only 35% of non-users. As seen below, this picture varies considerably across modes. In particular, those involved in some form of contractual arrangement or operating their own overseas site are much more likely to be involved in 3 or 4 different modes, suggesting that firms tend to adopt these approaches later in their international development.
Table 8.6.1 Number of Modes – By Modes Used
| Modes Used | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |------------|----------------|---------------------|--------------------------|---------------| | Base | 817 | 355 | 135 | 108 | | One | 56% | 12% | 11% | 5% | | Two | 29% | 57% | 23% | 27% | | Three | 10% | 22% | 40% | 36% | | Four | 4% | 9% | 26% | 31% |
There is relatively little difference in this respect by age of firm, although younger businesses established in the last 5 years are slightly more likely to only sell overseas through a single mode (typically selling direct).
Table 8.6.2 Number of Modes – By Age
| Age (Years Trading) | Up to 5 | Up to 5 | Up to 5 | |---------------------|---------|---------|---------| | Base | 253 | 255 | 392 | | One | 63% | 57% | 58% | | Two | 28% | 29% | 28% | | Three | 6% | 11% | 10% | | Four | 3% | 2% | 5% | 8.7 Export Experience
The chart below shows the number of years that firms have been doing business overseas. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 8.7.1 Number of Year Doing Business Overseas - By UKTI Usage
UKTI users tend to be more experienced overseas, with 51% having been exporting for over 10 years, compared to just 34% of non-user firms. As detailed below, the export experience profile of the Internationalisation Survey sample has remained very consistent over time.
Table 8.7.1 Number of Years Doing Business Overseas – Over Time
| | Total 2010 | Total 2011 | Total 2012 | UKTI Users 2010 | UKTI Users 2011 | UKTI Users 2012 | Non-Users 2010 | Non-Users 2011 | Non-Users 2012 | |------------------|------------|------------|------------|-----------------|-----------------|-----------------|----------------|----------------|----------------| | Base | 902 | 903 | 900 | 235 | 248 | 189 | 667 | 655 | 711 | | Not yet exporting| 4% | 6% | 6% | 3% | 2% | 5% | 4% | 7% | 6% | | Less than 2 years| 12% | 12% | 10% | 8% | 10% | 6% | 13% | 12% | 12% | | 2-5 years | 20% | 17% | 22% | 16% | 13% | 15% | 21% | 19% | 23% | | 6-10 years | 25% | 23% | 24% | 30% | 27% | 22% | 24% | 22% | 25% | | 11-20 years | 20% | 22% | 22% | 20% | 22% | 26% | 21% | 22% | 20% | | More than 20 years| 17% | 20% | 16% | 22% | 25% | 25% | 16% | 18% | 14% | | Don’t know/refused| 2% | 0% | 0% | 1% | 1% | 1% | 2% | 0% | 0% | The following table below shows the 2012 survey data on the length of time firms have been involved in overseas business activity analysed by both size (measured by number of employees) and age.
Table 8.7.2 Number of Years Doing Business Overseas - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Not yet exporting | 15% | 8% | 3% | 7% | 4% | 0% | 0% | 6% | | Less than 2 years | 40% | 7% | 3% | 12% | 6% | 9% | 0% | 11% | | 2-5 years | 44% | 25% | 14% | 23% | 18% | 19% | 27% | 21% | | 6-10 years | 0% | 60% | 17% | 26% | 25% | 3% | 18% | 24% | | 11-20 years | 0% | 0% | 36% | 21% | 24% | 24% | 6% | 22% | | More than 20 years | 0% | 0% | 27% | 11% | 21% | 44% | 49% | 16% | | Don't know/refused | 0% | 0% | 1% | 0% | 2% | 0% | 0% | 0% |
Aside from the obvious fact that older firms have been doing business overseas for longer, the above analysis suggests when firms do internationalise they often do so reasonably early on. 44% of young firms (established for 5 years or less) have been exporting for 2-5 years, 60% of firms aged 6-10 years have been exporting for 6-10 years, and 63% of firms aged over 10 years have been exporting for more than 10 years.
Similarly, there is a link between size and the length of time firms have been involved in overseas business activity, with smaller firms tending to have been involved in overseas business activity for a shorter period than the larger firms. 8.8 Intermittent Exporters
As an additional indicator of export activity, firms were also asked whether they had made overseas sales every year since they started exporting or whether there had been some years with no overseas sales. Please note that this question was only asked to firms that had been doing business overseas for at least 2 years.
Chart 8.8.1 Whether Made Overseas Sales Every Year Since Starting Exporting – By UKTI Usage
A quarter of internationalising firms are ‘intermittent’ exporters, in the sense that they have not consistently made overseas sales since they started exporting. Whilst this is less likely to be the case amongst users of UKTI, a significant minority have still dipped in and out of overseas business. As seen below, the smaller the firm the more likely they are to be an intermittent exporter. Interestingly, the same is true of older firms although this may be down to the fact that they tend to have been exporting for longer and hence have had a greater chance of experiencing a year without any overseas sales.
Table 8.8.1 Whether Made Overseas Sales Every Year Since Starting Exporting - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 6-10 | Over 10 | | Base: All exporting 2 years or more | 113 | 217 | 370 | | Some years with no overseas sales | 20% | 22% | 27% | | Overseas sales every year | 80% | 77% | 72% | | Don't know | 0% | 0% | 1% |
Unsurprisingly, firms that are active in fewer markets are more likely to have experienced interruptions to their overseas business. It might be expected that ‘web only’ exporters are more likely to be intermittent exporters due to the less engaged nature of their overseas business, but there is no evidence that this is the case.
Table 8.8.2 Whether Made Overseas Sales Every Year Since Starting Exporting - By Number of Markets & Web Only Exporters
| Number of Markets | 'Web only' exporters | |-------------------|-----------------------| | Base: All exporting 2 years or more | Up to 5 | 6-10 | Over 10 | Yes | No | | Some years with no overseas sales | 39% | 18% | 9% | 27% | 25% | | Overseas sales every year | 60% | 81% | 91% | 73% | 74% | | Don't know | 0% | 1% | 0% | 0% | 1% | The table below compares the profile of intermittent exporters with that of internationalising firms as a whole, ‘continual’ exporters (i.e. firms that have had overseas sales every year since they started exporting) and firms that have yet to start doing business overseas. Please note that the data on ‘continual’ exporters excludes firms that have been doing business overseas for less than 2 years to allow accurate comparisons to be made with intermittent exporters.
Table 8.8.3 Intermittent Exporters – Profile Comparison
| Profile | Total (all firms) | Intermittent exporters | Continual exporters | Not yet exporting | |--------------------------------|-------------------|------------------------|---------------------|-------------------| | | | | Exports as % of turnover | | | | | | 1-10% | 11-50% | 51%+ | | | **Base** | 900 | 171 | 526 | 224 | 160 | 125 | 68 | | **Age** | | | | | | 0-5 years | 17% | 7% | 10% | 11% | 9% | 9% | 43% | | 6-10 years | 23% | 21% | 25% | 24% | 26% | 25% | 31% | | Over 10 years | 60% | 72% | 66% | 65% | 65% | 66% | 26% | | **Size** | | | | | | 0-9 employees | 68% | 78% | 61% | 64% | 61% | 58% | 84% | | 10-249 employees | 30% | 21% | 35% | 32% | 36% | 38% | 16% | | 250+ employees | 3% | 1% | 4% | 3% | 3% | 4% | 0% | | **Sector** | | | | | | Production | 29% | 26% | 33% | 37% | 32% | 27% | 12% | | Services | 71% | 74% | 67% | 63% | 68% | 73% | 88% | | **Innovation classifications** | | | | | | Innovative | 75% | 72% | 78% | 79% | 81% | 72% | 74% | | Innovative (alt) | 46% | 40% | 50% | 46% | 54% | 53% | 40% | | IP active | 22% | 16% | 26% | 19% | 31% | 32% | 18% | | **Years exporting** | | | | | | 0-2 years | 16% | - | - | - | - | - | 100% | | 2-10 years | 46% | 59% | 52% | 61% | 48% | 45% | - | | Over 10 years | 38% | 40% | 47% | 38% | 51% | 55% | - | | **Overseas sales as % of total turnover** | | | | | | 0-10% | 53% | 63% | 43% | 100% | - | - | 100% | | 11-25% | 15% | 11% | 18% | - | 59% | - | - | | 26-50% | 10% | 7% | 12% | - | 41% | - | - | | Over 50% | 18% | 10% | 24% | - | - | 100% | - | | **Past growth (last 5 years)** | | | | | | Grown substantially | 20% | 11% | 23% | 20% | 24% | 31% | 16% | | Grown moderately | 43% | 42% | 43% | 43% | 45% | 39% | 52% | | Same/smaller | 34% | 47% | 34% | 37% | 31% | 30% | 18% | | Established < 1 yr | 2% | - | - | - | - | - | 12% | | **Future growth (next 5 years)** | | | | | | Grow substantially | 27% | 19% | 25% | 22% | 24% | 32% | 53% | | Grow moderately | 54% | 56% | 56% | 58% | 61% | 45% | 43% | | Same/smaller | 17% | 24% | 17% | 18% | 14% | 18% | 4% | | **Current written business plan** | | | | | | Yes (or in dev’t) | 52% | 47% | 50% | 45% | 53% | 58% | 68% | | No | 46% | 52% | 48% | 54% | 46% | 40% | 28% | | **Management growth strategy** | | | | | | Very clear strategy | 43% | 42% | 44% | 39% | 43% | 56% | 34% | | Fairly clear strategy | 42% | 42% | 42% | 44% | 41% | 39% | 56% | | No clear strategy | 13% | 13% | 13% | 15% | 14% | 5% | 8% | | **Management overseas strategy** | | | | | | Very clear strategy | 29% | 24% | 32% | 20% | 31% | 54% | 20% | | Fairly clear strategy | 32% | 30% | 32% | 25% | 42% | 36% | 34% | | No clear strategy | 37% | 43% | 33% | 52% | 25% | 10% | 42% | The previous table demonstrates that intermittent exporters have a slightly older profile than firms that have recorded overseas sales in every year since they started exporting (i.e. continual exporters), but tend to have fewer employees. They are also less innovative than continual exporters.
As might be expected, overseas sales tend to be less important to intermittent exporters, with 63% indicating that exports account for less than 10% of total turnover (compared to 43% for continual exporters).
Intermittent exporters also display less dynamic growth than firms that have had overseas sales every year; they are significantly less likely to have grown over the last 5 years and to anticipate growth over the next 5 years.
There is no difference in the proportions of intermittent and continual exporters that have a current business plan or have a clear management strategy for achieving their growth objectives (for the business as a whole). However, reflecting the fact that overseas sales account for a lower proportion of their turnover, intermittent exporters are less likely to have a clear management strategy in place for the development of their overseas business (although a quarter still have a ‘very clear’ overseas strategy). 8.9 Proportion of Turnover Accounted for by Overseas Sales
The chart below shows firms’ experience as measured by the proportion of their turnover that is accounted for by overseas sales. Analysis has been provided at the total level, and by UKTI users and non-users.
Consistent with the fact that they have generally been doing business overseas for longer and operate in more markets, users of UKTI also report that a significantly greater proportion of their turnover is accounted for by overseas sales than is the case for non-users. There are few clear differences by age or size of firms in terms of the proportion of turnover accounted for by overseas sales, although firms with 50+ employees are somewhat more likely to indicate that exports contribute more than half of their total turnover. However, it is important to note that a significant minority of young and small firms are also extremely reliant on exports, with 14% of firms established in the last 5 years and 17% of those with less than 10 employees indicating that overseas sales account for more than half of their revenues.
Table 8.9.1 Proportion of Turnover Accounted for by Overseas Sales - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Zero | 15% | 8% | 3% | 8% | 4% | 2% | 0% | 7% | | Less than 10% | 45% | 45% | 47% | 46% | 48% | 39% | 43% | 46% | | 11%-25% | 10% | 15% | 16% | 14% | 15% | 21% | 12% | 15% | | 26%-50% | 11% | 10% | 10% | 10% | 13% | 2% | 9% | 10% | | 51%-75% | 6% | 8% | 9% | 7% | 9% | 18% | 6% | 8% | | More than 75% | 8% | 10% | 10% | 10% | 9% | 10% | 18% | 10% | | Don't know/refused | 4% | 4% | 5% | 5% | 2% | 7% | 12% | 4% | 8.10 ‘Born Global’ Firms
Certain younger firms have been classified as ‘born global’, based on whether they started doing business overseas from the outset. The details of the ‘born global’ definition, and the alternative tighter definition, are shown below.
| ‘Born Global’ Firms | |---------------------| | Firms have been defined as being ‘born global’ if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established | | Firms have been defined as being ‘born global’ under the alternative (tighter) definition if they… | | • Have been established for 5 years or less | | • And have been doing business overseas for as long as they have been established | | • And the proportion of turnover accounted for by overseas sales is over 25% |
The table below shows the proportions of firms classified as ‘born global’ via each of these definitions. Analysis has been provided based on all respondents and based just on younger firms.
| Table 8.10.1 Born Global Firms – By UKTI Usage | |-----------------------------------------------| | | All firms | Firms aged up to 5 years | | | Total | UKTI User | Non-User | Total | UKTI User | Non-User | | Base | 900 | 189 | 711 | 253 | 26 | 227 | | Born global | 9% | 3% | 11% | 53% | 46% | 54% | | Born global (alternative) | 3% | 2% | 3% | 18% | 31% | 17% | | Up to 5 years old but not born global | 8% | 4% | 9% | 47% | 54% | 46% | | Over 5 years old | 83% | 93% | 80% | - | - | - |
Overall, 9% of firms are classified as being ‘born global’ under the main definition and 3% under the tighter, alternative definition (equating to 53% and 18% respectively when based just on firms established in the last 5 years).
Using the standard definition, it appears that UKTI users are less likely to be ‘born global’ than non-users (3% and 11% respectively). However, this is largely down to the older profile of UKTI users, with this group containing fewer firms aged 5 years or less. When the analysis is based just on young firms, there is no statistically significant difference in the proportion of users and non-users classified as ‘born global’. There is also no significant difference between users and non-users when it comes to the alternative, tighter ‘born global’ definition. As seen below, amongst firms established in the last 5 years, those with 10 or more employees are more likely to be ‘born global’ by the alternative definition. There are no other statistically significant differences in this regard.
Table 8.10.2 Born Global Firms – By Size
| | All firms | Firms aged up to 5 years | |--------------------------|-----------|--------------------------| | | Total | 0-9 emps | 10+ emps | Total | 0-9 emps | 10+ emps | | Base | 900 | 644 | 255 | 253 | 213 | 40 | | Born global | 9% | 10% | 6% | 53% | 51% | 64% | | Born global (alternative)| 3% | 3% | 3% | 18% | 15% | 40% | | Up to 5 years old but not born global | 8% | 10% | 3% | 47% | 49% | 36% | 8.11 Number of Markets
The chart below shows the number of overseas markets firms have done business in over the last 5 years. Analysis has been provided at the total level, and by UKTI users and non-users.
Chart 8.11.1 Number of Markets Done Business in During Last 5 Years – By UKTI Usage
Approaching half of internationalising firms (46%) have done business in more than five markets over the last five years, with a quarter (26%) indicating that they are active in more than 10.
Users of UKTI clearly have more overseas experience in this respect, with 43% having done business in more than 10 markets compared to only 20% of non-users. As seen below, the number of markets firms operate in tends to increase in line with age and size.
Table 8.11.1 Number of Markets Done Business in During Last 5 Years - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | None | 15% | 8% | 3% | 7% | 4% | 0% | 0% | 6% | | One | 14% | 13% | 10% | 14% | 7% | 5% | 0% | 12% | | 2-5 | 43% | 32% | 36% | 38% | 33% | 19% | 43% | 36% | | 6-10 | 13% | 25% | 21% | 20% | 24% | 14% | 12% | 21% | | More than 10 | 15% | 20% | 31% | 20% | 31% | 61% | 45% | 25% | | Don't know/refused | 0% | 2% | 0% | 1% | 0% | 0% | 0% | 0% | 8.12 Overseas Regions
The chart below shows the geographical regions in which firms have done business over the last 5 years. Analysis has been provided at the total level, and by UKTI users and non-users.
Table 8.12.1 Regions Currently Doing Business In – By UKTI Usage
| Regions | Total | UKTI Usage | | | |--------------------------|-------|------------|----------|----------| | | Base | | UKTI User| Non-User | | Europe | 900 | 189 | 84% | 87% | | North America | 47% | 57% | 43% | | | South & Latin America | 20% | 24% | 18% | | | Middle East & Africa | 41% | 57% | 36% | | | Asia Pacific | 45% | 57% | 41% | | | Not yet exporting | 6% | 5% | 6% | | | Don't know | 0% | 0% | 0% | |
| Number of Regions | Total | UKTI Usage | | | |--------------------------|-------|------------|----------|----------| | None/not exporting | 6% | 5% | 6% | | | One | 30% | 18% | 33% | | | Two | 21% | 20% | 22% | | | Three | 18% | 23% | 16% | | | Four | 14% | 18% | 12% | | | Five | 12% | 16% | 10% | | | Don't know | 0% | 0% | 0% | |
The vast majority of internationalising firms are doing business in Europe, and approaching half are operating in North America, Asia Pacific and the Middle East/Africa. However, only a fifth are active in South or Latin American markets. Almost a third of firms are only doing business in a single region (typically Europe).
With the exception of Europe, UKTI users are more likely to be doing business in each of these broad regions. Linked to this, they tend to be active in a significantly greater number of regions, with 57% operating in 3 or more regions compared to just 39% of non-users. As seen below, the older and larger a firm is the more geographic areas they tend to be operating in.
8.12.2 Regions Currently Doing Business In - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|----------| | Up to 5 | 6-10 | Over 10 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 |
| Regions | Europe | North America | South & Latin America | Middle East & Africa | Asia Pacific | Not yet exporting | Don't know | |---------------------|-----------------------------|---------------|-----------------------|----------------------|--------------|-------------------|------------| | | 75% | 36% | 14% | 28% | 34% | 15% | 1% | | | 85% | 47% | 19% | 38% | 41% | 8% | 0% | | | 90% | 49% | 21% | 46% | 50% | 3% | 0% | | | 84% | 44% | 18% | 36% | 42% | 7% | 0% | | | 90% | 47% | 20% | 47% | 47% | 4% | 0% | | | 93% | 71% | 32% | 74% | 63% | 0% | 0% | | | 94% | 63% | 33% | 51% | 46% | 0% | 0% | | | 86% | 46% | 19% | 41% | 45% | 6% | 0% |
| Number of Regions | None/not exporting | One | Two | Three | Four | Five | Don't know | |---------------------|-----------------------------|---------------|------------------------|----------------------|--------------|--------------------|------------| | | 15% | 34% | 22% | 12% | 9% | 8% | 1% | | | 8% | 27% | 24% | 18% | 13% | 10% | 0% | | | 3% | 29% | 20% | 19% | 16% | 14% | 0% | | | 7% | 31% | 23% | 17% | 13% | 9% | 0% | | | 4% | 31% | 18% | 20% | 14% | 13% | 0% | | | 0% | 19% | 12% | 17% | 20% | 18% | 0% | | | 0% | 12% | 37% | 18% | 32% | 21% | 0% | | | 6% | 30% | 21% | 18% | 13% | 12% | 0% |
| | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 8.13 Senior Management Experience
All firms were asked about if there was anyone in the senior management team of their company who had significant experience of doing business overseas before they joined the firm. The chart below shows responses at the total level and separately for users and non-users of UKTI.
UKTI users are significantly more likely to benefit from a senior management team that has brought export experience with them to the firm.
Unsurprisingly, given that they tend to have more partners and directors, larger firms are more likely to have previous overseas experience within their senior management team. However, there is no similar correlation by age of firm and in fact older firms appear less likely to have management with previous export experience.
8.13.1 Senior Management with Previous Overseas Experience - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Yes | 44% | 43% | 36% | 37% | 40% | 59% | 63% | 39% | | No | 56% | 56% | 61% | 63% | 58% | 36% | 30% | 60% | | Don't know | 0% | 1% | 2% | 1% | 2% | 5% | 6% | 1% | 9 Business Growth & Overseas Strategy
9.1 Past Growth
Firms were asked to whether their business had grown, remained the same size or become smaller over the past 5 years, with results summarised below.
Chart 9.1.1 Past Growth (Last 5 Years) – By UKTI Usage
Approaching two-thirds of internationalising firms have grown over the past 5 years, although in most cases this was described as ‘moderate’ growth. Although similar proportions of UKTI users and non-users have grown over this period, the former are significantly more like to have experienced ‘substantial’ growth. Those firms that had grown over the previous 5 years were asked to detail whether this had been in terms of employee numbers, turnover or both.
Most firms reported that their recent growth had involved increasing their turnover, either exclusively or in conjunction with a rise in employee numbers. Only 1% of those firms that said they had grown indicated that this solely related to employee numbers, which might suggest that firms generally focus on financial performance when asked to assess their growth. Older firms that have been trading more than 10 years are least likely to have grown over the past 5 years, and almost a fifth of this group (18%) have in fact become smaller. Micro SMEs (0-9 employees) are also least likely to have grown recently, with 39% either remaining the same size or becoming smaller.
Table 9.1.1 Past Growth (Last 5 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | 882 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Grown substantially | 25% | 30% | 15% | 15% | 28% | 41% | 30% | 20% | | Grown moderately | 44% | 42% | 44% | 43% | 43% | 42% | 45% | 43% | | - Employees only | 2% | 1% | 1% | 1% | 1% | 1% | 0% | 1% | | - Turnover only | 29% | 25% | 22% | 28% | 15% | 18% | 6% | 24% | | - Both | 37% | 44% | 33% | 26% | 55% | 61% | 70% | 35% | | - Neither | 0% | 2% | 3% | 3% | 1% | 2% | 0% | 2% | | Stayed the same | 13% | 18% | 23% | 21% | 22% | 13% | 12% | 21% | | Become smaller | 6% | 9% | 18% | 18% | 5% | 2% | 12% | 14% | | Don't know | 0% | 1% | 0% | 0% | 0% | 0% | 0% | 0% | | Established < 1 year| 11% | 0% | 0% | 2% | 1% | 1% | 0% | 2% | 9.2 Future Growth
All firms were asked their opinions on their future growth, assessing their business as a whole. The chart below shows firms’ growth objectives for the next five years.
Chart 9.2.1 Growth Objectives (Next 5 Years) – By UKTI Usage
Whilst the majority of firms indicated that they expect to grow, most felt that this growth would be ‘moderate’ rather than ‘substantial’. UKTI users are significantly more likely to be planning any growth (89% vs. 78% of non-users), and also more likely to predict ‘substantial’ growth. The table below provides an analysis of the growth objectives of UKTI users and non-users over time. For both groups there has been little change in growth aspirations over the past 3 years.
Table 9.2.1 Growth Objectives (Next 5 Years) – Over Time
| | UKTI Users | Non-Users | |------------------|------------|-----------| | | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 | | Base | 235 | 248 | 189 | 667 | 655 | 711 | | Grow substantially | 31% | 29% | 32% | 23% | 27% | 25% | | Grow moderately | 55% | 58% | 57% | 59% | 52% | 53% | | Stay the same | 10% | 11% | 10% | 14% | 13% | 17% | | Become smaller | 1% | 1% | 0% | 2% | 3% | 3% | | Don’t know | 2% | 2% | 1% | 2% | 4% | 2% |
The following table provides a comparison with the growth expectation data collected in the main PIMS survey (covering UKTI users) and the PIMS Non-User survey.
Table 9.2.2 Growth Objectives (Next 5 Years) – Comparison with PIMS
| | UKTI Users | Non-Users | |------------------|------------|-----------| | | Int Survey 2012 | PIMS 24-27 | Int Survey 2012 | PIMS Non-Users 2012 | | Base | 189 | 4419 | 711 | 300 | | Grow substantially | 32% | 43% | 25% | 26% | | Grow moderately | 57% | 46% | 53% | 51% | | Stay the same | 10% | 6% | 17% | 16% | | Become smaller | 0% | 1% | 3% | 2% | | Don’t know | 1% | 4% | 2% | 4% |
Results for non-users are extremely consistent between the Internationalisation Survey and the PIMS Non-User survey. However, in the case of UKTI users, the PIMS research shows significantly stronger growth aspirations, with 43% planning to grow substantially compared to just 32% in the Internationalisation Survey (although the overall proportion expecting to grow either moderately or substantially is the same). This difference is likely to be linked to the timing of the interviews in relation to when firms received UKTI support. The PIMS survey takes place c.6 months after firms access support, and it is likely that in some cases this support is driving firms’ growth predictions, or that firms are using UKTI at the time they are seeking to grow (to help realise their ambitions). In contrast, in the Internationalisation survey firms are defined as UKTI users if they indicate that they have ever received UKTI support, so this ‘recent support’ impact is less likely to be a factor. Younger firms have significantly more ambitious growth objectives than those established 5 years or more, suggesting that many firms’ growth trajectory hits a plateau after the first few years of trading. Firms with fewer than 10 employees have less dynamic growth projections than larger firms, with around a fifth (19%) simply aiming to remain the same size.
Table 9.2.3 Growth Objectives (Next 5 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 6-10 | Over 10 | | Base | 253 | 255 | 392 | | Grow substantially | 46% | 31% | 20% | | Grow moderately | 47% | 52% | 57% | | Stay the same | 6% | 14% | 18% | | Become smaller | 0% | 2% | 3% | | Don’t know | 0% | 1% | 3% |
As seen previously, just 2% of companies reported they were planning to downsize over the next five years (and all of these companies were non users). These firms were asked for their reasons.
Table 9.2.4 Reasons for Downsizing - By UKTI Usage
| Reason | Total | UKTI Usage | |---------------------------------------------|-------|------------| | Base: All planning to become smaller | 16 | 0 | 16 | | You can’t see any scope to grow | 42% | - | 42% | | You don’t want to grow and are happy as you are | 51% | - | 51% | | Parent company keeps changing strategy | 7% | - | 7% | 9.3 How Growth Objectives Will Be Achieved
All those planning on either growing or staying the same size over the next 5 years were asked how they would achieve these objectives. The question wording differed for these 2 groups, as follows:
- **If planning to grow:** “Do you expect this growth to mainly come from...?”
- **If planning to stay same size:** “To help maintain your current sales levels, will you be mainly focusing on...?”
Firms were asked separately about how they would achieve their growth objectives in 3 different areas, as follows:
- Markets (new or existing)
- Customers (new or existing)
- Products/services (new or existing)
The table below summarises these results, both at the total level and by the level of firms’ growth objectives.
| Will this mainly be through...? | Total | Growth Objectives | |---------------------------------|-------|-------------------| | | | Stay Same | Moderate Growth | Substantial Growth | | **Base: All planning to grow or stay same** | 871 | 123 | 476 | 272 | | Markets | | | | | | Entering new overseas countries | 5% | 2% | 6% | 6% | | Increasing sales to existing countries | 51% | 65% | 52% | 40% | | Both | 41% | 27% | 39% | 52% | | Don’t know | 3% | 6% | 3% | 2% | | Customers | | | | | | Selling to new customers | 26% | 10% | 28% | 32% | | Increasing sales to existing customers | 17% | 35% | 16% | 10% | | Both | 56% | 53% | 56% | 58% | | Don’t know | 0% | 2% | 0% | 0% | | Products/Services | | | | | | Introducing new products/services | 13% | 6% | 13% | 17% | | Increasing sales of existing products/services | 42% | 47% | 45% | 31% | | Both | 44% | 44% | 41% | 51% | | Don’t know | 1% | 2% | 1% | 2% | | **Summary** | | | | | | New countries | 46% | 30% | 44% | 58% | | Existing countries | 91% | 92% | 91% | 92% | | New Customers | 82% | 63% | 84% | 90% | | Existing customers | 73% | 88% | 72% | 68% | | New products/services | 57% | 51% | 54% | 68% | | Existing products/services | 86% | 92% | 86% | 81% | When it comes to the geographical focus of their growth ambitions, most firms are concentrating on the intensive margins (i.e. existing markets) rather than the external margins (i.e. new markets), with 91% and 46% focussing on each of these areas respectively. However, the proportion expecting to realise their growth objectives though new markets increases amongst those with more ambitious plans, with 58% of firms with ‘substantial’ growth aspirations indicating that they will achieve these by entering new markets (often in conjunction with increasing sales to existing countries).
A similar situation is seen when it comes to products and services, with firms more likely to feel that their growth objectives will be achieved through sales of existing products/services than by developing new ones (86% and 57% respectively). Firms that simply aim to remain the same size over the next 5 years are most likely to be focussing on their existing product range, whereas those intending to grow (particularly substantially) are comparatively more likely to feel that this growth will be at least partly driven by the introduction of new products/services.
However, a different situation is seen when it comes to the customer types that firms will be focussing on, with firms more likely to be targeting new customers than existing ones (82% and 73% respectively). That said, the majority of firms (56%) believe that it will be a combination of (increased) sales to existing customers and the identification of new customers that will help them meet their growth objectives. Again there is a difference between firms that aim to grow and those that are seeking to remain the same size, with the former more likely to be prioritising sales to new customers, and the latter more likely to be focussing on increasing/maintaining sales to existing ones. As seen below, there is very little difference between users and non users in terms of how whether they are focussing on new/existing customers and new/existing products and services. However, UKTI users are significantly more likely to be planning growth through expansion into new countries (55% vs. 43%), although the proportion also focussing on existing markets is the same.
Table 9.3.2 Meeting Growth Objectives - By UKTI usage
| Will this mainly be through...? | Total | UKTI Usage | Non-User | |--------------------------------|-------|------------|----------| | | | UKTI Usage | Non-User | | **Base: All planning to grow or stay same** | 871 | 187 | 684 | | **Markets** | | | | | Entering new overseas countries| 5% | 6% | 5% | | Increasing sales to existing countries | 51% | 43% | 53% | | Both | 41% | 50% | 38% | | Don't know | 3% | 2% | 4% | | **Customers** | | | | | Selling to new customers | 26% | 28% | 26% | | Increasing sales to existing customers | 17% | 17% | 17% | | Both | 56% | 55% | 56% | | Don't know | 0% | 0% | 0% | | **Products/Services** | | | | | Introducing new products/services | 13% | 13% | 13% | | Increasing sales of existing products/services | 42% | 43% | 41% | | Both | 44% | 42% | 45% | | Don't know | 1% | 2% | 1% | | **Summary** | | | | | New countries | 46% | 55% | 43% | | Existing countries | 91% | 92% | 91% | | New Customers | 82% | 83% | 82% | | Existing customers | 73% | 72% | 74% | | New products/services | 57% | 55% | 58% | | Existing products/services | 86% | 85% | 86% | 9.4 Management Strategy for Achieving Growth Objectives
Firms were asked if their Senior Management team had a clear strategy for achieving their growth objectives, with results summarised below.
The vast majority of internationalising firms (85%) believe that their senior management team has a reasonably clear strategy in place for how they will achieve their growth objectives. This is more likely to be the case for UKTI users (91% vs. 83% of non-users), although there is no statistically significant difference when it comes to the proportion having a ‘very clear’ strategy. As seen below, the likelihood of having a clear management strategy for achieving growth increases amongst larger companies. There is also evidence that young firms (established in the last 5 years) are more likely to have a ‘very clear’ growth strategy.
Table 9.4.1 Management Strategy for Achieving Growth Objectives - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base: All planning to grow or stay same | Yes – very clear | Yes – fairly clear | No | Don’t know | |---------------------|-----------------------------|----------------------------------------|-----------------|-------------------|----|-----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | | 252 | 247 | 372 | 619 | 190 | 45 | 16 | 854 | | Yes – very clear | 49% | 42% | 42% | 41% | 43% | 51% | 81% | 42% | | Yes – fairly clear | 37% | 40% | 44% | 39% | 49% | 48% | 19% | 42% | | No | 10% | 15% | 13% | 16% | 8% | 1% | 0% | 13% | | Don’t know | 4% | 3% | 1% | 3% | 0% | 0% | 0% | 2% |
Firms with ‘substantial’ growth objectives are more likely to indicate that the senior management team has a very clear strategy for achieving these. Unsurprisingly, there is also a clear link between firms having a formal business plan and the management team having a clear growth strategy. That said, a third of those without a written business plan claim to have a very clear growth strategy, indicating that a significant proportion of businesses have concrete plans in place but choose not to formally document them.
Table 9.4.2 Management Strategy for Achieving Growth Objectives - By Growth Objectives & Business Planning
| Growth Objectives | Current Business Plan | |-------------------|-----------------------| | Stay same | Moderate growth | Substantial growth | | Base: All planning to grow or stay same | Yes | No | | 123 | 476 | 272 | 471 | 385 | | Yes – very clear | 42% | 37% | 57% | 53% | 33% | | Yes – fairly clear| 38% | 46% | 35% | 39% | 44% | | No | 19% | 15% | 6% | 5% | 22% | | Don’t know | 1% | 2% | 3% | 3% | 1% | 9.5 Management Strategy for Developing Overseas Business
Firms were further asked if their senior management team had a clear strategy for developing their overseas business, with results summarised below.
Chart 9.5.1 Management Strategy for Developing Overseas Business – By UKTI Usage
Overall the majority of firms report that their senior management team has at least a fairly clear strategy for the development of their overseas business (61%), with this proportion increasing amongst users of UKTI (75%). As seen below, larger companies are significantly more likely to have clear strategies in place for developing their overseas business. However, there is no difference in this respect by age of firm.
Table 9.5.1 Management Strategy for Developing Overseas Business
- By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|---------------------------|------|------|---------|-----|-------|--------|------|---------| | Up to 5 | | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | 6-10 | | | | | | | | | | | Over 10 | | | | | | | | | | | 0-9 | | | | | | | | | | | 10-49 | | | | | | | | | | | 50-249 | | | | | | | | | | | 250+ | | | | | | | | | | | All SMEs | | | | | | | | | |
As detailed in the table below, the more ambitious a firm’s growth objectives, the more likely they are to indicate that the senior management has a very clear strategy for developing their overseas business, suggesting that overseas sales are fundamental to meeting these growth aspirations. However, it is still the case that 27% of those aiming to grow substantially do not have a clear overseas strategy.
The majority of firms with a current business plan (72%) have a reasonably clear overseas strategy in place. However, the fact that a fifth of those without a written business plan still have a ‘very clear’ overseas strategy demonstrates that significant numbers of firms that do not have formal, documented plans are still thinking and planning strategically.
Table 9.5.2 Management Strategy for Developing Overseas Business
- By Growth Objectives & Business Planning
| Growth Objectives | Current Business Plan | |-------------------|-----------------------| | Stay same | Moderate growth | Substantial growth | | Base | 123 | 476 | 272 | 482 | 401 | | Yes – very clear | 24% | 26% | 38% | 37% | 20% | | Yes – fairly clear| 26% | 33% | 35% | 35% | 28% | | No | 46% | 39% | 27% | 26% | 50% | | Not aiming to develop overseas business | 3% | 1% | 0% | 2% | 2% | | Don’t know | 0% | 1% | 0% | 0% | 1% | 9.6 Business Planning
Firms were asked to indicate whether or not they had a current, written business plan, with the following results.
Chart 9.6.1 Whether Have Current, Written Business Plan – By UKTI Usage
UKTI users appear to be more strategic in their approach than non-users, with two thirds having a current written business plan (or in the process of preparing one) compared to just under half of non-users.
As seen below, there is some evidence that the proportion of firms with a formal business plan has declined over the last year, particularly amongst non-users of UKTI support.
Table 9.6.1 Whether Have Current, Written Business Plan – Over Time
| | Total | UKTI Users | Non-Users | |----------------|--------|------------|-----------| | | 2008 | 2010 | 2011 | 2012 | 2008 | 2010 | 2011 | 2012 | 2008 | 2010 | 2011 | 2012 | | Base | 900 | 902 | 903 | 900 | 311 | 235 | 248 | 189 | 589 | 667 | 655 | 711 | | Yes | 61% | 57% | 59% | 49% | 68% | 68% | 74% | 64% | 58% | 53% | 52% | 45% | | In progress | - | - | - | - | - | - | - | - | - | - | - | - | | No | 33% | 38% | 38% | 46% | 30% | 27% | 25% | 32% | 35% | 42% | 43% | 50% | | Don't know | 5% | 5% | 3% | 2% | 2% | 5% | 2% | 1% | 7% | 5% | 4% | 2% | As seen below, recently established firms are most likely to have a current business plan, potentially because they needed to create one when setting up the company (e.g. to access funding, etc). It is also the case that the larger the firm, the more likely it is to have a formal plan in place.
Table 9.6.2 Whether Have Current, Written Business Plan - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Base | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|------|------|---------|-----|-------|--------|------|---------| | Up to 5 | | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | 6-10 | | 63% | 45% | 47% | 42% | 58% | 78% | 94% | 48% | | Over 10 | | 2% | 3% | 2% | 3% | 1% | 0% | 0% | 2% | | 0-9 | | 34% | 49% | 48% | 53% | 39% | 13% | 6% | 47% | | 10-49 | | 1% | 2% | 2% | 1% | 2% | 9% | 0% | 2% | | 50-249 | | 64% | 49% | 48% | 53% | 39% | 13% | 6% | 47% | | 250+ | | 2% | 2% | 2% | 1% | 2% | 9% | 0% | 2% | | All SMEs | | 882 | 882 | 882 | 882 | 882 | 882 | 882 | 882 |
Firms with more ambitious growth objectives appear to be more strategic in the sense that they are more likely to have a current written business plan.
Table 9.6.3 Whether Have Current, Written Business Plan - By Growth Objectives
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 123 | 476 | 272 | | Yes | 33% | 47% | 65% | | In progress | 1% | 2% | 4% | | No | 64% | 49% | 30% | | Don't know | 2% | 2% | 0% | 9.7 Expected Overseas Growth
9.7.1 Number of Markets
Firms were asked whether they expected the number of markets they were doing business in to increase, decrease or stay the same over the next 3 years.
Chart 9.7.1.1 Anticipated Change in Number of Markets (Next 3 Years) – By UKTI Usage
Almost half of internationalising firms expect to expand into more markets over the next 3 years, with only a very small minority (4%) anticipating a decline in this respect.
There is no statistically significant difference between the proportion of UKTI users and non-users that intend to increase the number of overseas markets they operate in over the next 3 years. As detailed below, there is some evidence that firms are less optimistic in terms of their overseas expansion than was the case in previous years, with only 48% of 2012 respondents expecting to increase the number of markets they operate in, compared to 53% in 2011. Interestingly, this downward shift in expectations is almost entirely down to UKTI users, where the proportion has fallen from 64% to 52%.
Table 9.7.1.1 Anticipated Change in Number of Markets (Next 3 Years) – Over Time
| | Total 2010 | Total 2011 | Total 2012 | UKTI Users 2010 | UKTI Users 2011 | UKTI Users 2012 | Non-Users 2010 | Non-Users 2011 | Non-Users 2012 | |------------------|------------|------------|------------|-----------------|-----------------|-----------------|----------------|----------------|----------------| | Base | 902 | 903 | 900 | 235 | 248 | 189 | 667 | 655 | 711 | | Increase | 50% | 53% | 48% | 63% | 64% | 52% | 45% | 49% | 47% | | Stay the same | 44% | 40% | 47% | 33% | 31% | 44% | 48% | 44% | 48% | | Decrease | 5% | 3% | 4% | 5% | 2% | 3% | 5% | 4% | 4% | | Don’t know/refused | 2% | 3% | 2% | 0% | 3% | 1% | 2% | 3% | 2% |
Although older firms tend to be active in a greater number of markets, it is younger firms that are more positive in terms of their growth plans, with 72% of firms established in the last 5 years expecting to enter new markets, compared to less than half of older firms. Although less pronounced, there is also some evidence that larger firms are more likely to anticipate an increase in the number of overseas markets they are doing business in.
Table 9.7.1.2 Anticipated Change in Number of Markets (Next 3 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|---------|------|---------|-----|-------|--------|------|---------| | Base | | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Increase | | 72% | 50% | 40% | 47% | 49% | 53% | 57% | 48% | | Stay the same | | 25% | 45% | 54% | 47% | 48% | 39% | 37% | 47% | | Decrease | | 3% | 3% | 5% | 5% | 3% | 7% | 0% | 4% | | Don’t know/refused | | 0% | 2% | 2% | 2% | 2% | 0% | 6% | 1% |
As expected, the more ambitious a firm’s growth plans, the more likely they are to envisage an increase in the number of markets they operate in over the next 3 years.
Table 9.7.1.3 Anticipated Change in Number of Markets (Next 3 Years) - By Growth Objectives
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 123 | 476 | 272 | | Increase | 15% | 49% | 69% | | Stay the same | 76% | 48% | 27% | | Decrease | 9% | 2% | 3% | | Don’t know/refused| 1% | 1% | 1% | 9.7.2 Export Turnover
Firms were also asked whether they expected the proportion of their turnover accounted for by overseas sales to increase, decrease or stay the same over the next 3 years.
Chart 9.7.2.1 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) – By UKTI Usage
Overall, 47% of firms expect overseas sales to become more important to their business over the next 3 years, with only 7% anticipating that they will account for a lower proportion of turnover than they do currently. This mirrors the results seen for expectations in relation to number of overseas markets, when 48% thought they would increase the number of markets they operate in over the next 3 years and only 4% felt the number would fall.
UKTI users are somewhat more ambitious in their plans for overseas growth, with 53% expecting an increase in the proportion of turnover coming from overseas sales compared to just 44% of non-users. As seen below, younger firms are more positive about the likely increase in their overseas turnover. It is also the case that firms with 50+ employees are more likely than smaller firms to anticipate an increase in this respect.
Table 9.7.2.1 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | 882 | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Higher | 62% | 48% | 42% | 46% | 44% | 59% | 63% | 46% | | About the same | 28% | 42% | 47% | 42% | 47% | 36% | 30% | 43% | | Lower | 9% | 7% | 7% | 8% | 7% | 2% | 0% | 7% | | Don't know/refused | 2% | 4% | 2% | 4% | 2% | 2% | 6% | 4% |
The more ambitious a firm’s growth objectives, the more likely it is to anticipate an increase in the proportion of turnover accounted for by overseas sales. This suggests that many growing firms believe that this growth will be driven by their overseas activity rather than the UK market.
Table 9.7.2.2 Anticipated Change in Proportion of Turnover Accounted for by Overseas Sales (Next 3 Years) - By Growth Objectives
| Growth Objectives | Stay same | Moderate growth | Substantial growth | |-------------------|-----------|-----------------|--------------------| | Base | 123 | 476 | 272 | | Higher | 23% | 46% | 63% | | About the same | 61% | 45% | 28% | | Lower | 12% | 5% | 8% | | Don't know/refused| 5% | 4% | 2% | 9.8 Difficulties Accessing Finance
All firms were asked whether they had experienced any difficulties in accessing finance over the past 6 months and, if so, whether this had a negative impact on the scale or scope of their overseas activities.
Chart 9.8.1 Whether Difficulties Accessing Finance in Last 6 Months
Approaching a fifth of all internationalising firms (19%) have experienced difficulties accessing finance in the past 6 months, and in most cases this was felt to have had a negative impact on their overseas business.
As seen below, the number of firms reporting difficulty in accessing finance has fallen back from last year’s significant rise, but is still higher than it was in 2010.
Table 9.8.1 Whether Difficulties Accessing Finance in Last 6 Months – By UKTI Usage & Over Time
| | Total 2010 | Total 2011 | Total 2012 | UKTI Users 2010 | UKTI Users 2011 | UKTI Users 2012 | Non-Users 2010 | Non-Users 2011 | Non-Users 2012 | |------------------|------------|------------|------------|-----------------|-----------------|-----------------|----------------|----------------|----------------| | Base | 902 | 903 | 900 | 235 | 248 | 189 | 667 | 655 | 711 | | Yes | 15% | 25% | 19% | 18% | 28% | 23% | 14% | 24% | 18% | | - Negative impact on overseas activities | 9% | 17% | 13% | 13% | 17% | 17% | 8% | 17% | 11% | | - No impact on overseas activities | 6% | 8% | 6% | 5% | 11% | 6% | 6% | 7% | 6% | | No | 83% | 73% | 80% | 81% | 71% | 75% | 84% | 73% | 81% | | Don’t know / refused | 2% | 3% | 1% | 1% | 248 | 2% | 2% | 3% | 1% | There is now consistent evidence to suggest that UKTI users are more likely to have difficulty accessing finance, although it should be noted that these differences are not statistically significant at an annual level (although they are significant when results are combined across the various survey waves). As seen previously, UKTI users tend to have more ambitious growth objectives, so this difference may be at least partly down to a higher proportion of UKTI users actually attempting to obtain finance.
As seen below, SMEs and firms established in the last 10 years are most likely to encounter problems raising finance.
Table 9.8.2 Whether Difficulties Accessing Finance in Last 6 Months – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 253 | 882 | | 6-10 | 255 | | | Over 10 | 392 | | | 0-9 | 644 | | | 10-49 | 192 | | | 50-249 | 46 | | | 250+ | 17 | | | Base | | | | Yes | 22% | | | - Negative impact on overseas activities | 17% | 15% | 11% | 14% | 12% | 10% | 6% | 13% | | - No impact on overseas activities | 6% | 8% | 5% | 6% | 7% | 6% | 0% | 6% | | No | 76% | | | Don't know/refused | 2% | |
Firms that have been exporting for the least time and those currently in no overseas markets (i.e. not yet exporting) are most likely to experience difficulties obtaining finance, and in the majority of cases this does have a negative impact on their overseas development.
Table 9.8.3 Whether Difficulties Accessing Finance in Last 6 Months – By Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | < 2 years | 2-10 years | > 10 years | | Base | | 0 | 1-5 | 6-10 | 10+ | | Yes | 27% | 20% | 14% | 37% | 18% | 19% | 17% | | - Negative impact on overseas activities | 19% | 13% | 10% | 26% | 10% | 14% | 13% | | - No impact on overseas activities | 8% | 7% | 4% | 10% | 7% | 5% | 3% | | No | 69% | 79% | 84% | 61% | 81% | 80% | 81% | | Don't know/refused | 3% | 1% | 2% | 3% | 1% | 1% | 2% | There are no significant differences between innovative and non innovative firms in terms of access to finance, nor between those who are IP active and those who are not.
Table 9.8.4 Whether Difficulties Accessing Finance in Last 6 Months – By Innovation
| | Innovative | IP Active | |----------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base | 402 | 663 | 237 | 193 | 698 | | Yes | 21% | 19% | 18% | 22% | 18% | | - Negative impact on overseas activities | 16% | 13% | 11% | 17% | 12% | | - Negative impact on product/service dev't | 5% | 6% | 7% | 5% | 6% | | No | 77% | 79% | 81% | 77% | 81% | | Don't know/refused | 1% | 2% | 1% | 2% | 1% |
Firms with substantial growth aspirations are most likely to experience difficulties accessing finance, suggesting that this could potentially be a barrier to the realisation of this growth. It is worth noting that 27% of the key group of ‘innovative high growth’ firms have had difficulties raising finance.
Table 9.8.5 Whether Difficulties Accessing Finance in Last 6 Months – By Innovation & Growth
| | Growth Objectives | Innovation & Growth | |----------------------|-------------------|---------------------| | | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | Non-innovative | | Base | 123 | 476 | 272 | 214 | 449 | 237 | | Yes | 13% | 17% | 28% | 27% | 16% | 18% | | - Negative impact on overseas activities | 10% | 10% | 21% | 20% | 11% | 11% | | - No impact on overseas activities | 3% | 7% | 7% | 7% | 5% | 7% | | No | 84% | 81% | 71% | 73% | 82% | 81% | | Don't know/refused | 3% | 1% | 1% | 1% | 2% | 1% | 10. Emerging & Fast Growing Markets
10.1 Opportunities in Emerging & Fast Growing Markets
Firms were asked to consider the extent to which they felt that there were opportunities for them in a number of emerging or fast growing markets. For each market, firms were asked to indicate whether they were already doing business there, were very likely to do so in the next 2 years, quite likely to do so or unlikely to do so.
Chart 10.1.1 Opinions on Opportunities in Emerging & Fast Growing Markets
Of these markets, it appears that the UAE represents the best opportunity for internationalising firms, with 21% of firms already doing business there and a further 6% very likely to do so in the next 2 years. This is followed by China and India, with 23% and 22% respectively either already doing business in these markets or very likely to do so.
There is comparatively little enthusiasm for doing business in Mexico, with just 12% of firms already active in this market or very likely to enter it in the next 2 years. To enable more detailed analysis of interest and activity in emerging markets by firm profile, results have been summarised across all 9 of these markets as follows:
### Opportunities In Emerging & Fast Growing Markets - Summary
**Firms have been defined as ‘already in’ if they...**
- Are already in at least one emerging/fast growing market
**Firms have been defined as being ‘very likely’ if they...**
- Are not already in any of the emerging/fast growing markets
- But feel they are ‘very likely’ to do business in at least one in the next 2 years
**Firms have been defined as being ‘quite likely’ if they...**
- Are not already in any of the emerging/fast growing markets
- Do not feel that they are ‘very likely’ to do business in any in the next 2 years
- But feel they are ‘quite likely’ to do business in at least one in next 2 years
**Firms have been defined as ‘unlikely’ if they...**
- Are not already in any of the emerging/fast growing markets
When the data is viewed in this way, it shows that 41% of internationalising firms are already doing business in at least one of these emerging/fast growing markets. A quarter of firms thought it was unlikely that they would enter any of these markets in the next two years.
**Chart 10.1.2 Opportunities in Emerging & Fast Growing Markets (Summary)**
- **Already in**: 41%
- **Very likely**: 12%
- **Quite likely**: 23%
- **Unlikely**: 24%
Base: All respondents (Base, Don’t know) (900, 0%) Over half of UKTI users are already in at least one of these markets and only 14% feel that they are unlikely to enter one in the next 2 years. In contrast, over a quarter (27%) of non-users are not in any emerging/fast growing markets and have no intention of entering any.
Table 10.1.1 Opportunities in Emerging & Fast Growing Markets (Summary) – By UKTI Usage
| | Total | UKTI Usage | | | | |------------------|-------|------------|----------|----------|----------| | | | UKTI User | Non-User | | | | Base | 900 | 189 | 711 | | | | Already in | 41% | 54% | 37% | | | | Very likely | 12% | 11% | 12% | | | | Quite likely | 23% | 21% | 24% | | | | Unlikely | 24% | 14% | 27% | | | | Don’t know | 0% | 1% | 0% | | |
As seen below, there appears to have been a decline in the proportion of firms active in emerging and fast growing markets over the past 2 years, from a high of 48% in 2010 to 41% currently. This pattern is evident for both users and non-users of UKTI.
Table 10.1.2 Opportunities in Emerging & Fast Growing Markets (Summary) – Over Time
| | Total | UKTI Users | | | | | | | | |------------------|-------|------------|----------|----------|----------|----------|----------|----------|----------| | | | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 | | Base | 902 | 903 | 900 | 235 | 248 | 189 | 667 | 655 | 711 | | Already in | 48% | 46% | 41% | 61% | 59% | 54% | 44% | 40% | 37% | | Very likely | 10% | 15% | 12% | 11% | 16% | 11% | 9% | 14% | 12% | | Quite likely | 22% | 19% | 23% | 18% | 14% | 21% | 23% | 21% | 24% | | Unlikely | 19% | 20% | 24% | 10% | 10% | 14% | 22% | 24% | 27% | | Don’t know | 1% | 1% | 0% | 0% | 0% | 1% | 2% | 1% | 0% | The table below provides a more detailed time series analysis by individual market. Please note that in 2010 and 2011 respondents were asked about “UAE or Saudi Arabia” (rather than assessing these markets separately), so as a result the 2012 data for these markets has been combined to allow comparisons to be made over time.
Table 10.1.3 Opportunities in Individual Emerging & Fast Growing Markets – Over Time
| | Russia | Turkey | South Africa | UAE or Saudi Arabia | |----------------|--------|--------|--------------|---------------------| | | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 | | Base | 902 | 903 | 900 | 902 | 903 | 900 | 902 | 903 | 900 | | Already in | 15% | 17% | 13% | 18% | 16% | 16% | 20% | 22% | 14% | | Very likely | 4% | 5% | 4% | 4% | 6% | 4% | 6% | 5% | 5% | | Quite likely | 15% | 14% | 14% | 16% | 18% | 12% | 18% | 18% | 18% | | Unlikely | 64% | 62% | 67% | 59% | 58% | 66% | 54% | 52% | 61% | | Don't know | 2% | 2% | 1% | 2% | 2% | 2% | 2% | 2% | 2% |
There has been a consistent fall in the proportion of firms operating in each of these markets over the past 2 years.
As seen below, older and larger firms are more likely to already be operating in emerging or fast growing markets. However, it is not the case that these markets are only targeted by more established firms, as half of firms in the youngest age band (established up to 5 years) and the smallest size band (0-9 employees) are either already doing business in at least one of these areas or feel that it is ‘very likely’ they will enter one in the next 2 years.
Table 10.1.4 Opportunities in Emerging & Fast Growing Markets (Summary) – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | |----------------|---------------------|-----------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Already in | 30% | 36% | 46% | 37% | 39% | 73% | 70% | 40% | | Very likely | 23% | 16% | 7% | 12% | 14% | 6% | 12% | 12% | | Quite likely | 26% | 23% | 22% | 25% | 23% | 6% | 6% | 23% | | Unlikely | 21% | 25% | 25% | 26% | 24% | 12% | 12% | 25% | | Don't know | 0% | 0% | 1% | 0% | 1% | 2% | 0% | 0% | The table below provides further analysis by growth objectives and by firms’ attitude to taking risks. For full details of how firms have been classified into each risk segment, please refer to Chapter 11.1 of this report.
Table 10.1.5 Opportunities in Emerging & Fast Growing Markets (Summary) – By Growth Objectives & Attitude to Risk
| Growth Objectives | Attitude to Risk | |-------------------|------------------| | Stay same | Moderate Growth | Substantial Growth | | Base | 123 | 476 | 272 | | Already in | 36% | 41% | 40% | | Very likely | 9% | 8% | 23% | | Quite likely | 18% | 26% | 22% | | Unlikely | 37% | 25% | 15% | | Don’t know | 0% | 1% | 0% |
| Risk Averse | Calculated risks | Risk Taker | |-------------------|------------------|------------| | Base | 108 | 557 | 227 | | Already in | 37% | 39% | 47% | | Very likely | 11% | 11% | 14% | | Quite likely | 16% | 25% | 21% | | Unlikely | 35% | 24% | 17% | | Don’t know | 0% | 0% | 1% |
There is little difference in the proportion of firms already doing business in emerging/fast growing markets by their growth objectives. However, firms planning substantial growth are significantly more likely to claim that it is ‘very likely’ they will enter one or more of these markets in the next 2 years.
In addition, firms with a more aggressive attitude to risk (i.e. ‘risk takers’) are more likely to already be in one or more of these markets. There is less difference between ‘risk averse’ firms and those willing to take ‘calculated risks’, although the former are significantly more likely to rule out emerging markets entirely (35% indicating it is unlikely that they will enter any of these in the next 2 years).
As detailed below, there is clear evidence that firms tend to enter fast growing markets later in their international life-cycle, with those that have been exporting longest significantly more likely to be operating in these markets. Unsurprisingly, the more markets a firm is active in, the more likely they are to be doing business in one of these emerging/fast growing markets.
Table 10.1.6 Opportunities in Emerging & Fast Growing Markets (Summary) – By Experience
| Years Exporting | Number of Overseas Markets | |-----------------|---------------------------| | Less than 2 years | 2-10 years | Over 10 years | None | 1-5 | 6-10 | More than 10 | | Base | 200 | 448 | 248 | 68 | 438 | 178 | 211 | | Already in | 16% | 39% | 54% | 0% | 20% | 51% | 80% | | Very likely | 22% | 12% | 7% | 33% | 11% | 12% | 8% | | Quite likely | 31% | 21% | 22% | 33% | 30% | 22% | 9% | | Unlikely | 30% | 29% | 17% | 34% | 39% | 15% | 2% | | Don’t know | 0% | 0% | 1% | 0% | 0% | 1% | 1% | Similarly, the more overseas regions a firm is active in, the more likely they are to be doing business in any of the emerging or fast growing markets.
Table 10.1.7 Opportunities in Emerging & Fast Growing Markets (Summary) – By Number of Regions
| Number of Overseas Regions Active In | None | One | Two | Three | Four | Five | |-------------------------------------|------|-----|-----|-------|------|------| | Base | 68 | 270 | 196 | 151 | 115 | 98 | | Already in | 0% | 15% | 31% | 52% | 75% | 87% | | Very likely | 33% | 8% | 11% | 14% | 13% | 8% | | Quite likely | 33% | 24% | 37% | 25% | 9% | 3% | | Unlikely | 34% | 53% | 21% | 9% | 3% | 1% | | Don't know | 0% | 0% | 0% | 1% | 0% | 1% |
There is some evidence that emerging or fast growing markets are more attractive to innovative and IP active firms. However, even amongst non-innovative firms, nearly half are either already in one of these markets or believe they are ‘very likely’ to enter one in the next 2 years.
Table 10.1.8 Opportunities in Emerging & Fast Growing Markets (Summary) – By Innovation
| Innovative | Yes (alternative) | Yes | No | Yes | No | |------------|-------------------|-----|----|-----|----| | Base | 402 | 663 | 237| 193 | 698| | Already in | 46% | 43% | 33%| 60% | 35%| | Very likely| 10% | 11% | 14%| 12% | 12%| | Quite likely| 24% | 24% | 21%| 16% | 25%| | Unlikely | 18% | 21% | 32%| 12% | 28%| | Don't know | 1% | 0% | 0% | 0% | 0% |
As might be expected, ‘born global’ firms (particularly via the alternative, tighter definition) are more likely to be in these markets than other young firms that internationalised at some point after they were established.
Table 10.1.9 Opportunities in Emerging & Fast Growing Markets (Summary) – By Born Global & Young, Tech Intensive
| Up to 5 years old | Total | Born global | Born global (alternative) | Young, tech intensive | Over 5 years old | |-------------------|-------|-------------|---------------------------|----------------------|------------------| | Base | 253 | 133 | 46 | 103 | 647 | | Already in | 30% | 41% | 65% | 32% | 43% | | Very likely | 23% | 19% | 11% | 29% | 9% | | Quite likely | 26% | 23% | 11% | 25% | 22% | | Unlikely | 21% | 17% | 13% | 14% | 25% | | Don't know | 0% | 0% | 0% | 0% | 0% | 10.2 Reasons for Not Doing Business in Emerging & Fast Growing Markets
Every firm that indicated that they were unlikely to do business in one or more of the emerging/fast growing markets was allocated one of these markets at random and asked for their reasons for this. These results have been summarised below (combined across all markets).
Chart 10.2.1 Reasons for Not Considering Emerging & Fast Growing Markets
- Focussing on other countries: 60%
- Little or no demand: 55%
- Too difficult: 37%
- Never thought about it: 34%
- Too risky: 25%
- None of these: 2%
Base: All unlikely to do business in any market (Base, Don't know) (784, 0%)
Most firms not targeting an emerging/high growth market indicate that this is because they are focussing on other markets or there is little/no demand for their products and services there. However, a significant minority highlighted either the perceived difficulties involved or the risks associated with doing business in that market. The table below provides a similar analysis by individual market.
Table 10.2.1 Reasons for Not Considering Emerging & Fast Growing Markets – By Individual Market
| Market | Russia | Turkey | South Africa | UAE | Saudi Arabia | Brazil | Mexico | China | India | |-----------------|--------|--------|--------------|-----|--------------|--------|--------|-------|-------| | Base: All unlikely to enter selected market | 103 | 92 | 95 | 73 | 70 | 95 | 120 | 78 | 58 | | Focussing on other countries | 63% | 64% | 65% | 57% | 45% | 64% | 66% | 50% | 54% | | Little or no demand | 44% | 57% | 57% | 54% | 65% | 52% | 53% | 51% | 66% | | Too difficult | 54% | 31% | 28% | 41% | 38% | 34% | 31% | 37% | 38% | | Never thought about it | 32% | 35% | 35% | 33% | 42% | 35% | 31% | 30% | 39% | | Too risky | 46% | 22% | 16% | 19% | 17% | 21% | 25% | 26% | 25% | | None of these | 4% | 2% | 3% | 0% | 3% | 2% | 0% | 6% | 0% | | Don't know | 0% | 0% | 0% | 0% | 0% | 0% | 1% | 0% | 0% |
With the exception of Russia, the most common reasons for not doing business in each of these markets are that the business is focussing on other, higher priority markets and there being little/no demand for their products or services. However, in the case of Russia, significant numbers of firms are deterred by the perceived difficulty (54%) and risk involved (46%).
As shown below, UKTI users are more likely to decide against emerging/fast growing markets because they are focussing on other countries, whereas non-users are more likely to believe there is little or no demand for their offering in these markets. There are no significant differences in the proportion of users and non-users avoiding these markets due to the perceived difficulty or risk involved.
Table 10.2.2 Reasons for Not Considering Emerging & Fast Growing Markets
- By UKTI Usage
| Reason | Total | UKTI User | Non-User | |-------------------------------|-------|-----------|----------| | Base: All unlikely to enter selected market | 784 | 160 | 624 | | Focussing on other countries | 60% | 71% | 57% | | Little or no demand | 55% | 48% | 57% | | Too difficult | 37% | 38% | 36% | | Never thought about it | 34% | 30% | 35% | | Too risky | 25% | 22% | 25% | | None of these | 2% | 3% | 2% | | Don't know | 0% | 0% | 0% | There are no major or consistent differences by age of firm, although recently established businesses are slightly more likely to be focussing on other markets in preference to these emerging/fast growing ones. There are also no significant differences by firm size (and the low base size for firms with 50+ employees should be taken into account when interpreting these results).
Table 10.2.3 Reasons for Not Considering Emerging & Fast Growing Markets - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 223 | 768 | | 6-10 | 235 | | | Over 10 | 326 | | | 0-9 | 572 | | | 10-49 | 167 | | | 50-249 | 29 | | | 250+ | 15 | | | All | 768 | |
| Reason | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All | |-------------------------------|---------|------|---------|-----|-------|--------|------|-----| | Focussing on other countries | 68% | 63% | 56% | 57% | 67% | 66% | 76% | 60% | | Little or no demand | 54% | 57% | 54% | 56% | 51% | 51% | 65% | 54% | | Too difficult | 39% | 40% | 35% | 36% | 43% | 29% | 21% | 37% | | Never thought about it | 39% | 34% | 33% | 35% | 32% | 47% | 21% | 35% | | Too risky | 25% | 24% | 25% | 24% | 28% | 16% | 14% | 25% | | None of these | 2% | 2% | 2% | 2% | 1% | 4% | 0% | 2% | | Don’t know | 0% | 0% | 0% | 0% | 1% | 0% | 0% | 0% |
Those firms with substantial growth objectives are more likely to be focussing their attentions on other markets at this stage, but are also more likely to view these emerging/fast growing markets as risky targets. There are also some differences by firms’ attitude to risk, with risk averse firms more likely to view these markets as too difficult, and those more open to taking risks more inclined to simply be avoiding these markets because they are focussing on other opportunities at the present time.
Table 10.2.4 Reasons for Not Considering Emerging & Fast Growing Markets - By Growth Objectives & Attitude to Risk
| Growth Objectives | Attitude to Risk | |-------------------|------------------| | Stay same | Mod. Growth | Sub. Growth | Risk Averse | Calculated risks | Risk Taker | | Base: All unlikely to enter selected market | 113 | 414 | 232 | 97 | 491 | 189 | | Focussing on other countries | 50% | 58% | 73% | 45% | 60% | 68% | | Little or no demand | 62% | 54% | 54% | 55% | 53% | 59% | | Too difficult | 39% | 35% | 39% | 43% | 38% | 30% | | Never thought about it | 37% | 35% | 34% | 27% | 36% | 34% | | Too risky | 19% | 24% | 29% | 30% | 24% | 24% | | None of these | 1% | 2% | 1% | 5% | 2% | 1% | | Don’t know | 1% | 0% | 0% | 0% | 0% | 0% | 11. Overseas Business Risks
11.1 Attitude to Risk
Firms have been categorised according to their attitude towards taking risks when doing business overseas. They were asked to think about the culture and attitude of their firm and its senior management team and select which one of 3 options best described their mindset to taking risks when doing business overseas.
Chart 11.1.1 Attitude to Risk – By UKTI Usage
As the chart above shows, the majority of firms feel that they are prepared to take calculated risks, but with a significant minority (24%) considering themselves ‘risk takers’. Only 13% believe that it is never worth taking risks and are therefore classified as ‘risk averse.
UKTI users appear to be slightly more inclined to take risks than non-users, although this difference is not statistically significant. Younger companies are significantly more open to taking risks than older firms. However, there are no consistent differences in the attitude to risk by size of firm.
Table 11.1.1 Attitude to Risk – By Age and Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Risk Averse | 9% | 11% | 15% | 14% | 11% | 6% | 12% | 13% | | Calculated Risks | 59% | 64% | 63% | 60% | 68% | 70% | 57% | 62% | | Risk Taker | 31% | 25% | 22% | 25% | 21% | 24% | 30% | 24% | | Don't know | 1% | 1% | 1% | 1% | 0% | 0% | 0% | 1% |
Those firms demonstrating the most dynamic growth are more likely to be risk takers, and those simply planning to remain the same size over the next 5 years are comparatively more likely to be classified as risk averse.
Table 11.1.2 Attitude to Risk – By Growth
| Past Growth | Growth Objectives | |-------------|-------------------| | Stayed same | Moderate growth | Substantial growth | | | Stay same | Moderate growth | Substantial growth | | Base | 171 | 390 | 199 | 123 | 476 | 272 | | Risk Averse | 15% | 13% | 11% | 25% | 10% | 11% | | Calculated Risks | 66% | 64% | 58% | 53% | 70% | 53% | | Risk Taker | 19% | 22% | 30% | 22% | 20% | 34% | | Don't know | 0% | 2% | 0% | 0% | 1% | 1% | 11.2 Impact of Perceived Risks on Overseas Activity
Firms were read out a list of 6 possible risks when doing business overseas, and asked whether they had ever been put off from entering a particular overseas market as a result of each one. They were then asked whether they had significantly altered the way they do business in any overseas markets as a result of these risks. These results are summarised below.
Chart 11.2.1 Impact of Perceived Risks on Overseas Activity
Overall, 70% of firms had been put off from entering a market due to one of the above risks, and 16% had still pursued opportunities in an overseas market but significantly altered the way they went about this as a result of the perceived risk.
The risk of not being paid (in full or on time) is the most significant deterrent to overseas expansion, with half of all firms (49%) deciding against entering a market because of this risk and 11% significantly altering the way they do business there as a result.
All of the individual risks tested have a significant impact on the behaviour of internationalising firms, with at least 25% reporting that that they have decided against entering an overseas market because of each one. As seen below, UKTI users are significantly more likely than non-users to have decided against entering overseas markets because of the risks involved (83% vs. 67%). In particular, users are more likely to have been deterred by the risk of not seeing a return on their investment (52% vs. 30%).
However, this should not be interpreted as meaning that UKTI users are more risk averse, and there is some evidence that users are in fact slightly less risk averse than non-users (see Chapter 11.1). Instead, it may be a reflection of the fact that UKTI users tend to be more ‘involved’ exporters (i.e. have been exporting longer, operate in more markets) and hence have had more opportunity to encounter these risks. It is also the case that users are significantly more likely to be active in fast growing or emerging markets, where the likelihood of encountering some of these risks may be higher.
Table 11.2.1 Impact of Perceived Risk on Overseas Activity - By UKTI Usage
| Have you been put off from doing business in a particular country because of any of the following risks? | Total | UKTI Usage | Non-User | |---|---|---|---| | Base | 900 | 189 | 711 | | Not being paid in full or on time | 49% | 54% | 47% | | Safety or security of staff | 25% | 37% | 22% | | Political or economic instability | 37% | 45% | 35% | | IP Theft | 29% | 38% | 26% | | Bribery, corruption or organised crime | 32% | 44% | 29% | | Not seeing return on investment | 35% | 52% | 30% | | None of these | 30% | 18% | 33% | | Don't know | 0% | 0% | 0% | | Net: Put off by any risk | 70% | 83% | 67% |
| Have you significantly altered the way you do business in a particular country because of any of the following risks? | Total | UKTI Usage | Non-User | |---|---|---|---| | Not being paid in full or on time | 11% | 14% | 11% | | Safety or security of staff | 4% | 5% | 4% | | Political or economic instability | 6% | 10% | 4% | | IP Theft | 3% | 4% | 3% | | Bribery, corruption or organised crime | 5% | 8% | 4% | | Not seeing return on investment | 5% | 8% | 4% | | None of these | 81% | 77% | 82% | | Don't know | 3% | 3% | 2% | | Net: Affected by any risk | 16% | 19% | 15% | Interestingly, there is little correlation between firms’ risk classification and the likelihood of them abandoning or changing their plans overseas as a result of the perceived risks involved. Overall, similar proportions of ‘risk takers’ and ‘risk averse’ firms have decided against entering a particular market due to the risk involved (69% and 66% respectively), and the former are significantly more likely to have abandoned their plans as a result of some of the individual risks (e.g. not seeing a return on their investment, IP theft). This suggests that those firms that categorise themselves as risk takers still weigh up the risks involved and do not go ahead if these are deemed to be too great.
Table 11.2.2 Impact of Perceived Risk on Overseas Activity - By Attitude to Risk
| Attitude to Risk | Risk Averse | Calculated Risks | Risk Taker | |------------------|-------------|------------------|------------| | Base | 108 | 557 | 227 |
Have you been put off from doing business in a particular country because of any of the following risks?
| Risk | Risk Averse | Calculated Risks | Risk Taker | |-------------------------------------------|-------------|------------------|------------| | Not being paid in full or on time | 42% | 53% | 43% | | Safety or security of staff | 21% | 27% | 24% | | Political or economic instability | 37% | 39% | 33% | | IP Theft | 20% | 31% | 30% | | Bribery, corruption or organised crime | 32% | 33% | 33% | | Not seeing return on investment | 26% | 36% | 36% | | None of these | 34% | 28% | 31% | | Don’t know | 0% | 0% | 1% | | **Net: Put off by any risk** | **66%** | **72%** | **69%** |
Have you significantly altered the way you do business in a particular country because of any of the following risks?
| Risk | Risk Averse | Calculated Risks | Risk Taker | |-------------------------------------------|-------------|------------------|------------| | Not being paid in full or on time | 11% | 11% | 13% | | Safety or security of staff | 5% | 4% | 4% | | Political or economic instability | 4% | 5% | 7% | | IP Theft | 3% | 3% | 6% | | Bribery, corruption or organised crime | 4% | 4% | 7% | | Not seeing return on investment | 4% | 5% | 7% | | None of these | 85% | 82% | 77% | | Don’t know | 1% | 3% | 4% | | **Net: Affected by any risk** | **14%** | **15%** | **19%** | As seen below, there is little difference in the impact of these risks by age of firm. However, it does appear that the likelihood of abandoning or significantly altering overseas plans due to the perceived risks increases amongst larger firms.
Table 11.2.3 Impact of Perceived Risk on Overseas Activity – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 6-10 | Over 10 | | Base | 253 | 255 | 392 | | | 644 | 192 | 46 | 17 | 882 |
Have you been put off from doing business in a particular country because of any of the following risks?
| Risk | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |-------------------------------------------|---------|------|---------|-----|-------|--------|------|----------| | Not being paid in full or on time | 49% | 51% | 48% | 47% | 52% | 49% | 67% | 49% | | Safety or security of staff | 23% | 27% | 25% | 22% | 30% | 32% | 39% | 25% | | Political or economic instability | 35% | 36% | 38% | 33% | 42% | 45% | 76% | 36% | | IP Theft | 29% | 29% | 29% | 29% | 28% | 33% | 30% | 29% | | Bribery, corruption or organised crime | 32% | 34% | 32% | 30% | 39% | 26% | 51% | 32% | | Not seeing return on investment | 33% | 38% | 34% | 33% | 37% | 44% | 57% | 34% | | None of these | 30% | 27% | 31% | 31% | 28% | 23% | 12% | 30% | | Don't know | 0% | 0% | 0% | 0% | 0% | 2% | 0% | 0% | | Net: Put off by any risk | 70% | 73% | 69% | 69% | 72% | 75% | 88% | 70% |
Have you significantly altered the way you do business in a particular country because of any of the following risks?
| Risk | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |-------------------------------------------|---------|------|---------|-----|-------|--------|------|----------| | Not being paid in full or on time | 10% | 14% | 11% | 11% | 12% | 10% | 12% | 11% | | Safety or security of staff | 4% | 3% | 4% | 4% | 4% | 5% | 9% | 4% | | Political or economic instability | 7% | 7% | 5% | 5% | 7% | 2% | 12% | 5% | | IP Theft | 3% | 4% | 4% | 4% | 3% | 5% | 0% | 4% | | Bribery, corruption or organised crime | 5% | 6% | 5% | 4% | 6% | 2% | 15% | 5% | | Not seeing return on investment | 5% | 7% | 5% | 6% | 3% | 5% | 9% | 5% | | None of these | 81% | 79% | 82% | 82% | 81% | 82% | 73% | 81% | | Don't know | 3% | 3% | 3% | 3% | 1% | 5% | 6% | 3% | | Net: Affected by any risk | 15% | 18% | 15% | 15% | 19% | 13% | 21% | 16% | Firms planning to grow substantially are more likely to have both been put off from doing business in overseas markets and to have significantly altered their business approach as a result of the perceived risks.
Table 11.2.4 Impact of Perceived Risk on Overseas Activity – By Growth
| Past Growth | Growth Objectives | |-------------|-------------------| | | Stayed same | Moderate growth | Substantial growth | Stayed same | Moderate growth | Substantial growth | | Base | 171 | 390 | 199 | 123 | 476 | 272 |
Have you been put off from doing business in a particular country because of any of the following risks?
| Risk | Stayed same | Moderate growth | Substantial growth | Stayed same | Moderate growth | Substantial growth | |-------------------------------------|-------------|-----------------|--------------------|-------------|-----------------|--------------------| | Not being paid in full or on time | 45% | 52% | 46% | 42% | 50% | 52% | | Safety or security of staff | 22% | 26% | 30% | 19% | 24% | 31% | | Political or economic instability | 35% | 39% | 38% | 30% | 37% | 42% | | IP Theft | 26% | 30% | 25% | 18% | 30% | 32% | | Bribery, corruption or organised crime | 25% | 34% | 35% | 30% | 32% | 37% | | Not seeing return on investment | 35% | 36% | 32% | 25% | 36% | 39% | | None of these | 33% | 28% | 29% | 36% | 30% | 24% | | Don’t know | 0% | 0% | 1% | 0% | 0% | 1% | | **Net: Put off by any risk** | **67%** | **72%** | **70%** | **64%** | **70%** | **75%** |
Have you significantly altered the way you do business in a particular country because of any of the following risks?
| Risk | Stayed same | Moderate growth | Substantial growth | Stayed same | Moderate growth | Substantial growth | |-------------------------------------|-------------|-----------------|--------------------|-------------|-----------------|--------------------| | Not being paid in full or on time | 8% | 12% | 13% | 9% | 11% | 14% | | Safety or security of staff | 5% | 4% | 6% | 2% | 3% | 7% | | Political or economic instability | 7% | 6% | 7% | 3% | 5% | 10% | | IP Theft | 3% | 4% | 5% | 2% | 2% | 7% | | Bribery, corruption or organised crime | 5% | 5% | 7% | 4% | 4% | 8% | | Not seeing return on investment | 7% | 4% | 6% | 2% | 4% | 9% | | None of these | 82% | 82% | 75% | 88% | 83% | 72% | | Don’t know | 3% | 3% | 3% | 1% | 2% | 5% | | **Net: Affected by any risk** | **14%** | **16%** | **22%** | **11%** | **14%** | **23%** | 11.3 Risk Perception of BRIC Markets
11.3.1 Overview
Firms were asked to assess how risky they felt it would be to do business in each of the BRIC markets (i.e. Brazil, Russia, India and China), and these results are summarised below. Please note that these questions were asked to all firms, irrespective of whether or not they were already doing business in these countries.
As demonstrated above, Russia is considered to be the most risky of the BRIC markets, with 59% of internationalising firms judging it to be ‘very’ or ‘fairly’ risky. For the other markets there was a broadly even split between firms feeling that they were very/fairly risky and those perceiving them to be not particularly/not at all risky. 11.3.2 Brazil
As seen below, there is some suggestion that UKTI users view Brazil as being slightly less risky than non-users, although this difference is not statistically significant. However, there is a notable difference in perceptions between firms that are currently doing business in Brazil and those that are not, with the former much less likely to view Brazil as a risky proposition. This might suggest that firms are being put off by their perception of Brazil, when the reality of doing business there may not involve as many risks as they fear.
Table 11.3.2.1 Perceived Risk of Brazil
- By UKTI Usage & Whether Doing Business There
| Perceived Risk of Brazil | Total | UKTI Usage | Doing Business in Brazil | |--------------------------|-------|------------|--------------------------| | | | UKTI User | Non-User | | | | Yes | No | | Base | 900 | 189 | 711 | 84 | 804 | | Very risky | 8% | 5% | 9% | 2% | 9% | | Fairly risky | 32% | 34% | 32% | 15%| 35%| | Not particularly risky | 32% | 37% | 31% | 50%| 30%| | Not at all risky | 15% | 12% | 15% | 29%| 13%| | Don’t know | 12% | 11% | 13% | 3% | 13%|
Unsurprisingly, the lower the perceived risk of Brazil, the more likely the firm is to do business there. Just 4% of firms that judge Brazil to be ‘very risky’ are either already operating there or very likely to do so. However, it should be noted that risk is clearly not the only reason that firms are not doing business in Brazil, with 54% of those that feel it is ‘not at all risky’ still not intending to enter the market.
Table 11.3.2.2 Likelihood of Doing Business in Brazil
- By Perceived Risk
| Perceived Risk of Brazil | Very risky | Fairly risky | Not particularly risky | Not at all risky | |--------------------------|------------|--------------|------------------------|------------------| | Base | 79 | 294 | 286 | 132 | | Already in | 3% | 5% | 16% | 20% | | Very likely | 1% | 4% | 6% | 10% | | Quite likely | 7% | 11% | 19% | 16% | | Unlikely | 89% | 80% | 57% | 54% | | Don’t know | 1% | 1% | 2% | 0% | 11.3.3 Russia
As noted previously, Russia is seen as the highest risk of the BRIC markets. Whilst there is little difference between users and non-users of UKTI in this respect, it is clear that firms that are not doing business in Russia are more negative about the associated risks. However, many firms that are currently operating in Russia are still conscious of the risks involved, with 39% of this group describing it as very or fairly risky.
Table 11.3.3.1 Perceived Risk of Russia
- By UKTI Usage & Whether Doing Business There
| Perceived Risk of Russia | Total | UKTI Usage | Doing Business in Russia | |-------------------------|-------|------------|--------------------------| | | Base | UKTI User | Non-User | Yes | No | | Very risky | 23% | 25% | 22% | 9% | 25%| | Fairly risky | 36% | 37% | 35% | 30% | 37%| | Not particularly risky | 22% | 25% | 22% | 36% | 20%| | Not at all risky | 11% | 7% | 12% | 21% | 9% | | Don't know | 8% | 5% | 9% | 5% | 9% |
As expected, firms that do not perceive Russia to be a risky market are more inclined to do business there.
Table 11.3.3.2 Likelihood of Doing Business in Russia
- By Perceived Risk
| Perceived Risk of Russia | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|------------------| | Base | 201 | 325 | 202 | 96 | | Already in | 5% | 11% | 22% | 26% | | Very likely | 4% | 4% | 5% | 4% | | Quite likely | 7% | 18% | 20% | 16% | | Unlikely | 84% | 66% | 51% | 52% | | Don't know | 0% | 1% | 2% | 1% | 11.3.4 India
As with the other BRIC markets, firms currently doing business in India tend to view it as less risky than those not operating there, suggesting that some firms may be put off by a perception of the business environment in India that does not entirely reflect the reality. There is no difference in the risk perception of India between UKTI users and non-users.
Table 11.3.4.1 Perceived Risk of India
- By UKTI Usage & Whether Doing Business There
| Perceived Risk of India | Total | UKTI Usage | Doing Business in India | |-------------------------|-------|------------|-------------------------| | | Base | UKTI User | Non-User | Yes | No | | Very risky | 900 | 189 | 711 | 125 | 761 | | Fairly risky | 10% | 10% | 10% | 3% | 11% | | Not particularly risky | 30% | 33% | 29% | 19% | 32% | | Not at all risky | 36% | 36% | 36% | 49% | 34% | | Don't know | 17% | 15% | 17% | 27% | 15% |
As seen below, the greater the perceived risk of doing business in India, the less likely firms are to export there.
Table 11.3.4.2 Likelihood of Doing Business in India
- By Perceived Risk
| Perceived Risk of India | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|-----------------| | Base | 88 | 279 | 322 | 146 | | Already in | 5% | 10% | 20% | 25% | | Very likely | 5% | 7% | 6% | 12% | | Quite likely | 10% | 23% | 23% | 18% | | Unlikely | 79% | 58% | 50% | 44% | | Don't know | 0% | 2% | 1% | 1% | 11.3.5 China
Unlike the other BRIC markets, for China there is a difference in the risk perception between users and non-users of UKTI, with the former significantly more likely to view it as either very or fairly risky. Whilst firms that already operate in China view the risks as considerably lower than those not doing business there, it is worth noting that over a quarter of the former group still judge it to be very or fairly risky.
Table 11.3.5.1 Perceived Risk of China
- By UKTI Usage & Whether Doing Business There
| Perceived Risk of China | Total | UKTI Usage | Doing Business in China | |-------------------------|-------|------------|-------------------------| | | Base | UKTI User | Non-User | Yes | No | | Very risky | 13% | 17% | 12% | 5% | 14%| | Fairly risky | 32% | 35% | 31% | 23% | 34%| | Not particularly risky | 33% | 29% | 34% | 43% | 32%| | Not at all risky | 15% | 12% | 16% | 27% | 13%| | Don’t know | 7% | 7% | 7% | 3% | 7% |
As was the case with the other BRIC markets, firms that perceive China as a lower risk are more likely to do business there.
Table 11.3.5.2 Likelihood of Doing Business in China
- By Perceived Risk
| Perceived Risk of China | Very risky | Fairly risky | Not particularly risky | Not at all risky | |-------------------------|------------|--------------|------------------------|------------------| | Base | 113 | 294 | 293 | 139 | | Already in | 6% | 11% | 20% | 27% | | Very likely | 2% | 6% | 9% | 11% | | Quite likely | 11% | 21% | 23% | 13% | | Unlikely | 80% | 60% | 47% | 47% | | Don’t know | 1% | 1% | 0% | 1% | 12. Market Entry Motivations & Preparations
12.1 Market Entry Motivations
12.1.1 Most Recent Market
Firms were asked whether, when they entered their most recent overseas market, this was mainly prompted by an enquiry from a potential customer, the identification that there may be opportunities for their business there or because they already had contacts there. Please note that although a firm’s decision to enter a market could be influenced by a combination of these factors, they were asked to pick the single main reason for first investigating that market.
Chart 12.1.1.1 Market Entry Motivations (Most Recent Market) - By UKTI Usage
As demonstrated above, most firms were fairly opportunistic when deciding to target their most recent market, with 57% reacting to enquiries from potential customers and 24% prompted by the fact they already had contacts there. Only 18% indicated that the primary reason for considering this market was that they had identified internally that there may be opportunities there.
While this is true of both users and non-users, the former appear to be a little less reactive in their approach, and are comparatively more likely to be driven by either existing contacts or the prior identification of opportunities. The table below illustrates that even amongst older firms market entry decisions are largely driven by customer enquiries. However, larger firms tend to be a little less reactive and are more likely to have identified internally that the market represented an opportunity for their business.
Table 12.1.1.1 Market Entry Motivations (Most Recent Market) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Enquiry from customer | Identified possible opportunity | Already had contacts there | Don't know | |---------------------|-----------------------------|-----------------------|-------------------------------|---------------------------|------------| | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | Base: All exporting | 215 | 235 | 382 | 587 | 181 | 46 | 17 | 814 | | Enquiry from customer | 54% | 53% | 59% | 60% | 53% | 47% | 45% | 57% | | Identified possible opportunity | 18% | 20% | 17% | 14% | 22% | 33% | 30% | 18% | | Already had contacts there | 26% | 26% | 23% | 25% | 24% | 15% | 24% | 24% | | Don't know | 1% | 1% | 1% | 1% | 0% | 5% | 0% | 1% |
There is no difference in market entry motivations by the number of years firms have been doing business overseas. However, there is some evidence that firms with a large international presence (active in more than 10 markets) are less likely to simply react to customer enquiries and are correspondingly more likely to decide to enter a market after identifying that it offered opportunities for them.
Table 12.1.1.2 Market Entry Motivations (Most Recent Market) - By Export Experience
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 2-10 | Over 10 | | Base: All exporting | 132 | 448 | 248 | | Enquiry from customer | 58% | 57% | 57% | | Identified possible opportunity | 19% | 18% | 18% | | Already had contacts there | 22% | 24% | 23% | | Don't know | 1% | 1% | 1% |
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | 1-5 | 6-10 | Over 10 | | Base: All exporting | 438 | 178 | 211 | | Enquiry from customer | 59% | 60% | 52% | | Identified possible opportunity | 15% | 17% | 24% | | Already had contacts there | 26% | 21% | 22% | | Don't know | 1% | 2% | 2% |
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | 6-10 | Over 10 | | Base: All exporting | 178 | 211 | | Enquiry from customer | 60% | 52% | | Identified possible opportunity | 17% | 24% | | Already had contacts there | 21% | 22% | | Don't know | 2% | 2% | 12.1.2 Other Markets
Firms were also asked to think about all the markets that they had entered over the past few years and indicate whether this had generally been prompted by enquiries from potential customers or because they had identified that there may be opportunities in these markets. Please note that firms that were not yet exporting and those only doing business in a single country were not asked this question and have been excluded from the analysis.
Chart 12.1.2.1 Market Entry Motivations (Other Markets) - By UKTI Usage
Reflecting the motivations for entering their most recent market (see previous section), when asked about their typical reasons for entering new markets the majority of firms highlighted customer enquiries.
UKTI users appear to be more strategic in their approach, with 18% indicating that prior identification of opportunities was the main stimulus for market entry and a further 37% reporting that it was a combination of this and customer enquiries (compared to 13% and 21% respectively for non-user firms). There is evidence that smaller firms are more inclined to take market entry decisions based largely on customer enquiries. However, there is little difference by age of firm in this respect.
Table 12.1.2.1 Market Entry Motivations (Other Markets)
- By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Enquiry from customer | Identified possible opportunity | Varies/mixture of both | Don't know/Not entered any markets recently | |---------------------|-----------------------------|-----------------------|---------------------------------|------------------------|------------------------------------------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | Base: All exporting to more than 1 market | 179 | 203 | 342 | 496 | 166 | 44 | 17 | 706 | | Enquiry from customer | 54% | 57% | 61% | 63% | 59% | 33% | 27% | 60% | | Identified possible opportunity | 15% | 15% | 14% | 12% | 17% | 26% | 18% | 14% | | Varies/mixture of both | 30% | 25% | 24% | 24% | 22% | 33% | 55% | 24% | | Don't know/Not entered any markets recently | 2% | 3% | 1% | 1% | 2% | 8% | 0% | 2% |
Interestingly, there is some indication that very recent exporters are more inclined to enter overseas markets after identifying them as offering opportunities, rather than solely reacting to customer enquiries. However, when looking at the data by the number of countries that firms are operating in, it seems that those active in more markets are more likely to be driven by the prior identification of opportunities.
Table 12.1.2.2 Market Entry Motivations (Other Markets)
- By Export Experience
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 2-10 | Over 10 | | Base: All exporting to more than 1 market | 96 | 387 | 237 | 330 | 178 | 211 | | Enquiry from customer | 49% | 60% | 59% | 69% | 60% | 44% | | Identified possible opportunity | 21% | 14% | 14% | 12% | 14% | 19% | | Varies/mixture of both | 26% | 24% | 26% | 17% | 23% | 37% | | Don't know/Not entered any markets recently | 3% | 2% | 1% | 2% | 3% | 0% | 12.1.3 Most Challenging Market
Firms were asked to identify the most challenging overseas market that they had done business in, and asked for their reasons for entering this market.
Table 12.1.3.1 Market Entry Motivations (Most Challenging Market) - By UKTI Usage
| Motivation | Total | UKTI Usage | | | |---------------------------------------------------------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base: All exporting | 832 | 178 | 654 | | You received an approach or enquiry from a potential customer or partner there | 69% | 68% | 70% | | A customer that you were already doing business with requested that you start doing business there | 39% | 36% | 41% | | There was someone in your company who already had experience of that country or contacts there | 27% | 29% | 26% | | A company that you were already doing business with in a different market helped you to start doing business there | 26% | 32% | 24% | | This country is at the forefront of developments for your industry | 19% | 18% | 20% | | None of these | 3% | 4% | 3% | | Don't know | 1% | 2% | 0% |
Reflecting the motivations for entering their most recent market and for entering overseas markets in general, the most widespread reason for firms entering their ‘most challenging’ market was enquiries from potential customers or partners.
It is also apparent that other companies can have a significant impact on firms’ market entry decisions, with 39% indicating that they entered their most challenging market because an existing customer requested that they do so, and 26% reporting that they had been helped by a company they were already working with in a different market.
The only statistically significant difference between users and non-users of UKTI is that the former were more likely to have been helped by a company they were already doing business with elsewhere. Although there are relatively few differences by age of firm, more recently established companies were more likely to be motivated by in-house experience/contacts and by the chosen market being at the forefront of developments for their industry. Similarly, smaller firms were more likely to highlight in-house experience/contacts, and also more inclined to have entered the market in response to a request from an existing customer.
Table 12.1.3.2 Market Entry Motivations (Most Challenging Market) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | |---------------------|-----------------------------|--------|------|---------|-----|-------|--------|------|---------| | Base: All exporting | | 215 | 235 | 382 | 587 | 181 | 46 | 17 | 814 | | Enquiry from potential customer/partner | | 69% | 69% | 69% | 72% | 63% | 65% | 57% | 70% | | Existing customer request | | 43% | 42% | 38% | 39% | 43% | 33% | 39% | 39% | | In-house experience or contacts | | 36% | 30% | 24% | 29% | 25% | 23% | 18% | 27% | | Helped by company working with in another market | | 22% | 25% | 27% | 25% | 27% | 20% | 39% | 25% | | Forefront of developments for the industry | | 25% | 19% | 18% | 20% | 18% | 17% | 30% | 19% | | None of these | | 5% | 5% | 3% | 3% | 4% | 5% | 6% | 3% | | Don't know | | 0% | 0% | 1% | 0% | 1% | 7% | 6% | 1% |
The only clear differences by export experience are that long-established exporters were more likely to have been helped by a company they were already working with in another market, and those in fewer markets were more likely to have been asked to enter the market by an existing customer.
Table 12.1.3.3 Market Entry Motivations (Most Challenging Market) - By Export Experience
| Experience (Years Exporting) | Number of Markets | Under 2 | 2-10 | Over 10 | 1-5 | 6-10 | Over 10 | |------------------------------|-------------------|--------|------|---------|-----|------|---------| | Base: All exporting | | 132 | 448 | 248 | 438 | 178 | 211 | | Enquiry from potential customer/partner | | 67% | 72% | 66% | 70% | 70% | 68% | | Existing customer request | | 41% | 41% | 36% | 45% | 37% | 32% | | In-house experience or contacts | | 28% | 26% | 27% | 29% | 24% | 26% | | Helped by company working with in another market | | 20% | 23% | 30% | 24% | 28% | 28% | | Forefront of developments for the industry | | 19% | 19% | 20% | 21% | 16% | 20% | | None of these | | 8% | 3% | 2% | 3% | 3% | 4% | | Don't know | | 0% | 0% | 2% | 0% | 1% | 1% | 12.2 Market Entry Preparations
12.2.1 Research Undertaken
Firms were asked about the extent of any research they had carried out before entering their most recent overseas market, as summarised below.
Table 12.2.1.1 Research Undertaken (Most Recent Market) - By UKTI Usage
| Research Undertaken | Total | UKTI Usage | | | |------------------------------------------------------------------------------------|-------|------------|----------|----------| | | | UKTI User | Non-User | | Base: All exporting | 832 | 178 | 654 | | Research the business environment and ways of working in that market | 31% | 48% | 25% | | Conduct a market analysis to identify its potential or the risks involved | 20% | 35% | 15% | | Pay an external organisation for any information or assistance about the market | 5% | 10% | 4% | | None of these | 62% | 40% | 68% | | Don’t know | 1% | 1% | 1% | | Net: Any of these | 37% | 59% | 31% |
Approaching a third of firms had researched the business environment before entering their most recent market, but only a fifth had conducted a more formal market analysis and very few had paid for any external assistance (from either public or private sector sources). It is notable that the majority of firms (62%) did not undertake any sort of research prior to market entry.
There is clear evidence that UKTI users conduct more comprehensive preparatory investigations before entering new markets, with half researching the business environment, a third carrying out a market analysis and 1 in 10 paying for external information or assistance. However, it is certainly not the case that all UKTI users carry out advance research, with 40% not doing any of these. The table below demonstrates that larger firms devote significantly more time and resources to researching overseas markets before deciding to enter them. However, there are no significant differences by age of firm in this respect.
Table 12.2.1.2 Research Undertaken (Most Recent Market) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 6-10 | Over 10 | | Base: All exporting | 215 | 235 | 382 | 587 | 181 | 46 | 17 | 814 | | Research the business environment | 32% | 29% | 31% | 25% | 34% | 55% | 70% | 30% | | Conduct a market analysis | 21% | 20% | 20% | 17% | 19% | 37% | 51% | 19% | | Pay for any info/ assistance | 5% | 7% | 5% | 4% | 6% | 7% | 12% | 5% | | None of these | 58% | 59% | 63% | 67% | 58% | 35% | 18% | 63% | | Don't know | 0% | 0% | 1% | 0% | 1% | 5% | 0% | 1% | | Net: Any of these | 42% | 41% | 36% | 33% | 41% | 60% | 82% | 36% |
While there is no relationship between the length of time firms have been doing business overseas and the extent of the market entry preparation they conduct, it is clear that firms that are active in more than 10 markets have more robust and comprehensive procedures in place.
Table 12.2.1.3 Research Undertaken (Most Recent Market) - By Export Experience
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 2-10 | Over 10 | | Base: All exporting | 132 | 448 | 248 | 438 | 178 | 211 | | Research the business environment | 31% | 30% | 31% | 27% | 24% | 43% | | Conduct a market analysis | 18% | 20% | 21% | 17% | 18% | 27% | | Pay for any info/ assistance | 3% | 6% | 5% | 5% | 6% | 6% | | None of these | 62% | 61% | 63% | 66% | 67% | 49% | | Don't know | 1% | 1% | 1% | 0% | 2% | 0% | | Net: Any of these | 37% | 38% | 36% | 34% | 31% | 51% | 12.2.2 External Assistance
Firms were also asked about their use of external support, covering both formal/informal sources and paid-for/free-of-charge assistance. Please note that this question was asked in relation to firms’ most challenging overseas market (whereas the analysis in the previous section was based on their most recent market).
Table 12.2.2.1 External Assistance Used (Most Challenging Market) - By UKTI Usage
| Base: All exporting | Total | UKTI Usage | |---------------------|-------|------------| | | | UKTI User | Non-User | | Obtained information, advice or support from UKTI or a British embassy/consulate overseas | 832 | 178 | 654 | | Commissioned information, advice or support from any other external organisations | 7% | 31% | 0% | | Received less formal advice or help from friends, family or business associates | 10% | 20% | 7% | | None of these | 42% | 54% | 38% | | Don’t know | 52% | 29% | 60% | | Net: Any external support | 48% | 70% | 40% |
Approaching half of all firms (48%) had accessed some form of external assistance in relation to their most challenging market, although in the majority of cases this had consisted of informal advice from friends, family or business associates.
UKTI users are significantly more likely to have used external support (70% vs. 40% of non-users) in relation to their most challenging market. Although this difference is largely driven by the 31% using UKTI services (compared to 0% of non-users), it is apparent that UKTI users are also more likely to commission assistance from other (non-UKTI) sources and to draw on the expertise of friends or business associates. As seen below, the larger a firm is the more likely they are to seek external assistance when doing business overseas, and this is true of both formal support (i.e. from UKTI or other providers) and of less formal advice from friends or associates. Whilst there is no difference in the overall proportion accessing external support by age of firm, there is some indication that older firms are more inclined to use UKTI services and less likely to rely on advice from friends or business associates.
Table 12.2.2.2 External Assistance Used (Most Challenging Market) - By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 215 | 814 | | 6-10 | 235 | | | Over 10 | 382 | | | 0-9 | 587 | | | 10-49 | 181 | | | 50-249 | 46 | | | 250+ | 17 | | | Base: All exporting | | |
Obtained support from UKTI or embassies/consulates
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 2% | 7% | | 6-10 | 6% | | | Over 10 | 9% | | | 0-9 | 5% | | | 10-49 | 9% | | | 50-249 | 17% | | | 250+ | 37% | | | Base: All exporting | | |
Commissioned support from other organisations
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 8% | 9% | | 6-10 | 9% | | | Over 10 | 12% | | | 0-9 | 8% | | | 10-49 | 10% | | | 50-249 | 21% | | | 250+ | 45% | | | Base: All exporting | | |
Received advice from friends, family or business associates
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 45% | 41% | | 6-10 | 45% | | | Over 10 | 40% | | | 0-9 | 39% | | | 10-49 | 44% | | | 50-249 | 55% | | | 250+ | 63% | | | Base: All exporting | | |
None of these
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 53% | 53% | | 6-10 | 51% | | | Over 10 | 53% | | | 0-9 | 57% | | | 10-49 | 49% | | | 50-249 | 35% | | | 250+ | 12% | | | Base: All exporting | | |
Don’t know
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 0% | 0% | | 6-10 | 0% | | | Over 10 | 1% | | | 0-9 | 0% | | | 10-49 | 0% | | | 50-249 | 2% | | | 250+ | 6% | | | Base: All exporting | | |
Net: Any external support
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|---------------------------|---------| | Up to 5 | 47% | 47% | | 6-10 | 49% | | | Over 10 | 46% | | | 0-9 | 43% | | | 10-49 | 51% | | | 50-249 | 63% | | | 250+ | 82% | | | Base: All exporting | | |
Experienced exporters and those active in a greater number of markets are more likely to obtain support from UKTI and to commission assistance from other organisations.
Table 12.2.2.3 External Assistance Used (Most Challenging Market) - By Export Experience
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 132 | | 2-10 | 448 | | Over 10 | 248 | | 1-5 | 438 | | 6-10 | 178 | | Over 10 | 211 | | Base: All exporting | |
Obtained support from UKTI or embassies/consulates
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 5% | | 2-10 | 6% | | Over 10 | 10% | | 1-5 | 6% | | 6-10 | 4% | | Over 10 | 13% | | Base: All exporting | |
Commissioned support from other organisations
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 5% | | 2-10 | 9% | | Over 10 | 13% | | 1-5 | 8% | | 6-10 | 12% | | Over 10 | 14% | | Base: All exporting | |
Received advice from friends, family or business associates
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 43% | | 2-10 | 42% | | Over 10 | 41% | | 1-5 | 42% | | 6-10 | 37% | | Over 10 | 47% | | Base: All exporting | |
None of these
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 55% | | 2-10 | 52% | | Over 10 | 52% | | 1-5 | 54% | | 6-10 | 57% | | Over 10 | 45% | | Base: All exporting | |
Don’t know
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 0% | | 2-10 | 0% | | Over 10 | 0% | | 1-5 | 0% | | 6-10 | 1% | | Over 10 | 1% | | Base: All exporting | |
Net: Any external support
| Experience (Years Exporting) | Number of Markets | |------------------------------|-------------------| | Under 2 | 45% | | 2-10 | 48% | | Over 10 | 48% | | 1-5 | 46% | | 6-10 | 42% | | Over 10 | 54% | | Base: All exporting | | 13. Barriers to Overseas Trade
13.1 Barriers (Summary)
As mentioned previously, for the sections of the interview relating to drivers of market and barriers, firms were asked to focus on just one market, as follows:
- Firms were asked to select the ‘most challenging’ country that they had done business in over the last 5 years
- If they were unable to pick one, they were asked to select the country they had started doing business in ‘most recently’
For full details of the markets selected by users and non-users of UKTI, please refer to Annex A.
Firms were then read out 11 potential barriers that they might have faced when trying to develop their business in the selected market, and asked to indicate the extent to which each one had been a difficulty (using a 5 point scale, where 5 meant it had been ‘extremely difficult’ and 1 meant it had ‘not been at all difficult’). The barriers tested were as follows:
- Dealing with legal or tax regulations or standards in < MARKET >
- Protecting your intellectual property
- Ensuring you get paid and enforcing contracts
- Dealing with customs procedures or paperwork
- Identifying who to make contact with in the first instance or finding a suitable partner
- Establishing an initial dialogue with prospective customers or business partners in < MARKET >
- Building relationships with key influencers or decision-makers
- Obtaining basic information about doing business in < MARKET >
- Finding the necessary management time to devote to doing business in < MARKET >
- Negotiating the culture and language
- A preference on the part of customers in < MARKET > for doing business with firms from < MARKET >
Please note that all analysis in this section of the report is based just on firms that were already doing business overseas. The chart below shows the proportion of firms experiencing each barrier to a significant extent (i.e. scoring 4 or 5 out of 5 for the extent to which it was a difficulty). Details of the full distribution of scores for each individual barrier are shown in Chapter 13.2.
Chart 13.1.1 Individual Barriers
- Dealing with customs procedures & paperwork: 24%
- Ensuring you get paid & enforcing contracts: 23%
- Dealing with legal or tax regulations & standards: 21%
- Negotiating the language & culture: 16%
- Finding the necessary management time to do business there: 15%
- Identifying who to make contact with in the first instance: 14%
- Building relationships with key influencers or decision-makers: 13%
- Establishing an initial dialogue with prospective customers or partners: 12%
- Protecting your intellectual property: 12%
- Customer preference for doing business with other firms from their own country: 12%
- Obtaining basic information about doing business in that country: 10%
Base: All exporters (Base) (832)
The most widely experienced barriers all relate to the formalities and bureaucracy of doing business overseas, with 24% having significant problems with customs procedures, 23% with getting paid and 21% with legal or tax regulations.
As seen earlier (in Chapter 11.2), half of all firms had been deterred from entering a new market due to the risk of not being paid. It is clear from the above analysis that this fear is not without substance, as almost a quarter of firms have experienced significant difficulties in this respect. The table below shows further analysis of the barriers encountered by users and non-users of UKTI.
Table 13.1.1 Individual Barriers – By UKTI Usage
| Proportion experiencing significant difficulty (4-5 out of 5) with... | Total | UKTI Usage | |---------------------------------------------------------------|-------|------------| | | | UKTI User | Non-User | | **Base: All exporters** | 832 | 178 | 654 | | Dealing with customs procedures & paperwork | 24% | 29% | 23% | | Ensuring you get paid & enforcing contracts | 23% | 25% | 23% | | Dealing with legal or tax regulations & standards | 21% | 28% | 19% | | Negotiating the language & culture | 16% | 20% | 14% | | Finding the necessary management time to devote to doing business in there | 15% | 19% | 14% | | Identifying who to make contact with in the first instance | 14% | 20% | 12% | | Building relationships with key influencers or decision-makers| 13% | 19% | 11% | | Establishing an initial dialogue with prospective customers or partners | 12% | 18% | 10% | | Protecting your intellectual property | 12% | 17% | 10% | | Customer preference for doing business with firms from their own country | 12% | 18% | 10% | | Obtaining basic information about doing business in that country | 10% | 12% | 9% |
UKTI users are consistently more likely to report each of these barriers than non-users, although this difference is not statistically significant for customs procedures, getting paid, finding the necessary management time and obtaining basic information. This marked difference between users and non-users suggests that the experience of encountering these difficulties prompted firms to contact UKTI.
However, at this stage it should be remembered that respondents were asked to talk about the ‘most challenging’ market that they had done business in, and this is likely to be contributing towards the difference in the barriers experienced by users and non-users. UKTI users tend to have been doing business overseas longer, be operating in more markets and are more likely to be doing business in high growth markets. As such, they would appear to have a higher chance of having encountered a particularly ‘challenging’ market which involves significant barriers.
Overall, 43% of firms indicated that they had not experienced significant difficulties with any of these issues. When asked whether they had encountered any other significant problems, the vast majority of this group (88%) stated that they had not, suggesting that the current list of barriers that firms are prompted with is comprehensive and covers the major issues. The most widely mentioned additional barriers were different business procedures (2%), political unrest (2%) and legal/tax issues on the UK side (2%). The 11 individual barriers firms were prompted with have been summarised further as outlined below.
| Barriers - Summary | |--------------------| | Firms have been defined as perceiving significant ‘legal & regulatory’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with legal or tax regulations or standards in <MARKET> | | • Or, Protecting your intellectual property | | • Or, Ensuring you get paid and enforcing contracts | | Firms have been defined as perceiving significant ‘customs’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Dealing with customs procedures or paperwork | | Firms have been defined as perceiving significant ‘contacts’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Identifying who to make contact with in the first instance or finding a suitable partner | | • Or, Establishing an initial dialogue with prospective customers or business partners in <MARKET> | | • Or, Building relationships with key influencers or decision-makers | | Firms have been defined as perceiving significant ‘information’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Obtaining basic information about doing business in <market> | | Firms have been defined as perceiving significant ‘resource’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Finding the necessary management time to devote to doing business in <MARKET> | | Firms have been defined as perceiving significant ‘language & cultural’ barriers if they scored 4 or 5 on a 5-point scale for… | | • Negotiating the language & culture | | Firms have been defined as perceiving significant ‘bias’ barriers if they scored 4 or 5 on a 5-point scale for… | | • A preference on the part of customers in <MARKET> for doing business with firms from <MARKET> | The table below shows the proportions of firms scoring against each of these summary categories as well as an analysis of the number of individual barriers experienced to a significant extent.
Table 13.1.2 Summary Barriers – By UKTI Usage
| Types of Barriers | Total | UKTI Usage | Non-User | |-----------------------------------|-------|------------|----------| | | | UKTI User | Non-User | | Base: All exporters | 832 | 178 | 654 | | Legal & regulatory barriers | 37% | 43% | 35% | | Customs barriers | 24% | 29% | 23% | | Contacts barriers | 24% | 34% | 20% | | Information barriers | 10% | 12% | 9% | | Resource barriers | 15% | 19% | 14% | | Language & cultural barriers | 16% | 20% | 14% | | Bias barriers | 12% | 18% | 10% |
| Number of Barriers | | | | |-----------------------------------|-------|------------|----------| | At least one significant individual barrier | 57% | 72% | 52% | | - One | 16% | 19% | 15% | | - Two | 13% | 14% | 12% | | - Three | 10% | 14% | 9% | | - Four or more | 18% | 26% | 16% | | No significant barriers | 43% | 28% | 48% |
As has been the case in past UKTI studies, internationalising firms are most likely to be affected by legal and regulatory barriers, contacts barriers and customs barriers.
Overall, well over half (57%) of firms have experienced at least one significant barrier in their selected market (which, it should be noted, is the ‘most challenging market’ many have done business in). A significant proportion (18%) have encountered significant difficulties with four or more of the individual barriers, suggesting there is a clear need for some form of external assistance to help firms overcome these barriers and successfully trade in overseas markets.
UKTI users clearly come across more significant barriers than non-users, with 72% experiencing at least one, compared to just 52% of non-users. Users are more likely to encounter each of the barrier types (although please note that this difference is not statistically significant for customs barriers, information barriers and resource barriers).
Interestingly, the proportion of firms experiencing any significant barriers has fallen since the 2011 survey (from 67% to 57% currently), and this drop is evident for both users and non-users of UKTI. This may be connected to the corresponding fall in the proportion of firms that are active in emerging/fast growing markets (down from 46% to 40%), as these markets tend to present firms with greater challenges. Firms operating overseas sites are most likely to have encountered all of the barrier types and also tend to have encountered a greater number of barriers, and operating overseas through contractual arrangements is also associated with a greater incidence of barriers.
Table 13.1.3 Individual Barriers – By Modes Used In Selected Market
| Types of Barriers | Selling direct | Agents/distributors | Contractual arrangements | Overseas site | |-----------------------------------|----------------|---------------------|--------------------------|---------------| | Base: All exporters | 658 | 221 | 43 | 51 | | Legal & regulatory barriers | 35% | 39% | 43% | 51% | | Customs barriers | 24% | 24% | 28% | 40% | | Contacts barriers | 23% | 26% | 38% | 38% | | Information barriers | 9% | 11% | 14% | 18% | | Resource barriers | 15% | 19% | 17% | 23% | | Language & cultural barriers | 15% | 13% | 20% | 21% | | Bias barriers | 12% | 12% | 13% | 27% |
Number of Barriers
| At least one significant individual barrier | 56% | 60% | 73% | 75% | |--------------------------------------------|-----|-----|-----|-----| | - One | 16% | 17% | 22% | 12% | | - Two | 12% | 15% | 7% | 20% | | - Three | 10% | 10% | 20% | 15% | | - Four or more | 18% | 19% | 24% | 28% | | No significant barriers | 44% | 40% | 27% | 25% | The table below provides further analysis of the barriers experienced by firms’ motivations for trying to enter that particular market.
Table 13.1.4 Summary Barriers – By Market Entry Motivations
| Significant Motivations | Enquiry from potential customer | Existing customer request | In-house experience or contacts | Helped by company already working with in another market | Market is at forefront of developments for industry | |--------------------------|---------------------------------|---------------------------|---------------------------------|--------------------------------------------------------|--------------------------------------------------| | Base: All exporters | 576 | 334 | 238 | 208 | 168 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | Number of Barriers | |-------------------|--------------------|---------|----------|-------------|----------|---------------------|------|-------------------| | | 37% | 23% | 21% | 10% | 14% | 15% | 10% | At least one barrier | | | 41% | 26% | 25% | 10% | 16% | 18% | 14% | - One | | | 36% | 24% | 23% | 8% | 15% | 13% | 12% | - Two | | | 40% | 31% | 29% | 12% | 20% | 21% | 17% | - Three | | | 39% | 22% | 26% | 8% | 12% | 17% | 18% | - Four or more | | | | | | | | | | No significant barriers |
There is some evidence to suggest that firms who entered markets in response to an approach or enquiry from a potential customer are less likely to encounter significant barriers. Perhaps counter intuitively, those firms that were helped to enter a market by a company they were already working with elsewhere appear more likely to face barriers, and the same is true of those targeting a market because it is at the forefront of developments for their industry. Firms who sought professional, external support with their market entry are more likely to have experienced difficulties, suggesting that encountering barriers prompts firms to seek assistance to help overcome them.
Table 13.1.5 Summary Barriers – By Support Received
| Received support about market from | UKTI (inc. Posts) | Other external organisations | Friends, family, associates | None of these | |-----------------------------------|-------------------|-----------------------------|-----------------------------|---------------| | Base: All exporters | 54 | 81 | 355 | 435 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | | 57% | 36% | 46% | 19% | 25% | 30% | 17% | | | 49% | 41% | 37% | 16% | 21% | 26% | 24% | | | 43% | 29% | 32% | 11% | 19% | 19% | 17% | | | 30% | 19% | 16% | 8% | 12% | 11% | 8% |
Number of Barriers
| Number of Barriers | At least one barrier | One | Two | Three | Four or more | No significant barriers | |--------------------|----------------------|-----|-----|-------|--------------|-------------------------| | | 90% | 21% | 15% | 14% | 25% | 10% | | | 77% | 15% | 14% | 14% | 14% | 23% | | | 69% | 17% | 15% | 14% | 24% | 31% | | | 45% | 15% | 11% | 7% | 13% | 55% |
While it might be expected that larger firms are less likely to experience barriers due to their greater resources (and typically greater overseas experience), in fact the opposite is true and it is firms with less than 10 employees that are least likely to report barriers. There are no consistent differences by age of firm in this respect.
Table 13.1.6 Summary Barriers – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | All SMEs | |---------------------|-----------------------------|---------| | Up to 5 | 6-10 | Over 10 | | Base: All exporters | 215 | 235 | 382 | 587 | 181 | 46 | 17 | 814 |
Types of Barriers
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|--------------------|---------|----------|-------------|----------|--------------------|------| | | 38% | 25% | 22% | 10% | 12% | 13% | 14% | | | 39% | 26% | 21% | 11% | 16% | 16% | 11% | | | 35% | 23% | 25% | 9% | 16% | 16% | 11% | | | 33% | 21% | 20% | 8% | 14% | 15% | 10% | | | 33% | 30% | 30% | 12% | 20% | 18% | 14% | | | 47% | 28% | 33% | 12% | 7% | 12% | 16% | | | 36% | 27% | 27% | 33% | 37% | 33% | 24% | | | 45% | 33% | 27% | 33% | 37% | 33% | 23% | | | 36% | 24% | 23% | 9% | 15% | 15% | 15% |
Number of Barriers
| Number of Barriers | At least one barrier | One | Two | Three | Four or more | No significant barriers | |--------------------|----------------------|-----|-----|-------|--------------|-------------------------| | | 54% | 16% | 11% | 11% | 17% | 46% | | | 58% | 16% | 13% | 11% | 19% | 42% | | | 57% | 16% | 13% | 9% | 19% | 43% | | | 51% | 15% | 12% | 9% | 11% | 49% | | | 68% | 14% | 14% | 9% | 11% | 32% | | | 68% | 24% | 15% | 9% | 12% | 32% | | | 76% | 15% | 12% | 9% | 12% | 24% | | | 56% | 16% | 13% | 10% | 18% | 44% | There is no evidence that barriers decline as firms become more experienced overseas and in fact the converse is true, as the more markets or experience a firm has, the more likely they are to encounter barriers. However, it should be remembered that this data relates to firms’ most challenging market, and experienced exporters are more likely to have encountered more difficult markets.
Table 13.1.7 Summary Barriers – By Export Experience
| Years Exporting | Number of Markets | |-----------------|-------------------| | | Less than 2 years | 2-10 years | Over 10 years | 1-5 | 6-10 | More than 10 | | Base: All exporters | 132 | 448 | 248 | 438 | 178 | 211 |
Types of Barriers
| Types of Barriers | Less than 2 years | 2-10 years | Over 10 years | 1-5 | 6-10 | More than 10 | |-------------------|-------------------|------------|---------------|-----|------|--------------| | Legal & regulatory | 26% | 36% | 40% | 30% | 38% | 48% | | Customs | 21% | 22% | 27% | 18% | 27% | 34% | | Contacts | 18% | 22% | 26% | 19% | 25% | 30% | | Information | 9% | 11% | 9% | 8% | 11% | 12% | | Resource | 13% | 14% | 18% | 12% | 18% | 19% | | Language & cultural | 10% | 17% | 16% | 11% | 20% | 19% | | Bias | 9% | 12% | 12% | 9% | 12% | 16% |
Number of Barriers
| Number of Barriers | Less than 2 years | 2-10 years | Over 10 years | 1-5 | 6-10 | More than 10 | |--------------------|-------------------|------------|---------------|-----|------|--------------| | At least one barrier | 49% | 55% | 61% | 49% | 61% | 68% | | - One | 16% | 15% | 17% | 17% | 16% | 14% | | - Two | 10% | 12% | 15% | 12% | 15% | 13% | | - Three | 11% | 10% | 9% | 6% | 9% | 16% | | - Four or more | 12% | 18% | 20% | 14% | 21% | 24% | | No significant barriers | 51% | 45% | 39% | 51% | 39% | 32% |
Firms that are active in only one overseas region are significantly less likely to have experienced any barriers.
Table 13.1.8 Summary Barriers – By Number of Regions
| Number of Overseas Regions Active In | One | Two | Three | Four | Five | |-------------------------------------|-----|-----|-------|------|------| | Base: All exporters | 270 | 196 | 151 | 115 | 98 |
Types of Barriers
| Types of Barriers | One | Two | Three | Four | Five | |-------------------|-----|-----|-------|------|------| | Legal & regulatory | 23% | 38% | 40% | 51% | 45% | | Customs | 15% | 22% | 31% | 35% | 28% | | Contacts | 15% | 24% | 31% | 28% | 27% | | Information | 7% | 9% | 16% | 11% | 6% | | Resource | 11% | 14% | 23% | 20% | 13% | | Language & cultural | 11% | 17% | 20% | 17% | 17% | | Bias | 9% | 11% | 13% | 18% | 12% |
Number of Barriers
| Number of Barriers | One | Two | Three | Four | Five | |--------------------|-----|-----|-------|------|------| | At least one barrier | 43% | 58% | 69% | 67% | 59% | | - One | 16% | 16% | 22% | 11% | 14% | | - Two | 9% | 12% | 17% | 15% | 12% | | - Three | 5% | 11% | 9% | 17% | 12% | | - Four or more | 12% | 19% | 21% | 24% | 21% | | No significant barriers | 57% | 42% | 31% | 33% | 41% | As seen below, innovative and IP active firms consistently report more barriers to overseas trade, and this is true of all the barrier types.
Table 13.1.9 Summary Barriers – By Innovation
| Types of Barriers | Innovative | IP Active | |-------------------|------------|-----------| | | Yes (alternative) | Yes | No | Yes | No | | Base: All exporters | 377 | 616 | 216 | 182 | 641 |
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|----------|----------------|-------------------------| | Legal & regulatory | 61% | 14% | 15% | 13% | 19% | 39% | | Customs | 59% | 16% | 13% | 11% | 19% | 41% | | Contacts | 50% | 16% | 12% | 7% | 16% | 50% | | Information | 70% | 15% | 18% | 15% | 21% | 30% | | Resource | 54% | 16% | 8% | 15% | 18% | 46% | | Language & cultural| 44% | 19% | 16% | 14% | 18% | 35% | | Bias | 36% | 16% | 16% | 16% | 16% | 37% |
Firms with substantial growth aspirations are more likely to encounter significant barriers, suggesting that they are most in need of external assistance to enable them to fulfil their ambitions.
Table 13.1.10 Summary Barriers – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | | Stay same | Mod. growth | Sub. growth | Expect sub. growth | Other | Non innovative | | Base: All exporters | 121 | 448 | 235 | 186 | 430 | 216 |
| Types of Barriers | Legal & regulatory | Customs | Contacts | Information | Resource | Language & cultural | Bias | |-------------------|---------------------|---------|----------|-------------|----------|---------------------|------| | | 33% | 24% | 14% | 8% | 12% | 15% | 10% | | | 35% | 23% | 25% | 9% | 16% | 16% | 10% | | | 44% | 26% | 26% | 12% | 16% | 16% | 17% | | | 42% | 26% | 25% | 13% | 16% | 14% | 16% | | | 36% | 25% | 24% | 11% | 16% | 18% | 10% | | | 34% | 22% | 20% | 5% | 13% | 11% | 11% |
| Number of Barriers | At least one barrier | - One | - Two | - Three | - Four or more | No significant barriers | |--------------------|----------------------|-------|-------|----------|----------------|-------------------------| | | 51% | 16% | 13% | 5% | 17% | 49% | | | 56% | 15% | 13% | 10% | 18% | 44% | | | 65% | 19% | 14% | 14% | 19% | 35% | | | 63% | 18% | 13% | 13% | 19% | 37% | | | 58% | 15% | 13% | 10% | 19% | 43% | | | 50% | 16% | 12% | 7% | 16% | 50% | There is some suggestion that firms classified as ‘born global’ under the tighter definition are more likely to experience barriers, but this difference is not statistically significant.
Table 13.1.11 Summary Barriers – By Born Global & Young, Tech Intensive
| Types of Barriers | Up to 5 years old | Over 5 years old | |-------------------|-------------------|------------------| | | Total | Born global | Born global (alternative) | Young, tech intensive | Total | Born global | Born global (alternative) | Young, tech intensive | | Base: All exporters | 215 | 133 | 46 | 89 | 617 | 36% | 44% | 35% | | Legal & regulatory | 38% | 44% | 43% | 35% | 36% | 44% | 43% | 35% | | Customs | 25% | 29% | 30% | 26% | 24% | 29% | 30% | 26% | | Contacts | 22% | 25% | 30% | 21% | 24% | 25% | 30% | 21% | | Information | 10% | 9% | 11% | 13% | 10% | 9% | 11% | 13% | | Resource | 12% | 12% | 15% | 11% | 16% | 12% | 15% | 11% | | Language & cultural | 13% | 12% | 11% | 13% | 16% | 13% | 11% | 13% | | Bias | 14% | 15% | 9% | 15% | 11% | 15% | 9% | 15% |
There is clear evidence that high growth and ‘other’ markets are associated with greater barriers than those in the European Economic Area, and this is true for all types of barrier except bias. However, it should be noted that approaching half of the firms that were focusing on EEA markets had still experienced significant barriers.
Table 13.1.12 Summary Barriers – By Market Type
| Market | High Growth | EEA | Other | |--------|-------------|-----|-------| | Base: All exporters | 261 | 315 | 256 | | Types of Barriers | | | | | Legal & regulatory | 48% | 26% | 38% | | Customs | 34% | 14% | 26% | | Contacts | 30% | 16% | 26% | | Information | 13% | 8% | 9% | | Resource | 18% | 11% | 17% | | Language & cultural | 23% | 12% | 13% | | Bias | 12% | 12% | 11% | | Number of Barriers | | | | | At least one barrier | 69% | 44% | 59% | | - One | 18% | 15% | 15% | | - Two | 14% | 9% | 15% | | - Three | 10% | 8% | 12% | | - Four or more | 27% | 12% | 16% | | No significant barriers | 31% | 56% | 41% | The table below provides analysis of the barriers experienced by individual market. Please note that it has only been possible to provide this analysis for markets selected by at least 30 respondents.
Table 13.1.13 Summary Barriers – By Individual Market
| Market | China | France | Germany | India | Ireland | Russia | USA | |--------|-------|--------|---------|-------|---------|--------|-----| | Base: All exporters | 58 | 48 | 36 | 37 | 61 | 45 | 59 |
Types of Barriers
| Types of Barriers | China | France | Germany | India | Ireland | Russia | USA | |-------------------|-------|--------|---------|-------|---------|--------|-----| | Legal & regulatory | 58% | 29% | 12% | 45% | 16% | 58% | 40% | | Customs | 25% | 24% | 15% | 31% | 3% | 58% | 20% | | Contacts | 40% | 28% | 21% | 29% | 6% | 38% | 21% | | Information | 10% | 12% | 9% | 8% | 6% | 26% | 5% | | Resource | 22% | 21% | 9% | 17% | 7% | 16% | 16% | | Language & cultural | 40% | 35% | 16% | 11% | 0% | 26% | 6% | | Bias | 18% | 40% | 4% | 13% | 1% | 7% | 14% |
Number of Barriers
| Number of Barriers | China | France | Germany | India | Ireland | Russia | USA | |--------------------|-------|--------|---------|-------|---------|--------|-----| | At least one barrier | 75% | 56% | 39% | 60% | 25% | 84% | 65% | | - One | 14% | 6% | 5% | 18% | 15% | 17% | 20% | | - Two | 6% | 9% | 14% | 5% | 4% | 28% | 26% | | - Three | 22% | 12% | 9% | 8% | 1% | 3% | 8% | | - Four or more | 33% | 30% | 11% | 29% | 4% | 36% | 10% | | No significant barriers | 25% | 44% | 61% | 40% | 75% | 16% | 35% |
Based on the above analysis, there are significant variations in the type and extent of barriers experienced in different markets. Russia and China appear to be the most challenging markets, with the vast majority of firms (84% and 75% respectively) reporting at least one significant barrier.
Legal and regulatory issues and customs issues are very significant issues in Russia, with 58% reporting a significant difficulty in both these areas (compared to 37% across all markets for legal and regulatory and 24% for customs). It is also clear that initiating and building relationships can also be a major problem in Russia, with 38% reporting significant difficulties with contacts barriers (compared to 24% overall). It also appears that many firms are having difficulty finding basic information about the Russian market, with 26% experiencing this barrier (compared to 10% across all markets), suggesting a need for more widely available support in this area.
As with Russia, the most widespread barrier encountered in China is legal and regulatory (58%). Significant proportions of firms have also had problems with identifying and developing contacts (40%) and negotiating the language and culture (40%).
Interestingly, bias barriers (i.e. where firms in an overseas market demonstrate a preference for doing business with other firms from their own market) seem to be a particularly large problem in France (40%), and this is consistent with results seen in previous years. As seen below, in every type of market UKTI users are more likely to report significant barriers than non-users (although the difference is less pronounced, and not statistically significant, in high growth markets). This suggests that the greater incidence of barriers amongst users is not simply a reflection of the type of markets they do business in.
Table 13.1.14 Summary Barriers – By Market Type & UKTI Usage
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 60 | 201 | 47 | 268 | 71 | 185 | | Legal & regulatory | 52% | 47% | 28% | 25% | 44% | 36% | | Customs | 34% | 34% | 9% | 15% | 38% | 21% | | Contacts | 35% | 29% | 27% | 14% | 37% | 20% | | Information | 14% | 13% | 7% | 8% | 14% | 7% | | Resource | 14% | 20% | 20% | 9% | 23% | 15% | | Language & cultural | 23% | 23% | 19% | 11% | 19% | 11% | | Bias | 19% | 12% | 26% | 9% | 17% | 9% |
Number of Barriers
| At least one barrier | 74% | 68% | 64% | 41% | 77% | 51% | | - One | 20% | 17% | 26% | 13% | 13% | 16% | | - Two | 8% | 17% | 10% | 9% | 23% | 12% | | - Three | 14% | 9% | 9% | 7% | 16% | 10% | | - Four or more | 33% | 26% | 19% | 11% | 24% | 13% | | No significant barriers | 26% | 32% | 36% | 59% | 23% | 49% |
Similarly, when the analysis compares users and non-users that are active in a similar number of markets, UKTI users are still more likely to report significant barriers (although this difference is only significant for those active in 1-5 markets).
Table 13.1.15 Summary Barriers – By Number of Markets & UKTI Usage
| Types of Barriers | 1-5 markets | 6-10 markets | More than 10 markets | |-------------------|-------------|--------------|----------------------| | | UKTI User | Non-User | UKTI User | Non-User | UKTI User | Non-User | | Base: All exporters | 67 | 371 | 35 | 143 | 76 | 135 | | Legal & regulatory | 48% | 26% | 42% | 37% | 38% | 54% | | Customs | 21% | 17% | 31% | 26% | 34% | 33% | | Contacts | 29% | 17% | 34% | 23% | 37% | 26% | | Information | 11% | 7% | 14% | 10% | 12% | 12% | | Resource | 25% | 10% | 20% | 18% | 15% | 21% | | Language & cultural | 17% | 10% | 21% | 20% | 22% | 18% | | Bias | 13% | 8% | 28% | 9% | 17% | 15% |
Number of Barriers
| At least one barrier | 75% | 43% | 70% | 59% | 71% | 65% | | - One | 25% | 15% | 13% | 17% | 16% | 13% | | - Two | 16% | 11% | 17% | 14% | 12% | 14% | | - Three | 15% | 5% | 4% | 11% | 16% | 17% | | - Four or more | 19% | 12% | 36% | 18% | 28% | 22% | | No significant barriers | 25% | 57% | 30% | 41% | 29% | 35% | As seen below, there are no clear or consistent differences by age of firm within any of the 3 market types.
Table 13.1.16 Summary Barriers – By Market Type & Age
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | Up to 5 yrs old | 6-10 yrs old | Over 10 yrs old | | Base: All exporters | 67 | 76 | 118 | 86 | 87 | 142 | 62 | 72 | 122 |
Number of Barriers
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 72% | 72% | 68% | 43% | 49% | 43% | 52% | 54% | 62% | | - One | 16% | 25% | 15% | 14% | 11% | 17% | 18% | 13% | 16% | | - Two | 13% | 11% | 16% | 12% | 14% | 7% | 6% | 14% | 18% | | - Three | 10% | 13% | 8% | 12% | 10% | 6% | 10% | 8% | 14% | | - Four or more | 31% | 24% | 28% | 6% | 14% | 13% | 18% | 19% | 15% | | No significant barriers | 28% | 28% | 32% | 57% | 51% | 57% | 48% | 46% | 38% |
However, it does appear that experienced exporters are more likely to encounter barriers in EEA and ‘other’ markets, but there is no difference by export experience in high growth markets.
Table 13.1.17 Summary Barriers – By Market Type & Experience
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | Exp. up to 2 yrs | Exp. 2-10 yrs | Exp. over 10 yrs | | Base: All exporters | 42 | 134 | 84 | 54 | 178 | 81 | 36 | 136 | 83 |
Number of Barriers
| Number of Barriers | High Growth | EEA | Other | |--------------------|-------------|-----|-------| | At least one barrier | 66% | 72% | 68% | 36% | 45% | 47% | 47% | 52% | 69% | | - One | 20% | 21% | 14% | 15% | 12% | 20% | 12% | 13% | 18% | | - Two | 16% | 12% | 17% | 7% | 11% | 7% | 8% | 14% | 19% | | - Three | 10% | 14% | 6% | 9% | 8% | 6% | 14% | 8% | 16% | | - Four or more | 19% | 25% | 31% | 5% | 13% | 14% | 13% | 16% | 16% | | No significant barriers | 34% | 28% | 32% | 64% | 55% | 53% | 53% | 48% | 31% | In each type of market, smaller firms with less than 10 employees appear least likely to encounter significant barriers. When interpreting the data below, the extremely low base sizes for firms with 250+ employees should be taken into account.
Table 13.1.18 Summary Barriers – By Market Type & Size
| Types of Barriers | High Growth | EEA | Other | |-------------------|-------------|-----|-------| | | 0-9 | 10-249 | 250+ | SME total | 0-9 | 10-249 | 250+ | SME total | 0-9 | 10-249 | 250+ | SME total | | Base: All exporters | 170 | 83 | 8 | 253 | 230 | 80 | 4 | 310 | 187 | 64 | 5 | 251 | | Legal & regulatory | 43% | 56% | 60% | 48% | 24% | 31% | 0% | 26% | 34% | 48% | 60% | 38% | | Customs | 31% | 41% | 19% | 35% | 13% | 15% | 25% | 14% | 22% | 33% | 60% | 25% | | Contacts | 30% | 33% | 19% | 31% | 15% | 18% | 50% | 15% | 19% | 43% | 20% | 26% | | Information | 9% | 15% | 46% | 12% | 7% | 8% | 50% | 7% | 7% | 14% | 0% | 9% | | Resource | 17% | 20% | 27% | 18% | 10% | 12% | 50% | 10% | 15% | 21% | 40% | 17% | | Language & cultural | 24% | 20% | 33% | 22% | 11% | 13% | 25% | 12% | 10% | 18% | 40% | 12% | | Bias | 14% | 10% | 0% | 13% | 11% | 13% | 50% | 11% | 7% | 20% | 20% | 11% |
At the total level, there are no significant differences between production and service sector firms, either in the proportion experiencing any significant barriers or by the types of barriers encountered. However, service sector firms are significantly more likely to encounter barriers in High Growth markets.
Table 13.1.19 Summary Barriers – By Market Type & Sector
| Types of Barriers | Total | High Growth | EEA | Other | |-------------------|-------|-------------|-----|-------| | | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | Prod. | Serv. | | Base: All exporters | 240 | 592 | 68 | 193 | 96 | 219 | 76 | 180 | | Legal & regulatory | 34% | 38% | 38% | 52% | 27% | 25% | 38% | 39% | | Customs | 22% | 25% | 33% | 35% | 14% | 14% | 24% | 27% | | Contacts | 20% | 25% | 22% | 34% | 16% | 16% | 24% | 26% | | Information | 10% | 10% | 14% | 13% | 11% | 6% | 6% | 10% | | Resource | 14% | 16% | 11% | 21% | 12% | 10% | 18% | 17% | | Language & cultural | 15% | 16% | 23% | 23% | 12% | 12% | 12% | 13% | | Bias | 11% | 12% | 9% | 13% | 15% | 11% | 8% | 12% |
At least one barrier 56% 57% 60% 73% 49% 42% 60% 59%
- One 18% 15% 19% 17% 16% 15% 21% 13%
- Two 14% 13% 13% 15% 14% 7% 13% 17%
- Three 9% 10% 10% 10% 8% 8% 11% 13%
- Four or more 15% 20% 19% 31% 11% 13% 15% 17% No sig. barriers 44% 43% 40% 27% 51% 58% 41% 41% 13.2 Barriers (Detailed)
13.2.1 Dealing with Legal or Tax Regulations & Standards (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.1 Dealing with Legal or Tax Regulations & Standards – By UKTI Usage
Dealing with legal or tax regulations and standards is one of the most widespread barriers, with over a fifth of firms (21%) experiencing it to a significant extent (i.e. 4 or 5 out of 5). Half of all internationalising firms (53%) reported at least some difficulties in this respect (i.e. 2-5 out of 5), with this more likely to be the case amongst UKTI users. 13.2.2 Protecting Your Intellectual Property (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.2.1 Protecting Your Intellectual Property – By UKTI Usage
Only 12% of firms reported a significant problem with protecting their intellectual property. However, it is clearly still an issue to at least some degree for a large number of firms, with 36% indicating that they had experienced at least some difficulties in this respect (i.e. 2-5 out of 5). As seen below, firms that hold some form of IP protection are more likely to highlight some level of difficulty in protecting their IP overseas (53% vs. 32%), and this of course may have prompted them to obtain the IP protection in the first place.
Table 13.2.2.1 Protecting Your Intellectual Property – By IP Activity
| IP Active | Yes | No | |-----------|-----|----| | Base: All exporters | 182 | 641 | | 5 – Extremely difficult | 8% | 7% | | 4 | 8% | 4% | | 3 | 14% | 9% | | 2 | 23% | 12% | | 1 – Not at all difficult | 43% | 64% | | Don’t know | 5% | 4% |
The fact that a third of those with no IP protection report some degree of difficulty in protecting their IP (i.e. give a score of 2-5 out of 5) suggests that some firms do not see any value in IP protection even though their IP assets are at risk. This is consistent with the findings of a recent qualitative project conducted for UKTI, which found that firms often adopted a fairly informal approach to assessing the risk of IP theft and protecting their IP. Firms often felt that there was not a great deal that they could (or should) do to overcome this risk beyond putting in place prominent terms and conditions in contracts, licence agreements, etc.
Those firms that had experienced difficulties protecting their IP were asked to give details of what this involved. As seen below, the biggest issue for firms is enforcing their IP protection, rather than obtaining the protection in the first place.
Chart 13.2.2.2 Specific IPP Problems Experienced
- Obtaining protection for your intellectual property: 6%
- Enforcing your intellectual property protection: 11%
- Neither of these: 8%
- No problems with intellectual property protection (1-2 out of 5): 73%
Base: All exporters (Base, Don’t know) Total (832, 5%).
______________________________________________________________________
7 The Risks Faced When Entering Overseas Markets And The Relationship Between Risks And Choice Of Mode (OMB Research, November 2011) 13.2.3 Ensuring You Get Paid & Enforcing Contracts (Legal & Regulatory Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.3 Ensuring You Get Paid & Enforcing Contracts – By UKTI Usage
Just over half of all internationalising firms (53%) reported at least some difficulty with getting paid and enforcing contracts, with 23% indicating it had been a significant difficulty (i.e. 4-5 out of 5). As with all the barriers, UKTI users were more likely to encounter this issue, although the proportion experiencing significant difficulties is similar for users and non-users.
It is worth noting that 49% of all firms have actively avoided doing business in a specific market due to the risk of not getting paid (as seen in Chapter 11.2). This suggests that the scale of this problem may be even greater than that recorded here, as the above data shows the proportion experiencing difficulties with this issue in their ‘most challenging’ market and does not take account of firms that have decided against entering markets because of concerns in this area. 13.2.4 Dealing with Customs Procedures & Paperwork (Customs Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.4 Dealing with Customs Procedures & Paperwork – By UKTI Usage
Around a quarter of internationalising firms (24%) have experienced significant difficulties with customs procedures, making it one of the most widely reported of the barriers tested. Furthermore, 55% of firms have had at least some problems in this respect (i.e. score 2-5 out of 5), with this proportion increasing to 67% amongst UKTI users. 13.2.5 Identifying Who to Make Contact With in the First Instance (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.5 Identifying Who to Make Contact With in the First Instance – By UKTI Usage
Approaching half of all firms (45%) have experienced some level of difficulty with identifying initial contacts in their selected market, with this rising to 61% amongst UKTI users. This is consistent with other survey data that shows that a need to access suitable contacts is one of the major reasons for using UKTI support. 13.2.6 Establishing an Initial Dialogue with Prospective Customers or Partners (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.6 Establishing an Initial Dialogue with Prospective Customers or Partners – By UKTI Usage
Half of firms (47%) have experienced some level of difficulty with establishing an initial dialogue with prospective customers or partners in the market in question, although only 12% indicated that this had been a significant problem (i.e. 4-5 out of 5). Once again, this was more likely to be an issue for UKTI users. 13.2.7 Building Relationships with Key Influencers or Decision Makers (Contacts Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.7 Building Relationships with Key Influencers or Decision Makers – By UKTI Usage
Overall, 13% of firms reported significant difficulties building relationships with key influencers or decision makers in an overseas market, but this rises to a fifth of UKTI users. Over half of all internationalising firms (52%) indicated that they had experienced at least some problems in this respect (i.e. 2-5 out of 5). 13.2.8 Obtaining Basic Information about Doing Business in the Market (Information Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.8 Obtaining Basic Information about Doing Business in the Market – By UKTI Usage
Only 10% of firms indicated that obtaining basic information about an overseas market had been a significant problem (i.e. 4-5 out of 5), making this the least prevalent of the barriers tested. However, it should be noted that over half (53%) reported that they had experienced at least some difficulty in this respect, highlighting the need for an organisation such as UKTI to help fill these knowledge gaps. The fact that UKTI users are more likely to report this barrier suggests that this can be a reason for firms approaching UKTI. 13.2.9 Finding the Necessary Management Time to Devote to Doing Business in the Market (Resource Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.9 Finding the Necessary Management Time to Devote to Doing Business in the Market – By UKTI Usage
Lack of time and resources is clearly a hindrance to the development of overseas business for many firms, with 54% indicating that they have had some difficulties in this respect (and 15% claiming that it has been a significant problem). Once again, users of UKTI are more likely to report this barrier, emphasising the importance of UKTI's role in helping firms target their often limited resources most effectively.
It is worth noting that this issue is not just confined to smaller firms, with 15% of larger firms with 50+ employees reporting significant difficulties in this regard. 13.2.10 Negotiating the Language & Culture (Language & Cultural Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.10 Negotiating the Language & Culture – By UKTI Usage
Overall, 16% of all internationalising firms have experienced significant problems with language or cultural differences in their most challenging market, with almost half (47%) reporting at least some difficulty in this regard (i.e. 2-5 out of 5). Again, this barrier is more likely to have been experienced by UKTI users. 13.2.11 A Preference on the Part of Customers in the Market for Doing Business with Other Firms from that Market (Bias Barrier)
The chart below shows the detailed breakdown of the extent to which firms have experienced this barrier in their chosen market. Analysis has been provided at the total level and by UKTI usage.
Chart 13.2.11 A Preference on the Part of Customers in the Market for Doing Business with Other Firms from that Market – By UKTI Usage
Approaching half of firms (44%) claim to have encountered bias issues to at least some extent (i.e. score 2-5 out of 5), with 12% indicating that it has been a significant barrier. As with all the barriers, UKTI users are more likely to have been affected in this way. 14. Marketing Channels
14.1 Usage & Usefulness
All respondents were asked whether they used various channels to obtain news or information that was relevant to their business. If they attended events or used social networking sites, they were then asked to rate the usefulness of these channels on a 1-5 scale (where 5 was ‘very useful’ and 1 was ‘not at all useful’). The chart below summarises these results, and provides comparative results from the 2011 Internationalisation Survey.
Chart 14.1.1 Usage & Usefulness of Marketing Channels
| Channel | Proportion using for business news/information (All firms) | Proportion rating as ‘useful’ (4-5 out of 5) (All using the channel) | |--------------------------------|-----------------------------------------------------------|---------------------------------------------------------------------| | Seminars, tradeshows or conferences | 61% | 54% | | Social networking sites | 42% | 42% | | Other websites | 75% | 71% | | | 65% | 60% |
Base: All respondents (Base, Don’t know) 2012 (900, 0%), 2011 (903, 0%) Base: All using channel (Base, Don’t know 2012 – Events (558, 0%), Networking (407, 1%) 2011 – Events (594, 0%), Networking (308, 1%)
Approaching two-thirds of internationalising firms have attended seminars, tradeshows or conferences in the last year, slightly down on the 65% recorded last year. The majority of firms that attend these types of event view them as being useful (54%).
However, use of social networking sites has increased significantly over the last year and currently stands at 42%. However, the perceived value of this channel varies, with less than half of users rating social networking sites as useful (i.e. 4-5 out of 5).
Three-quarters of internationalising firms use other websites as a source of business news or information. Younger firms are more likely to use social networking sites and also tend to view this channel as more useful than older firms. There is also some evidence that larger firms are more likely to attend seminars, conferences or tradeshows.
Table 14.1.1 Usage & Usefulness of Marketing Channels – By Age & Size
| Age (Years Trading) | Size (Number of Employees) | Proportion using channel | Proportion rating as useful (4-5 out of 5) | |---------------------|---------------------------|--------------------------|------------------------------------------| | | | Base: All firms | Base: All using | | | | Up to 5 | 164/148 | | | | 6-10 | 158/119 | | | | Over 10 | 236/140 | | | | 0-9 | 385/309 | | | | 10-49 | 124/69 | | | | 50-249 | 33/19 | | | | 250+ | 16/10 | | | | All SMEs | 542/397 | | | | Seminars, etc | | | | | 65% | 54% | | | | 62% | 61% | | | | 60% | 52% | | | | Social networking | | | | | 59% | 53% | | | | 47% | 42% | | | | Websites | | | | | 77% | 79% | | | | 79% | 73% | | | | 73% | 75% | | | | 75% | 73% | | | | 78% | 94% | | | | 94% | 75% | | | | Seminars, etc | | | | | 54% | 53% | | | | 61% | 42% | | | | 52% | 37% | | | | Social networking | | | | | 53% | 58% | | | | 42% | 40% | | | | Websites | | | | | 79% | 75% | | | | 75% | 74% | | | | 74% | 83% | | | | 83% | 72% | | | | 72% | 72% | | | | 72% | 82% |
Firms that are fairly new to overseas business and those operating in relatively few markets are most likely to be using social networking sites for business purposes, and also have a more positive view of their usefulness. This suggests that social networking could be an effective route to reaching firms at the point they are starting to develop overseas and hence may be in need of external guidance.
Table 14.1.2 Usage & Usefulness of Marketing Channels – By Experience
| Years Exporting | Number of Markets | Proportion using channel | Proportion rating as useful (4-5 out of 5) | |-----------------|-------------------|--------------------------|------------------------------------------| | | < 2 yrs | 2-10 yrs | > 10 yrs | | | 0 | 1-5 | 6-10 | 10+ | | Base: All firms | 200 | 448 | 248 | | | Seminars, etc | 67% | 59% | 62% | | | Social networking | 62% | 42% | 33% | | | Websites | 79% | 75% | 74% | | | Base: All using | 138/128 | 266/195 | 153/83 | | | Seminars, etc | 53% | 57% | 52% | | | Social networking | 58% | 40% | 33% | | As seen below, innovative and IP active firms are more likely to use each of these channels, and this difference is particularly evident when it comes to attendance at seminars, tradeshows and conferences. However, there is relatively little difference in the perceived usefulness of these channels by whether or not firms are innovative or IP active.
Table 14.1.3 Usage & Usefulness of Marketing Channels – By Innovation
| Proportion using channel | Innovative | IP Active | |--------------------------|------------|-----------| | Base: All firms | | | | Proportion using channel | | | | Base: All firms | 402 | 663 | | Seminars, etc | 69% | 68% | | Social networking | 50% | 46% | | Websites | 81% | 79% | | Proportion rating as useful (4-5 out of 5) | | | | Base: All using | 283/207 | 450/319 | | Seminars, etc | 55% | 55% | | Social networking | 44% | 42% |
The more ambitious a firm’s growth objectives, the more likely they are to attend events and use social networking for business purposes, and this is particularly true of innovative high growth firms. However, there is no real evidence that growing firms place any more value on these channels (in terms of their usefulness as a source of business news or information).
Table 14.1.4 Usage & Usefulness of Marketing Channels – By Innovation & Growth
| Proportion using channel | Growth Objectives | Innovation & Growth | Non-innovative | |--------------------------|-------------------|---------------------|----------------| | Base: All firms | Stay same | Moderate growth | Substantial growth | Expect substantial growth | Other | | Seminars, etc | 40% | 62% | 75% | 80% | 62% | | Social networking | 30% | 40% | 53% | 55% | 42% | | Websites | 71% | 77% | 77% | 82% | 77% | | Proportion rating as useful (4-5 out of 5) | | | | Base: All using | 49/38 | 290/205 | 204/153 | 172/124 | 278/195 | | Seminars, etc | 55% | 57% | 51% | 52% | 57% | | Social networking | 50% | 38% | 45% | 46% | 40% | 14.2 Social Networking Sites
As seen previously, 42% of firms indicated that they currently used social networking sites as a source of business information or news. Those that did not already use these sites for business purposes were asked whether they expected to do so in the next year.
Chart 14.4.1 Whether Expect to Use Social Networking Sites for Business Purposes in the Next Year
| | Yes | No | Don't know | |----------------|-----|----|------------| | Already use social networking for business news or info | 42% | 17% | 1% |
Base: All respondents (Base) (900)
In addition to the 42% of respondents that already use social networking sites for business purposes, a further 17% plan to start doing so in the next year.
As seen below, as well as being least likely to currently use social networking sites, older firms established for more than 10 years are also less inclined to start using them in the next year. There are no consistent differences by size of firm in this respect.
Table 14.4.1 Whether Expect to Use Social Networking Sites for Business Purposes in the Next Year – By Age & Size
| | Age (Years Trading) | Size (Number of Employees) | All SMEs | |----------------|---------------------|-----------------------------|----------| | | Up to 5 | 6-10 | Over 10 | 0-9 | 10-49 | 50-249 | 250+ | All SMEs | | Base | 253 | 255 | 392 | 644 | 192 | 46 | 17 | 882 | | Yes | 18% | 20% | 15% | 16% | 19% | 22% | 12% | 17% | | No | 23% | 33% | 48% | 39% | 48% | 34% | 27% | 41% | | Don't know | 1% | 1% | 1% | 1% | 0% | 2% | 0% | 1% | | Already use | 59% | 47% | 36% | 45% | 33% | 41% | 61% | 42% | | Net: Use/plan to use | 76% | 66% | 51% | 61% | 52% | 63% | 73% | 59% | Firms that have started exporting more recently are most open to the idea of using social networking sites, with 80% either using them already or planning to do so in the next year. Interest in social networking sites is particularly pronounced amongst those that are not yet exporting at all.
Table 14.4.2 Whether Expect to Use Social Networking Sites for Business Purposes in the Next Year – By Experience
| Years Exporting | Number of Markets | 0 | 1-5 | 6-10 | 10+ | |-----------------|-------------------|---|-----|------|-----| | < 2 years | | 68 | 438 | 178 | 211 | | 2-10 years | | 28%| 15% | 17% | 17% | | > 10 years | | 15%| 43% | 46% | 39% | | Base | | 18%| 17% | 17% | 17% | | Yes | | 16%| 18% | 18% | 18% | | No | | 41%| 48% | 48% | 48% | | Don't know | | 0% | 1% | 1% | 1% | | Already use | | 57%| 41% | 37% | 43% | | Net: Use/plan to use | | 85%| 57% | 54% | 61% |
Around two-thirds of innovative and IP active firms use social networking sites or expect to do so in the next year (compared to 46% of non-innovative firms).
Table 14.4.3 Whether Expect to Use Social Networking Sites for Business Purposes in the Next Year – By Innovation
| Innovative | IP Active | |------------|-----------| | Yes (alternative) | Yes | No | Yes | No | | Base | 402 | 663 | 237 | 193 | 698 | | Yes | 17% | 17% | 15% | 18% | 16% | | No | 32% | 36% | 53% | 30% | 43% | | Don't know | 1% | 1% | 0% | 1% | 1% | | Already use| 50% | 46% | 31% | 51% | 40% | | Net: Use/plan to use | 67% | 63% | 46% | 69% | 56% |
The more ambitious a firm’s growth objectives are, the more likely they are to be using or planning to use social networking sites for business purposes.
Table 14.4.4 Whether Expect to Use Social Networking Sites for Business Purposes in the Next Year – By Innovation & Growth
| Growth Objectives | Innovation & Growth | |-------------------|---------------------| | Stay same | Innovative | | Moderate growth | Expect substantial growth | Other | | Substantial growth| | Non-innovative | | Base | 123 | 476 | 272 | 214 | 449 | 237 | | Yes | 11% | 18% | 20% | 21% | 16% | 15% | | No | 59% | 41% | 27% | 24% | 41% | 53% | | Don't know | 1% | 1% | 0% | 0% | 1% | 0% | | Already use | 30% | 40% | 53% | 55% | 42% | 31% | | Net: Use/plan to use | 41% | 58% | 73% | 76% | 58% | 46% | Annex A: Markets Selected
A.1 Most Recent Market
Firms were asked to give details of the overseas market that they had entered most recently, and were then asked about their motivations for entering this market and the research/preparation they undertook before doing so (as reported in Chapter 12). The table below gives details of the most recently entered markets, shown separately for users and non-users of UKTI.
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | **Base: All exporting** | 832 | 178 | 654 | | USA | 9% | 7% | 9% | | Ireland (Republic) | 8% | 3% | 9% | | Germany | 5% | 2% | 7% | | China | 5% | 7% | 4% | | Australia | 4% | 3% | 5% | | France | 4% | 2% | 5% | | Spain | 4% | 4% | 4% | | UAE | 3% | 3% | 3% | | Russia | 3% | 3% | 3% | | Netherlands | 3% | 2% | 3% | | Italy | 3% | 2% | 3% | | India | 3% | 2% | 3% | | Sweden | 3% | 1% | 3% | | Turkey | 2% | 5% | 2% | | Poland | 2% | 1% | 3% | | Brazil | 2% | 2% | 2% | | Canada | 2% | 1% | 2% | | Belgium | 2% | 1% | 2% | | Saudi Arabia | 2% | 2% | 1% | | South Africa | 1% | 2% | 1% | | Norway | 1% | 2% | 1% | | Singapore | 1% | 3% | 1% | | North America | 1% | 2% | 1% | | Greece | 1% | 1% | 1% | | Malaysia | 1% | 2% | 1% | | Finland | 1% | 0% | 1% | | Mexico | 1% | 1% | 1% | | Japan | 1% | 1% | 1% | | Kenya | 1% | 1% | 1% | | Nigeria | 1% | 1% | 1% | | Hong Kong | 1% | 0% | 1% |
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | **Base: All exporting** | 832 | 178 | 654 | | Chile | 1% | 1% | 1% | | Czech Republic | 1% | 2% | 1% | | Denmark | 1% | 1% | 1% | | Israel | 1% | 1% | 1% | | New Zealand | 1% | 1% | 1% | | Qatar | 1% | 0% | 1% | | South Korea | 1% | 0% | 1% | | Switzerland | 1% | 0% | 1% | | Cyprus | 1% | 0% | 1% | | Middle East | 1% | 1% | 1% | | Ghana | 1% | 2% | 0% | | Portugal | 1% | 1% | 1% | | Austria | 0% | 1% | 0% | | Iceland | 0% | 0% | 1% | | Lithuania | 0% | 1% | 0% | | Kuwait | 0% | 1% | 0% | | Egypt | 0% | 2% | 0% | | Jordan | 0% | 2% | 0% | | Libya | 0% | 1% | 0% | | Tanzania | 0% | 1% | 0% | | Sudan | 0% | 1% | 0% | | Belarus | 0% | 1% | 0% | | Central Africa | 0% | 1% | 0% | | Equatorial Guinea | 0% | 1% | 0% | | Estonia | 0% | 1% | 0% | | Gibraltar | 0% | 1% | 0% | | Lebanon | 0% | 1% | 0% | | Pakistan | 0% | 1% | 0% | | Tunisia | 0% | 1% | 0% | | Uganda | 0% | 1% | 0% | | Venezuela | 0% | 1% | 0% | A.2 Most Challenging Market
Firms were also asked to identify the most challenging overseas market that they had done business in, and were then asked various questions about their motivations for entering this market, their use of external support about it, and the barriers they had experienced (as reported in Chapters 12 and 13). The table below gives details of the markets selected as being the ‘most challenging’, shown separately for users and non-users of UKTI.
Table A.2 Most Challenging Market – By UKTI Usage
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | Base: All exporting | 832 | 178 | 654 | | Ireland (Republic) | 8% | 3% | 9% | | China | 7% | 8% | 6% | | USA | 7% | 6% | 7% | | Russia | 6% | 5% | 6% | | France | 5% | 5% | 6% | | India | 4% | 4% | 5% | | Germany | 4% | 1% | 6% | | Italy | 3% | 4% | 3% | | Saudi Arabia | 3% | 4% | 3% | | UAE | 3% | 2% | 3% | | Spain | 3% | 3% | 3% | | Australia | 3% | 1% | 3% | | Nigeria | 2% | 5% | 2% | | South Africa | 2% | 2% | 2% | | Netherlands | 2% | 1% | 2% | | Turkey | 2% | 4% | 1% | | Sweden | 2% | 1% | 2% | | Poland | 2% | 1% | 2% | | Brazil | 1% | 2% | 1% | | Belgium | 1% | 1% | 1% | | Portugal | 1% | 1% | 1% | | Middle East | 1% | 2% | 1% | | Singapore | 1% | 2% | 1% | | Japan | 1% | 1% | 1% | | Kenya | 1% | 2% | 1% | | Egypt | 1% | 1% | 1% | | Switzerland | 1% | 0% | 1% | | Israel | 1% | 1% | 1% | | Canada | 1% | 1% | 1% |
| Market | Total | UKTI User | Non-User | |-------------------------|-------|-----------|----------| | Base: All exporting | 832 | 178 | 654 | | Malaysia | 1% | 2% | 1% | | North America | 1% | 1% | 1% | | Chile | 1% | 1% | 1% | | Greece | 1% | 2% | 1% | | Denmark | 1% | 1% | 1% | | Pakistan | 1% | 0% | 1% | | Lithuania | 1% | 1% | 1% | | New Zealand | 1% | 1% | 1% | | Ukraine | 1% | 2% | 0% | | Finland | 1% | 1% | 1% | | Czech Republic | 1% | 1% | 0% | | Austria | 1% | 1% | 1% | | South Korea | 1% | 0% | 1% | | Romania | 1% | 0% | 1% | | Africa | 0% | 1% | 0% | | Norway | 0% | 0% | 1% | | Mexico | 0% | 1% | 0% | | Iceland | 0% | 0% | 1% | | Qatar | 0% | 0% | 1% | | Angola | 0% | 2% | 0% | | Libya | 0% | 1% | 0% | | Syria | 0% | 1% | 0% | | Venezuela | 0% | 1% | 0% | | Hong Kong | 0% | 1% | 0% | | Belarus | 0% | 1% | 0% | | Estonia | 0% | 1% | 0% | | Macau | 0% | 1% | 0% | | Mauritania | 0% | 1% | 0% | | Tunisia | 0% | 1% | 0% | Annex B: Questionnaire OMB RESEARCH LIMITED UKTI – International Business Strategies, Barriers & Awareness Survey 2012 Questionnaire March-May 2012
QUOTAS (900 INTERVIEWS): • 250 interviews with firms 0-5 years old • 250 interviews with firms 6-10 years old • 400 interviews with firms more than 10 years old • All quotas to run from questionnaire (S7)
INTRO
ASK ALL Could I please speak to either the owner or someone responsible for your firm’s strategy in relation to overseas business?
Good morning/afternoon, my name is … and I am calling on behalf of OMB Research, an independent market research agency. We have been commissioned by UK Trade & Investment and the Department for Business, Innovation & Skills (BIS) to conduct a survey of businesses on the topic of doing business overseas.
IF NECESSARY We are interested in talking to firms who are either involved in any form of overseas business activity or who are seriously considering doing business overseas in the next year. This overseas business activity could include selling directly to customers based overseas, selling overseas through agents or distributors, licensing, franchising or joint venturing overseas, or operating your own overseas office or site.
INTERVIEWER NOTE - YOU MAY TAKE REFERRALS TO ANOTHER SITE WITHIN THE UK.
INTERVIEWER NOTE – IF FIRM IS NOT CURRENTLY DOING BUSINESS OVERSEAS, BUT PLANNING DOING SO WITHIN THE NEXT YEAR CONTINUE WITH THE INTERVIEW ON THIS BASIS
READ OUT TO ALL This research will cover areas such as your current and planned overseas activities, including the way you go about doing business overseas and any issues you may have faced. It will take around 15-20 minutes, depending on your answers. It doesn't matter how much or how little overseas business you do – we're interested in speaking to a range of firms about their experiences.
AS NECESSARY: UKTI is responsible for helping UK firms do business overseas. They want to find out more about how firms are going about overseas business and any difficulties they have. This will help UKTI develop the type of help they offer to UK firms.
AS NECESSARY: We are able to offer all businesses taking part in this research an electronic link to a summary report of the research findings (which will be available later this year) Is it convenient to speak to you now or would you prefer to make an appointment for another time?
ADD IF NECESSARY
- The research is being conducted under the Code of Practice of the Market Research Society, which means that all of the answers you give are strictly confidential and anonymous. Participation in this survey is voluntary.
- The responses of all organisations taking part will be combined into a statistical report.
- Your organisation was selected at random from a list of UK businesses held by a commercial list broker.
- If you wish to check that OMB Research is a bona fide market research agency, you can contact the Market Research Society on 0500 396999, or call James Murray at OMB Research on 01732 220582 or Heather Booth di Giovanni at UK Trade & Investment on 020 7215 4989.
OFFER EMAIL/FAX REASSURANCE IF NECESSARY
ASK ALL
S1 – Can I confirm that you are one of the people best qualified to talk about your company’s overseas business activity?
INTERVIEWER NOTE: IF KNOW ALREADY THAT YOU ARE SPEAKING TO THE CORRECT PERSON THEN CODE YES AUTOMATICALLY
REFERRALS CAN BE TAKEN TO ANY UK SITE WHEN THE CONTACT FEELS THAT THERE IS SOMEONE WITHIN THE COMPANY BETTER PLACED TO ANSWER QUESTIONS ON THE TOPIC AREAS OUTLINED
Yes .................................................................................. 1 No – take referral and being transferred .......................... 2 No – take referral and arrange call back ....................... 3 No – refused referral ......................................................... 4
CATI TO INSERT TIME MARKER
ASK ALL
S11 – Is your organisation...? READ OUT. SINGLE CODE
A business..................................................................................1 A trade association.................................................................2 – CLOSE Or, a public sector organisation such as a Government department, local council, etc...........................................3 – CLOSE Other (SPECIFY)......................................................................4 (Don’t know) ...........................................................................5 OVERSEAS BUSINESS ACTIVITY
ASK ALL S2a – Which of the following overseas business activities has your firm been involved in, over the last 5 years? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
AS NECESSARY: Please only include overseas sites if you have some responsibility or control over them from the UK. Do not include sites or companies operated by your parent company or other group companies.
- Selling directly to overseas customers ........................................ 1
- Selling to overseas customers through agents or distributors..... 2
- Licensing or franchising overseas, or other contractual arrangements such as joint ventures ......................................................... 3
- Operating your own overseas site or office ................................. 4
- (None of these) ............................................................................ 5
- (Don’t know) ................................................................................ 6 – CLOSE
S9a/b/c – DELETED
IF NONE AT S2a (CODE 5) S2b – Are you seriously considering starting to conduct overseas business via any of these routes in the NEXT YEAR?
- Yes .............................................................................................. 1
- No ................................................................................................ 2 - CLOSE
- (Don’t know) ................................................................................ 3 - CLOSE
IF JUST CONSIDERING OVERSEAS BUSINESS (CODE 1 AT S2b) S2c – Which of the following overseas business activities are you planning to become involved in, in the next year? READ OUT – MULTICODE ALLOWED – DO NOT RANDOMISE
- Selling directly to overseas customers ........................................ 1
- Selling to overseas customers through agents or distributors..... 2
- Licensing or franchising overseas, or other contractual arrangements such as joint ventures ......................................................... 3
- Operating your own overseas site or office ................................. 4
- (None of these) ............................................................................ 5 – CLOSE
- (Don’t know) ................................................................................ 6 – CLOSE
ASK IF EXPORT (CODES 1-4 AT S2a) S10a – And do you make any sales directly through your website when doing business overseas?
AS NECESSARY: By this I mean sales where the customer places an order on your website and you don’t have any other direct contact with them other than sending email confirmation, etc.
- Yes .............................................................................................. 1
- No ................................................................................................ 2
- (Don’t know) ................................................................................ 3 IF SELL THROUGH WEBSITE (CODE 1 AT S10a) & ONLY SELL DIRECT (CODE 1 AT S2a & NOT CODES 2-5 AT S2a)
S10b – And do you only sell to overseas customers directly through your website, or do you sometimes get orders in other ways (e.g. over the phone, face to face, responding to tenders, etc)?
Only sell through the website ...................................................... 1 Use other ways as well................................................................. 2 (Don’t know) ............................................................................. 3
IF HAVE OVERSEAS SITE (CODE 4 AT S2a)
S5b – How many overseas sites do you have? READ OUT
One................................................................................... 1 2-5 .................................................................................... 2 6-10 .................................................................................. 3 11-20 ................................................................................ 4 21-50 ................................................................................ 5 More than 50 ....................................................................... 6 (Don’t know) ........................................................................ 7 (Refused)............................................................................. 8
OVERALL FILTER FOR S5c: IF HAVE OR PLANNING OVERSEAS SITE (CODE 4 AT S2a OR CODE 4 AT S2c)
IF HAVE JUST ONE OVERSEAS SITE (CODE 1 AT S5b)
S5c – Would you say that the MAIN purpose of this site is…? READ OUT – AIM FOR SINGLE CODE BUT MULTI ALLOWED
IF HAVE MORE THAN ONE OVERSEAS SITE (CODES 2-8 AT S5b)
S5c – Thinking about all of your overseas sites, do any of these have the following purposes? READ OUT – CODE ALL THAT APPLY
IF PLANNING OVERSEAS SITE (CODE 4 AT S2c)
S5c – < IF CODE 4 AT S2c & CODES 1, 2 OR 3 ALSO MENTIONED AT S2c You mentioned operating your own overseas office or site. > Would you say that the MAIN purpose of this site will be…? READ OUT – AIM FOR SINGLE CODE BUT MULTI ALLOWED
Manufacturing or assembly ............................. 1 Call centre ................................................................. 3 Distribution or sales office ............................... 4 Service delivery ..................................................... 6 Research, product or process development.... 7 (Don’t know/None of these)................................. 8 – CLOSE IF ONLY CODE 4 AT S2a/S2c ((S2a=4 & S2a=Not 1, 2 OR 3) OR (S2a=5 & S2c=4 & S2c=Not 1, 2 or 3)) IF EXPORT & HAVE MANUFACTURING/CALL CENTRE/R&D SITE (CODES 1-4 AT S2a & CODES 1,3 OR 7 AT S5c) S5d And \<IF S5b=1 does this overseas site/IF S5b=2-8 do these overseas sites> sell to or supply...? READ OUT – SINGLE CODE
Internal customers, by which I mean other sites or companies that are owned by or affiliated to your firm .............................................. 1 External customers, by which I mean those that are not connected to your company ................................................................. 2 Or, both ........................................................................................................ 3 (Don't know) .......................................................................................... 4
IF SELL TO EXTERNAL CUSTOMERS (CODES 2-3 AT S5d) S5e And are any of these external customers located...? READ OUT – CODE ALL THAT APPLY
In the UK ............................................................................................ 1 In the same country as your overseas site ......................................... 2 In other overseas countries ................................................................ 3 (Don't know/None of these) ................................................................. 4
IF ONLY ACTIVITY IS OVERSEAS SITE & ONLY SELL TO INTERNAL OR UK CUSTOMERS ((CODE 4 AT S2a & NOT CODES 1-3 AT S2a) & (CODE 1 AT S5d OR (CODE 1 AT S5e & NOT CODES 2-4 AT S5e))) A5a – Can I just check, have you made any sales at all to customers in overseas countries in the last year?
Yes ............................................................................................. 1 No ............................................................................................... 2 (Don't know) ............................................................................... 3
ASK ALL S6a – And can I just check, < IF CODE 1 OR 3 at S5d other than from the overseas site that you've just mentioned > have you imported any goods or services into the UK over the last 5 years?
AS NECESSARY By importing I mean buying in goods or services from overseas suppliers. This includes having goods manufactured for you overseas.
Yes ............................................................................................. 1 No ............................................................................................... 2 (Don't know) ............................................................................... 3
IF CODE 1 AT S6a From now on, when I'm asking questions about your overseas business activity please DO NOT include importing \<IF S5d=1 OR 3, other than through your own overseas site(s)> ASK ALL S7 – How long ago was your business established in the UK? READ OUT AS NECESSARY
AS NECESSARY – THIS MEANS WHEN THE BUSINESS IN ITS CURRENT FORM STARTED TRADING
AS NECESSARY – IF THE BUSINESS IS A SUBSIDIARY THIS REFERS TO THE SUBSIDIARY IN WHICH YOU WORK
Within the last year ........................................................... 1 Over 1, up to 2 years ago .................................................. 2 Over 2, up to 3 years ago .................................................. 3 Over 3, up to 4 years ago .................................................. 4 Over 4, up to 5 years ago .................................................. 5 Over 5, up to 10 years ago ............................................... 6 Over 10, up to 20 years ago ............................................. 7 Over 20 years ago ............................................................ 8 (Not yet trading) ................................................................ 9 (Don’t know) ..................................................................... 10 - CLOSE (Refused) .......................................................................... 11 – CLOSE
ASK IF ESTABLISHED 1-2 YEARS (CODES 1-2 AT S7) S7b – Can I just check, has your business actually started trading yet?
Yes ................................................................................... 1 No .................................................................................... 2 (Don’t know) ..................................................................... 3
ASK ALL H1b – Is the business UK or foreign-owned?
UK-owned ......................................................................... 1 Foreign-owned ................................................................. 2 (Joint UK and foreign-owned) ........................................... 3 (Don’t know) ..................................................................... 4
READ OUT IF FOREIGN OWNED (CODES 2-3 AT H1b) For the rest of this interview, please just answer about the firm where you work, and not your parent company or any other group companies. So when I ask about your overseas business, please just focus on the overseas activities of your UK firm.
S8 - DELETED ASK IF CODES 1-4 AT S2a UNLESS NOT YET TRADING OR ESTABLISHED \<1 YEAR (CODES 1 OR 9 AT S7 OR CODE 2 AT S7b)
A4 – And how long ago did your company start conducting business overseas? READ OUT AS NECESSARY. CATI TO ONLY SHOW FEASIBLE CODES BASED ON ANSWER TO S7
IF IMPORTER (CODE 1 AT S6a & A5a IS NOT 2-3) AS NECESSARY: By this I mean when did you start selling overseas, so please do not include importing.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
INTERVIEWER NOTE: IF RESPONDENT SAYS THEY’VE NOT YET STARTED DOING BUSINESS OVERSEAS THEN YOU NEED TO GO BACK TO S2a AND CHANGE TO ‘NONE OF THESE’ & THEN ASK S2b & S2c
Within the last year........................................................... 1 Over 1, up to 2 years ago.................................................. 2 Over 2, up to 3 years ago.................................................. 3 Over 3, up to 4 years ago.................................................. 4 Over 4, up to 5 years ago.................................................. 5 Over 5, up to 10 years ago............................................... 6 Over 10, up to 20 years ago............................................. 7 Over 20 years ago............................................................ 8 (Don’t know) ....................................................................................... 10 (Refused)......................................................................................... 11
ASK IF EXPORTING MORE THAN 2 YEARS (A4=3-11) UNLESS CODES 2-3 AT A5a
A15 – Since this time, have you had overseas sales every year or have there been some years where you haven’t made any sales at all to overseas customers?
Overseas sales every year (since started doing business overseas). 1 Some years with no overseas sales........................................... 2 (Don’t know) ......................................................................................... 3 ASK IF EXPORTING (CODES 1-4 AT S2a) BUT DO NOT ASK IF CODES 2-3 AT A5a OR CODE 9 AT S7 OR CODE 2 AT S7b)
A5c – In the last financial year, approximately what percentage of your turnover was accounted for by overseas sales? <IF S2a=4 Please include sales made by the overseas sites or subsidiaries that you control from the UK.> READ OUT AS NECESSARY
IF CODE 3 AT S2a AS NECESSARY: Please include any fees received from overseas licensing or franchising deals.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
Up to 5% ................................................................................. 1 6 - 10% .................................................................................. 2 11 - 15% .................................................................................. 3 16 – 25% .................................................................................. 4 26 – 50% .................................................................................. 5 51 – 75% .................................................................................. 6 More than 75% ........................................................................ 7 (No overseas sales in last year) ........................................... 10 (Don't know) ........................................................................... 8 (Refused) ................................................................................ 9
ASK IF EXPORTING (CODES 1-4 AT S2a) A5d – In 3 years time, do you think that the percentage of your turnover accounted for by overseas sales will be higher than it is now, lower or about the same?
Higher .................................................................................. 1 Lower ...................................................................................... 2 About the same ....................................................................... 3 (Don't know) ........................................................................... 4 (Refused) ................................................................................ 5
ASK IF EXPORTING (CODES 1-4 AT S2a) G5 – Which of the following regions of the world have you done business in \<IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since your were established>? < IF IMPORTER (CODE 1 AT S6a & A5a IS NOT 2-3) (but please DO NOT include countries that you have only imported from)> READ OUT. CODE ALL THAT APPLY
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just answer about the areas where your UK firm is doing business, but don’t include the activity of your parent company or any other group companies
Europe, other than the UK.................................................. 1 North America ................................................................. 3 South America or Latin America...................................... 4 The Middle East or Africa............................................... 6 Asia Pacific ......................................................................... 7 (Don't know) ....................................................................... 9 ASK IF CODES 1-4 AT S2a A1b – How many overseas countries have you done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since your were established >, in any form < IF IMPORTER (CODE 1 AT S6a) (although please DO NOT include countries that you have only imported from)>? READ OUT
One................................................................................... 2 2-5 .................................................................................... 3 6-10 .................................................................................. 4 11-20 ................................................................................ 5 21-50 ................................................................................ 6 More than 50 ...................................................................... 7 (Don’t know) ........................................................................ 8 (Refused)............................................................................. 9
IF CODE 2 AT A1b A2 – Which country was this? WRITE IN
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) .............................................................. (Don’t know) - CLOSE
ASK IF CURRENTLY EXPORTING (S2a=1-4) G7 – Over the next 3 years do you expect the number of countries in which you do business to increase, decrease or stay the same?
Increase............................................................................. 1 Decrease ............................................................................ 2 Stay the same .................................................................... 3 (Don’t know) ...................................................................... 4 READ OUT TO ALL I'm now going to ask you about the extent to which you see there being opportunities for YOUR FIRM in some of the world's fast growing and emerging economies over the next 2 years.
ASK ALL G1 – For each of these countries please could you tell me whether you are already doing business there, you are very likely to, you are quite likely to, or you are unlikely to do business there in the next 2 years.
IF IMPORTER (CODE 1 AT S6a) AS NECESSARY: I'm interested in the likelihood of you selling to these countries, so please do not answer in relation to imports.
So firstly, ... DO NOT ROTATE ORDER
a) Russia b) Turkey c) South Africa d) The United Arab Emirates ej) Saudi Arabia f) Brazil g) Mexico h) China i) India
AS NECESSARY Are you...?
Already doing business there ........................................... 1 Very likely ................................................................. 2 Quite likely ............................................................... 3 Or, unlikely to do business there in the next 2 years....... 4 (Don't know) ............................................................. 5
G4b - DELETED
HIGH GROWTH MARKET ALLOCATION: IF UNLIKELY TO DO BUSINESS IN ONE OR MORE HIGH GROWTH MARKETS (CODE 1 AT ANY OF G1a-i)
• .......................................................................................................................... FIR MS TO BE ALLOCATED ONE OF THE MARKETS THEY ARE UNLIKELY TO ENTER AT G1 (I.E. CODE 4). • .......................................................................................................................... CA TI TO SELECT THE MARKET (OF THOSE WHERE G1=4) AT RANDOM. ASK IF ‘UNLIKELY’ (CODE 4) AT ANY OF G1a-j
G11 – You indicated that you are unlikely to do business in <INSERT SELECTED MARKET> in the next two years. Is this for any of the following reasons...? READ OUT. CODE ALL THAT APPLY. RANDOMISE ORDER.
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
There is little or no demand for your products or services there ....1 You are focussing on opportunities in other countries instead.......2 It would be too difficult to do business there.................................3 It would be too risky to do business there ....................................4 You’ve never thought about doing business there .........................5 (None of these).............................................................................6 (Don’t know) ................................................................................7
ASK IF NONE OF THESE (CODE 6 AT G11)
G12 – You indicated that none of these reasons really apply to you, so what is the main reason that you are not likely to do business in <MARKET> over the next few years? RECORD VERBATIM.
.................................................................................................................... ....................................................................................................................
CATI TO INSERT TIME MARKER ASK ALL A17a – Moving on, is there anyone in the senior management team of your company who had significant experience of doing business overseas before they joined your firm?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ................................................................. 3
A17b - DELETED
ASK ALL A21 – Would you say that your senior management team has a clear strategy for developing your firm’s overseas business? IF YES, PROBE FOR WHETHER VERY OR FAIRLY CLEAR
Yes – very clear strategy .................................................. 1 Yes – fairly clear strategy ................................................. 2 No ..................................................................................... 3 (Don’t know) ..................................................................... 4 (Not aiming to develop our overseas business) ............... 5
IF DOING BUSINESS IN MORE THAN ONE MARKET (A1b=3-9) A22 – Which overseas country have you started doing business in most recently? RECORD ONE COUNTRY ONLY – DO NOT ALLOW ‘DON’T KNOW’
IF NOT SURE ASK RESPONDENT TO JUST CHOOSE ONE OF THE COUNTRIES THAT THEY DO BUSINESS IN (E.G. THE ONE THEY KNOW MOST ABOUT)
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) ..............................................................
ASK IF CURRENTLY EXPORTING (S2a=1-4) A23 – When you first decided to investigate \<IF A1b = 3-9 INSERT MARKET FROM A22 / IF A1B = 2 INSERT MARKET FROM A2>, was this mainly prompted by an enquiry from a potential customer or because you’d identified that there may be opportunities for your business there or because you already had contacts there? SINGLE CODE
INTERVIEWER NOTE: If the respondent mentions more than one of these reasons then probe for which of these was the main reason
INTERVIEWER NOTE: Sales through the firm’s website would count as ‘enquiries from customers’
Enquiry from customer ..................................................... 1 Identified that may be opportunities ................................ 2 Already had contacts there ............................................. 3 (Don’t know/Can’t remember) ........................................... 4 ASK IF CURRENTLY EXPORTING (S2a=1-4) A24 – And when you were deciding whether or not to enter < IF A1b = 3-9 INSERT MARKET FROM A22 / IF A1B = 2 INSERT MARKET FROM A2>, did you do any of the following? READ OUT. CODE ALL THAT APPLY
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
Conduct a market analysis to identify its potential or the risks involved .................. 1 Research the business environment and ways of working in that market ............... 2 Pay an external organisation for any information or assistance about the market... 3 (None of these) ........................................................................................................ 4 (Don't know) ............................................................................................................. 5
ASK IF CURRENTLY EXPORTING TO >1 MARKET (S2a=1-4 & A1b=3-9) A25 – Now thinking about any other countries that you’ve started doing business in over the last few years, was this generally prompted by enquiries from potential customers or because you’d identified that there might be opportunities for your business in these countries? SINGLE CODE
INTERVIEWER NOTE: Sales through the firm’s website would count as ‘enquiries from customers’
Enquiries from customers.................................................. 1 Identified that may be opportunities ................................. 2 (It varies / mixture of both).................................................. 3 (Not entered other countries recently)............................... 4 (Don't know) ............................................................................................................. 5
ASK IF BUSINESS OVER 1 YEAR OLD (CODES 2-8 AT S7) H11a – Now thinking about your business as a whole, < IF S7=6-8 in the last five years / IF S7=2-5 since your business was established> would you say that it has...? READ OUT. SINGLE CODE
AS NECESSARY: This is just your overall impression of the growth of the business taking account of factors like size, number of employees, turnover, etc.
Remained the same size.................................................. 1 Become smaller................................................................ 2 Grown moderately ............................................................ 3 Grown substantially .......................................................... 4 (Don't know) ............................................................................................................. 5 (Refused) .................................................................................................................. 6
ASK IF GROWN (CODES 3-4 AT H11a) H11b – Specifically, have you grown in terms of employee numbers, turnover or both? SINGLE CODE
Employee numbers ......................................................... 1 Turnover ........................................................................... 2 Both .................................................................................. 3 (Neither) ............................................................................. 4 (Don't know) ............................................................................................................. 5 (Refused) .................................................................................................................. 6 ASK ALL H10 – \<IF S7=1 OR 9 Now / IF S7=2-8 Still> thinking about your business as a whole, what growth objectives do you have for the business over the next five years? Do you plan to...? READ OUT
Remain the same size...................................................... 1 Become smaller.............................................................. 2 Grow moderately............................................................ 3 Grow substantially.......................................................... 4 (Don’t know) ..................................................................... 5 (Refused)........................................................................... 6
ASK IF PLANNING TO GROW OR TO REMAIN SAME (CODES 1, 3 OR 4 AT H10) A26 – Would you say that your senior management team has a clear strategy for how your firm will \<IF H10=3-4 achieve its growth objectives / IF H10=1 maintain its current sales levels>? IF YES, PROBE FOR WHETHER VERY OR FAIRLY CLEAR
Yes – very clear strategy.................................................. 1 Yes – fairly clear strategy................................................. 2 No..................................................................................... 3 (Don’t know) ..................................................................... 4 (Not aiming to develop our overseas business).............. 5
ASK IF PLANNING TO GROW (CODES 3-4 AT H10) A27a – You mentioned that you are planning to grow over the next 5 years. Do you expect this growth to mainly come from...? READ OUT. SINGLE CODE.
Entering new overseas countries .............................................................. 1 Or, increasing sales to countries where you are already doing business . 2 (Both).................................................................................. 3 (Don’t know) ........................................................................... 4
ASK IF PLANNING TO GROW (CODES 3-4 AT H10) A27b – And do you expect this growth to mainly come from...? READ OUT. SINGLE CODE.
Selling to new customers ......................................................... 1 Or, increasing sales to your existing customers.............. 2 (Both).................................................................................. 3 (Don’t know) ........................................................................... 4
ASK IF PLANNING TO GROW (CODES 3-4 AT H10) A27c – And do you expect this growth to mainly come from...? READ OUT. SINGLE CODE.
Introducing new products or services................................. 1 Or, increasing sales of your existing products or services .... 2 (Both).................................................................................. 3 (Don’t know) ........................................................................... 4 ASK IF PLANNING TO STAY SAME SIZE (CODE 1 AT H10) A28a – You mentioned that you expect your business to remain the same size over the next 5 years. To help maintain your current sales levels, will you be mainly focussing on...? READ OUT. SINGLE CODE.
Entering new overseas countries .............................................................. 1 Or, selling to countries where you are already doing business .............. 2 (Both) ......................................................................................................... 3 (Don't know) .............................................................................................. 4
ASK IF PLANNING TO STAY SAME SIZE (CODE 1 AT H10) A28b – And will you be mainly focussing on...? READ OUT. SINGLE CODE.
Selling to new customers ........................................................ 1 Or, selling to existing customers ............................................. 2 (Both) ....................................................................................... 3 (Don't know) ............................................................................ 4
ASK IF PLANNING TO STAY SAME SIZE (CODE 1 AT H10) A28c – And will you be mainly focussing on...? READ OUT. SINGLE CODE.
Introducing new products or services .............................................. 1 Or, selling your existing products or services .................................. 2 (Both) ....................................................................................... 3 (Don't know) ............................................................................ 4
ASK IF PLANNING TO BECOME SMALLER (CODE 2 AT H10) A29 – You mentioned that you expect your business to become smaller over the next 5 years. Is this mainly because...? READ OUT. SINGLE CODE.
You don't see any scope or opportunity to grow ....................................... 1 Or, because you don't want to grow and are happy as you are ............ 2 (Other - SPECIFY) .................................................................................... 3 (Don't know) .............................................................................................. 4
A7 - DELETED A8 – DELETED
ASK ALL A9a – Thinking about your business overall, over the next 3 years do you think that you will...? READ OUT. CODE ALL THAT APPLY.
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
Develop any new products or services ......................................................... 1 Make fundamental changes or modifications to any of your existing products or services ................................................................. 2 Make more cosmetic changes to any of your existing products or services, such as packaging or translation ........................................... 3 (None of these) ............................................................................................. 4 (Don't know) .............................................................................................. 5 ASK IF PLANNING ANY PRODUCT/SERVICE DEVELOPMENT (CODES 1-3 AT A9a) A9h – And do you expect \<IF A9a=1 this product or service development activity / IF A9a=not 1 the changes to your products or services> to be aimed at UK customers, overseas customers or both? READ OUT. SINGLE CODE.
UK customers.................................................................1 Overseas customers ..........................................................2 Both.................................................................................3 (Don’t know) .....................................................................4
C1d - DELETED A9b - DELETED A9c - DELETED
IF WILL INTRODUCE OR MODIFY PRODUCTS/SERVICES (CODES 1-3 AT A9a) A9f – In your view, are some countries more important than others in terms of being a stimulus for your company’s innovation and product or service development activity?
Yes ...................................................................................1 No ....................................................................................2 (Don’t know) .....................................................................3
IF SOME COUNTRIES MORE IMPORTANT (CODE 1 AT A9f) A9g – And which countries are most important to you in this respect? CODE ALL THAT APPLY
INTERVIEWER NOTE: They don’t need to be doing business in these countries, and they could include the UK.
CATI TO SHOW LIST OF MOST COMMON MARKETS (INCLUDING THE UK), PLUS: Other (SPECIFY)................................................................. (None/Don’t know)
A9d - DELETED A10 - DELETED A11 - DELETED A12 - DELETED A18 - DELETED
CATI TO INSERT TIME MARKER OVERSEAS BUSINESS RISKS
READ OUT TO ALL I'd like to move on to talking about the risks involved in starting to do business in new overseas countries.
ASK ALL B1 – Firstly, have you been put off from doing business in a particular country for any of the following reasons? READ OUT. CODE ALL THAT APPLY.
AS NECESSARY: For each one, please only answer ‘yes’ if you have decided not to do business in a particular country because of this risk.
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
The risk of not being paid in full or on time ................................................ 1 The risk to the safety and security of your staff ............................................. 2 The risks associated with political or economic instability in that country . 3 The risk of intellectual property theft (i.e. your products or technology being copied) ................................................................. 4 The risk of encountering bribery, corruption or organised crime ............... 5 The risk of not seeing a return on the investment you would need to make to enter that country ......................................................... 6 (None of these) .......................................................................................... 7 (Don't know) .............................................................................................. 8
ASK ALL B1b – And over the last 2 years, have you significantly altered the way that you do business in any overseas countries for any of the reasons I've just mentioned?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don't know) ..................................................................... 3
ASK IF ALTERED WAY DO BUSINESS (CODE 1 AT B1b) B1c – Specifically, which of these risks has prompted you to significantly alter the way you do business in any overseas countries? READ OUT AS NECESSARY. CODE ALL THAT APPLY.
The risk of not being paid in full or on time ................................................ 1 The risk to the safety and security of your staff ............................................. 2 The risks associated with political or economic instability in that country . 3 The risk of intellectual property theft (i.e. your products or technology being copied) ................................................................. 4 The risk of encountering bribery, corruption or organised crime ............... 5 The risk of not seeing a return on the investment you would need to make to enter that country ......................................................... 6 (None of these) .......................................................................................... 7 (Don't know) .............................................................................................. 8 ASK ALL B2 – Thinking about the types of risk I've just mentioned, overall how risky do you think it is for your firm to do business in each of the following countries? READ OUT.
(a) Brazil (b) Russia (c) India (d) China
ON EACH OF THE B2 SCREENS (AT TOP) READ OUT AS NECESSARY Would you say that doing business in this country is...?
AS NECESSARY: It doesn't matter if you don't have any experience of doing business in this country, I'm just interested in your perception of how risky it is.
Very risky.................................................................1 Fairly risky .................................................................2 Not particularly risky ..................................................3 Not at all risky............................................................4 (Don't know) ..............................................................5
ASK ALL B3 – Thinking about the culture and attitude of your firm and its senior management team, which one of the following best describes how your firm thinks about taking risks when doing business overseas? READ OUT. SINGLE CODE
It's never worth taking any risks ........................................1 It's sometimes worth taking risks provided the commercial benefits are very clear ........................................2 Or, to be a successful business you have to regularly take risks 3 (Don't know) ..................................................................4
CATI TO INSERT TIME MARKER BARRIERS
IF DOING BUSINESS IN MORE THAN ONE MARKET (A1b=3-9)
B4 – Thinking now about all the overseas countries that you have done business in < IF CODES 5-8 AT S7 over the last 5 years / IF CODES 1-4 OR 9 since you were established >, which of these was the most challenging country to do business in? RECORD ONE COUNTRY ONLY
CATI TO SHOW LIST OF MOST COMMON MARKETS, PLUS: Other (SPECIFY) .............................................................. (None/Don’t know/All equally challenging) .......................
B5 - DELETED
CATI TO ALLOCATE <MARKET> AS FOLLOWS: • FROM B4: IF IN MORE THAN ONE MARKET (A1b=3-9) AND MARKET PROVIDED AT B4 • FROM A22: IF IN MORE THAN ONE MARKET (A1b=3-9) & NONE/DON’T KNOW AT B4 • FROM A2: IF ONLY IN ONE MARKET (A1b=2)
READ OUT IF CURRENTLY EXPORTING (CODES 1-4 AT S2a) I’d like to ask you some questions now about your experience of doing business in <MARKET> \<IF A1b=3-9 & NONE/DON’T KNOW AT B4 as you indicated earlier that this is the country you’ve started doing business in most recently>.
C1a - DELETED
ASK IF CURRENTLY EXPORTING (CODES 1-4 AT S2a)
C4 – Did you start doing business in <MARKET> for any of the following reasons? READ OUT. CODE ALL THAT APPLY.
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
An existing customer that you were already doing business with requested that you start doing business there........................................... 1 You received an approach or enquiry from a potential customer or partner in <MARKET> ................................................................. 2 A company that you were already doing business with in a different country helped you to start doing business in <MARKET> ....................... 3 There was someone in your company who already had experience of <MARKET> or contacts there...................................................... 4 <MARKET> is at the forefront of developments for your industry .......... 5 (None of these).............................................................................. 6 (Don’t know) .............................................................................. 7 ASK IF ONLY DONE BUSINESS IN ONE MARKET (CODE 2 AT A1b) OR IF ONLY USE ONE MODE (ONLY ONE OF CODES 1-4 SELECTED AT S2a)
B9 – Based on what you told me earlier about your overseas business, I believe that you do business in <MARKET> by...
CATI TO LIST ALL OF THE FOLLOWING THAT APPLY
IF S2a=1: Selling direct to customers. IF S2a=2: Selling through agents or distributors. IF S2a=3: Licensing, franchising or other contractual arrangements (such as joint ventures). IF S2a=4: Operating your own site or office in <MARKET>.
Is that correct or do you do business in <MARKET> in any different ways?
Yes – correct ................................................................. 1 No – use different ways .................................................. 2 (Don’t know) ..................................................................... 3
ASK IF DOING BUSINESS IN >1 MKT & USE MORE THAN 1 MODE (CODES 3-9 AT A1b & MORE THAN ONE OF CODES 1-4 SELECTED AT S2a) OR INFO WRONG AT B9 (CODE 2 AT B9)
B7 – In which of the following ways have you done business in <MARKET>?
READ OUT – CODE ALL THAT APPLY – DO NOT RANDOMISE
Selling directly to customers in <MARKET> ......................... 1 Selling through agents or distributors in <MARKET> ............. 2 Licensing, franchising or other contractual arrangements such as joint ventures ......................................................... 3 Operating your own site or office in <MARKET> .................. 6 (None of these) .................................................................. 7 (Don’t know) ..................................................................... 8
IF OVERSEAS SITE (CODE 6 AT B7)
B8a – Thinking about your site in <MARKET>, which of the following purposes does it have...? READ OUT. CODE ALL THAT APPLY.
INTERVIEWER NOTE: IF THE FIRM HAS SEVERAL SITES IN THIS COUNTRY ASK THEM THE PURPOSE OF THEIR MOST IMPORTANT SITE
Manufacturing or assembly ........................................... 1 Call centre ........................................................................ 3 Distribution or sales office ............................................. 4 Service delivery ............................................................. 6 Research, product or process development .................. 7 (Don’t know/None of these) .............................................. 8 IF MORE THAN ONE PURPOSE (MORE THAN ONE CODE SELECTED AT B8a)
B8b – And which of these is the MAIN purpose of this site? READ OUT AS NECESSARY. SINGLE CODE.
CATI TO ONLY DISPLAY CODES SELECTED AT B8a (& DON'T KNOW)
- Manufacturing or assembly ......................... 1
- Call centre .................................................. 3
- Distribution or sales office ............................ 4
- Service delivery .......................................... 6
- Research, product or process development .... 7
- (Don't know/None of these) ............................ 8
MODE REFERENCES
M1 - Selling direct (B7=1 OR (S2a=1 & B9=1)) M2 - Selling through agents/distributors (B7=2 OR (S2a=2 & B9=1)) M3 – Licensing, franchising, other contractual (B7=3 OR (S2a=3 & B9=1)) M6 – Production site ((B7=6 & B8a=1) OR (S5c=1 & B9=1)) M7 – Call centre (B7=6 & B8a =3) OR (S5c=3 & B9=1)) M8 – Sales/service site (B7=6 & B8a =4-6) OR (S5c=4-6 & B9=1)) M9 – R&D site (B7=6 & B8a =7) OR (S5c=7 & B9=1)) M10 – Unknown site (B7=6 & B8a =8) OR (S5c=8 & B9=1)) M11 – Unknown mode (B7=7-8 OR B9=3)
IF M6, 7 OR 9 & NOT M8
C1b – Can I just check, does your site in < MARKET > sell any products or services directly to any customers in < MARKET >? READ OUT
- Yes ........................................................................................................ 1
- No ......................................................................................................... 2
- (Don't know) ...................................................................................... 3 ASK IF CURRENTLY EXPORTING (S2a=1-4) E1 – I’m now going to read out a list of issues that you may have had to tackle when trying to develop your business in <MARKET>. For each one, please give me a score of 1 to 5 for the extent to which you feel that this has been a difficulty, where 1 means it has ‘not been at all difficult’ and 5 means it has been ‘extremely difficult’. So firstly... READ OUT. ROTATE LIST BUT ALWAYS ASK B, C & D IN ORDER
ON EACH OF THE E1 SCREENS (AT BOTTOM) AS NECESSARY To what extent has this been a difficulty in <MARKET> (where 1 means it has ‘not been at all difficult’ and 5 means it has been ‘extremely difficult’)
INTERVIEWER NOTE: If respondent says it is not relevant or doesn't apply, then code as ‘1 – Not at all difficult’
(a) Obtaining basic information about doing business in <MARKET> (b) Identifying who to make contact with in the first instance < IF M2-3 or finding a suitable partner > (c) Establishing an initial dialogue with prospective < IF M1, M3, M8, M10, M11 OR YES AT C1b customers or > business partners in <MARKET> (d) Building relationships with key influencers or decision-makers (i) IF M1-3, M8, M10, M11 OR YES AT C1b: A preference on the part of customers in <MARKET> for doing business with firms from <MARKET>
AS NECESSARY: For example, where customers in France prefer to buy from French companies rather than UK ones. (k) Finding the necessary management time to devote to doing business in <MARKET> (r) Dealing with legal or tax regulations or standards in <MARKET> (s) Negotiating the culture and language (t) Protecting your intellectual property (w) Ensuring you get paid and enforcing contracts (x) Dealing with customs procedures or paperwork
1 – Not at all difficult ......................................................... 1 2 ...................................................................................... 2 3 ...................................................................................... 3 4 ...................................................................................... 4 5 – Extremely difficult ...................................................... 5 (Don't know) .............................................................................. 6
ASK IF NO SIGNIFICANT BARRIERS (CODES 1-3 OR 6 AT ALL OF E1a-x) E5 – Were there any other significant difficulties that you encountered in <MARKET> that I haven't already mentioned? IF YES, PROBE FOR DETAILS
Yes (SPECIFY) ................................................................. 1 No...................................................................................... 2 (Don't know) .............................................................................. 3 ASK IF PROBLEMS WITH PROTECTING IP (CODES 3-5 AT E1t)
E4 – You mentioned that you had experienced problems with protecting your intellectual property in <MARKET>. Specifically, did you have difficulty with...?
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
Obtaining protection for your intellectual property in <MARKET> ........................................ 1 Enforcing your intellectual property protection in <MARKET> ........................................ 2 (Neither of these) ........................................................................................................ 95 (Don’t know) ............................................................................................................. 97
E2 - DELETED E3 – DELETED G10f - DELETED
CATI TO INSERT TIME MARKER AWARENESS & USE OF UKTI
READ OUT TO ALL I’d now like to ask you some questions about sources of information or advice that are available to help UK firms do business overseas.
ASK ALL F2 – Prior to this interview, had you heard of...? READ OUT
(a) UK Trade & Investment or UKTI (b) The commercial services provided by British embassies and consulates overseas
Yes ................................................................. 1 No ........................................................................ 2 (Don’t know) ...................................................... 3
IF AWARE OF UKTI (CODE 1 AT F2a) F3a – And has your firm used any of UK Trade & Investment’s services?
Yes ........................................................................ 1 No ........................................................................ 2 (Don’t know) ...................................................... 3
IF AWARE OF POSTS (CODE 1 AT F2b) F3b – And has your firm obtained any business information or advice from any British embassies or consulates overseas?
AS NECESSARY: It doesn’t matter whether or not you had to pay for this, if you have received any information or advice then please answer yes.
Yes ........................................................................ 1 No ........................................................................ 2 (Tried to but got no help) ........................................ 4 (Don’t know) ...................................................... 3
F4a - DELETED ASK IF CURRENTLY EXPORTING (CODES 1-4 AT S2a) F4b – Now thinking specifically about your experiences of doing business in <MARKET> (from Market Allocation in Barriers section), have you done any of the following? READ OUT. CODE ALL THAT APPLY.
INTERVIEWER NOTE: Pause after reading each option to let the respondent say yes or no.
ONLY IF F3a=1 OR F3b=1: Obtained information, advice or support about <MARKET> from \<IF F3a=1 & F3b=not1 UKTI / IF F3a=not1 & F3b=1 a British embassy or consulate overseas / IF 3a=1 & F3b=1 UKTI or a British embassy or consulate overseas> ................................................................. 1 Commissioned information, advice or support about <MARKET> from any <IF F3a=1 OR F3b=1 other> external organisations ........................................ 2 Received less formal advice or help from friends, family or business associates ........................................................................................................... 3 (None of these) ........................................................................................................ 4 (Don't know) ........................................................................................................ 5
F5 - DELETED F4b - DELETED F2k - DELETED F2m - DELETED F2j - DELETED F2l - DELETED F2n – DELETED
CATI TO INSERT TIME MARKER SECTION I – MARKETING
ASK ALL I1 – I’d now like to ask you a few questions about the types of media channels that you personally use and how useful these are to your business. So, do you get news or information that’s relevant to your business from either of the following? READ OUT. CODE ALL THAT APPLY. DO NOT RANDOMISE ORDER
Social networking sites ..................................................... 8 Other websites ................................................................. 9 (None of these) .................................................................. 10 (Don’t know) ................................................................. 11
IF CODE 8 AT I1 I2h – And how useful are social networking sites as a source of news or information that is relevant to your business? Please answer on a scale of 1-5 where 1 is ‘not at all useful’ and 5 is ‘extremely useful’.
1 – Not at all useful ........................................................... 1 2 ....................................................................................... 2 3 ....................................................................................... 3 4 ....................................................................................... 4 5 – Extremely useful ......................................................... 5 (Don’t know) ..................................................................... 6
I2i - DELETED
IF DO NOT USE SOCIAL NETWORKING (I1 IS NOT CODE 8) I3b – Do you expect to use any social networking sites for business purposes within the next year?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
ASK ALL I4 – During the last year, have you attended any business seminars, tradeshows or conferences?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
IF CODE 1 AT I4 I5 – How useful do you find these events as a source of information or news that is relevant to your business? AS NECESSARY. Please answer on a scale of 1-5 where 1 is ‘not at all useful’ and 5 is ‘extremely useful’.
1 – Not at all useful ........................................................... 1 2 ....................................................................................... 2 3 ....................................................................................... 3 4 ....................................................................................... 4 5 – Extremely useful ......................................................... 5 (Don’t know) ..................................................................... 6 Finally, I'd now like to ask you some questions about your business just to classify your answers for analysis purposes.
**ASK ALL**
**H2a – How many people are currently employed by your business in the UK?**
**AS NECESSARY** Please include both full and part-time staff.
INTERVIEWER NOTE – If the respondent owns the company and does not employ anyone else, please code as zero employees.
Write in number (0+):
(Don’t know) – PROMPT WITH RANGES
(Refused)
**IF DON’T KNOW AT H2a**
**H2b – If you had to estimate, approximately how many people are employed by your business in the UK? READ OUT AS NECESSARY**
No employees .................................................................1 1-4 .................................................................................2 5-9 .................................................................................3 10-19 .............................................................................4 20-49 .............................................................................5 50-99 .............................................................................6 100-199 .........................................................................7 200-249 .........................................................................8 250-499 .........................................................................9 500 or more .....................................................................10 (Don’t know) .................................................................11 (Refused)........................................................................12
**H2c - DELETED**
**H2d - DELETED**
**H2e - DELETED**
**H19a - DELETED**
**H19b - DELETED**
**H19c - DELETED**
**H20a - DELETED** ASK ALL H3b –< IF S7=NOT 1 & NOT 9 AND S7b=NOT 2 Can I just ask, what is the current annual turnover of your business? / IF S7=1 OR 9 OR S7b=2 What do you anticipate will be the turnover of your business in the first year of trading?> READ OUT AS NECESSARY
AS NECESSARY By this I mean your annual sales, income or receipts.
IF OVERSEAS SITE (CODE 4 AT S2a): AS NECESSARY: Please include sales from any overseas sites or subsidiaries that you control from the UK.
IF FOREIGN OWNED (CODES 2-3 AT H1b): AS NECESSARY: Please just focus on your UK firm, not your parent company
£0 ................................................................................... 1 £100,000 or less............................................................... 2 £100,001 - £500,000 ...................................................... 3 £500,001 - £2million .................................................... 4 £2million - £10million .................................................. 5 £10million - £25million ............................................... 6 £25million - £50million ............................................... 7 £50million - £500million ............................................. 8 More than £500million ............................................... 9 (Don't know) ..................................................................... 10 (Refused)........................................................................ 11
H3c - DELETED
ASK ALL UNLESS ESTABLISHED IN LAST TWO YEARS (I.E. NOT 1-2 OR 9 AT S7 & NOT CODE 2 AT S7b) H7a – Have you introduced any new products or services over the last three years?
Yes ............................................................................... 1 No .................................................................................. 2 (Don't know) ..................................................................... 3
ASK IF YES AT H7a H7b - And are these new products or services... READ OUT - SINGLE CODE ADD AS NECESSARY: By completely new I mean that, to the best of your knowledge, they have not been introduced by anyone before you READ OUT – SINGLE CODE
Just new to your business .................................................. 1 New to your industry or sector........................................... 2 Or, are they completely new to the world .......................... 3 (Some are just new to the business and some are completely new) ...... 4 (Don't know) ..................................................................... 5 ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b
H4a – Approximately how many of your UK employees are engaged either wholly or partly in R&D activity? READ OUT AS NECESSARY
AS NECESSARY: By R&D I mean ‘research and development’
Zero .................................................................................. 1 One ................................................................................... 2 2-4 .................................................................................... 3 5-9 .................................................................................... 4 10-19 .............................................................................. 5 20-49 .............................................................................. 6 50-99 .............................................................................. 7 100-199 ......................................................................... 8 200-249 ......................................................................... 9 250-499 ......................................................................... 10 500 or more ..................................................................... 11 (Don't know) ..................................................................... 12 (Refused) .......................................................................... 13
ASK IF H4a IS CODES 2-11
H4b – Can I just check, are any of these employees involved in activities that could be described as ‘the development of scientific or technical knowledge that is NOT commonly available’?
Yes ................................................................................... 1 No ..................................................................................... 2 (Don't know) ..................................................................... 3
ASK ALL EXCEPT NO EMPLOYEES (0 AT H2A OR CODE 1 AT H2B) OR CODES 2, 3 OR 4 AT H7b OR CODE1 AT H4a
H5 – And approximately how many of your UK employees are engaged either wholly or partly in new product or service development? READ OUT AS NECESSARY
Zero .................................................................................. 1 One ................................................................................... 2 2-4 .................................................................................... 3 5-9 .................................................................................... 4 10-19 .............................................................................. 5 20-49 .............................................................................. 6 50-99 .............................................................................. 7 100-199 ......................................................................... 8 200-249 ......................................................................... 9 250-499 ......................................................................... 10 500 or more ..................................................................... 11 (Don't know) ..................................................................... 12 (Refused) .......................................................................... 13 ASK ALL EXCEPT CODES 2, 3 OR 4 AT H7b OR (CODE 1 AT H4b & CODES 3-11 AT H4a & CODES 3-11 AT H5)
H6 – In the last year have you commissioned anyone external to your business to conduct any R&D or new product or service development activity for you?
Yes ................................................................. 1 No ........................................................................ 2 (Don’t know) ....................................................... 3
Analysis
Innovative Firms
• ‘Innovative’ firms are those that... • Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5) • Or, have employed someone external to conduct new product or service development in the last year (H6) • Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years
Innovative Firms – Alternative (Tighter) Definition
• ‘Innovative’ firms (by the alternative measure) are those that... • Have more than one employee engaged in R&D activity (H4a) and more than one employee engaged in new product or service development (H5) and at least some R&D employees are engaged in the ‘development of scientific or technical knowledge that is not commonly available’ (H4b) • Or, have employed someone external to conduct new product or service development in the last year (H6) • Or, derive at least some turnover from products & services introduced in the last 3 years (H7a) except firms established in the last 2 years and these products & services are either ‘new to the world’ or ‘new to the industry/sector’ (H7b)
ASK ALL
H8b – Have you either applied for or obtained any patents, trademarks, design rights or other legal protection, either in the UK or overseas, for any of your products or services?
Yes ................................................................. 1 No ........................................................................ 2 (Don’t know) ....................................................... 3
IF IP PROTECTION (CODE 1 AT H8b)
H8e – And is this...? READ OUT. CODE ALL THAT APPLY
Patents ............................................................. 1 Trademarks ....................................................... 2 Design rights ..................................................... 3 Or other legal protection .................................... 4 (Don’t know) ..................................................... 5 IF IP PROTECTION (CODE 1 AT H8b) H8c – And do these relate to the UK, overseas countries or both? SINGLE CODE
AS NECESSARY: Please include all patents, trademarks, design rights and other legal protection
- UK ................................................................. 1
- Overseas .......................................................... 2
- Both ..................................................................... 3
- (Don’t know) ...................................................... 4
IF OVERSEAS PATENTS (CODE 1 AT N8e & CODES 2-3 AT H8c) H8d – Does your firm hold any ‘triadic patents’, by which I mean you hold a patent in the US, EU and Japan for the same product or innovation?
INTERVIEWER NOTE: ONLY CODE YES IF SAME PATENT HELD IN ALL THREE MARKETS
- Yes ..................................................................... 1
- No ....................................................................... 2
- (Don’t know) ...................................................... 3
- (Refused) ............................................................ 4
ASK ALL H8f – Can I just check, have you ever heard of the UK government’s overseas Intellectual Property attaché network?
EXPLAIN AS NECESSARY: The UK Government has recently established a network of Intellectual Property attachés based in China, India, Brazil and South East Asia. This network will be used to strengthen advice and support on Intellectual Property Protection in these markets with a view to further developing trade for UK companies there.
- Yes ..................................................................... 1
- No ....................................................................... 2
- (Don’t know) ...................................................... 3
ASK ALL H9a – Moving on, do you have a current, written business plan?
- Yes ..................................................................... 1
- No ....................................................................... 2
- (In progress/currently writing business plan) ............... 5
- (Don’t know) ...................................................... 3
- (Refused) ............................................................ 4
H9b - DELETED ASK ALL G10a – Over the last 6 months, has your business had any difficulties in obtaining finance, either from within the company or from external sources?
INTERVIEWER NOTE: If respondent says it is not applicable or they haven’t tried to obtain finance, then code as ‘no’
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) .................................................................... 3 (Refused) ........................................................................ 4
IF DIFFICULTIES ACCESSING FINANCE (G10a=1) G10e – Have these difficulties obtaining finance had any negative impact on the scale or scope of your <IF S2b=1 planned> overseas activities? SINGLE CODE.
Yes ................................................................................... 1 No ..................................................................................... 3 (Don’t know) .................................................................... 4
H18a - DELETED H18b - DELETED H18c - DELETED H21 - DELETED
CATI TO INSERT TIME MARKER ASK ALL H14 – That’s the end of the interview, thank you very much for taking part. I just need to check a few things before you go. Would you be willing to take part in any future UK Trade & Investment research on this topic?
AS NECESSARY If you say ‘yes’ you can always decline at the time if it’s not convenient.
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
ASK ALL H17d – Would you like us to email you some more information on the services that UKTI provide to help UK firms do business overseas? READ OUT
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
ASK ALL H17a - We will be producing a report of the results from this survey. Would you like us to email you an electronic link to this report when it’s published? READ OUT
ADD AS NECESSARY The report will be available later this year.
Yes ................................................................................... 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
IF YES AT H17a OR H17d H17b - Can I take your e-mail address? AS NECESSARY: This will only be used to email you < IF YES AT H17d some information about UKTI services / IF YES AT H17d & H17a and / IF YES AT H17a a link to the report > and will not be passed on to anyone else.
INTERVIEWER NOTE: PLEASE MAKE SURE YOU RECORD THE EMAIL ADDRESS CORRECTLY, & READ IT BACK TO THE RESPONDENT TO CHECK SPELLINGS ETC
Yes (WRITE IN) ................................................................ 1 No ..................................................................................... 2 (Don’t know) ..................................................................... 3
H17c - DELETED
CATI TO INSERT TIME MARKER ASK ALL H15 – Finally as proof of this interview please could I just confirm your business postcode? CATI TO DISPLAY POSTCODE IF AVAILABLE – AMEND IF MISSING OR INCORRECT
........................................................................................................................................
ASK ALL H16 – And may I take a note of your name?
........................................................................................................................................
STANDARD THANK & CLOSE
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cd4e864de7e27fd60973714bec0646ec8158e7a2 | Family Court Statistics Quarterly
Data visualisation tool
29 September 2016 Introduction
The Family Court Statistics Quarterly (FCSQ) presents key statistics on activity in the family courts of England and Wales with accompanying commentary and analysis. The bulletin provides a summary overview of the volume of cases dealt with by these courts over time, with statistics also broken down for the main type of case involved.
As part of our wider work on improving data visualisation and accessibility, we have developed a data visualisation tool which sits on top of the data underlying the publication and its associated csv files. The tool provides users with the capability to:
- interrogate the published information at a lower level of detail, e.g. by region; and
- access and produce a range of charts specific to their user requirements.
The data visualisation tool
The tool can be found here:
https://public.tableau.com/profile/moj.analysis#!/vizhome/FamilyCourtstatisticstool2016Q2/Frontpage
How to send us your feedback
We welcome any comments you have about the data visualisation tool.
Enquiries and feedback should be directed to Bridgette Miles at the address below.
Email: [email protected]
Bridgette Miles Justice Statistics Analytical Services Ministry of Justice 7th Floor 102 Petty France, London, SW1H 9AJ
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4bb930677f37898b85fe76205a4e9945eed578e7 | The Department of Agriculture and Rural Development(1) makes the following Regulations in exercise of the powers conferred by sections 19(1), 124(1) and (2) and 127(1) of the Fisheries Act (Northern Ireland) 1966(2)
Citation and commencement
1. These Regulations may be cited as the Conservation of Scallops Regulations (Northern Ireland) 2008 and shall come into operation on 17th November 2008.
Interpretation
2.—(1) In these Regulations—
“the Act” means the Fisheries Act (Northern Ireland) 1966;
“belly rings” means rings which make up the floor of a scallop dredge;
“British fishing boat” means a fishing boat which is either registered in the United Kingdom under Part II of the Merchant Shipping Act 1995(3) or is owned wholly by persons qualified to own British ships for the purposes of that part of the Act;
“defined area” means Northern Ireland inshore waters and that part of the Northern Ireland zone within twelve nautical miles measured from baselines in Northern Ireland;
“dredge bar” or “tooth bar” means a horizontal bar with teeth on the bottom of a scallop dredge;
“French dredge” means a scallop dredge of the type known as a “French dredge” incorporating paravanes, diving plates, pressure plates, water deflecting plates or any similar device, and having rigid fixed teeth;
“scallops” means shellfish of the species *Pecten maximus*;
______________________________________________________________________
(1) Formerly the Department of Agriculture S.I. 1999/283 (N.I.1) Article 3 (2) 1966 c.17 (N.I.) as amended by S.I. 1981/227 (N.I. 7), 2001c.4(NI) and S.I. 2002/790 (3) 1995 c.21 “scallop dredge” includes any appliance with a rigid framed mouth which is towed through the water and is manufactured, adapted, used or intended for use for the purpose of fishing for scallops; “size” in relation to any scallop means the size calculated by measuring the maximum length of the shell; “Strangford Lough” shall be construed in accordance with the Inshore Fishing (Prohibition of Fishing and Fishing Methods) Regulations (Northern Ireland) 1993(4); “tow bar” means any device or appliance which is capable of being used for the purpose of fixing or attaching a scallop dredge to a vessel for the purpose of enabling such a dredge to be towed by the vessel; “width” in relation to any scallop dredge means the distance across the mouth of a dredge when measured horizontally.
Prohibition of fishing and fishing methods
3.—(1) Subject to regulation 4, fishing for scallops by any means within the defined area is prohibited— (a) during the period commencing at 8 p.m. on each weekday other than Saturday and ending at 6 a.m. on the next following weekday; and (b) during the period commencing at 6 a.m. on each Saturday and ending at 6 a.m. on the next following Monday. (2) A person shall not use or carry on board any British fishing boat within the defined area— (a) a scallop dredge or system of scallop dredges with a width, or in the case of a system of scallop dredges, an aggregate width, of more than 915 cms; (b) a scallop dredge with more than 9 teeth per dredge or tooth bar; (c) a scallop dredge with a tooth spacing between the internal edges of less than 75 mm on the dredge or tooth bar; (d) a scallop dredge with belly rings having a clear opening of less than 75 mm internal diameter; (e) a scallop dredge with a mesh size of less than 100 mm in the netting cover; and (f) a French dredge. (3) A person shall not use or carry on board any British fishing boat within the defined area— (a) a tow bar which exceeds 5.5 metres in length; (b) a tow bar 5.5 metres or less in length which is constructed in such a way as to enable more than 6 scallop dredges to be attached to it at the same time. (4) A person shall not fish for scallops within the defined area using more than 6 scallop dredges from each side of any British fishing boat. (5) A person shall not, while diving, take scallops during the period 1st June to 31st October, both days inclusive, in any year, within the defined area. (6) Paragraph (5) shall not apply in relation to the taking of scallops in Strangford Lough. (7) A person shall not, within the defined area— (a) take by diving; or (b) land, bring to land or retain on board any British fishing boat, scallops of a size less than 110mm.
(8) A person who, within the defined area, catches fish by any means other than a scallop dredge shall not take and retain on board a British fishing boat, scallops which are more than 1% by weight of the total of all fish on board.
Exemptions
4. The prohibitions contained in Regulation 3(1), (2), (3), (4), (5), (7) and (8) shall not apply to— (a) fishing from a sea-fishing boat other than a British fishing boat; or (b) any person who is operating under the authority of and in accordance with the terms and conditions of a fish culture licence granted under section 11 of the Act or a permit granted under section 14 of the Act.
Revocation
5. The following Regulations are revoked— (a) The Sea Fish (Minimum Size) (No. 2) Order (Northern Ireland) 1983 (5); (b) The Conservation of Scallops Regulations (Northern Ireland) 1997(6) and (c) (b) The Inshore Fishing (Daily Closed Time for Scallops) Regulations (Northern Ireland) 2000(7).
Sealed with the Official Seal of the Department of Agriculture and Rural Development on 24th October 2008.
L.S.
Liam McKibben A senior officer of the Department of Agriculture and Rural Development
(5) S.R.1983 No.417 (6) S.R. 1997 No.89 as amended by S.R. 1998 No.46. (7) S.R. 2000 No.39. EXPLANATORY NOTE
(This note is not part of the Order)
These Regulations revoke and replace the Sea Fish (Minimum Size) (No 2) Order (Northern Ireland) 1983, the Conservation of Scallops Regulations (Northern Ireland) 1997 and The Inshore Fishing (Daily Close Time for Scallops) Regulations (Northern Ireland) 2000.
The Regulations prohibit:—
(a) fishing for scallops by any means within the defined area during the times specified; (b) the use or carriage on board any British fishing boat a scallop dredge or system of scallop dredges with a width, or in the case of a system of scallop dredges, an aggregate width, of more than 915 cms; (c) the use or carriage on board any British fishing boat a scallop dredge with more than 9 teeth per dredge; (d) the use or carriage on board any British fishing boat a scallop dredge with a tooth spacing between the internal edges of less than 75mm on the dredge or tooth bar; (e) the use or carriage on board any British fishing boat a scallop dredge with belly rings having a clear opening of less than 75mm internal diameter; (f) the use or carriage on board any British fishing boat a scallop dredge with a mesh size of less than 100mm in the netting cover; (g) the use or carriage on board any British fishing boat a French dredge; (h) the use or carriage on board any British fishing boat a tow bar which exceeds 5.5 metres in length; (i) the use or carriage on board any British fishing boat a tow bar 5.5 metres or less in length which is constructed in such a way as to enable more than six scallop dredges to be attached to it at the same time; (j) fishing for scallops within the defined area using more than 6 scallop dredges from each side of any British fishing boat; (k) taking scallops by diving during the period 1st June to 31st October both days inclusive, in any year with in the defined area except for Strangford Lough; (l) a person, within the defined area, taking by diving or landing, bringing to land, or retaining on board any British fishing boat scallops of a size less than 110mm; (m) a person who, within the defined area, catches fish by any means other than a scallop dredge taking and retaining on board a British fishing boat, scallops which are more than 1% by weight of the total of all fish on board.
The Regulations do not apply to:—
(a) fishing from a sea fishing boat other than a British sea fishing boat; or (b) any person operating under the authority of and in accordance with the terms and conditions of a fish culture licence or a permit granted by the Department of Agriculture under sections 11 and 14 respectively of the Fisheries Act (Northern Ireland) 1966.
Contravention of these Regulations is an offence under section 124(3) of the Act. The penalty is a fine on summary conviction not exceeding level 5 on the standard scale (£5,000). These Regulations were notified in draft to the European commission in accordance with Directive 98/34/EC, as amended by Directive 98/48/EC.
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a03bba14c5ff5d06a48237d3cd3fac168080a6c5 | THE FOOD STANDARDS AGENCY DATA STRATEGY
Contents
Our Data Vision .................................................................................................................. 2 Why We Need Data Strategy .......................................................................................... 3 Data Strategy Summary ................................................................................................. 6 Data Principles ................................................................................................................ 8 Strategic Data Outcomes ............................................................................................... 9 Data Strategy Goals ....................................................................................................... 10 Data Strategy Action Plan ............................................................................................. 11 Our Data Vision
1. At the Food Standards Agency we recognise the value of data: both our own and that held by other parties: government departments, industry, academia, NGOs, civic society and social media. We recognise the power and the promise of data to improve outcomes for society in many areas by increasing efficiency, transparency and access to information. We recognise that data can help us safeguard the public and provide them with the best available information about food safety throughout the food system.
2. We consider data to be the fundamental enabler of our ability to deliver our key strategic outcomes in food safety and public information.
3. At the FSA, we therefore commit to using data to its fullest potential by attaining the highest possible standard in information and data management, by becoming data driven and by promoting innovative approaches to data work.
4. We have created this Data Strategy to describe how we will work with data – this key strategic enabler - to deliver the wider strategic outcomes of our organisation and to maximise the impact of all our activity.
5. The Data Strategy consists of Our Data Vision (this section), the problem statement explaining Why We Need a Data Strategy, our Data Principles, our Strategic Data Outcomes, Data Strategy Goals and Data Strategy Action Plan - which contains the more specific actions required to achieve each of the Data Strategy Goals. Why We Need Data Strategy
6. At the FSA, we recognised the importance of data for our organisation and have embarked on the journey to increase our understanding of how to best use data to achieve our strategic goals and needs. We are now in the process of building an advanced and sustainable capability for information and data management.
7. In the past few months we have significantly advanced our awareness of data issues and we have built strong foundations for information management and governance. Whilst this has generally improved our data capability, it has also made us more aware of the many problems and issues with our data which persist due to the legacy of old technologies, processes and approaches.
OUR DATA ECOSYSTEM:
09. Many areas of our data ecosystem are in need of significant improvement. The poor quality of data on collection is making us start from the low baseline with the low data quality then persisting through its whole lifecycle. This reduces the use of data as people do not trust it, which translates into higher costs of data processing and more effort being needed for data collection and management. Much value is then lost, data does not yield much return on investment and we are not aligned with the ICO good practice.
10. Inconsistent, incomplete and duplicated data sources are used for decision making – potentially negatively impacting the quality of these decisions and introducing business and reputational risk.
11. With many important and high visibility political events on the horizon (e.g. all the legislation and policy changes likely to accompany the UK’s EU exit) it is of critical importance to ensure our organisational decision quality is at its highest.
12. As well as risks, poor data quality also creates missed opportunities (e.g. with respect to Regulating our Future, surveillance and food crime). We are less effective than we otherwise could be, as we find ourselves prevented from using the existing data to its full capacity and from taking advantage of exploiting new data sources (e.g. the Internet of Things) and new data methods (such as the Artificial Intelligence, Machine Learning, etc.) to their full power.
13. Similar data challenges were identified in the Discovery Report for the IT Strategy conducted by Rainmaker in 2016.
14. It is important to recognise that the work described in the Data Strategy will need to be undertaken in alignment and in collaboration with the FSA’s internal IT section and the relevant IT service providers. Some of the effort will have to focus on designing and building the right technical infrastructure to support development of the overall data capability within the FSA.
15. This necessarily has implications for the IT Strategy in terms of the technology platforms and tools which will need to be built or procured and then supported, therefore a close and on-going dialogue with the internal IT function is required to align the work on the data infrastructure and to consider all the related dependencies, opportunities and risks. The IT Strategy Discovery report highlights the need for a bold and progressive data strategy and recognises the impact and importance it will have for the overall direction of the FSA’s future IT Strategy.
16. Extra resources will need to be made available for the effort - as it is likely to exceed the ‘business as usual’ capacity - both in terms of staff time and budget. The extra resourcing is likely to be required for both the internal IT section and the Information Management team.
17. For all these reasons, the FSA needs an ambitious and game changing Data Strategy. We need it to identify our needs and our goals, to focus our minds on the outcomes we wish to achieve using data and to provide a clear guidance for our efforts. We need to agree our Data Principles to inform our priorities and decisions we take about our actions and plans. We need the Data Strategy to reiterate our commitments, re-state our goals and to map out a clear path and action plan to achievement.
18. Finally, we need the Data Strategy to be our communication tool - to help everyone in the organisation understand the value of data and what it can do for them. We are hoping that a clearly stated and communicated data strategy will inspire and motivate our colleagues to support us and to participate in the effort to make the FSA data driven - making them more aware about the value of data and enriching their own work, thus creating value for the entire organisation. Data Strategy Summary
19. Our Data Strategy is based on our Data Vision and our core Data Principles. The Strategy specifies how we will value our data and manage it to support the FSA’s business outcomes and to create value for the public and for ourselves.
20. The Data Strategy expresses our intent to create a strong organisational data culture and to make the FSA data driven - as expressed in our organisational objectives plan of 2016/17 and in the Chief Scientist’s Report of March 2017.
21. We will put data on the organisational agenda and promote data literacy, data driven decision making and positive attitudes towards data. We will be advocating to senior management that data utilisation targets be a part of our overall performance measurement. We intend to use visual methods and story-telling to promote our data success stories and to highlight further opportunities for positive outcomes and impact which can be enabled by data.
22. We understand that in order to achieve these goals we need to build a modern data capability within the FSA and to support and encourage our Data Team to create even more powerful insights from data. We need to develop further our Data Science expertise and find ways to increase its impact. We also need to increase the overall data literacy across the Agency and equip our workforce with the skills to engage with data and use it more effectively in their work.
23. We need to guarantee that our data and information continues to be effectively governed and protected by ensuring our policies, processes and skills remain current and fit for purpose. But we also need to innovate with data and collaborate with our government and industry partners to create better insights and information. We need to continue to publish our data as Open Data, striving to achieve our ambition of most of our data being openly and regularly published - promoting reuse of our data by external agents and by ourselves.
24. To make sure that we attend to all these needs, our Data Strategy Action Plan creates a list of foundational tasks, joining together all strands of our data work and linking them into a coherent programme to build a strong platform for execution for our ambitious data strategy and achievement of wider organisational outcomes.
25. The Action Plan shows how we will work with our colleagues across the Agency to improve the understanding of our information needs and how we will architect and build modern data infrastructure to meet our current and future needs. The Action Plan specifies how we will enrich our data estate through development of our own datasets and the reuse of trusted data from external sources. It reiterates our commitment to the proportionate and appropriate data processing - in line with the Information Commissioner’s Office principles, the law and our own strong stance on data ethics.
26. The Action Plan contains the list of technical tasks, where we will work with our IT partners (internal function and external suppliers) to build and operationalize a modern data infrastructure that is resilient, flexible, scalable, and enables us to use modern data technologies and approaches to make our organisation more efficient.
27. The Data Strategy shows how we will strengthen our data practice and our Data Team - enhancing our capability in data science, data architecture, data governance and other relevant data disciplines and ensuring that we have the technology, tools, processes and skills to deliver impactful and relevant data work for our organisation, our partners and the public.
28. We will continue to champion transparency, advocating Open Data and promoting strong communities of data consumers interested in working with us to create value from our data and using it to increase positive outcomes for everybody. Following from that goal we will naturally continue to proactively publish our data as Open Data, aiming for most of our data to be publically accessible in reusable format. Data Principles
29. Our Data Principles express our values, beliefs, priorities and philosophy in relation to data. They underpin everything we do with data and inform how we use data to achieve the Agency’s strategic outcomes.
30. The principles encapsulate our belief that data is a valuable organisational resource which must be managed strategically to create business value. Our data is at the heart of our responsibility to safeguard the public and to inform them about food safety and other food related issues. We make great effort to ensure our data is trusted.
31. We aim to create a strong data culture within our organisation and to become a ‘data driven organisation’. We are at the forefront of thinking about data ethics and believe strongly in ethical data collection and usage, respecting information relating to organisations, individuals and everything in between.
32. Our vision of being ‘data driven’ is about making data available for use when an individual or team identify the need for it. Timeliness is of key importance. We want to make access to information easy, immediate and supported by the necessary tools and expertise. We want our Agency colleagues to be able to use the data they work with to its maximum effect - with full understanding what it will and won’t support.
33. We aspire to excellence in our data management and strive to advance our data capability. We champion transparency and efficiency across the food sector - proactively publishing much of our data as Open Data and working proactively to reuse it and to realise maximum value from it - encouraging our public and private sector partners to do adopt aligned approaches towards their data and to work with us towards our shared goals.
Our Data Principles are:
i. Value ii. Trust iii. Responsibility iv. Culture v. Ethics vi. Excellence vii. Open Data Strategic Data Outcomes
37. Our Strategic Data Outcomes summarise the high level business results we wish to achieve with our data. They set out our approach to data and specify how we will use data to help us achieve the high level strategic objectives of our organisation. The Strategic Data Outcomes show how our data and information management underpins our corporate strategy.
Our Strategic Data Outcomes are:
i. Effective management and use of data to deliver the UK food safety - putting consumers at the heart of all we do.
ii. Leveraging data to fulfil our statutory responsibility to protect, to inform and to educate the public about food safety.
iii. Increasing trust in the UK food data and the food safety information in the public domain.
iv. Championing transparency and efficiency in government and beyond through our on-going commitment to open data.
v. Building trust and alliances with our public sector and industry partners – utilising and reusing data extensively, whilst remaining sensitive to the issues of personal and corporate data privacy.
vi. Delivering innovation and value through creative use of data to become a data driven organisation and the best organisation we can be. Data Strategy Goals
39. We have defined our Data Strategy Goals as the specific objectives we will pursue in order to deliver our high level Strategic Data Outcomes. These goals include becoming a data driven organisation and a transparency champion as we believe these actions will make the biggest contribution to the larger strategic goals of the Agency.
40. Our Data Strategy Goals express how we will build an advanced data capability, including the skills, infrastructure and governance required to deliver the high level strategic outcomes and impact defined in both our organisational and data strategies.
To realize our Data Vision and to accomplish our Strategic Data Outcomes, we will:
i. Become data driven (create a data culture) ii. Develop our data estate iii. Improve our data infrastructure iv. Strengthen our data capability v. Further mature our data governance (including achieving GDPR compliance) vi. Champion transparency through Open Data
______________________________________________________________________
1 Data Estate is all the data assets an organisation holds permanently or intermittently in all of its data stores or pipelines (including databases, electronic files, documents, images, logs, datasets, contents of data warehouses, data lakes, or content management systems, even paper files in physical filing cabinets)
2 Data infrastructure is all the technology (hardware and software) an organisation utilises (owns or rents via managed service or as a Cloud service) to collect, capture, store, process, disseminate, integrate, analyse, present, visualise, manage (backup, restore, replicate), govern and dispose of its data Data Strategy Action Plan
42. Our Data Strategy Action Plan details specific actions we will take to achieve each of the Data Strategy Goals.
43. Although the actions described below are quite specific and deemed appropriate at this time - it is important for our Data Strategy to remain flexible and responsive to changes in the environment. Political, economic and social priorities may and will change, often at short notice, necessitating change to the FSA’s corporate strategy and the resulting change to the priorities and activities related to data.
44. Therefore, it is more important to focus on the general thrust and direction of travel for the Data Strategy – that of building the general data capability for the future and increasing the effectiveness and innovation of our data environment - than on attainment of any specific set of goals. Because of that, the following Action Plan is presented as current and present but subject to periodic review and re-assessment of the strategic goals and the related actions.
The Data Strategy Action Plan:
Become data driven (create a data culture)
a. Increase data literacy across the organisation b. Promote data driven decision making at all levels c. Actively engage in the public debate on data ethics and advocate the Agency’s position on the subject d. Implement Key Performance Indicators for data utilisation e. Develop sustainable data innovation and future readiness plan f. Develop data visualisation competency to showcase the power of data g. Develop and tell stories showcasing the value of data and build experience using it (starting with the Data Strategy)
Develop the FSA’s data estate
a. Review and define our current information needs from a range of business perspectives b. Understand our wider data ecosystem (all data we use regularly, whether from our own holding or external – not owned by us) c. Develop/source new datasets in support of our revised information needs d. Develop the metadata (information about data) management capability e. Increase the reuse of our own and external (open) data f. Make our data more discoverable to internal and external users
Improve the FSA’s data infrastructure (in collaboration with IT)
a. Design our ‘future state’ (to be) data architecture b. Create the roadmap to deliver the future state data architecture c. Continue to build the future state data infrastructure in line with the existing IT Strategy/GDS design principles (e.g. reuse, open source where it makes sense, avoiding vendor lock-in, Cloud first, etc.) d. Continue to transition legacy components to the new infrastructure e. Define and agree a data infrastructure evolution process to add new components as required
Strengthen our data capability
a. Define the data capability required to deliver our Strategic Data Outcomes b. Develop the skills of the Data Team to match the new data capability c. Work to advance data skills across the whole organisation d. Promote the culture of self-sufficiency in data work across the Agency, enabling the Data Team to focus on high value tasks e. Develop our Data Science function and find ways to increase its impact f. Engage with the leading data institutions (such as The Alan Turing Institute) and leverage their expertise to advance our own learning
Further develop our data governance
a. Incorporate data governance into our information management model – defining the roles of data owners, data stewards and data custodians b. Define and agree organisational Data Standards and promote their implementation c. Incorporate Data Standards into a wider organisational meta-data (information about data) management framework to increase understanding of data and its quality d. Increase staff awareness and skill level in information and data management and analytics e. Continue monitoring and curating our growing data estate f. Develop action plan for strengthening our data protection stance and attain voluntary General Data Protection Regulation compliance
Champion transparency through Open Data
a. Achieve our ambition of a high percentage of our data to be published as Open Data b. Create sustainable data publication mechanisms, securing commitment from data owners to on-going publication and timely dataset refresh
c. Publicise the data we publish and promote its reuse
d. Where appropriate, develop data visualisation of our Open Data sets to increase their impact
e. Engage with the external consumers of our data, building communities of interest and supporting data discovery and repurposing efforts
f. Take part in public data events to enhance the Agency’s reputation and influence in the relevant communities
g. Advocate transparency and Open Data with our government and industry partners, encouraging them to be more open and to publish more data
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e7a42530b312626ed2372e43271a57491fd7ca87 | ORR’s Policy on Third Rail DC Electrification Systems
Aim
ORR’s aim is to ensure:
- The rail industry delivers an electrification system that is capable of being constructed, operated and maintained in accordance with their duties under all applicable health and safety legislation.
- The industry has a suitable long-term strategy to ensure it protects workers and members of the public from risks associated with railway electrification systems.
- Where development of the network involves considering new DC third rail electrification (which includes extension of existing infrastructure) there is a full assessment of the safety, technical and economic benefits of installing alternative electrification systems by the relevant duty holder.
- It will press for fundamental improvements to the design and management of DC electrification in order to ensure duty holders fully comply with their legal duties if they clearly have no other option and have fully demonstrated that any other specific option in comparison would be a grossly disproportionate approach.
- It will continue to question and challenge duty holders to drive excellence in the management of electrical safety risks – particularly those associated with third rail technology. Purpose and scope of this policy statement
This statement sets out and clarifies ORR’s policy on third rail DC electrification systems and is intended to provide duty holders with a clear view of the issues we, as the regulator, expect industry to consider and address when evaluating options for the proposed construction or renewal, upgrade or extension of third rail.
Our policy:
(i) The relevant duty holder must be able to demonstrate that any proposed new-build or extended third rail proposal will comply with all applicable health and safety legislation.
(ii) There is a presumption against the reasonable practicability of new-build or extended DC third rail in view of the safety requirements duty holders must satisfy in order to justify the use of third rail.
(iii) Where existing third rail needs to continue to be operated, maintained and renewed for the purpose of the railway, the relevant duty holder must ensure it continually reviews such third rail and seek improvements in the design, operation and maintenance of the third rail systems.
Considerations:
1. ORR considers that the weight of safety evidence creates a presumption against new-build or extended third rail being reasonably practicable. A duty holder will therefore need to demonstrate, to ORR’s satisfaction, that any proposed new-build or extended third rail proposal complies with the applicable legislation and be able to explain how and why it rebuts this presumption.
2. Infrastructure managers have a range of duties under health and safety law to design and operate their undertaking so that risk to workers, passengers and members of the public is minimised. There are more specific duties in the Electricity at Work Regulations 1989 (the “EAW Regulations”) which require precautions to be taken to avoid death or personal injury from electricity at work activities. The existing DC network predates the EAW Regulations and consequently was not designed to comply with them. Therefore, when developing options for the design and implementation of electrification schemes, and when approaching maintenance and renewal of the existing network, we expect the industry to appropriately and robustly address the serious safety concerns associated with third rail DC electrification.
3. If, at the earliest design optioneering stage, a duty holder fully assesses the risks of a proposed electrification scheme then it is possible to exploit opportunities to design those risks out or minimise them, as required by legislation. For example, later DC systems – such as the DLR – have designed their traction arrangements so that the conductor rail is insulated or shrouded. Access to third rail by the public on this system is also more restricted than on the mainline as it is raised or underground and has no level crossings. Similarly, this has been the case where London Underground has expanded its fourth rail network. Physical limitations and compatibility considerations have constrained adoption of alternative traction current arrangements but this is set against the already greater levels of compliance achieved on that network, such as no live working and greater separation of members of the public from the network.
4. A suitable and detailed assessment of the risks at the start of any project – or project proposal – should identify the full range of statutory duties and associated requirements with which a duty holder must comply. A design option selected to minimise those risks will tend to satisfy any specific legal duties, although it is incumbent on the duty holder to ensure it complies with all such duties. The rail industry should take every opportunity to design out risk and shortcomings and install electrical infrastructure that is safer and will ensure greater compliance with the legal requirements than the current system.
5. ORR’s most significant concern in regard to legacy third rail systems (the “legacy network”) is the running of bare, live conductors through publicly accessible areas. These conductors are not insulated or shrouded. The legacy network does not allow quick, secure isolations, and exposes individuals to a range of risks whilst carrying out isolations. Due to the difficulty in obtaining isolations on the legacy network, a lot of work tends to be carried out on or near the live conductor, further undermining safety and weakening compliance with the applicable legislation. This is not an abstract or theoretical risk: the harm done to both workers and members of the public by the legacy network occurs significantly more frequently than on the overhead AC network. A duty holder proposing the laying of new bare third rail (as used across the legacy network) would therefore have to make a compelling case that it had considered all other possibilities and could satisfactorily demonstrate that all such possibilities would be grossly disproportionate in comparison to using third rail.
6. No significant geographic extension of third rail electrification has taken place on the mainline railway for many years. However, smaller third rail renewal and very minor
______________________________________________________________________
1 This weakness has been recognised by Network Rail in its acknowledgment of the safety benefits of DC – Electrical Power Asset Policy December 2012 (page 284) and is why ORR has agreed to a ring fenced fund for ‘safer, faster isolations’ in CP5.
2 This is borne out by data from RSSB’s safety risk model – despite the legacy network being only half the size of the AC network (4400km compared to 8200km), it contributes almost eight times more (in terms of fatalities and weighted injuries per year) to overall risks on the railway. See FWI comparative data for OLE / conductor rail / non-electrified: Network Rail Electrical Power Asset Policy December 2012 (Table 2.1, page 52). extension schemes have been – and continue to be – proposed. For these small-scale projects, duty holders may be able to demonstrate that simple extension or replacement of the third rail is the only viable option in the circumstances. Nevertheless, this does not detract from duty holders’ obligations to show:
i) they have evaluated the full range of options available;
ii) proceeding with third rail is the only viable option in those circumstances; and
iii) how compliance with applicable health and safety legislation will be delivered in relation to this project from the design stage onward³.
7. Where existing third rail needs to continue being operated, maintained and renewed, the rail industry must ensure continuous improvements in the design, operation and maintenance of such electrical systems.
**How we expect duty holders to move towards our aim:**
- To consider electrification options for new schemes (i.e. when extending a part of the DC network or introducing electrification to a route for the first time) at the optioneering design stage of projects, with recognition that extending the third rail requires a high degree of justification.
- Whenever renewal or upgrade of the electrification systems is being proposed a duty holder should carry out a thorough design risk analysis of the available electrification options and should develop a thorough and credible cost-benefit analysis to support any determination that alternatives to third rail electrification are grossly disproportionate.
- To achieve excellence in continual improvement in safety management and risk control approaches associated with the operation and maintenance of the legacy network.
- Duty holders should note that compliance with health and safety duties is not confined to the third rail network. The generic safety advantages of overhead electrification do not mean that its installation (for example in preference to third rail) automatically delivers full compliance with health and safety legislation. Duty holders must design, operate and maintain all electrification systems in such a way so as to prevent danger and reduce risks so far as is reasonably practicable, whatever technology is used.
³ For Network Rail this must at least include making optimal use of funding ORR has agreed for CP5 to deliver safer and faster isolations.
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082b61529e3c656d1a78cb0f1087c61d3762c16e | Incorporating Digital Continuity into your IT strategy
This guidance relates to: Stage 1: Plan for action Stage 2: Define your digital continuity requirements Stage 3: Assess and address risks to digital continuity Stage 4: Maintain digital continuity
This guidance should be read before you start to manage digital continuity. The full suite of guidance is available on The National Archives’ website. Contents
1 Introduction ........................................................................................................................................... 4
1.1 What is the purpose of this guidance ................................................................................................. 4
2 Digital continuity and your IT strategy .................................................................................................. 5
2.1 Why is embedding digital continuity in your IT strategy important .................................................. 5
2.1.1 It supports business continuity ....................................................................................................... 5
2.1.2 It supports information assurance .................................................................................................... 6
2.1.3 It supports government agendas ..................................................................................................... 6
3 Embedding digital continuity principles ............................................................................................... 7
3.1 Build digital continuity requirements in your technology lifecycle .................................................. 7
3.1.1 Procurement / systems development ............................................................................................... 7
3.1.2 Decommissioning ............................................................................................................................. 7
3.1.3 Interoperability .................................................................................................................................. 8
3.2 Understand and manage your IT services ........................................................................................... 8
3.2.1 Understand your requirements ......................................................................................................... 9
3.2.2 Build comprehensive configuration management ............................................................................. 9
3.2.3 Manage your architecture ................................................................................................................ 9
3.2.4 Establish governance ....................................................................................................................... 9
3.3 Streamline and standardise your technical environment .................................................................... 9
3.3.1 Review your use of open standards ................................................................................................. 10
3.3.2 Limit your use of different file formats ............................................................................................ 10
3.3.3 Reduce reliance on legacy technology ............................................................................................ 10
3.3.4 Reduce data volumes ....................................................................................................................... 11
4 Next steps ............................................................................................................................................... 12 1 Introduction
Digital continuity is the ability to use your information in the way you need, for as long as you need.
If you do not actively work to ensure digital continuity, your information can easily become unusable. Digital continuity can be put at risk by changes in your organisation, management processes or technology. You need to manage your information carefully over time and through changes to maintain the usability you need.
Managing digital continuity protects the information you need to do business. This enables you to operate accountably, legally, effectively and efficiently. It helps you to protect your reputation, make informed decisions, avoid and reduce costs, and deliver better public services. If you lose information because you haven’t managed your digital continuity properly, the consequences can be as serious as those of any other information loss.
1.1 What is the purpose of this guidance
This guidance will support Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) to embed digital continuity into the organisation’s Information Technology (IT) strategy.
You should already understand the basic principles of digital continuity and recognise the need to manage this within your organisation. Your organisation may also have mapped the technical dependencies of your information assets. This guidance will support you in maintaining your digital continuity over time and through change, which is the final stage of our four-stage process of managing digital continuity.
Specifically, this guidance will help you to understand the principles to follow when including digital continuity in the planning and development of your IT infrastructure. It will reduce your chances of encountering digital continuity issues in the future, and ensure you are well placed to respond to changes in the way you need to use your information. 2 Digital continuity and your IT strategy
Digital information is vulnerable at times of change. Your organisation relies on technology and systems to enable it to use its digital information as it needs to; providing the ability to find, open, use, understand and trust your information.
If your technology environment changes, your organisation may no longer be able to use its digital information in the way it needs. To maintain digital continuity, you must ensure your technology infrastructure is based on planned development and change, rather than ad hoc response to demand, new technology or changing business priorities.
However, establishing digital continuity in your existing IT strategies will also enable you to better respond to any changing requirements as they do arise, ensuring information does not become contained in silos and that you have the interoperability and flexibility necessary to meet these changing requirements.
2.1 Why is embedding digital continuity in your IT strategy important
It is difficult to restore continuity when it has been lost. Our Managing Digital Continuity Loss guidance can help you in these circumstances; however restoring continuity can be expensive and is not always possible. The best mitigation against losing your information is to manage the relationship between your information and technology well in the first place.
Your organisation needs to make a commitment in its IT strategy to support digital continuity: enabling the digital continuity Senior Responsible Owner (SRO) to plan and manage digital continuity, undertaking a digital continuity risk assessment and embedding digital continuity principles into the policies and processes covering your technical environment.
Digital continuity is also central to meeting your business continuity and information assurance requirements and supports government agendas.
2.1.1 It supports business continuity
To ensure business continuity, your organisation needs to plan for the ability to use its digital information over the long term. While business continuity involves planning for the restoration of access to key digital information following an incident, managing digital continuity also mitigates the risk to the degradation of your digital information over time and through change. 2.1.2 It supports information assurance Losing the ability to use your digital information in the way that you need to is an information risk like any other, and ensuring you can continue to use your information over time and through change is an important part of assuring and protecting it. Digital continuity forms part of the government’s Information Assurance Maturity Model (IAMM).
Digital continuity guidance is available to support you to assure the availability and integrity of digital information through business and technology change.
2.1.3 It supports government agendas IT strategies need to reflect that the way government is managing its services, producing and sharing information. It is important to reflect that the way that this information is being consumed is changing rapidly; for example, government emphasis on transparency and openness are reflected in the need to publish increasing amounts of public data. This makes it all the more important that you manage the digital continuity of your information; to ensure you can find, interrogate, trust, share, re-use and publish it as required. You should embed digital continuity principles into your IT strategy so that your organisation can take steps towards assuring the usability of its information. 3 Embedding digital continuity principles
The following principles will help you to manage your IT strategy in a way that supports digital continuity:
3.1 Build digital continuity requirements in your technology lifecycle
Information has a lifecycle that is different to that of the technology in which it is created or stored. If you do not consider this and plan the development of your architecture around retaining the usability of your information, your technology may stop you working with your information when you need to, in the way that you need to.
The most important time to think about how you will need to use your information is before development or procurement; it is much more expensive and difficult (indeed, if possible at all) to fix these issues after development is complete or a product has been rolled out. There are three key issues to consider:
3.1.1 Procurement/systems development
Can you get information in to – and out of – the system, with its associated metadata? This may include user generated metadata, system metadata, audit logs etc.
You need to consider the following requirements when developing or procuring new systems – and ensure that any upgrades or fixes do not adversely impact on these:
- How does your organisation need to work with the information across its lifecycle and how will you ensure this?
- Can information be imported into or retrieved from the system during the normal operational lifecycle for use in other systems? (e.g. in some systems, standard metadata may be exported but user-generated metadata that was specific to the system does not get exported)
- Can you use open standards for your information?
- What interfaces do you need the system to provide to help you get at the information it holds?
- What are your performance requirements for getting information in and out of the system?
- Can you maintain the link with your metadata and audit information when moving information between systems or upgrading?
3.1.2 Decommissioning
Do you have digital continuity plans for each decommissioned system? This will need to include: • What information do you need to keep? • What are your usability requirements? o How are you going to ensure that usability requirements are met? o Will you need to retain the full functionality for your legacy information, or can you use cheaper formats or applications with less continuity risk? (e.g. can you convert legacy information into PDF, or use rendering technology rather than full applications?) o Can you use cheaper and more cost-efficient storage for the information you need to keep? • How will you test for continuity after the change? • Are you ensuring you dispose of information that is no longer required?
3.1.3 Interoperability You should consider interoperability across your IT environment, including technology supplied by third parties, to ensure that information can be transferred between systems to support business use and digital continuity. It is important that you consider digital continuity in Service level Agreements (SLAs)/contracts if using third party providers or Cloud services.
Also consider how you can ensure maximum interoperability with your current technology environment.
• For infrastructure technology, it may be worth using existing or highly standard software, and adapting your business processes to fit the technology. This will require less specialist support and knowledge and is likely to be more compatible with other systems • For strategic technology (with a unique business benefit), complex or non-standard technology may be the most suitable option, implementing the exact business processes you want, but with reduced chance of interoperability with other systems
3.2 Understand and manage your IT services Your technology must support the provision of information that is complete, available and usable to the business. To maintain this, it is vital that you understand each of the elements of the technical environment which support its usability.
To monitor this, link your IT strategy to business services. You need to reflect these services in your technology lifecycle and technology architecture, and map them through an IT service catalogue.
The actions below will support you to monitor and manage your strategic priorities. You should: 3.2.1 Understand your requirements You need to know what information is required by each business service and where that information is stored. You also need to understand the business value of that information. Use your Information Asset Register (IAR) to understand what information you hold and how the technology needs to support this.
This should also inform your technology decisions from the perspective of the organisation – e.g. at times of business change, development, upgrades, or new technology.
3.2.2 Build comprehensive configuration management A planned and managed IT service is more likely to deliver digital continuity than one that develops reactively over time. Ideally your organisation will work towards having a comprehensive configuration management database and single enterprise architecture.
For digital continuity purposes, this will document the relationships between your information and technology architecture, including dependencies, and making the impact of change easier to measure and manage. It will support you in implementing robust change management and configuration management, enabling you to maintain the usability of your digital information.
3.2.3 Manage your architecture Building an understanding of digital continuity and how you need to use your information over time into information architecture, technical architecture or a single enterprise architecture will enable the organisation to develop an IT environment which supports the business use of information across its lifecycle.
3.2.4 Establish governance To ensure you have digital continuity embedded in your IT policies and processes, you need to assign owners, ensure they are implemented and that you have a process in place to ensure compliance.
Also include Information Management (IM) professionals on change boards to ensure that the impact of change on the way the organisation can use its information is being considered.
3.3 Streamline and standardise your technical environment For many organisations, their technical environment has developed over time according to demand, new technology or changes in business priorities. Ad hoc growth often results in a diverse and complex technical environment that is difficult to manage and has not been planned to meet usability requirements, including interoperability between systems. This makes it increasingly difficult to ensure you are able to use your digital information as you need to, and that you are managing digital continuity through comprehensive change and configuration management. Reducing the complexity of your current technology infrastructure could mean:
- less complexity to manage over change
- reduced costs by disposing of unnecessary licences, support contracts and storage
- increased flexibility as standardised information and technology allow for greater interoperability
- less reliance on specialist knowledge and skills
### 3.3.1 Review your use of open standards
Open standards enable the transfer of information between systems more easily and broaden the choice of technology available, avoiding lock-in to proprietary formats. This provides flexibility for the sharing and significantly increases the likelihood that your information can be used in the future.
The Cabinet Office has issued guidance on [the use of open standards in government](#).
Open standards may not always be the most appropriate choice for your business function; however you should always ensure that your information standards are as open, commonly used or standardised as possible.
### 3.3.2 Limit your use of different file formats
Reducing the complexity of the IT environment by minimising the number of systems, applications and formats in use will reduce overheads, make change easier to manage and improve interoperability. Active management of file formats used by your organisation, including maintaining a file format policy that identifies the recommended or enabled file formats, will help you to:
- maintain control over your IT environment
- ensure that applications are in place to provide ongoing access to all information
- more effectively plan for file format migration and conversion when necessary
### 3.3.3 Reduce reliance on legacy technology
Legacy technology increases risk to digital continuity because it reduces your ability to respond to change, making it increasingly difficult and costly to maintain and resolve issues that arise. It also tends to be harder to extract information from legacy technology, often held in non-standard formats or structures. The longer legacy technology is left in place, the higher the risks and harder it will be to move away from. Consider limiting your use of legacy formats, especially those which may be going out of support. You should consider this in conjunction with representatives from the IM function in order to ensure that you are applying the right level of digital continuity according to the business need.
You may still need full functionality from your legacy formats, for example maintaining the ability to edit, change or re-use the information. If this is the case, consider the costs, benefits and risks associated with conversion against the cost and risk of continuing to support the full application. In many cases it will be sufficient to use viewer (or rendering) technology rather than the full application, which reduces the risks to digital continuity and is cheaper.
3.3.4 Reduce data volumes Managing your data effectively and removing unnecessary information will reduce your overall volumes. This will make it easier for your organisation to find and manage the information it needs and reduce costs and complexity associated with maintaining its digital continuity over long periods. It will also reduce your storage costs and consume less energy in heating and cooling your servers, supporting you to meet the green agenda. If you use a third party IT storage supplier, you may find that cost savings are reflected at the time of re-contracting. 4 Next steps
Now you have recognised the need to embed digital continuity in your IT strategy, you need to ensure that this is reflected in the right places. You will need to embed digital continuity into relevant business plans, procurement policies, architectures, requirements and specifications, checklists for introducing and decommissioning technology, change and risk management policies and strategies. You must ensure these have ownership at the correct levels and compliance is monitored.
You also need to talk to your IM team and reference their strategies for digital continuity within your own technology strategy and processes, ensuring cohesion.
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8811950fee6cf94c9bc2dd1b0039f0ffd878c7e1 | The Costs of Adapting to Climate Change for Infrastructure development and climate change The Costs of Adapting to Climate Change for Infrastructure
\*Gordon Hughes \*\*Paul Chinowsky \*\*\*Ken Strzepek
Note: This paper is based upon work that has been commissioned by the World Bank as part of the Economics of Adaptation to Climate Change study. The results reported in the paper are preliminary and subject to revision. The analysis, results, and views expressed in the paper are those of the authors alone and do not represent the position of the World Bank or any of its member countries.
- Department of Economics, University of Edinburgh, UK \*\* Department of Civil, Environmental and Architectural Engineering, University of Colorado, Boulder, CO \*\*\* MIT Joint Program on the Science and Policy of Global Change, Cambridge, MA
Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Copies are available from the Environment Department of the World Bank by calling 202-473-3641. TABLE OF CONTENTS
Abstract vii Section 1. Setting the Scene 1 Section 2. Data 5 Section 3. Climate Change 5 Section 4. Econometric Specifications 8 Section 5. The Effects of Climate on Demand for Infrastructure 13 Section 6. Calculating the Cost of Adaptation 30 Section 7. Estimates of the Costs of Adaptation 34 Section 8. Conclusion 43 References 43
TABLES
01. Correlation matrix of climate variables and historic demographic indicators 7
02. Projection equations for electricity generating capacity, fixed telephone lines, and electricity network coverage 13
03. Projection equations for municipal and industrial water demand 17
04. Projection equations for water and sewer networks 19
05. Projection equations for roads 20
06. Projection equations for other transport 23
07. Projection equations for health 25
08. Projection equations for social infrastructure 27
09. Projection equations for average household size 31
10. Delta-P costs of adaptation by category and country class for 2010–50 (US$ billion per year at 2005 prices, no discounting) 34
11. Delta-P costs of adaptation by infrastructure category and World Bank region for 2010–50 (US$ billion per year at 2005 prices, no discounting) 36
12. Delta-P costs of adaptation by decade and World Bank region for all infrastructure (US$ billion per year at 2005 prices, no discounting) 38
13. Total costs of adaptation by infrastructure category and country class for 2010–50 (US$ billion per year at 2005 prices, no discounting) 40
14. Total costs of adaptation by infrastructure category and region for 2010–50 (US$ billion per year at 2005 prices, no discounting) 41
Appendix 1. Derivation of the climate dose-response relationships 45 References 51 ABSTRACT
An approach to estimating the costs of adapting to climate change is presented along with results for major components of infrastructure. The analysis separates the price/cost and quantity effects of climate change. The first component measures how climate change alters the cost of a baseline program of infrastructure development via changes in design standards and operating costs. The second component measures the effect of climate changes on the long-run demand for infrastructure. The results indicate that the price/cost element is usually less than 1 percent of baseline costs, while the quantity effect may be negative for many countries.
1. SETTING THE SCENE
This paper presents the results of a global analysis of the costs of adapting infrastructure to climate change over the period from 2010 to 2050. The analysis was carried out as part of the World Bank’s Economics of Adaptation to Climate Change study. In this context, infrastructure has been given a rather broad definition. It includes the usual types of infrastructure services, including transport (especially roads, rail, and ports), electricity, water and sanitation, and communications. In addition, urban and social infrastructure such as urban drainage, urban housing, health and educational facilities (both rural and urban), and general public buildings have been included.
The basic approach is extremely simple. For any country j and date t (t = 2010, 2015, …, 2050), we start from the assumption that there is some “efficient” level of provision of infrastructure of type i, which will be denoted by Qijt. The efficient level of infrastructure is that which would be reached if the country had invested up to the point at which the marginal benefits of additional infrastructure just cover the marginal costs—both capital and maintenance—of increasing the stock of infrastructure. It is often argued that developing countries tend to underinvest in infrastructure and that the extent of underinvestment is particularly large for the poorest countries (AICD 2009). This is an important development issue, which is not directly related to climate change. Hence, the approach attempts to strip out the effects of country differences in their actual provision of infrastructure by establishing a common benchmark that depends upon factors such as population and income.
In the period from t to t+1, for example from 2010 to 2015, the country will have to invest in order to meet the efficient level of infrastructure in t+1 and to replace infrastructure in situ at date t, which reaches the end of its useful life during the period. Thus, the total value of investment in infrastructure of type i in country j and period t is
\[ I\_{ijt} = C\_{ijt}[Q\_{ijt+1} - Q\_{ijt} + R\_{ijt}] \]
(1)
where ( C\_{ijt} ) is the unit cost of investment and ( R\_{ijt} ) is the quantity of existing infrastructure of type i that has to be replaced during the period. The change in the total cost of infrastructure investment may be expressed in terms of the total differential of (1) with respect to the relevant climate variables that affect either unit costs or efficient levels of provision for infrastructure of type i:
\[ \\Delta I\_{ijt} = \\Delta C\_{ijt}[Q\_{ijt+1} - Q\_{ijt} + R\_{ijt}] + (C\_{ijt} + \\Delta C\_{ijt})[\\Delta Q\_{ijt+1} - \\Delta Q\_{ijt} + \\Delta R\_{ijt}] \]
(2)
An equivalent equation may be derived for the costs of operating and maintaining infrastructure. In the discussion that follows, the first part of the right-hand side of equation (2) is referred to as the Delta-P component of the cost of adaptation, while the second part is referred to as the Delta-Q component. These components themselves cover a number of ways in which climate change may cause changes in the costs or quantities of providing infrastructure services.
**Delta-P.** At the simplest level, changes in temperature, precipitation, or other climate variables may alter the direct cost of constructing infrastructure to a standard specification. For example, seasonal weather variations can increase the costs of building. However, this is a minor factor. More important is the impact of climate change on the design standards that are applied in order to maintain the quality of infrastructure services provided by a unit of infrastructure, such as a kilometer of paved road or a fixed telephone connection (See Canadian Standards Association 2006 for a discussion of this issue).
a. Changes in the frequency and/or the severity of storms, flooding, and other extreme weather events may compromise the performance of infrastructure designed to existing standards. Hence, it is common to refer to “climate proofing” investments or ensuring “climate resilience.” The study starts from the basis that design standards should be adjusted so as to deliver the same level of performance as would have applied if climate change had not occurred. Thus, if roads or buildings are currently constructed to withstand a 1-in-50 or 1-in-100-year flood or wind storm, then the same design standard should apply, but under the circumstances of a changed frequency or severity of those events. The changes in the unit costs—ΔC\_{ijt}—represent the costs of building infrastructure that delivers the same level of performance in the face of different climatic stresses. The derivation of the cost changes, expressed as dose-response relationships for different climate stressors, are described in Appendix 1. The dose-response functions are applied to estimates of the average values of climate variables under a scenario of a stable climate and for a changing climate. A similar exercise may be carried out for operating, maintenance, and replacement costs in order to calculate the increment in annualized infrastructure costs as a consequence of climate change.
b. Delta-Q. The quantities of infrastructure assets required (holding income constant) will change as a consequence of different climatic conditions. Again, this has two dimensions. The first is that climate change may change the level or composition of demand for energy, transport, and water at given levels of income, so we need to calculate the net impact of these changes in terms of capital and operating costs. The second is that climate change will mean that countries have to invest in specific additional assets in order to maintain specific standards of protection for non-infrastructure activities.
The Delta-P dimension of the study is uncontroversial in principle, though more or less difficult in practice. Various organizations have made broad brush estimates of the cost of “climate proofing” existing investment programs in developing countries (UNFCCC 2007; McGray et al. 2008). Typically, the analysis starts from a baseline program in investment by time of infrastructure. Then, an estimate is made of the percentage increase in unit costs required to ensure that investments are resilient to climate change.
One problem with the “climate proofing” approach concerns the investment program to which the cost of climate proofing should be applied. For some sectors or countries/regions, it is possible to start from a detailed inventory of infrastructure assets and then to ask what investments will be required to meet future demand for infrastructure services. The best example of this approach is a study of the costs of adaptation to climate change in Alaska (Larsen et al. 2008). However, this type of exercise requires an inventory of infrastructure assets and it does not take account of future investment in infrastructure.
In the case of developing countries, many institutions that are concerned with adaptation to climate change for infrastructure draw a distinction between (a) the cost of eliminating the “development deficit,”—that is, the gap between the infrastructure that a country “ought” to have and the infrastructure that it actually has—and (b) the cost of adapting to climate change on the assumption that the country has an efficient level of infrastructure. The former is seen as a development problem, while the latter is a climate change problem. Even though it is understood that money is fungible, the two elements of total investment in infrastructure might be financed out of different pots of money.
The corollary of this distinction between adaptation and the development budget is that the baseline program for infrastructure investment used in constructing the Delta-Q should not be derived from actual or planned investment in infrastructure. Instead, it should reflect the “efficient” demand for infrastructure. This is no simple task. The World Bank has recently completed a detailed assessment of infrastructure investment needs in 22 African countries, assuming a catch-up from actual to efficient provision over a decade to 2020 (AICD 2009). That exercise involved very substantial work and cannot be extended to all countries in a short period. Instead, the analysis has to be based on an econometric model that can be used to construct projections of the efficient demand for infrastructure up to 2050.
While the principle of drawing a distinction between the “development deficit” and adaptation to climate change is widely followed in international negotiations, many economists consider that the distinction is either unworkable in practice or simply wrong as a matter of economic logic. The reason is that most assessments of the “efficient” demand for infrastructure ignore the question of resources. A specific country might wish to have more roads, schools, or hospitals than the stocks that are currently in situ, and the rest of the world might agree that this would be a desirable goal. But, this is nothing more than a wish list independent of the resources that are available. With limited resources some countries may choose to spend their funds on providing better roads or more healthcare services.
Relying either upon wish lists or on the envelope of what other countries at similar incomes have invested ignores the trade-offs that all governments have to make. Even if external assistance is available to fund capital projects, it is common experience that lack of funds for operations and maintenance may lead to rapid deterioration in the services provided by stocks of infrastructure assets.
Thus, it may be argued that the analysis should not be based on some notional “efficient” level of infrastructure, but should start from the actual levels and growth of infrastructure based on decisions that reflect real constraints on budgets and the associated priorities. To examine whether the distinction is important in practice, the full study has used two sets of baseline projections of demand for infrastructure. The “frontier” projection is derived by using frontier methods of estimation to estimate econometric equations that characterize the envelope of infrastructure demand given exogenous variables such as income, population, urbanization, etc. This is intended to provide an estimate of the “efficient” level of infrastructure demand as envisaged in discussions of the development gap. In contrast, the “panel” projection uses conventional projections derived from econometric estimates of the average relationship between infrastructure and the exogenous variables.
The difference between the Delta-P estimates using the two sets of baseline projections is not as large as some might expect. There is an important reason for this. We find that the relative gap between the frontier and panel projections tends to narrow, because there appears to be convergence toward standard patterns of infrastructure provision. Further, the income elasticity of demand for infrastructure is generally less than 1 for the frontier demand equations and is lower than the equivalent income elasticities for the average demand equations. For the frontier baselines projection, these factors lead to a lower level of new investment in infrastructure, but a higher level of expenditure on replacing and maintaining the initial level of infrastructure. Under the panel baseline projection, lower levels of spending on replacement and maintenance are offset by higher spending on new investment. Depending on the initial development gap and the timing of new investment, it is possible—though not usual—for the cost of
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3 This paper will refer to the (efficient) demand for infrastructure and will not attempt to address the question of how far the actual stocks of infrastructure are constrained by the supply of infrastructure assets. In effect, we assume that (a) we can identify an equation describing the long-run demand for infrastructure, and (b) supply constraints are not relevant when projecting the future investment program in calculating adaptation costs. adaptation to be larger for the average baseline than for the frontier baseline.
In this paper we will focus exclusively upon the panel projections derived from panel data models rather than the frontier models. This is consistent with the view that the distinction between the development deficit and the adaptation deficit is difficult to draw under the best of circumstances and may not be useful in practical terms.
The second, Delta-Q, aspect of this work concerns the impact of changes in climate on the demand for infrastructure. To approach this issue, we have to consider the mechanisms by which changes in climate may affect the demand for infrastructure and how we might identify these consequences. For example, it is generally accepted that demand for electricity depends upon climate in general, but it is not so easy to identify the key climate parameters when estimating the demand for electricity or for electricity-generating capacity. Note that even these two variables may be subject to different influences because the seasonal or diurnal pattern of electricity demand is strongly influenced by climate.4
Part of the difficulty is that the outcome depends upon the relative weights assigned to different factors. An increase in average temperatures will lead to less demand for heating in the colder seasons but more demand for cooling in the warmer seasons. The overall direction of change is not easy to predict and is likely to depend upon the way in which we set up the problem.
Electricity is simple to think about by comparison with roads or other transport infrastructure because there is an intuitive sense of the mechanisms involved in a relationship between climate variables and the stock of electricity-generating capacity. But it would be wrong simply to impose the assumption that climate has no effect on the demand for roads. Patently, climate variables do affect the structure of economic activity holding other factors constant—for example, through the level and composition of agricultural output—and this will influence the nature of investment in roads. There are more complex but potentially larger effects operating through the economic geography of urban life, industry, and commerce; that is, in the ways in which we organize economic activity in space. Small changes may have significant consequences for the level of investment in infrastructure.
While the principle that climate change may affect the demand for infrastructure seems straightforward, the task of estimating the Delta-Q costs of adaptation is much more difficult for two general reasons.
a. Many of the impacts of climate on demand for infrastructure are long term in nature. This may not be true for electricity, but any influence of climate on the demand for roads will operate via the path of economic development over a period of one, two, or many decades. There are two consequences. First, we should not think of the Delta-Q component of the costs of adaptation as arising on a regular schedule every five years. The calculation merely identifies additions to and subtractions from a liability (or asset) that will materialize in future as economic activity adjusts to the changes in climate that are taking place. Second, in planning for future infrastructure development, governments need to consider how climate change may affect the amount and type of infrastructure that is required if it will influence future patterns of economic activity.
b. In practice, there is no way of examining the empirical impact of climate on the demand for infrastructure other than through some form of panel data analysis—pooling data for countries, regions, states, or other geographical units over time. Inevitably, climate is a cross-sectional variable (since year-to-year variations are weather), which may easily be confounded with other cross-section fixed effects. This has prompted various criticisms of the Ricardian approach to identifying the impact of climate change on agriculture or GDP on the grounds that climate variables are acting as a proxy for non-climate factors such as institutions. Some economists draw the conclusion that climate variables should not be used in this way. We do not accept this view, since it
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4 There are also limitations on what one can obtain from climate projections. For example, it is conventional to include degree-days as a climate variable in equations predicting energy demand because of heating requirements. The number of heating degree-days for a particular location is calculated from the truncated distribution of temperatures below some threshold—often 18°C—either on an hourly or a daily basis. closes off any possibility of estimating the impact of climate change on overall demand for infrastructure. Instead, we have carried an extensive econometric analysis of the role of climate variables in modeling the demand for infrastructure. The details are technical and take up a large amount of space, so that they are reported in a separate paper (Hughes 2010). The issues and results are summarized in sections 4 and 5 below. Our results suggest that the demand for some categories of infrastructure is affected by different climate variables with important interactions with income per capita and urbanization.
The results of our econometric analysis suggest that the absolute magnitude of the Delta-Q component of adaptation should not be ignored in the long run. On the other hand, the Delta-P component is much more predictable as a basis for discussing plans for adapting to climate change. For these reasons, our detailed estimates of the costs of adaptation by 5-year period up to 2050 concentrate on the Delta-P component, while the Delta-Q estimates are presented as indicative estimates for the whole period.
2. DATA
The core data used in this study is the World Development Indicators (WDI) database published in 2008 by the World Bank, which provides panel data for up to 168 countries and the years 1960 to 2006. The year 2005 is treated as the base year for all of our estimation. Our work relies on the 2008 version of the database. One crucial consequence is that the purchasing power parity estimates of GDP per person rely on a version of the 2005 ICP baseline due to appear as Penn World Tables (PWT) Version 7. These estimates cover the period 1980–2007 for a large set of countries. They have been extended backwards to 1960 by splicing estimates from PWT Version 6.2, which uses the 2000 ICP baseline. Country gaps have been filled by the standard approach of using a quadratic equation linking GDP per person in constant (2000) USD at market exchange rates to GDP per person at constant (2005) PPP exchange rates.
The WDI data has been supplemented with data on infrastructure availability from a wide variety of sources, including other international organizations (FAO, ITU, WHO, UNICEF, UPU), official country data (especially census data), and various systematic surveys such as Demographic and Health Surveys (DHS) and Living Standards Measurement Surveys (LSMS), which are broadly consistent across countries. Even so, the final dataset is very patchy in terms of coverage, especially for earlier periods. The panels are unbalanced and there are many missing values for intermediate years. Thus, it is not possible to make use of econometric specifications involving autoregressive or similar errors over time.
A further remark concerns the nature of the data relating to different types of infrastructure. In a few cases, we have direct measures of the quantity of infrastructure assets—for example, kilometers of paved or all roads, kilometers of rail track, MW of generating capacity. More commonly we have to rely upon measures of infrastructure output—for example, numbers of households connected to electricity, water, or sewer systems. In practice, the efficient levels of infrastructure assets are closely linked to these output or input variables, so we believe that it is reasonable to base our projections on an analysis of these infrastructure indicators.
3. CLIMATE CHANGE
Describing the historic climate in a manner that is compatible with macroeconomic data is far from straightforward without any of the complications of projecting climate change into the second half of the 21st century. The literature on the influence of climate on economic variables has tended to rely upon average values of climate variables, primarily temperature, measured for the capital city of the country. The classic dataset is the data compiled by NCAR—NOAA’s National Center for Atmospheric Research in Boulder, Colorado—for weather stations around the world identified by their World Meteorological Organization reference code. The difficulty with this dataset is that there is no consistency across stations in the data that is reported. We have examined average data for capital cities derived from weather stations in or near the capital—including, for example, nearby airports. This is used to obtain an average elevation for the capital city, but there are too many missing values to rely upon the climate variables for our econometric analysis.
The Climate Research Unit at the University of East Anglia has compiled a series of historic weather data for 0.5 degree grid squares for land areas of the globe. Summary statistics have been computed for each grid cell for monthly average, maximum and minimum temperatures (in degrees C), and precipitation (in mm) for the period 1901–2002. The distribution of temperatures is generally accepted as being well-approximated by the normal distribution, so it was sufficient to compute the mean and standard deviation for each grid cell. For precipitation, the distribution is closer to the log-normal, so the mean and standard deviation of ln(precipitation+1mm) were calculated in addition to the mean of precipitation.5
Country estimates of the climate variables were constructed using grid cell means for monthly mean, maximum, and minimum temperatures and precipitation. The primary variables are population-weighted averages using the population in each country in each grid cell to weight the grid-cell means, thus reflecting the average exposure for the population of each country.6 Alternative sets of country means weighted by (a) the land areas in each cell, and (b) the inverse of population in each cell were also constructed. The reason for doing this is linked to the demand for transport and other types of hard infrastructure. Consider a country such as Australia. The population is concentrated in the coastal areas of the continent, while the interior—with very different climatic conditions—is very thinly populated. So the population-weighted averages will reflect the climate on the coast whereas the inverse population-weighted averages reflect the climate in the interior, while the area-weighted averages fall in between.7 The correlations between the population-weighted and inverse population-weighted climate variables are shown in Table 1 along with correlations with historic demographic variables used as instruments for institutional development as discussed in Section 4.
The primary climate variables used in the econometric analyses are the two weighted means for (a) annual average temperature (computed as the average of monthly average temperatures) in °C; (b) total annual precipitation (computed as the sum of monthly average precipitation); (c) the temperature range (the average maximum temperature in the hottest month, the average minimum temperature in the coldest month); and (d) the precipitation range (average precipitation in the wettest month, average precipitation in the driest month).
One point to note is that annual average temperature measured in degrees C is negative or very small in a number of countries, especially for the inverse population-weighted means. Because of the use of the logarithmic transform, it is necessary either to exclude countries with extreme temperatures or to apply some linear shift to temperatures. The transformation adopted was to add 40°C to all temperatures. This value reflects the range from the minimum value of the monthly minimum temperature (-29.1°C) and the maximum value of the monthly maximum temperature (+46.9°C). Of course, the shift has no effect on the temperature range.
The choice and use of climate projections to 2050 and beyond is considerably more complex. Global climate models (GCMs) are programmed to produce projections of different variables for different time periods. At a micro scale, there are large differences between the results generated by the various models, so that it is necessary to be very careful about relying upon a single model. The standard deviation of projections for any one grid cell is typically large relative to the mean value of the projected change up to 2050 or even 2100. Further, the problem is more serious than simple models may suggest. Our econometric models suggest
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5 The shift of +1mm is required because precipitation is zero for many months at some grid squares, which would generate missing values without the shift.
6 There is one complication. Just over 10 percent of grid cells cover more than one country, but the data only provide the land area of each country in each grid cell plus total population in the grid cell. It is, therefore, necessary to assume that population density is uniform over these grid cells so that population is split between countries in the same proportion as land area.
7 We have tested whether using either the inverse-population-weighted and area-weighted means instead of or in addition to the population-weighted means improves the performance of our equations. In all of the cases that we have examined, the area-weighted climate variables are dominated by the inverse population-weighted (ipop) climate variables. TABLE 1. CORRELATION MATRIX OF CLIMATE VARIABLES AND HISTORIC DEMOGRAPHIC INDICATORS
| | Population-weighted climate | Inverse population-weighted climate | Birth rate 1950–54 | |--------------------------|-----------------------------|-------------------------------------|-------------------| | | Average temperature | Precipitation | Temperature range | Precipitation range | Average temperature | Precipitation | Temperature range | Precipitation range | Birth rate 1950–54 | | Population-weighted | 1.000 | | | | 0.830 | 0.151 | -0.630 | 0.433 | 1.000 | | climate | | | | | 0.083 | 0.811 | -0.576 | 0.525 | 0.070 | | Average temperature | -0.656 | -0.650 | 1.000 | | -0.563 | -0.612 | 0.943 | -0.526 | -0.598 | -0.646 | 1.000 | | Precipitation range | 0.600 | 0.774 | -0.618 | 1.000 | 0.373 | 0.789 | -0.630 | 0.775 | 0.283 | 0.885 | -0.631 | 1.000 | | Inverse population- | | | | | | | | | | | | | | weighted climate | | | | | | | | | | | | | | Average temperature | 0.830 | 0.151 | -0.630 | 0.433 | 1.000 | | | | | | | | | Precipitation | 0.083 | 0.811 | -0.576 | 0.525 | 0.070 | | | | | | | | | Temperature range | -0.563 | -0.612 | 0.943 | -0.526 | -0.598 | -0.646 | 1.000 | | | | | | | Precipitation range | 0.373 | 0.789 | -0.630 | 0.775 | 0.283 | 0.885 | -0.631 | 1.000 | | | | | | Historic demographic | | | | | | | | | | | | | | indicators | | | | | | | | | | | | | | Birth rate 1950–54 | 0.728 | 0.042 | -0.373 | 0.510 | 0.637 | -0.106 | -0.293 | 0.215 | 1.000 | | | | | Infant mortality 1950–54 | 0.595 | -0.027 | -0.201 | 0.430 | 0.528 | -0.118 | -0.165 | 0.183 | 0.821 | | | |
Source: Authors’ estimates using data for 157 countries with non-missing data for GDP, population, urbanization, and generating capacity in 2005.
that the ranges between maximum and minimum monthly temperatures and precipitation are often the primary drivers of infrastructure demand. This means that the projections used to calculate the Delta-Q costs must be based upon climate scenarios that generate monthly maximum and minimum temperatures as well as average temperatures, which restricts the set of GCMs that can be used. But even more important, the variance of the difference between two variables is the sum of their variances minus their covariance. Under most plausible outcomes, this will exceed the variance of each element, so that the uncertainty about climate ranges will be higher than for climate means.8
For the main scenario analysis in this study, we have used results from the NCAR CCSM-3 and CSIRO-3 models (abbreviated to NCAR and CSIRO). These have relatively similar changes in the global moisture index, but they differ significantly in their patterns of climate change at the regional and country level. The models are part of a larger set of 26 GCMs that have been examined in detail by the MIT Joint Program on the Science and Policy of Global Change. As part of their analysis, the MIT group has down-scaled the climate projections to match the 0.5 degree grid cells used for the historic climate data, so population- and area-weighted means were constructed for the countries covered by our study for the NCAR and CSIRO scenarios.
These projections are not sufficient for the Delta-P analysis, because design standards for certain types of infrastructure are driven by extreme values rather than monthly average values. However, GCMs are not capable of generating reliable estimates of daily maximum/
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8 This is particularly the case for the precipitation range. Generally, climate change projections suggest that monthly maximum and minimum temperatures will move roughly in line with average temperatures. That is certainly not the case for precipitation since in many places it is expected that rainfall patterns will become more uneven with zero or even negative covariance between changes for the driest and wettest months. minimum temperatures, precipitation, or wind speed, so it is necessary to deal with this requirement in an indirect manner. We have proceeded as follows:
a. Use the normal or log-normal distributions of monthly averages of maximum/minimum temperature and monthly precipitation to estimate the 99th percentile of monthly maximum temperature, the 1st percentile of monthly minimum temperature, and the 99th percentile of maximum monthly precipitation.
b. Express these percentiles as a ratio of the maximum/minimum of monthly average maximum/minimum temperatures and the maximum monthly precipitation and assume that these ratios will remain broadly constant in the future.
c. Apply the ratios of the 99th/1st percentiles to the associated monthly extremes for 2050 in order to compute the change from extreme values for the historic climate to extreme values for the climate scenario in absolute units—degrees C or mm of rainfall.
d. In the case of wind speed, we have estimated the elasticity of the 99th percentile of wind speed with respect to the 99th percentile of precipitation by fitting extreme value distributions to the historic climate data and used the change in maximum precipitation to project changes in extreme wind events.
4. ECONOMETRIC SPECIFICATIONS
In considering the specification of the econometric analysis, it has to be remembered that the goal is to generate projections of the average demand for infrastructure up to 2050, whether or not these are affected by climate. We are not trying to examine the factors that drive the actual amounts of infrastructure assets supplied today or in the past. The key implication is that it is not appropriate to include, for example, indicators of governance or institutional development in the analysis. These may be relevant factors explaining actual outcomes for individual countries today. But they are not relevant when we wish to make projections 40 or more years into the future, since it is neither possible nor desirable to attempt to project how governance or institutions will evolve over that period.
To the extent that (a) institutional factors influence the current level of infrastructure provision, and (b) there is a correlation between institutional development and GDP per person or urbanization, then the impact of institutional development will be (partly) captured by the coefficients on GDP per person or urbanization in the reduced form discussed below. This is one reason why the elasticities of infrastructure demand with respect to these variables may be higher when estimated using a sample of all countries than for a sample of high-income countries only. But, equally, there are many other factors that may affect the reduced form elasticities.
Quite apart from matters of econometric philosophy, the nature of the data available for the purpose of making projections of future demand for infrastructure has an important influence upon the specification of the models. There are a very limited number of variables for which independent projections extending to 2050 have been constructed and can be used. In addition to the climate variables discussed above, these are total population, the age structure of the population, urbanization, and growth in income (GDP per capita measured at purchasing power parity), plus a number of geographical features, which act as country-fixed effects.9
The basic approach for the econometric analysis is to develop a reduced form specification of the efficient demand for the services provided by each type of infrastructure—for example, paved roads or railways.10
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9 The demographic projections are based on the medium fertility projection in the UN Population Division’s 2006 revision, which is linked to the urbanization projections. The central scenario for growth rates for GDP per person at purchasing power is computed by taking the average of five economic integrated assessment models—Hope (2003), Nordhaus (2002), Tol (2007), IEA (2008) and EIA (2008). The average growth rate for world GDP in real terms is very close to the IPCC A1 SRES scenario, but the country growth rates are not based upon the downscaled versions of that scenario since those were constructed with a base data of 1990 and the relative country weights are very out of date. The sources of the population and income projections are described in a separate note.
10 There is an extensive literature, much of it originating in the World Bank, on developing econometric models to identify links between We assume that the structural equation defining the efficient demand for infrastructure type ( i ) in country ( j ) in period ( t ) may be written as:
[ Q\_{ijt} = f_i{P\_{jt}, Y\_{jt}, C\_{ijt}, X\_{jt}, Z\_{ijt}, V\_{jt}, t} ]
(3)
The variables are defined as follows:
- ( P\_{jt} ) is the population of country ( j ) in period ( t );(^{11})
- ( Y\_{jt} ) is average income per head for country ( j ) in period ( t );
- ( C\_{ijt} ) is the unit cost of infrastructure type ( i ) for country ( j ) in period ( t );
- ( X\_{jt} ) is a vector of country characteristics for country ( j ) in period ( t );
- ( Z\_{ijt} ) is a vector of economic or other variables that affect the demand for infrastructure type ( i ) for country ( j ) in period ( t ); and
- ( V\_{jt} ) is a vector of climate variables for country ( j ) in period ( t ).
We can observe or project values for some of these variables, notably ( P, Y, X, ) and ( V ) (dropping subscripts). For the other variables we assume that:
[ C\_{ijt} = c_i{Y\_{jt}, X\_{jt}, Z\_{ijt}, V\_{jt}, t} ]
(4)
and
[ Z\_{ijt} = g_i{Y\_{jt}, X\_{jt}, V\_{jt}, t}. ]
(5)
Solving for ( Z\_{ijt} ) and ( C\_{ijt} ) allows us to write the reduced form as
[ Q\_{ijt} = h_i{P\_{jt}, Y\_{jt}, X\_{jt}, V\_{jt}, t} ]
(6)
Since there are no strong priors on the appropriate functional forms for ( f_i ), ( c_i ), and ( g_i ), we can use a standard flexible functional form to represent the demand equation ( h_i ) in terms of the explanatory variables. We have adopted a restricted version of the translog specification for all variables other than population. Using the notation ( x_j = \\ln(X_j) ), the general translog function for infrastructure services may be written as:
[ d\_{ijt} = a_i + b\_{ijt}P\_{jt} + b\_{ijt}Y\_{jt} + \\sum b\_{xim}x\_{mjt} + \\sum b\_{vir}v\_{rjt} + \\sum g\_{xim}x\_{mjt}^2 + \\sum g\_{vir}v\_{rjt}^2 + \\sum r\_{im}Y\_{jt}x\_{mjt} + \\sum j\_{ir}Y\_{jt}v\_{rjt} + \\sum s\_{im}x\_{mjt}v\_{rjt} + \\sum f\_{im}x\_{mjt}v\_{rjt} ]
(7)
In practice, it is often difficult to estimate the full translog specification using the more complex econometric models, so the approach adopted was to start with the log-linear specification and then test whether the coefficients on the quadratic and cross-product terms are significant. Because this involves repeated testing of overlapping specifications, we have followed the spirit of the Bonferroni adjustment to test statistics by requiring that any coefficients retained in the model are significantly different from zero at the 1 percent level using conventional statistical tests.(^{12})
We have noted that including climate variables in equations for the demand for infrastructure may be challenged by some economists, especially if one goes on to assume that future demand for infrastructure will be affected by projected changes in these climate variables. The reason for the debate is that climate variables are believed to act as a proxy for institutional and other factors that determine actual outcomes, partly as a consequence of historical patterns of development (Acemoglu et al. 2001; Albouy 2008; Dell et al. 2008; Horowitz 2008. For example, attempts have been made to estimate a relationship linking income per person
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(^{11}) For some types of infrastructure, total population may be replaced by population in each age group; i.e., the number of children (ages 0 to 14), the number of elderly (ages 65+). The country-fixed effects include country size and the proportions of land area that are desert, arid, semiarid, steep, or very steep using standard FAO land classifications. In addition, we have used the proportion of land that has no significant soil constraints for agriculture.
(^{12}) In fact almost all of the coefficients are significantly different from zero at the 0.1 percent level. The exceptions to this procedure relate to linear terms in exogenous variables when one or more of the quadratic terms is significant at the 0.1 percent level. In such cases the linear term is retained, since it may be important for scaling the predictions. and average temperature as a basis for measuring the impact of climate change at highly aggregated level. Indeed, any simple correlation of these variables appears to show that a higher average temperature (usually for the capital city of the country) is associated with lower average income per person. But even this relationship is complicated by the role of natural resource endowments. Acemoglu et al. (2001) suggest that, in part, temperature is serving as an instrument for institutional development, so they include historical mortality rates in their analysis on the grounds that this is an alternative—and better—proxy for institutional development.
The strategy adopted for our analysis relies on a number of alternative ways of dealing with this problem.
a. The Acemoglu et al (AJR) study used colonial (mostly 18th century) mortality as an instrument for institutional development and found that this had a very significant coefficient in their equations for recent economic growth. However, estimates of colonial mortality are not available for more than one-half of the countries in our sample and, in any case, there is considerable controversy about the reliability of the estimates that have been used. Instead, we have used an alternative set of instrumental variables. The UN’s population statistics include a variety of demographic variables for the early 1950s for almost all countries. These provide good instruments because they are closely correlated with the historical endowment of both institutions and infrastructure, but demographic changes over the past 50 years mean they are less associated with current patterns. Two instruments have been used—the crude birth rate and infant mortality. These two were chosen because they capture the highest proportion of the cross-country variation of the demographic variables examined. Reflecting their special role, these variables were included on their own without quadratic terms or cross-products with other explanatory variables. Consistently, one or both of the variables have coefficients that are significantly different from zero at the 95 percent or 99 percent levels. For this reason, the variables are included in all of the models discussed below. So, it must be remembered that—even without further controls for the possible role of climate as an instrument for institutional development—the analysis starts from a point that matches the state of the art in the current literature.
b. The role of climate as an instrument for institutional development is a geographical argument—that is, it is about the geography of regional development—as much as it is about climate per se. Thus, the natural approach—again made difficult in the past by data limitations—is to consider the use of spatial econometrics in which spatially weighted values of variables are used as instruments for institutional and other factors. The standard model of spatial interaction (or autocorrelation) is:
[ y_i = a + \\sum\_{j \\neq i} W\_{ij} y_j + b x_i + \\epsilon_i ]
where the matrix ( W ) is a matrix of weights capturing the spatial influence of location ( j ) on location ( i ), ( \\varphi ) is called the spatial autocorrelation coefficient, and ( \\epsilon ) is the error term whose distribution depends upon the model specification. The inverse-distance model has been used for this analysis for which the elements of ( W ) are proportional to the reciprocal of the distance between the population centroids for countries ( i ) and ( j ) up to a maximum of 2,500 km. The ( W ) matrix is normalized so that the row sums are equal to 1. The equations are estimated using panel GMM with spatially weighted values of population, GDP per person, urbanization, and country size as instruments. The details of the analysis are given in a separate paper, but the overall
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13 The actual variable used in the AJR study is ( \\ln(\\text{settler mortality}) ). For 63 countries in their samples (excluding Bahamas), the correlations between ( \\ln(\\text{settler mortality}) ) and our historic demographic variables are 0.46 for ( \\ln(\\text{crude birth rate}) ), 0.67 for ( \\ln(\\text{infant mortality}) ), and -0.69 for ( \\ln(\\text{life expectancy}) ). The correlations with AJR’s proximate indicator of institutions (average protection against expropriation risk 1985–95) are -0.58 for ( \\ln(\\text{settler mortality}) ), -0.57 for ( \\ln(\\text{crude birth rate}) ), -0.69 for ( \\ln(\\text{infant mortality}) ), and 0.65 for ( \\ln(\\text{life expectancy}) ). Hence, our historic demographic indicators should provide better instruments for institutional influences than AJR’s use of settler mortality.
14 The distance band is chosen to ensure that all countries have at least three “neighbors” within the band. This is a particular concern for large/isolated countries or territories such as Australia, Brazil, Canada, and Papua New Guinea. Reducing the distance band to 2,000 km would mean that seven countries or territories have only one “neighbor” within the band, while reducing it to 1,500 km excludes Australia, Mongolia, Papua New Guinea, and Timor-Leste as having no “neighbors.” conclusion is that (a) the spatial interactions are consistently insignificant, and (b) including them does not alter the role of the climate variables in our equations.
c. Setting aside the spatial argument, the central econometric contention of the argument that climate variables do not reflect the role of climate per se is that some or all of these variables are correlated with the error terms in the regression. This is a classic econometric problem that may be caused by omitted variables, measurement errors, or other factors. The standard solution is to treat the suspect climate variables as endogenous and look for instruments that are correlated with the climate variables but not with the error term—see, for example, Cameron and Trivedi (2006, chapter 4) or Baum (2005, chapter 8). It is not easy to find suitable instruments for all of the climate variables, especially as a group, since physical characteristics of countries are included in the infrastructure demand equations. We have investigated a range of potential instruments, such as the absolute value of latitude (the best instrument for temperature); internal renewable water resources; numbers of bird, mammal, and plant species per sq km; percentage covered by water and snow/ice; and spatially weighted physical characteristics for neighboring countries. These instruments perform reasonably well for mean temperature and temperature range (both population-weighted and inverse population-weighted) on their own. In these cases, the use of instrumental variables does not alter our conclusions. The variables turn out to be weak instruments for total precipitation and precipitation range on their own or for all climate variables together, but no one has seriously proposed that either total precipitation or precipitation range act as proxies for other influences on infrastructure demand. Finally, the analysis using instrumental variables consistently fails to reject the hypothesis that the climate variables—either individually or as a group—can be treated as exogenous; that is, that the correlation between the climate variables and the error term is zero.
d. A final possibility is that climate variables act as instruments for governance variables. One problem is that governance ratings change over time, whereas the climate variables are constant. To get around this, we have computed country averages for the years for which data is available and constructed the correlation matrices for both population-weighted and inverse population-weighted climate variables. Population-weighted mean temperature and precipitation range would be the best instruments, as they have simple correlations of -0.41 to -0.49 for the main WGI governance variables—notably government effectiveness, regulatory quality, and rule of law. Population-weighted precipitation and temperature range have very low correlations with the governance variables, and the correlations for the inverse population-weighted variables are significantly worse than for the population-weighted variables. With squared correlations of 0.2 or less, climate variables would have high standard errors if they were acting as instruments for governance—roughly 5 times the true standard errors for the governance variables—which is difficult to reconcile with the relatively high t-ratios actually obtained. Further, including governance variables in the tests reported below may reduce or increase the F-values for the joint tests on the sets of climate variables, but it does not alter the inference. Overall, our results provide little support for this interpretation.
It is not possible to prove a negative. Our analysis cannot demonstrate conclusively that the coefficients on our climate variables reflect the effects of climate per se rather than the indirect influence of other, non-climate, factors. Nonetheless, we would argue that the cumulative weight of evidence is strong enough to shift the burden of proof. A key point is that the influence of climate in our infrastructure equations rarely depends upon a single climate variable on its own, whereas arguments about the role of climate as a proxy or instrument for other factors focus almost exclusively on mean temperature. There is even less reason to believe that inverse population-weighted climate variables act in this way, since by definition these reflect climate patterns in areas where people do not live and have not lived in large numbers.\\textsuperscript{15} Hence, after extensive and careful investigation, we conclude that the evidence supports the view that climate does and will have a significant influence on future demand for infrastructure. In reaching this conclusion, we have been particularly strict when considering the inclusion of mean temperature (population-weighted and inverse population-weighted) in our projection models, so there has been a bias in favor of omitting these variables unless there was unambiguous support for retaining them. On that basis, we believe it is reasonable to estimate the Delta-Q component of adaptation over the full period from 2010 to 2050 on the basis of the demand projections generated by our equations.
The primary investigation of alternative specifications is carried out using pooled OLS with Driscoll-Kraay standard errors, which allow for a general pattern of spatial dependence between countries (Driscoll and Kraay 1998; Hoechle 2007).\\textsuperscript{16} In the case of the proportions of the population covered by electricity, water, and sewer networks, the dependent variable is the logit of the relevant shares in order to translate values between 0 and 1 to the entire real line. It is necessary to censor values that are reported as either 0 or 1 in order to avoid degeneracy. Thus, the minimum and maximum values correspond to shares of 0.001 and 0.999, as the shares are reported to the nearest 0.1 of a percentage point. A panel tobit model has been used to estimate the demand equations for coverage rates for which a significant fraction of observations are censored from above with the upper limit equal to logit (0.999).
In addition to climate variables, the explanatory variables in the base models are:
- Log of population
- Logs of GDP per person at 2005 PPP, country size, and urban population as percentage of total population plus quadratic terms in these variables
- Log of a cross-country building cost index with the U.S.=1.0
- Logs of the proportions of land area that are desert, arid, semi-arid, steep, very steep, and have no soil constraints for agriculture—obtained from FAO’s Terrastat database
- Logs of the birth rate and infant mortality for 1950-54
- Dummy variables for World Bank regions.
The last two groups of variables are retained in all models. Tests for the inclusion of non-climate and climate variables are performed separately. At the first stage, the non-climate variables are tested for significance in a model containing the seven climate variables—pop and ipop variants other than temperature range. After dropping non-climate variables that do not have significant coefficients, tests on the hypotheses that the coefficients for (a) the population-weighted climate variables, (b) the inverse population-weighted climate variables, and (c) all climate variables are all equal to zero are carried out. If one or more of these hypotheses are rejected, the set of climate variables included in the model is reduced by first dropping either the pop or the ipop variants and then those variables within each category that do not have significant coefficients. Finally, interactions with GDP and urbanization are tested for the climate variables that have been retained.
Finally, we have used total, urban, or rural population weights (as appropriate) in estimating equations for which the dependent variable is the log or logit of an infrastructure indicator per person or per household; for example, municipal industrial water use per person, average household size, or the percentages of households connected to electricity, water, or sewer networks. In all cases, the weights are normalized to sum to the number of observations used for the analysis.
5. THE EFFECTS OF CLIMATE ON DEMAND FOR INFRASTRUCTURE
Electricity generating capacity. Model (1) in Table 2 shows that the tests for the joint significance of the climate variables reject the hypothesis of zero coefficients decisively for both the population-weighted and the inverse population-weighted climate variables. The rejection of the hypothesis of zero coefficients is particularly strong for the inverse-population weighted climate variables; this is reinforced by the higher values of the t-ratios for these coefficients. The only climate variable with a coefficient that is not significantly different from zero is population-weighted mean temperature. On the other hand, both temperature range and inverse population-weighted mean temperature have coefficients that are highly significant. The signs of the coefficients differ, but these variables are negatively correlated (see Table 1) so that warmer countries tend to have less generating capacity, holding other factors constant.
| Variables | Ln(Generating capacity) | Ln(Fixed telephone lines) | Logit(Urban electricity coverage) | Logit(Rural electricity coverage) | |--------------------|-------------------------|---------------------------|-----------------------------------|-----------------------------------| | | (1) | (2) | (3) | (4) | | Ln(Population) | 0.954\*\*\* | 0.959\*\*\* | 1.088\*\*\* | 1.081\*\*\* | | | (0.028) | (0.021) | (0.033) | (0.030) | | Ln(GDP per person) | 0.975\*\*\* | 0.926\*\*\* | 0.618\*\*\* | 0.608\*\*\* | | | (0.141) | (0.129) | (0.024) | (0.016) | | Ln(Country size) | 1.111\*\*\* | 1.034\*\*\* | -0.159\*\*\* | -0.150\*\*\* | | | (0.137) | (0.117) | (0.026) | (0.026) | | Ln(% urban) | 2.936\*\*\* | 4.248\*\*\* | 2.084\*\*\* | 1.340 | | | (0.563) | (0.711) | (0.474) | (1.593) | | Ln(% urban) squared| 0.324\*\*\* | 0.309\*\*\* | | | | | (0.050) | (0.044) | | | | Ln(GDP per person) | -0.115\*\*\* | -0.108\*\*\* | -0.621\*\*\* | -0.714\*\*\* | | | (0.014) | (0.012) | (0.070) | (0.078) | | Ln(Country size) | -0.239\*\*\* | -0.226\*\*\* | -0.203\*\* | -0.191\*\* | | | (0.056) | (0.060) | (0.066) | (0.062) | | Ln(% urban) | 0.131\*\*\* | 0.106\*\*\* | 1.001\*\*\* | 1.091\*\*\* | | | (0.027) | (0.026) | (0.136) | (0.140) |
(continued) | Variables | Ln(Generating capacity) | Ln(Fixed telephone lines) | Logit(Urban electricity coverage) | Logit(Rural electricity coverage) | |---------------------------------|-------------------------|---------------------------|-----------------------------------|-----------------------------------| | | (1) | (2) | (3) | (4) | | Ln(Building cost) | -1.878\*\*\* | -1.712\*\*\* | 21.44\*\* | 18.21\*\* | | | (0.289) | (0.284) | (6.636) | (5.967) | | Ln(% desert) | 0.0276\*\*\* | 0.0278\*\*\* | 0.0250\*\*\* | 0.0351\*\*\* | | | (0.004) | (0.005) | (0.005) | (0.007) | | Ln(% semi-arid) | -0.0378\*\*\* | -0.0297\*\* | 0.0296\*\*\* | 0.0307\*\*\* | | | (0.011) | (0.011) | (0.004) | (0.004) | | Ln(% steep land) | -0.107\*\*\* | -0.111\*\*\* | -1.509\*\*\* | -0.321 | | | (0.008) | (0.012) | (0.413) | (0.350) | | Ln(% very steep land) | 0.0947\*\*\* | 0.0792\*\*\* | 0.0647\*\*\* | 0.0647\*\*\* | | | (0.008) | (0.007) | (0.004) | (0.004) | | Ln(% no soil constraint) | -0.0522\*\*\* | -0.0414\*\*\* | 0.0365\*\*\* | 0.0346\*\*\* | | | (0.010) | (0.008) | (0.006) | (0.007) | | Ln(Temperature - pop) | -0.837 | -2.158\*\*\* | -2.620\*\*\* | -5.626 | | | (0.480) | (0.202) | (0.376) | (6.088) | | Ln(Precipitation - pop) | 0.395\*\*\* | 0.152\*\*\* | -0.001 | -3.175\*\* | | | (0.069) | (0.040) | (0.085) | (1.224) | | Ln(Temp range - pop) | 0.313\*\* | 0.386\*\*\* | -0.250\*\* | 0.144\* | | | (0.103) | (0.074) | (0.090) | (0.067) | | Ln(Precip range - pop) | -0.431\*\*\* | -0.272\*\*\* | -0.169\*\* | -0.0449\*\* | | | (0.055) | (0.052) | (0.065) | (0.017) | | Ln(Temperature - ipop) | -1.057\*\*\* | -1.447\*\*\* | -0.388\*\*\* | 0.305\*\*\* | | | (0.137) | (0.125) | (0.111) | (0.068) | | Ln(Precipitation - ipop) | -0.272\*\*\* | -0.269\*\*\* | -0.149 | -1.771 | | | (0.045) | (0.036) | (0.098) | (0.997) | | Ln(Precip range - ipop) | 0.479\*\*\* | 0.468\*\*\* | 0.240\*\* | 0.0542\* | | | (0.055) | (0.048) | (0.077) | (0.025) | | Ln(% urban) * | | | -1.006\*\* | | | Ln(Temperature - pop) | | | (0.363) | |
### TABLE 2. PROJECTION EQUATIONS FOR ELECTRICITY GENERATING CAPACITY, FIXED TELEPHONE LINES, AND ELECTRICITY NETWORK COVERAGE (continued)
| Variables | Ln(Generating capacity) | Ln(Fixed telephone lines) | Logit(Urban electricity coverage) | Logit(Rural electricity coverage) | |-----------|-------------------------|---------------------------|-----------------------------------|-----------------------------------| | | (1) | (2) | (3) | (4) | | Ln(% urban) * | -0.388\*\*\* | | | | | Ln(Precipitation - pop) | (0.050) | | | | | Ln(% urban) * | 0.328\*\*\* | | | | | Ln(Temp range - pop) | (0.070) | | | | | Ln(% urban) * | 0.270\*\*\* | 0.139\*\*\* | | | | Ln(Precip range - pop) | (0.066) | (0.031) | | | | Ln(% urban) * | 0.862\*\*\* | -4.295\*\*\* | | | | Ln(Temperature - ipop) | (0.102) | | | (1.151) | | Ln(% urban) * | -0.0749\*\*\* | | | | | Ln(Precip range - ipop) | (0.009) | | | |
| Model | POLS | POLS | POLS | POLS | Tobit | Tobit | Tobit | Tobit | |-------|------|------|------|------|-------|-------|-------|-------| | Observations | 6027 | 6027 | 5130 | 5130 | 906 | 906 | 853 | 853 | | Number of countries | 165 | 165 | 186 | 186 | 130 | 130 | 127 | 127 | | R-squared | 0.923 | 0.924 | 0.938 | 0.939 | | | | | | Log-likelihood | -250.6 | -253.2 | -436.6 | -438.4 | | | | | | DF | 26 | 27 | 25 | 28 | 19 | 15 | 24 | 20 | | No of censored obs | 716 | 716 | 661 | 661 | | | | | | P-value for all climate variables = 0 | 0.000 | 0.000 | 0.008 | 0.000 | | | | | | P-value for pop climate variables = 0 | 0.000 | 0.000 | 0.005 | 0.000 | | | | | | P-value for ipop climate variables = 0 | 0.000 | 0.000 | 0.167 | 0.000 | | | | |
Note: Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
Source: Authors’ estimates. Overall, however, temperature and temperature range are less important influences on the amount of generating capacity than precipitation and precipitation range together with their interactions with urbanization. There are various mechanisms by which precipitation may affect installed capacity. One factor is the role of hydro power in total electricity supply, since utilization factors tend to be lower for hydro plants. Another is the role of pumped irrigation systems and similar influences on patterns of electricity demand in countries with high interseasonal variations in rainfall. Even though the absolute values of the coefficients for precipitation and precipitation range are smaller than the equivalent coefficients for temperature, these variables have an important effect in the calculation of the Delta-Q changes because the distributions of changes in total precipitation and precipitation range are much more dispersed and much larger relative to their historic values than are the equivalent distributions for temperature.
**Fixed telephone lines.** The projection equations for fixed telephone lines are reported as Models (3) & (4) in Table 2. Again, the hypotheses of zero coefficients for climate variables are decisively rejected, particularly for the population-weighted variables, with mean temperature, temperature range, and precipitation range all having significant coefficients. There are strong interactions with urbanization, so that the impact of climate change on demand for telephones varies markedly both within and across country classes.
**Electricity network coverage.** Models (5) through (8) in Table 2 show the estimated equations for the logits of electricity coverage for urban and rural households weighted by the relevant populations in 2005. Panel tobit models are used with an upper censoring value corresponding to a coverage of 99.9 percent. Since the majority of observations are censored, the number of exogenous variables is reduced in each equation by much more than for electricity generating capacity. Nonetheless, population-weighted precipitation, precipitation range, and temperature range clearly warrant inclusion in the equation for urban coverage. For rural coverage, population-weighted precipitation range and inverse population-weighted temperature—on its own and interacted with urbanization—are the key climate variables. The chi-square statistic for the test of zero influence of the temperature variables is 59.7, so that these cannot be excluded.
**Water use.** The dependent variables for water use are the logs of water abstractions per person for municipal and industrial use, which are derived from FAO data. This includes water that is lost in treatment and in water supply networks. Models (1) and (2) in Table 3 summarize the results of the econometric analysis for municipal water use per person. In this case, the tests for the joint significance of the climate variables reject the hypothesis of zero coefficients decisively for the population-weighted variables, but not for the inverse population-weighted variables. The best specification includes population-weighted precipitation and precipitation range. Another point to note is the quadratic in GDP per person. The results seem to be intuitively reasonable, reflecting rainfall patterns where people live and the effect of changes in GDP on water use. The quadratic terms in GDP per person imply that water consumption per person reaches a peak at an income of about $12,000 per capita in 2005 PPP, and falls gradually as countries get richer beyond this point.
Models (3) and (4) in Table 3 summarize the results for industrial water use per person. In this case, the tests reject the hypotheses that the population-weighted and/or inverse population-weighted climate variables have zero coefficients. The detailed investigation identifies population-weighted temperature range and precipitation range plus inverse population-weighted precipitation and precipitation range as having significant coefficients. There are significant interactions between the inverse-population weighted climate variables and GDP per person with urbanization. Use of water in industry is a derived demand, so the influence of climate variables operates through the scale and location of food processing and similar resource-based industries. Hence, it is climate conditions in rural and thinly populated areas that have a significant influence.
**Water and sewer connections.** Table 4 summarizes the results for coverage rates of piped water supply and
### TABLE 3. PROJECTION EQUATIONS FOR MUNICIPAL AND INDUSTRIAL WATER DEMAND
| Variables | Ln(Municipal water use per person) | Ln(Industrial water use per person) | |----------------------------------|------------------------------------|-------------------------------------| | | (1) | (2) | | Ln(GDP per person) | 2.159\*\* | 2.000\*\* | | | (0.679) | (0.632) | | Ln(Country size) | | | | Ln(% urban) | 0.530\*\*\* | 0.559\*\*\* | | | (0.071) | (0.067) | | Ln(GDP per person) squared | -0.115\*\* | -0.105\*\* | | | (0.039) | (0.036) | | Ln(Building cost) | -2.477\*\*\* | -2.342\* | | | (0.662) | (0.904) | | Ln(% steep land) | | 0.970\*\*\* | | | (0.124) | (0.100) | | Ln(% very steep land) | 0.152\*\*\* | 0.156\*\*\* | | | (0.023) | (0.032) | | Ln(% no soil constraint) | -0.265\*\*\* | -0.156\*\*\* | | | (0.040) | (0.027) | | Ln(Temperature - pop) | 0.923\* | -0.027 | | | (0.391) | (1.219) | | Ln(Precipitation - pop) | -0.150 | -0.306\*\*\* | | | (0.173) | (0.087) | | Ln(Temp range - pop) | 0.459\*\* | 2.091\*\*\* | | | (0.163) | (0.294) | | Ln(Precip range - pop) | 0.205 | 0.367\*\*\* | | | (0.175) | (0.103) | | Ln(Temperature - ipop) | 0.079 | -0.842 | | | (0.239) | (0.592) | | Ln(Precipitation - ipop) | 0.102 | -0.512\* | | | (0.081) | (0.240) | | Ln(Precip range - ipop) | -0.054 | 0.902\*\* | | | (0.103) | (0.287) | | Ln(GDP per person) * | | 0.577\*\*\* | | Ln(Precipitation - ipop) | | (0.099) | | Ln(GDP per person) * | | -0.577\*\*\* | | Ln(Precip range - ipop) | | (0.107) |
Model | POLS | POLS | POLS | POLS Observations | 368 | 368 | 337 | 337 Number of countries | 161 | 161 | 158 | 158
(continued) TABLE 3. PROJECTION EQUATIONS FOR MUNICIPAL AND INDUSTRIAL WATER DEMAND (continued)
| Variables | Ln(Municipal water use per person) | Ln(Industrial water use per person) | |----------------------------|------------------------------------|-------------------------------------| | R-squared | 0.980 | 0.954 | | Log-likelihood | | | | DF | 19 | 14 | | No of censored obs | 0.000 | 0.000 | | P-value for all climate variables = 0 | 0.000 | | | P-value for pop climate variables = 0 | 0.000 | | | P-value for ipop climate variables = 0 | 0.087 | 0.000 |
Note: Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
Source: Authors’ estimates.
sewer networks in urban and rural areas. Models (1) to (6) are based upon panel tobit estimation, allowing for the upper censoring of countries with reported coverage of 99.9 percent or higher. In general, population-weighted climate variables have a significant influence on coverage rates in urban areas, while inverse population-weighted climate variables are more important in rural areas. The only exception is rural water supply, for which both sets of climate variables are significant. Interactions with GDP per person and urbanization are not significant. Since coverage rates for piped water supply are close to or equal to 99.9 percent in high income countries, changes in climate variables will not have any effect on costs of adaptation in many countries. However, changes in average temperature—and precipitation for rural households—may affect the numbers of households connected to collective sewer systems.18
For the purpose of costing wastewater treatment, we have assumed that the BOD/COD concentration and other characteristics of sewage handled by wastewater treatment plants correspond to typical values for municipal wastewater. This implies that industries will be expected to process wastewater with high concentrations of industrial pollutants. Further, it is assumed that wastewater treatment plants are scaled to process 80 percent of the volume of water treated by water treatment plants, allowing for network losses and wastewater that is not discharged to sewers.
Roads. Table 5 shows equations for the total length of roads (both paved and unpaved) and for the logit of the share of paved roads in total road length, weighted by total road length in the latter case. The key climate variables affecting the length of roads are temperature and precipitation range—both population-weighted and inverse population-weighted—plus population-weighted temperature range. There are strong interactions with GDP per person for temperature and precipitation
18 It should be emphasized that this is not a matter of whether households have access to some form of adequate sanitation. The dependent variable is the proportion of households that are connected to community sewers, rather than relying upon septic tanks or equivalent individual arrangements. Community sewers are more expensive to construct and the wastewater that is collected must be treated, so costs of adaptation arise from shifts to or away from reliance on community sewers. Again, we have allowed for non-household connections by assuming that the total numbers of water supply and sewer connection are 10 percent higher than the numbers of household connections, based on typical ratios for middle-income countries.
### Table 4. Projection Equations for Water and Sewer Networks
| Variables | Logit(Urban water coverage) | Logit(Rural water coverage) | Logit(Urban sewer coverage) | Logit(Rural water coverage) | |----------------------------|------------------------------|-----------------------------|-----------------------------|-----------------------------| | Ln(Population) | 0.353\*\* (0.127) | 0.300\* (0.118) | 0.513\*\*\* (0.113) | 0.488\*\*\* (0.113) | | Ln(GDP per person) | 0.889\*\*\* (0.150) | 0.901\*\*\* (0.148) | 0.430 (0.826) | 0.647 (0.824) | | Ln(Country size) | -0.580\*\*\* (0.112) | -0.539\*\*\* (0.095) | 1.327\*\*\* (0.318) | 1.439\*\*\* (0.314) | | Ln(% urban) | -3.744\*\*\* (0.995) | -3.797\*\*\* (0.982) | 1.388\*\*\* (0.230) | 1.371\*\*\* (0.229) | | Ln(GDP per person) squared | 0.157\*\* (0.053) | 0.149\*\* (0.053) | | | | Ln(GDP per person) * | -0.282\*\*\* (0.131) | -0.293\*\*\* (0.130) | -0.276\*\*\* (0.095) | -0.285\*\*\* (0.095) | | Ln(Country size) * | 0.451\*\*\* (2.878) | 0.462\*\*\* (2.607) | 13.91\*\* (4.162) | 14.16\* (5.622) | | Ln(% arid land) | -0.421\*\*\* (0.082) | -0.295\*\*\* (0.073) | -0.254\*\*\* (0.053) | -0.266\*\*\* (0.072) | | Ln(% semi-arid land) | 0.141\* (0.064) | 0.162\* (0.063) | 0.375\*\*\* (0.075) | 0.449\*\*\* (0.074) | | Ln(% no soil constraint) | -0.282\* (0.114) | -0.422\*\*\* (0.091) | | | | Ln(Temperature - pop) | -8.469\*\*\* (2.303) | -8.000\*\*\* (1.352) | -0.351 (2.406) | -5.950\*\* (2.128) | | Ln(Precipitation - pop) | -0.262 (0.530) | -1.690\*\* (0.570) | -1.319\*\*\* (0.214) | 0.128 (0.529) | | Ln(Temp range - pop) | -0.693 (0.742) | -1.793\* (0.767) | -1.498\*\* (0.484) | -0.119 (0.747) | | Ln(Precip range - pop) | -1.184\* (0.517) | -1.500\*\*\* (0.238) | 0.870 (0.593) | 0.288 (0.593) | | Ln(Temperature - ipop) | -0.761 (1.033) | -6.472\*\*\* (0.947) | -6.385\*\*\* (0.863) | -1.098 (0.889) | | Ln(Precipitation - ipop) | -0.017 (0.375) | 0.131 (0.381) | -0.283 (0.356) | -0.981\*\*\* (0.356) |
(continued)
### TABLE 4. PROJECTION EQUATIONS FOR WATER AND SEWER NETWORKS (continued)
| Variables | Logit(Urban water coverage) | Logit(Rural water coverage) | Logit(Urban sewer coverage) | Logit(Rural water coverage) | |----------------------------|------------------------------|------------------------------|------------------------------|------------------------------| | Ln(Precip range - ipop) | -0.084 | -0.486 | -0.429 | 0.255 | | | (0.416) | (0.425) | (0.430) | (0.269) |
| Model | Tobit | Tobit | Tobit | Tobit | |----------------------------|------------------------------|------------------------------|------------------------------|------------------------------| | Observations | 582 | 582 | 547 | 547 | | Number of countries | 157 | 157 | 155 | 155 | | R-squared | | | | | | Log-likelihood | -452.1 | -452.9 | -461.5 | -464.7 | | | (0.416) | (0.425) | (0.430) | (0.269) | | DF | 21 | 16 | 21 | 17 | | No of censored obs | 94 | 94 | 36 | 36 | | P-value for all climate variables = 0 | 0.000 | 0.000 | 0.000 | 0.000 | | P-value for pop climate variables = 0 | 0.000 | 0.000 | 0.024 | 0.021 | | P-value for ipop climate variables = 0 | 0.854 | 0.001 | 0.002 | 0.000 |
Note: Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
Source: Authors’ estimates.
### TABLE 5. PROJECTION EQUATIONS FOR ROADS
| Variables | Ln(Total road length) | Logit(Share of paved roads) | |----------------------------|-----------------------|-----------------------------| | Ln(Population) | 0.584\*\*\* | 0.590\*\*\* | | | (0.004) | (0.005) | | Ln(GDP per person) | -0.042 | 2.070\*\*\* | | | (0.034) | (0.098) | | Ln(Country size) | -0.0931\* | -0.007 | | | (0.045) | (0.029) | | Ln(% urban) | 0.395\*\*\* | 0.786\*\*\* | | | (0.069) | (0.074) | | Ln(Country size) squared | 0.0166\*\*\* | 0.0175\*\*\* | | | (0.002) | (0.001) | | Ln(% urban) squared | -0.155\*\*\* | -0.0581\*\*\* | | | (0.015) | (0.010) |
(continued)
### TABLE 5. PROJECTION EQUATIONS FOR ROADS (continued)
| Variables | Ln(Total road length) | Logit(Share of paved roads) | |--------------------------------|-----------------------|-----------------------------| | | (1) | (2) | (3) | (4) | | Ln(GDP per person) * | 0.0331\*\*\* | 0.0217\*\*\* | -0.316\*\*\* | 0.010 | | Ln(Country size) | (0.003) | (0.002) | (0.023) | (0.023) | | Ln(GDP per person) * | -0.105\*\*\* | -0.199\*\*\* | | | | Ln(Country size) * | (0.006) | (0.012) | | | | Ln(% urban) | | | 0.434\*\*\* | 0.036 | | Ln(% urban) | | | (0.053) | (0.037) | | Ln(Building cost) | | | -11.84\*\*\* | -9.597\*\*\* | | Ln(% desert) | 0.0347\*\*\* | 0.0546\*\*\* | -0.157\*\*\* | -0.232\*\*\* | | Ln(% arid) | | | (0.009) | (0.006) | | Ln(% semi-arid) | -0.0492\*\*\* | -0.0503\*\*\* | | | | Ln(% steep land) | 0.100\*\*\* | 0.0660\*\*\* | | | | Ln(% very steep land) | -0.0245\*\*\* | -0.0111\*\*\* | 0.196\*\*\* | 0.174\*\*\* | | Ln(% no soil constraint) | 0.0279\*\*\* | 0.0402\*\*\* | | | | Ln(Temperature - pop) | -1.267\*\*\* | 1.589\*\*\* | 2.041 | | | Ln(Precipitation - pop) | 0.017 | 0.262 | | | | Ln(Temp range - pop) | -0.108\*\* | -0.206\*\*\* | -2.074\*\*\* | 16.46\*\*\* | | Ln(Precip range - pop) | -0.170\*\* | -0.154\*\*\* | -2.099\*\*\* | 0.663\* | | Ln(Temperature - ipop) | 0.593\*\*\* | 0.684\*\*\* | -2.213\*\*\* | -1.829\*\*\* | | Ln(Precipitation - ipop) | 0.039 | -0.646\*\*\* | | | | Ln(% urban) * | 0.156\* | 1.334\*\*\* | 0.976\*\*\* | | | Ln(Precip range - pop) | | | (0.060) | (0.070) | | Ln(GDP per person) * | -0.373\*\*\* | | | | | Ln(Temperature - pop) | | | (0.025) | |
(continued) range and with urbanization for precipitation range. These climate variables are directly linked to the cost of building and maintaining roads—temperature is particularly important for paved roads subject to heavy use, while temperature and precipitation ranges affect the capital and maintenance costs of both paved and unpaved roads. The fact that both population-weighted and inverse-population weighted climate variables are significant reflects the impact of climate on all types of roads—rural, urban, and national. It is likely that climate may also play a role through the structure of the economy—for example, the nature and role of agricultural production—and through geographical patterns of economic development.
The share of paved roads in total road length is influenced by the same variables and their interactions with GDP per person. In particular, higher temperatures in rural areas—that is, inverse population-weighted temperature—lead to a lower share of paved roads, which is exactly what one would expect in view of the higher costs of construction and maintenance for rural paved roads associated with higher temperatures.
**Other transport.** Table 6 shows the projection equations for rail track length, aircraft movements, and container traffic handled by ports. The last two are indicators used in estimating investments in airports and sea/river ports. With one exception, the tests reject the hypothesis of zero coefficients for all climate variables decisively. The exception is for inverse population-weighted climate variables in the rail equation. The primary climate influences are:
______________________________________________________________________
**TABLE 5. PROJECTION EQUATIONS FOR ROADS (continued)**
| Variables | Ln(Total road length) | Logit(Share of paved roads) | |----------------------------|-----------------------|-----------------------------| | Ln(GDP per person) * | | -2.150\*\*\* | | Ln(Temp range - pop) | | (0.192) | | Ln(GDP per person) * | | -0.190\*\*\* | | Ln(Precip range - pop) | | (0.038) | | Ln(GDP per person) * | | -0.127\*\*\* | | Ln(Precip range - ipop) | | (0.008) |
| Model | POLS | POLS | POLS | POLS | |-------|------|------|------|------| | Observations | 2040 | 2040 | 1790 | 1790 | | Number of countries | 182 | 182 | 179 | 179 | | R-squared | 0.922 | 0.926 | 0.816 | 0.822 | | Log-likelihood | | | | | | DF | 27 | 28 | 25 | 23 | | No of censored obs | | | | | | P-value for all climate variables = 0 | 0.000 | 0.000 | | | | P-value for pop climate variables = 0 | 0.000 | 0.000 | | | | P-value for ipop climate variables = 0 | 0.000 | 0.000 | | |
*Note:* Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
*Source:* Authors’ estimates.
### Table 6. Projection Equations for Other Transport
| Variables | Ln(Rail track length) | Ln(Aircraft movements) | Ln(Container traffic) | |----------------------------------|-----------------------|------------------------|-----------------------| | | (1) | (2) | (3) | (4) | (5) | (6) | | Ln(Population) | 0.484\*\*\* | 0.472\*\*\* | 0.540\*\*\* | 0.540\*\*\* | 0.649\*\*\* | 0.649\*\*\* | | | (0.043) | (0.041) | (0.035) | (0.032) | (0.034) | (0.023) | | Ln(GDP per person) | 0.259\*\*\* | 0.971 | 0.710\*\*\* | 0.692\*\*\* | 0.005 | -2.830\*\*\* | | | (0.053) | (0.741) | (0.065) | (0.066) | (0.074) | (0.748) | | Ln(Country size) | 0.425\*\*\* | 0.405\*\*\* | -0.184\*\*\* | -0.167\*\*\* | -2.751\*\*\* | -3.495\*\*\* | | | (0.076) | (0.049) | (0.030) | (0.030) | (0.195) | (0.363) | | Ln(% urban) | -0.315 | -0.215 | -0.376\*\* | 2.202\*\*\* | 3.989\*\*\* | -0.071 | | | (0.172) | (0.146) | (0.143) | (0.571) | (0.389) | (1.116) | | Ln(Country size) squared | 0.0337\*\*\* | 0.0325\*\*\* | 0.0299\*\*\* | 0.0278\*\*\* | | | | | (0.003) | (0.003) | (0.003) | (0.003) | | | | Ln(% urban) squared | -0.112\* | 1.090\*\*\* | 1.563\*\*\* | | | | | | (0.047) | (0.168) | (0.171) | | | | | Ln(GDP per person) * | | 0.222\*\*\* | 0.302\*\*\* | | | | | Ln(Country size) | | (0.015) | (0.034) | | | | | Ln(Country size) * | | -0.507\*\*\* | -0.513\*\*\* | | | | | Ln(% urban) | | (0.021) | (0.026) | | | | | Ln(Building cost) | -3.062\*\*\* | -2.936\*\*\* | | | | | | | (0.349) | (0.339) | | | | | | Ln(% desert) | 0.0862\*\*\* | 0.0728\*\*\* | 0.266\*\*\* | 0.223\*\*\* | | | | | (0.021) | (0.020) | (0.009) | (0.015) | | | | Ln(% arid) | | -0.333\*\*\* | -0.363\*\*\* | | | | | | (0.012) | (0.011) | | | | | | Ln(% semi-arid) | | 0.0404\*\*\* | 0.0710\*\*\* | | | | | | (0.006) | (0.004) | | | | | | Ln(% steep land) | -0.132\*\*\* | -0.144\*\*\* | | | | | | | (0.029) | (0.032) | | | | | | Ln(% very steep land) | 0.0743\*\*\* | 0.0819\*\*\* | | | | | | | (0.010) | (0.011) | | | | | | Ln(Temperature - pop) | -2.235\*\*\* | 3.225\* | -0.466 | 0.712\* | | | | | (0.660) | (1.288) | (0.334) | (0.307) | | | | Ln(Precipitation - pop) | 0.362\*\*\* | -1.378\*\*\* | -0.396\*\*\* | -0.351\*\*\* | 0.591\*\*\* | 0.909\*\*\* | | | (0.035) | (0.153) | (0.102) | (0.080) | (0.140) | (0.124) | | Ln(Temp range - pop) | 0.939\*\*\* | -0.797 | -1.038\*\*\* | -1.400\*\*\* | 0.232 | | | | (0.183) | (0.512) | (0.131) | (0.111) | (0.170) | | | Ln(Precip range - pop) | -0.175 | 0.373\*\*\* | 0.313\*\*\* | 0.035 | | | | | (0.123) | (0.053) | (0.044) | (0.079) | | | | Ln(Temperature - ipop) | 0.814 | -1.005\*\*\* | -1.084\*\*\* | -0.906\*\*\* | -6.590\*\*\* | | | | (0.745) | (0.114) | (0.091) | (0.093) | (1.305) | |
(continued)
### TABLE 6. PROJECTION EQUATIONS FOR OTHER TRANSPORT (continued)
| Variables | Ln(Rail track length) | Ln(Aircraft movements) | Ln(Container traffic) | |----------------------------|-----------------------|------------------------|-----------------------| | | (1) | (2) | (3) | (4) | (5) | (6) | | Ln(Precipitation - ipop) | 0.149 | 0.326\*\*\* | 0.026 | 0.429\*\*\* | 0.261\*\*\* | | | (0.133) | (0.046) | (0.072) | (0.075) | (0.051) | | Ln(Precip range - ipop) | -0.217 | -0.183\*\*\* | 0.060 | -0.457\*\*\* | -0.326\*\*\* | | | (0.174) | (0.041) | (0.059) | (0.034) | (0.058) | | Ln(% urban) * | | | | | 0.707\*\*\* | | Ln(Precipitation - pop) | | | | | (0.163) | | Ln(% urban) * | | | | | -0.508\*\*\* | | Ln(Temp range - pop) | | | | | (0.074) | | Ln(% urban) * | | | | | -0.354\*\*\* | | Ln(Precipitation - ipop) | | | | | (0.089) | | Ln(% urban) * | | | | | 0.324\*\*\* | | Ln(Precip range - ipop) | | | | | (0.058) | | Ln(GDP per person) * | | -0.580\*\*\* | | | | | Ln(Temperature - pop) | | (0.156) | | | | | Ln(GDP per person) * | | 0.167\*\*\* | | | | | Ln(Precipitation - pop) | | (0.014) | | | | | Ln(GDP per person) * | | 0.159\*\* | | | | | Ln(Temp range - pop) | | (0.051) | | | | | Ln(GDP per person) * | | 0.612\*\*\* | | | | | Ln(Temperature - ipop) | | (0.139) | | | |
| Model | POLS | POLS | POLS | POLS | POLS | POLS | |----------------------------|------|------|------|------|------|------| | Observations | 1969 | 1969 | 5040 | 5040 | 407 | 407 | | Number of countries | 133 | 133 | 175 | 175 | 69 | 69 | | R-squared | 0.741| 0.740| 0.831| 0.833| 0.805| 0.822| | Log-likelihood | | | | | | | | DF | 19 | 18 | 23 | 24 | 25 | 24 | | No of censored obs | | | | | | | | P-value for all climate variables = 0 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | | P-value for pop climate variables = 0 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | | P-value for ipop climate variables = 0 | 0.040 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 |
**Note:** Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
**Source:** Authors’ estimates. a. Rail length—temperature, precipitation, and temperature range, both on their own and interacted with GDP per person
b. Aircraft movements—all climate variables other than population-weighted temperature plus interactions with urbanization
c. Container traffic—both precipitation variables, inverse population-weighted temperature, and precipitation plus interactions with urbanization and GDP per person.
In these cases, there is no easy explanation for the results since it is clear that there are multiple influences on the indicators. For example, the number of aircraft movement will be affected by factors such as the amount and distribution of tourism (both internal and external), the dispersion and nature of natural-resource based industries, and the availability of alternative methods of transport.
**Health care.** Our analysis of adaptation costs relies upon two health care inputs—the numbers of hospital beds and physicians—as indicators used in assessing the baseline cost of health infrastructure (hospitals and clinics) and the impact of climate change. The projection equations are shown in Models (1) through (4) of Table 7. In addition, Models (5) and (6) report equations for one important indicator of health outcomes—the log of the infant mortality rate.
### Table 7. Projection Equations for Health
| Variables | Ln(No of hospital beds) | Ln(No of doctors) | Ln(Infant mortality rate) | |----------------------------|-------------------------|-------------------|---------------------------| | | (1) | (2) | (3) | (4) | (5) | (6) | | Ln(Population 0-14) | 0.283\*\* | 0.323\*\*\* | -0.520\*\*\* | -0.558\*\* | 1.423\*\*\* | 1.444\*\*\* | | | (0.099) | (0.060) | (0.135) | (0.187) | (0.116) | (0.129) | | Ln(Population 15-64) | 0.881\*\*\* | 0.736\*\*\* | 1.300\*\*\* | 1.196\*\*\* | -0.982\*\*\* | -0.964\*\*\* | | | (0.131) | (0.064) | (0.120) | (0.182) | (0.132) | (0.143) | | Ln(Population 65+) | -0.224\*\*\* | -0.128\*\*\* | 0.275\*\*\* | 0.391\*\*\* | -0.475\*\*\* | -0.508\*\*\* | | | (0.032) | (0.023) | (0.045) | (0.034) | (0.035) | (0.033) | | Ln(GDP per person) | 1.721\*\*\* | -2.680\*\*\* | 0.246\*\* | -4.951\*\*\* | 0.928\* | 0.947\* | | | (0.327) | (0.605) | (0.080) | (0.589) | (0.390) | (0.384) | | Ln(Country size) | -0.155\*\*\* | -0.0984\*\*\* | 0.364\*\*\* | 0.147\*\* | 0.105\*\*\* | 0.109\*\*\* | | | (0.021) | (0.021) | (0.106) | (0.046) | (0.031) | (0.031) | | Ln(% urban) | -0.094 | 1.077\*\*\* | 1.301\*\*\* | -0.165\*\*\* | 1.738\*\* | | | (0.072) | (0.211) | (0.162) | (0.031) | (0.584) | | Ln(GDP per person) squared | -0.100\*\*\* | -0.0853\*\*\* | -0.0661\*\* | -0.0661\*\* | | | (0.019) | (0.010) | (0.023) | (0.023) | | Ln(Country size) squared | 0.0173\*\*\* | 0.0124\*\*\* | 0.0111\*\*\* | 0.0116\*\*\* | | | (0.002) | (0.001) | (0.001) | (0.001) | | Ln(GDP per person) * | -0.0454\*\*\* | -0.0185\*\*\* | -0.0172\*\*\* | -0.0186\*\*\* | | Ln(Country size) | (0.011) | (0.004) | (0.004) | (0.004) | | Ln(GDP per person) * | -0.118\*\*\* | -0.130\*\*\* | | Ln(% urban) | (0.027) | (0.024) | | Ln(Country size) * | 0.0966\*\*\* | 0.0642\*\*\* | | Ln(% urban) | (0.015) | (0.010) |
(continued)
### TABLE 7. PROJECTION EQUATIONS FOR HEALTH (continued)
| Variables | Ln(No of hospital beds) | Ln(No of doctors) | Ln(Infant mortality rate) | |--------------------------------|-------------------------|-------------------|--------------------------| | | (1) | (2) | (3) | (4) | (5) | (6) | | Ln(% arid) | | | | | | | | | 0.0627\*\*\* | 0.0462\*\*\* | | | | | | | (0.011) | (0.007) | | | | | | Ln(% very steep land) | | | | | | | | | 0.0306\*\*\* | 0.0244\*\*\* | | | | | | | (0.005) | (0.006) | | | | | | Ln(Temperature - pop) | -1.275\*\*\* | -10.13\*\*\* | -1.512\*\*\* | -7.442\*\*\* | 0.954\*\*\* | 0.345 | | | (0.084) | (1.416) | (0.173) | (1.432) | (0.142) | (0.216) | | Ln(Precipitation - pop) | -0.275\*\*\* | -0.357\*\*\* | -0.244\*\*\* | | 0.054 | | | | (0.079) | (0.040) | (0.031) | | (0.047) | | | Ln(Temp range - pop) | 0.011 | -0.037 | 0.263\*\*\* | 0.203\*\*\* | | | | | (0.102) | (0.044) | (0.052) | (0.053) | | | | Ln(Precip range - pop) | 0.168\* | 0.0722\* | -0.102\* | | | | | | (0.080) | (0.035) | (0.049) | | | | | Ln(Temperature - ipop) | 0.102 | -0.276\* | -5.061\*\*\* | -0.262\*\*\* | -0.208\*\*\* | | | | (0.110) | (0.113) | (1.114) | (0.049) | (0.047) | | | Ln(Precipitation - ipop) | 0.164\* | 0.0756\*\*\* | -0.0824\* | 0.0911\*\* | 0.0622\*\* | | | | (0.079) | (0.021) | (0.039) | (0.034) | (0.020) | | | Ln(Precip range - ipop) | -0.039 | 0.104\*\* | -0.028 | | | | | | (0.058) | (0.037) | (0.044) | | | | | Ln(% urban) * | | | | | | -0.463\*\* | | Ln(Temperature - pop) | | | | | | (0.139) | | Ln(GDP per person) * | 1.022\*\*\* | 0.709\*\*\* | | | | | | | (0.159) | (0.162) | | | | | | Ln(Temperature - ipop) | | | | | | | | | | | | | | | | Model | POLS | POLS | POLS | POLS | POLS | POLS | | Observations | 1852 | 1852 | 2650 | 2650 | 2486 | 2486 | | Number of countries | 177 | 177 | 180 | 180 | 177 | 177 | | R-squared | 0.936 | 0.939 | 0.950 | 0.955 | 0.917 | 0.917 | | Log-likelihood | | | | | | | | DF | 22 | 17 | 25 | 23 | 24 | 22 | | No of censored obs | | | | | | | | P-value for all climate variables = 0 | 0.000 | 0.000 | 0.000 | | | | | P-value for pop climate variables = 0 | 0.000 | 0.000 | 0.000 | | | | | P-value for ipop climate variables = 0 | 0.000 | 0.000 | 0.000 | | | |
**Note:** Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
**Source:** Authors’ estimates. Again, the hypothesis that climate variables have no effect on either health inputs or health outcomes is consistently rejected at very high confidence levels.
a. Hospital beds—Population-weighted temperature on its own and interacted with GDP per person plus inverse population-weighted precipitation are the key variables in this case. The overall coefficient (elasticity) on mean temperature increases—from -3.07 for a low-income country with a GDP per person of $1,000, to -0.72 for a middle-income country with a GDP of $10,000 per person, and to +0.70 for a high-income country with a GDP of $40,000 per person. Thus, it is easy to be misled by simple assumptions about how climate “ought” to affect investment in healthcare facilities that are based on experience in a narrow range of countries. The coefficient on precipitation is positive but quite small. It is possible that this reflects an increased need for dispersed hospital facilities when communications are subject to disruption caused by high rainfall.
b. Doctors—The results for the number of doctors are similar to those for hospital beds, but the influence of temperature is divided between population and inverse population-weight variables. This seems reasonable since hospitals are invariably located in urban areas, whereas doctors may be more dispersed, though this is not the case in the poorest countries. Again, the interactions with GDP per person mean that the overall coefficients switch from negative to positive at a GDP per person of $12,600 for inverse population-weighted temperature, and at a GDP per person of $36,200 for population-weighted temperature. How this works out country-by-country depends upon the temperature distribution across heavily and thinly populated areas. In this case, the coefficient on precipitation is negative and is linked to the population-weighted variable.
c. Infant-mortality—This is influenced by temperature, including an interaction with urbanization plus temperature range and inverse population-weighted precipitation. The signs of the coefficients on temperature can be misinterpreted. Assuming that temperature increases (or decreases) uniformly throughout a country, the net coefficient on temperature is +0.88 for a country with an urbanization rate of 20 percent, but +0.24 for a country with an urbanization rate of 80 percent. Hence, an increase in mean temperature is likely to increase infant mortality, but by more in low-income countries with low levels of urbanization than in middle- and high-income countries with higher levels of urbanization. These results conform with a priori expectations. In addition, a higher temperature range and higher precipitation in rural areas tend to increase infant mortality, both of which seem reasonable.
Social infrastructure. The number of teachers is used as the indicator for investment in schools, while the number of post offices is used as one indicator for municipal infrastructure. The equations are shown in Table 8. As one would expect, one cannot reject the hypothesis that the inverse population-weighted climate variables have no effect on the number of post offices, which are concentrated in areas of greater population
| Variables | Ln(No of teachers) | Ln(No of post offices) | |--------------------|--------------------|------------------------| | | (1) | (2) | (3) | (4) | | Ln(Population 0-14)| 0.360\*\*\* | 0.397\*\*\* | 0.276\*\*\* | 0.366\*\*\* | | | (0.062) | (0.074) | (0.065) | (0.060) | | Ln(Population 15-64)| 0.670\*\*\* | 0.544\*\*\* | 0.363\*\*\* | 0.048 | | | (0.115) | (0.132) | (0.099) | (0.091) |
(continued)
### Table 8. Projection Equations for Social Infrastructure (continued)
| Variables | Ln(No of teachers) | Ln(No of post offices) | |----------------------------------|--------------------|------------------------| | | (1) | (2) | (3) | (4) | | Ln(Population 65+) | -0.059 | 0.029 | 0.231\*\*\* | 0.445\*\*\* | | | (0.042) | (0.048) | (0.032) | (0.030) | | Ln(Population) | | | | | | Ln(GDP per person) | 0.0878\*\*\* | 0.0851\*\*\* | 1.977\*\*\* | -1.124\*\* | | | (0.022) | (0.020) | (0.155) | (0.403) | | Ln(Country size) | -0.188\*\*\* | -0.111\*\*\* | -0.0338\*\*\* | -0.018 | | | (0.011) | (0.014) | (0.010) | (0.011) | | Ln(%) urban | -0.404\*\*\* | -3.032\*\*\* | -2.066\*\*\* | -2.178\*\*\* | | | (0.064) | (0.429) | (0.097) | (0.078) | | Ln(GDP per person) squared | | | | | | | | | | | | Ln(Country size) squared | 0.00308\*\*\* | 0.00191\* | 0.0139\*\*\* | 0.0133\*\*\* | | | (0.001) | (0.001) | (0.001) | (0.001) | | Ln(%) urban squared | -0.222\*\*\* | -0.185\*\*\* | -0.641\*\*\* | -0.701\*\*\* | | | (0.023) | (0.025) | (0.031) | (0.027) | | Ln(GDP per person) * | 0.0170\*\*\* | 0.0114\*\*\* | | | | Ln(Country size) | (0.001) | (0.002) | | | | Ln(Country size) * | | | 0.0861\*\*\* | 0.0729\*\*\* | | | (0.011) | (0.011) | (0.007) | (0.007) | | Ln(%) desert | 0.0318\*\*\* | | 0.013 | | | | (0.007) | (0.007) | | | | Ln(%) arid | -0.121\*\*\* | -0.0989\*\*\* | | | | | (0.006) | (0.005) | | | | Ln(%) semi-arid | 0.0423\*\*\* | 0.0489\*\*\* | | | | | (0.006) | (0.007) | | | | Ln(%) steep land | -0.0549\*\*\* | -0.0488\*\*\* | | | | | (0.012) | (0.013) | | | | Ln(%) very steep land | 0.0167\*\*\* | 0.00934\*\*\* | 0.0827\*\*\* | 0.0667\*\*\* | | | (0.003) | (0.003) | (0.006) | (0.010) | | Ln(%) no soil constraint | 0.0532\*\*\* | 0.0314\*\*\* | | | | | (0.003) | (0.007) | | | | Ln(Temperature - pop) | -0.923\*\*\* | -0.694\*\*\* | -2.167\*\*\* | -10.35\*\*\* | | | (0.071) | (0.084) | (0.119) | (0.859) | | Ln(Precipitation - pop) | -0.130\*\*\* | -0.289\*\*\* | -0.173\*\* | 0.650\*\*\* | | | (0.027) | (0.017) | (0.059) | (0.084) | | Ln(Temp range - pop) | -0.277\*\*\* | -0.217\*\*\* | -0.518\*\*\* | -0.537\*\*\* | | | (0.017) | (0.026) | (0.066) | (0.047) |
### TABLE 8. PROJECTION EQUATIONS FOR SOCIAL INFRASTRUCTURE (continued)
| Variables | Ln(No of teachers) | Ln(No of post offices) | |----------------------------|---------------------|------------------------| | Ln(Precip range - pop) | -0.125\*\*\* | 0.0871\*\*\* | | | (0.014) | (0.014) | | Ln(Temperature - ipop) | 0.222\*\*\* | 0.751\*\*\* | | | (0.046) | (0.056) | | Ln(Precipitation - ipop) | 0.041 | -0.0824\* | | | (0.028) | (0.038) | | Ln(Precip range - ipop) | -0.022 | 0.068 | | | (0.031) | (0.046) | | Ln(% urban) * | -0.444\*\*\* | | | Ln(Precipitation - pop) | (0.043) | | | Ln(% urban) * | 0.485\*\*\* | | | Ln(Precip range - pop) | (0.036) | | | Ln(% urban) * | 0.825\*\*\* | | | Ln(Temperature - ipop) | (0.045) | | | Ln(GDP per person) * | 0.931\*\*\* | | | Ln(Temperature - pop) | (0.112) | | | Ln(GDP per person) * | -0.100\*\*\* | | | Ln(Precipitation - pop) | (0.007) | |
| Model | POLS | POLS | POLS | POLS | |----------------------------|------|------|------|------| | Observations | 950 | 950 | 3251 | 3251 | | Number of countries | 167 | 167 | 173 | 173 | | R-squared | 0.979| 0.982| 0.909| 0.911| | Log-likelihood | | | | | | DF | 25 | 26 | 29 | 27 | | No of censored obs | | | | | | P-value for all climate variables = 0 | 0.000 | 0.000 | 0.000 | 0.000 | | P-value for pop climate variables = 0 | 0.000 | 0.000 | 0.000 | 0.000 | | P-value for ipop climate variables = 0 | 0.000 | 0.000 | 0.000 | 0.065 |
**Note:** Standard errors are shown in brackets underneath the relevant coefficients with \*\*\* p < 0.001, \*\* p < 0.01, * p < 0.05. In addition to the variables shown, all of the equations include the following explanatory variables: ln(birthrate 1950), ln(infant mortality 1950) and dummy variables for World Bank regions.
**Source:** Authors’ estimates. density. Otherwise the results show a mixture of climate interactions with urbanization for the number of teachers and with GDP per person for post offices. Focusing again on mean temperature in the equation for the number of teachers, the overall coefficients for a uniform increase in temperature are -0.55 for an urbanization rate of 20 percent and -0.02 for an urbanization rate of 80 percent, so the effect of climate on teachers is much larger in low-income and rural countries. This is consistent with the well-established difficulty of equipping and staffing rural schools. Of course, low-income countries today are likely to be much more urban in 2050, so that the cumulative impact of an increase in temperature on the number of teachers will be small even in these cases.
**Household size.** In several cases, the amount of infrastructure is linked to the projected number of households, so it is necessary to rely upon equations that project the average household size in urban and rural areas. These are shown in Table 9. It seems that climate does affect average household sizes. The primary mechanism is that higher temperatures are associated with larger average sizes for both urban and rural households. There is also a significant but quantitatively small impact of precipitation on rural household size.
### 6. Calculating the Cost of Adaptation
The calculation of the cost of adaptation involves a number of steps. The description that follows focuses on investment or capital costs. A similar process is required to estimate changes in the costs of operation and maintenance, both for the baseline level of infrastructure and for changes in infrastructure resulting from changes in climate conditions.(^{19})
**Step 1—Construct baseline projections of infrastructure investment.** The projection equations discussed in the previous section are used to construct baseline projections of the efficient stock of infrastructure assets for periods from 2010 to 2050 under the assumption of no climate change. The projections of physical infrastructure demand are based upon standard assumptions about income and population growth, population structure, and urbanization. The value of new investment required for infrastructure type (i) for country (j) in period (t) is obtained by multiplying (\\Delta Q\_{ijt} = Q\_{ijt+1} - Q\_{ijt}) by (C\_{ij}), the unit cost of infrastructure type (i) in country (j) at 2005 prices. The unit costs have been compiled from a large variety of World Bank and other sources. A standardized construction cost index has been used to allow for broad cross-country differences in construction costs, but allowances are also made for location (urban or rural) and other special factors. In addition to new investment, we have estimated the amount of investment that would be required to replace infrastructure assets that reach the end of their economic life. There is no realistic way of modeling the age structure of assets in situ at the beginning of the analysis. Implementing a full vintage model of infrastructure is not sensible given the uncertainty about other parameters in the model. Hence, we have adopted a continuous depreciation assumption—that is, in period (t) the required replacement investment is ((5/L_i)Q\_{ijt}) where (L_i) is the typical economic life of infrastructure of type (i).
**Step 2—Add alternative climate scenarios.** The data used for the baseline projections is supplemented with projections of the climate variables taken from the climate scenarios that are being used for the whole EACC study. These are constructed as deltas at different dates with respect to the no-climate-change baseline derived from calculations of monthly average, maximum, and minimum temperatures and precipitation. To avoid instability in the projections arising from path-dependency and other effects, the climate variables for 2010 are 20-year averages centered on 2010. These are computed for 2010, 2030, … and then interpolated to give the projections for the 5-year periods.
**Step 3—Project infrastructure quantities under the alternative climate scenarios.** This is similar to the projection of baseline infrastructure quantities in Step 1, but using the climate variables for the alternative climate scenarios.
### Table 9. Projection Equations for Average Household Size
| Variables | Ln(Urban household size) | Ln(Rural household size) | |----------------------------|--------------------------|--------------------------| | | (1) | (2) | (3) | (4) | | Ln(Population 0-14) | 0.295\*\*\* | 0.353\*\*\* | 0.285\*\*\* | 0.304\*\*\* | | | (0.051) | (0.044) | (0.047) | (0.031) | | Ln(Population 15-64) | -0.247 | -0.357\*\* | -0.208 | -0.258\* | | | (0.132) | (0.120) | (0.113) | (0.109) | | Ln(Population 65+) | -0.119 | -0.073 | -0.120 | -0.089 | | | (0.099) | (0.094) | (0.084) | (0.096) | | Ln(GDP per person) | -0.038 | -0.028 | 0.521\*\*\* | 0.373\*\* | | | (0.028) | (0.027) | (0.150) | (0.112) | | Ln(Country size) | 0.0254\* | 0.0303\* | 0.0897\*\*\* | 0.0798\*\* | | | (0.011) | (0.012) | (0.022) | (0.025) | | Ln(% urban) | 0.109\*\* | 0.119\*\* | 0.017 | 0.044 | | | (0.034) | (0.036) | (0.026) | (0.023) | | Ln(GDP per person) squared | -0.0292\*\* | -0.0200\* | | | | | (0.009) | (0.008) | | | | Ln(GDP per person) * | -0.0112\*\*\* | -0.0107\*\*\* | | | | Ln(Country size) | | | (0.002) | (0.003) | | Ln(% desert) | -0.0196\*\*\* | -0.0212\*\*\* | | | | | (0.003) | (0.003) | | | | Ln(% arid) | 0.0152\*\*\* | 0.0195\*\*\* | | | | | (0.004) | (0.004) | | | | Ln(% semi-arid) | 0.0217\*\*\* | 0.0248\*\*\* | | | | | (0.003) | (0.004) | | | | Ln(Temperature - pop) | 0.859\*\*\* | 0.777\*\*\* | 0.844\*\*\* | 0.718\*\*\* | | | (0.140) | (0.138) | (0.178) | (0.111) | | Ln(Precipitation - pop) | -0.118\* | -0.118\* | -0.119\*\*\* | | | | (0.047) | (0.053) | (0.025) | | | Ln(Temp range - pop) | 0.054 | 0.156 | | | | | (0.079) | (0.080) | | | | Ln(Precip range - pop) | 0.109 | 0.039 | | | | | (0.066) | (0.064) | | | | Ln(Temperature - ipop) | -0.166\*\* | -0.177\*\*\* | 0.057 | | | | (0.063) | (0.047) | (0.043) | | | Ln(Precipitation - ipop) | 0.0785\*\*\* | 0.0795\*\*\* | 0.0296\*\* | | | | (0.016) | (0.022) | (0.010) | | | Ln(Precip range - ipop) | -0.0827\*\*\* | -0.0496\*\* | | | | | (0.019) | (0.018) | | |
Model: POLS POLS POLS POLS (continued) Step 4—Apply the dose-response relationship to estimate changes in unit costs for alternative climate scenarios. We calculate the changes in unit costs for infrastructure type i in country j for period t, $\\Delta C\_{ijt}$, using the climate change deltas for the alternative climate scenarios and the dose-response relationships discussed in Appendix 1. There is a complication that has to be considered. This concerns the question of whether the design standards used for infrastructure are—or should be—forward looking. Normal engineering practice does not take account of changes in underlying climate conditions. Thus, in designing for a 100-year storm, the engineer looks at the characteristics of the 100-year storm on the basis of evidence of storms up to the current date. Clearly, this does not allow for changes in the severity of the 100-year storm that might be expected to occur over the life of the asset. There are two possible approaches that can be adopted.
a. **Variant 1** assumes that the dose-response adjustment to unit costs is calculated using current climate conditions—that is:
$$\\Delta C\_{ijt} = d[V\_{jt}]C\_{ij}$$ \\hspace{1cm} (9)
where $d[\\ ]$ is the dose-response relationship.
b. **Variant 2** assumes that the asset is designed to withstand the worst conditions that it might be exposed to over its life—that is:
$$\\Delta C\_{ijt} = d[\\max(V\_{jt},\\ldots,V\_{jt+t_c})]C\_{ij}$$ \\hspace{1cm} (10)
on the assumption that the severity of storms increases monotonically with the relevant climate variable(s) $V$.
The difficulty with Variant 2 is that it implies that the asset is significantly overdesigned for most of its working life because it will only be exposed to the most severe weather conditions at the very end of its life. In economic terms, Variant 2 is not the optimal solution and it would be sensible to design for the 100-year storm consistent with the expected climate at some earlier date. There is no general solution, since the optimal period to look ahead depends upon both the expected increase in the severity of storms over the future and the shape of the dose-response relationship. For consistency with the analysis of coastal protection, we have modified Variant 2 to look ahead for a fixed period of 50 years. Step 5—Estimate the change in total investment costs for the baseline projections. This yields the Delta-P estimates of the cost of adaptation for each climate scenario with two variants corresponding to the alternatives at Step 4 above.
Step 6—Estimate the change in investment costs due to the difference between the baseline infrastructure quantities and the alternative climate scenario quantities. This yields the Delta-Q estimates of the cost of adaptation for each climate scenario.
Step 7—Special adjustments. We have incorporated some special factors in the calculation of the costs of adapting to climate change that could not be represented by the general dose-response relationships. These are:
a. For electricity generation, we have taken account of the decrease in the operating efficiency of existing thermal power plants as the ambient temperature increases. The effect is documented in the literature for ambient temperatures above 15°C, though it is possible to design new power plants to include absorption chillers to bring the ambient temperature of the air entering turbines down to 15°C for a relatively minor penalty on operating costs.
b. Another special factor for electricity generation concerns the efficiency and feasibility of water cooling as temperatures increase, because of limits on the temperature rise that can be permitted in the receiving waters. Dry cooling can be adopted either in parallel with wet cooling or as an alternative in particularly hot or dry locations. The model assumes that an increasing proportion of power plants will rely upon dry cooling as average temperatures rise.
c. The operating costs of water treatment plants may increase as a result of climate change. Primary attention has focused on the amount of chemicals used for flocculation if the levels of turbidity and suspended solids in raw water rise. This is likely to be associated with changes in levels of peak flow in rivers from which water is abstracted, so the model allows for cost of chemicals to increase pro rata with maximum monthly precipitation.
d. Changes in temperature affect the rate at which oxygen levels recover in rivers to which the effluent is discharged from waste water treatment plants. Thus, a higher level of BOD removal is required to maintain the quality of receiving waters. This implies higher consumption of electricity or use of chemicals at treatment plants. The increase in O&M costs is linked to the increase in average temperatures and is incorporated in our estimates of the cost of adaptation.
These steps are followed in deriving the estimates of $\\Delta C\_{ijt}$ used in calculating the Delta-P costs of adaptation in the first part of equation (2):
$$\\Delta I\_{jt}[1] = \\sum_i \\Delta C\_{ijt} [Q\_{ijt+1} - Q\_{ijt} + R\_{ijt}]$$
with the $Q\_{ijt}$, etc. given by the baseline projections of infrastructure investment. The Delta-Q costs of adaptation are defined by:
$$\\Delta I\_{jt}[2] = \\sum_i (C\_{ijt} + \\Delta C\_{ijt}) [\\Delta Q\_{ijt+1} - \\Delta Q\_{ijt} + \\Delta R\_{ijt}]$$
in which $\\Delta Q\_{ijt}$ are obtained from the changes in the baseline investments associated with the alternative climate scenarios.
Equation (12) yields engineering estimates of the Delta-Q costs, which reflect an assumption that countries will respond to climate change by building more or less infrastructure. However, it should be noted that more cost-effective options may be available. In another paper, we examine one of these options in more detail for the water sector (Hughes, Chinowsky, and Strzepek 2010). We show that the welfare cost of using water abstraction fees to limit increases in demand for water may be lower than the cost of building additional capacity for water and wastewater treatment. Our results demonstrate that this economic approach can reduce the cost of adaptation in the water sector by a substantial amount relative to the engineering approach of building more infrastructure assets in response to an increase in demand for water.
There is an obvious instrument—water abstraction fees—available in the water sector. Similar policies could be followed for some other types of infrastructure—for example, energy and transport. As a consequence, the estimates of the Delta-Q costs of adaptation will tend to overstate the economic costs of adaptation in countries that face an increase in demand for infrastructure as a consequence of climate change. Since the effect is one-sided—that is, an economic approach can reduce costs when the demand for infrastructure increases, but would not be required when the demand for infrastructure decreases—it is safe to conclude that the engineering estimates of the Delta-Q costs of adaptation presented in the next section represent an upper bound on the costs of following a cost-effective strategy of adaptation.
7. ESTIMATES OF THE COSTS OF ADAPTATION
Our estimates of the costs of adaptation for electricity and water services are shown in Tables 10 to 14. To facilitate comparisons all figures in the tables are presented as average costs per year at 2005 prices over the relevant period—that is, for 2010–50 as a whole or for each decade—with no discounting. Figures are rounded to the nearest $1 billion per year to avoid any impression of spurious accuracy. As a consequence, sums of the separate numbers may differ from the relevant totals due to rounding. The Delta-P increases in investment, O&M, and total costs for the two climate scenarios are shown by infrastructure category and country class in Table 10. The baseline costs without any climate change are shown as a point of reference. In all cases, the costs of adaptation are substantially
| NCAR scenario | Cost type | Low income | Lower middle income | Upper middle income | High income | Total | |---------------|-----------|------------|---------------------|---------------------|-------------|-------| | 1. Power & telephones | Capital cost | 0 | 0 | 0 | 1 | 2 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 1 | 0 | 1 | 2 | | | Baseline cost | 132 | 173 | 92 | 304 | 701 | | 2. Water & sewers | Capital cost | 0 | 0 | 0 | 0 | 0 | | | O&M cost | 0 | 0 | 0 | 0 | 1 | | | Total cost | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 119 | 154 | 95 | 193 | 562 | | 3. Roads | Capital cost | 3 | 2 | 1 | 6 | 11 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 3 | 2 | 1 | 7 | 12 | | | Baseline cost | 67 | 56 | 60 | 215 | 398 | | 4. Other transport | Capital cost | 0 | 0 | 1 | 0 | 1 | | | O&M cost | 0 | 0 | 3 | 1 | 5 | | | Total cost | 0 | 0 | 4 | 1 | 6 | | | Baseline cost | 8 | 18 | 86 | 31 | 142 | | 5. Health & schools | Capital cost | 0 | 1 | 0 | 1 | 2 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 1 | 0 | 1 | 2 | | | Baseline cost | 36 | 121 | 92 | 302 | 551 |
(continued)
### TABLE 10. DELTA-P COSTS OF ADAPTATION BY CATEGORY AND COUNTRY CLASS FOR 2010–50 (US$ billion per year at 2005 prices, no discounting) (continued)
| NCAR scenario | Cost type | Low income | Lower middle income | Upper middle income | High income | Total | |---------------|-----------|------------|---------------------|---------------------|-------------|-------| | 6. Urban infrastructure | Capital cost | 8 | 6 | 2 | 5 | 20 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 8 | 6 | 2 | 5 | 20 | | | Baseline cost | 287 | 219 | 209 | 841 | 1,555 | | Total | Capital cost | 11 | 9 | 4 | 14 | 37 | | | O&M cost | 0 | 0 | 4 | 2 | 6 | | | Total cost | 11 | 9 | 8 | 15 | 43 | | | Baseline cost | 649 | 740 | 634 | 1,887 | 3,910 |
| CSIRO scenario | Cost type | Low income | Lower middle income | Upper middle income | High income | Total | |----------------|-----------|------------|---------------------|---------------------|-------------|-------| | 1. Power & telephones | Capital cost | 0 | 0 | 0 | 1 | 1 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 1 | 2 | | | Baseline cost | 132 | 173 | 92 | 304 | 701 | | 2. Water & sewers | Capital cost | 0 | 0 | 0 | 0 | 0 | | | O&M cost | 0 | 0 | 0 | 0 | 1 | | | Total cost | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 119 | 154 | 95 | 193 | 562 | | 3. Roads | Capital cost | 1 | 1 | 0 | 5 | 6 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 1 | 1 | 0 | 5 | 7 | | | Baseline cost | 67 | 56 | 60 | 215 | 398 | | 4. Other transport | Capital cost | 0 | 0 | 0 | 0 | 1 | | | O&M cost | 0 | 0 | 2 | 1 | 3 | | | Total cost | 0 | 0 | 2 | 1 | 4 | | | Baseline cost | 8 | 18 | 86 | 31 | 142 | | 5. Health & schools | Capital cost | 0 | 0 | 0 | 1 | 2 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 1 | 2 | | | Baseline cost | 36 | 121 | 92 | 302 | 551 | | 6. Urban infrastructure | Capital cost | 4 | 2 | 1 | 4 | 11 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | | | Total cost | 4 | 2 | 1 | 4 | 11 | | | Baseline cost | 287 | 219 | 209 | 841 | 1,555 | | Total | Capital cost | 5 | 4 | 2 | 10 | 21 | | | O&M cost | 0 | 0 | 2 | 1 | 4 | | | Total cost | 5 | 4 | 4 | 11 | 25 | | | Baseline cost | 649 | 740 | 634 | 1,887 | 3,910 |
Source: Authors’ estimates higher for the NCAR scenario than for the CSIRO scenario, so we will focus on the NCAR figures. The total Delta-P cost of adaptation over 40 years is about 1 percent of the baseline cost for all countries. The ratio of adaptation costs to baseline costs is highest for low-income countries at about 1.7 percent and is lowest for high-income countries.
Table 11 shows the same information for developing countries disaggregated by World Bank region. Outside the low-income countries, the costs of adaptation are highest for East Asia (EAP) and for South Asia (SAS), reflecting their populations and aggregate income. The costs for Europe and Central Asia (ECA) are higher than might have been anticipated, but this reflects the initial level of infrastructure leading to relatively high O&M costs. Sub-Saharan Africa (SSA) has the highest ratio of adaptation costs to baseline costs at 2.3 percent. Broken down by infrastructure category and region, the heaviest burden of adaptation is for other
| NCAR scenario | Cost type | EAP | ECA | LCA | MNA | SAS | SSA | Total | |---------------|-----------|-----|-----|-----|-----|-----|-----|-------| | 1. Power & telephones | Capital cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 137 | 75 | 41 | 24 | 79 | 41 | 397 | | 2. Water & sewers | Capital cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 115 | 71 | 54 | 25 | 81 | 22 | 368 | | 3. Roads | Capital cost | 1 | 0 | 1 | 0 | 2 | 1 | 5 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 1 | 0 | 1 | 0 | 2 | 1 | 5 | | | Baseline cost | 36 | 37 | 31 | 13 | 44 | 23 | 183 | | 4. Other transport | Capital cost | 0 | 1 | 0 | 0 | 0 | 0 | 1 | | | O&M cost | 0 | 3 | 0 | 0 | 0 | 0 | 4 | | | Total cost | 0 | 4 | 0 | 0 | 0 | 0 | 5 | | | Baseline cost | 16 | 80 | 6 | 2 | 4 | 4 | 111 | | 5. Health & schools | Capital cost | 1 | 0 | 0 | 0 | 0 | 0 | 1 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 1 | 0 | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 93 | 49 | 52 | 20 | 25 | 9 | 249 | | 6. Urban infrastructure | Capital cost | 5 | 1 | 2 | 0 | 5 | 2 | 15 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
(continued)
### TABLE 11. DELTA-P COSTS OF ADAPTATION BY INFRASTRUCTURE CATEGORY AND WORLD BANK REGION FOR 2010–50 (US$ billion per year at 2005 prices, no discounting) (continued)
| NCAR scenario | Cost type | EAP | ECA | LCA | MNA | SAS | SSA | Total | |---------------|-----------|-----|-----|-----|-----|-----|-----|-------| | | Total cost| 5 | 1 | 2 | 0 | 5 | 2 | 15 | | | Baseline cost | 163 | 159 | 78 | 32 | 252 | 31 | 714 | | | Capital cost | 8 | 2 | 3 | 1 | 8 | 3 | 24 | | | O&M cost | 0 | 3 | 0 | 0 | 0 | 0 | 4 | | | Total cost | 8 | 5 | 3 | 1 | 8 | 3 | 28 | | | Baseline cost | 560 | 470 | 262 | 116 | 485 | 130 | 2,023 |
| CSIRO scenario | Cost type | EAP | ECA | LCA | MNA | SAS | SSA | Total | |----------------|-----------|-----|-----|-----|-----|-----|-----|-------| | 1. Power & telephones | Capital cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 137 | 75 | 41 | 24 | 79 | 41 | 397 | | 2. Water & sewers | Capital cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Baseline cost | 115 | 71 | 54 | 25 | 81 | 22 | 368 | | 3. Roads | Capital cost | 0 | 0 | 0 | 0 | 1 | 0 | 2 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 0 | 1 | 0 | 2 | | | Baseline cost | 36 | 37 | 31 | 13 | 44 | 23 | 183 | | 4. Other transport | Capital cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | O&M cost | 0 | 2 | 0 | 0 | 0 | 0 | 2 | | | Total cost | 0 | 2 | 0 | 0 | 0 | 0 | 3 | | | Baseline cost | 16 | 80 | 6 | 2 | 4 | 4 | 111 | | 5. Health & schools | Capital cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 93 | 49 | 52 | 20 | 25 | 9 | 249 | | 6. Urban infrastructure | Capital cost | 2 | 1 | 1 | 0 | 3 | 1 | 7 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Total cost | 2 | 1 | 1 | 0 | 3 | 1 | 7 |
(continued) transport in the ECA region, largely because of the high level of O&M costs. This is followed by roads in South Asia, but in both cases the cost of adaptation is little more than 5 percent of baseline costs.
Table 12 shows the breakdown of the Delta-P costs of adaptation for all infrastructure by decade. The relative cost of adaptation increases gradually from about 1 percent of baseline costs for 2010–19 to about 1.6 percent for 2040–49. One component of this increase is the rise in O&M costs in the ECA region, which has already been highlighted, but even for all regions other than ECA there is an increase from about 1.2 percent of baseline costs in the first decade to 1.6 percent in the final decade.
Tables 13 and 14 give details of the costs of adaptation by infrastructure category and country class or region when the definition of the cost of adaptation is extended to include both the Delta-P and the Delta-Q components in the analysis. Recall that the Delta-Q costs are driven by the increase or decrease in the demand for infrastructure associated with the projected changes in climate. Table 13 shows that the Delta-Q changes are negative for the world as a whole in both scenarios. This means that total expenditure on infrastructure will fall as a consequence of climate change, though more investment may be required in some countries and some sectors. However, the fall in total expenditure is most important for high-income countries, so that the overall scale of the Delta-Q adjustments for developing countries is similar to that of the Delta-P.
### TABLE 12. DELTA-P COSTS OF ADAPTATION BY DECADE AND WORLD BANK REGION FOR ALL INFRASTRUCTURE (US$ billion per year at 2005 prices, no discounting) (continued)
| NCAR scenario | Cost type | EAP | ECA | LCA | MNA | SAS | SSA | Total | |---------------|-----------|-----|-----|-----|-----|-----|-----|-------| | 2030-39 | Capital cost | 9 | 2 | 3 | 1 | 9 | 3 | 27 | | | O&M cost | 0 | 5 | 0 | 0 | 0 | 0 | 6 | | | Total cost | 9 | 7 | 3 | 1 | 9 | 3 | 33 | | | Baseline cost | 608 | 497 | 283 | 127 | 550 | 146 | 2,213 | | 2040-49 | Capital cost | 11 | 2 | 4 | 1 | 11 | 5 | 34 | | | O&M cost | 0 | 6 | 0 | 0 | 0 | 0 | 7 | | | Total cost | 11 | 8 | 4 | 1 | 12 | 5 | 41 | | | Baseline cost | 710 | 538 | 330 | 156 | 719 | 187 | 2,641 | | CSIRO scenario | Capital cost | 3 | 1 | 1 | 0 | 1 | 0 | 6 | | | O&M cost | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Total cost | 3 | 1 | 1 | 0 | 1 | 1 | 7 | | | Baseline cost | 417 | 395 | 197 | 77 | 273 | 79 | 1,438 | | 2020-29 | Capital cost | 3 | 1 | 1 | 0 | 2 | 1 | 7 | | | O&M cost | 0 | 1 | 0 | 0 | 0 | 0 | 2 | | | Total cost | 3 | 2 | 1 | 1 | 2 | 1 | 9 | | | Baseline cost | 505 | 452 | 238 | 101 | 396 | 109 | 1,801 | | 2030-39 | Capital cost | 3 | 1 | 1 | 0 | 4 | 1 | 12 | | | O&M cost | 0 | 3 | 0 | 0 | 0 | 0 | 4 | | | Total cost | 4 | 4 | 1 | 1 | 4 | 1 | 15 | | | Baseline cost | 608 | 497 | 283 | 127 | 550 | 146 | 2,213 | | 2040-49 | Capital cost | 4 | 2 | 1 | 1 | 8 | 2 | 19 | | | O&M cost | 0 | 3 | 0 | 0 | 0 | 0 | 4 | | | Total cost | 4 | 6 | 2 | 1 | 8 | 2 | 23 | | | Baseline cost | 710 | 538 | 330 | 156 | 719 | 187 | 2,641 |
Source: Authors’ estimates.
Costs. This is illustrated in the breakdown of adaptation costs by World Bank region in Table 14, which shows that the sum of Delta-P and Delta-Q costs of adaptation is close to zero for all developing countries. The net costs of adaptation per year over the full period vary from a negative cost (that is, a saving) of $7 billion per year for East Asia to a positive cost of $2 billion per year for the Middle East and North Africa (MNA).
The striking feature of the results—taking account of both Delta-P and Delta-Q costs of adaptation—is how small the overall costs of adaptation are relative to the baseline costs. The impact of climate change is far from evenly distributed, but even in the worst-affected region—MNA—the net cost is little more than 2 percent of baseline expenditures. Thus, in practice the cost of adaptation for infrastructure is well within all of the margins of error inherent in this type of exercise.
### TABLE 13. TOTAL COSTS OF ADAPTATION BY INFRASTRUCTURE CATEGORY AND COUNTRY CLASS FOR 2010–50 (US$ billion per year at 2005 prices, no discounting)
| NCAR scenario | Cost type | Low income | Lower middle income | Upper middle income | High income | Total | |---------------|-----------|------------|---------------------|---------------------|-------------|-------| | 1. Power & telephones | Delta-P | 0 | 1 | 0 | 1 | 2 | | | Delta-Q | -4 | -2 | -2 | -20 | -29 | | | Delta-P+Delta-Q | -4 | -2 | -2 | -19 | -27 | | | Baseline cost | 132 | 173 | 92 | 304 | 701 | | 2. Water & sewers | Delta-P | 0 | 0 | 0 | 0 | 1 | | | Delta-Q | -5 | 1 | 1 | -1 | -4 | | | Delta-P+Delta-Q | -5 | 1 | 1 | -1 | -3 | | | Baseline cost | 119 | 154 | 95 | 193 | 562 | | 3. Roads | Delta-P | 3 | 2 | 1 | 7 | 12 | | | Delta-Q | 0 | -2 | -3 | -23 | -27 | | | Delta-P+Delta-Q | 3 | 0 | -2 | -17 | -16 | | | Baseline cost | 67 | 56 | 60 | 215 | 398 | | 4. Other transport | Delta-P | 0 | 0 | 4 | 1 | 6 | | | Delta-Q | 0 | 0 | -4 | -1 | -6 | | | Delta-P+Delta-Q | 0 | 0 | 0 | 0 | 0 | | | Baseline cost | 8 | 18 | 86 | 31 | 142 | | 5. Health & schools | Delta-P | 0 | 1 | 0 | 1 | 2 | | | Delta-Q | 0 | -1 | 1 | 3 | 2 | | | Delta-P+Delta-Q | 0 | 0 | 1 | 4 | 4 | | | Baseline cost | 36 | 121 | 92 | 302 | 551 | | 6. Urban infrastructure | Delta-P | 8 | 6 | 2 | 5 | 20 | | | Delta-Q | -3 | -5 | -3 | -10 | -21 | | | Delta-P+Delta-Q | 5 | 0 | -1 | -5 | -1 | | | Baseline cost | 287 | 219 | 209 | 841 | 1,555 | | Total | Delta-P | 11 | 9 | 8 | 15 | 43 | | | Delta-Q | -13 | -10 | -10 | -53 | -86 | | | Delta-P+Delta-Q | -1 | -1 | -2 | -38 | -43 | | | Baseline cost | 649 | 740 | 634 | 1,887 | 3,910 |
**CSIRO scenario**
| 1. Power & telephones | Delta-P | 0 | 0 | 0 | 1 | 2 | | | Delta-Q | -4 | 1 | -1 | -4 | -8 | | | Delta-P+Delta-Q | -4 | 2 | 0 | -4 | -6 | | | Baseline cost | 132 | 173 | 92 | 304 | 701 | | 2. Water & sewers | Delta-P | 0 | 0 | 0 | 0 | 1 | | | Delta-Q | -2 | 1 | 1 | -8 | -8 | | | Delta-P+Delta-Q | -2 | 1 | 1 | -7 | -7 | | | Baseline cost | 119 | 154 | 95 | 193 | 562 | | 3. Roads | Delta-P | 1 | 1 | 0 | 5 | 7 |
(continued)
### TABLE 13. TOTAL COSTS OF ADAPTATION BY INFRASTRUCTURE CATEGORY AND COUNTRY CLASS FOR 2010–50 (US$ billion per year at 2005 prices, no discounting) (continued)
| CSIRO scenario | Cost type | Low income | Lower middle income | Upper middle income | High income | Total | |----------------|-----------|------------|---------------------|---------------------|-------------|-------| | Delta-Q | -2 | -2 | -4 | -23 | -30 | | | Delta-P+Delta-Q| -1 | -1 | -4 | -18 | -24 | | | Baseline cost | 67 | 56 | 60 | 215 | 398 | | | 4. Other transport | Delta-P | 0 | 0 | 2 | 1 | 4 | | | Delta-Q | 0 | 0 | -2 | -1 | -3 | | | Delta-P+Delta-Q | 0 | 0 | 0 | 1 | 0 | | | Baseline cost | 8 | 18 | 86 | 31 | 142 | | 5. Health & schools | Delta-P | 0 | 0 | 0 | 1 | 2 | | | Delta-Q | -1 | -2 | 0 | 1 | -2 | | | Delta-P+Delta-Q | -1 | -1 | 0 | 1 | 0 | | | Baseline cost | 36 | 121 | 92 | 302 | 551 | | 6. Urban infrastructure | Delta-P | 4 | 2 | 1 | 4 | 11 | | | Delta-Q | -5 | -5 | -3 | -10 | -24 | | | Delta-P+Delta-Q | -1 | -3 | -3 | -7 | -13 | | | Baseline cost | 287 | 219 | 209 | 841 | 1,555 | | Total | Delta-P | 5 | 4 | 4 | 11 | 25 | | | Delta-Q | -14 | -7 | -9 | -45 | -75 | | | Delta-P+Delta-Q | -8 | -3 | -5 | -34 | -50 | | | Baseline cost | 649 | 740 | 634 | 1,887 | 3,910 |
Source: Authors’ estimates.
### TABLE 14. TOTAL COSTS OF ADAPTATION BY INFRASTRUCTURE CATEGORY AND REGION FOR 2010–50 (US$ billion per year at 2005 prices, no discounting)
| NCAR scenario | Cost type | EAP | ECA | LCA | MNA | SAS | SSA | Total | |---------------|-----------|-----|-----|-----|-----|-----|-----|-------| | 1. Power & telephones | Delta-P | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Delta-Q | -5 | -1 | 1 | 2 | -3 | -1 | -9 | | | Delta-P+Delta-Q | -5 | -1 | 1 | 2 | -3 | -1 | -7 | | | Baseline cost | 137 | 75 | 41 | 24 | 79 | 41 | 397 | | 2. Water & sewers | Delta-P | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Delta-Q | -3 | 4 | 0 | 1 | -4 | -1 | -3 | | | Delta-P+Delta-Q | -3 | 4 | 0 | 1 | -4 | -1 | -3 | | | Baseline cost | 115 | 71 | 54 | 25 | 81 | 22 | 368 | | 3. Roads | Delta-P | 1 | 0 | 1 | 0 | 2 | 1 | 5 | | | Delta-Q | -1 | -1 | -1 | 0 | 0 | 0 | -4 | | | Delta-P+Delta-Q | 0 | -1 | 0 | 0 | 2 | 1 | 1 | | | Baseline cost | 36 | 37 | 31 | 13 | 44 | 23 | 183 |
(continued)
### TABLE 14. TOTAL COSTS OF ADAPTATION BY INFRASTRUCTURE CATEGORY AND REGION FOR 2010–50 (US$ billion per year at 2005 prices, no discounting) (continued)
| NCAR scenario | Cost type | EAP | ECA | LCA | MNA | SAS | SSA | Total | |---------------|-----------|-----|-----|-----|-----|-----|-----|-------| | 4. Other transport | Delta-P | 0 | 4 | 0 | 0 | 0 | 0 | 5 | | | Delta-Q | 0 | -4 | 0 | 0 | 0 | 0 | -5 | | | Delta-P+Delta-Q | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Baseline cost | 16 | 80 | 6 | 2 | 4 | 4 | 111 | | 5. Health & schools | Delta-P | 1 | 0 | 0 | 0 | 0 | 0 | 1 | | | Delta-Q | -1 | 1 | 0 | 0 | 0 | 0 | -1 | | | Delta-P+Delta-Q | 0 | 1 | 0 | 0 | 0 | 0 | 1 | | | Baseline cost | 93 | 49 | 52 | 20 | 25 | 9 | 249 | | 6. Urban infrastructure | Delta-P | 5 | 1 | 2 | 0 | 5 | 2 | 15 | | | Delta-Q | -4 | -2 | -1 | -1 | -2 | 0 | -11 | | | Delta-P+Delta-Q | 1 | -2 | 0 | -1 | 3 | 1 | 4 | | | Baseline cost | 163 | 159 | 78 | 32 | 252 | 31 | 714 | | Total | Delta-P | 8 | 5 | 3 | 1 | 8 | 3 | 28 | | | Delta-Q | -15 | -5 | -2 | 1 | -10 | -2 | -33 | | | Delta-P+Delta-Q | -7 | 0 | 1 | 2 | -2 | 1 | -5 | | | Baseline cost | 560 | 470 | 262 | 116 | 485 | 130 | 2,023 | | CSIRO scenario | Delta-P | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | 1. Power & telephones | Delta-Q | -1 | 0 | 0 | 1 | -3 | -2 | -4 | | | Delta-P+Delta-Q | -1 | 1 | 0 | 1 | -3 | -2 | -3 | | | Baseline cost | 137 | 75 | 41 | 24 | 79 | 41 | 397 | | 2. Water & sewers | Delta-P | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Delta-Q | -1 | 2 | 0 | 1 | -2 | 0 | 0 | | | Delta-P+Delta-Q | -1 | 2 | 0 | 1 | -2 | 0 | 0 | | | Baseline cost | 115 | 71 | 54 | 25 | 81 | 22 | 368 | | 3. Roads | Delta-P | 0 | 0 | 0 | 0 | 1 | 0 | 2 | | | Delta-Q | -1 | -2 | -2 | -1 | -1 | -1 | -8 | | | Delta-P+Delta-Q | -1 | -2 | -2 | 0 | 0 | 0 | -6 | | | Baseline cost | 36 | 37 | 31 | 13 | 44 | 23 | 183 | | 4. Other transport | Delta-P | 0 | 2 | 0 | 0 | 0 | 0 | 3 | | | Delta-Q | 0 | -2 | 0 | 0 | 0 | 0 | -3 | | | Delta-P+Delta-Q | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | Baseline cost | 16 | 80 | 6 | 2 | 4 | 4 | 111 | | 5. Health & schools | Delta-P | 0 | 0 | 0 | 0 | 0 | 0 | 1 | | | Delta-Q | -1 | 0 | 0 | -1 | -1 | 0 | -2 | | | Delta-P+Delta-Q | -1 | 0 | 0 | 0 | 0 | 0 | -1 | | | Baseline cost | 93 | 49 | 52 | 20 | 25 | 9 | 249 | | 6. Urban infrastructure | Delta-P | 2 | 1 | 1 | 0 | 3 | 1 | 7 |
(continued) 8. CONCLUSION
The work reported in this paper represents the most extensive and careful effort that has been made to estimate the costs of adapting to climate change in the infrastructure sector at a global level. Our primary conclusion is that the cost of adapting to climate change, given the baseline level of infrastructure provision, is no more than 1–2 percent of the total cost of providing that infrastructure. While there are differences across regions and sectors, the pattern is clear and unambiguous—the cost of adaptation is small in relation to other factors that may influence the future costs of infrastructure. We accept that we may have omitted or underestimated some of the costs of adaptation. On the other hand, we have consistently tried to err on the generous side—increasing our estimates of probable costs when there is reasonable doubt. Further, it can be shown that an economic rather than an engineering approach to adaptation when climate change increases the demand for infrastructure will reduce the Delta-Q costs by a substantial amount in some cases. Thus, in our view it is extremely unlikely that revised estimates will alter our conclusion about the relative magnitude of the costs of adaptation.
The second conclusion of our study is that the impact of climate change on the overall demand for infrastructure may be more important than the increase in the cost of providing the baseline level of provision. These Delta-Q effects may be positive or negative—increasing or decreasing the costs of adaptation—in different countries. Summed by region, the Delta-Q totals are negative in all regions except MNA. The results of our econometric analysis do not dictate that climate change will have the effect of reducing demand for generating capacity or roads. The equations contain complex interactions between income and various climate variables—not merely temperature—with both population-weighted and inverse population-weighted variants. It does not seem plausible that these effects are merely capturing the influence of one or more omitted variables. Hence, estimates of the costs of adaptation that ignore the potential impact of climate change on the demand side may give a rather partial view of the overall picture.
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UNFCCC. 2007. *Climate Change: Impacts, Vulnerabilities and Adaptation in Developing Countries*. UNFCCC Secretariat. Bonn: UNFCCC. APPENDIX 1. DERIVATION OF THE CLIMATE DOSE-RESPONSE RELATIONSHIPS
Paul Chinowsky (Department of Civil, Environmental and Architectural Engineering, University of Colorado)
Jason Price & Jim Neumann (Industrial Economics Inc, Cambridge, Mass)
The dose-response relationship between climate change and the cost of building and maintaining infrastructure is a central component of the World Bank’s assessment of infrastructure adaptation costs. The magnitude of the dose-response relationship is likely to vary both by infrastructure type and by country. Variation in this relationship by infrastructure type reflects, among other factors, differences in the materials with which different types of infrastructure are constructed and the ways in which different types of infrastructure are used; for example, buildings often provide heating and cooling. In addition, variation in the dose-response relationship by country reflects inter-country variation in labor and materials costs as well as terrain; for example, varying degrees of flat versus mountainous terrain.
The data and methods supporting the World Bank’s assessment of dose-response values by infrastructure type and country are outlined in the sections below. This information is presented separately for infrastructure construction costs and infrastructure maintenance costs. Exhibits 1 and 2 describe the specific dose-response relationships analyzed. We note that the dose-response values estimated for both construction costs and maintenance costs are based on the cost of building and maintaining infrastructure in the United States. To develop dose-response values specific to individual developing countries, we scaled the U.S.-based cost estimates using an inter-country construction cost index published by Compass International Consultants Inc. (2009). The country-specific values that make up this index represent average construction costs for each country relative to costs in the United States.
1. Estimation of Dose-Response Values for Construction Costs
To generate dose-response values for infrastructure construction costs, we employed two general approaches. The first estimates dose-response values based on the cost associated with the change in the typical building code update, while the second more directly estimates the incremental costs of climate stressors and design changes. We use the building code approach to generate dose-response values for paved roads, buildings, and transmission towers and the latter for bridges and unpaved roads.
Our assessment of dose-response values for infrastructure construction costs assumes perfect foresight with respect to climate change. Therefore, these dose-response values represent the relationship between infrastructure construction costs at the time of construction and the changes in climate projected during the infrastructure’s lifespan.
A. Building Code Methodology
The building code methodology is based on the premise that a major update of design standards results in a 0.8 percent increase in construction costs (FEMA 1998). The readily available data suggest that such code updates would occur with every 10 centimeter (cm) increase in precipitation for paved roads and buildings; therefore, we express the precipitation dose-response relationship for these specific types of infrastructure as follows:
[ C\_{P,BPR} = 0.8% (B\_{BPR}) ]
where
[ C\_{P,BPR} = \\text{change in building and paved road construction costs associated with a 10 cm change in annual precipitation} ]
[ B\_{BPR} = \\text{base construction costs for buildings and paved roads} ]
Based on published construction cost information, we assume base construction costs of $185 per square foot for medical buildings as a base for public facilities.
### EXHIBIT 1 — DOSE-RESPONSE DESCRIPTIONS FOR CONSTRUCTION COSTS
| | Precipitation Dose-Response | Temperature Dose-Response | Wind Dose-Response | |------------------------|-----------------------------|---------------------------|-------------------| | **Bridges** | Change in construction costs per bridge per 1 foot increase in bridge height. | Not estimated. Impact likely to be minimal. | Not estimated. Impact likely to be minimal. | | **Paved Roads** | Change in costs of constructing a km of paved road per 10 cm change in annual precipitation projected during lifespan relative to baseline climate. Dose-response represents change in costs for every 10 cm increment. | Change in cost of constructing a km of paved road per step-wise increase in the maximum of monthly maximum temperature values projected during lifespan relative to baseline climate. The first increase occurs after a 1 degree Celsius change in maximum temperature. Every other step occurs 3 degrees Celsius beyond that. | Not estimated. Impact likely to be minimal. | | **Unpaved Roads** | Change in construction costs per km per 1% change in the maximum of the monthly maximum precipitation values projected during lifespan relative to baseline climate. | Not estimated. Impact likely to be minimal. | Not estimated. Impact likely to be minimal. | | **Transmission Poles** | Not estimated. Impact likely to be minimal. | Not estimated. Impact likely to be minimal. | Percent change in costs per 15 mph (~24 kmh) increase in the maximum of the monthly maximum wind speeds projected during lifespan, relative to baseline climate. | | **Buildings** | Change in costs per square foot, per 10 cm change in annual precipitation projected during lifespan. | Change in costs per square foot, per 0.5 degree change Celsius in annual average temperature during lifespan, relative to baseline climate. | Not estimated. Impact likely to be minimal. |
### EXHIBIT 2 — DOSE-RESPONSE DESCRIPTIONS FOR MAINTENANCE COSTS
| | Precipitation | Temperature | |------------------------|---------------|-------------| | **Paved Roads - Existing** | Change in annual maintenance costs per km per 10 cm change in annual rainfall projected during lifespan relative to baseline climate. | Change in annual maintenance costs per km per 1 degree Celsius change in maximum of monthly maximum temperature projected during lifespan. | | **Paved Roads - Newly Constructed** | Paved roads constructed after 2010 would have no maintenance impact if designed for changes in climate expected during their lifetime. | | | **Unpaved Roads** | Change in annual maintenance costs per 1% change in maximum of monthly precipitation projected during lifespan. | Not estimated. Impact likely to be minimal. | | **Railroads** | Not estimated. Impact likely to be minimal. | Change in annual maintenance costs per km per 1 degree Celsius change in maximum of monthly maximum temperature projected during lifespan. | | **Buildings - Existing** | Change in annual maintenance costs per square foot per 10 cm change in annual rainfall projected during lifespan. | Change in annual maintenance costs per square foot per 1 degree change Celsius in annual average temperature projected during lifespan. | | **Buildings - Newly Constructed** | Buildings constructed after 2010 would have no maintenance impact if designed for changes in climate expected during their lifetime. | | (DCD 2007) and $621,000 per kilometer (km) for paved roads, the latter of which represents the average cost per km of constructing a 2-lane collector road in rural areas (FDOT 2009a).20
The code update methodology that we employed for temperature effects is similar to the approach outlined in Equation 1 for precipitation. Unlike the code update approach for precipitation, we do not apply the full 0.8 percent cost increase of a code update to each incremental change in temperature. Instead, we scale the 0.8 percent value to reflect the portion of construction costs likely to be associated with temperature effects. Based on data published by Whitestone Research (2008), we assume that 28 percent of the costs associated with a code update for buildings are related to HVAC equipment affected by temperature. Similarly, research into the effects of temperature on roads provides a guideline of 36 percent of the costs for a code update for roads is temperature-related (Miradi 2004). Based on these values, we assume a 0.22 percent increase in building construction costs for each incremental change in temperature and a 0.29 percent increase in paved road construction costs for such changes. Based on professional judgment and the design parameters for HVAC systems, which are typically based on the number of degree days per year (NOAA 2009), we assume that the 0.22 percent value is applied to building costs for each 0.5 degree Celsius increase in average annual temperature. For paved roads, we apply the 0.29 percent increase as a step function, with the first increase occurring after a 1 degree Celsius increase in temperature and later increases occurring with each 3-degree increase in temperature. This reflects the need for new pavement binders with every 3-degree increase in temperature and a change in practice for a 1-degree change as an initial safety factor (Blacklidge Emulsions, Inc. 2009).
We also apply the building code methodology to transmission line towers, but instead of precipitation and temperature, wind is the climate stressor of concern. For every 15 mile per hour (~24 km per hour) increase in the maximum of the maximum monthly wind speeds projected, we assume a 0.8 increase in construction costs due to a design standard update.
The readily available data suggests several relationships will have no impact or minimal impact in these categories as follows: 1) no impact from wind on paved roads or buildings, 2) no impact from temperature on transmission poles, and finally 3) no impact from precipitation on transmission poles.
B. Example of Building Code Methodology
Two examples are presented here to illustrate the application of the building code methodology to new construction, a building example for precipitation and a paved road example for temperature. For the former, assume that a new hospital is to be built in a location that has a base precipitation level of 100 cm per year. It is projected that due to climate change, the location will have a 15 cm increase during the 40-year anticipated lifespan of the building. Given the 10cm threshold for a building code update, the design of the structure would anticipate the precipitation increase and the associated building code update. Essentially, the building will be overbuilt for Year 0 to anticipate the need later in the lifespan to accommodate the increased precipitation. The cost of this overbuild will be the cost of one code update for the 10 cm increase, or 0.8 percent of the base construction costs.
In the context of temperature, consider the example of paved road construction. Using the 36 percent relative impact discussed above, the standard 0.8 percent cost increase for a code update is modified by this percentage resulting in a modified value of 0.29 percent of base construction costs. However, to apply this to new construction, the guidelines for pavement design are brought into the equation. Specifically, temperature increases require new pavement binders every 3 degrees Celsius (Blacklidge Emulsions, Inc. 2009). Therefore, for a new construction scenario where the maximum temperature will increase 2 degrees over the 20-year lifespan of the road, a cost increase of 0.29 percent of base construction costs is applied after the first 1 degree to account for an initial safety factor built into the design. Since the increase does not total an additional 3 degrees, the total increase from the temperature impact is 0.29 percent of base construction costs.
______________________________________________________________________
20 Both of these base cost values represent the costs of construction in the United States. We developed values specific to other countries based on an inter-country construction cost index published by Compass International Consultants Inc. (2009), as indicated above. C. Direct Response Methodology
For bridges and unpaved roads, we use a more direct approach for estimating the cost impact of changes in climate stressors. Under this approach, we directly relate changes in infrastructure construction costs to specific changes in climate or infrastructure design requirements. In general terms, this approach is summarized by Equation 2.
[ C\_{URB} = M \\times B\_{URB} ]
where ( C\_{URB} ) = change in construction costs for bridges and unpaved roads associated with a unit change in climate stress or design requirements
( M ) = cost multiplier
( B\_{URB} ) = base construction costs for bridges and unpaved roads
Implementation of the approach represented by Equation 2 is somewhat different for unpaved roads than it is for bridges. For unpaved roads, we express the dose-response relationship represented by Equation 2 as the change in construction costs associated with a 1 percent change in maximum monthly precipitation. Research findings have demonstrated that 80 percent of degradation of unpaved roads can be attributed to precipitation (Ramos-Scharron and MacDonald 2007). The remaining 20 percent is attributed to factors such as tonnage of traffic and traffic rates. Given this 80 percent attribution to precipitation, we assume that the base construction costs for unpaved roads increase by 80 percent of the total percentage increase in maximum monthly precipitation; that is, a 0.8 percent increase in costs for each 1 percent increase in maximum precipitation. For example, if the maximum monthly precipitation increases by 10 percent in a given location, then 80 percent of that increase is used (8 percent) as the increase in base construction costs. In addition, we further assume a base construction cost of $13,000 per km for unpaved roads, based on published cost data (Cerlanek et al. 2006). The readily available data suggest no relationship between temperature and the cost of building unpaved roads.
For bridges, we estimate the climate-related change in costs per one-foot increase in bridge clearance. The most significant design changes associated with an increase in clearance would involve changes to bridge-deck support structures, which account for approximately 50 percent of bridge construction costs (Kinsella and McGuire 2005). In addition, based on the standard 16-foot clearance for bridges on highways (FHWA 2009), a one-foot increase in bridge clearance would represent a 6.25 percent increase. Assuming that the increase in costs for bridge foundations would be proportional to the change in clearance, we assume that construction costs for the bridge support structures would increase by 6.25 percent with each 1-foot increase in clearance. Because support structures represent approximately 50 percent of bridge construction costs, we assume that the total construction costs for a bridge would increase by approximately 3.13 percent (50 percent x 6.25 percent) with each one-foot increase in clearance.
The base cost of a bridge is likely to vary significantly due to differences in the number of lanes per bridge and bridge length. For the purposes of this analysis, we use the costs of a 2-lane bridge spanning 100 feet. Assuming an average lane width of 12 feet, this translates to a bridge deck with an area of approximately 2,400 square feet. Based on a unit cost of $220 per square foot (FDOT 2009b), we estimate that the total base construction costs for a bridge are approximately $528,000. Applying the 3.13 percent value derived above to this estimate, we assume an increase of $16,500 in bridge construction costs for each one-foot increase in bridge clearance.21
The readily available data suggest no impact or minimal impact will originate from wind or temperature increases for new construction of bridges or unpaved roads.
2. Estimation of Dose-Response Values for Maintenance Costs
Similar to our development of dose-response values for infrastructure construction costs, we employed two basic methodologies to generate dose-response values relating
______________________________________________________________________
21 This value is based on U.S. construction cost data. We developed values specific to other countries based on an inter-country construction cost index published by Compass International Consultants Inc. (2009), as indicated above. changes in climate stressors to changes in infrastructure maintenance costs. The first approach is based on infrastructure lifespan decrements that could potentially result from climate change if maintenance practices remain unchanged following changes in climate stress. We use this methodology to develop dose-response values for existing paved roads and buildings. Newly constructed paved roads and buildings are assumed to not be affected by climate stressors because forward-looking design allows these structures to accommodate future climate changes at the time of construction. For railroads and unpaved roads (both existing and newly constructed), we use a separate methodology similar to the direct dose-response approach outlined above for bridge and unpaved road construction costs.
A. Avoided Lifespan Decrement Methodology
To assess the relationship between climate stressors and maintenance costs for existing paved roads and buildings, we use an approach based on the cost of preventing the reduction in lifespan that may result from changes in climate-related stress. As indicated by Equation 3, implementation of this approach involves two basic steps: (1) estimating the lifespan decrement that would result from a unit change in climate stress and (2) estimating the costs of avoiding this reduction in lifespan.
[ M\_{TERB} = (L\_{ERB})(C\_{ERB}) ]
where (M\_{TERB}) = Change in maintenance costs for existing paved roads and buildings associated with a unit change in climate stress
(L\_{ERB}) = Potential percent change in lifespan for existing paved roads and buildings associated with a unit change in climate stress
(C\_{ERB}) = Cost of preventing a given lifespan decrement for existing paved roads and buildings
To estimate the reduction in lifespan that could result from an incremental change in climate stress ((L\_{ERB})), we assume that such a reduction is equal to the percent change in climate stress, scaled for the stressor’s effect on maintenance costs, as shown in Equation 4.
[ L\_{ERB} = \\frac{\\Delta S}{BaseS}(SMT) ]
where (L\_{ERB}) = Potential percent change in lifespan for existing paved roads and buildings associated with a unit change in climate stress
(\\Delta S) = Change in climate stress (i.e., precipitation or temperature)
(BaseS) = Base level of climate stress with no climate change
(SMT) = Percent of existing paved road or building maintenance costs associated with a given climate stressor (i.e., precipitation or temperature)
As indicated in Equation 4, the potential change in lifespan is dependent on the change in climate stress. For precipitation effects, we assume a potential reduction in lifespan for existing paved roads and buildings for every 10 cm increase in annual rainfall. For temperature, we assume a potential lifespan reduction with every 1 degree Celsius change in temperature (average annual temperature for existing buildings and maximum annual temperature for existing paved roads).
Equation 4 also illustrates that our estimate of the potential reduction in lifespan associated with a given change in climate stress reflects the contribution of that stressor to baseline maintenance costs (i.e., variable (SMT)). For buildings, we assume that changes in precipitation associated with climate change will affect roofing and external enclosures and changes in temperature will affect HVAC systems. Because roofing and external enclosures represent 15 percent of building maintenance costs (Whitestone Research 2008), we assumed that precipitation contributes 15 percent to a building’s maintenance costs. Similarly, because HVAC represents 28 percent of building maintenance costs (Whitestone Research 2008), we assume that temperature effects are responsible for 28 percent of a building’s maintenance costs. We also identified similar data for paved roads suggesting that precipitation-related maintenance represents 4 percent of maintenance costs and that temperature-related maintenance represents 36 percent (Miradi 2004).
After estimating the potential reduction in lifespan associated with a given climate stressor, we estimate the costs of avoiding this reduction in lifespan. To estimate these costs, we assume that the change in maintenance costs would be approximately equal to the product of (1) the potential percent reduction in lifespan ((L\_{ERB})) and (2) the base construction costs of the asset. Therefore, if we project a 10 percent potential reduction in lifespan, we estimate the change in maintenance costs as 10 percent of base construction costs. As indicated above, we estimate base construction costs of $185 per square foot for buildings and $621,000 per km for paved roads in the U.S.(^{23})
**B. Example of Avoided Lifespan Decrement Approach**
As an example of the avoided lifespan methodology, consider a country with baseline annual precipitation of 80 cm without climate change. For such a country, a 10-cm increase in annual precipitation would represent a 12.5 percent increase in precipitation. Because precipitation accounts for approximately 15 percent of building-related maintenance costs, we would assume a 1.9 percent potential reduction in building lifespan (12.5% x 15%). If baseline building construction costs in this country are approximately $175 per square foot, we would estimate an increase in maintenance costs of approximately $3.30 per square foot for every 10 cm increase in annual precipitation. If the country were to experience a 15-cm increase in annual precipitation, we would still assume a $3.30 per square foot increase because the 15-cm increase includes just one 10-cm incremental change. However, if we were to project a 21-cm increase, we would assume an increase of $6.60 per square foot.
**C. Direct Response Methodology**
To estimate dose-response values for railroad and unpaved road maintenance costs, we follow an approach similar to that outlined above for bridge and unpaved road construction costs. More specifically, we estimate the change in railroad and unpaved road maintenance costs associated with a unit change in climate stress as a fixed percentage of baseline construction costs (for railroads) or maintenance costs (for unpaved roads), as illustrated by Exhibit 5.
[ (5) \\quad MT\_{URR} = M \\times B\_{URR} ]
where (MT\_{URR}) = Change in maintenance costs for unpaved roads and railroads associated with a unit change in climate stress
(M) = Cost multiplier
(B\_{URR}) = Baseline maintenance (for unpaved roads) costs or construction costs (for railroads)
Similar to the direct response methodology for construction costs, implementation of this approach for maintenance costs also varies by infrastructure type. For railroads, we express the relationship described by Equation 5 as the change in maintenance costs associated with a 1 degree Celsius change in the maximum of the maximum monthly temperature projections for an area. Based on research on the effect of heat stress on rails and the associated costs, we estimate that for every 1 degree increase in maximum temperature, railroad maintenance costs increase by 0.14 percent of railroad construction costs (DRPT 2008). Therefore, assuming construction costs of approximately $404,000 per km (in the U.S) (Railroad 2009; Vickers 1992), we estimate that railroad maintenance costs would increase by $565 for every 1 degree increase in maximum temperature.
For unpaved roads, we express the dose-response relationship represented by Equation 5 as the change in maintenance costs associated with a 1 percent change in maximum monthly precipitation. As indicated above, research has demonstrated that 80 percent of unpaved road degradation can be attributed to precipitation, while the remaining 20 percent is due to traffic rates and other factors (Ramos-Scharron and MacDonald 2007). Given this 80 percent attribution to precipitation, we assume that maintenance costs increase by 0.8 percent with every 1 percent increase in the maximum of the maximum monthly precipitation values projected for any given year. Published data indicates that the
(^{23}) As indicated above, we developed values specific to other countries based on these U.S. values and an inter-country construction cost index published by Compass International Consultants Inc. (2009), as indicated above. baseline cost of maintaining an unpaved road is approximately $930 per km (Cerlanek et al. 2006). Therefore, for every 1 percent increase in maximum temperature, we assume a maintenance cost increase of $7.45 per km.
The readily available data suggest climate stressors will have no impact or minimal impact in these categories as follows: 1) no impact from temperature on unpaved roads, 2) no impact from precipitation on railroads.
REFERENCES
Blacklidge Emulsions, Inc. 2009. “SHRP Performance Graded Asphalt Binders.” http://www.blacklidgeemulsions.com/shrp.htm, viewed May 31, 2009.
Cerlanek, W. D., C.M Zeigler, and S.E. Torres. 2006. Maintenance of Paved and Unpaved Roads in Alachua County. Alachua, FL: Department of Public Works.
Compass International Consultants, Inc. 2009. Global Construction Costs Yearbook. Morrisville, PA: Compass International.
DCD. 2007. “The DCD Cost Guide for Medical Buildings.” DCD Construction Magazine, March/April Issue.
DRPT. 2008. Heat Order Issues Technical Memorandum. Richmond, VA: Virginia Department of Rail and Public Transportation.
FDOT. 2009a. “Generic Cost Per Mile Models.” Florida Department of Transportation. http://ftp.dot.state.fl.us/LTS/CO/Estimates/CPM/summary.pdf, viewed May 31, 2009.
FDOT. 2009b. “Bridge Costs.” Florida Department of Transportation. http://www.fhwa.dot.gov/infrastructure/50vertical.cfm, viewed May 31, 2009.
FEMA. 1998. “Promoting the Adoption and Enforcement of Seismic Building Codes.” FEMA 313.
Washington, DC: Federal Emergency Management Agency.
FHWA. 2009. “Right of Passage: Controversy Over Vertical Clearance on the Interstate System.” Federal Highway Administration. http://www.fhwa.dot.gov/infrastructure/50vertical.cfm, viewed May 31, 2009.
Kinsella, Y., and F. McGuire. 2005. “Climate Change Impacts on the State Highway Network: A Moving Target.” Proceedings of the NIZHT Conference, Christchurch, New Zealand, November 2005.
Miradi, M. 2004. “Artificial neural network (ANN) models for prediction and analysis of ravelling severity and material composition properties.” In M. Mohammadian, ed. CIMCA 2004. Gold Coast, Australia: CIMCA.
NOAA. 2009. “Heating and Cooling Degree Day Data.” NOAA Satellite and Image Information Service. http://www.ncdc.noaa.gov/oa/documentlibrary/hcs/hcs.html#51overview.
Railroad. 2009. “Railroad Construction Costs.” Henry County Library. http://tacnet.missouri.org/history/railroads/rrcosts.html#1995, Clinton, MO, viewed May 31, 2009.
Ramos-Scharron, C. E., and L.H. MacDonald. 2007. “Runoff and suspended sediment yields from an unpaved road segment, St. John, U.S. Virgin Islands.” Hydrological Processes 21(1): 35–50.
Vickers, R.A. 1992. Cost Effective Maintenance of Railway Tracks. London: Institute of Civil Engineers.
Whitestone Research. 2008. Building Maintenance and Repair Cost Reference 2008–2009. Santa Barbara, CA: Whitestone Research.
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ec3b7cc290207460749dc9829c09d4bb46f67a3c | Information Management Assessment
Action plan progress review
Department for Communities and Local Government
Reviewed February 2015
Published August 2015
Working with government to raise standards in information management **Background**
The Information Management Assessment (IMA) programme is the best-practice model for government bodies wishing to demonstrate commitment to the principles of good information management.
The Department for Communities and Local Government (DCLG) IMA took place in 2012. Interviews were conducted at the Department’s London offices between 12 and 19 March. DCLG produced a detailed action plan and progress against this was formally assessed via meetings held in August 2014 and February 2015. The IMA report and action plan are both published on The National Archives website.¹
This progress review summarises key developments since the 2012 IMA. Areas where continued attention is still needed are listed below under ‘Next Steps’.
**Progress to address recommendations and risk areas**
The 2012 IMA report rated DCLG’s performance as ‘Satisfactory’ against 8 headings on the IMA performance framework risk matrix and ‘Good’ against 1 heading. It identified 11 ‘Development Needed’ areas and made 15 recommendations for improvement. Particular attention was paid to the following considerations:
**Strategic direction**
| Situation at the time of the IMA | |----------------------------------| | Annual work plans were being produced by the Corporate Records Management Services team, but there was limited evidence that long-term, DCLG-wide goals were being established for the information the Department held and for which it has responsibility. |
An Electronic Records Handling Strategy is now in place. This was jointly approved by the Departmental Records Officer (DRO) and Chief Information Officer (CIO) in 2014. The strategy covers information held in shared and personal drives, mailboxes and the Department’s near-line electronic records repository, VISIONS.
¹ [http://www.nationalarchives.gov.uk/information-management/manage-information/ima/ima-reports-action-plans/](http://www.nationalarchives.gov.uk/information-management/manage-information/ima/ima-reports-action-plans/) A separate Knowledge Management Strategy was drafted in early 2014. This document is intended as the successor to the previous 2008 DCLG Knowledge Management Strategy. It was agreed by the Senior Information Risk Owner (SIRO) in December 2014. This gives DCLG a set of high-level endorsed strategic aims and outcomes above the level of the Electronic Records Handling Strategy, towards which work by KIM, IT and information assurance teams can be aligned. This makes it easier for DCLG to achieve co-ordinated improvements in the management, protection and exploitation of its information. It also means that the Electronic Records Handling Strategy can be positioned as a key enabler of the overall Knowledge Management Strategy.
**Resources, planning and transition to the 20-year rule**
| Situation at the time of the IMA | |----------------------------------| | Corporate Records Management Services staff were predominantly engaged in “fire fighting” and were not engaged in proactive activities. The IMA report noted the potential additional impact that transition to the 20-Year rule could have on the service they provided. |
Corporate Records Management Services was rebranded as Records and Information Governance Services in 2013. The team continues to provide shared services, which will necessarily have some impact on time and resources available to oversee DCLG’s own records. The team has also undergone resource cuts since the IMA. Nonetheless, we recognise that the team is currently planning and working in a more structured manner than at the time of the IMA. It is also engaging more actively with individual business units. This includes the provision of tailored advice on retention to staff working with particularly sensitive or high-value information.
DCLG has a 20-year rule implementation plan that covers its own records and the shared service arrangements it provides for other organisations. The plan provides detailed context on review progression up to 2003 and overall progress against 20-year rule targets. It highlights events with potential historic significance in scope of the transition period. We understand that progress against the plan has been a major focus for the monthly meetings DCLG set up with The National Archives following the IMA. These meetings have provided the opportunity to interrogate progress and understand the volume and transfer status of the records in more detail.
**Records creation, staff understanding and management controls**
| Situation at the time of the IMA | |----------------------------------| | Shared drives and Approved File Plans were not subject to central control. Email accounts with large capacities and personal drives with unlimited capacities provided staff with alternative locations where information could be held. Without a signed-off records management policy, there was no mandate and there was little monitoring to assess how staff were managing information in practice. |
DCLG has now produced a concise and straightforward, corporately branded record retention and disposal policy, and a linked policy on deletion processes. The publication of the former is a crucial first step in ensuring staff can understand what is expected of them. DCLG further supported this through work carried out to review and simplify the records management pages on the intranet.
DCLG has also, in liaison with The National Archives, drafted an electronic review and transfer policy document. DCLG is seeking to refine the policy and establish a small pilot project in order to identify and address the difficulties in reviewing large quantities of electronic and hybrid material. DCLG is a member of The National Archives’ Digital Working Group and is seeking further guidance through this route.
At the time of the IMA we noted the lack of a single corporate repository as a concern. There is still no corporate filing plan in place. However, DCLG did include a request for a collaboration tool and email management system in its 2014 IT re-let, through which SharePoint 2010 and E-Vault were acquired.
We recognise that work has been carried out since the IMA to influence behaviours including challenging individuals who were judged to be holding significant volumes of information outside corporate repositories. Processes were also put in place to monitor mailbox sizes and escalate concerns to the CIO and SIRO. Monitoring activities are currently being carried out on an ad-hoc basis in advance of the introduction of SharePoint 2010 and E-Vault. While a driver for this work has been removed by a reduction in pressures on corporate storage capacity, the potential impact of personal storage on information availability remains the same. DCLG should re-energise monitoring activities as the new IT environment is put in place. This is because of the new behaviours and ways of working that will be required and the potential influence these may have on the information and records management-related risks the department faces.
Digital continuity and change management
| Situation at the time of the IMA | |----------------------------------| | There was limited opportunity for formal communication between knowledge and information management and IT staff. Access to the shared drives was controlled by a third-party IT supplier. DCLG had little oversight of the digital information in its shared drives and lacked a formal digital continuity plan. It needed to ensure information requirements were central to IT change. |
An IT liaison role has now been established. In practical terms, a lack of access to the shared drives continues to be a barrier to oversight of digital information by the KIM team. This makes it harder to ensure digital information will remain complete, available and usable and harder to ensure legal requirements and business needs can be met. The Records and Information Governance Services Team has, however, been working to overcome permissions related issues to gain access and has undertaken work to identify the areas of its shared drives that contain active and non-active information. It plans to build on this work, allocating ownership to information held and identifying and taking responsibility for any information that has been orphaned by structural changes.
The discovery phase of assessing the capabilities of SharePoint finished in April 2015. DCLG developed functional requirements for SharePoint and for E-Vault, which contain a number of positive elements including outcomes for metadata generation, maintenance and migration. SharePoint 2010 does not by itself support records management or email integration and DCLG has no plans to procure third party software modules to deliver either of these. DCLG is instead investigating the use of customised scripting to enable activities such as email transfer. The Department recognises the risks that overcustomisation can bring.
Because DCLG is planning to use SharePoint as a repository for records, the new system needs to support the Department to meet its obligations for their safekeeping and transfer. From a records management point of view and from a business point of view the new system also needs to support effective email integration. Without this there is a risk that email will be excluded from the Department’s records. For example, while it is positive in principle that a requirement has been identified for automated disposal within E-Vault, this will in practice increase the threat that DCLG loses information with value if staff cannot move important emails to corporate repositories. Current investigations are intended to identify solutions to these issues. Getting this right will be crucial to ensuring the new system can deliver required outcomes.
**Information Risks and Information Security**
| Situation at the time of the IMA | |----------------------------------| | The lack of strategy and clear goals for information undermined the Department’s ability to identify the information risks it faced. Risk descriptions focused on IT considerations and we gained no assurance that impacts relating to information and records management were defined or subject to senior scrutiny. The department gained a ‘development needed’ rating for security in the 2012 IMA report due to a lack of controls to prohibit the use of unencrypted pen drives to transfer data off the network. |
In practical terms, we are pleased to recognise that DCLG now has a solution in place to manage which USB devices can be connected to the Department’s desktops. We also recognise that the Records and Information Governance Services team has defined a range of information and records management-related risks since 2012. These include risks that relate to a number of problem areas. highlighted in the Department’s IMA report, such as adoption and use of Accredited File Plans and storage of corporate records in email and personal drives. DCLG states that records and information management related risks feature on the directorate risk register and have featured on the departmental security risk register where necessary. We understand that the DRO also attends the Information Risk Advisory Board and also liaises regularly with the SIRO.
DCLG reviewed its information assurance and risk policy in July 2014 and again following the IMA progress review as part of a wider guidance refresh. We note that the policy now includes reference to the Public Records Act. While this is positive in itself, the document does not, however, define the risk of not capturing or keeping the information DCLG needs, how this risk will be managed or how the effectiveness of DCLG’s approach will be assessed. DCLG has also defined its appetite in relation to information risk. This work represents positive progress, but we note that the risk appetite statement does not explicitly reference information and records management-related risk. Further work in this area is needed to build on the start DCLG has made.
**Networks and training**
| Situation at the time of the IMA | |----------------------------------| | DCLG did not have an active, centrally-directed network of information support staff. A re-energised Business Records Officers (BRO) network would provide a means to promote good practice and encourage adherence to information and records management principles |
At the time of our February 2015 progress review meeting, DCLG had not yet been able to resurrect the BRO network. We understand that it has now done so. Having an active and complete network will help DCLG to enable good information and records management within the current technology environment and when new systems are introduced.
Although a fully operational network was not in place to support dissemination of good-practice guidance and drive compliance, DCLG estimates that nearly 140 knowledge and information management-related training events have been conducted since the IMA. These include specific training delivered to individual divisions and within regional offices and to audiences including Information Asset Owners and senior service staff. Across March and April of 2015, DCLG conducted 10 workshops for staff to prepare for the eventual roll out of SharePoint 2010. DCLG is also seeking to ensure that all members of their Records and Information Governance Service have some form of qualification in Records/Information Management. Two members of staff have received certificates from the University of Liverpool, whilst another is due to start the same course in September. Other members of staff will be certified by relevant KIM bodies.
**Knowledge management**
| Situation at the time of the IMA | |----------------------------------| | DCLG had not defined in corporate terms what it meant by knowledge and without a signed off strategy was not setting clear goals. |
Adoption of the DCLG Knowledge Management strategy provides a basis to take this work forward. As the Department seeks to embrace new opportunities for sharing and exploiting information offered by the introduction of new IT systems, ensuring clarity in this area becomes more important than ever. Next steps
The National Archives will continue to work closely with DCLG so that the Department is supported as it continues its work on information and records management. It is recommended that DCLG focuses on the following:
- Implementation of the DCLG Knowledge Management Strategy against defined milestones. This now needs to provide direction for Records and Information Governance Services, IT and IA staff together.
- Ensuring that information and records management related risks can receive the right level of scrutiny and visibility as new systems such as SharePoint and E-Vault are introduced so their impact on information and records management objectives can be understood. DCLG should refer to guidance on information risk policies published in support of the Security Policy Framework and ensure that its own information assurance and risk policy provides a clear definition of information and records management-related risk, and clearly sets out the approach to managing it.²
- Getting the right solutions in place to support email integration and records management. This will be crucial to enabling hoped for business benefits including increased opportunities for collaborative working and improved ability to meet legal obligations. If the ability to dispose of and transfer records in a controlled manner and according to agreed policy is not enabled through SharePoint, then these outcomes will have to be achieved through other means. DCLG needs to ensure there is ongoing senior backing to work to provide a more supportive technology environment.
- Embedding a working, centrally-led network to help promote good practice principles and drive necessary improvements in culture.
- Identifying criteria for good practice in information and records management once new systems are introduced and ensuring metrics are in place to monitor performance against them.
- Continuing to liaise with The National Archives on: the planned P-drive strategy; plans for information held in the shared drives; and for digital appraisal, disposal and transfer; and digital continuity planning more widely.
² https://www.gov.uk/government/collections/government-security Following publication of this review, The National Archives will work closely with DCLG to address remaining issues via regular meetings with the Department's Information Management Consultant (IMC). Areas highlighted in the Next Steps section will be reviewed at the time of the Department's IMA reassessment.
**IMA risk matrix**
| Governance and leadership | Assessed 2011 | Reviewed 2014 | |---------------------------|--------------|--------------| | Strategic management | | | | Business objectives | | | | Management controls | | | | Resourcing | | | | Risk management | | |
**Records management**
| Records management | Assessed 2011 | Reviewed 2014 | |--------------------|--------------|--------------| | Creation | | | | Storage | | | | Appraisal, disposal and transfer | | | | Management | | | | Digital continuity | | | | Access to information | | | |-------------------------------|---|---| | FOI/Data protection | | | | Re-use | | | | Security | | |
| Compliance | | | |-------------------------------|---|---| | Staff responsibilities and delegations | | | | Policies and guidance | | | | Training | | | | Change management | | |
| Culture | | | |-------------------------------|---|---| | Commitment | | | | Staff understanding | | | | Knowledge management | | |
| Key to colour coding | | | |-------------------------------|---|---| | Best Practice | | | | Category | |--------------------------| | Good | | Satisfactory | | Development needed | | Priority attention area |
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| | | Headcount | Full-time equivalent | Headcount | Full-time equivalent | Headcount | Full-time equivalent | Headcount | Full-time equivalent | | Leasehold Advisory Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 4 | 3.4 | 1 | 1 | 16 | 15.5 | 0 | 0 | 1 | 1 | 0 | 0 | 22 | 21 | | Valuation Tribunal Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 24 | 22.54 | 41 | 39.941 | 12 | 11.736 | 1 | 1 | 1 | 1 | 0 | 0 | 79 | 76 | | Department for Communities and Local Government | Ministerial Department | Department for Communities and Local Government | 3 | 3 | 1 | 1 | 29 | 21.6 | 2 | 2 | 35 | 27.6 | | Planning Inspectorate | Executive Agency | Department for Communities and Local Government | 8 | 8 | 0 | 0 | 81 | 29.25 | 0 | 0 | 89 | 37.25 | | Queen Elizabeth II Conference Centre | Executive Agency | Department for Communities and Local Government | 4 | 4 | 0 | 0 | 0 | 0 | 2 | 2 | 6 | 6 | | Homes and Communities Agency | Executive Non-Departmental Public Body | Department for Communities and Local Government | 3 | 3 | 2 | 2 | 12 | 12 | 0 | 0 | 17 | 17 | | Organisation name | Organisation type | Main, parent or sponsoring department: | Grand Total (workforce numbers) | Payroll staff costs | |-----------------------------------|-------------------|---------------------------------------|---------------------------------|--------------------| | | | | Headcount | Full-time equivalent | Salary | Allowances | Non-consolidated performance payments | Overtime | Employer pension contributions | Employer national insurance contributions | Total paybill for payroll staff | | Housing Ombudsman Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 11 | 11 | 0 | 0 | 0 | 0 | 0 | 0 | 11 | 11 | | Leasehold Advisory Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Valuation Tribunal Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 0 | 0 | 1 | 0.6 | 0 | 0 | 0 | 0 | 1 | 0.6 | | Department for Communities and Local Government | Ministerial Department | Department for Communities and Local Government | 1,714 | 1,654 | £6,633,423.22 | £18,469.95 | £57,508.42 | £74,379.83 | £1,163,509.04 | £655,801.78 | £8,566,152.34 | | Planning Inspectorate | Executive Agency | Department for Communities and Local Government | 868 | 722 | £2,187,328.36 | £31,566.56 | £19,444.00 | £3,218.30 | £444,009.84 | £194,831.01 | £2,880,398.07 | | Queen Elizabeth II Conference Centre | Executive Agency | Department for Communities and Local Government | 48 | 48 | £123,376.94 | £861.00 | £0.00 | £9,373.01 | £23,092.45 | £11,424.01 | £168,127.41 | | Homes and Communities Agency | Executive Non-Departmental Public Body | Department for Communities and Local Government | 941 | 920 | £3,302,236.19 | £120,997.15 | £0.00 | £2,227.95 | £785,008.11 | £316,228.83 | £4,526,698.23 | | Housing Ombudsman Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 51 | 50 | £155,341.50 | £274.34 | £0.00 | £261.86 | £28,770.54 | £13,700.83 | £198,339.07 | | Leasehold Advisory Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | 22 | 21 | £65,122.00 | £0.00 | £0.00 | £5,811.00 | £6,609.00 | £77,542.00 | | Organisation name | Organisation type | Main, parent or sponsoring department: | Non-Payroll staff (contingent labour/consultancy) costs | Grand Total paybill/staffing (payroll and non-payroll) costs | |-----------------------------------|-------------------|---------------------------------------|--------------------------------------------------------|----------------------------------------------------------| | | | | Total monthly cost of contingent labour: agency (clerical and admin) staff, interim managers and specialist contractors | Total monthly cost of consultants/consultancy | Total non-payroll (CCL) staff costs | | Department for Communities and Local Government | Ministerial Department | Department for Communities and Local Government | £337,007.00 | £40,796.00 | £377,803.00 | £8,943,955.34 | | Planning Inspectorate | Executive Agency | Department for Communities and Local Government | £178,547.92 | £0.00 | £178,547.92 | £3,058,945.99 | | Queen Elizabeth II Conference Centre | Executive Agency | Department for Communities and Local Government | £11,820.54 | £5,250.00 | £17,070.54 | £185,197.95 | | Homes and Communities Agency | Executive Non-Departmental Public Body | Department for Communities and Local Government | £265,458.00 | £0.00 | £265,458.00 | £4,792,156.23 | | Housing Ombudsman Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | £56,496.07 | £0.00 | £56,496.07 | £254,835.14 | | Leasehold Advisory Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | £0.00 | £0.00 | £0.00 | £77,542.00 | | Valuation Tribunal Service | Executive Non-Departmental Public Body | Department for Communities and Local Government | £8,100.00 | £0.00 | £8,100.00 | £271,620.93 |
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7ac150b1ff0d809e89cbc0d8f4ed21e093e3dc30 | ORR’s Equality Objectives
To embed the Equality Act within the regulatory work of ORR
- Review ORR’s practice and compliance in policy formation and decision making, address any areas of shortfall and promote examples of good practice.
- Work with duty-holders and RSSB to ensure that incident and risk-monitoring tools reflect where safety incidents (including assaults) include individuals with protected characteristics.
- Work with stakeholders to establish a consistent reporting procedure for passenger and workforce complaints relating to discrimination and harassment, showing protected characteristics and prohibited conduct.
- Monitor and enforce compliance with DPPPs through station and passenger train licences.
ORR to embed the Equality Act 2010, as an employer and as a place to work.
- ORR will tackle discrimination and harassment, supporting a culture where differences are embraced, and leading to a reduction in staff reporting personal experience of discrimination and harassment.
- Improve staff declaration-rates for protected characteristics, increasing workforce data to help identify and address any barriers to equality.
- Monitor ORR's performance management system to ensure that it promotes equality of opportunity.
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d9109359b5371c2d73c39592e3d19c01b1bf1ddc | FINAL PENALTY NOTICE IN ACCORDANCE WITH SECTION 57C OF THE RAILWAYS ACT 1993
31 May 2019
1. This is a notice, given in accordance with section 57C(6) of the Railways Act 1993, (the Act), stating that the Office of Rail and Road (ORR) has imposed a penalty of £5 million on Govia Thameslink Railway Limited (GTR) for contravention of condition 4 of its Passenger Statement of National Regulatory Provisions (SNRP).
2. The contravention is in respect of GTR’s provision of appropriate, accurate and timely information to passengers following the implementation of the 20 May 2018 timetable and during the subsequent disruption.
3. The acts and omissions which, in the opinion of ORR, constitute the contravention and justify the imposition of the penalty are more fully set out in paragraphs 18 to 19 of this notice. ORR’s decision that GTR contravened Condition 4 of its SNRP was communicated to GTR by letter dated 14 March 2019 (the Contravention Decision), and paragraphs 18 to 19 below fully reflect the reasons contained in the Contravention Decision.
4. In accordance with the Act, the penalty should be paid in full to the Secretary of State by 28 June 2019, unless GTR make an application within 21 days from the date of this Notice for ORR to specify different dates by which different portions of the penalty are to be paid.
Relevant Legal Provisions
5. Under Section 57A of the Act, ORR may levy a penalty of such amount as is reasonable, if it is satisfied that the licence holder is contravening or has, within the last two years, contravened a licence condition. The amount may not exceed 10 per cent of the licence holder’s turnover, defined in accordance with the Railways Act 1993 (Determination of Turnover) Order 2005 (SI 2005 No 2185.)
6. Section 57B(3) of the Act provides that, in deciding whether to impose a penalty, and in determining its amount, ORR must have regard to its statement of policy
______________________________________________________________________
1 GTR to contact the office of Nick Joyce, Director General, Resources and Strategy Group, Department of Transport, Great Minster House, 33 Horseferry Rd, Westminster, London SW1P 4DR. [REDACTED] Telephone: 0300 330 3000 for details. published at the time when the contravention occurred. ORR’s statement of policy is contained in its Economic Enforcement Policy and Penalties Statement, published in November 2017 (the Penalties Statement)².
7. Under Section 57A(6) of the Act, ORR shall not impose a penalty if it is satisfied that the most appropriate way of proceeding is under the Competition Act 1998. In this case, ORR does not consider that the Competition Act 1998 is applicable.
The Contravention
08. Condition 4 of GTR’s SNRP sets out a purpose and general duty as follows³:
**Purpose**
1. The purpose is to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
**General duty**
2. The SNRP holder shall achieve the purpose to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
09. To assist licence holders with compliance, ORR published guidance⁴ to support condition 4 by giving more information about what is expected and how it will be enforced. The guidance recognises that timetabling services and providing good information is a complex task and states:
‘The licence obligations are not intended to undermine the primary objective of providing best available service for passengers. Making justified changes to the train plan to meet passengers’ needs should not be conditional on providing perfect advance information about these. However, we would expect licence holders to use reasonable endeavours to get such information out as widely as possible and as quickly as possible. We will take circumstances into account during any assessment of compliance’
10. ORR considers the provision of passenger information to be a fundamental objective of delivering effective service recovery following disruption and if information is available that could be used by passengers to better plan and make their journeys, this should be shared in a timely manner.
11. This is reflected in the additional principles that ORR set out for train operators in February 2018. ORR wrote that train operators ‘should be open about the impact
______________________________________________________________________
² [https://orr.gov.uk/\_\_data/assets/pdf_file/0004/18697/penalty-notice-2015-08-10.pdf](https://orr.gov.uk/__data/assets/pdf_file/0004/18697/penalty-notice-2015-08-10.pdf). ³ Condition 4 is set out in full in Annex A ⁴ [https://orr.gov.uk/\_\_data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf](https://orr.gov.uk/__data/assets/pdf_file/0015/4353/information-for-passengers-guidance-on-meeting-the-licence-condition.pdf) on all passengers of the challenges they face, and take responsibility for ensuring that their passengers can get the information they need to plan and make their journey as that information comes available(^5).
**ORR inquiry and the initiation of its investigation into GTR’s provision of passenger information**
12. In June 2018, ORR was asked by the Secretary of State to set up an independent Inquiry into the disruption that followed the introduction of the new timetable on 20 May 2018.
13. In September 2018, the findings of the Phase 1 Report of the timetable Inquiry found that information provided to passengers was inadequate which meant that passengers were unable to plan and make their journeys with any certainty.
14. Arising from these findings, on 3 October 2018 ORR launched a formal investigation into GTR - whose passengers were particularly impacted - to assess whether GTR is in contravention of, or contravened its obligation under condition 4 of its SNRP in relation to the provision of appropriate, accurate and timely information:
a. to passengers and prospective passengers **prior** to the implementation of 20 May 2018 timetable; and b. to passengers during the subsequent disruption i.e. **following** the implementation of the 20 May 2018 timetable.
15. As part of the investigation, ORR considered a range of information, evidence, and direct communication with GTR. ORR analysed both source evidence provided to the timetable Inquiry and significant volumes of further information provided by GTR, including internal documents and staff communications. ORR also undertook a detailed analysis of the GTR passenger experience pertaining to the timetable change to better understand the nature and impacts of the primary information failures.
16. In assessing these issues, ORR considered whether GTR did, and is doing, everything reasonably practicable to comply with its obligations in condition 4.
17. Full details about the investigation may be found in ORR’s Investigation Report(^6), which was published alongside the ORR’s proposed penalty notice dated 14 March 2019 (the Proposed Penalties Notice).
18. A summary of the investigation findings was provided in the Proposed Penalty Notice and is reproduced below(^7):
______________________________________________________________________
(^5) This letter was issued as part of ORR’s informed traveller / T-12 investigations February 2018
https://orr.gov.uk/\_\_data/assets/pdf_file/0020/27047/licence-condition-4-letter-to-toc-managing-directors-2018-02-23.pdf
(^6) Office of Rail and Road Rail Investigation Report: Govia Thameslink Railway: Provision of passenger information – May 2018 timetable change
(^7) Paragraphs 22-35 of the Proposed Penalty Notice “Investigation findings
22. In relation to the provision of appropriate, accurate and timely information to passengers and prospective passengers prior to the implementation of 20 May 2018 timetable, ORR considers that GTR took reasonably practicable steps to provide appropriate, accurate and timely information to passengers. This part of the investigation is therefore not discussed any further in this notice.
23. In relation to its investigation into the provision of appropriate, accurate and timely information to passengers following the implementation of the 20 May 2018 timetable, ORR considers that GTR contravened condition 4 of its SNRP by not achieving the purpose in condition 4.1 to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
24. ORR’s investigation is set out in full in its Investigation Report. Our findings from this part of the investigation are set out from paragraph 4.64 and are summarised below.
25. ORR considers that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. Evidence demonstrates that GTR’s overriding focus throughout the period that followed 20 May was on providing as much capacity as it could to meet customer demand.
26. ORR’s guidance to support compliance with condition 4 recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing the best available services for passengers.
27. ORR consider the immediate response to the timetable change on 20 May required a period of reactivity as both the scale and severity of the disruption emerged. However, ORR consider that better passenger information should be a core element of the service recovery process and as time progressed an increasingly improving picture should have emerged. Against this context, ORR considers that GTR failed to appropriately balance service recovery with the need for passenger information to an unacceptable extent and duration throughout the implementation of their service recovery plan.
28. In particular ORR has identified failings in the following areas:
a. Aligning service recovery with passenger information obligations. ORR considers that too often there was a failure in operational decision-making to give adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Further ORR considers that as information failures persisted over such a sustained period of time, without any timely or proportionate response to these
______________________________________________________________________
8 ORR’s investigation into GTR’s delivery of passenger information prior to 20 May timetable is set out in full in our Investigation Report.
9 Details set out in paragraphs 4.68-4.69 of ORR’s Investigation Report issues, there was a fundamental problem at both a strategic and functional level in aligning operation recovery with passenger information obligations.
b. **Provision of ‘Alpha list’ and other journey information**. ORR considers that GTR’s failure to clearly communicate known cancellations in a timely manner undermined the ability of prospective passengers to plan ahead and make informed journey decisions. The Alpha list information could have been published sooner than 25 June, which would have provided greater certainty to passengers about services which were not planned to run.
c. **Day to day amendments**. ORR considers that operational decisions taken and implemented to support the recovery process were in many cases to the detriment of providing passengers with appropriate, accurate and timely information to an unacceptable extent and duration. Passengers were therefore left uncertain of what services would run each day as travelling on a particular train one day was no guarantee that it would run or be shown on station screens the next day. ORR considers that the cumulative effect of the factors described here manifested in the unacceptable passenger outcomes described in our Investigation Report and in the numerous examples of passenger information failures.
29. ORR wrote a case to answer letter to GTR on 29 January 2019 to state that we considered there was evidence that GTR did not do, and is not doing everything reasonably practicable to deliver its passenger information obligations following the 20 May timetable change.
30. GTR requested a meeting with ORR and provided a written response to our letter on 13 February 2019. GTR raised a number of inaccuracies with our Investigation Report and stated that it considered that it did do everything reasonably practicable to deliver its passenger information obligations in light of exceptional circumstances, which were a direct result of industry failings.
31. In response to the representations ORR made some revisions to its Investigation Report.
32. In accordance with ORR’s rules of procedure, the decision whether to find GTR in contravention of condition 4 and if so what regulatory action to take, was made by ORR’s Board. ORR’s Board took into account all relevant material including the Investigation Report and GTR’s representations and is satisfied that:
(i) GTR’s operational decision making was not supported by passenger information that was sufficiently aligned to the steps that it was taking to recover the service;
(ii) GTR’s failure to clearly communicate known cancellations in a timely manner undermined the ability of prospective passengers to plan ahead and make informed journey decisions; and
(iii) Operational decisions taken and implemented to support the recovery process did not take account of the need to provide passengers with
______________________________________________________________________
10 GTR’s Alpha list was a list of specified train services that it was unable to run and which were removed from the timetable. 11 Details set out in paragraphs 4.70–4.74 of ORR’s Investigation Report 12 Details set out in paragraphs 4.75-4.79 of ORR’s Investigation Report 13 ORR’s case to answer letter has been published along with this notice appropriate, accurate and timely information to an acceptable extent and within an acceptable time period.
33. ORR is therefore satisfied that, taking account of all evidence, including our findings and GTR’s representations, there is evidence that GTR contravened Condition 4 of its SNRP in that it failed to deliver to the greatest extent reasonably practicable, having regard to all relevant circumstances, its obligation to provide appropriate, accurate and timely information to passengers to enable them to plan and make their journeys with a reasonable degree of assurance.
34. ORR is not satisfied that there is sufficient evidence that this contravention is a current breach because GTR has taken some steps to ensure that the same situation would not happen again, in particular: a. The steps GTR took to provide appropriate, accurate and timely passenger information during the implementation of the interim timetable on 15 July 2018, the phasing of additional services through September 2018 and the further timetable change in December 2018; b. The information from Transport Focus regarding a Customer Awareness Report based on research carried out through October and November 2018 showing that 88% of passengers overall and 92% of commuters were aware of the planned February blockade on the Brighton Mainline; c. The utilisation of a dedicated project website by Network Rail and GTR to communicate to passengers about The Brighton Mainline Improvement Project; d. GTR advise it has service recovery frameworks (SRF) to respond to disruptive events across GTR’s routes, which are supported by customer plans; e. Since May 2018, GTR advise it has rolled out new smart phones to its entire front line staff pre-loaded with industry information applications to enable staff to have improved access to passenger information. Further, as it became apparent during the May Timetable disruption that GTR’s messaging system “Tyrell” was not able to keep up the level of changes being inputted into the system, GTR has since converted to a cloud based scaleable environment to allow the system to respond to user demand more effectively; and f. Improvement in performance and reduction in compensation claims following the introduction of the July 2018 timetable.
35. The penalty that ORR proposes to impose on GTR therefore relates to a past breach of condition 4 as specified above.”
36. The Proposed Penalty Notice then went on to consider whether, in ORR’s provisional view, a penalty was justified and if so (again, in ORR’s provisional view) what the level of such penalty should be. That part of the Proposed Penalty Notice is reproduced below14:
14 Paragraphs 36-63 of the Proposed Penalty Notice “Factors that justify the imposition of a penalty
36. ORR’s penalties statement states that, in deciding whether to impose a penalty, we will take full account of the particular facts and circumstances of the contravention, including any representations and objections made to us. ORR will also act in accordance with our Section 4 duties under the Act, and take into account the six penalty principles set out in the Macrory report(^{15}) and the related five principles of good regulation (proportionality, targeting, consistency, transparency and accountability).
37. ORR’s primary objective in setting a penalty is to change the future behaviour of a licence holder and to incentivise it and others to comply with their obligations both specifically and in general.
38. ORR considers that a penalty is appropriate in relation to GTR’s failure to provide appropriate, accurate and timely information to passengers because: a. a penalty would incentivise GTR to ensure that the provision of information to passengers is managed more effectively in the future; and b. a penalty could also act as a future deterrent to other licence holders.
39. In deciding whether or not a penalty is appropriate, ORR also considered the following factors to be relevant: a. The reputational damage GTR have already suffered and additional costs incurred due to their wider failings in relation to the 20 May timetable change; b. GTR have taken some steps to compensate passengers through delay compensation schemes and have paid a passenger benefits fund to the Department for Transport. However, these sums were paid in response to its wider failings in relation to the 20 May timetable change and do not address the harm caused by its additional failings to provide adequate information to passengers; c. GTR have learnt some lessons from the 20 May timetable change and made some changes prior to the December timetable change. However, there is a lack of evidence that GTR undertook a significant lessons learnt exercise relating to passenger information and have focused instead on the wider industry failings; d. GTR have not acknowledged responsibility for its failure to provide adequate information to passengers.
Factors that justify the amount of the penalty
(^{15}) See the Macrory report - ‘Regulatory Justice: Making Sanctions Effective’ and the related five principles of good regulation- The six penalty principles are: (i) aim to change the behaviour of the offender; (ii) aim to eliminate any financial gain or benefit from non-compliance; (iii) be responsive and consider what is appropriate for the particular offender and regulatory issue, which can include punishment and the public stigma that should be associated with a criminal conviction; (iv) be proportionate to the nature of the offence and the harm caused; (v) aim to restore the harm caused by regulatory non-compliance, where appropriate; and (vi) aim to deter future non-compliance. 40. In line with our penalties statement ORR has considered factors falling into two categories: a. Proportionality; and b. Mitigating and aggravating factors.
Proportionality
41. The penalty should be proportionate to the seriousness of the contravention, and this is our starting point in calculating the amount. In considering the seriousness, in line with paragraph 129 of ORR’s economic enforcement policy and penalties statement, ORR has looked at: a. the actual and potential harm caused to third parties including passengers and other railway users and to the public interest purpose of the obligation (including the effectiveness of the regulatory regime); b. the culpability of the licence holder, including whether it has acted negligently, recklessly, knowingly or intentionally; and c. the extent to which the licence holder has co-operated with ORR during the investigation.
42. ORR sets out in its penalties statement, five levels of seriousness ranging from a technical or de minimis contravention to a very serious contravention, with corresponding financial ranges. Our policy states that these levels of seriousness are based on previous actions taken by us and judgements of seriousness and recognises that when we consider the particular facts and circumstances of each individual case, we may consider it appropriate to deviate from the scales.
Actual and potential harm:
43. To assist in determining the starting point for the penalty, ORR have assessed the level of harm/potential harm, particularly the harm caused to passengers of GTR’s Thameslink and Great Northern services caused by the failure to provide appropriate, accurate and timely information.
44. In relation to passenger information, it is difficult to quantify the actual and potential harm caused, although we have some evidence relating to key industry data, GTR social media engagement and passenger research carried out at the time of the issues.
45. In this particular case, issues with the provision of information, while serious, do not appear to be ‘systemic’ nature and affected passengers relying on GTR services primarily during an 8-week disruption period.
46. ORR further recognises that ineffective passenger information was not the only cause of harm as passengers were already suffering disruption to services because of the timetabling problems. In effect, even if passenger information had been ‘perfect’ passengers would still have suffered harm due to the wider disruption to services. ORR considers that GTR’s passenger information failings exacerbated the level of harm felt by passengers during this period as inaccurate or late changes to timetables further undermined their ability to plan and make journeys.
47. The impact of the passenger information issues predominantly affected GTR’s Thameslink and Great Northern service routes and GTR stated in its letter of 13 February 2019 to ORR that: a) at the time of the May 2018 timetable implementation, it carried on average 1.06m passengers per weekday including in excess of 474,000 passengers per weekday on its Thameslink and Great Northern services and there were 982 front line staff on the Thameslink and Great Northern services; b) Southern and Gatwick Express services did not suffer to the same extent from the late validation of the timetable issues and the operational and passenger information systems were therefore fully uploaded and correct for the implementation of the May 2018 timetable. As a result, passengers travelling on those services, which at the time made up over 63% of the GTR operation, were not as significantly affected as the passenger information was held and displayed correctly within the industry information systems.
48. ORR also considered the following impacts felt by passengers from the overall disruption: financial; stress and inconvenience; employment; social; personal safety; trust in the railway (and changing travel behaviour); and the impact of the disruption on disabled passengers. It is not possible to assess the extent to which these impacts can be directly attributed to the failure to provide adequate information, however it is clear that inadequate information will have exacerbated the impacts of the service issues.
Culpability: 49. ORR’s policy is to consider culpability including whether GTR acted negligently, recklessly, knowingly or intentionally.
50. ORR consider that GTR has some culpability in relation to the provision of passenger information post 20 May timetable until its interim timetable was introduced on 15 July.
51. We do not think that GTR benefited financially from the breach and we have no evidence that it cut corners to save money. In fact, ORR are aware GTR increased its staffing to manage the problems and the cost to GTR could be significant both reputationally, as well as financially.
52. Overall, ORR considers that GTR’s behaviour was not knowing or intentional but was instead towards the negligent end of the spectrum. Its focus on capacity of services during disruption was, we consider, made with the best intentions, but we take the view that much of its positive work to stabilise service levels and manage these issues post 20 May 2018 did not flow effectively through to adequate passenger information outcomes.
53. However, as time progressed and the extent of the information failures impacting passengers was repeatedly communicated to senior management, we have no evidence to demonstrate a timely or proportionate level of reaction or enhanced response to recognise and then improve the situation. In this respect, we consider that there was initially negligence but then latterly a level of knowing
______________________________________________________________________
16 These impacts are set out in more detail in chapter 2 of ORR’s Investigation Report. acceptance of the problem until the interim timetable was introduced on 15 July (Phase 3 of the Service Recovery Plan).
Co-operation with ORR during the investigation: 54. ORR considers that GTR’s co-operation with the investigation is what we would expect and therefore it does not alter our perception of the level of seriousness.
Level of seriousness: 55. ORR considered that the relevant levels of seriousness drawn from ORR’s penalties statement were: a. Less serious – this level would be appropriate in circumstances where a relatively small amount of harm was caused or was caused only to a small geographical area. b. Moderately serious – this level is more appropriate in circumstances where there were more serious implications and more serious actual or potential harm to third parties. c. Serious – this level is appropriate where there is evidence of systemic failings that results in serious harm or potential harm to third parties. 56. ORR does not consider that the contravention should be regarded as less serious because of the wide areas covered by the Thameslink and Great Northern routes, the large number of passengers affected over an 8 week period and the fact that, whilst the provision of information was not the only cause of harm, it exacerbated it to a significant degree. ORR also does not consider the contravention should be regarded as serious since ORR does not consider the failings to be systemic in nature. 57. Having considered the factors above, ORR has decided that this contravention therefore falls into the moderately serious level in our penalties statement, which suggests a starting point in the range up to £10m. 58. Taking all potentially relevant factors into account, we have decided that the significant actual (and potential) harm caused to passengers from the failure to provide adequate information, taken together with GTR’s culpability, puts the starting point in the middle of this range. ORR has therefore decided that the starting point should be £5m.
Mitigating and aggravating factors 59. ORR’s penalties statement also states that we will adjust the starting penalty up or down to take account of relevant mitigating and aggravating factors, according to the particular facts and circumstances of each case. 60. ORR’s penalties statement sets out a number of mitigating and aggravating factors which it may consider. From this list, ORR has identified the following mitigating factors that apply to GTR: a. Steps taken to minimise the risk of the breach recurring:- GTR has taken some steps to improve communications and passenger information for future timetable introductions and more generally (see paragraph 34); b. Repeated or continuing infringement of this or other obligations:— no formal licence action has previously been taken against GTR to date; and
c. Co-operation with ORR’s investigation:— we consider that GTR has co-operated with our investigation and have been generally open and forthcoming with their responses.
61. ORR has also identified the following aggravating factors that apply to GTR:
a. Steps taken to rectify the breach, including whether these were initiated proactively by the licence holder or in response to ORR’s actions & the extent of involvement of directors of senior management in the action or inaction which caused the breach or their lack of appropriate involvement in action to remedy the breach:— during the 8 weeks of disruption, the scale of information failures became more apparent to senior management. However, despite this awareness we have not seen sufficient evidence that GTR took subsequent steps to address the level of inadequate information to passengers;
62. ORR has noted that to date we have also not received any separate offers of reparations for consideration under our economic enforcement policy.
63. ORR considers that the mitigating and aggravating factors balance each other out and therefore proposes that the penalty should be set at £5m.”
Representations
20. In accordance with s.57C(1)(e) ORR specified in the Proposed Penalty Notice the period within which representations or objections with respect to the proposed penalty should be made, namely by 5 April 2019.
21. ORR received two responses during the specified period, neither of which were withdrawn.
Transport Focus
22. Transport Focus responded to the Proposed Penalty Notice via letter dated 1 April 2019. It welcomed ORR’s decision that GTR failed to provide appropriate, accurate and timely information to passengers after the 20 May 2018 timetable change.
23. However, Transport Focus considers that whilst the proposed £5m penalty sends a message to GTR and the industry, it will not directly benefit those passengers who suffered. They consider that it would be better to reinvest the money in order to benefit the affected passengers and therefore they had contacted GTR urging them to consider making an offer of reparations with a focus on improving passenger information and making journey planning easier. Transport Focus encouraged ORR to consider any such offer of reparations, should one be made by GTR.
17 Transport Focus’ letter is provided at Annex B to this Notice **ORR response**
24. ORR’s states in its Penalties Statement that it encourages licence holders to offer reparations to be considered as part of its enforcement process, if a licence holder has acknowledged its failings. ORR would expect any offer of reparations to be submitted along with a detailed plan so that it is clear what is being offered, or what has already been done. ORR would then determine if the reparation is genuinely additional, appropriately targeted and proportionate, deliverable and provides value for money.
25. However, ORR has not received any offer of reparations from GTR. Further, as recorded elsewhere in this Notice, GTR has not acknowledged its failings. Transport Focus’ submissions are therefore inapplicable.
**GTR**
26. GTR responded to the Proposed Penalty Notice via letter dated 5 April 2019 and made a number of substantive representations, in relation to both the Contravention Decision and the proposed penalty.
**Summary of GTR’s representations**
27. In summary GTR consider that ORR has: a. failed to take all relevant circumstances into account when formulating the remit of its investigation; and b. failed to give other relevant circumstances due and proper weight in arriving at its findings.
28. GTR submit that if all relevant circumstances are considered ORR should not have found it to be in contravention of condition 4 following the implementation of the 20 May 2018 timetable.
29. In relation to the proposed penalty, GTR also submit that without prejudice to its representations on the Contravention Decision: a. no penalty should be imposed upon them in respect of any contravention found by ORR; alternatively b. the proposed penalty is in any event disproportionate and not reasonable in light of the factors highlighted in its representations.
**Contravention Decision:**
30. GTR submit that ORR wrongly failed to take account the reasons for the disruption that occurred following 20 May 2018. It also submits that, both at the time when ORR commenced its investigation and in its “case to answer” letter dated 29 January 2019, ORR failed to mention that it would disregard the circumstances that led to the disruption and GTR’s decision not to implement an emergency timetable, both of which are in GTR’s view material and highly relevant.
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18 GTR’s letter of representations and supporting material is provided at Annex C to this Notice considerations. Accordingly, GTR submits, ORR has failed to take into account all relevant circumstances and has therefore failed to apply condition 4 correctly.
31. GTR points to “significant failings” by Network Rail in terms of its timetable offer to GTR, leading to very late finalization of the new timetable, with a knock-on impact on GTR, resulting in the delays and cancellation of services experienced in the period following the timetable change, the volume of which only became apparent at a very late stage in the process. Such delay had a damaging effect on GTR’s ability to finalise its resourcing plans and on the time available to GTR to match the skills and route knowledge of its crew with the requirements of the timetable and associated operating plans.
32. GTR submit that its ability to provide accurate and timely information to passengers cannot be considered in isolation from what ORR refers to as GTR’s decision not to implement an emergency timetable. GTR emphasises that emergency timetables are only suitable for very short-term disruption, and the 8-week period of disruption could not have been adequately addressed by an emergency timetable.
33. GTR contends that its best option was to stabilise services whilst planning to introduce a more robust and sustainable timetable on 15 July 2019, which passengers could rely on. GTR submit that it was not possible to introduce the interim timetable any sooner, had it done so then it would have resulted in a severely limited service that would not be acceptable for a commuter operator. GTR submit that ORR should have taken into account its inability to implement an emergency timetable.
34. In relation to ORR’s specific findings of failings, GTR submits as follows: a. As to the finding that operational decision-making was not supported by passenger information that was sufficiently aligned to service recovery, GTR submits that ORR has failed to give due and proper consideration to the particular characteristics of its franchise. GTR’s status as a commuter operator means that its priority was necessarily to enable as many passengers as possible to undertake their journeys. The value provided by every additional train it was able to run was not significantly diminished by an inability to provide passengers with the level of advance information that it would provide in ordinary circumstances. GTR do not accept that there was a lack of alignment between its service recovery and passenger information operations. GTR’s operational and information teams are both located in the Three Bridges Rail Operating Centre, and information was being updated manually as the operational decisions were being made. b. As to the finding that GTR failed to clearly communicate known cancellations in a timely manner, undermining the ability of prospective passengers to plan ahead and make informed journey decisions, GTR reiterate that it would not have been appropriate to publish the ‘Alpha list’ in its operational form as it did not contain details of the intermediate stops. The information in the Alpha lists was made available via journey planners from 11 June 2018. GTR further submit that they took the best approach, which was to produce accurate revised timetables for passengers and to disseminate the information once it was stable.
c. As to the finding that operational decisions taken and implemented to support the recovery process did not take account of the need to provide passengers with appropriate, accurate and timely information to an acceptable extent and within an appropriate time period, GTR submit that the exceptional circumstances of the disruption were such that GTR was receiving information on an hour-by-hour basis, which restricted its ability to provide greater advance notice of ‘Beta list’ cancellations to passengers, hence its advice to passengers to keep checking journey planners and speak to station staff prior to their planned journey.
**ORR response:**
35. ORR has carefully considered GTR’s representations, but for the following reasons does not consider that they call into question the soundness of the Contravention Decision.
36. First, both the terms of reference for the investigation and ORR’s case to answer letter clearly explain that the scope of ORR’s investigation was to investigate GTR’s provision of information prior to the implementation of the 20 May 2018 timetable and during the subsequent disruption.
37. Contrary to GTR’s submissions, ORR did take account of the exceptional circumstances that GTR faced following the implementation of the 20 May 2018 timetable. As can be seen from paragraphs 25 to 27 of the Proposed Penalty Notice, ORR explicitly acknowledged the exceptional circumstances facing GTR at the time, which meant that providing perfect advance information was from the outset an impossible task and that there would inevitably be a period of reactivity on GTR’s part as both the scale and severity of the disruption emerged. However, ORR maintains the view that as time progressed the provision of information should have improved.
38. ORR reiterates that it does not criticise GTR for its decision not to implement an emergency timetable. As stated at paragraph 4.6 of the Investigation Report, “Condition 4 of the Passenger Train Licence and the Statement of National Regulatory Provision (SNRP) is not intended to undermine the primary objective of providing the best available service for passengers. For that reason we have not sought to question GTR’s decision in this area.” ORR have also not criticised GTR, or questioned its reasons, for implementing its interim timetable on 15 July. The relevant inquiry, however, is whether, having made those decisions, GTR’s provision of information over the 8-week period between 20 May and 15 July 2018 complied with condition 4. ORR’s conclusion was that it did not.
39. To the extent that GTR contends that its duty under condition 4 is modified on account of its operating predominantly commuter services to and from London, ORR disagrees. First, not all passengers are commuters, and of those who are commuters not all of them commute to and from London. Secondly, it should be noted that GTR run timetabled services rather than high-frequency, high-capacity services such as the London Underground. As such, GTR’s passengers are entitled to proper information as to the status of such services for the purposes of both planning and making journeys, in the same way as passengers on routes served by other train operators.
40. ORR next addresses GTR’s criticisms of ORR’s specific findings of failings in relation to the provision of information.
41. ORR maintains the view that GTR’s operational decision-making was not supported by passenger information that was sufficiently aligned to service recovery. As the final investigation report explained at paragraph 4.18, “too often there was a failure in operational decision-making to give adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take. Moreover, the persistence of these information failures over such a sustained period of time, coupled with the lack of evidence as to the company developing any timely or proportionate response to these issues, lead us to conclude there had been a fundamental problem at both a strategic and functional level in aligning operational recovery with passenger information obligations”. It is irrelevant that, as GTR states, the operations and information teams are located in the same physical space.
42. ORR also maintains its conclusions in respect of the ‘Alpha list’. ORR disagrees with GTR’s view that it would have been inappropriate to publish that list in its operational form because it did not contain details of the intermediate stops. ORR notes in this regard that it is standard industry practice to publish information about disrupted services by referring solely to their time, origin and destination.19
43. Further, whilst it is true that journey planners were updated as of 11 June 2018, GTR did not make clear to passengers until 25 June 2018 which services had been cancelled altogether until further notice and which were just one off cancellations. As noted at paragraph 4.22 of the Investigation Report, whilst the timetables for weekday services were uploaded to journey planners on the Sunday evening, the times for more than a week ahead still showed the full Monday-to-Friday timetable as expected to be introduced in May 2018.
44. Finally, ORR maintains the view that the day-to-day amendments made by GTR led to unacceptable passenger outcomes, as found at paragraphs 4.75 to 4.79 of the Investigation Report. GTR persevered with a process of making overnight and
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19 See e.g. Southern’s website on 9 April 2019: very late notice changes until the introduction of an interim timetable on 15 July, despite the impact that this had on the provision of passenger information for a prolonged period. ORR does not accept that GTR has provided sufficient reason to justify the extremely late provision of information over a sustained period of time, including in some cases after a service was due to have departed, and more generally the numerous instances of information inadequacies experienced by passengers.
45. In conclusion, therefore, ORR does not consider it appropriate to alter or withdraw its decision that GTR contravened condition 4 of its SNRP.
**Decision to impose a penalty:**
46. In response to the Proposed Penalty Notice, GTR first makes submissions on whether ORR should impose any penalty at all.
47. GTR submits that ORR acted inconsistently with the Penalties Statement by failing to “take full account of the particular facts and circumstances of the contravention”. GTR submit that, when placed in the proper context of the exceptional circumstances of the 20 May 2018 timetable change, any contravention should not be met with a penalty.
48. GTR states that ORR has not found any current breach of Condition 4 and has acknowledged steps taken by GTR to guard against the same situation reoccurring. GTR submit that it is accordingly neither necessary nor appropriate to impose a penalty based on seeking to change or incentivise its future behaviour, and it is unjustifiable to impose a penalty as a deterrent to other operators.
49. In relation to the factors justifying the imposition of a penalty as set out at paragraph 39 of the Proposed Penalty Notice, GTR make the following representations:
a. It has paid out over £17.7m under its additional passenger compensation scheme, over £2.5m under the delay repay scheme over and above the normal run rate, and almost £30k in enhanced compensation for the period 20 May to 14 July;
b. The delivery of accurate and timely information to passengers was, and continues to be, one of its key priorities. The various steps taken to improve its passenger information as set out in paragraph 34 of the Proposed Penalty Notice demonstrate that it has undertaken significant lessons learnt exercises; and
c. It is not correct to say that it has not acknowledged responsibility for the provision of inadequate information to passengers. GTR acknowledges responsibility for its passenger information not reaching the standards it would ordinarily meet, and has apologised for the unacceptable levels of disruption suffered by passengers, both publically and in submissions to ORR.
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20 See paragraph 4.76 of the Investigation Report 50. GTR further submit that the imposition of a penalty would be inconsistent with the penalty principles set out in the Macrory Report.\\textsuperscript{21} GTR submit that as ORR have not found them to be in current breach, it is not appropriate to impose a penalty partially or wholly on the basis of seeking to change its future behaviour and/or deter future non-compliance. GTR also point to the fact that they have already suffered reputational damage and additional costs as a result of the 20 May 2018 timetable change.
51. GTR contends that ORR have not appropriately factored in the financial repercussions already felt by GTR. In particular, GTR draws attention to the £15m passenger benefits fund that GTR has made available pursuant to agreement reached in November 2018 with the Department for Transport (the Passenger Benefits Fund). GTR submits that ORR is wrong to consider that the Passenger Benefits Fund does not address the harm caused by its failings to provide adequate information to passengers. GTR submit that its agreement with the DfT did address the failure to provide adequate information to passengers.
52. GTR also submit that a decision to impose a financial penalty is not compliant with the five principles of good regulation:
a. **Proportionality:** ORR’s finding that there is no current breach, and the significant costs and investment incurred by GTR, demonstrate that it is not necessary or proportionate to effectively re-penalise it;
b. **Accountability/transparency:** in light of GTR’s submissions regarding ORR’s remit of its investigation, imposing a penalty would not serve the interests of accountability or transparency;
c. **Consistency:** ORR has not been completely consistent in its approach to its investigation into Northern’s compliance with Condition 4 compared to its investigation into GTR. Further, no penalty has been imposed on Network Rail despite it being in breach of conditions 1.23 and 2.7 of its licence, on the basis that it would not be appropriate as it would not further incentivise compliance; and
d. **Targeting:** in failing to properly consider the wider May 2018 context, ORR has necessarily been unable to accurately quantify the level of harm suffered by passengers that is attributable to any passenger failings by GTR; therefore any penalty is insufficiently targeted at the specific issue of passenger information.
**ORR response:**
53. ORR has carefully considered the points advanced by GTR but remains of the view that the imposition of a penalty is justified and proportionate, in accordance with the Macrory principles.
54. As noted at paragraph 121 of the Penalties Statement, ORR’s primary objective in setting a penalty is to change the future behaviour of an offender and to deter non-
\\textsuperscript{21} Regulatory Justice: Making Sanctions Effective (November 2006). compliance with its obligations (both specifically and in general); ORR also aims to incentivise others subject to similar obligations to comply with them.
55. The fact that GTR is not currently in breach of condition 4 does not make a penalty inappropriate in this case. ORR considers that imposing a penalty would provide a transparent signal to the industry in respect of GTR’s (and other TOCs’) role and responsibilities in relation to passenger information, and would serve to deter both GTR and others subject to similar SNRP conditions from breaching them in future. Moreover, whilst there is no finding that GTR is currently in breach of condition 4, the fact remains that GTR has not accepted responsibility for the information failures experienced by passengers (indeed, it has consistently denied contravening the condition).
56. Further, as already explained above, the circumstances facing GTR at the time do not excuse its failings; nor do they not justify the non-imposition of a penalty.
57. ORR is confident that there has been no inconsistency of treatment between GTR and Northern: there were clear differences in the respective TOCs’ provision of information to passengers during the disruption, as detailed in the respective decision letters and investigation reports. Further, ORR considers that drawing parallels with Network Rail in this context is inappropriate. The circumstances of the two companies are not the same, and ORR notes that Network Rail’s licence breaches resulted in ORR making an enforcement order requiring Network Rail to undertake a number of actions, including reporting to ORR, which were designed to ensure that such breaches would be remedied. The same does not apply to GTR.
58. With regard to the GTR’s reliance on the compensation it has paid and the Passenger Benefit Fund, ORR considers that neither amounts to an “offer of reparations”, per paragraph 122 of the Penalties Statement. The compensation payments relate to the (persistent) delays suffered by passengers, rather than the additional impact felt by them as a result of the information failings identified by ORR. As for the Passenger Benefits Fund, ORR notes that it has not been provided with a copy of the agreement between GTR and DfT pursuant to which the fund was set up or any clear explanation of its purpose and scope. A letter from DfT in December 2018 stated that the Passenger Benefits Fund was a means of holding GTR to account for their role in the unacceptable performance following the 20 May 2018 timetable change. ORR notes that DfT has responsibility for holding TOCs to account in their performance of their franchise obligations, and that GTR’s wider failings in relation to the timetable change will have fallen within the purview of its franchise agreement. Unsurprisingly, the DfT’s letter did
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22 The decision letter and investigation report in respect of Northern are available at https://orr.gov.uk/rail/investigations-and-current-issues/investigation-into-gtr-and-northern-trains-provision-of-information-to-passengers-during-and-after-the-may-2018-timetable-disruption.
23 In its letter to ORR dated 24 July 2018 in relation to the Inquiry, GTR provided a screenshot confirming that “if there are persistent delays on a route, season ticket holders are also sometimes entitled to enhanced compensation.” not suggest that the Passenger Benefits Fund covered failings related to GTR’s SNRP, which are ORR’s responsibility to investigate.
59. On 20 February 2019, DfT further provided the following additional explanation:
“On the level of the fund I suspect all we could say is that we took all the facts and circumstances into account including the level of the previous payment made by GTR in relation to the 2016 problems on Southern, the desire to create a fund which could provide meaningful benefits for passengers and the financial position of the TOC: pointing out that with the fund set at this level GTR will make no profit at all this year in recognition of their role in the disruption.”
60. This further explanation does not alter ORR’s analysis at paragraph 58 above.
61. ORR further notes that the Passenger Benefits Fund relates to GTR’s performance delivery to Thameslink, Great Northern and Southern, and that all these routes will receive benefits under the fund, whereas ORR’s breach findings relate to the first two routes only. Again, this is consistent with the DfT’s own remit in respect of TOCs’ franchise obligations.
62. ORR have become aware of a new website that has been set up in recent weeks in relation to the Passenger Benefits Fund24 which sets out how the funding will be allocated to the stations affected and how passengers can propose local or wider passenger benefit schemes. Under “wider passenger benefit schemes”, the site suggests some examples of possible schemes that would lead to passenger information improvements.
63. ORR recognises that the operation of the fund could result in some improvement to the provision of passenger information at specific stations (e.g. an additional CIS screen,) but only if a significant proportion of passengers support such an improvement. Further, it is not sufficiently clear whether the fund will go towards making passenger information improvements for it to have any, or any significant, weight in the penalty assessment. Finally, it is in any event highly doubtful whether any such forward-looking information improvements as may be brought about by the fund would constitute “reparations” to those who were affected by the breach of condition 4.
**Penalty amount**
64. GTR further submit that, in any event, a penalty amount of £5 million is excessive and not reasonable in the circumstances.
65. It disagrees with the proposed starting point of £5 million for the following reasons: a. ORR has attributed too much of the harm suffered by passengers to the matters identified by it as GTR’s passenger information failings and therefore the level of penalty imposed is disproportionate to the level of harm directly attributable to issues with passenger information;
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24 [https://www.passengerbenefitfund.co.uk/](https://www.passengerbenefitfund.co.uk/) b. the alleged contravention is a past breach, it was not a systemic breach, and the effects were largely limited to an 8 week period;
c. ORR has acknowledged that the contravention did not extend to the majority of GTR’s passengers on its Southern and Gatwick Express services;
d. ORR has failed to take into account GTR’s status as a commuter operator, which makes a focus on capacity absolutely essential and therefore the contravention cannot be characterised as being towards the negligent end of the spectrum. GTR further denies that at any point was there a level of knowing acceptance of the problem; and
e. ORR raises no issues with GTR’s cooperation with the investigation.
66. GTR agrees with the mitigating factors set out in paragraph 60 of the Proposed Penalty Notice; however, it considers that greater weight should be given to these factors. It considers that the following additional factors are also relevant:
a. the primary mitigating factor is the wider context of the 20 May 2018 timetable change and therefore GTR’s contravention cannot be accurately addressed without a consideration of the context in which it was operating; and
b. the remedial measures GTR took (resulting in a finding of no current contravention) and the interim timetable it implemented demonstrate that it proactively took steps to rectify any failings and minimise the chances of the failings re-occurring.
67. GTR disagrees with the aggravating factor set out in paragraph 61 of the Proposed Penalty Notice, submitting that its senior managers were involved in the development and implementation of responses to issues through gold command control calls five times a day, daily “exec calls” chaired by GTR’s Chief Operating Officer, and “war room meetings” every 48 hours. GTR submits that its service recovery plan had at its heart a recognition of the importance of passenger information, and reflected the fact that GTR would not have reliable information to give to passengers until a certain level of service stability had been achieved.
68. GTR therefore submit that the relevant mitigating factors significantly outweigh any aggravating factors, and the level of penalty should be reduced to reflect this.
**ORR response**
69. ORR has carefully considered GTR’s representations on the amount of the proposed penalty, but remains of the view that a penalty of £5 million is appropriate in this case, for the following reasons:
70. First, the Penalties Statement points out at paragraph 129 that in setting a penalty the starting point will normally be the seriousness of the breach. In considering seriousness, ORR will look at the actual and potential harm caused to third parties, the culpability of the offender and the extent of its cooperation with ORR during the investigation. Those factors were all addressed in the Proposed Penalty Notice. At paragraph 130 of the Penalties Statement, ORR distinguishes five levels of seriousness. ORR notes that GTR has not expressly disputed ORR’s provisional decision, by reference to the Penalties Statement, that the contravention is a “moderately serious” breach, justifying a penalty of up to £10 million; nor does it argue that another level is more appropriate.
71. ORR maintains its view that the breach here falls into the “moderately serious” bracket:
a. This is not a case where third parties suffered only a relatively small amount of harm: to the contrary, GTR’s information failings, on two important routes, compounded the adverse impact already felt by passengers as a result of the May 2018 disruption, as explained in the Proposed Penalty Notice and in chapter 2 of the Investigation Report. The fact that the contravention did not extend to Southern and Gatwick Express services does not make the breach “less serious”, in ORR’s view.
b. ORR maintains the view that GTR’s behaviour was towards the negligent end of the spectrum. GTR’s emphasis on its status as a commuter operator is misplaced: as explained above, the fact that GTR carries many commuters does not dilute its duty to provide appropriate information to passengers. ORR maintains the points it made at paragraphs 52 and 53 of the Proposed Penalty Notice.
72. ORR therefore maintains that it is justified in choosing a starting point in the middle of the range indicated in the Penalties Statement, namely £5 million.
73. As for mitigating factors, ORR acknowledges the context of the 20 May 2018 timetable change, but does not consider that this represents an additional mitigating factor. As set out in this Notice, ORR’s investigation required focus on the circumstances in which GTR found itself and how it then provided information to passengers, and not the underlying cause of the timetable failure. Even taking the circumstances into account, the scale and extent of the information failure was substantial.
74. The calculation of the proposed penalty acknowledged both the improvement in performance following the introduction of the interim timetable and the steps GTR had taken to improve communications and passenger information in future (see paragraphs 34 and 60 of the Proposed Penalty Notice). However, set against that is the aggravating factor that ORR identified, namely that senior staff were aware of the scale and extent of information failures that were occurring (a point that is merely reinforced by GTR’s representations), yet any steps that were taken to improve information provision to passengers were ineffective and remained largely ineffective for the 8-week period that followed the 20 May 2018 timetable change.
75. The question of what adjustment, if any, should be made to the starting point is a matter of judgement, as paragraph 136 of the Penalties Statement notes. ORR’s judgement is that the mitigating and aggravating factors balance each other out, such that no adjustment to the starting point is warranted in this case. For that reason, the appropriate penalty is £5 million. Conclusion
76. ORR has carefully considered the representations received from Transport Focus and GTR. Having regard to its duties in Section 4 of the Act and the guidance contained in the Penalties Statement, and for the reasons set out above, ORR has decided that it should impose a penalty of £5 million in respect of GTR’s contravention of condition 4 as described in this Notice.
John Larkin Chief Executive Office of Rail and Road Annex A
Condition 4: Information for Passengers
Purpose
1. The purpose is to secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption.
General duty
2. The SNRP holder shall achieve the purpose to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available.
Specific obligations
3. The following obligations in this condition are without prejudice to the generality of the general duty in paragraph 2 and compliance with these obligations shall not be regarded as exhausting that general duty. In fulfilling these obligations the SNRP holder shall at all times comply with the general duty in paragraph 2.
Planning services
4. The SNRP holder shall cooperate, as necessary, with Network Rail and other train operators to enable Network Rail to undertake appropriate planning of train services and to establish or change appropriate timetables, including when there is disruption.
5. In particular, the SNRP holder shall:
(a) provide Network Rail with such information about the SNRP holder’s licensed activities as may be reasonably necessary for Network Rail to fulfil its obligations relating to timetabling in its network licence;
(b) participate constructively in any timetabling consultation carried out by Network Rail;
(c) use reasonable endeavours to resolve promptly any timetabling disputes; and
(d) respond expeditiously to any timetabling matter which Network Rail reasonably considers to be urgent.
Code(s) of practice and improvement plan(s) 6. The SNRP holder shall, unless ORR otherwise consents, publish one or more code(s) of practice or other documents setting out the principles and processes by which it will comply with the general duty in paragraph 2.
7. Where the SNRP holder considers, or is directed by ORR, that improvements to its arrangements for the provision of information to railway passengers and prospective passengers are necessary or desirable to enable it better to fulfil the general duty in paragraph 2, it shall develop, publish and deliver a plan, which sets out the improvements it intends to make and the dates by which such improvements will be made.
8. The SNRP holder shall, from time to time and when so directed by ORR, review and, if necessary, revise, following consultation, anything published under paragraph 6 and any plan under paragraph 7 so that they may better fulfil the general duty in paragraph 2.
9. ORR shall not make any direction under paragraphs 7 or 8 without first consulting the SNRP holder.
Provision of information to intermediaries
10. The SNRP holder shall as soon as reasonably practicable:
(a) provide to the holders of passenger and station licences; and
(b) provide to all timetable information providers on request reasonable access to appropriate, accurate and timely information to enable each on request to provide passengers with all relevant information to plan their journeys including, so far as reasonably practicable, the fare or fares and any restrictions applicable.
11. In this condition:
“Network Rail” means Network Rail Infrastructure Limited (a company registered in England and Wales under number 02904587), and its successors and assigns. Dear Stephanie
I am writing in relation to the potential £5m fine announced by ORR for Govia Thameslink Railway (GTR) over its failure to provide appropriate, accurate and timely information during the introduction of the new timetable last summer.
Our evidence to the Glaister inquiry clearly sets out the impact that poor information provision had on passengers during the ‘timetable crisis’. So we welcomed your announcement and hope it will be a wake-up call to train companies that accurate passenger information really matters.
We are very mindful, however, that it was passengers who felt the pain during this period. So while a £5m fine sends a message to GTR and the industry it will not directly benefit those passengers who suffered. We believe that the money from this fine would be better reinvested to benefit those passengers.
We are aware that the regulatory process ultimately results in fines being passed back to the Treasury but that there is provision for GTR to offer ‘reparations’ in mitigation of any such fine. We have contacted GTR urging that they consider making such an offer, with the focus on improving passenger information and making journey planning easier. Clearly this would need to be over and above existing commitments and be capable of being measured/monitored.
Assuming an offer is put forward we would urge ORR to consider it. This would still send a clear message to train companies about the importance of passenger information while at the same time ensuring that some of those who suffered from the licence breach benefit from the penalty.
Yours sincerely
Mike Hewitson Head of Policy Annex C – GTR letter of 5 April 2019 and appended documents to ORR 5 April 2019
Stephanie Tobyn Deputy Director, Railway Markets and Economics Office of Rail and Road One Kemble Street London WC2B 4AN
By post and email
Dear Stephanie
Re: Penalty Notice dated 14 March 2019 in accordance with Section 57C of The Railways Act 1993 (Penalty Notice)
1. We refer to ORR's investigation report published on 14 March 2019 (Report), the Penalty Notice and John Larkin's letter to Patrick Verwer dated 14 March 2019. We are writing in response to ORR's findings in the Report that Govia Thameslink Railway Limited (GTR) breached Condition 4 of its GB Statement of National Regulatory Provisions: Passenger (SNRP) in respect of the provision of appropriate, accurate and timely information to passengers following the implementation of the 20 May 2018 timetable and during the subsequent disruption, and its proposal to impose a £5m financial penalty on GTR.
Executive summary
2. We welcome ORR's finding that GTR complied with Condition 4 in the period prior to 20 May. This demonstrates that we take the provision of passenger information seriously and operate effectively in that regard both in ordinary circumstances and in circumstances of “business as usual” disruption.
3. The disruption which followed the implementation of the May 2018 timetable was truly exceptional in nature (as recognised by ORR at pages 5 and 60 of the Report) and directly and materially impacted on GTR's ability to provide adequate passenger information. We do not believe that ORR's finding that GTR breached Condition 4 in the period following the implementation of the May 2018 timetable is correct and this letter sets out GTR's representations and objections in relation to ORR's findings and the proposed penalty.
4. Condition 4 of the SNRP provides that the SNRP holder shall:
"…secure the provision of appropriate, accurate and timely information to enable railway passengers and prospective passengers to plan and make their journeys with a reasonable degree of assurance, including when there is disruption…to the greatest extent reasonably practicable having regard to all relevant circumstances, including the funding available” (emphasis added).
5. As explained further below, GTR's position is that:-
a. ORR has: (1) failed to take all relevant circumstances into account when formulating the remit of its investigation; and (2) failed to give other relevant circumstances due and proper weight in arriving at its findings;
b. if all relevant circumstances are considered, GTR was not in breach of Condition 4 in the period following the implementation of the 20 May 2018 timetable; and
c. without prejudice to the preceding point, no penalty should be imposed upon GTR in respect of any breach found by ORR or, alternatively, the £5m financial penalty is in any event disproportionate and not reasonable in light of the factors highlighted below.
The remit of ORR's investigation
6. Paragraph 4.6 of the Report states that:-
"The remit of this investigation is to consider the provision of passenger information during the disruption that occurred in the period following 20 May irrespective of the reasons for that disruption or the decision not to implement an emergency timetable" (emphasis added).
7. When ORR informed GTR that it was commencing its investigation and described its remit there was no mention of disregarding the circumstances that led to the disruption that occurred after 20 May or the "decision not to implement an emergency timetable" (see the Annex to your letter dated 3 October 2018). Further, when the investigation had reached an advanced stage and you wrote to GTR with ORR's preliminary findings on 29 January 2019, that letter did not make clear that these two material and highly relevant considerations would not be taken into account.
The reasons for the disruption
08. In response to ORR's preliminary findings, we expressed concern in our letter dated 13 February 2019 that ORR had not given sufficient consideration to the factors that caused the severe disruption suffered following the introduction of the May 2018 timetable (see paragraph 6 of that letter). Specifically, we explained that to divorce the investigation into GTR's compliance with Condition 4 from the wider context of the May 2018 disruption is not only an artificial exercise but one which would inevitably, and did in fact, lead to GTR being judged against a flawed standard. As noted above, ORR is required to have regard to all relevant circumstances and it is submitted that the reasons for the May 2018 disruption — broadly, industry-wide failings in the implementation of a timetable change of unprecedented size and complexity, in respect of which Network Rail was best placed to take action to avoid – are amongst some of the most relevant circumstances for ORR to consider and take into account.
09. ORR has now expressly confirmed that it has not considered the factors which led to the May 2018 disruption in producing the Report and imposing and setting the level of the financial penalty on GTR. This demonstrates that the concerns raised in our 13 February letter were well-founded, that ORR has not considered the exceptional circumstances of May 2018, and that ORR has failed to apply Condition 4 correctly.
10. In order that these factors can be considered now, we set out below an overview of the key issues, from GTR’s perspective, that led to the May 2018 disruption. These have been covered in greater detail in our previous submissions and in the Glaister Report itself:-
a. There were significant failings by Network Rail which ultimately led to the timetable disruption. The primary cause of the difficulties experienced in May 2018 was that the timetable offer made to GTR by Network Rail in November 2017 was not fit for purpose. This took several months to rectify; the last of the material changes were not resolved until 9 April 2018 when the new timetable offer was received from Network Rail, three months after GTR submitted its bid. This delay in providing the final timetable was critical. It meant that there was insufficient time to optimise the train crew diagrams – the diagrams that were issued for scrutiny were necessarily “first draft” versions whereas normally these would have been iterated several times to improve their efficiency – and the inevitable outcome was a high proportion of poor quality diagrams and then imbalanced rosters, resulting in the delays and cancellation of services experienced in the period following the timetable change. The volume of the cancellations only became apparent at a very late stage in the process, and was magnified by the complexity of the changes being made once the timetable was actually implemented.
b. Staff consultation took place in a very compressed timescale preventing GTR from optimising solutions.
c. The delays to the finalisation of the timetable had a particularly damaging impact on GTR’s ability to finalise its resourcing plans and on the time available to GTR to match the skills and route knowledge of its train crew with the requirements of the timetable and associated operating plans. That compressed the time available to carry out the necessary planning to ensure that sufficient route-trained drivers were in place. A process that usually takes 18 weeks was compressed into a 5 week period.
GTR’s interim timetable
11. GTR’s ability to provide accurate and timely information to passengers cannot be considered in isolation from what you refer to as our “decision” not to implement an emergency timetable. Clearly, if GTR had been able to introduce an emergency timetable, it would have been able to provide passengers with more accurate and timely information sooner. However, as set out at paragraph 21 of our 13 February 2019 letter, emergency timetables are only suitable for very short term disruption and the 8-week period of disruption resulting from the May 2018 timetable change could not have been adequately addressed by an emergency timetable.
12. As set out in our 16 October 2018 letter "...the better option was to stabilise services as best we could, whilst we planned to introduce a more robust and sustainable timetable on the 15 July, with optimised driver diagrams to ensure sufficient resources were available, and a timetable our passengers could rely on." The interim timetable introduced on 15 July was, in effect, an emergency timetable, but one that could provide the capacity that was needed, provide surety of consistent delivery and a timetable that could be communicated to passengers effectively. We were unable to create an immediate emergency timetable because of the time required to re-write the timetable and rolling stock and train crew diagrams that also needed to interface with Southern, Gatwick Express and other operators' timetables.
13. More fundamentally, even if some form of emergency timetable could have been introduced before 15 July, it would have resulted in a severely limited, unviable service. As we explained when we met on 24 October 2018, an emergency timetable would have involved running 70% of GTR's pre-May timetable services (transcript of 24 October 2018 meeting, page 19, lines 1-4) whereas, even on the worst days following 20 May, GTR ran roughly the same number of trains as we did prior to 20 May (page 19, lines 15-19); on most days we ran more. Demand would therefore have exceeded capacity to an unacceptable extent.
14. GTR's status as a commuter operator, the complexity of the railway services it provides, and the interfaces with other train operators across numerous Network Rail routes are significant and have not been given due consideration and weight by ORR. If they had been, ORR would have appreciated that, rather than "deciding" not to introduce an immediate emergency timetable, such an option was never available to GTR. As a commuter operator, GTR runs a high volume train service – approximately 3,500-4,000 trains are operated per day carrying 1.06 million passengers per weekday, many of whom are travelling to the same destinations on a regular/routine basis. This means that capacity is necessarily a key focus even in times of minimal disruption. The Report and ORR's own guidance states that Condition 4 "is not intended to undermine the primary objective of providing the best available service for passengers", but ORR has not applied this principle (see paragraphs 4.6 and 4.65 of the Report and paragraph 25 of Information for passengers: Guidance on meeting the licence condition). GTR's actions were governed by the need to provide as much capacity as possible and by the fact that the earlier introduction of an emergency timetable was not an option (since, amongst other reasons, it would have meant that tens of thousands of passengers would not have been able to travel). This could and should have been taken into account by ORR.
15. ORR has correctly recognised that the circumstances that arose following the introduction of the May 2018 timetable were exceptional (see, for example, paragraph 4.64 of the Report). On the bank holiday of 28 May 2018, once the extent of the problems had become clear, GTR's Chief Operating Officer called a crisis meeting in order to develop a recovery plan that would restore Thameslink and Great Northern back to a good level of service (a recovery plan was not required for Southern/Gatwick Express because passengers of those services were, by comparison, less affected by the May 2018 disruption (as noted at paragraph 47(b) of the Penalty Notice)). At this meeting it was identified that drastic action was required to arrest the decline in service and, as you are aware (see paragraph 4.8 of the Report), a three-phase programme was formulated. Phase 2 ("Achieve Stability") commenced on 4 June and was aimed at learning lessons from the two weeks following the implementation of the new timetable and removing a consistent set of diagrams from the timetable. During that phase, GTR also planned for the implementation of an interim timetable. Phase 3 ("Deliver Consistent Service") began from the implementation of the interim timetable on 15 July.
16. As we informed you when we met on 24 October 2018:-
a. Any emergency timetable would have to be for the duration of the timetable period (i.e. to December 2018) (see page 15, lines 15-16 of the transcript) because there is limited opportunity to change rolling stock and train crew diagrams other than at the industry timetable change dates. Furthermore, validation of the new emergency timetable was required by Network Rail, which was outside of the usual industry timescales.
b. It would have only been possible to use the standard short term emergency timetable. Such timetables are not validated against other train operators' normal timetables but are designed to interface with other operators' emergency timetables. This is because the normal arrangements for the introduction of emergency timetables are generally as a result of incidents that restrict normal operation. If GTR had implemented these short term emergency timetables, this would have resulted in service clashes and disruption extended to other operators, such as LNER, East Midlands Trains and Southeastern. This would also have had a knock-on effect for the Southern and Gatwick timetables which were operating robustly at the time.
c. The interim timetable that was introduced in July 2018 included approximately 70% of the increased capacity that we expected to put in place on peak services through the full implementation of the May 2018 timetable (page 22, line 24-26 of the transcript).
d. It was not possible to introduce the interim timetable earlier than 15 July because of the constraints of the trade union agreements which allow adjustments (changes to diagrams, rosters and timetables) every 8 weeks. In ordinary circumstances, such changes are minor in nature, however, GTR took the opportunity afforded by the break in the roster cycle on 15 July to negotiate the interim timetable (which required major changes to diagrams, rosters and timetables). As a result, the viability and success of the interim timetable was heavily reliant upon cooperation and support from the unions, which GTR received. Given that the interim timetable would subsist until December 2018, it was important to ensure that it was done correctly and effectively at the first opportunity (pages 54-55 of the transcript). e. The aim of the interim timetable was to provide stability; to produce a service that we could run and communicate effectively to passengers.
17. The Report acknowledges that GTR's interim timetable:-
a. resulted in an improvement in service reliability (paragraphs 2.4 and 4.3);
b. resulted in delay compensation claims returning to normal levels (paragraph 2.36); and
c. was preceded by a proactive communications campaign for passengers (paragraph 4.3).
18. Therefore, on the basis of the Report, the implementation of the interim timetable on 15 July was a positive and effective step, which produced a service that GTR was both able to run and able to communicate to passengers. The Report failed to recognise that the implementation of the interim timetable on 15 July introduced significant enhanced capacity, which would not have been the case if an emergency timetable had been introduced earlier. An emergency timetable would have delivered approximately 2,300 trains per day whereas, between 4 June and 13 July, we operated approximately 3,200 trains per day. The interim timetable introduced on 15 July 2018 resulted in the operation of 3,400 trains per day which, as stated above, amounted to approximately 70% of the planned additional capacity for May 2018. Therefore, an interim timetable could not have been implemented sooner without materially sacrificing capacity. GTR therefore considers that the implementation of the interim timetable represents a highly relevant factor – and one which it believes demonstrates its compliance with Condition 4.
19. We note that Northern's implementation of an interim timetable correctly formed a material element of ORR's decision that Northern complied with Condition 4 in the post-20 May period. Therefore, we cannot see any justification for failing to take due account of the implementation of GTR's interim timetable, which was introduced at the earliest opportunity.
**ORR's findings - post-20 May**
20. As stated in paragraphs 4.68-4.79 of the Report, ORR found failings in the following areas:-
a. aligning service recovery with passenger information obligations;
b. provision of "Alpha list" and other journey information; and
c. day to day amendments.
21. For the reasons explained below, GTR considers that ORR has failed to give relevant considerations due and proper weight in arriving at these findings.
**Aligning service recovery with passenger information obligations** 22. As ORR has recognised in paragraph 25 of its guidance on complying with the licence condition (extracted at paragraph 1.12 of the Report):
"The licence conditions are not intended to undermine the primary object of providing the best available service for passengers. Making justified changes to the train plan to meet passengers' needs should not be conditional on providing perfect advance information about these. However, we would expect licence holders to use reasonable endeavours to get such information out as widely as possible and as quickly as possible. We will take circumstances into account during any assessment of compliance".
23. Further, at paragraphs 4.64-4.66 of the Report, ORR notes that:
"We consider that the exceptional circumstances that followed the introduction of the 20 May timetable meant that providing perfect advance information for all services was, from the outset, an impossible task. Evidence demonstrates that GTR's overriding focus throughout the period that followed 20 May was on providing as much capacity as it could to meet customer demand.
Our guidance to support compliance with condition 4 recognises that timetabling services and providing information to passengers are difficult, complex tasks. There is a balance to be struck between service delivery and the ability to provide appropriate, accurate and timely information for passengers during sustained periods of disruption. The licence condition is not intended to undermine the primary objective of providing the best available services for passengers.
We accept that the immediate response to the timetable change required a period of reactivity as both the scale and severity of the disruption emerged."
24. Despite these statements, the finding made by ORR (paragraphs 4.68-4.69) is that the efforts made and decisions taken by GTR to stabilise and improve service levels were not sufficiently "aligned" to its passenger information obligations. In short, GTR is said to have failed to give "adequate regard to the fact that running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive, where it is going and how long the journey will take". In arriving at this finding, it is clear that ORR has again failed to give due and proper consideration to the particular characteristics of GTR's franchise.
25. As set out in paragraph 20 of our 13 February 2019 letter, and as explained again above, GTR is a commuter operator, which means that its priority during the May 2018 disruption was necessarily "to enable as many of its passengers as possible to undertake their journeys". To put it another way, as noted at paragraph 4.64 of the Report, "GTR's overriding focus throughout the period that followed 20 May was on providing as much capacity as it could to meet customer demand".
26. GTR's status as a commuter operator means that the value provided by every additional train it is able to run is not significantly diminished by an inability to provide passengers with the level of advance information that it would provide in ordinary circumstances. Due to the high volume of passengers using GTR's services, if rolling stock and train crew became available at short notice, it was important to run the service even if it could only be accompanied by, for example, a station announcement to passengers, rather than more comprehensive advance information. This point was emphasised at the 24 October 2018 meeting and is relevant to ORR's criticism of the so-called "ghost trains" (see pages 43-44 of the transcript and paragraph 4.76 of the Report). Furthermore, these so-called "ghost trains" would then become available to form further timetabled services which otherwise would not have been provided and for which sufficient time was available to disseminate information to passengers about those services.
27. If GTR had limited the services it ran to those it was able to provide comprehensive advance information about, it would have resulted in a significant decrement in capacity, severe overcrowding and a completely unacceptable outcome with a poorer service for passengers.
28. GTR does not accept that there was a lack of alignment between its service recovery and passenger information operations. As set out in paragraph 14 of our 13 February 2019 letter, GTR's operational and information teams are both located in the Rail Operating Centre at Three Bridges, and the customer information teams were manually updating the passenger systems as the operational decisions were being made. Further, in our 16 October 2018 letter we set out various measures taken by GTR which were specifically targeted at improving the quality of the passenger information we were able to provide. Amongst many other things, this included increasing resources within the control, social media and customer contact centre teams, establishing the station thread to enable communication between the station and control teams, and acting upon the feedback generated by the station thread (such as by placing additional station stop orders on trains).
29. Whilst the exceptional circumstances of May 2018 made providing perfect advance information impossible (paragraph 25 of the Penalty Notice), it is not correct to say that this was exacerbated by a misalignment of GTR's respective teams.
30. In summary, the finding that "running a train service (or rail replacement bus) is only helpful to passengers if they know when and where the service will arrive" ignores the fact that announcements were made before these trains departed and, more fundamentally, would lead to a perverse scenario where an operator is penalised for running services that passengers would otherwise use if it is not possible to disseminate information about those services more widely. That cannot be correct, but it is the natural result of the ORR's determination.
Provision of "Alpha list" and other journey information
31. As noted at paragraph 4.70 of the Report, a key element of GTR's service recovery efforts was the use of selective cancellations of services on the Alpha list. However, ORR criticises GTR for failing to disseminate the Alpha list information to passengers sufficiently or quickly enough. In short, ORR's finding is that there was a "failure to clearly communicate known cancellations in a timely manner" (paragraph 4.73 of the Report).
32. GTR repeats the following points from its 13 February 2019 letter in relation to the Alpha list, which do not appear to have been taken into account:
a. It would not have been appropriate to publish the Alpha list in its operational form to passengers; that list did not contain details of the intermediate stops (see paragraph 18 of our 13 February 2019 letter).
b. The information in the Alpha list was made available to passengers via the journey planners from 11 June (see paragraph 19 of our 13 February 2019 letter and Appendix 5). The vast majority of GTR's passengers use live journey planners in preference to printed/PDF timetables, and GTR actively encouraged passengers to check the planners on a regular basis. For our passengers, it was essential that the journey planners were prioritised. It is therefore not correct to say that this information was "not clearly communicated to passengers between 6 June and 25 June" (paragraph 4.70 of the Report). The PDF timetables were made available on 25 June.
c. The best approach for passengers, and the approach taken by GTR, was to produce accurate revised timetables for passengers and disseminate the information once it was stable (see paragraph 18 of our 13 February 2019 letter).
Day to day amendments
33. The Report notes that GTR's Service Recovery Plan permitted the removal or cancellation of services on a day-by-day basis (the Beta list) which, ORR finds, "led to very short notice changes to the timetable and a severe lack of certainty for passengers up until the point of travel" (paragraphs 4.75 to 4.79 of the Report). The exceptional circumstances of the May 2018 disruption were such that GTR was receiving information on an hour-by-hour basis. This inherently restricted our ability to provide greater advance notice of cancellations to passengers, hence the guidance to passengers to keep checking journey planners and to speak to station staff prior to their planned journey. However, the primary means by which we were able to do so was as a result of the introduction of the interim timetable on 15 July. As noted above, it was not possible for that timetable to be introduced any sooner, and the introduction of an emergency timetable in the immediate aftermath of 20 May was not a viable alternative option.
The Penalty
34. GTR's position is that once all relevant circumstances are taken into account and given the appropriate weight, as outlined above, it should be found that GTR did not breach Condition 4 in the period following the implementation of the May 2018 timetable. Without prejudice to that point, it is submitted that if the finding that GTR has breached Condition 4 in that period is maintained, it is not appropriate to impose a financial penalty or, alternatively, the £5m financial penalty imposed is excessive and unreasonable.
35. It is submitted that in addition to the points made below, the points made above in relation to the question of breach are equally relevant to the question of the appropriateness of imposing, and the amount of, a financial penalty. The points made above are therefore also relied upon here.
A penalty is not appropriate
36. As stated in paragraph 122 of ORR's economic enforcement policy and penalties statement dated November 2017 (Penalties Statement), in deciding whether a penalty is appropriate ORR "shall take full account of the particular facts and circumstances of the contravention".
37. GTR submits that, given that ORR has failed to take into account all relevant circumstances in arriving at its finding of breach (see, for example, the points made above regarding the wider May 2018 context, GTR's interim timetable and its status as a commuter operator), it follows that ORR has also failed to "take full account of the particular facts and circumstances of the contravention" for the purposes of its finding that a penalty should be imposed. GTR submits that, when placed in its proper context of the exceptional circumstances of May 2018 caused by industry-wide failings, any breach of Condition 4 found by ORR in respect of GTR should not be met with a penalty.
38. ORR emphasises that the imposition of a penalty is "likely to be a 'last resort" (paragraph 123 of the Penalties Statement).
39. The Penalty Notice states that "ORR is not satisfied that there is sufficient evidence that this contravention is a current breach because GTR has taken some steps to ensure that the same situation would not happen again" (paragraph 34) and that "[t]he penalty that ORR proposes to impose on GTR therefore relates to a past breach of condition 4" (paragraph 35).
40. Notwithstanding this, the Penalty Notice continues (paragraph 37) that "ORR's primary objective in setting a penalty is to change the future behaviour of a licence holder and to incentivise it and others to comply with their obligations" and two justifications are given for imposing a penalty on GTR in this case (paragraph 38):
a. "a penalty would incentivise GTR to ensure that the provision of information to passengers is managed more effectively in the future"; and
b. "a penalty could also act as a future deterrent to other licence holders".
41. Given that ORR found no "current" breach by GTR and acknowledged the various steps taken by GTR to guard against the same situation re-occurring (including in relation to the subsequent December 2018 timetable change), it is submitted that it is neither necessary nor appropriate to impose a penalty even partially on the basis of seeking to "change" or "incentivise" GTR's future behaviour. On the basis of ORR's findings, there is insufficient evidence to indicate that any kind of "incentive" is required or warranted and, in those circumstances, a penalty imposed partially or wholly for the purposes of deterring other operators is unjustifiable. An example should not be made of GTR in this manner: to the extent that ORR has any concerns about the activities of other operators, then those concerns fall properly to be investigated with the operators concerned.
42. Further, in relation to the factors listed at paragraph 39 of the Penalty Notice as justifying the imposition of a penalty, GTR makes the following submissions:-
a. GTR has paid out over £17.7m under its additional passenger compensation scheme (paragraph 9 of our 13 February 2019 letter). In addition to this, GTR has paid out in excess of £2.5m under the delay repay scheme over and above the normal run rate, and almost £30,000 in enhanced compensation for the period from 20 May to 14 July. Further costs incurred by GTR are set out in paragraph 45 below.
b. The delivery of accurate and timely information to passengers was, and continues to be, one of GTR's key priorities; we constantly review our performance in this area in order to make improvements. As noted at paragraph 34 of the Penalty Notice, ORR acknowledges the various tangible steps taken by GTR to improve in this area following May 2018, and it is therefore not correct to say that there is a "lack of evidence that GTR undertook a significant lessons learnt exercise relating to passenger information". However, it remains GTR's position that the primary lesson to be learnt from May 2018 in relation to passenger information has to be that a timetable change of such scale and complexity cannot be permitted to re-occur without strict adherence to the established industry processes for timetable development and implementation. Issues with the provision of passenger information are indivisibly linked to the wider May 2018 disruption. In ordinary circumstances, and even in cases of "business as usual" disruption, GTR is effective in its provision of passenger information (as supported by ORR's "no breach" finding for the pre-20 May period and the provision of information during the Brighton Mainline Improvement Project (paragraphs 22 and 27 of our 13 February 2019 letter)); this demonstrates that quality passenger information is heavily influenced by, and necessarily follows, a competently implemented timetable change.
c. It is not correct to say that GTR has "not acknowledged responsibility for its failure to provide adequate information to passengers" (paragraph 39(d) of the Penalty Notice). GTR has acknowledged responsibility for its passenger information not reaching the standards it would ordinarily meet, and has consistently apologised for the unacceptable levels of disruption suffered by passengers, both publically and in its submissions to ORR. See, for example, paragraph 2 of our 13 February 2019 letter, page 4 of our 16 October 2018 letter and the enclosed press releases.
43. Paragraph 122 of the Penalties Statement also states that ORR "shall take account of the six penalty principles" set out in the Macrory Report (reiterated in paragraph 36 of the Penalty Notice). As summarised in the Penalties Statement, those principles are:-
a. aim to change the behaviour of the offender;
b. aim to eliminate any financial gain or benefit from non-compliance; c. be responsive and consider what is appropriate for the particular offender and regulatory issue;
d. be proportionate to the nature of the offence and the harm caused;
e. aim to restore the harm caused by regulatory non-compliance, where appropriate; and
f. aim to deter future non-compliance.
44. Principles a) and f) have no application to these circumstances; ORR has found no current breach of Condition 4 in respect of GTR and so it is not appropriate to impose a penalty partially or wholly on the basis of seeking to change future behaviour and/or deter future non-compliance.
45. In relation to principles b) and e), ORR notes that GTR has already suffered "reputational damage" and "additional costs" in relation to the May 2018 timetable change (paragraph 39(a) of the Penalty Notice). At least the following costs have been incurred by GTR as a result of the industry-wide disruption of May 2018:-
a. GTR will make no profit from its franchise in this financial year;
b. GTR's profits for subsequent financial years are capped until the end of the franchise;
c. over £17.7m in compensation has been paid to passengers under GTR's additional compensation scheme (see paragraph 9 of our 13 February 2019 letter);
d. GTR has paid £15m into a Passenger Benefits Fund as agreed with the Department for Transport;
e. GTR incurred operational costs of over £10m in mitigating the impact of the disruption on passengers and staff;
f. over £2.5m in compensation has been paid to passengers under the delay repay scheme; and
g. almost £30,000 in enhanced compensation has been paid to passengers.
46. GTR has therefore already been subjected to very severe financial repercussions as a direct result of the disruption caused following the introduction of the May 2018 timetable. These do not appear to have been appropriately factored into ORR's reasoning and we note in this regard the following statement at paragraph 39(b) of the Penalty Notice:-
"GTR have taken some steps to compensate passengers through delay compensation schemes and have paid a passenger benefits fund to the Department for Transport. However, these sums were paid in response to its wider failings in relation to the 20 May timetable change and do not address the harm caused by its additional failings to provide adequate information to passengers."
47. In relation to the £15m Passenger Benefits Fund, it is not correct to say that this investment does "not address the harm caused by its additional failings to provide adequate information to passengers". The agreement reached with the Department for Transport addressed all aspects of the issues associated with the implementation of the May 2018 timetable, which included the failure to provide adequate information to passengers. We refer in this regard to the letter sent by the Department for Transport to ORR dated 10 December 2018 (copy enclosed for ease of reference) in which the Department set out the financial impact of the agreement reached with GTR and confirmed that this outcome was in respect of the Secretary of State "... holding GTR to account for their role in the unacceptable performance following the introduction of the May timetable". The letter concluded by stating that ORR "... may wish to take GTR's obligations under this agreement into account when determining any enforcement action or sanction against GTR in respect of its role in the implementation of the May 2018 timetable". It does not appear that GTR's obligations under the agreement with the Department have been taken into account at all and, in fact, the scope and extent of that agreement has been misrepresented and misunderstood in the Penalty Notice.
48. GTR is engaging with passengers in respect of the expenditure to be funded from the Passenger Benefits Fund, which is aimed at providing tangible improvements to passengers on the GTR network who were affected by the disruption. User groups and passenger representatives will be able to decide for themselves what improvements are delivered by the Fund – this could range, for example, from new waiting shelters or additional lighting to new information screens. The Passenger Benefits Fund is designed to address the full circumstances surrounding the May 2018 disruption.
49. There can be no suggestion of any financial gain or benefit being received by GTR; the May 2018 disruption has had a substantial financial impact on GTR and it is submitted that it is not appropriate to penalise GTR again under Condition 4. As set out above, GTR considers that the harm suffered by passengers was as a direct result of the industry-wide failings during the May 2018 timetable change – it is submitted that such harm has been addressed by the significant compensation and investment it has made.
50. In deciding whether to impose a penalty, ORR must also take account of the "five principles of good regulation": proportionality, accountability, transparency, consistency and targeting (paragraph 36 of the Penalty Notice). GTR submits that a financial penalty in this case would not comply with those principles:-
a. **Proportionality**: a penalty should only be imposed where necessary and only to the extent required. ORR's finding that there is no current breach and the significant costs and investment incurred by GTR to date demonstrate that it is not necessary or proportionate to effectively re-penalise GTR when its current compliance is not in question.
b. **Accountability/Transparency**: in light of GTR's submissions regarding the factors ORR has excluded from the remit of its investigation, it is submitted that imposing a penalty on the basis of that investigation would not serve the interests of accountability or transparency. It is not clear to GTR why ORR has conducted its investigation in this way and GTR was not notified about or given an opportunity to make representations about ORR's decision to exclude these factors from the scope of its investigation.
c. **Consistency**: it is submitted that ORR has not been completely consistent in its approach to its investigation into Northern's compliance with Condition 4 compared to its investigation into GTR. As noted above, Northern's interim timetable was (correctly) a key consideration in ORR reaching a finding of no breach (and therefore no penalty). However, ORR has expressly not considered the particular circumstances which meant that GTR could not introduce an interim timetable sooner or the impact of that timetable once introduced. It is submitted that such inconsistency cannot properly result in the imposition of a penalty. The inconsistent treatment of GTR is further compounded by the fact that we have found no record of any fine being imposed by ORR on Network Rail, despite a finding that Network Rail was in breach of conditions 1.23 and 2.7 of its licence and despite Network Rail being best placed to take action to avoid the widespread disruption caused by the implementation of the May 2018 timetable, which impacted on the passengers of both GTR and Northern. As stated in ORR's letter to Network Rail of 27 July 2018, the rationale behind not imposing a penalty in relation to the breach is that it would not be "appropriate as it would not further incentivise compliance". As noted above, imposing a financial penalty on GTR would not be appropriate for precisely the same reason (amongst others).
d. **Targeting**: it is submitted that, in failing to properly consider the wider May 2018 context, ORR has necessarily been unable to accurately quantify the level of harm suffered by passengers which is attributable to any passenger information failings by GTR (as distinct from harm which is attributable to the May 2018 disruption generally). As a result, any penalty imposed by ORR is insufficiently targeted at the specific issue of passenger information.
51. In summary, in the event that ORR maintains its finding of breach, GTR submits that a penalty cannot be justified on the grounds cited in the Penalty Notice, the Macrory Report principles or the associated principles of good regulation. In effect, a penalty would re-penalise GTR for matters for which it has already suffered financially to a significant extent, would be made on the basis of an incomplete and misleading range of relevant factors and is currently justified on the basis of an aim (influencing future behaviour) which, on its own findings, ORR acknowledges is not necessary.
The amount of the penalty is excessive
52. In the event that ORR maintains that GTR has breached Condition 4 and maintains that a financial penalty is appropriate, it is submitted that a penalty amount of £5m is excessive and not reasonable in the circumstances.
53. As noted in paragraph 8 of the Penalty Notice, under section 57A of the Railways Act 1993, upon making a finding of breach, ORR may impose a penalty "of such amount as is reasonable".
54. It is submitted that the amount of the penalty is not reasonable for the following reasons:
a. ORR acknowledges that "ineffective passenger information was not the only cause of harm as passengers were already suffering disruption to services because of the timetabling problems" (paragraph 46 of the Penalty Notice). As a function of its exclusion of the wider May 2018 context from the remit of its investigation, it is submitted that ORR has attributed too much of the harm suffered by passengers to the matters identified by ORR as GTR's passenger information failings. It is submitted that the substantial majority of any harm suffered by passengers is attributable to the May 2018 disruption generally (and therefore to the industry-wide failings which Network Rail was best placed to prevent) and that the level of penalty imposed is disproportionate to the level of harm directly attributable to issues with passenger information.
b. ORR acknowledges that there is no current breach, that any past breach is not "systemic" in nature and that the effects were largely limited to an 8-week period (paragraph 45 of the Penalty Notice).
c. ORR acknowledges that the majority of GTR's passengers – the 63% travelling on its Southern and Gatwick Express services – were "not as significantly affected as the passenger information was held and displayed correctly within the industry information systems" (paragraph 47(b) of the Penalty Notice).
d. GTR does not accept that its approach to the provision of passenger information can fairly be characterised as "towards the negligent end of the spectrum", much less that at any point there was a "level of knowing acceptance of the problem" (paragraphs 52-53 of the Penalty Notice). ORR appears to justify these conclusions on the basis of GTR's stated focus on capacity. Again, this conclusion fails to take into account GTR's status as a commuter operator, which makes a focus on capacity absolutely essential. GTR also considers that this finding is influenced by ORR's failure to consider the impact of GTR's interim timetable which, as noted in the Report, resulted in an improvement in service reliability (paragraphs 2.4 and 4.3), resulted in delay compensation claims returning to normal levels (paragraph 2.36) and was preceded by a proactive communications campaign for passengers (paragraph 4.3). The submissions made at paragraphs 56-59 below in relation to the role of senior management apply equally here.
e. ORR raises no issues with GTR's cooperation with the investigation (paragraph 54 of the Penalty Notice).
55. GTR agrees with the mitigating factors identified by ORR at paragraph 60 of the Penalty Notice. It is submitted that greater weight should be given to these factors and that the following additional factors are relevant and should be considered: a. The primary mitigating factor in this case is the wider context of the May 2018 timetable change, which ORR has expressly excluded from the remit of its investigation. GTR's compliance with Condition 4 cannot be accurately assessed without a consideration of the context in which GTR was operating.
b. ORR has acknowledged the efficacy of GTR's remedial measures and has made a finding that there is no continuing breach by GTR. In addition, as explained above GTR implemented an interim timetable on 15 July which ORR acknowledges stabilised service levels and was accompanied by a proactive communications campaign. These factors are highly significant as they demonstrate that GTR proactively took steps to rectify any failings and minimise the chances of the failings re-occurring and that there have been no continuing issues identified by ORR. These constitute three distinct mitigating factors under the terms of paragraph 137 of the Penalties Statement.
56. ORR identifies one aggravating factor justifying the amount of the penalty (paragraph 61 of the Penalty Notice): namely, that GTR's senior management were made aware of passenger information issues but that ORR has not seen sufficient evidence that senior management were involved in developing and implementing a response to those issues. That is not a fair characterisation.
57. GTR held Gold Command "Control calls" five times per day between 20 May and the end of the first week of the interim timetable, which were chaired by the Head of Network Operations and attended by GTR's operational managers and Head of Customer Information. The attendees discussed the passenger impact of the disruption, information delivery and the operational plan of the day, and the Head of Customer Information – informed by real-time feedback from passengers – took the decisions required to implement the various measures targeted at improving GTR's passenger information provision during the disruption. Such measures have been set out in GTR's previous submissions to ORR (see, in particular, our 24 July 2018, 16 October 2018 and 13 February 2019 letters and supporting documents) and include:-
a. Increasing the number of ground staff at stations to provide information to passengers, particularly in hotspot areas.
b. Establishing the station thread to enable station teams to communicate with each other and staff in the control centre.
c. Placing additional stop orders on trains based on information received from the station thread.
d. Providing additional support to the social media team as Twitter took on a greater role in providing real-time information to passengers.
e. Additional resources in the control centre and customer contact centre to support passenger information provision.
f. Working closely with National Rail Enquiries to ensure that live journey planners were as accurate and up-to-date as possible.
g. Engaging with Transport Focus to ensure that passenger communications were clear and informative.
h. Use of leaflets, PA announcements and CIS screens at stations. 58. GTR's passenger information strategy was therefore developed and directed by its senior management, in particular, through the Head of Customer Information who in turn was acting on the authority of, and was briefing, GTR's executive via the daily "exec calls" chaired by GTR's Chief Operating Officer (referred to on page 58 of the transcript of our 19 July 2018 meeting).
59. In addition, GTR held "war room meetings" every 48 hours which brought together the relevant members of GTR's executive to discuss key decisions, risk mitigations, stakeholder feedback and performance issues (see page 70 of the transcript). These meetings were attended by a range of senior managers at GTR, including, amongst others, the Service Recovery Crisis Management Team (which included GTR's Programme Lead for Communications), Chief Operating Officer, Business Improvement Director, Service Delivery Director and Operations Planning Director. The primary outcome of the war room meetings was the production of the service recovery plan, which recognised that the immediate priority had to be achieving a period of service stability in order to provide a basis for disseminating reliable passenger information. It is not correct to say that the service recovery plan prioritised running services at the expense of providing passenger information. On the contrary, the service recovery plan had at its heart a recognition of the importance of passenger information, and reflected the simple truth that GTR would not have reliable information to give to passengers until a certain level of service stability had been achieved. It was also an initiative in which GTR's senior management were heavily involved.
60. It follows from the above that GTR considers that the relevant mitigating factors in this case significantly outweigh any aggravating factors (it being disputed that there are any aggravating factors in this case in any event), and that the level of the penalty should be reduced to reflect this.
Conclusion
61. We have set out in this letter the reasons why we believe ORR has failed to take all relevant circumstances into account when formulating the remit of its investigation and failed to give other relevant circumstances due and proper weight in arriving at its findings. We remain firmly of the view that, if all relevant circumstances are properly considered, GTR was not in breach of Condition 4 in the period following the implementation of the May 2018 timetable and that, even if such a finding could be made, there is no basis on which a financial penalty should be imposed. In particular, we believe that ORR has failed to take proper account of GTR's status as a capacity-constrained commuter operator whose overriding aim in the aftermath of the introduction of the May 2018 timetable had to be to ensure that as much capacity as possible was made available to our passengers. As explained above, the perversity at the heart of ORR's determination is perhaps best illustrated by the fact that, if it is followed to its logical conclusion, GTR would have been better advised not to run services in circumstances where it was not able to provide what would normally be considered an acceptable level of information to passengers – this cannot be right and, even with the benefit of hindsight, would not be the way in which GTR would choose to react to the exceptional circumstances that followed the introduction of the May 2018 timetable.
62. We have set out above why, in seeking to impose a financial penalty, ORR has failed to take proper account of its own guidance, the “five principles of good regulation” or the six penalty principles set out in the Macrory Report. In particular, either no (or inadequate) account has been taken of the very significant financial penalties which GTR has already incurred as a result of the events following the implementation of the May 2018 timetable – these include the fact that GTR will make no profit in the current financial year, will be subjected to capped profits in subsequent financial years and has paid £15m into a Passenger Benefits Fund. Imposing any further financial penalty in these circumstances cannot be justified, let alone one at the unprecedented level that is proposed.
We trust that, in light of the submissions made above, ORR will reconsider its decision.
This letter is being copied to the Secretary of State for Transport and Polly Payne, Ruth Hannant and Tim Rees at the Department for Transport.
Yours sincerely
Keith Jipps Infrastructure Director Govia Thameslink Railway Ltd Rail companies to introduce temporary timetables to give customers more certainty
Press Release • May 24, 2018 17:48 BST
The rail industry has pledged to work together to get services back on track as quickly as possible, giving customers the greater certainty they need over what trains will run, following disruption resulting from the biggest timetable change in a generation to accommodate more and faster trains.
Today, Northern has published a temporary timetable which will enable it to start to stabilise service levels over the next few weeks and, importantly, start to reduce the number of last-minute cancellations. GTR will also be introducing a temporary timetable on Great Northern and Thameslink as soon as possible. Next week, GTR has plans to provide a more consistent level of service to allow passengers to plan their journeys with greater confidence.
The biggest timetable change in a generation took place on 20 May. This was part of delivering the rail industry’s plan to add 6,400 extra services a week and 7,000 new carriages by 2021, using new and upgraded track across the country to give customers a better service, better connect communities and secure £85bn of additional economic benefits.
While nationwide, more than eight out of 10 services have arrived as planned since the new timetable was introduced, customers in some parts of the country have experienced unacceptable levels of disruption. Northern and GTR are taking decisive action to give greater certainty to passengers as quickly as possible.
To accommodate the extra services being introduced, six out of 10 services nationwide had to be retimed. The time of all GTR and most Northern services had to be changed. All of these new journeys needed to be individually approved by Network Rail to ensure the national rail network runs safely and smoothly. As a result of the sheer number of changes required and the late running of some engineering improvements, the process took longer than anticipated, approvals for service changes were delayed and some timetable requests were changed. This meant that train companies had much less time to prepare for the new timetable meaning specialist training required could not be completed in time for drivers to learn all the new routes, or operate different trains for operators to address all the logistical challenges.
While it will be some weeks before customers in the areas affected have the service improvements they were expecting in May, rail companies plan to run more services compared to before the change on 20th May. They will also be continuing to train drivers on new routes and timetables so that, in time, the full benefits for customers of the new timetable can be realised.
Passengers are advised to continue to check before they travel and, if they are delayed, to check with their operator to see whether they are due compensation.
Robert Nisbet, Regional Director of the Rail Delivery Group, said:
"We understand that rail customers quite rightly want a service they can rely on and in some parts of the country that has not been the case and we are sorry for that. The companies involved have plans to get services back on track as quickly as possible and while things will improve in the coming days, giving passengers greater certainty, it will be some time before the full benefits of the timetable are felt.
"The industry is determined to deliver its plan to change and improve Britain's railway for customers, communities and the economy and will learn the lessons to ensure that as we transform the network, people continue to get the level of service they deserve."
The industry has also committed to learn the lessons from what went wrong with introducing the new timetable to ensure future changes do not cause such disruption. Rail timetables are normally confirmed 12 weeks ahead of time but this was not the case for the May timetable change and the Rail Delivery Group, which represents Network Rail and train operators, has begun a review into why this happened.
Charles Horton, CEO, GTR, said:
"May's new timetable was part of the biggest change to services for decades introducing 400 extra services and providing longer trains to address the doubling of passengers on our network in just 16 years." "We always said that it would be challenging – but we are very sorry for the significant disruption being experienced by passengers and apologise sincerely. Delayed approval of the timetable led to an unexpected need to substantially adjust our plans and resources in an unexpectedly short time-frame.
"We fully understand that passengers want more certainty and this week will make changes to bring greater consistency services with fewer unplanned cancellations, allowing passengers to arrange their journeys with greater confidence. We are also working with industry colleagues to introduce further changes that will progressively deliver improvement."
David Brown, Managing Director, Northern, said:
"I'd like to apologies for this unacceptable situation and for the disruption and inconvenience many passengers have faced. We're truly sorry for this and we're working hard with the Network Rail team to fix this.
"To deliver a more robust and stable service we are introducing an interim train timetable, effective from Monday 4 June until the end of July. This interim timetable will enable us to start to stabilise service levels over the next few weeks and, importantly, start to reduce the number of last-minute train cancellations."
Mark Carne, Network Rail's chief executive said:
"There is no doubt that the May timetable was finalised significantly later than normal for reasons that were both within and without our control. The consequences of that have been particularly hard for both Northern and GTR to absorb.
"The industry has let down its passengers by failing to deliver the new services offered by the new timetable; a timetable that ultimately will deliver thousands of new services for the benefit of passengers, both far and wide. It has not been good enough and we know it. That is why we are working together across the industry to build a recovery plan that people can rely on and then more gradually introduce the benefits and new services everyone needs."
ENDS
Govia Thameslink Railway
Govia Thameslink Railway (GTR) operates Thameslink, Great Northern, Southern and Gatwick Express services as follows:
- Thameslink – services between Bedford and Brighton, Luton/St Albans and Sutton, Wimbledon and Sevenoaks • Great Northern – services between London and Welwyn, Hertford, Peterborough, Cambridge and King’s Lynn • Southern – services between London and the Sussex coast (Brighton, Worthing, Eastbourne, Bognor Regis, Hastings) and parts of Surrey, Kent and Hampshire (Ashford International, Southampton, Portsmouth) • Gatwick Express – fast, non-stop direct services between Gatwick Airport and London Victoria
www.southernrailway.com, www.thameslinkrailway.com, www.gatwickexpress.com, www.greatnorthernrail.com Please see the below joint media statement from Network Rail, GTR and Northern which has been issued this morning regarding the new timetable.
Frequently asked questions that can be used to answer customer queries will also be available on the RailPlan20/20 website (www.railplan2020.com) today.
We are working on a recovery plan to stabilise the timetable and make sure that customers can plan their journey. As soon as the plan is finalised we will share it with you.
Joint media statement from Network Rail, GTR and Northern
We are again extremely sorry to all passengers affected by recent disruption, and are setting out how we’re going to improve the service for our customers as quickly as possible.
What has gone wrong?
Demand for rail services since 1994 has more than doubled to over 1.7bn journeys. While this has been very welcome, it has also brought its challenges and some of our busiest routes are operating at capacity, particularly during peak times. To facilitate the extra services to satisfy the huge growth in demand, the railway is undergoing its biggest modernisation since the Victorian era. And the new timetable, introduced on Sunday 20 May, was planned to be the most ambitious in recent railway history, providing additional capacity for tens of thousands more peak-time commuters.
In order to make space on the network for the thousands of extra services, the timing of all GTR and most Northern services had to be changed. All of these new journeys needed to be individually approved by Network Rail to ensure the national rail network runs safely and smoothly. Unfortunately, as a result of the sheer number of changes required and the late running of some engineering improvements, the process took longer than anticipated, approvals for service changes were delayed and some timetable requests were changed.
Whilst circumstances differ across the country, this meant that train companies had much less time to prepare for the new timetable which required trains and drivers to run on different routes. The differences between the timetables submitted and those approved created a requirement for training that had not been anticipated. This meant that the necessary specialist training was not able to be completed in time for drivers to learn new routes and for operators to address all the logistical challenges.
What are we going to do to put it right?
Network Rail, Northern and GTR are urgently working on comprehensive plans to reduce disruption and give passengers the greatest possible certainty of train services, so they can better plan ahead. Unfortunately, it will take some time to deliver significant improvements to services, but we will keep passengers up to date on all changes we make. Delivering a better railway together
What are we doing to ensure it won’t happen again?
We are reviewing how timetable changes are introduced to better understand the root causes of exactly what went wrong here, so that future changes can implemented more smoothly.
How are we making this up to customers?
Passengers are encouraged to apply for Delay Repay compensation for affected journeys and we are working hard to respond to all claims as soon possible.
Mark Carne, Network Rail’s chief executive said: “There is no doubt that the May timetable was finalised significantly later than normal for reasons that were both within and without our control. The consequences of that have been particularly hard for both Northern and GTR to absorb.
“But we are all firmly focussed on fixing this issue as quickly as possible to give passengers the reliable service they need and deserve. At the moment, in some parts of the country, that simply isn’t happening and for that I’d like to wholeheartedly apologise.”
Charles Horton, CEO, GTR, said: “We always said that delivering the biggest timetable change in generations would be challenging – but we are sorry that we have not been able to deliver the service that passengers expect. Delayed approval of the timetable led to an unexpected need to substantially adjust our plans and resources. We fully understand that passengers want more certainty and are working very hard to bring greater consistency to the timetable as soon as possible. We will also be working with industry colleagues to establish a timetable that will progressively deliver improvement.”
David Brown, Managing Director, Northern said: “We are doing everything we can to minimise cancellations and keep customers informed. It has been extremely difficult for many of our customers, in particular on a number of routes around north Manchester, Liverpool, and Blackpool extending up to Cumbria, and we are truly sorry for this.
“We’ve agreed a number of actions with the Department for Transport and are urgently working with them on a comprehensive plan to stabilise our services. Such a plan is likely to take a number of weeks to deliver lasting improvements, but we recognise our customers deserve better and that’s what we’re focused on.”
In due course, the Thameslink Programme and the investment programmes on Northern will provide more capacity and reliability as intended, with more trains running more regularly and more reliably to more destinations. But these services will only be re-introduced when we can do so reliably without any negative effect on the service. The industry continues to be confident that the new timetables will work well once bedded-in.
We thank you for your patience and apologise again for the delays in rolling out the new timetable. Everyone in the rail industry is working together to provide a safe, improved and reliable service. Dear Sirs,
Govia Thameslink Railway Limited – May 2018 Timetable Implementation - Passenger Services Benefits Fund
We are writing to you to inform you that the Department and Govia Thameslink Railway Limited ("GTR") the Franchisee of the TSGN Franchise, have entered into an agreement which includes a requirement for GTR to make an additional £15m available to develop and implement initiatives which will benefit passengers affected by the issues surrounding the implementation of the Thameslink timetable in May 2018. GTR has agreed to work with rail user groups representing affected passengers in order that they may determine the substance of those initiatives.
The passenger benefits sum is being made available by GTR as means of the Secretary of State holding GTR to account for their role in the unacceptable performance following the introduction of the May timetable. The agreement also stipulates that GTR will make no profit from its franchise in this financial year and looking ahead, we have also capped the amount of profit that the operator is able to make for the remainder of its franchise, which is due to expire in September 2021.
You may wish to take GTR's obligations under this agreement into account when determining any enforcement action or sanction against GTR in respect of its role in the implementation of the May 2018 timetable.
Yours faithfully
Tim Rees Deputy Director - Passenger Services, Cross London Market
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5a75680a48143eff3f99dd44d40a69d2b48f7624 | Provision of information to passengers when booking tickets
Thank you for your letter of 27 June 2019, in response to my letter of 18 June 2019 regarding the information provided to passengers by Trainline when booking train tickets through your website.
I am grateful to you for setting out the work Trainline is doing to improve the information available to passengers. We welcome your proactive response to the issues we raised and note that you have already implemented some of the improvements you outlined.
We note the wider points you have made about the lack of availability of reliable information on planned disruption/engineering works more than 12 weeks in advance. This is a matter which we are discussing with the industry, including how an engineering works forward look for significant events can be made available.
We have a small number of further comments on your reply for which I would be grateful for your response. In particular, we note the helpful messaging highlighting the possibility of engineering works included in appendix 2. You may wish to consider including similar text in the blue messaging box in appendix 1. We also welcome your rollout of automated notifications for affected customers who have already purchased tickets, to inform them of subsequent timetable changes. Please could you provide a timescale for completion of this.
I shall be grateful if you will provide me with your response by 31 July 2019. In the meantime, if you have any questions about this letter, please contact
Yours sincerely
Marcus Clements
Head of Consumer Policy
17 July 2019
Neil Murrin General Counsel and Director, Regulatory Affairs Trainline BY EMAIL
Dear Neil
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e716a4c50d128feaebbdb7272e6a6c8714bc4c76 | The Office of Rail and Road (ORR) is committed to enhancing the diversity of its people and the inclusiveness of its working arrangements, practices and policies. We aim to reflect the people and communities we serve.
It is essential that ORR has the best people to undertake the important work that we do, and there is overwhelming evidence to indicate that diverse teams deliver the best outcomes. I am therefore committed to ensuring we have a strong, diverse and inclusive organisation that provides all our employees with equal opportunity to deliver, develop and progress. We have policies and practices in place to achieve this aim, but there is more to do.
The diversity challenge we face is similar to those in the rail and engineering sectors. We are committed to drive forward our strategies to achieve greater inclusiveness and diversity, for example further embedding our flexible working approach; inclusive and diverse recruitment practice; maintaining and enhancing our inclusive culture; and by providing appropriate training for our managers (such as unconscious bias and managing inclusive teams).
I am confident that, over time, these strategies will address the current disparity in gender representation at middle management levels and will address our gender pay gap.
Joanna Whittington Chief Executive March 2018 Introduction and summary
This report sets out ORR's gender pay gap and diversity profile.
The gender pay gap is calculated at 31 March 2017, whilst our diversity data takes a 'snapshot' of ORR's workforce as at 31 December 2017.
ORR has 310 employees, 61% of whom are male and 39% female (compared to 46% and 54% respectively in the whole Civil Service).
Our mean gender pay gap 12.8%, whilst the median gender pay gap is 27.2%.
The median gender pay gap shows the percentage difference between the middle points of the salary distribution for male and female employees.
The mean gender pay gap shows the difference between the average salaries for male and female employees. This reflects that, in ORR, 74% (94) of our middle management grades (C and B, equivalent to Civil Service grades 7 and 6) are male employees, and that these grades represent over 40% (127) of the organisation. Average pay is therefore higher for males than for females. Our health and safety inspection and engineering teams sit at this level and, historically, these teams have shown a predominance of male employees.
Conversely, at grades G, F and E, there is a higher proportion of female than male colleagues.
The proportion of female employees in ORR has increased by 6 percentage points over the last five years. This improvement coincides with ORR's implementation of 'smarter working', with flexible working supported by mobile technology available to all employees. 16% (49) of employees work part-time hours or a non-standard working pattern. Many staff take advantage of the ability to work from home, to help optimise their work-life balance.
Just under 19% (56) of employees declare a minority ethnic background, compared to 9% in the Civil Service as a whole. 5% (16) of employees have reported a disability, which is lower than the Civil Service average of 7%. Action being taken on diversity and ORR’s gender pay gap
ORR has in place a range of policies and practices to maintain and improve its diversity and inclusion, including the following:
- A flexible employment offer for all employees where people can work where and in a manner that best enables them to deliver their objectives, with mobile technology to support remote working;
- A formal flexi-time system for junior employees, and flexibility in working arrangements and time for all staff;
- Most vacancies are advertised as available on a flexible working, part-time and job share basis, and most vacancies are advertised as being workable in any of ORR’s six offices (in Bristol, London, Birmingham, Manchester, York and Glasgow);
- Recruitment is based on the Civil Service Commission’s principles of fair and open competition and appointment on merit;
- A recruitment and marketing strategy is adopted for all vacancies with the aim of achieving a broad and diverse pool of applicants;
- Applications for vacancies are anonymised, so that protected characteristics cannot influence sifting decisions, and training is provided to all managers to recognise and mitigate unconscious bias;
- We have a structured pay system with set pay bands for each grade, which limits the potential for inequality in pay, both on appointment and during employment, and the length of each of our pay ranges is being shortened, year on year;
- All decisions on performance and competence related reward are scrutinised by the senior management team to eliminate the potential for bias and inequality;
- We offer a wide-ranging development package to employees at all levels to support development and help enhance career progression. Our aim is to increase the proportion of women at middle and senior management grades (C, B and A). ORR’s actions, outlined above, have helped achieve a 6 percentage point increase in the number of women at both grades C and B since 2013.
In 2017, 3 of the 6 successful candidates for our trainee inspector assistant roles were female and, over time, this change in profile is expected to work up through the organisation as these individuals progress in their career.
Since 31 March 2017, we have seen the number of women increase at Senior Civil Service level by 1 which takes the proportion to 37%. Within the last two years we have also increased the number of women on our board and now have 25% (3) representation.
However, it should be noted that our trainee inspectors and our Senior Civil Servants represent small groups, and so any change in the number of individuals can have a significant impact on these percentages.
Year on year, we have reduced the proportion of employees who are unwilling to report their protected characteristics, although for some protected characteristics the absence of positive declarations remains an issue (for example, on religion where 50.7% (152 people) make no declaration). Annex 1: Gender pay gap
ORR’s gender pay gap
In 2017, the government introduced legislation that made it statutory for organisations with 250 or more employees to report annually on their gender pay gap. Non-ministerial departments are covered by the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 which came into force on 31 March 2017. These regulations underpin the Public Sector Equality Duty and require the relevant organisations to publish their gender pay gap data by 30 March 2018 and then annually, including the:
- mean and median gender pay gaps
- mean and median gender bonus gaps
- proportion of men and women who received bonuses
- proportions of male and female employees in each pay quartile
The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are.
A pay gap does not indicate that men and women are being paid differently for equal work, but our data analysis shows there is a higher proportion of women in junior and middle grades, and lower representation at senior levels. This has a greater impact on median pay which explains the difference between the mean and median pay gaps.
The gender pay gap is different to equal pay. Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.
The mean gender pay gap in ORR is 12.8%. The median gender pay gap is 27.2%. The following report provides further detail and analysis. Hourly pay report
We are confident that people at ORR are paid equally for doing equivalent roles, taking into account skills, experience, performance and competence. However, our gender pay gap reflects the fact that we have more male employees in middle and senior positions, and proportionately fewer male employees in junior positions. **Bonus pay report**
People at all levels in ORR are eligible for performance related payments. People who have delivered an outstanding performance across the whole of a reporting year may receive a one off payment.
**Median bonus pay**
- **Female**: £900
- **Male**: £996
- **Percentage Gap**: 9.6
**Mean bonus pay**
- **Female**: £1,352
- **Male**: £1,676
- **Percentage Gap**: 19.3
**Number of bonuses paid by gender**
- **F**: 37.3%
- **M**: 62.7%
- **Total**: 236
**Value of bonuses by gender**
- **F**: £119K (32.4%)
- **M**: £248K (67.6%)
**% of males paid a bonus**: 76
**% of females paid a bonus**: 70.4 ORR gender profile by pay quartile
The following chart shows the proportion of male and female colleagues in each pay quartile. This shows the variation in gender diversity at our middle management levels (upper middle quartile).
- **Lower Quartile**: M 35.1%, F 64.9%
- **Lower Middle Quartile**: M 59.0%, F 41.0%
- **Upper Middle Quartile**: M 80.5%, F 19.5%
- **Upper Quartile**: M 69.2%, F 30.8%
- **Up to £19.43 per hour**
- **Up to £28.18 per hour**
- **Up to £34.09 per hour**
- **From £34.09 per hour** ORR gender pay gap by grade
The following chart shows the pay gap between women and men at the same grade. This is calculated using the basic hourly rate of pay. Annex 2: Diversity
Workforce demographics
Overall, 60% of colleagues at ORR are male, whilst almost 40% are female.
The majority of colleagues are white (67%), whilst just under 19% are non-white. 5% of colleagues have reported a disability.
Over 58% of colleagues are aged 40 or over. ORR employee distribution by grade
ORR has an unusual profile of employees by grade, with a high proportion of colleagues at middle management grades of D, C and B.
As stated elsewhere in this report, a high proportion of these colleagues are male. Annex 3 – Recruitment data
These charts show the protected characteristics for applicants (or those who started the application process) for ORR vacancies, advertised externally between 1 January 2017 and 31 December 2017. NB: Please note that a change in approach in our recruitment practice between 2016 and 2017 resulted in fewer applicants providing no information on their protected characteristics, but an increase in those who positively ‘preferred not to say’.
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7ad45cf7ab8e4eddee4ad00b5c5599fa909645fe | The Office of Rail and Road (ORR) is committed to enhancing the diversity of its people and the inclusiveness of its working arrangements, practices and policies. We aim to reflect the people and communities we serve.
It is essential that ORR has the best people to undertake the important work that we do, and we believe that diverse teams deliver the best outcomes. We are committed to having a strong, diverse and inclusive organisation that provides all our employees with equal opportunity to deliver, develop and progress.
The diversity challenge we face is similar to those in the rail and engineering sectors. This report identifies a mean gender pay gap of 18.3%, whilst the median gender pay gap is 25.1%.
These figures are disappointing. A primary driver is most of employees in our middle management grades are male, and that these grades represent nearly half of the organisation. Average pay is therefore higher for males than for females.
We are committed to reducing this gap. Policies we are implementing include embedding our flexible working approach; refreshing our internal values; making recruitment more open and inclusive; maintaining and enhancing our inclusive culture; and providing appropriate training for our managers (such as unconscious bias and managing inclusive teams).
I am confident that, over time, these strategies will address the current disparity at middle management levels in ORR and that this will improve our gender pay gap.
John Larkin Chief Executive December 2018 Introduction and summary
This report sets out ORR’s gender pay gap and diversity profile, calculated at 31 March 2018.
ORR has 312 employees, 60.3% of whom are male and 39.7% female (compared to 46.1% and 53.2% respectively in the whole Civil Service).
Our mean gender pay gap is 18.3%, whilst the median gender pay gap is 25.1%.
The mean gender pay gap shows the difference between the average salaries for male and female employees. This reflects that, in ORR, 72% (109) of our middle management grades (C, B and A, equivalent to Civil Service grades 7 and 6) are male employees, and that these grades represent over 49% (152) of the organisation. Average pay is therefore higher for males than for females.
Conversely, at grades G, F and E, there is a higher proportion of female than male colleagues.
The proportion of female employees in ORR has increased by 7 percentage points over the last five years. This improvement coincides with ORR’s implementation of ‘smarter working’, with flexible working supported by mobile technology available to all employees. 19% (58) of employees work part-time hours or a non-standard working pattern. Many staff take advantage of the ability to work from home, to help optimise their work-life balance.
Just under 20.5% (64) of employees declared a minority ethnic background, compared to 12% in the Civil Service as a whole. 6% (18) of employees have reported a disability, which is lower than the Civil Service average of 10%.
We are working to increase the proportion of women at middle and senior management grades (C, B and A) and we have achieved a 6 percentage point increase in the number of women at grades C, B and A since March 2017. This has been assisted by a number of action, including
- A commitment to 50/50 gender split outcome for feeder grades recruitment exercise (i.e Trainee roles)
- Increase in the number of vacancies advertised as available on flexible working, part-time, job share basis and the option to be based in any of ORR’s six office locations across the country;
- A flexible employment offer for all employees allowing remote working supported by mobile technology;
- Requiring all people involved in recruitment to undertake unconscious bias training; and
- Making our recruitment adverts more generic and inclusive. As part of our Diversity and Inclusion plan for 2018/19, we will continue to promote ORR as an inclusive employer, and ensure diversity is a key objective in all recruitment activities. Annex 1: Gender pay gap
ORR’s gender pay gap
In 2017, the government introduced legislation that made it statutory for organisations with 250 or more employees to report annually on their gender pay gap. Non-ministerial departments are covered by the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 which came into force on 31 March 2017. These regulations underpin the Public Sector Equality Duty and require the relevant organisations to publish their gender pay gap data by 30 March 2018 and then annually, including the:
- mean and median gender pay gaps
- mean and median gender bonus gaps
- proportion of men and women who received bonuses
- proportions of male and female employees in each pay quartile
The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are.
A pay gap does not indicate that men and women are being paid differently for equal work, but our data analysis shows there is a higher proportion of women in junior and middle grades, and lower representation at senior levels. This has a greater impact on median pay which explains the difference between the mean and median pay gaps.
The gender pay gap is different to equal pay. Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.
The mean gender pay gap in ORR is 18.3%. The median gender pay gap is 25.1%. The following report provides further detail and analysis. Hourly pay report
We are confident that people at ORR are paid equally for doing equivalent roles, taking into account skills, experience, performance and competence. However, our gender pay gap reflects the fact that we have more male employees in middle and senior positions, and proportionately fewer male employees in junior positions.
| Median hourly pay | Male | Female | |-------------------|------|--------| | £29.84 | | £22.35 |
| Mean hourly pay | Male | Female | |-------------------|------|--------| | £31.31 | | £25.59 |
Employees by Gender
- **Headcount**: 312
- **Female**: 39.7%
- **Male**: 60.3%
Percentage Gap
- **Median**: 25.1%
- **Mean**: 18.3% **Bonus pay report**
People at all levels in ORR are eligible for performance related payments. People who have delivered an outstanding performance across the whole of a reporting year may receive a one off payment, whilst people who have made a special one-off contribution during the year may receive an in year award. The proportion of men and women in receipt of bonus payment has remained the same over the last 2 years: 37% female - 63% male. However, in 2018, more women received higher payments than men, resulting in mean pay gap of -22.9%, whilst the median pay gap is 0%. Out of the 193 male population, 63.2% received a bonus whilst 53.4% of the total female population of 131 received a bonus this year. ORR gender profile by pay quartile
The following chart shows the proportion of male and female colleagues in each pay quartile. This shows the variation in gender diversity at our middle management levels (upper middle quartile). ORR gender pay gap by grade
The following chart shows the pay gap between women and men at the same grade. This is calculated using the basic hourly rate of pay. A year on year comparison indicate that the median gender pay gap is closing for all grades except grade A. This is partly due to a number of staff changes at grade A in 2018, the gap should be addressed as we continue to focus more on the diversity analysis for the feeder group recruitment and selection. Annex 2: Diversity
Workforce demographics
Overall, 60% of colleagues at ORR are male, whilst almost 40% are female.
The majority of colleagues are white (64.1%), whilst 20.5% are non-white, an increase of 3% compared to the previous year. 6% of colleagues have reported a disability.
Over 61.5% of colleagues are aged 40 or over. Annex 3 – Recruitment data
These charts show the protected characteristics for applicants (or those who started the application process) for ORR vacancies, advertised externally between 1 April 2017 and 31 March 2018.
Gender
Disability
Religion
Sexual Orientation
Ethnicity
Age
NB: Please note that a change in approach in our recruitment practice between 2016 and 2017 resulted in fewer applicants providing no information on their protected characteristics, but an increase in those who positively ‘preferred not to say’.
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4f1174349bb9a3042339544f0316b3f617bc4a7b | ORR Gender Pay Gap and Diversity report 2019/20
Introduction
In 2017, the Government introduced world-leading legislation that made it statutory for organisations with 250 or more employees to report annually on their gender pay gap. Government departments are covered by the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 which came into force on 31 March 2017.
These regulations underpin the Public Sector Equality Duty and require relevant organisations to publish their gender pay gap by 30 March annually. This includes the mean and median gender pay gaps; the mean and median gender bonus gaps; the proportion of men and women who received bonuses; and the proportions of male and female employees in each pay quartile.
The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are. The gender pay gap is different to equal pay. Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.
Building a diverse and inclusive workforce that reflects the people we serve is one of the Civil Service’s top workforce priorities. Our collective aim is to make the Civil Service the UK’s most inclusive employer by 2020. Our Diversity & Inclusion work plan outlines how we plan to achieve this. The Civil Service should create opportunities for all in a truly meritocratic way and reward all civil servants fairly, regardless of gender, ethnicity or any other personal characteristic.
This report analyses our gender pay gap figures in more detail, makes comparisons with our 2018 and 2019 data where relevant, and sets out what we are doing to close the gender pay gap in our department. Reflections from our Chief Executive
The Office of Rail and Road (ORR) is committed to enhancing the diversity of its people and the inclusiveness of its working arrangements, practices and policies. We aim to reflect the people and communities we serve.
It is essential that ORR has the best people to undertake the important work that we do, and we believe that diverse teams deliver the best outcomes. We are committed to having a strong, diverse and inclusive organisation that provides all our employees with equal opportunity to deliver, develop and progress.
The diversity challenge we face is similar to those in the rail and engineering sectors. This report identifies a mean gender pay gap of 18.1%, whilst the median gender pay gap is 23.8%.
These figures are improving gradually across most grades although there is still clear scope for improvement. A primary driver is that a majority of employees in our middle management grades are male, and that these grades represent nearly half of the organisation. Average pay is therefore higher for males than for females.
Policies we are implementing to help reduce the gap include: embedding our flexible working approach; making recruitment more open and inclusive; maintaining and enhancing our inclusive culture; promoting programmes for under-represented groups; and providing appropriate training for our managers (such as unconscious bias and managing inclusive teams). In addition, we are conducting a full review of our Diversity and Inclusion work using independent consultants.
We also recognise that achieving this gap reduction needs a continued commitment and persistent effort over the long term. Two areas that I am particularly keen on working on are: having a different approach to recruitment whereby we look carefully at the skills actually needed for a role; and a commitment to flexible working where we seek to accommodate different individual needs.
I am confident that, over time, these strategies will address the current disparity at middle management levels in ORR and that this will improve our gender pay gap.
John Larkinson, CEO
January 2020 Gender Pay Gap data
| Gender pay & bonus gap | Pay quartiles | |------------------------|--------------| | **Difference between Men and Women** | **Quartile 1** | **Quartile 2** | | Gender pay gap | 18.1% | 39% | | Gender bonus gap | 29.0% | 61% | | **Median (Average)** | 23.8% | 41% |
| Proportion of staff receiving a bonus | |--------------------------------------| | **Quartile 1** | **Quartile 2** | | Female | 39% | 59% | | Male | 61% | 41% |
We are confident that people at ORR are paid equally for doing equivalent roles, taking into account skills, experience, performance and competence. However, our gender pay gap reflects the fact that we have more male employees in middle and senior positions, and proportionately more female employees in junior positions.
Pay Quartiles are where an organisation is split into four equally sized chunks of employees based on their hourly earnings - and then the gender split is recorded.
Using the quartile percentages from the chart above, in ORR the lower quartile (Up to £20.02 per hour) is made up of 61% women while the upper quartile (From £34.17 per hour) is made up of 30% women. Gender Pay Gap – annual comparison
| Gender pay gap | 2017 | 2018 | 2019 | |-------------------------|------|------|------| | Mean gender pay gap | 12.8%| 18.3%| 18.1%| | Median gender pay gap | 27.2%| 25.1%| 23.8%|
The table above shows a comparison over the last three reporting years. While the median gender pay gap is improving gradually, the mean gender pay gap stepped back in 2018 but has marginally improved over the last year.
The pay gaps reflect a lack of gender diversity at our most prominent grades. Since 2018, there has been a 4.2% increase of the female population at grade C (middle management) and a slight increase at the two lower grades.
From the above chart, the female pay gap has improved at grades A and B. The other grades have gone back slightly. Hourly Pay report
The median pay gap is the difference between the midpoints in the ranges of hourly earnings of men and women. It takes all salaries in the sample, lines them up in order from lowest to highest, and picks the middle salary.
The mean gender pay gap is the difference between the average hourly earnings of men and women.
Our mean gender pay gap is 18.1%, whilst the median gender pay gap is 23.8%.
The mean gender pay gap shows the difference between the average salaries for male and female employees. This reflects that, in ORR, 71% (109) of our middle management grades (C, B and A, equivalent to Civil Service grades 7 and 6) are male employees, and that these grades represent over 48% (154) of the organisation. Average pay is therefore higher for males than for females.
Conversely, at grades G, F and E (equivalent to Civil Service grades AO to HEO), there is a higher proportion of female than male colleagues. People at all levels in ORR are eligible for performance related payments. People who have delivered an outstanding performance across the whole of a reporting year may receive a one off payment at the end of the year, whilst people who have made a special one-off contribution during the year may receive an in year award at any point during the year.
The proportion of men and women in receipt of a bonus payment has remained the same over the last 2 years. The mean pay gap is 29.0%, whilst the median pay gap is 15.1% Out of the 200 male population, 59.5% received a bonus whilst 52.7% of the total female population of 129 received a bonus this year. Actions to close the gender pay gap
ORR continues to build on the actions outlined in the 2018 report. Last year we sought to achieve a 50/50 gender split outcome for feeder grades for Inspector roles. We also had a number of work streams in our 2018/19 diversity and inclusion programme to tackle the under-representation of certain groups, including women, in senior management positions. ORR also ensures that interview panel members undertake unconscious bias training and that wherever possible all interview panels are gender mixed.
ORR will continue to review these initiatives as part of its Diversity & Inclusion plan, working closely with our Diversity and Inclusion Network and SCS Diversity Champion.
We are also carrying out, with the assistance of external Diversity & Inclusion consultants, a full review of our Diversity & Inclusion plan, and will be looking at the gender pay gap as one part of this, so that we can identify further actions that we can take to improve this.
Our 2019/20 Diversity & Inclusion plan will be focussing on the following areas over the coming year:
- An increase in the number of vacancies advertised as available on flexible working, part-time, job share basis and the option to be based in any of ORR’s six office locations across the country;
- A flexible employment offer for all employees allowing regional and occasional home working supported by mobile technology;
- A requirement that all people involved in recruitment to undertake unconscious bias training;
- A move to make our recruitment adverts more generic and inclusive;
- A continuation of ‘blind’ recruitment where all personal information including gender is redacted and not visible to those making decisions until the interview stage; and
- A strong policy that mixed gender selection panels are in place for interview panels. Progression and career paths
- ORR participated in a ‘Positive Action Pathways’ programme for all grades, which aimed to tackle the under-representation of certain groups, including women, in middle and senior management positions.
- ORR runs an annual talent and succession planning round, which provides a source of data that helps monitor diversity with a view to informing development opportunities.
Performance management
- All employees will continue to be offered access to various talent programmes, aimed at supporting the right people into the right roles. These include: Future Leaders Scheme; Positive Action Pathway; and various apprenticeships. Annex 1 - ORR workforce demographics
ORR has 319 employees, 60.8% of whom are male and 39.2% female (compared to 46.1% and 53.9% respectively in the whole Civil Service).
The proportion of female employees in ORR has increased by 2 percentage points over the last five years. 21% (67) of employees work part-time hours or a non-standard working pattern. Many staff take advantage of the ability to work from home, to help optimise their work-life balance.
Just under 17% (54) of employees declared a minority ethnic background, compared to 12.7% in the Civil Service as a whole. 5% (17) of employees have reported a disability, which is lower than the Civil Service average of 11.7%.
The majority of colleagues are white (69%), whilst 16.9% are non-white, a decrease of 3.6% compared to the previous year. Over 63.3% of colleagues are aged 40 or over. Annex 2 - Recruitment data
These charts show the protected characteristics for applicants (or those who started the application process) for ORR vacancies, advertised externally between 1 April 2018 and 31 March 2019.
**Gender**
The gender split of applicants have remained the same over the last 2 years.
**Disability**
There is a 1% increase in the number of applicants declaring a disability this year.
**Sexual Orientation**
In 2018/19, there was an increase of 1% in LGBT applicants.
**Ethnicity**
There are no changes over the last two years. However, the number of applicants not willing to declare their ethnicity has slightly increased. There is a slight decrease in the number of applicants under 40 years of age compared to the
We continue to attract applicants from different faiths
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022229be6f0ecf456fd9a3c23ba9c031725e547f | ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future.
ORR / HRA RM3 2019 Seminars ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future.
Safety Management Systems
Why?
Ian Skinner Assistant Chief Inspector of Railways Office of Rail and Road ORR’s vision for GB’s Railways
Zero workforce and industry-caused passenger fatalities, with an ever decreasing overall safety risk
- My perception on passenger’s expectations:
- ‘1953 experience’ with 21st century levels of safety and service
- A management system will help achieve this.
- Stop and think
- Improve
- Record Purpose of a management system
What is the number one objective of a heritage railway organisation?
- Preserve & enjoy – members and visitors
- Helping visitors understand rail based history
- More track, locos, carriages?
- Make money?
Delivery of something that ‘the market’ needs
- Management system help deliver a solution to the identified market need.
- Good management systems do that:
- Repeatedly;
- Efficiently;
- Responsively; and
!!!SAFELY!!! Why do ‘heritage’ need management systems?
Low speed $\\equiv$ little risk
Think of the energy:
- moving vehicles – kinetic energy
- gravity – potential energy
- steam boiler, braking systems – stored energy
Think of the controls:
- the hardware
- role of the paid workers & unpaid volunteers
- and passengers The Management System Principles
- Know your operation / asset
- Know your risks
- Know your controls
- And gaps
- Put in place:
- Planning
- Organisation
- Monitoring
- Review
- And demonstrate it ‘If you can’t describe what you’re doing as a system you don’t know what you are doing’
W Edwards Denning An introduction to RM³ and the five maturity levels
Ian Skinner Assistant Chief Inspector of Railways Office of Rail and Road iskRM Management Maturity odel The RM³ model The 5 maturity levels
Ad hoc and uncoordinated
Local groups are organised to ensure repeatable performance BUT each work group performs similar tasks differently
Proactive/continual improvement
Delivery can be predicted by the management system Variation and change is controlled
Good practice synthesised into standard processes Why does risk control need to get better?
...because essentially it is people that control risks day in, day out and human performance varies.
If they are already high performing ("excellent"), then greater likelihood that any dips in performance will still be above the legal minimum and risks will be adequately controlled...
...If they are only poorly performing ("ad hoc"), then greater likelihood that their normal performance (and any dips) are below the legal minimum and risks are uncontrolled. Compliance ?
Non-compliance ?
Ad hoc
Excellent
Time Getting better in risk control
.....the legal bit
The Railways and Other Guided Transport Systems (Safety) Regulations 2006
schedule 1 looks for the safety management system to show how continuous improvement of the safety management system is ensured.
and, more generally
The Management of Health and Safety at Work Regulations 1999
looks for continuous improvement through risk assessment and control through the principles of prevention (the ‘risk control hierarchy’) and the requirement to review arrangements. So what about the risks?...
... what is ORR’s focus? Our strategy for regulating risks ... ... is set out in our 14 Strategic Risk Chapters
- Health and safety management systems
- Industry staff competence and human failure
- Management of change
- Level crossings
- Interface system safety
- Track
- Civil engineering assets
- Rolling stock asset management
- Occupational Health
- Worker safety
- Management of train movements and signalling
- Health and safety by design
- Leadership and culture
- Tramways The RM$^3$ journey
Railway Management Maturity Model (RM$^3$)
(Version 1.02)
March 2011 2019
- Version 3 published on 1st April General layout for criteria, maturity levels and evidence factors OC6 – Organisational culture collation
The significant ways of thinking and doing, which underpin a positive H&S culture suited to the organisation, are identified and applied.
Culture is a lever which can assist the board and senior managers to improve company and safety performance. Setting out a culture strategy for H&S as part of a SMS is a necessity for excellence.
Culture consists of the shared ways of thinking and doing in respect of the most significant risks of the organisation, which underpin the approach to devising and implementing the SMS.
Current thinking suggests there are ‘seven attributes of an integrated health and safety culture’, these are shown opposite.
Different positive cultural characteristics may be more relevant to some parts of the business. For example, a just and fair reporting culture, may be more pertinent to enhance learning in front-line work, whereas a process safety culture of doubt, and a challenge culture of questioning, may be more relevant to those in engineering functions concerned with the high hazard systemic risks of the infrastructure.
Testing organisational culture and RM³
There are different ways of finding out about an organisation’s H&S culture:
1. By routinely gathering informal information about the H&S culture during monitoring, inspections, investigations and other dealings with employees, interfacing organisations and the supply chain. For instance, workers on site during a routine preventive inspection may comment that performance pressures sometimes take priority over risk controls. In this case, as well as investigating the allegation, the background should be recorded to build up a picture of the organisation’s H&S culture.
2. Organisations can conduct H&S culture or safety climate assessments, using techniques and toolkits, such as the RSSB’s Safety Culture toolkit. These assessments can provide useful information on the current safety culture, and provide information and views about leadership, communications, learning culture, employee involvement and attitudes to blame.
3. RM³ is not intended to be a substitute for other safety culture assessment tools, but in this version there are highlighted ‘culture call-outs’ against every level of maturity in all criteria. Assessors using these ‘call-outs’ will see elements of the ‘seven attributes’ throughout the RM³ criteria. The ‘call-outs’ suggest typical actions, beliefs and behaviours held by staff, at all levels, suggesting the culture of the organisation.
An explanation of how to collate and use the culture indications from the ‘call-outs’ is provided on pages 40 and 41. How will ORR use RM$^3$ going forward?
- We are going to be more consistent and use RM3 with all our dutyholders?
- We will apply these fundamental principles:
- CONSISTENCY
- QUANTITY
- QUALITY
- CURRENCY
- We will engage with you and discuss our findings and yours before reporting on assessment levels.
- We will support you in using RM3.
RM3 process in our quality management system Moderation of RM3 assessments in all sectors Our assessments will be evidence based There will be refresher training for our inspectors ORR’s Annual health and safety report Mainline: Train operating companies Management maturity
Overview: In 2017-18, we produced RM3 assessments for 16 TOCs. Six criteria were at AdHoc, Nine were at managed and 11 at standardised. In 2016-17, the numbers were Five at “AdHoc”, 16 at “managed” and Five at “standardised”. At the top of the range of assessed scores, 13 criteria were at “excellent”, 13 at “predictable”. In 2016-17, 16 were assessed at “excellent” and 10 at “predictable”.
Overall, there has been an improvement in the management maturity of GB’s TOCs. It is pleasing to see the 11 criteria where the minimum assessed value from all of the TOCs was “standardised”.
This year we have been required to dedicate more resource to respond to events, especially to ensure that the TOCs are managing the risks of prolonged industrial action effectively. We intend to return to a proactive inspection program driven by our strategic chapters.
At Old Oak Common depot, a train maintenance worker lost their life during maintenance on a bogie, when a traction motor fell on to them. We continue to investigate this incident. RM³ and Network Rail We want you to use RM³ to improve your success and demonstrate your capability to manage risks:
- internally, and with your ORR inspectors, discuss the evidence found through all assessment work; to
- determine the good things, and not so good things, about your arrangements to control risks; and
- identify what you need to do to improve these arrangements and share your success with other railways
We have designed this new edition of RM³ to be more readily accessible to those just starting out with RM³ ....
.... we have thought about the needs of the heritage sector.....
....but the model also pushes boundaries of excellence for experienced users. SHARING OUR AUDIT EXPERIENCE
LIZ PARKES, HEAD OF OPERATIONS & SAFETY REGULATORY FRAMEWORK & STANDARDS
ROGS: competence, safety management systems, risk assessment, management of engineering change, (use of common safety methods and safety verification for non-mainline and light rail operators)
Environmental legislation
BS/EN/ISO 14001: 2015 • Organisation – scope, interfaces, description, policy safety management, planning, management accountability, workforce involvement, monitoring • Management of change • Risk assessment and risk control • Competence • Provision of information • Incidents • Emergency planning • Audit • Co-operation MEETING ENVIRONMENTAL REQUIREMENTS
BS/EN/ISO 14001: 2015
Environmental Protection Act 1990 and regulations under the act COMMON CONCERNS
Show stoppers: fire, collision, derailment Platform train interfaces Shunting Heritage stock - sub optimum ergonomics Signalling systems Rail/road vehicle and pedestrian interfaces Congestion Noise and vibration, water, land and air pollution avoidance Accessibility HOW ARE WE DOING?
1. Ad hoc?
2. Managed?
3. Standardised?
4. Predictable?
5. Excellent? | Code | Description | Score | |------|------------------------------|-------| | OC7 | Record keeping | 3 | | OP1 | Worker involvement | 3 | | OP2 | Competence management | 3 | | P13 | Workload planning | 4 | | RCS1 | Safe systems of work | 3 | | RCS2 | Asset management | 3 large 2 small | | RCS3 | Change management | 2 | | RCS4 | Control of contractors | 3 | SHARING OUR EXPERIENCES
HOW DO WE BEST LEARN FROM EACH OTHER? ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future.
Ian Skinner Assistant Chief Inspector of Railways Office of Rail and Road
RM³ 2019 for the Heritage Sector RM3 Topic Sets
- RM3 Topic Sets
- To provide focused assessment of key risk management areas
- E.g. Occupational Health, Infrastructure management
- Support the RM3 approach in a targeted manner
- Potential to support RM3 introduction into the Heritage Sector
- Accessible
- Meaningful
- Useful RM3 Topic Set – Heritage Railways
- Nine criteria over the 5 themes
- Retain the 5 maturity steps – ad-hoc thro’ excellence
- Meaningful descriptors for each maturity level
- Plus governance descriptors
- Under development
- Ready to test first draft
- Asking for your help and input The nine criteria
| Health and safety policy, leadership and board governance | SP1 Leadership | | Organising for control and communication | OC7 Record keeping, document control and knowledge management | | Securing co-operation, competence and development of employees at all levels | OP2 Competence management | | Planning and implementing risk controls through co-ordinated management arrangements | PI1 Risk assessment and management | | Monitoring, audit and review | MRA2 Audit |
SP3 Governance SP4 Written safety management system OP2 Competence management OC7 Record keeping PI1 Risk management RCS2 Asset management MRA2 Audit MRA3 Incident investigation Testing the approach
- Draft Topic set produced
- Use in practical applications
- Provide feedback ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future. What evidence?
**Reactive assessment** includes:
- Workplace violations and errors
- Incidents
- Failures to deliver performance objectives
- Complaints
**Proactive assessment** includes:
- Risk control system review
- Safety verification activity
- Safety certification/authorisation assessment
**Audit** includes:
- Top down SMS reviews
- Corrective action monitoring
- Internal and external audits Assessing principles Leadership from the top provides a consistent example and inspiration for leaders at all levels of the organisation. Good leadership in health and safety (H&S) management involves:
- The attitudes and decisions of senior managers aligning with the H&S policy and culture;
- Identifying and promoting the styles of leadership and management practices at all levels, which best support a positive health and safety culture;
- Promoting effective collaboration and engagement of all workers and business partners to achieve continuous improvement on health and safety;
- Aligning the leaders in operational management, organisational functions and operational and support units in pursuit of the common health and safety purpose, strategies and goals;
- Assessing health and safety leadership and management behaviour to motivate and reward success, in improving the control of risk; and
- Adjusting the performance-management and reward systems so they help the organisation achieve its goals and strategies for improving health, safety and performance.
Leaders at all levels of the organisation demonstrate shared values which strive towards continuous improvement.
Leaders search within and outside the organisation for opportunities to improve risk control in their area of the organisation to ensure it is as effective and efficient as possible.
Leaders always consider how they influence others, recognising that good leadership is compelling not coercive.
They pro-actively promote a positive culture and encourage safety improvements in all areas of the business.
Health and safety leaders recognise that better results are achieved through exercising power with, rather than control over, staff.
Leadership activities are consistent with and reinforce the organisation’s health and safety policies.
Leaders at all levels of the organisation are credible and open to ideas for improvement.
Leaders take responsibility to ensure that the health and safety management system achieves its intended outcome.
Leaders inspire others within the organisation to work to deliver against the H&S vision of the organisation.
Culture Leaders recognise they have an obligation to foster the kind of organisational climate where people find it easy to speak up and share when they have made mistakes rather than covering up errors.
Leaders encourage people and enable them to join forces and to participate as responsible individuals in a collaborative institutional enterprise.
Non-technical management skills development is recognised as world class.
Leadership demonstrates and reinforces the values and culture of the organisation and ensure those lead to engagement and empowerment across all layers.
Culture Leaders take responsibility for developing, leading and promoting a positive culture in the organisation that supports effective H&S risk management.
Non-technical management skills are recognised and developed within the organisation.
Guidance and further reading:
- INDG 277 ‘Leadership in the Major Hazard Industries’: Health and Safety Executive (HSE)
- INDG 417 ‘Leading Health and Safety at Work’: HSE SP 1 Leadership
Leadership from the top provides a consistent example and inspiration for leaders at all levels of the organisation. Good leadership in health and safety (H&S) management involves:
- The attitudes and decisions of senior managers aligning with the H&S policy and culture;
- Identifying and promoting the styles of leadership and management practices at all levels, which best support a positive health and safety culture;
- Promoting effective collaboration and engagement of all workers and business partners to achieve continuous improvement on health and safety;
- Aligning the leaders in operational management, organisational functions and operational and support units in pursuit of the common health and safety purpose, strategies and goals;
- Assessing health and safety leadership and management behaviour to motivate and reward success, in improving the control of risk; and
- Adjusting the performance-management and reward systems so they help the organisation achieve its goals and strategies for improving health, safety and performance.
**Excellence**
- Leaders at all levels of the organisation demonstrate shared values which strive towards continuous improvement.
- Leaders search within and outside the organisation for opportunities to improve risk control in their area of the organisation to ensure it is as effective and efficient as possible.
- Leaders always consider how they influence others, recognising that good leadership is compelling not coercive.
- They pro-actively promote a positive culture and encourage safety improvements in all areas of the business.
- Health and safety leaders recognise that better results are achieved through exercising power with, rather than control over, staff.
**Predictable**
- Leadership activities are consistent with and reinforce the organisation’s health and safety policies.
- Leaders at all levels of the organisation are credible and open to ideas for improvement.
- Leaders take responsibility to ensure that the health and safety management system achieves its intended outcome.
- Leaders inspire others within the organisation to work to deliver against the H&S vision of the organisation.
**Culture**
Leaders recognise they have an obligation to foster the kind of organisational climate where people find it easy to speak up and share when they have made mistakes rather than covering up errors.
- Leaders encourage people and enable them to join forces and to participate as responsible individuals in a collaborative institutional enterprise.
- Non-technical management skills development is recognised as world class.
- Leadership demonstrates and reinforces the values and culture of the organisation and ensure those lead to engagement and empowerment across all layers.
**Agile**
- There is no evidence of positive health and safety leadership at any level in the organisation.
- Health and safety leadership is not considered to be important in staff development.
- No effective application of health and safety leadership standards in the organisation.
- Leaders do not collaborate internally or externally.
**Culture**
Staff consider there is little effective leadership in health and safety at any level of the organisation.
- Health and safety leadership skills and other non-technical management skills are not recognised or developed within the organisation.
**Guidance and further reading:**
- INDG 277 ‘Leadership in the Major Hazard Industries’: Health and Safety Executive (HSE)
- INDG 417 ‘Leading Health and Safety at Work’: HSE SP 1 Leadership
Leadership from the top provides a consistent example and inspiration for leaders at all levels of the organisation. Good leadership in health and safety (H&S) management involves:
- The attitudes and decisions of senior managers aligning with the H&S policy and culture;
- Identifying and promoting the styles of leadership and management practices at all levels, which best support a positive health and safety culture;
- Promoting effective collaboration and engagement of all workers and business partners to achieve continuous improvement on health and safety;
- Aligning the leaders in operational management, organisational functions and operational and support units in pursuit of the common health and safety purpose, strategies and goals;
- Assessing health and safety leadership and management behaviour to motivate and reward success, in improving the control of risk; and
- Adjusting the performance-management and reward systems so they help the organisation achieve its goals and strategies for improving health, safety and performance.
**Excellence**
- Leaders at all levels of the organisation demonstrate shared values which strive towards continuous improvement.
- Leaders search within and outside the organisation for opportunities to improve risk control in their area of the organisation to ensure it is as effective and efficient as possible.
- Leaders always consider how they influence others, recognising that good leadership is compelling not coercive.
- They pro-actively promote a positive culture and encourage safety improvements in all areas of the business.
- Health and safety leaders recognise that better results are achieved through exercising power with, rather than control over, staff.
**Predictable**
- Leadership activities are consistent with and reinforce the organisation’s health and safety policies.
- Leaders at all levels of the organisation are credible and open to ideas for improvement.
- Leaders take responsibility to ensure that the health and safety management system achieves its intended outcome.
- Leaders inspire others within the organisation to work to deliver against the H&S vision of the organisation.
**Culture**
Leaders recognise they have an obligation to foster the kind of organisational climate where people find it easy to speak up and share when they have made mistakes rather than covering up errors.
- Leaders encourage people and enable them to join forces and to participate as responsible individuals in a collaborative institutional enterprise.
- Non-technical management skills development is recognised as world class.
- Leadership demonstrates and reinforces the values and culture of the organisation and ensure those lead to engagement and empowerment across all layers.
**Agile**
- There is no evidence of positive health and safety leadership at any level in the organisation.
- Health and safety leadership is not considered to be important in staff development.
- No effective application of health and safety leadership standards in the organisation.
- Leaders do not collaborate internally or externally.
**Guidance and further reading:**
- INDG 277 ‘Leadership in the Major Hazard Industries’: Health and Safety Executive (HSE)
- INDG 417 ‘Leading Health and Safety at Work’: HSE SP 1 Leadership
Leadership from the top provides a consistent example and inspiration for leaders at all levels of the organisation. Good leadership in health and safety (H&S) management involves:
- The attitudes and decisions of senior managers aligning with the H&S policy and culture;
- Identifying and promoting the styles of leadership and management practices at all levels, which best support a positive health and safety culture;
- Promoting effective collaboration and engagement of all workers and business partners to achieve continuous improvement on health and safety;
- Aligning the leaders in operational management, organisational functions and operational and support units in pursuit of the common health and safety purpose, strategies and goals;
- Assessing health and safety leadership and management behaviour to motivate and reward success, in improving the control of risk; and
- Adjusting the performance-management and reward systems so they help the organisation achieve its goals and strategies for improving health, safety and performance.
Leaders at all levels of the organisation demonstrate shared values which strive towards continuous improvement.
Leaders search within and outside the organisation for opportunities to improve risk control in their area of the organisation to ensure it is as effective and efficient as possible.
Leaders always consider how they influence others, recognising that good leadership is compelling not coercive.
They pro-actively promote a positive culture and encourage safety improvements in all areas of the business.
Health and safety leaders recognise that better results are achieved through exercising power with, rather than control over, staff.
Leadership activities are consistent with and reinforce the organisation’s health and safety policies.
Leaders at all levels of the organisation are credible and open to ideas for improvement.
Leaders take responsibility to ensure that the health and safety management system achieves its intended outcome.
Leaders inspire others within the organisation to work to deliver against the H&S vision of the organisation.
Culture Leaders recognise they have an obligation to foster the kind of organisational climate where people find it easy to speak up and share when they have made mistakes rather than covering up errors.
Leaders encourage people and enable them to join forces and to participate as responsible individuals in a collaborative institutional enterprise.
Non-technical management skills development is recognised as world class.
Leadership demonstrates and reinforces the values and culture of the organisation and ensure those lead to engagement and empowerment across all layers.
Culture Leaders take responsibility for developing, leading and promoting a positive culture in the organisation that supports effective H&S risk management.
Non-technical management skills are recognised and developed within the organisation.
Culture Leadership is still largely viewed as a senior management role.
Non-technical skills are specified and staff receive appropriate training.
Culture Leadership is viewed solely as a senior management role.
There is no consistency over how non-technical management skills are developed in the organisation.
Culture Staff consider there is little effective leadership in health and safety at any level of the organisation.
Health and safety leadership skills and other non-technical management skills are not recognised or developed within the organisation.
Guidance and further reading:
- INDG 277 ‘Leadership in the Major Hazard Industries’: Health and Safety Executive (HSE)
- INDG 417 ‘Leading Health and Safety at Work’: HSE SP 1 Leadership
Leadership from the top provides a consistent example and inspiration for leaders at all levels of the organisation. Good leadership in health and safety (H&S) management involves:
- The attitudes and decisions of senior managers aligning with the H&S policy and culture;
- Identifying and promoting the styles of leadership and management practices at all levels, which best support a positive health and safety culture;
- Promoting effective collaboration and engagement of all workers and business partners to achieve continuous improvement on health and safety;
- Aligning the leaders in operational management, organisational functions and operational and support units in pursuit of the common health and safety purpose, strategies and goals;
- Assessing health and safety leadership and management behaviour to motivate and reward success, in improving the control of risk; and
- Adjusting the performance-management and reward systems so they help the organisation achieve its goals and strategies for improving health, safety and performance.
**Excellence**
- Leaders at all levels of the organisation demonstrate shared values which strive towards continuous improvement.
- Leaders search within and outside the organisation for opportunities to improve risk control in their area of the organisation to ensure it is as effective and efficient as possible.
- Leaders always consider how they influence others, recognising that good leadership is compelling not coercive.
- They pro-actively promote a positive culture and encourage safety improvements in all areas of the business.
- Health and safety leaders recognise that better results are achieved through exercising power with, rather than control over, staff.
**Predictable**
- Leadership activities are consistent with and reinforce the organisation’s health and safety policies.
- Leaders at all levels of the organisation are credible and open to ideas for improvement.
- Leaders take responsibility to ensure that the health and safety management system achieves its intended outcome.
- Leaders inspire others within the organisation to work to deliver against the H&S vision of the organisation.
**Culture**
Leaders recognise they have an obligation to foster the kind of organisational climate where people find it easy to speak up and share when they have made mistakes rather than covering up errors.
- Leaders encourage people and enable them to join forces and to participate as responsible individuals in a collaborative institutional enterprise.
- Non-technical management skills development is recognised as world class.
- Leadership demonstrates and reinforces the values and culture of the organisation and ensure those lead to engagement and empowerment across all layers.
**Guidance and further reading:**
- INDG 277 ‘Leadership in the Major Hazard Industries’: Health and Safety Executive (HSE)
- INDG 417 ‘Leading Health and Safety at Work’: HSE Example Company: Mid-Fens Heritage Railway
- The Mid-Fens Heritage railway runs on 8 miles of single track between Outwell and Whittlesey;
- Operates a mixed fleet with steam locomotives and mk1 stock, 1 DMU and 1 DEMU;
- Outwell is a two track station with a headshunt
- Whittlesey is a single track terminus with run-round facilities
- There is an island platform within a passing loop at the intermediate station at Elm Drove; and some level crossings.
- There are workshops and stabling at Outwell, where restoration is also a major activity.
- Staffing includes
- 35 full-time employees
- 400 regular working volunteers Scenario
- You are to carry out an assessment of the Mid-Fens Heritage Railway management system using the RM3 heritage topic set;
- You have a number of different sources of evidence;
- Train dispatch monitoring report;
- Station masters report;
- Email with ISO 45001 accreditation;
- Email about performance monitoring workshop;
- ORR inspector’s contact notes re: complaint from member of the public;
- Copy of email from Safety Rep to Health and Safety Manager;
- Safety Reps’ inspection report Instructions
■ For each piece of information; – Identify the relevant RM3 Criteria; – Determine the level of achievement using the RM3 guidance; – Have you got any culture evidence? …..and what is the maturity level?? – Record the results and plot on the RM3 graph;
■ Remember that there may be different levels of performance for different pieces of evidence. ORR / HRA RM3 2019 Seminars
SEVERN VALLEY RAILWAY 03 December 2019 ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
ORR’s approach and ‘an inspector calls’
Steve Turner HM Principal Inspector of Railways Office of Rail and Road ORR’s vision for GB’s Railways
- Zero workforce and industry-caused passenger fatalities, with an ever decreasing overall safety risk
- ORR perception on heritage passenger’s expectations:
- ‘1950’s experience’ with 2019 levels of safety and service
- Increasing ORR’s capability in the heritage sector
- Supervision – greater presence on the ground
- RM3 type support tool
- Approach to supervision A bit of credibility: my class 47 at GCRN on a Santa train 10/12/17 Austerity ‘Whiston’ on the 26th May 2019 175 years of railway safety 1840 – 2015
1825 First locomotive-pulled passenger railway opens
1830 William Huskisson was the first death on a public railway at the opening of the Liverpool and Manchester Railway when he was run down by Stephenson's Rocket.
1833 Bagworth: Collision with farmer's cart on level crossing, led to the implementation of the locomotive whistle. 1840 Railway companies required to give one month’s notice of intention to open a new railway.
1840 Railway Inspectorate founded.
1841 Railway accident at Sonning Cutting: Train ran into landslide caused by heavy rain. 8 killed and 17 injured. Initiated the concept of Parliamentary trains and that all should be conveyed at the same level of safety.
1842 Railway Inspectorate given powers to postpone the opening of new railways on safety grounds.
1871 Railway Inspectorate given powers to investigate accidents and recommend ways of avoiding them. 1889 Armagh rail disaster: Runaway carriages collide with following train. 80 killed and 260 injured. Inspectorate drives legislation quickly through Parliament that mandates continuous brakes, locking of facing points and block signalling.
1900 Railway Inspectorate given powers to investigate accidents to railways staff.
1911 Railway Inspectorate moves from Board of Trade to Ministry of Transport. 1872 Bridge of Dun boiler explosion: Until the introduction of systematic boiler examinations by a ‘competent person’ commenced in the mid 1850s (mainly driven by the Royal Navy) boiler explosions were not uncommon. In the 19th century there were 122 railway boiler explosions but just 15 in the 20th century. Risks from boiler explosion are considered so serious that ORR still publishes guidance on the approach to be taken.
1879 Tay Bridge disaster. Bridge collapsed under train in a gale. 75 estimated killed. Parliament set out that safety rests with the railway company and not with the Inspectorate.
1889 1915 Quintinshill collision, 22 May; 226 killed, 246 injured: Troop train hit local standing train and 2 coal trains; another train hit wreckage caused by mistakes by signalmen. The greatest loss of life in any British train accident. Drives the end of gas lighting in carriages and improves enhanced crash worthiness.
1935 Welwyn Garden City rear-end collision caused by signalman's error. 13 killed and 85 injured. Drove improvements in signalling systems to assist the signaller.
1948 Railways nationalised. 1951 First heritage railway approved - Tallyllyn.
1952 Harrow and Wealdstone rail disaster: Train ignored signals, rear-end collision with stationary train, train travelling in the opposite direction ran into wreckage. 112 killed, 340 injured. The greatest peace timeloss of life in a railway accident. Started the long road to automatic train protection.
1957 Lewisham rail crash. Missed signals in fog, rear-end collision with another passenger service. Overbridge fell on wreckage when bridge's abutment struck by derailing locomotive and carriages. 1967 Hither Green rail crash: Hastings to Charing Cross service derailed at 70 m.p.h. due to broken fishplate. 49 killed and 78 injured. Drove the introduction of continuous welded rails.
1984 The Polmont rail accident, when a westbound push-pull express train travelling struck a cow. All 6 carriages and the locomotive of the train derailed, killing 13 people and injuring 61 others. The accident led to a debate about the safety of push-pull trains on British Rail. This led to recommendations for object deflectors to be fitted to the leading vehicles of all trains with an axle load of less than 16 tonnes and that headlights were to be fitted on the front of all trains. 1987 Kings Cross fire: 31 people died and 100 were injured. The fire started on an escalator serving the Piccadilly line and 15 minutes after being reported, the fire flashed over, filling the underground ticket office with heat and smoke. Reconstruction of the fire’s sudden increase in intensity revealed the previously unknown ‘trench effect’ which fundamentally influenced future underground station design.
1988 Clapham Junction rail crash: Rear-end collision, oncoming train ran into wreckage: wrong-side signalling failure due to wiring error. 35 killed, 100+ injured. Principle underlying cause identified as fatigue. Drove the control of working hours for safety critical staff. 1989 Purley Station rail crash, missed distant signal, overshot signal at danger; rear-end collision, part of train down embankment. 5 killed, 90 injured.
1989 Railway Inspectorate moves to HSE.
1991 Cannon Street Station rail crash: Passenger train hit buffer stop. 2 killed, 542 injured.
1994 Cowden rail crash, Kent: Signal passed at danger; head-on collision. 5 killed, 13 injured. 1994 Cowden rail crash, Kent: Signal passed at danger; head-on collision. 5 killed, 13 injured.
The accidents from 1988 to 1994 drove the removal of mark 1 rolling stock from the network, resulting in the 1999 Railway Safety Regulations that finally prohibited Mark 1 carriages.
1994 First female inspector appointed to HMRI.
1994 Railway privatised. 1994 Introduction of safety case regulations – operators must demonstrate that safety practices are followed.
1996 Watford Junction: Signal passed at danger; empty coaching stock collided with stationery passenger train 700m south of Watford Junction. 1 killed, 69 injured.
1997 Southall, rail crash: Signal passed at Danger, High Speed Passenger Train collided with a freight train. 7 passengers killed and 150 injured.
Number of recommendations made, covering driver training and research into driver behaviour, crashworthiness and fleet maintenance. and fleet maintenance.
1999 Ladbroke Grove rail crash. Driver passed signal at danger; head-on collision and fire; allegations that signal (SN109) was hard to see. 31 killed, 523 injured.
Finally drove the Inspectorate to legislate requiring the national roll out of TPWS and incorporated prohibition of Mark 1 rolling stock, only the second time that the Inspectorate has legislated.
2000 Hatfield: 4 killed, 70 injured when an Intercity express travelling at 115 mph derailed south of Hatfield due to a rail fracturing as the train travelled over it. 2001 Great Heck, near Selby North Yorkshire: 10 killed, 82 injured when a land rover and trailer ran down an embankment onto the railway tracks and was hit by an intercity train which was then deflected into the path of an oncoming freight train carrying coal. Drove improvements to reduce the likelihood of vehicle incursion at critical high risk locations.
2002 Potters Bar: 7 killed, 76 injured when a passenger train derailed at poorly maintained points south of Potters Bar and carriages came into contact with the platform at the station. 2005 Elsenham, Essex: 2 teenage girls killed by a train while using the station's pedestrian level crossing. Drove the on-going closure programme of level crossings and significant improvements in risk assessment and ownership, with the creation of level crossing managers.
2005 Last of the slam door trains following concern about fatalities due to falls from moving trains.
2006 ORR and HSE Railway Safety merged.
2007 Grayrigg derailment. Train derailed over a set of faulty points. 1 killed and 88 injured. Drove improvements in railway management and culture.
2014-19 ORR’s second occupational health programme.
2015 Driving for excellence in the railway industry. Some comparisons
| Year | Worker fatalities | Pass + public fatalities | Suicide | Trespass | Nr of Pass mainline | Nr of Pass LUL | |--------|-------------------|--------------------------|---------|----------|---------------------|----------------| | 1874 | 788 | | | | | | | 1983 | 28 | 69 | 212 | 146 | 695M | 585M | | 1993 | 11 | 39 | 108 | 136 | 769M | 787M | | 2015 | 4 | 14 | 293 | 22 | 1,600M | 1,300M | | 2018-19| 2 | 44 | 302 | | 1,759M | 1,384M |
No passenger fatalities as a result of a train accident since 2007 (Grayrigg) No heritage railway fatalities since 2012 when a guard was crushed whilst shunting To put into 19th century perspective (1)
The honourable Gentleman the Member for Belfast mentioned the relative risk of life between railway-men and soldiers. I have this comparison to make; that there were 29 British soldiers killed at the battle of Khartoum, and that there were 501 railway-men killed on our railways last year. There were 148 killed in the Balaclava charge, and there are considerably more shunters and brakesmen killed every year in the industry of our railways. It seems to me to be a curious fact that the man who is paid for getting killed rarely gets killed. In 15 years, from 1872 to 1886, out of 1,407,000 troops liable to be engaged in battle, there were only 1,396 killed in action, and in that same period of 15 years there were 8,400 men killed on our railways, and a total of 6,500 civilian workmen killed in the same period. To put into 19th century perspective (2)
- We cannot permit this wanton sacrifice of human life to go on. Officers in the Army and Navy, to their credit be it said, look after the protection of their men, and do everything in their power to prevent the needless slaughter of those who are placed under their command.
- Unfortunately, we have not, in relation to our railwaymen, officers who take up the same position with regard to the railway industry as a Colonel of a regiment does with the soldiers under his command. The nearest substitute to that kind of a man in the railway world is the President of the Board of Trade. To put into 19th century perspective (3)
- Every year in this industry there are 500 men killed, and 67,000 more or less injured. They are killed by the neglect of the most elementary causes, and through the lack of administrative control which the right, honourable Gentleman himself can provide, and I would respectfully suggest to him that instead of allowing Colonels of the Royal Engineers to be present at a coroner's inquest after a railway accident has happened he should appoint sub-inspectors and Chief Inspectors of railways to examine lines and to make suggestions, and their advice should be forced upon our railway companies, and if he does that I am sure that the 50s per cent. diminution of accidents in America which we have witnessed will be followed by a remarkable diminution in the number of men injured and killed in this country.
- John Burns MP for Battersea (in 1899 on a debate about automatic couplers for railways) Heritage railway numbers: source HRA
- 200 plus heritage railways
- 2016 HRA figures (2/3): 9.6m passengers, 562m of line, 460 stations, 11.7m visitors resulting in revenue of £130m
- 2,867 full time employees; 21,659 working volunteers
- 790 steam locomotives
- 1021 diesel locomotives
- 268 DMU
- 2176 carriages and 3950 wagons
- HST power car and six Mk3 carriages at GCRN (as below)! 41001 returning to NRM and two production power cars donated by ROSCO Any latin scholars
- Sales populi suprema lex esto Translation
■ “Let the good (or safety) of the people be the supreme (or highest law)”
■ Marcus Tullius Cicero (106 BC to 43BC) - Roman Politician and lawyer
■ So good health and safety is nothing new! Origins of modern safety legislation
- Industrial revolution: first Factory Inspector in 1833, £1000 pa.
- Dark satanic mills, children and women in the mines, bad conditions in most of industry – notable exceptions such as Titus Salt at Saltaire, Joseph Rowntree of York or Cadbury’s in Bourneville, Birmingham: “model villages”.
- Various Factories Acts / Regulations throughout history to date.
- HSWA 1974 following Robens Report [http://www.hse.gov.uk/aboutus/40/robens-report.htm](http://www.hse.gov.uk/aboutus/40/robens-report.htm)
- 21st October 1966: Aberfan (116 children, 28 adults died) [https://en.wikipedia.org/wiki/Aberfan_disaster](https://en.wikipedia.org/wiki/Aberfan_disaster)
- Edwards v NCB All ER 743 CA [https://en.wikipedia.org/wiki/Edwards_v_National_Coal_Board](https://en.wikipedia.org/wiki/Edwards_v_National_Coal_Board)
- Risk assessment Perhaps a reason for safety inspectors?
- “We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert.”
- J Robert Oppenheimer 1904-67 – Father of the atomic bomb
- There’s an old saying that if you think safety is expensive, try an accident. Accidents cost a lot of money. And, not only in damage to plant and in claims for injury, but also in the loss of the company’s reputation.”
- Professor Trevor Kletz Requirements
- HSWA 1974 Sections 2(1), 3(1), 4, 6, 7, 36 and 37
- Powers of Inspectors (IN, PN, Legal Proceedings – triable either way)
- Penalties
- Regulations such as
- Railways and Other Guided Transport Systems (Safety) Regulations 2006. Heritage based on 25mph, SMS (RB, Competence, Maintenance and Risk Assessment)
- PSSR 2000, PUWER 2008, WAH 2006, LOLER 1998, EAW 1989, COSHH 2002, CAW 2012, CLAW 2002, NAW 2005 Recent events
- **Two trains in one section** running towards one another. Staff and ticket system broke down: Abermule 26/01/21 – 17 died. Happened quite a few years ago on another heritage railway!
In summary:
- a ticket could be issued without staff present
No clear understanding between Signaller and Trainee Stationmaster as to what movements were planned
Trainee not qualified in staff and ticket working and prepared a ticket without staff in his possession – staff on train coming towards him Recent events
- Driver accepted ticket without seeing the staff
Station master did not adequately supervise the trainee
[https://www.gov.uk/government/publications/safety-digest-082019-romney-sands/serious-operating-irregularity-at-romney-sands-28-august-2019](https://www.gov.uk/government/publications/safety-digest-082019-romney-sands/serious-operating-irregularity-at-romney-sands-28-august-2019)
- (OP2 Competence Management System) Droplight windows: young man died on the mainline when his head hit a close structure. A number of fatalities since 1999 including Clayton Tunnel and Denmark Hill plus near misses. TOC fined £1m plus £52k costs on 17/07/19. https://orr.gov.uk/news-and-blogs/press-releases/2019/gtr-fined-after-man-killed-on-the-gatwick-express
Letter to HRA and about forty heritage railways. Risk Assessment and necessary actions. Including moving nearby structures, vegetation clearance, train announcements, improved droplight door signage, ticket information, window bars as a last resort.
Bash Mash Kevin https://www.youtube.com/watch?v=pSQzSs56jVE and The Bashers https://www.youtube.com/watch?v=VUFm2rWn41g Droplight windows continued
Some adverse comments from enthusiasts as believed no fatalities since 1960 on heritage railways! Some that come to mind follow:
No names but:
Guard crushed to death between two carriages whilst shunting Guard caught between two buckeye connection Passenger run over by train when he was running for train and slipped Farmer in collision with a train on a crossing on a standard gauge line Three died in separate incidents on a narrow gauge line Fireman hit his head on a bridge whilst in tender shovelling coal forwards Surveyor crushed by jib of crane whilst undertaking LOLER inspection Fragile elderly lady died some months later after falling under a train Mark 1 corrosion: not just Mk1s 30 year life, now double.
Standards such as CMS 123, BR10906/7 don’t consider corrosion.
Heritage railways must inspect and invasively if necessary.
SMS requirements including subsidiary documents
Development of suitable maintenance standards and records: each carriage needs its own folder / record!
Need for own wheel profile and buckeye gauges (or borrowed).
HOPS or other digital recording system. Some paper records very poor or sketchy. If records are poor what does that imply re the rolling stock.
Days of heavy general repaints are over. (RCS2 Management of Assets, OC7 Record keeping, document control and Knowledge information) Some non fatal and other incidents (1)
- Gas main strike
- Volunteer tripped over steel plate # hip / another fell & fractured shoulder
- Passenger tripped at toilet entrance on platform # hip
- Dropped fusible plugs (OP2 Competence Management System)
- Signals Passed at Danger (lots) (OP2 Competence Management System)
- Passenger train buffer fell off due to broken shaft – others examined and had potential problems (RCS2 Management of Assets)
- Derailments for a variety of reasons – latest only last week
- Platform despatch incidents: some on CCTV – quite useful!
- Falls from height: # broken sternum / # shoulder blade (RCS1 SSoW) Some more incidents (2)
- Collapsing large ‘A’ frame in course of movement (OP2 Competence)
- Near crane overturn: no lift plan, weight of load unknown, outriggers and springs stops not deployed, non functioning ASLI, operator unable to show competence, outside wheels lifted off rails, CCTV. If gone over would have resulted in possible prosecution (OP2 Competence)
- SPAD and subsequent collision resulting in PN being served (RCS1 Safe System of Work)
- Light engine runaway, trolley, ECS, brake van runaway (RCS2 Management of Asset, RCS3 Change Management)
- Collision between car and passenger train on Open Crossing
- Other AOCL collisions
- Child fell from moving train as door was opened
- Low speed light engine and stock collision during station move (OP2 Competence)
- Plant shed burned to the ground Some more incidents in 2018 / 19 (3)
- Locomotive failures of varying kinds: eg top water cock handle blew out, piston failure, gauge glass and frame failure (RCS2 Management of Assets)
- Permanent Way issues in general (RCS2 Management of Assets)
- Operational incidents: lots of SPADS, two trains in section, trains in section without staff etc
- Near blinding of volunteer from flying ballast chip (RCS1 Safe System of Work)
- Locomotive running into MPD and damaging other locos (OP2 Competence Management System)
- Near misses at level crossings – particularly AOCL
- Passenger train division in 2019 – four in 2017 (RCS2 Management of Assets & OP2 Competence)
- Excessive speed – in forties on passenger trains! (OC2 Management and Supervisory Accountability) Other issues
- Safety critical components: rivets, tubes, C107 copper etc
- Health: done work with lead, asbestos, effluent discharge etc
- Work with LAs – noise and smoke etc
- Statutory Inspection: eg Level Crossing Orders
- Complaints and Inspections: complaints are many and varied – just about anything you can think of
- Extra resource: Simon Smith joined the heritage team on a permanent basis in April 2019 (26 years as an Inspector) and looks after SE and SW England. Revolving six month secondments for trainees into heritage: as from 21/10/19 Andrew Clapp. This will allow for proactive inspections to occur inc RM3! Common themes (1)
- **Primary control for H&S is the SMS:** Bell curve or normal distribution: Improvement Notices served down the years *(SP4 Written SMS)*
- **Competence** or sometimes inability to demonstrate: couple of railways as at Nov 2019 not running at present - one with PN *(OP2 Competence Management.)*
- **Age / medical fitness:** self assessment questionnaires / formal medicals for footplate staff *(OP2 Competence Management)* Common themes (2)
Assessment / reassessment (Open v closed book and periodicity of same) (OP2 Competence Management System)
Maintenance: T&RS, p’way, structures, signalling. One railway currently non operational partly due to inability to show proper maintenance. OC7 Record keeping, document control and knowledge management & RCS2 Management of Assets
Need to assess those undertaking maintenance work, inspection (eg track patrolling or FTR) etc Don’t forget workshop competence! (OP2 Competence Management System) Common themes (3)
- **Standards for maintenance** sometimes poor or not available! Make use of internet: eg Locomotive Manufacturers Handbook 1949 @ https://www.martynbane.co.uk/tech/steam-tech.html (OC7 Record keeping, document control and knowledge management, RCS2 Management of Assets and OP2 Competence Management)
- and MT 276 examination schedule on the internet @ http://www.tonysimons.me.uk/bestt/ewExternalFiles/MT276.pdf Boiler Code of Practice @ https://www.hra.uk.com/guidance-notes
- Rolling stock standards on internet and HRA website https://www.hra.uk.com/br-maintenance-specs
- Work with other railways to determine common standards: too much reinventing the wheel (OC5 System safety and interface arrangements) Common themes (4)
**Records:** again like the proverbial “curates egg”. Very important to allow a railway to demonstrate say maintenance or competence etc. Many railways are exemplary but some are woeful. As above the normal distribution describes many aspects of heritage railways *(OC7 Record Keeping, document control and knowledge management)*
Move to digital record keeping where possible: standards / procedures / rostering / boiler washouts / mech exams etc *(OC7 Record Keeping, document control and knowledge management)*
**Corporate Governance and Leadership:** not always adequate *(Self evident which criteria)* Some of my prosecutions
- 2002: commuter train derailment in South London due to gauge spread. Prosecuted both the IC and IMC (RCS2 Asset Management & OC7 Record Keeping)
- Nov 2004: IC and IMC were fined a total of £285,000 following death of an eight year old girl who was electrocuted by third rail. (RCS2 Asset Management)
- March 2006: an employee lost part of his hand whilst fitting new pads to brake discs of Mk 3 rake in the depot. (Two non connected workstreams underway on a rake plus loco at same time (RCS1 SSoW & SP4 Safety Management System)
- June 2007: employee received a 25kv electric shock whilst working on top of a class 86 in a depot. He was lucky to survive. £30,000 (RCS1 SSoW & SP4 Safety Management System)
- July 2012: 450kg rail dropped on to a volunteer on a heritage railway: severe leg injuries. £5,000 fine imposed (RCS1 SSoW & SP4 Safety Management System) More prosecutions
- May 2010: boiler inspector fined following inadequate boiler inspection of a standard gauge steam locomotive. (OP2 Competence)
- 2011 – overgrown UWC with missing gate and other tied back: train / car collision. £4000 fine (RCS2 Asset Management)
- June 2016: TOC and driver fined total of £200,000 following significant SPAD at Wootton Bassett. Brake safety system isolated. (OC2 Management and Supervisory Accountability)
- May 2018: missing floor in Mk1 – child fell onto bogie: £40k fine plus £13k costs (RCS2 Asset Management)
- July 2019: mainline TOC fined £1m plus £52k costs re death of a passenger at a droplight (PI1 Risk Assessment & Management) Some Improvement and Prohibition notices
- Lots (around 14) to do with inadequate safety management systems: all complied with (SP4 Written Safety Management System)
- Condition of level crossing (RCS2 Management of Assets & SP1 Leadership)
- Many month closure of a heritage railway due to condition of track, lack of competence of staff and very poor operating practices (SP1 Leadership, OC6 Organisational Culture, OP2 Competence Management, RCS1 SSoW and RCS2 Management of Assets)
- Voluntary cessation of operations for many months on another railway due to similar problems (As above)
- PN re all operations: (OP2 Competence Management, OC7 Record Keeping, document control and knowledge management), and RCS2 Management of Assets) Going forwards
- Increased resource in heritage team: plan of work to include proactive inspections
- Risk based approached to plan of work targeting a number of higher priority dutyholders
- Criteria for risk includes: passenger numbers, route miles, numbers of staff / working volunteers. Level crossings, t&rs, previous history
- All based on lower risk than the mainline due to maximum speed of 25mph (not average as once believed by members of one railway)!
- That said trains are sometimes heavier and most assets and staff are certainly older than the big railway Key areas for inspection
- Safety Management System – bedrock
- Governance and leadership
- Asset management including p’way, structures, t&rs, level crossings, workshops
- Competence management
- Occupational health to include asbestos, lead, welding fume etc
- We will be using RM3 ourselves but using just third of the criteria: individual railways can use more or less at a periodicity of their choosing.
- Opportunity to compare dutyholders and HMRI evaluations over time
- RM3 could lend itself to other issues: finance or commercial activities Selected criteria for our inspection work (1)
- SP1 Leadership and SP3 Governance: key to the successful management of health and safety risk is effective Leadership and Governance: former to set and communicate a clear direction and required standards, and act in a consistent manner to reinforce the required behaviours; the latter to make sure the organisation is accountable for the management of risk, and has effective arrangements in place.
- SP4 written SMS arrangements: to help understand the capability of the written safety management system, and identify areas for development.
- OP2 Competence management; Essential that all heritage railways can have arrangements that can demonstrate competence in all safety critical functions.
- OC7 Record Keeping; dovetails with OP2 & RCS2 to allow dutyholders to demonstrate competence (and maintenance, operations etc) Selected criteria for our inspection work (2)
- PI1: Risk Management – simple risk matrices to demonstrate that risk have been identified, mitigations identified and prioritised for action.
- RCS2 Asset Management; how railways inspect and maintain their assets; be it traction and rolling stock maintenance, permanent way and structures. The SMS should determine scope, standards and periodicity and records must be readily available. (Similar to competence).
- MRA2 Audit: some internal auditing would be very useful to dutyholders. An area for development in most operators.
- MRA3 Incident investigation: Such investigations need to be robust with correct conclusions, pertinent recommendations and importantly follow up to ensure they are implemented. Questions and possible answers
Forbidden questions include:
- Brexit and forthcoming general election (SP1 Leadership and SP3 Governance)
- Will my beloved Stoke get back into the Premier League or for that matter stay in the Championship (RCS2 Asset Management, OC3 Organisational Structure, SP3 Board Governance, OC2 Management, PI2 Objective / target Setting) etc etc ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future.
Standards and guidance
What’s available?
Steve Oates Heritage Railway Association Heritage Railway Association
RM3 Seminars November/December 2019
Steve Oates, Chief Executive, Heritage Railway Association Guidance Notes & Standards ...
Boiler Code of Practice Standards for carriage maintenance Infrastructure standards Employment guidance Governance Operating & safety guidance What is the HRA?
The Heritage Railway Association or HRA is a voluntary run trade association representing Heritage & Tourist railways, related Museums, Terminals, Cliff Lifts, etc. www.hra.uk.com/guidance-notes HERITAGE RAILWAY ASSOCIATION
GUIDANCE NOTE
FITNESS ASSESSMENT for Safety Critical Workers
Table of Contents
01. Introduction .................................................. 3
02. Recommendations ........................................... 3
03. Fitness for Safety Critical Work .......................... 3
04. Medical Officers ............................................. 3
05. Nurse Advisors .............................................. 4
06. Process for all Safety Critical Workers .................. 4
07. Safety Critical Workers requiring a Medical Examination ........................................... 5
08. Content of Medical Examinations ......................... 5
09. Certificates of Medical Fitness from other Operators ........................................... 5
10. Practical Test of Colour Vision ............................ 5
11. Cognitive Capacity .......................................... 6
12. Stamina and Fatigue ........................................ 6
13. Records ...................................................... 6
14. Reference Documents ...................................... 6
Appendix A - Extracts from ROGS, SI 2006 / 0590, Part 4 - Safety Critical Work .................. 7 Appendix B - Agreement between Heritage Railway or Tramway and Medical Officer or Nurse Advisor ........................................... 6 Appendix C: Medical Questionnaire for all Safety Critical Staff ........................................... 10 Appendix D: Exemplar Medical Fitness Certificate for all Safety Critical Staff .................. 12 Appendix E: Recommended minimum content of Medical Examination .................. 13 Boiler Code of Practice ...
TUBING OF LOCOMOTIVE BOILERS BOILER STAYS SUPERHEATERS BOILER MOUNTINGS PIPEWORK & FITTINGS FUSIBLE PLUGS WASHOUT PLUGS SAFETY VALVES MUDHOLE DOORS PLATEWORK INNER FIREBOX REPAIR AND RENEWAL THERMIC SYPHONS & ARCH TUBES STEEL RIVETS & RIVETING WELDING PROCEDURES & PROCESSES PATCH SCREWS SMOKEBOXES STEAM HEATING APPARATUS BOILER WATER TREATMENT PREPARATION OPERATION & DISPOSAL FROST & CORROSION PROTECTION MATERIALS & NON-DESTRUCTIVE TESTING WASHOUT & EXAMINATION EXAMINATION IN SERVICE Reviews, revisions and updates
Input from you
Establishing new standards
Maintenance and Fitness to Run Standards for Heritage Carriages CCoP - Carriages Code of Practice - 11 Modules
01. Introductory Module
02. Policies and Procedures
03. Asbestos and Hazardous Materials
04. Fitness to Run Examinations
05. Facilities and Tooling Requirements
06. Bogies and wheelsets
07. Braking systems
08. Underframes and drawgear
09. Bodywork and structure
10. Ancillary systems – toilets, water, electrics
11. Wooden bodywork and structures Guidance Notes & Standards ...
Boiler Code of Practice Standards for carriage maintenance Infrastructure standards Employment guidance Governance Operating & safety guidance
Workshops, Seminars & Conferences “The guidance notes are excellent … They should be mandatory to institute”
“The HRA keep a keen eye on legislation and provides protection - this is really good” Heritage Rail Safety & Standards Board
- Establish a members forum for the discussion of common safety issues and the exchange of experiences
- Manage the provision, development and production of a sharable set of standards, guidance and competencies to support HRA member heritage railways
- Gather industry and safety data and statistics, and monitor and report on the sector’s safety performance
- Circulate, publish and share safety information, experiences, relevant data and best practice to members
- Establish and provide a mechanism to publish urgent safety information and notices to members
- Assistance with creating and auditing SMS’s Stronger Together
Supporting the UK’s Heritage and Tourist Railways, Tramways, Museums and Related Organisations ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future.
What more would you like? More safety support - discuss
- The ‘going forwards’ bit (strategy)
- Future requirements
- Current gaps in support
Working in groups,
- have a think about what further training, information and guidance you want,
- that you don’t get
…….. how can the gap be filled? ORR protects the interests of rail and road users, improving the safety, value and performance of railways and roads today and in the future
Summary of the day
Ian Skinner
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128fb84fb85c9c314b66150649519b5c9471da1a | AGENCY AGREEMENT BETWEEN THE HEALTH AND SAFETY EXECUTIVE AND THE OFFICE OF RAIL AND ROAD ON ENFORCEMENT FUNCTIONS IN RELATION TO THE DESIGN OF RAILWAYS, TRAMWAYS AND OTHER SYSTEMS OF GUIDED TRANSPORT
This Agreement is made between (1) the Health and Safety Executive ('HSE') and (2) the Office of Rail and Road ('ORR') under paragraph 7(2) of Schedule 3 to the Railways Act 2005 pursuant to the authorisation of the Secretary of State given on 2 February 2016, and section 13(3) of the 1974 Act.
WHEREAS:
A. Under the 1974 Act HSE is under a duty to make adequate arrangements for the enforcement of the relevant statutory provisions except to the extent some other authority is made responsible for their enforcement.
B. Under the 2006 Regulations ORR is made responsible for enforcing the relevant statutory provisions to the extent that they relate to the operation of a railway, tramway or any other system of guided transport, subject to certain exceptions. HSE remains the authority responsible for enforcing the relevant statutory provisions in respect of certain of these exceptions. HSE is also responsible for enforcing the relevant statutory provisions in relation to a railway, tramway or any other system of guided transport prior to such system of transport becoming operational.
C. This Agreement relates to certain functions exercisable by HSE under the 1974 Act and regulations made under it, which ORR has agreed to carry out on behalf of HSE, being functions which the Secretary of State has considered can appropriately be carried out by ORR in connection with the carrying out of its safety functions.
IT IS HEREBY AGREED THAT:
1. To the extent that ORR is not currently responsible under the 2006 Regulations for the enforcement of the relevant statutory provisions and such responsibility lies with HSE, ORR, in connection with the carrying out of its safety functions, will carry out, on behalf of HSE, HSE's functions for the enforcement of the relevant statutory provisions as they apply in relation to the design of any infrastructure, operational premises or other fixed assets relating to a railway, tramway or any other system of guided transport for the purpose of ensuring that the design:
(a) eliminates or reduces health and safety risks which could otherwise arise during the operation of such system of transport; and/or
(b) will not adversely affect the safe operation of such system of transport.
2. ORR and HSE will each provide the other with such information as they may at any time reasonably require in connection with the performance of the functions specified in this Agreement.
3. For the purpose of this Agreement: (a) 'guided transport', 'railway' and 'tramway' each has the same meaning as set out in regulation 2 of the 2006 Regulations;
(b) 'infrastructure' and 'operational premises' each has the same meaning as set out in regulation 2 of the 2006 Regulations and any terms defined therein shall have the same meaning given to them in the 2006 Regulations;
(c) 'operation of a railway', 'operation of a tramway' and 'operation of any other system of guided transport' each has the same meaning as set out in regulation 2 of the 2006 Regulations subject to regulation 4 of the 2006 Regulations;
(d) 'other fixed assets' means fixed assets of a railway, tramway or other system of guided transport (other than infrastructure), which are both used in the operation and comprise, or are located within, operational premises, of such system of transport;
(e) 'the relevant statutory provisions' has the same meaning as set out in section 53 of the 1974 Act;
(f) '1974 Act' means the Health and Safety at Work etc. Act 1974; and
(g) '2006 Regulations' means the Health and Safety (Enforcing Authority for Railways and Other Guided Transport Systems) Regulations 2006.
4. Any reference in this Agreement to regulations or Acts is a reference to those regulations or Acts as amended, updated or replaced before or after the date of this Agreement.
5. HSE and ORR must regularly review the terms of this Agreement and must do so at least once each year that this Agreement is in force from the date it comes into effect.
6. HSE and ORR must ensure that the memorandum of understanding between HSE and ORR is amended to facilitate the performance of, and sets out provision for appropriate arrangements for implementation of, this Agreement.
7. This Agreement comes into effect on the date it is signed by the last party to execute this Agreement and shall continue in force until terminated either on a date agreed between the parties or on the expiry of 28 days following receipt of a written notice to terminate given by either party to the other. IN WITNESS whereof the Common Seal of the Health and Safety Executive is affixed on March 2016 and authenticated by:
Judith Hackitt, Chair of the Health and Safety Executive
Signature:
Signed by Ian Prosser, Chief Inspector of Railways:
On behalf of the Office of Rail and Road
Date: 21st March 2016.
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f1653be38418192a1104b9e6588a54d6c57ee66d | Crown Prosecution Service Service to Bereaved Families Contents
CPS Service to Bereaved Families ................................................................. 3 Appointment of a police Family Liaison Officer ........................................... 3 What types of case qualify for the service? .................................................. 3 When does the case qualify? ........................................................................ 3
The meetings When will the meetings be held? ................................................................... 4 Do I have to go to the meetings? ................................................................... 4 Who will attend the meetings? ...................................................................... 4 Where will the meetings take place? ............................................................. 4
The victim personal statement (VPS) What is a VPS? ............................................................................................... 5 Do I have to make a VPS? ............................................................................. 5 Can I still have a meeting even if I don’t want to make a VPS? ..................... 5 When can I make a VPS? .............................................................................. 5 Who can make a VPS? .................................................................................. 5 Who will see the VPS? .................................................................................. 5
The court procedure What happens to the VPS? ........................................................................... 6 When will the court hear the VPS? ............................................................... 6 What happens if the defendant is found not guilty? ..................................... 6 What support will I have at court? ............................................................... 6
Who can I contact for more information? .................................................. 6
This is a public document.
For information about the Crown Prosecution Service, and to view or download an electronic copy of this document, please visit our website:
www.cps.gov.uk
CPS Operations Directorate July 2015 © Crown Copyright CPS Service to Bereaved Families
This document explains when and how we, the Crown Prosecution Service (CPS), can meet you and your family to explain some of the procedures relating to the prosecution of your case. This can include, if you wish, making a statement to the court about how your family member’s death has affected you and your family. This statement is called a victim personal statement (VPS).
Appointment of a police Family Liaison Officer
You should always be appointed a police Family Liaison Officer at the beginning of the investigation into your family member’s death. The Family Liaison Officer will explain the service offered by the CPS to you and your family. We will arrange any meeting with you through your Family Liaison Officer.
What types of case qualify for the service?
You and your family will be offered meetings with the CPS where the victim is a member of your family and if the suspect is charged with one of the following offences:
- murder;
- manslaughter;
- corporate manslaughter;
- familial homicide;
- causing death by dangerous driving;
- causing death by careless driving when under the influence of drink or drugs;
- causing death by careless or inconsiderate driving);
- causing death by driving whilst unlicensed, disqualified or uninsured;
- aggravated vehicle taking where death is caused.
When does the case qualify?
The police will collect all the evidence and then pass the evidence in a file to the CPS lawyer to review. He or she is called the prosecutor.
Sometimes, and more especially in large or complicated cases, where there is a lot of evidence, this can take a number of weeks to review, because the prosecutor will often need to ask the police to collect more evidence.
The case qualifies if, following the prosecutor’s review, a suspect is charged with one of the above offences where the victim is a member of your family (family includes partners (including same-sex partners)). The meetings
When will the meetings be held?
You and your family will be offered meetings with the CPS at key stages of the prosecution process.
The CPS will offer you and your family a meeting with the prosecutor shortly before or after the suspect has been charged to explain the role of the CPS, the charges on which the prosecution is proceeding, how the case will be handled by us and what to expect at each court hearing. The prosecutor will also explain the VPS scheme.
You and your family will be given the opportunity to meet the CPS prosecutor or trial advocate, if he or she is a different person.
If we have made a substantial change to or discontinued a charge we will offer you a meeting to explain the reasons for our decision.
Following conviction we will meet you to make sure that a VPS has been made and/or to confirm that it is up to date (see later). This meeting will normally take place at court. We will also meet you at or following the sentence hearing to explain the sentence.
We will offer to meet you in cases which result in an acquittal or in a conviction on a less serious charge to respond to any questions you may have about the trial.
We will also offer to meet you where a defendant has been given leave to appeal to the Court of Appeal against his or her sentence or conviction to explain the nature of the appeal and the court process to you.
Very rarely, the police refer cases back to the CPS after an acquittal where new and compelling evidence has come to light (‘double jeopardy’ cases). In these cases, we will offer to meet you to explain our decision.
At these meetings the prosecutor will try and answer any questions you may have about the case, although depending on the stage of the proceedings, he or she might not be able to discuss the detail of the evidence.
Do I have to go to the meetings?
No. The meetings are entirely optional and you do not have to take up the offer of a meeting if you do not want one. Equally, even if you initially refuse, you can change your mind later on. In that case, you should let your Family Liaison Officer know and they will contact the prosecutor to arrange a meeting.
Who will attend the meetings?
The CPS and the police will attend the meetings. The trial advocate, if it is someone other than the prosecutor, may also be present depending on the reason for the meeting being held.
Where will the meetings take place?
The meeting will take place either in the CPS office where the prosecutor works or at a local police station where available. If this is inconvenient to you, you should let the Family Liaison Officer know so that the prosecutor can consider whether any alternative arrangements can be made. The victim personal statement (VPS)
What is a VPS? The VPS is your chance to tell the court, in your own words, how the death of your family member has affected you and your family.
Do I have to make a VPS? No. You may decide you do not want to make a VPS. Your Family Liaison Officer, local victim support contact or other local support groups can help you understand the choices you have, so that you can decide what is best for you and your family.
Can I still have a meeting even if I don’t want to make a VPS? Yes. Discussing the VPS is only part of the service. Even if you do not want to make a VPS, you may want to know what is happening in the case or have questions you want to ask.
When can I make a VPS? You can make a VPS if the victim is a member of your family. You are entitled to say whether or not you would like your VPS to be read aloud in court if the defendant is found guilty. You are also entitled to say whether you would like to read your VPS aloud or have it read on your behalf (usually by the CPS prosecutor or trial advocate).
You or other family members may already have made a VPS before the meeting takes place. However, if you wish, you or other family members can make a further VPS if you think the first statement does not include everything you wanted to say or if your feelings about the offence have changed since you made the first statement.
Who can make a VPS? Close family members of the deceased are allowed to make a VPS. This usually means parents, guardians, spouses, civil partners, partners and children of the victim.
Who will see the VPS? If you make a VPS, it will become part of the case papers. This means that it will be seen by everybody involved with your case, for example, the police, the CPS, the defence, and the magistrates and judges at the courts. The court procedure
What happens to the VPS? If the defendant is convicted (pleads guilty or is found guilty by the magistrates or jury), the prosecutor or the trial advocate, if he or she is a different person, will talk to you and confirm the content of your VPS. They will normally do this at the court immediately after the defendant is convicted.
If you would like to amend your VPS at that stage, your police Family Liaison Officer or other police officer who is present with you at court will take an additional statement to give to the court and the defence.
The VPS will be shown to the magistrates or judge, the defence and the prosecution before the defendant is sentenced.
The court has to sentence on the facts of the case, taking into account any relevant aggravating and mitigating factors and legal guidelines. (An aggravating factor is a feature of the case that means a higher sentence may be appropriate: a mitigating factor is one that means a lower sentence may be appropriate.)
When will the court hear the VPS? If you have written a VPS, the magistrates or judge will read it in advance of the hearing.
The court will hear your VPS after the defendant is convicted, but before they are sentenced. It is for the court to decide whether and what sections of the VPS should be read aloud and by whom taking in to account your views. If you choose not to read your VPS aloud yourself, the CPS prosecutor or trial advocate will usually do so on your behalf.
What happens if the defendant is found not guilty? The judge will not be able to take account of the VPS if the defendant is found not guilty because there will be no sentencing hearing.
What support will I have at court? The CPS prosecutor will answer any questions you have about what happens on the day of the sentencing hearing.
The court staff and the Witness Service are also there to help you. Witness Service staff can arrange for you to visit the court before the trial and/or the sentencing hearing, so you can learn more about court procedures. On the day, they can give you a quiet place to wait and arrange for someone to go into the courtroom with you and other practical help.
Who can I contact for more information? Your Family Liaison Officer can give you details of your local victim support group and other support groups in your area. They can also help you to arrange to talk to one of these groups if you want to discuss the service being offered.
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44e878ab9423c4f117d337371f7764dded41a0dd | Best before and use-by dates
Understanding ‘best before’ and ‘use-by’ dates on food labels and how you must treat them differently.
Food may contain bacteria and if stored for too long or at the wrong temperature, can cause food poisoning. So it’s important to understand the different types of dates and advice on food packaging.
Use-by dates are about safety
A use-by date on food is about safety. This is the most important date to remember. Foods can be eaten until the use-by date but not after. You will see use-by dates on food that goes off quickly, such as meat products or ready-to-eat salads.
For the use-by date to be a valid guide, you must carefully follow storage instructions. For example, if the instructions on the packaging tell you to refrigerate after opening, you should keep the food in a fridge at 5°C or below. Find out more about chilling your food correctly.
After the use-by date, don’t eat it, cook it or freeze it. The food could be unsafe to eat or drink, even if it has been stored correctly and looks and smells fine. A lot of foods, including meat and milk, can be frozen before the use-by date though so plan ahead.
Best before dates are about quality
The best before date, sometimes shown as BBE (best before end), is about quality and not safety. The food will be safe to eat after this date but may not be at its best. Its flavour and texture might not be as good. Best before dates appear on a wide range of foods including:
- frozen foods
- dried foods
- tinned foods
The best before date will only be accurate if the food is stored according to the instructions on the packaging.
There is more guidance on WRAP’s website for best before and use-by dates.
Charity food banks
If you are supplying people with packaged food from a food bank, you still need to check and follow the use-by dates.
Giving out food after its ‘use-by’ date puts people at risk, and could lead to enforcement action. being taken against the food bank.
**Plan your meals ahead**
Get into the habit of checking what you already have in the fridge and freezer before you go shopping. Look out for foods that are approaching their use-by date and other fresh foods that can go off over time and try to use them up first. This includes:
- fruit and vegetables
- meat and fish
- cheese, milk or other dairy products
**Don’t trust the sniff test**
Food can look and smell fine even after its use-by date, but that doesn't mean it's safe to eat. It could still be contaminated.
You cannot see, smell or taste the bacteria that cause food poisoning.
**Freeze and defrost your food correctly**
Food properly frozen won’t deteriorate and bacteria cannot grow in it, so when frozen it can’t become more unsafe. Once defrosted however, the pause button is off. Only defrost food as you need it and eat it within 24 hours. Find out more about freezing and defrosting food.
Once food has been defrosted, use it within 24 hours and cook it until **steaming hot** before serving.
Check packet instructions to ensure that foods are suitable for freezing, especially for Ready-To-Eat foods.
Take a look at [Love Food Hate Waste](https://www.lovefoodhatewaste.org) for more information, including recipe ideas for leftovers.
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2de9dd44a402b02886041e0b3ebf70cd6a0a5f82 | Best Practice: How to handrub step by step images
1. Apply a palmful of the product in a cupped hand and cover all surfaces.
2. Rub hands palm to palm.
3. Right palm over the back of the other hand with interlaced fingers and vice versa.
4. Palm to palm with fingers interlaced.
5. Backs of fingers to opposing palms with fingers interlocked.
6. Rotational rubbing of left thumb clasped in right palm and vice versa.
7. Rotational rubbing, backwards and forwards with clasped fingers of right hand in left palm and vice versa.
8. Once dry, your hands are safe.
Adapted from the World Health Organization/Health Protection Scotland © Crown copyright 2020
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1c13634956f680705dc9592cbc13555826331751 | BEST USE OF STOP & SEARCH SCHEME The Best Use of Stop and Search Scheme was announced by the Home Secretary in her statement to Parliament on 30th April 2014.
The principal aims of the Scheme are to achieve greater transparency, community involvement in the use of stop and search powers and to support a more intelligence-led approach, leading to better outcomes, for example, an increase in the stop and search to positive outcome ratio.
The features of the Scheme are:
- **Data Recording** – forces will record the broader range of stop and search outcomes e.g. arrests, cautions, penalty notices for disorder and all other disposal types. Forces will also show the link, or lack of one, between the object of the search and its outcome.
- **Lay observation policies** – providing the opportunity for members of the local community to accompany police officers on patrol using stop and search.
- **Stop and search complaints 'community trigger'** – a local complaint policy requiring the police to explain to local community scrutiny groups how the powers are being used where there is a large volume of complaints.
- **Reducing section 60 ‘no-suspicion’ stop and searches by** –
- raising the level of authorisation to senior officer (above the rank of chief superintendent);
- ensuring that section 60 stop and search is only used where it is deemed necessary – and making this clear to the public;
- in anticipation of serious violence, the authorising officer must reasonably believe that an incident involving serious violence will take place rather than may;
- limiting the duration of initial authorisations to no more than 15 hours (down from 24); and
- communicating to local communities when there is a section 60 authorisation in advance (where practicable) and afterwards, so that the public is kept informed of the purpose and success of the operation.
By adopting the Scheme, forces will use stop and search strategically, which will improve public confidence and trust.
1. Data recording
1.1. Currently national data, published in the annual Police Powers and Procedures publication, provides information on the number of stop and searches and the proportion that result in an arrest. The latest statistics for 2012/13 showed that of the 1 million stop and searches under section 1 of the Police and Criminal Evidence Act 1984, only 10% led to an arrest.
1.2. This figure does not give the whole picture concerning the effectiveness of stop and search. Forces adopting the Scheme will therefore provide the public with a richer picture of how their use of stop and search powers is enabling them to reduce crime rates, and how well individual officers are using their ‘reasonable suspicion powers’ to target suspects with prohibited items in their possession.
1.3. A key component of the Scheme, therefore, is the requirement on forces to record and publish a broader range of outcomes which could follow from a stop and search encounter.
Forces participating in the Scheme will expand their data requirements and return information where stop and search has resulted in any of the following outcomes:
i. Arrest (as is currently required); ii. Summons / charged by post; iii. Caution (simple or conditional); iv. Khat or Cannabis Warning; v. Penalty Notice for Disorder; vi. Community resolution; or vii. A no further action disposal.
Information will be returned through the Home Office Annual Data Requirement.¹
1.4. The measure of the success of stop and search is not necessarily a ‘hit’, or positive outcome, as there may be occasions where the outcome of a stop and search is unconnected to the reasonable grounds for suspicion. Such an outcome is likely to represent a chance detection rather than professional judgement and the use of reasonable grounds by the officer in question. It is for this reason that it is important that the public has access to this information to assess how effectively the police are using their powers. Data must therefore be made available which show whether the object of the stop and search is connected to the outcome; this will encourage accountability in the police use of these powers.
¹ Only one outcome should be recorded for each stop and search encounter. Where one of the above outcomes follows an arrest, the recorded outcome will be the arrest and not any further action through out of court disposal, prosecution or otherwise. Recording both arrest and other outcome for the same stop and search will distort the figures which are concerned with immediate stop and search outcomes. 2. Lay observation policies
2.1. In order to improve public understanding of the police and contribute to best practice, forces must be open and accessible. It is important for the public, particularly young people and people from Black and Minority Ethnic communities, to be able to see the police conducting their work in a professional way. Equally, it is also important for the police to understand the communities that they are serving – as this enables more effective policing through police and community cooperation and exemplifies ‘policing by consent’.
2.2. By introducing ‘lay observation’, a process of two-way learning can take place, bringing the police closer to the public. A core element of the Scheme is the requirement that participating forces will provide opportunities for members of the public to accompany police officers on patrol when they might deploy stop and search powers.
Forces participating in the Scheme will develop lay observation policies which adhere to the following principles:
- members of the public are provided with the opportunity to see stop and search in action;
- the police have the opportunity to demonstrate their use of stop and search;
- the public has the opportunity to provide feedback to the police based on their observations; and
- the need to ensure the safety of lay observers is appropriately taken into account.
2.3. We recognise that the stop and search rate varies between forces, and that it is difficult to predict when a stop and search encounter might take place. Some forces already facilitate public observation through ‘Ride Along’ schemes, for example. It is open to forces to meet this requirement through such schemes. By extension, where forces do not have public observation policies, they may wish to apply a policy with a broader scope.
______________________________________________________________________
2 Individual police forces will develop their own local policies to ensure that the use of lay observers is compatible with Article 8 of the ECHR (the right to respect for private life) and the Data Protection Act 1998. 3. Community complaints trigger
3.1. The community complaints trigger will be the requirement on forces to signpost the appropriate mechanism for members of the community to raise any concerns or complaints that they have with the way that a stop and search has been carried out by their police force.
3.2. Forces participating in the Scheme have local discretion to determine the most appropriate way to establish the community complaints trigger; however, consideration should be given to including information on the complaints trigger either on the receipt provided to all individuals following a stop and search or verbally by officers (or both). Importantly, forces will publish their policy to ensure transparency in the process.
3.3. The nature of the trigger will be quantitative and/or qualitative and, whilst there will be variation between forces, each force must ensure that the local community (often through Independent Advisory Groups or Scrutiny Boards) is provided with the opportunity to influence how it is set up and how many complaints, and of what nature, would set off the trigger.
3.4. In forces where complaints are particularly low, forces should consider treating every complaint as a ‘trigger’ – each requiring explanation and scrutiny by community groups.
Forces participating in the Scheme will develop a compliant policy which:
- ensures individuals stopped and searched are made aware of where to complain;
- introduce a threshold above which the police are compelled to explain their use of stop and search; and
- that explanation will be given, primarily, to local community groups responsible for scrutinising the use of stop and search.
4. Section 60 Criminal Justice and Public Order Act 1994 stop and search
4.1. Section 60 stop and search powers are among the most controversial of all such powers by virtue of the fact that individual police officers are not required to have any reasonable grounds for suspicion.
4.2. Once a section 60 authorisation is in place, officers do not need to have suspicions on a particular individual prior to stopping them; though it is a requirement of PACE Code A for an officer to explain to an individual who has been stopped that a section 60 authorisation is in place. This can lead to a large number of searches which result in community and police tensions. The Scheme introduces a set of requirements that, when combined, will ensure that participating forces improve their use of this type of stops.
Forces participating in the Scheme will revise their use of section 60 stop and search powers so that all stops and searches conducted under this section will adhere to the following conditions:
- The 1994 Act currently provides for an officer of at least the rank of inspector to give a section 60 authorisation in a particular area for a specified period time. Forces in the Scheme will raise the level of authorisation to a senior officer.(^3)
- Although the word “necessary” does not appear in section 60(1), the effect of Article 8 of ECHR is that necessity remains relevant to each decision as to whether an authorisation is justified. Any authorisation made under section 60 must be made only when the officer believes it is necessary. In practice, in addition to expediency, which is explicit in the 1994 Act, the authorising officer must also have considered the authorisation necessary to prevent serious violence or to find dangerous instruments or weapons after an incident involving serious violence, or to apprehend persons carrying weapons. This applies to all forces using this power regardless of whether they are participating in the Scheme or not.
- Informed by intelligence, senior officers in participatory forces must have a higher degree of certainty by reasonably believing that incidents involving serious violence will take place rather than it being a possibility. Any judgment about the credibility of the intelligence will be a matter for the senior officer.
- The law provides for initial authorisations to be made for up to 24 hours (extendable for a further 24 hours). Forces participating in the Scheme will limit the maximum duration of the initial authorisation to 15 hours. For an extension up to 24 hours, an officer of senior rank will authorise any additional extensions.(^4)
- Participating forces must communicate with the public in the areas where a section 60 authorisation is to be put in place in advance (where practicable) and afterwards. The public need to be informed of the purpose and outcomes of each section 60 operation. However, it is a matter of local discretion to participating forces as to how they communicate this information.
______________________________________________________________________
(^3) In all cases, a ‘senior officer’ for the purposes of the Scheme has the meaning of at least an Assistant Chief Constable, Commander of the Metropolitan Police, or Commander of the City of London Police or above.
(^4) An extension made beyond 15 hours will not exceed nine hours, which will take the authorisation up to the statutory 24 hours mark. An extension beyond 24 hours will not exceed 15 hours, as applies to the first authorisation. 5. Adherence to the Scheme
5.1 Forces signed up to the Scheme are expected to adhere to all its components, subject to exceptional circumstances. However, nothing in the Scheme is binding in law; statute and case law on stop and search therefore remain unaffected.
5.2 All departures from the Scheme must be made public. The Home Secretary reserves the right to withdraw membership of the Scheme where there is evidence that a force is not in compliance with its terms.
Forces participating in the Scheme will make public all instances where they have departed from the requirements of the Scheme and explain the reason for why this occurred.
6. Race and Diversity Monitoring
6.1 To comply with the public sector equality duty in section 149 of the Equality Act 2010, whilst designing and implementing any new policies as part of the Best Use of Stop and Search Scheme, forces must consider the impact on all individuals. This duty requires that forces have due regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations between different people when carrying out their activities.
6.2 In addition, as an important element of the Scheme is to encourage a better relationship between the police and the public, participating forces need to ensure that they are actively monitoring their use of stop and search powers.
Forces participating in the Scheme will ensure that the impact of the Best Use of Stop and Search Scheme is monitored, particularly as it relates to individuals from Black and Minority Ethnic groups and young people. Contacts
John de Sousa 020 7035 0911 [email protected]
Miv Elimelech 020 7035 4859 [email protected]
Nick Glynn 07971 992452 [email protected]
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7523cbb308c16f748f4c3225bf0e0f3272768dda | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Barking and Dagenham
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate widely
# CONTENTS
| CONTENTS | Page | |----------------------------------------------|------| | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 11 | | AIR QUALITY | 14 | | HEALTHY FOOD | 17 | | FUEL POVERTY | 20 | | OVERHEATING | 23 | | REFERENCES | 27 | | FURTHER READING | 30 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 31 | | DATA APPENDIX | 34 | | ACKNOWLEDGEMENTS | 41 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: ‘Access to Public Open Space and Access to Nature by Ward’; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Barking & Dagenham Picture
- 34 per cent of the borough surface has green space coverage.
- Within Barking & Dagenham, more than 50 per cent of households in 4 out of 17 wards have deficient access to nature.
- 15 per cent of Barking & Dagenham’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 45 per cent participate once a week.
- Barking & Dagenham’s adult obesity prevalence is 29 per cent, which is significantly higher than the London rate, 21 per cent, and the national rate, 24 per cent. Figure 1 Green Spaces in Barking and Dagenham Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
• All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;¹² • The Green Flag Award system to improve quality and promote access to green spaces.¹³ • Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.¹⁴
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Planning for Health (2009) HUDU | | 1.16 Utilisation of outdoor space for exercise/health reasons | • The Marmot review (2010) www.instituteofhealthequity.org | | **Additional (for example)** | • www.nice.org.uk | | 2.6 Excess weight in 4-5 and 10-11 year olds | • Benefit of Urban Parks, IFpra (2013): www.ecehh.org | | 2.13 Proportion of physically active and inactive adults | • www.naturalengland.org.uk | | 2.23 Self-reported well-being | • www.hphpcentral.com | | | • CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens\\textsuperscript{16}. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing\\textsuperscript{17}. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts\\textsuperscript{18}. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week\\textsuperscript{19}. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers\\textsuperscript{20}. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable\\textsuperscript{21}.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk\\textsuperscript{22}. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Barking & Dagenham Picture
- On average 280,000 trips per day are made by people originating in Barking & Dagenham.(^{23})
- Low numbers of people participate in active travel, with the percentage of people cycling to work below the Greater London average.
- Use of motor vehicles is 7 per cent above the Greater London average.(^{24})
- There was an average of 604 casualties and 5 fatalities per year on Barking & Dagenham’s roads between 2005 and 2009: below the Greater London average.
- The most heavily used road (excluding motorways) is the A13 with an average daily flow of 115,000 motor vehicles.(^{25})
- There is currently one cycle super highway in the Borough.(^{26})
Figure 2 Journeys in the Barking and Dagenham by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users.
- Promoting cycling through information, maps and cycle hire schemes.
- Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality. Case Study: Cycling across Hackney
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
- Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads.
- Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created.
- Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres.
- A comprehensive free cycling training programme has targeted a range of audiences.
Contact: Ben Kennedy, Hackney Council, [email protected]
Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | 2.13 Proportion of physically active and inactive adults | • NICE Walking and Cycling, Local Government Briefing | | **Additional (for example)** | • Mayors Vision for Cycling, 2013 GLA | | 1.16 Utilisation of outdoor space for exercise/health reasons | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • What are the health benefits of active travel: A systematic review of trials and cohort studies, PloSOne, 8 | | 3.1 Fraction of mortality attributable to particulate air pollution | | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
**The Barking and Dagenham Picture** The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
**Potential actions:**
- Developing emergency plans to reduce effects of surface water flood risk.
- Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding.
- Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff.
- Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans.
- Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
**Case Studies:** **Purley (LB Croydon) community flood plan**
- Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan.
- The flood plan is developed and owned by the community, and aims to reduce the impact of flooding.
- It advises the community on how to prevent flooding and what to do if it happens.
- It is a low cost but effective way of reducing a wide range of impacts of flooding.
- The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
**Surface water flooding event, London, July 2007**
- In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding.
- Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result.
- The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | London Climate Change Adaptation Strategy | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Multi-Agency Flood Plan, LB Havering, 2012 | | | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The Barking & Dagenham Picture.
- On some of Barking & Dagenham’s roads there are high concentrations of NO2 (see map) which are above the recommended limits.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Barking & Dagenham is the 14th least affected area by poor air quality in London.
- In 2011 GLA identified three Air Quality Focus Areas within Barking & Dagenham.
Figure 3 NO₂ emissions on Barking and Dagenham Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation.
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport.
Case Studies: Reducing exposure – City Air ‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact - Croydon Air Text In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 3.1 Fraction of mortality attributable to particulate air pollution | • GLA Local Authority Air Quality Guides | | 2.13 Proportion of physically active and inactive adults | • www.londonair.org.uk | | 1.14 The percentage of the population affected by noise | • www.comeap.org.uk | | | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution | HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence?
Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Barking & Dagenham Picture
- Barking & Dagenham’s adult obesity rate is 29 per cent. This is significantly higher than the London average (21 per cent), and the national average (24 per cent).
- Barking & Dagenham’s obesity rate among primary school children (year 6) is 27 per cent. This is significantly higher than the national and London rates (19 and 23 per cent respectively).
- In 8 of the 22 Middle Super Output Areas (two darkest blue areas on map), 25-31 per cent of the total population consume five portions of fruits and vegetables a day.
- 15 per cent of Barking & Dagenham’s population participate five times per week in physical activity for at least 30 minutes and nearly 45 per cent participate once a week. Figure 4 Healthy food consumption in Barking & Dagenham
Model based consumption of fruit and vegetables in Barking and Dagenham by ward, 2006-8 LA population consuming five portions of fruits and vegetables a day.
Potential actions
- Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html).
- Using planning controls to manage proliferation of fast-food outlets on high streets and near schools.
- Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas.
- Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security.
- Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan.
See also section on green spaces and surface flood risk. Case Study: Fast-food Fix – LB Waltham Forest – Tackling the Takeaways: Making an Impact
- Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes.
- A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
Achievements:
- Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission.
- HFTs in the borough have been reduced from 241 to 194
Contact: Gordon Glenday, Head of Planning Policy and Regeneration [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The Barking and Dagenham Picture
- The older population of Barking and Dagenham is projected to rise from 19,700 (2012) to 24,700 (2025) and 35,900 (2040). 46
- A Fuel Poverty Risk score has been developed. Although there are no stark disparities between wards, none are at low risk; Gascoigne ward is 606th out of 625 wards and at significantly greater risk.
- Six Barking and Dagenham wards are at high risk of fuel poverty and the ward of Village, in particular, show a significant downward trend. 47
Figure 5 Fuel Poverty risk in Barking and Dagenham
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- Housing
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- Health
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- Older people
- People aged 60 and over
- Older people claiming pension credit
- Worklessness
- Unemployment
- Poverty
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore
Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through: • Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
• Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation. The Mayor’s RE:NEW Programme support team can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
• Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements).
• Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty
Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and blood stream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events, and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Barking and Dagenham Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations, this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Barking and Dagenham
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council*
*[email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NHS Heatwave Plan for England | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk) | | **Additional (for example)** | • GLA (2011) London Climate Change Adaptation Strategy | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • London Climate Change Partnership (2012) Heat Thresholds Project: Final Report | | | • Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org)) | | | • Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from “Marmot Review (2010) Fair Society, Healthy Lives”; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken from www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation) 16 London Travel Demand Survey (LTDS),2011,taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk
Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk
Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk
Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk
Most heavily vehicular used roads, 2000-2012, taken from Traffic Statistics, Department of Transport
The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk
Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk
Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk
London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk
Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk
Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england
Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk
https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works
Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy: http://cieh.org/.
Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-healthy-sustainable-food/london-boroughs/takeaways-toolkit;
Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63.
Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html
New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk
Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk
Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england
Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion
Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf
Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/datasetstore/applications/custom-age-range-creator-tool-gla-population-projections-borough
Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/datasetstore/package/london-fuel-poverty-risk-indicators-wards
Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk
The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk
UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted
Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk
Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939
Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345
Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england
Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf
## PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013–2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT – Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH – Overheating | FP – Fuel Poverty | | HF – Healthy Food | | |
### Domain 1
Improving the wider determinants of health
| Indicator | AQ | AT | GS | FR | OH | HF | FP | |-----------|----|----|----|----|----|----|----| | 1.1 Children in poverty | | | | | | | | | 1.2 School readiness | | | | | | | | | 1.3 Pupil absence | | | | | | | | | 1.4 First time entrants to the youth justice system | | | | | | | | | 1.5 16-18 year olds not in education, employment or training | | | | | | | | | 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation | | | | | | | | | 1.7 People in prison who have a mental illness or a significant mental illness | | | | | | | | | 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services | | | | | | | | | 1.9 Sickness absence rate | | | | | | | | | 1.10 Killed and seriously injured casualties on England’s roads | | | | | | | | | 1.11 Domestic abuse | | | | | | | | | 1.12 Violent crime (including sexual violence) | | | | | | | | | 1.13 Re-offending levels | | | | | | | | | 1.14 The percentage of the population affected by noise | | | | | | | | | 1.15 Statutory homelessness | | | | | | | | | 1.16 Utilisation of outdoor space for exercise/health reasons | | | | | | | | | 1.17 Fuel poverty | | | | | | | | | 1.18 Social isolation | | | | | | | | | 1.19 Older people’s perception of community safety | | | | | | | | | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|----------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|---------------|-----------------------------|--------------|---------------|-----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
**Notes:**
- NOO (2005) - National Obesity Observatory
- Greenspace Information for Greater London CIC (GiGL)
- Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-------------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
### Table 4 Healthy Food Data
| LA | Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | |---------------------|--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------| | | | LA | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | | Barking & Dagenham | 28.7 | Once a week 45.1 | 15.4 | 22 | 8 (25.40 - 31.20) | | Barnet | 17.9 | 54.9 | 17.6 | 41 | 16 (43.90 - 56.10) | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 (31.20 - 37.20) | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 (38.20 - 45.30) | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 (27.20 - 45.30) | | Camden | 15.5 | 65.1 | 26 | 28 | 10 (44.60 - 55.10) | | City of London | 19.7 | 52.8 | 28.7 | 48 | | | City of Westminster | 15 | 59.3 | 25.4 | 24 | 10 (48.60 - 52.10) | | Croydon | 24.3 | 58.9 | 19.8 | 44 | 17 (35.50 - 48.8) | | Ealing | 18.1 | 48.2 | 14.6 | 39 | 15 (41.10 - 55.40) | | Enfield | 23.2 | 50.7 | 18.6 | 36 | 14 (33.90 - 41.90) | | Greenwich | 22.6 | 55.4 | 19.5 | 32 | 12 (32.70 - 42.20) | | Hackney | 22.6 | 58.9 | 24 | 27 | 10 (34.90 - 41.60) | | Hammersmith & Fulham| 15.6 | 66.4 | 27.6 | 25 | 10 (41.70 - 48.20) | | Haringey | 20.1 | 54.9 | 17.7 | 36 | 14 (39.20 - 48.00) | | Harrow | 19.2 | 51.7 | 17.1 | 31 | 12 (39.70 - 47.60) | | Havering | 27.3 | 52.5 | 16.4 | 30 | 12 (30.80 - 37.30) | | Hillingdon | 23.2 | 48.9 | 14.1 | 32 | 12 (34.20 - 45.40) | | Hounslow | 20.5 | 52.4 | 17.8 | 28 | 10 (36.90 - 47.20) | | Islington | 18 | 61.3 | 22.4 | 23 | 7 (27.60 - 40.80) | | Borough | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |-------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | 22.53 | | | | | | England | 24.2 | 19.2 | | | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-------------------------------|-----------------------------|--------------------|-------------------------------------|-----------------------------------| | Barking and Dagenham | 60 | 19,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team
GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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44e82fb305511d459b13310cc99c350016ee9472 | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Barnet
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate widely
# CONTENTS
| CONTENTS | | |----------------------------------------------|---| | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 11| | AIR QUALITY | 14| | HEALTHY FOOD | 17| | FUEL POVERTY | 20| | OVERHEATING | 23| | REFERENCES | 27| | FURTHER READING | 30| | PUBLIC HEALTH OUTCOMES FRAMEWORK | 31| | DATA APPENDIX | 34| | ACKNOWLEDGEMENTS | 41| FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: ‘Access to Public Open Space and Access to Nature by Ward’; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Barnet Picture
- 41 per cent of the borough surface has green space coverage; 10 per cent above the London average.
- Within Barnet, more than 40 per cent of households in 4 out of 21 wards have deficient access to nature.
- 18 per cent of Barnet’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 55 per cent participate once a week, which is below the London average.
- Barnet’s adult obesity prevalence is 18 per cent, which is lower than the London rate, 21 per cent, and the national rate, 24 per cent. Figure 1 Green Spaces in Barnet Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
• All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;¹² • The Green Flag Award system to improve quality and promote access to green spaces.¹³ • Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.¹⁴
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example, improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU | | Additional (for example) | • The Marmot review (2010) www.instituteofhealthequity.org | | 2.6 Excess weight in 4-5 and 10-11 year olds | • www.nice.org.uk | | 2.13 Proportion of physically active and inactive adults | • Benefit of Urban Parks, IFpra (2013): www.ecehh.org | | 2.23 Self-reported well-being | • www.naturalengland.org.uk | | | • www.hphpcentral.com | | | • CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health? A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Barnet Picture
- On average 769,000 trips per day are made by people originating in Barnet.(^{23})
- Low numbers of people participate in active travel, with the percentage of people cycling to work below the Greater London average.
- Use of motor vehicles is 3 per cent above the Greater London average.(^{24})
- There was an average of 1,344 casualties and 13 fatalities per year on Barnet’s roads between 2005 and 2009: below the Greater London average.
- The most heavily used road (excluding motorways) is the A1 with an average daily flow of 97,000 motor vehicles.(^{25})
- One cycle superhighway originating in the Borough is proposed in the Mayor’s ‘Vision for Cycling’.(^{26})
Figure 2 Journeys in the Barnet by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users.
- Promoting cycling through information, maps and cycle hire schemes.
- Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality. Case Study: Cycling across Hackney
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
- Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads.
- Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created.
- Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres.
- A comprehensive free cycling training programme has targeted a range of audiences.
Contact: Ben Kennedy, Hackney Council, [email protected]
Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 2.13 Proportion of physically active and inactive adults | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | Additional (for example) | • NICE Walking and Cycling, Local Government Briefing | | 1.16 Utilisation of outdoor space for exercise/health reasons | • Mayors Vision for Cycling, 2013 GLA | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 3.1 Fraction of mortality attributable to particulate air pollution | • What are the health benefits of active travel: A systematic review of trials and cohort studies, PloSOne, 8 | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
**The Barnet Picture** The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
**Potential actions:**
- Developing emergency plans to reduce effects of surface water flood risk.
- Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding.
- Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff.
- Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans.
- Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
**Case Studies:** **Purley (LB Croydon) community flood plan**
- Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan.
- The flood plan is owned by the community, and aims to reduce the impact of flooding.
- It advises the community on how to prevent flooding and what to do if it happens.
- It is a low cost but effective way of reducing a wide range of impacts of flooding.
- The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
**Surface water flooding event, London, July 2007**
- In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding.
- Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result.
- The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • Multi-Agency Flood Plan, LB Havering, 2012 | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The Barnet Picture
- On some of Barnet’s main arterial roads there are high concentrations of NO2 (see map) which are above the recommended limits.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Barnet is the 10th least affected area by poor air quality in London. 33
- In 2011 the GLA identified fifteen Air Quality Focus Areas within Southwark.
Figure 3 NO₂ emissions on Barnet Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation 34.
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport.
Case Studies: Reducing exposure – City Air ‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact – Croydon Air Text In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
Links to Public Health Outcomes Framework
| Suggested further reading | |---------------------------| | • GLA Local Authority Air Quality Guides | | • www.londonair.org.uk | | • www.comeap.org.uk | | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution |
Primary 3.1 Fraction of mortality attributable to particulate air pollution
Additional (for example) 2.13 Proportion of physically active and inactive adults 1.14 The percentage of the population affected by noise HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence? Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Barnet Picture
- Barnet’s adult obesity rate is 18 per cent. This is lower than the London average (21 per cent), and the national average (24 per cent).
- Barnet’s obesity rate among primary school children (year 6) is 19 per cent. This is equal to than the national and lower than the London rates (19 and 23 per cent respectively).
- In 16 of the 41 Middle Super Output Areas (two darkest blue areas on map), 44-56 per cent of the population consume five portions of fruits and vegetables a day.
- 18 per cent of Barnet’s population participate five times per week in physical activity for at least 30 minutes and nearly 55 per cent participate once a week. Figure 4 Healthy food consumption in Barnet
Model based consumption of fruit and vegetables in Barnet by ward, 2006-8 LA population consuming five portions of fruits and vegetables a day.
Potential actions • Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html). • Using planning controls to manage proliferation of fast-food outlets on high streets and near schools. • Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas. • Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan.
See also section on green spaces and surface flood risk.
Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact
• Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes. • A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
Achievements: • Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission. • HFTs in the borough have been reduced from 241 to 194
Contact: Gordon Glenday, Head of Planning Policy and Regeneration [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The Barnet Picture
- The older population of Southwark is projected to rise from 49,400 (2012) to 65,600 (2025) and 88,100 (2040).
- A Fuel Poverty Risk score has been developed. There are some disparities between wards with Garden Suburb achieving 27th position of all London wards in terms of low risk but Burnt Oak being 407th out of 625 wards and at significantly greater risk.
- Nine Barnet wards are at low risk of fuel poverty and with only one in the worse performing half of London wards according to the fuel poverty risk indicator. No ward shows a significant change in their risk score between 2006 and 2010.
Figure 5 Fuel Poverty risk in Barnet
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- Housing
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- Health
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- Older people
- People aged 60 and over
- Older people claiming pension credit
- Worklessness
- Unemployment
- Poverty
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
- Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation(^5). The Mayor’s RE:NEW Programme support team(^5) can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
- Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements(^5)).
- Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 – The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and blood stream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to an overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Barnet Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Barnet
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council* [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • NHS Heatwave Plan for England\
• RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk)\
• GLA (2011) London Climate Change Adaptation Strategy\
• London Climate Change Partnership (2012) Heat Thresholds Project: Final Report\
• Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org))\
• Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | | **Additional (for example)** 3.6 Public sector organisations with a board-approved sustainable development management plan | |
26 REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward ; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from “Marmot Review (2010) Fair Society, Healthy Lives”; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken fromwww.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation) 16 London Travel Demand Survey (LTDS),2011,taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk 21 Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk 22 Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk 23 Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk 24 Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk 25 Most heavily vehicular used roads, 2000-2012, taken from Traffic Statistics, Department of Transport 26 The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk 27 Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk 28 Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk 29 London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk 30 Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk 31 Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england 32 Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk 33 www.phoutcomes.info 34 https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works 35 Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy: http://cieh.org/. 36 Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-measures/how-the-green-deal-works 37 Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63. 38 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 39 Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 40 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 41 Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 42 New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk 43 Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk 44 Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england 45 Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion 46 Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf 47 Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/applications/custom-age-range-creator-tool-gla-population-projections-borough 48 Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/package/london-fuel-poverty-risk-indicators-wards 49 Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk 50 The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk 51 UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted 52 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 53 Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk 54 Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939 55 Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345 56 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 57 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
### Domain 1
Improving the wider determinants of health
| Indicator | AQ | AT | GS | FR | OH | HF | FP | |-----------|----|----|----|----|----|----|----| | 1.1 Children in poverty | | | | | | | | | 1.2 School readiness | | | | | | | | | 1.3 Pupil absence | | | | | | | | | 1.4 First time entrants to the youth justice system | | | | | | | | | 1.5 16-18 year olds not in education, employment or training | | | | | | | | | 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation | | | | | | | | | 1.7 People in prison who have a mental illness or a significant mental illness | | | | | | | | | 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services | | | | | | | | | 1.9 Sickness absence rate | | | | | | | | | 1.10 Killed and seriously injured casualties on England’s roads | | | | | | | | | 1.11 Domestic abuse | | | | | | | | | 1.12 Violent crime (including sexual violence) | | | | | | | | | 1.13 Re-offending levels | | | | | | | | | 1.14 The percentage of the population affected by noise | | | | | | | | | 1.15 Statutory homelessness | | | | | | | | | 1.16 Utilisation of outdoor space for exercise/health reasons | | | | | | | | | 1.17 Fuel poverty | | | | | | | | | 1.18 Social isolation | | | | | | | | | 1.19 Older people’s perception of community safety | | | | | | | | | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|----------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|--------------|-----------------------------|--------------|--------------|----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
Greenspace Information for Greater London CIC (GiGL) National Obesity Observatory (2010-2011) Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-----------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
## Table 4 Healthy Food Data
| LA | Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | |---------------------|--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------|---------------|-------------------------------------------|-------------| | Barking & Dagenham | 28.7 | Once a week 45.1 | 5 times per week 15.4 | LA 22 | 8 | (25.40 - 31.20) | | | Barnet | 17.9 | 54.9 | 17.6 | 41 | 16 | (43.90 - 56-10) | | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 | (31.20 - 37.20) | | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 | (38.20 - 45.30) | | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 | (27.20 - 45.30) | | | Camden | 15.5 | 65.1 | 26 | 28 | 10 | (44.60 - 55.10) | | | City of London | 19.7 | 52.8 | 28.7 | 48 | | | | | City of Westminster | 15 | 59.3 | 25.4 | 24 | 10 | (48.60 - 52.10) | | | Croydon | 24.3 | 58.9 | 19.8 | 44 | 17 | (35.50 - 48.8) | | | Ealing | 18.1 | 48.2 | 14.6 | 39 | 15 | (41.10 - 55.40) | | | Enfield | 23.2 | 50.7 | 18.6 | 36 | 14 | (33.90 - 41.90) | | | Greenwich | 22.6 | 55.4 | 19.5 | 32 | 12 | (32.70 - 42.20) | | | Hackney | 22.6 | 58.9 | 24 | 27 | 10 | (34.90 - 41.60) | | | Hammersmith & Fulham| 15.6 | 66.4 | 27.6 | 25 | 10 | (41.70 - 48.20) | | | Haringey | 20.1 | 54.9 | 17.7 | 36 | 14 | (39.20 - 48.00) | | | Harrow | 19.2 | 51.7 | 17.1 | 31 | 12 | (39.70 - 47.60) | | | Havering | 27.3 | 52.5 | 16.4 | 30 | 12 | (30.80 - 37.30) | | | Hillingdon | 23.2 | 48.9 | 14.1 | 32 | 12 | (34.20 - 45.40) | | | Hounslow | 20.5 | 52.4 | 17.8 | 28 | 10 | (36.90 - 47.20) | | | Islington | 18 | 61.3 | 22.4 | 23 | 7 | (27.60 - 40.80) | | | Location | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |--------------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | 22.53 | | | | | | England | 24.2 | 19.2 | | | | |
Source: Health Needs Assessment Toolkit (2010-2011) Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 2012 | Population Aged 65 2025 | Population Aged 65 2040 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-----------------------------|------------------------------|-------------------------|-------------------------|-------------------------|-------------------------------------|-------------------------------------| | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 | 22.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team
GLA Design Team
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0887dbb582907a5ddebab6c19f24af2a46ae7987 | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Bexley
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate widely
# CONTENTS
| CONTENTS | Page | |----------------------------------------------|------| | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 12 | | AIR QUALITY | 15 | | HEALTHY FOOD | 18 | | FUEL POVERTY | 21 | | OVERHEATING | 24 | | REFERENCES | 28 | | FURTHER READING | 31 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 32 | | DATA APPENDIX | 35 | | ACKNOWLEDGEMENTS | 42 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: 'Access to Public Open Space and Access to Nature by Ward'; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Bexley Picture
- 32 per cent of the borough surface has green space coverage; 1 per cent higher than the London average.
- Within Bexley, more than 40 per cent of households in 4 out of 21 wards have deficient access to nature.
- 20 per cent of Bexley’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 61 per cent participate once a week which is above the London average.
- Bexley’s adult obesity prevalence is 26 per cent, which is higher than the London rate, 21 per cent, and the national rate, 24 per cent. Figure 1 Green Spaces in Bexley Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
• All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;(^\\text{12}) • The Green Flag Award system to improve quality and promote access to green spaces.(^\\text{13}) • Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.(^\\text{14})
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example, improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU | | Additional (for example) | • The Marmot review (2010) www.instituteofhealthequity.org | | 2.6 Excess weight in 4-5 and 10-11 year olds | • www.nice.org.uk | | 2.13 Proportion of physically active and inactive adults | • Benefit of Urban Parks, IFpra (2013): www.ecehh.org | | 2.23 Self-reported well-being | • www.naturalengland.org.uk | | | • www.hphpcentral.com | | | • CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens\\textsuperscript{16}. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing\\textsuperscript{17}. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts\\textsuperscript{18}. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week\\textsuperscript{19}. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers\\textsuperscript{20}. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable\\textsuperscript{21}.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk\\textsuperscript{22}. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Bexley Picture
- On average 357,000 trips per day are made by people originating in Bexley.\\textsuperscript{23}
- Low numbers of people participate in active travel, with the percentage of people cycling to work below the Greater London average.
- Use of motor vehicles is 61 per cent, the highest rate in London.\\textsuperscript{24}
- There was an average of 644 casualties and 4 fatalities per year on Bexley’s roads between 2005 and 2009, which has been decreased by 12% 2009-2011.
- The most heavily used road (excluding motorways) is the A2 with an average daily flow of 107,000 motor vehicles.\\textsuperscript{25}
- There is no proposed cycle super highway in the Borough in the Mayor’s ‘Vision for Cycling’.\\textsuperscript{26}
Figure 2 Journeys in the Bexley by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users. • Promoting cycling through information, maps and cycle hire schemes. • Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality.
**Case Study: Cycling across Hackney**
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
• Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads. • Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created. • Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres. • A comprehensive free cycling training programme has targeted a range of audiences.
*Contact: Ben Kennedy, Hackney Council, [email protected]*
**Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney**
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | 2.13 Proportion of physically active and inactive adults | • NICE Walking and Cycling, Local Government Briefing | | **Additional (for example)** | • Mayors Vision for Cycling, 2013 GLA | | 1.16 Utilisation of outdoor space for exercise/health reasons | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • What are the health benefits of active | | 3.1 Fraction of mortality attributable to particulate air pollution | travel: A systematic review of trials and cohort studies, PloSOne, 8 | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
The Bexley Picture The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
Potential actions: • Developing emergency plans to reduce effects of surface water flood risk. • Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding. • Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff. • Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans. • Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
Case Studies: Purley (LB Croydon) community flood plan • Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan. • The flood plan is owned by the community, and aims to reduce the impact of flooding. • It advises the community on how to prevent flooding and what to do if it happens. • It is a low cost but effective way of reducing a wide range of impacts of flooding. • The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
Surface water flooding event, London, July 2007 • In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding. • Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result. • The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • London Climate Change Adaptation Strategy | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Multi-Agency Flood Plan, LB Havering, 2012 | | | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems
The Bexley Picture • On some of Bexley’s main arterial roads there are high concentrations of NO2 (see map) which are above the recommended limits. • Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Bexley is the 7th least affected area by poor air quality in London.33 • In 2011 the GLA identified one Air Quality Focus Area within Bexley.
Figure 3 NO₂ emissions on Bexley Roads
Potential actions: • Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality. • Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation34. • Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText. See also section on active travel and transport. Case Studies: Reducing exposure – City Air ‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact – Croydon Air Text In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary** | • GLA Local Authority Air Quality Guides | | 3.1 Fraction of mortality attributable to particulate air pollution | • www.londonair.org.uk | | | • www.comeap.org.uk | | **Additional (for example)** | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | 2.13 Proportion of physically active and inactive adults | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution | | 1.14 The percentage of the population affected by noise | HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence?
Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Bexley Picture
- Bexley’s adult obesity rate is 26 per cent. This is higher than both the London average (21 per cent) and the national average (24 per cent).
- Bexley’s obesity rate among primary school children (year 6) is 22 per cent. This is similar to the national and London rates (19 and 23 per cent respectively).
- In 10 of the 28 Middle Super Output Areas (two darkest blue areas on map), 31-37 per cent of the population consume five portions of fruits and vegetables a day.
- 20 per cent of Bexley’s population participate five times per week in physical activity for at least 30 minutes and nearly 61 per cent participate once a week. Figure 4 Healthy food consumption in Bexley Model based consumption of fruit and vegetables in Bexley by ward, 2006-8 LA population consuming five portions of fruits and vegetables a day.
Potential actions • Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html). • Using planning controls to manage proliferation of fast-food outlets on high streets and near schools. • Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas. • Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan.
See also section on green spaces and surface flood risk.
Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact
• Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes. • A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
Achievements: • Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission. • HFTs in the borough have been reduced from 241 to 194
Contact: Gordon Glenday, Head of Planning Policy and Regeneration [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The Bexley Picture
- The older population of Bexley is projected to rise from 38,500 (2012) to 45,100 (2025) and 56,300 (2040).
- A Fuel Poverty Risk score has been developed. Although there are no stark disparities between wards, St Mary’s achieves the lowest risk score, being 35th of all London wards but Northend being 421st out of 625 wards and at significantly greater risk.
- Seven Bexley wards are at low risk of fuel poverty and some show a significant reduction in their score between 2006 and 2010, indicating a negative development trend.
Figure 5 Fuel Poverty risk in Bexley
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- **Housing**
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- **Health**
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- **Older people**
- People aged 60 and over
- Older people claiming pension credit
- **Worklessness**
- Unemployment
- **Poverty**
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
- Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation. The Mayor’s RE:NEW Programme support team can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
- Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements).
- Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and bloodstream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Bexley Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Bexley
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council* *[email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • NHS Heatwave Plan for England\
• RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk)\
• GLA (2011) London Climate Change Adaptation Strategy\
• London Climate Change Partnership (2012) Heat Thresholds Project: Final Report\
• Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org))\
• Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | | **Additional (for example)** 3.6 Public sector organisations with a board-approved sustainable development management plan | | REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from “Marmot Review (2010) Fair Society, Healthy Lives”; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken from www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation 16 London Travel Demand Survey (LTDS), 2011, taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk 21 Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk 22 Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk 23 Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk 24 Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk 25 Most heavily vehicular used roads, 2000–2012, taken from Traffic Statistics, Department of Transport 26 The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk 27 Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk 28 Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk 29 London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk 30 Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk 31 Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england 32 Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk 33 www.phoutcomes.info 34 https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works 35 Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy : http://cieh.org/. 36 Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-healthy-sustainable-food/london-boroughs/takeaways-toolkit; 37 Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63. 38 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 39 Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 40 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 41 Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 42 New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk 43 Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk 44 Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england 45 Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion 46 Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf 47 Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/applications/custom-age-range-creator-tool-gla-population-projections-borough 48 Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/package/london-fuel-poverty-risk-indicators-wards 49 Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk 50 The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk 51 UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted 52 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 53 Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk 54 Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939 55 Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345 56 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 57 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf
# PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
## Domain 1
Improving the wider determinants of health
| AQ | AT | GS | FR | OH | HF | FP | |----|----|----|----|----|----|----| | | | | | | | |
1.1 Children in poverty 1.2 School readiness 1.3 Pupil absence 1.4 First time entrants to the youth justice system 1.5 16-18 year olds not in education, employment or training 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation 1.7 People in prison who have a mental illness or a significant mental illness 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services 1.9 Sickness absence rate 1.10 Killed and seriously injured casualties on England’s roads 1.11 Domestic abuse 1.12 Violent crime (including sexual violence) 1.13 Re-offending levels 1.14 The percentage of the population affected by noise 1.15 Statutory homelessness 1.16 Utilisation of outdoor space for exercise/health reasons 1.17 Fuel poverty 1.18 Social isolation 1.19 Older people’s perception of community safety | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|----------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|--------------|-----------------------------|--------------|--------------|----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
NOO (2005) Greenspace Information for Greater London CIC (GiGL) National Obesity Observatory (2010-2011) Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-------------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
### Table 4 Healthy Food Data
| Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | |--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------| | | LA | Once a week | 5 times per week | LA | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | | Barking & Dagenham | 28.7 | 45.1 | 15.4 | 22 | 8 | (25.40 - 31.20) | | Barnet | 17.9 | 54.9 | 17.6 | 41 | 16 | (43.90 - 56-10) | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 | (31.20 - 37.20) | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 | (38.20 - 45.30) | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 | (27.20 - 45.30) | | Camden | 15.5 | 65.1 | 26 | 28 | 10 | (44.60 - 55.10) | | City of London | 52.8 | 28.7 | 48 | | | | | City of Westminster | 15 | 59.3 | 25.4 | 24 | 10 | (48.60 - 52.10) | | Croydon | 24.3 | 58.9 | 19.8 | 44 | 17 | (35.50 - 48.8) | | Ealing | 18.1 | 48.2 | 14.6 | 39 | 15 | (41.10 - 55.40) | | Enfield | 23.2 | 50.7 | 18.6 | 36 | 14 | (33.90 - 41.90) | | Greenwich | 22.6 | 55.4 | 19.5 | 32 | 12 | (32.70 - 42.20) | | Hackney | 22.6 | 58.9 | 24 | 27 | 10 | (34.90 - 41.60) | | Hammersmith & Fulham | 15.6 | 66.4 | 27.6 | 25 | 10 | (41.70 - 48.20) | | Haringey | 20.1 | 54.9 | 17.7 | 36 | 14 | (39.20 - 48.00) | | Harrow | 19.2 | 51.7 | 17.1 | 31 | 12 | (39.70 - 47.60) | | Havering | 27.3 | 52.5 | 16.4 | 30 | 12 | (30.80 - 37.30) | | Hillingdon | 23.2 | 48.9 | 14.1 | 32 | 12 | (34.20 - 45.40) | | Hounslow | 20.5 | 52.4 | 17.8 | 28 | 10 | (36.90 - 47.20) | | Islington | 18 | 61.3 | 22.4 | 23 | 7 | (27.60 - 40.80) | | Borough | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |-------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | 22.53 | | | | | | England | 24.2 | 19.2 | | | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-----------------------------|------------------------------|--------------------|-------------------------------------|-----------------------------------| | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 | 22.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team
GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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0afdd10acb374cfa773a5398ee351f0a076b851d | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Brent
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate widely
# CONTENTS
| CONTENTS | Page | |----------------------------------------------|------| | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 11 | | AIR QUALITY | 14 | | HEALTHY FOOD | 17 | | FUEL POVERTY | 20 | | OVERHEATING | 23 | | REFERENCES | 27 | | FURTHER READING | 30 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 31 | | DATA APPENDIX | 34 | | ACKNOWLEDGEMENTS | 41 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: 'Access to Public Open Space and Access to Nature by Ward'; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Brent Picture
- 22 per cent of the borough surface has green space coverage; 8 per cent below the London average.
- Within Brent, more than 40 per cent of households in 4 out of 21 wards have deficient access to nature.
- 16 per cent of Brent’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 49 per cent participate once a week which is below the London average.
- Brent’s adult obesity prevalence is 21 per cent, which is equal to the London rate, 21 per cent, and lower than the national rate, 24 per cent. Figure 1 Green Spaces in Brent Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
- All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;(^\\text{12})
- The Green Flag Award system to improve quality and promote access to green spaces.(^\\text{13})
- Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.(^\\text{14})
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example, improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU | | Additional (for example) | • The Marmot review (2010) www.instituteofhealthequity.org | | 2.6 Excess weight in 4-5 and 10-11 year olds | • www.nice.org.uk | | 2.13 Proportion of physically active and inactive adults | • Benefit of Urban Parks, IFpra (2013): www.ecehh.org | | 2.23 Self-reported well-being | • www.naturalengland.org.uk | | | • www.hphpcentral.com | | | • CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens\\textsuperscript{16}. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing\\textsuperscript{17}. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts\\textsuperscript{18}. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week\\textsuperscript{19}. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers\\textsuperscript{20}. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable\\textsuperscript{21}.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk\\textsuperscript{22}. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Brent Picture
- On average 592,000 trips per day are made by people originating in Brent.\\textsuperscript{23}
- Low numbers of people participate in active travel, with the percentage of people cycling to work below the Greater London average.
- Use of motor vehicles is 7 per cent above the Greater London average.\\textsuperscript{24}
- There was an average of 918 casualties and 8 fatalities per year on Brent’s roads between 2005 and 2009: below the Greater London average.
- The most heavily used road (excluding motorways) is the A406 with an average daily flow of 122,000 motor vehicles.\\textsuperscript{25}
- There is no proposed cycle super highway in the Borough in the Mayor’s ‘Vision for Cycling’.\\textsuperscript{26}
Figure 2 Journeys in the Brent by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users.
- Promoting cycling through information, maps and cycle hire schemes.
- Improving safety of heavily trafficked streets where most traffic related health risk is concentrated.
See also section on air quality. Case Study: Cycling across Hackney
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
- Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads.
- Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created.
- Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres.
- A comprehensive free cycling training programme has targeted a range of audiences.
Contact: Ben Kennedy, Hackney Council [email protected]
Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 2.13 Proportion of physically active and inactive adults | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | Additional (for example) | • NICE Walking and Cycling, Local Government Briefing | | 1.16 Utilisation of outdoor space for exercise/health reasons | • Mayors Vision for Cycling, 2013 GLA | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 3.1 Fraction of mortality attributable to particulate air pollution | • What are the health benefits of active travel: A systematic review of trials and cohort studies, PloSOne, 8 | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
**The Brent Picture** The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
**Potential actions:**
- Developing emergency plans to reduce effects of surface water flood risk.
- Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding.
- Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff.
- Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans.
- Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
**Case Studies:** **Purley (LB Croydon) community flood plan**
- Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan.
- The flood plan is owned by the community, and aims to reduce the impact of flooding.
- It advises the community on how to prevent flooding and what to do if it happens.
- It is a low cost but effective way of reducing a wide range of impacts of flooding.
- The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
**Surface water flooding event, London, July 2007**
- In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding.
- Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result.
- The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • Multi-Agency Flood Plan, LB Havering, 2012 | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The Brent Picture
- On some of Brent’s main roads there are high concentrations of NO2 (see map) which are above the recommended limits.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Bexley is the 14th most affected area by poor air quality in London. 33
- In 2011 the GLA identified six Air Quality Focus Areas within Brent.
Figure 3 NO2 emissions on Brent Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation34.
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport.
Case Studies: Reducing exposure – City Air ‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact - Croydon Air Text In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary** | • GLA Local Authority Air Quality Guides | | 3.1 Fraction of mortality attributable to particulate air pollution | • www.londonair.org.uk | | **Additional (for example)** | • www.comeap.org.uk | | 2.13 Proportion of physically active and inactive adults | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | 1.14 The percentage of the population affected by noise | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution | HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence? Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Brent Picture
- Brent’s adult obesity rate is 21 per cent. This is equal to the London average (21 per cent), and lower than the national average (24 per cent).
- Brent’s obesity rate among primary school children (year 6) is 23 per cent. This is similar to the national and London rates (19 and 23 per cent respectively).
- In 13 of the 34 Middle Super Output Areas (two darkest blue areas on map), 38-45 per cent of the population consume five portions of fruits and vegetables a day.
- 16 per cent of Brent’s population participate five times per week in physical activity for at least 30 minutes and nearly 49 per cent participate once a week. Figure 4 Healthy food consumption in Brent Model based consumption of fruit and vegetables in Brent by ward, 2006–8 LA population consuming five portions of fruits and vegetables a day.
Potential actions • Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html). • Using planning controls to manage proliferation of fast-food outlets on high streets and near schools. • Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas. • Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan.
See also section on green spaces and surface flood risk. Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact
- Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes.
- A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
Achievements:
- Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission.
- HFTs in the borough have been reduced from 241 to 194
Contact: Gordon Glenday, Head of Planning Policy and Regeneration [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?Id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The Brent Picture
- The older population of Brent is projected to rise from 33,800 (2012) to 46,300 (2025) and 61,100 (2040).
- A Fuel Poverty Risk score has been developed. There are some disparities between wards with Harlesden achieving a rank of 623 out of 625 wards and at significantly greater risk.
- Two Brent wards are at low risk of fuel poverty and five are at high risk according to the fuel poverty risk indicator. No ward shows a significant improvement or reduction of its score between 2006-2010.
Figure 5 Fuel Poverty risk in Brent
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- Housing
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- Health
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- Older people
- People aged 60 and over
- Older people claiming pension credit
- Worklessness
- Unemployment
- Poverty
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
- Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation. The Mayor’s RE:NEW Programme support team can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
- Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements).
- Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and bloodstream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Brent Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Brent
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint may help on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council*
*[email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NHS Heatwave Plan for England | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk) | | **Additional (for example)** | • GLA (2011) London Climate Change Adaptation Strategy | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • London Climate Change Partnership (2012) Heat Thresholds Project: Final Report | | | • Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org)) | | | • Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward ; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from "Marmot Review (2010) Fair Society, Healthy Lives"; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken from www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation) 16 London Travel Demand Survey (LTDS),2011,taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk 21 Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk 22 Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk 23 Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk 24 Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk 25 Most heavily vehicular used roads, 2000-2012, taken from Traffic Statistics, Department of Transport 26 The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk 27 Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk 28 Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk 29 London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk 30 Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk 31 Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england 32 Effects of floods on mental health, 2011, taken from Murray, V, Cadin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk 33 www.phoutcomes.info 34 https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works 35 Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy : http://cieh.org/. 36 Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-measures/how-the-green-deal-works/london-boroughs/takeaways-toolkit; 37 Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63. 38 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 39 Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 40 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 41 Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 42 New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk 43 Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk 44 Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england 45 Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion 46 Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf 47 Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/applications/custom-age-range-creator-tool-gla-population-projections-borough 48 Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/package/london-fuel-poverty-risk-indicators-wards 49 Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk 50 The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk 51 UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted 52 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 53 Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk 54 Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939 55 Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345 56 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 57 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf
## PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
### Domain 1
Improving the wider determinants of health
| AQ | AT | GS | FR | OH | HF | FP | |----|----|----|----|----|----|----| | | | | | | | |
1.1 Children in poverty 1.2 School readiness 1.3 Pupil absence 1.4 First time entrants to the youth justice system 1.5 16-18 year olds not in education, employment or training 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation 1.7 People in prison who have a mental illness or a significant mental illness 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services 1.9 Sickness absence rate 1.10 Killed and seriously injured casualties on England’s roads 1.11 Domestic abuse 1.12 Violent crime (including sexual violence) 1.13 Re-offending levels 1.14 The percentage of the population affected by noise 1.15 Statutory homelessness 1.16 Utilisation of outdoor space for exercise/health reasons 1.17 Fuel poverty 1.18 Social isolation 1.19 Older people’s perception of community safety | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|-------------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough | Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |---------|---------------------|---------------|-----------------------------|--------------|--------------|----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1 | 23.2 | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8 | 20.5 | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4 | 18.0 | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5 | 13.9 | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1 | 16.7 | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2 | 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3 | 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5 | 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3 | 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4 | 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4 | 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5 | 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7 | 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7 | 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3 | 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9 | 15.0 | 20.7 | 24.2 |
**Notes:**
- NOO (2005) - National Obesity Observatory
- Greenspace Information for Greater London CIC (GiGL)
- Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-------------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
## Table 4 Healthy Food Data
| LA | Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | |---------------------|--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------|---------------|---------------------------------------------|-------------| | Barking & Dagenham | 28.7 | Once a week 45.1 5 times per week 15.4 | LA 22 | 8 (25.40 - 31.20) | | | | | Barnet | 17.9 | 54.9 17.6 | LA 41 | 16 (43.90 - 56-10) | | | | | Bexley | 26.4 | 60.8 20 | LA 28 | 10 (31.20 - 37.20) | | | | | Brent | 21.2 | 49.4 16.3 | LA 34 | 13 (38.20 - 45.30) | | | | | Bromley | 21.8 | 62.4 21.1 | LA 39 | 15 (27.20 - 45.30) | | | | | Camden | 15.5 | 65.1 26 | LA 28 | 10 (44.60 - 55.10) | | | | | City of London | 15.5 | 52.8 28.7 | LA 48 | | | | | | City of Westminster | 15 | 59.3 25.4 | LA 24 | 10 (48.60 - 52.10) | | | | | Croydon | 24.3 | 58.9 19.8 | LA 44 | 17 (35.50 - 48.8) | | | | | Ealing | 18.1 | 48.2 14.6 | LA 39 | 15 (41.10 - 55.40) | | | | | Enfield | 23.2 | 50.7 18.6 | LA 36 | 14 (33.90 - 41.90) | | | | | Greenwich | 22.6 | 55.4 19.5 | LA 32 | 12 (32.70 - 42.20) | | | | | Hackney | 22.6 | 58.9 24 | LA 27 | 10 (34.90 - 41.60) | | | | | Hammersmith & Fulham| 15.6 | 66.4 27.6 | LA 25 | 10 (41.70 - 48.20) | | | | | Haringey | 20.1 | 54.9 17.7 | LA 36 | 14 (39.20 - 48.00) | | | | | Harrow | 19.2 | 51.7 17.1 | LA 31 | 12 (39.70 - 47.60) | | | | | Havering | 27.3 | 52.5 16.4 | LA 30 | 12 (30.80 - 37.30) | | | | | Hillingdon | 23.2 | 48.9 14.1 | LA 32 | 12 (34.20 - 45.40) | | | | | Hounslow | 20.5 | 52.4 17.8 | LA 28 | 10 (36.90 - 47.20) | | | | | Islington | 18 | 61.3 22.4 | LA 23 | 7 (27.60 - 40.80) | | | | | Borough | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |-------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | | | 22.53 | | | | England | 24.2 | | | 19.2 | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-----------------------------|------------------------------|--------------------|-------------------------------------|-----------------------------------| | | 2012 | 2025 | 2040 | 2011 | 2011 | | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 | 22.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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dc9af44abbecc916b133bfda9ee59a78efc682a6 | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Bromley
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate wide
# CONTENTS
| CONTENTS | Page | |--------------------------------|------| | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 11 | | AIR QUALITY | 14 | | HEALTHY FOOD | 17 | | FUEL POVERTY | 20 | | OVERHEATING | 23 | | REFERENCES | 27 | | FURTHER READING | 30 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 31 | | DATA APPENDIX | 34 | | ACKNOWLEDGEMENTS | 41 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: ‘Access to Public Open Space and Access to Nature by Ward’; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Bromley Picture
- 58 per cent of the borough surface has green space coverage; 17 per cent above the London average.
- Within Bromley, 50 per cent of households in 2 out of 22 wards have deficient access to nature.
- 21 per cent of Bromley’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 62 per cent participate once a week, above the London average.
- Bromley’s adult obesity prevalence is 22 per cent, which is higher than the London rate, 21 per cent, but lower than the national rate, 24 per cent. Figure 1 Green Spaces in Bromley Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
- All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;¹²
- The Green Flag Award system to improve quality and promote access to green spaces.¹³
- Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.¹⁴
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example, improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU | | Additional (for example) | • The Marmot review (2010) www.instituteofhealthequity.org | | 2.6 Excess weight in 4-5 and 10-11 year olds | • www.nice.org.uk | | 2.13 Proportion of physically active and inactive adults | • Benefit of Urban Parks, IFpra (2013): www.ecehh.org | | 2.23 Self-reported well-being | • www.naturalengland.org.uk | | | • www.hphpcentral.com | | | • CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens\\textsuperscript{16}. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing\\textsuperscript{17}. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts\\textsuperscript{18}. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week\\textsuperscript{19}. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers\\textsuperscript{20}. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable\\textsuperscript{21}.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk\\textsuperscript{22}. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Bromley Picture
- On average 691,000 trips per day are made by people originating in Bromley.\\textsuperscript{23}
- Low numbers of people participate in active travel, with the percentage of people cycling to work below the Greater London average.
- Use of motor vehicles is 7 per cent above the Greater London average.\\textsuperscript{24}
- There was an average of 929 casualties and 10 fatalities per year on Bromley’s roads between 2005 and 2009: this decreased by 6% by 2009-2011.
- The most heavily used road (excluding motorways) is the A406 with an average daily flow of 45,000 motor vehicles.\\textsuperscript{25}
- One cycle superhighway originating in the Borough is proposed in the Mayor’s ‘Vision for Cycling’.\\textsuperscript{26}
Figure 2 Journeys in the Bromley by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users.
- Promoting cycling through information, maps and cycle hire schemes.
- Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality. Case Study: Cycling across Hackney
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
- Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads.
- Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created.
- Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres.
- A comprehensive free cycling training programme has targeted a range of audiences.
Contact: Ben Kennedy, Hackney Council [email protected]
Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 2.13 Proportion of physically active and inactive adults | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | Additional (for example) | • NICE Walking and Cycling, Local Government Briefing | | 1.16 Utilisation of outdoor space for exercise/health reasons | • Mayors Vision for Cycling, 2013 GLA | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 3.1 Fraction of mortality attributable to particulate air pollution | • What are the health benefits of active travel: A systematic review of trials and cohort studies, PloSOne, 8 | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
**The Bromley Picture** The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
**Potential actions:**
- Developing emergency plans to reduce effects of surface water flood risk.
- Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding.
- Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff.
- Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans.
- Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
**Case studies:** **Purley (LB Croydon) community flood plan**
- Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan.
- The flood plan is owned by the community, and aims to reduce the impact of flooding.
- It advises the community on how to prevent flooding and what to do if it happens.
- It is a low cost but effective way of reducing a wide range of impacts of flooding.
- The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
**Surface water flooding event, London, July 2007**
- In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding.
- Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result.
- The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • Multi-Agency Flood Plan, LB Havering, 2012 | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The Bromley Picture
- On some of Bromley’s main arterial roads there are higher concentrations of NO2 (see map).
- 6.3 per cent of deaths in Bromley are attributable to poor air quality. This is 13 per cent higher than the UK average and is the lowest in London.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Bromley is the least affected area by poor air quality in London.
- In 2011 the GLA identified one Air Quality Focus Area within Bromley
Figure 3 NO₂ emissions on Bromley Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation.
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport.
Case Studies:
Reducing exposure – City Air
‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting.
Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact - Croydon Air Text
In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
Links to Public Health Outcomes Framework
| Suggested further reading | |---------------------------| | • GLA Local Authority Air Quality Guides | | • www.londonair.org.uk | | • www.comeap.org.uk | | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution |
Primary
3.1 Fraction of mortality attributable to particulate air pollution
Additional (for example)
2.13 Proportion of physically active and inactive adults 1.14 The percentage of the population affected by noise HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence? Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Bromley Picture
- Bromley’s adult obesity rate is 22 per cent. This is higher than the London average (21 per cent), but lower than the national average (24 per cent).
- Bromley’s obesity rate among primary school children (year 6) is 16 per cent. This is lower than the national and London rates (19 and 23 per cent respectively).
- In 15 of the 39 Middle Super Output Areas (two darkest blue areas on map), 27-45 per cent of the population consume five portions of fruits and vegetables a day.
- 21 per cent of Bromley’s population participate five times per week in physical activity for at least 30 minutes and nearly 62 per cent participate once a week. Potential actions
- Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html).
- Using planning controls to manage proliferation of fast-food outlets on high streets and near schools.
- Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas.
- Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan. See also section on green spaces and surface flood risk.
Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact • Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes. • A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
Achievements: • Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission. • HFTs in the borough have been reduced from 241 to 194
Contact: Gordon Glenday, Head of Planning Policy and Regeneration [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?Id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The Bromley Picture
- The older population of Bromley is projected to rise from 54,200 (2012) to 64,200 (2025) and 79,500 (2040).
- A Fuel Poverty Risk score has been developed. Overall the borough is at low risk of fuel poverty with some variation across wards - Biggin Hill achieving the third lowest risk score of all London wards but Crystal Palace being 500th out of 625 wards and at significantly greater risk.
- Eleven Bromley wards are at low risk of fuel poverty and only one at high risk according to the fuel poverty risk indicator. Biggin Hill, however, shows a marked reduction in its score while still retaining a low-risk position.
Figure 5 Fuel Poverty risk in Bromley
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- Housing
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- Health
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- Older people
- People aged 60 and over
- Older people claiming pension credit
- Worklessness
- Unemployment
- Poverty
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
- Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation(^5). The Mayor’s RE:NEW Programme support team(^5) can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
- Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements(^5)).
- Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people and there is a strong link between high temperatures, dehydration and blood stream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Bromley Picture
The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Bromley
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council*
*[email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • NHS Heatwave Plan for England\
• RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk)\
• GLA (2011) London Climate Change Adaptation Strategy\
• London Climate Change Partnership (2012) Heat Thresholds Project: Final Report\
• Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org))\
• Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | | **Additional (for example)** 3.6 Public sector organisations with a board-approved sustainable development management plan | | REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward ; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from “Marmot Review (2010) Fair Society, Healthy Lives”; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken fromwww.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation 16 London Travel Demand Survey (LTDS),2011,taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk 21 Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk 22 Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk 23 Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk 24 Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk 25 Most heavily vehicular used roads, 2000–2012, taken from Traffic Statistics, Department of Transport 26 The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk 27 Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk 28 Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk 29 London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk 30 Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk 31 Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england 32 Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk 33 www.phoutcomes.info 34 www.phoutcomes.info 35 https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works 36 Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy : http://cieh.org/. 37 Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-healthy-sustainable-food/london-boroughs/takeaways-toolkit; 38 Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63. 39 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 40 Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 41 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 42 Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 43 New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk 44 Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk 45 Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england 46 Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion 47 Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf 48 Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/custom-age-range-creator-tool-gla-population-projections-borough 49 Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/package/london-fuel-poverty-risk-indicators-wards 50 Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk 51 The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk 52 UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted 53 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 54 Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk 55 Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939 56 Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345 57 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 58 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
### Domain 1
Improving the wider determinants of health
| Indicator | AQ | AT | GS | FR | OH | HF | FP | |-----------|----|----|----|----|----|----|----| | 1.1 Children in poverty | | | | | | | | | 1.2 School readiness | | | | | | | | | 1.3 Pupil absence | | | | | | | | | 1.4 First time entrants to the youth justice system | | | | | | | | | 1.5 16-18 year olds not in education, employment or training | | | | | | | | | 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation | | | | | | | | | 1.7 People in prison who have a mental illness or a significant mental illness | | | | | | | | | 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services | | | | | | | | | 1.9 Sickness absence rate | | | | | | | | | 1.10 Killed and seriously injured casualties on England’s roads | | | | | | | | | 1.11 Domestic abuse | | | | | | | | | 1.12 Violent crime (including sexual violence) | | | | | | | | | 1.13 Re-offending levels | | | | | | | | | 1.14 The percentage of the population affected by noise | | | | | | | | | 1.15 Statutory homelessness | | | | | | | | | 1.16 Utilisation of outdoor space for exercise/health reasons | | | | | | | | | 1.17 Fuel poverty | | | | | | | | | 1.18 Social isolation | | | | | | | | | 1.19 Older people’s perception of community safety | | | | | | | | | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|-------------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|--------------|-----------------------------|--------------|--------------|----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
**NOO (2005)**
**Greenspace Information for Greater London CIC (GiGL)**
**National Obesity Observatory (2010-2011)**
**Health Needs Assessment Toolkit**
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-------------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
### Table 4 Healthy Food Data
| LA | Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | |---------------------|--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------|---------------|-------------------------------------------|------------| | Barking & Dagenham | 28.7 | Once a week 45.1 | 5 times per week 15.4 | LA 22 | 8 | (25.40 - 31.20) | | | Barnet | 17.9 | 54.9 | 17.6 | 41 | 16 | (43.90 - 56.10) | | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 | (31.20 - 37.20) | | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 | (38.20 - 45.30) | | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 | (27.20 - 45.30) | | | Camden | 15.5 | 65.1 | 26 | 28 | 10 | (44.60 - 55.10) | | | City of London | 19.7 | 52.8 | 28.7 | 48 | | | | | City of Westminster | 15 | 59.3 | 25.4 | 24 | 10 | (48.60 - 52.10) | | | Croydon | 24.3 | 58.9 | 19.8 | 44 | 17 | (35.50 - 48.8) | | | Ealing | 18.1 | 48.2 | 14.6 | 39 | 15 | (41.10 - 55.40) | | | Enfield | 23.2 | 50.7 | 18.6 | 36 | 14 | (33.90 - 41.90) | | | Greenwich | 22.6 | 55.4 | 19.5 | 32 | 12 | (32.70 - 42.20) | | | Hackney | 22.6 | 58.9 | 24 | 27 | 10 | (34.90 - 41.60) | | | Hammersmith & Fulham| 15.6 | 66.4 | 27.6 | 25 | 10 | (41.70 - 48.20) | | | Haringey | 20.1 | 54.9 | 17.7 | 36 | 14 | (39.20 - 48.00) | | | Harrow | 19.2 | 51.7 | 17.1 | 31 | 12 | (39.70 - 47.60) | | | Havering | 27.3 | 52.5 | 16.4 | 30 | 12 | (30.80 - 37.30) | | | Hillingdon | 23.2 | 48.9 | 14.1 | 32 | 12 | (34.20 - 45.40) | | | Hounslow | 20.5 | 52.4 | 17.8 | 28 | 10 | (36.90 - 47.20) | | | Islington | 18 | 61.3 | 22.4 | 23 | 7 | (27.60 - 40.80) | | | Location | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |--------------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | 22.53 | | | | | | England | 24.2 | 19.2 | | | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 2012 | Population Aged 65 2025 | Population Aged 65 2040 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-----------------------------|------------------------------|-------------------------|-------------------------|-------------------------|-------------------------------------|-------------------------------------| | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 | 22.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team
GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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4767797ad606e8c867a7a5d2996d58668b5fe1a1 | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Camden
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate wide
## CONTENTS
| Section | Page | |----------------------------------------------|------| | CONTENTS | 1 | | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 12 | | AIR QUALITY | 15 | | HEALTHY FOOD | 18 | | FUEL POVERTY | 21 | | OVERHEATING | 24 | | REFERENCES | 28 | | REFERENCES | 31 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 32 | | DATA APPENDIX | 35 | | ACKNOWLEDGEMENTS | 42 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and wellbeing as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: ‘Access to Public Open Space and Access to Nature by Ward’; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Camden Picture
- 25 per cent of the borough surface has green space coverage; 6 per cent below the London average.
- Within Camden, 50 per cent of households in 5 out of 18 wards, have deficient access to nature.
- 26 per cent of Camden’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 65 per cent participate once a week, which is above the London average.
- Camden’s adult obesity prevalence is 16 per cent, which is lower than the London rate, 21 per cent, and the national rate, 24 per cent. Figure 1 Green Spaces in Camden Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
• All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;¹² • The Green Flag Award system to improve quality and promote access to green spaces.¹³ • Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.¹⁴
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example, improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU\
• The Marmot review (2010)\
www.instituteofhealthequity.org\
• www.nice.org.uk\
• Benefit of Urban Parks, IFpra (2013):\
www.ecehh.org\
www.naturalengland.org.uk\
www.hphpcentral.com\
• CMO (2011) Start Active, Stay Active | | Additional (for example) | 2.6 Excess weight in 4-5 and 10-11 year olds\
2.13 Proportion of physically active and inactive adults\
2.23 Self-reported well-being | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens\\textsuperscript{16}. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing\\textsuperscript{17}. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts\\textsuperscript{18}. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week\\textsuperscript{19}. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers\\textsuperscript{20}. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable\\textsuperscript{21}.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk\\textsuperscript{22}. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Camden Picture
- On average 744,000 trips per day are made by people originating in Camden.\\textsuperscript{23}
- High numbers of people participate in active travel, with the percentage of people cycling to work above the Greater London average.
- Use of motor vehicles is 16 per cent below the Greater London average.\\textsuperscript{24}
- There was an average of 902 casualties and 5 fatalities per year on Camden’s roads between 2005 and 2009: similar to the London average.\\textsuperscript{25}
- The most heavily used road (excluding motorways) is the A501 with an average daily flow of 93,000 motor vehicles.
- One cycle superhighway is proposed in the Mayor’s ‘Vision for Cycling’.\\textsuperscript{26}
Figure 2 Journeys in the Camden by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users. • Promoting cycling through information, maps and cycle hire schemes. • Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality.
**Case Study: Cycling across Hackney**
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
• Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads. • Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created. • Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres. • A comprehensive free cycling training programme has targeted a range of audiences.
*Contact: Ben Kennedy, Hackney Council, [email protected]*
**Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney**
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | 2.13 Proportion of physically active and inactive adults | • NICE Walking and Cycling, Local Government Briefing | | **Additional (for example)** | • Mayors Vision for Cycling, 2013 GLA | | 1.16 Utilisation of outdoor space for exercise/health reasons | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • What are the health benefits of active | | 3.1 Fraction of mortality attributable to particulate air pollution | travel: A systematic review of trials and cohort studies, PloSOne, 8 | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
**The Camden Picture** The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
**Potential actions:**
- Developing emergency plans to reduce effects of surface water flood risk.
- Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding.
- Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff.
- Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans.
- Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
**Case Studies:** **Purley (LB Croydon) community flood plan**
- Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan.
- The flood plan is owned by the community, and aims to reduce the impact of flooding.
- It advises the community on how to prevent flooding and what to do if it happens.
- It is a low cost but effective way of reducing a wide range of impacts of flooding.
- The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
**Surface water flooding event, London, July 2007**
- In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding.
- Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result.
- The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • Multi-Agency Flood Plan, LB Havering, 2012 | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air-quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The Camden Picture
- On some of Camden’s main roads there are high concentrations of NO2 (see map) which are above the recommended limits.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Camden is the 9th most affected area by poor air quality in London. 33
- In 2011 the GLA identified five Air Quality Focus Areas within Camden.
Figure 3 NO₂ emissions on Camden Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation34.
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport. Case Studies: Reducing exposure – City Air ‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact – Croydon Air Text In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 3.1 Fraction of mortality attributable to particulate air pollution | • GLA Local Authority Air Quality Guides | | 2.13 Proportion of physically active and inactive adults | • www.londonair.org.uk | | 1.14 The percentage of the population affected by noise | • www.comeap.org.uk | | | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution | HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence? Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Camden Picture
- Camden’s adult obesity rate is 16 per cent. This is lower than the London average (21 per cent), and the national average (24 per cent).
- Camden’s obesity rate among primary school children (year 6) is 22 per cent. This is higher than the national rate and lower and London rates (19 and 23 per cent respectively).
- In 10 out of 28 Middle Super Output Areas (two darkest blue areas on map), 45 and 55 per cent of the total population consume five portions of fruits and vegetables a day.
- 26 per cent of Camden’s population participate five times per week in physical activity for at least 30 minutes and nearly 65 per cent participate once a week. Figure 4 Healthy food consumption in Camden Model based consumption of fruit and vegetables in Camden by ward, 2006-8 LA population consuming five portions of fruits and vegetables a day.
Potential actions • Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html). • Using planning controls to manage proliferation of fast-food outlets on high streets and near schools. • Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas. • Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan.
See also section on green spaces and surface flood risk.
**Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact**
• Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes.
• A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
**Achievements:**
• Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission.
• HFTs in the borough have been reduced from 241 to 194
*Contact: Gordon Glenday, Head of Planning Policy and Regeneration*\
[email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The Camden Picture
- The older population of Camden is projected to rise from 24,800 (2012) to 30,200 (2025) and 39,300 (2040).(^{47})
- A Fuel Poverty Risk score has been developed. There are some disparities between wards with Hampstead Town achieving the 59(^{th}) lowest risk score of all London wards but Kilburn being 622(^{nd}) out of 625 wards and at significantly greater risk.
- Two Camden wards are at low risk of fuel poverty and eight are at high risk according to the fuel poverty risk indicator. On the positive side, four wards show significant improvement between 2006-2010.(^{48})
Figure 5 Fuel Poverty risk in Camden
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- **Housing**
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- **Health**
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- **Older people**
- People aged 60 and over
- Older people claiming pension credit
- **Worklessness**
- Unemployment
- **Poverty**
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
- Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation(^5). The Mayor’s RE:NEW Programme support team(^5) can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
- Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements(^5)).
- Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and bloodstream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Camden Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Camden
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council* *[email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • NHS Heatwave Plan for England\
• RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk)\
• GLA (2011) London Climate Change Adaptation Strategy\
• London Climate Change Partnership (2012) Heat Thresholds Project: Final Report\
• Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org))\
• Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | | **Additional (for example)** 3.6 Public sector organisations with a board-approved sustainable development management plan | | REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116; Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward ; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from “Marmot Review (2010) Fair Society, Healthy Lives”; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken fromwww.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation) 16 London Travel Demand Survey (LTDS),2011,taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk 21 Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk 22 Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk 23 Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk 24 Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk 25 Most heavily vehicular used roads, 2000-2012, taken from Traffic Statistics, Department of Transport 26 The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk 27 Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk 28 Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk 29 London Regional Flood Risk Appraisal, October 2009, taken from GLA; , www.london.gov.uk 30 Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk 31 Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england 32 Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk 33 www.phoutcomes.info 34 https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works 35 Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy : http://cieh.org/. 36 Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-healthy-sustainable-food/london-boroughs/takeaways-toolkit; 37 Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63. 38 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 39 Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 40 Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx 41 Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 42 New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk 43 Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk 44 Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england 45 Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion 46 Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf 47 Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/applications/custom-age-range-creator-tool-gla-population-projections-borough 48 Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/package/london-fuel-poverty-risk-indicators-wards 49 Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk 50 The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk 51 UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england
Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk
Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939
Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345
Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england
Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
### Domain 1
Improving the wider determinants of health
| Indicator | AQ | AT | GS | FR | OH | HF | FP | |-----------|----|----|----|----|----|----|----| | 1.1 Children in poverty | | | | | | | | | 1.2 School readiness | | | | | | | | | 1.3 Pupil absence | | | | | | | | | 1.4 First time entrants to the youth justice system | | | | | | | | | 1.5 16-18 year olds not in education, employment or training | | | | | | | | | 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation | | | | | | | | | 1.7 People in prison who have a mental illness or a significant mental illness | | | | | | | | | 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services | | | | | | | | | 1.9 Sickness absence rate | | | | | | | | | 1.10 Killed and seriously injured casualties on England’s roads | | | | | | | | | 1.11 Domestic abuse | | | | | | | | | 1.12 Violent crime (including sexual violence) | | | | | | | | | 1.13 Re-offending levels | | | | | | | | | 1.14 The percentage of the population affected by noise | | | | | | | | | 1.15 Statutory homelessness | | | | | | | | | 1.16 Utilisation of outdoor space for exercise/health reasons | | | | | | | | | 1.17 Fuel poverty | | | | | | | | | 1.18 Social isolation | | | | | | | | | 1.19 Older people’s perception of community safety | | | | | | | | | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|----------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|-----------------------------------------------|-------------------------------------------------------------|-------------------| | | | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|--------------|-----------------------------|--------------|--------------|----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
Greenspace Information for Greater London CIC (GiGL) National Obesity Observatory (2010-2011) Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-----------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 9 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-------------------------------|---------------------------------------------------------------------|------|-------------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
### Table 4 Healthy Food Data
| Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | |--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------| | | LA | Once a week | 5 times per week | LA | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | | Barking & Dagenham | 28.7 | 45.1 | 15.4 | 22 | 8 | (25.40 - 31.20) | | Barnet | 17.9 | 54.9 | 17.6 | 41 | 16 | (43.90 - 56-10) | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 | (31.20 - 37.20) | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 | (38.20 - 45.30) | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 | (27.20 - 45.30) | | Camden | 15.5 | 65.1 | 26 | 28 | 10 | (44.60 - 55.10) | | City of London | 52.8 | 28.7 | | | 48 | | | City of Westminster | 15 | 59.3 | 25.4 | 24 | 10 | (48.60 - 52.10) | | Croydon | 24.3 | 58.9 | 19.8 | 44 | 17 | (35.50 - 48.8) | | Ealing | 18.1 | 48.2 | 14.6 | 39 | 15 | (41.10 - 55.40) | | Enfield | 23.2 | 50.7 | 18.6 | 36 | 14 | (33.90 - 41.90) | | Greenwich | 22.6 | 55.4 | 19.5 | 32 | 12 | (32.70 - 42.20) | | Hackney | 22.6 | 58.9 | 24 | 27 | 10 | (34.90 - 41.60) | | Hammersmith & Fulham | 15.6 | 66.4 | 27.6 | 25 | 10 | (41.70 - 48.20) | | Haringey | 20.1 | 54.9 | 17.7 | 36 | 14 | (39.20 - 48.00) | | Harrow | 19.2 | 51.7 | 17.1 | 31 | 12 | (39.70 - 47.60) | | Havering | 27.3 | 52.5 | 16.4 | 30 | 12 | (30.80 - 37.30) | | Hillingdon | 23.2 | 48.9 | 14.1 | 32 | 12 | (34.20 - 45.40) | | Hounslow | 20.5 | 52.4 | 17.8 | 28 | 10 | (36.90 - 47.20) | | Islington | 18 | 61.3 | 22.4 | 23 | 7 | (27.60 - 40.80) | | Borough | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |-------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | | | 22.53 | | | | England | 24.2 | | | 19.2 | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-----------------------------|------------------------------|--------------------|-------------------------------------|-----------------------------------| | | 2012 | 2025 | 2040 | | | | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 | 22.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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996f8dbc1809f309234ffcbdcfb8d9c0f8efe5ce | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of City of London
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate widely
## CONTENTS
| Section | Page | |----------------------------------------------|------| | CONTENTS | 1 | | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 11 | | AIR QUALITY | 14 | | HEALTHY FOOD | 17 | | FUEL POVERTY | 20 | | OVERHEATING | 23 | | REFERENCES | 27 | | FURTHER READING | 30 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 31 | | DATA APPENDIX | 34 | | ACKNOWLEDGEMENTS | 41 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: ‘Access to Public Open Space and Access to Nature by Ward’; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The City of London Picture
- 5 per cent of the borough surface has green space coverage; 26 per cent below the London average.
- Within the City of London, 100 per cent of households have deficient access to nature.
- 29 per cent of City of London’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 53 per cent participate once a week which is below the London average.
- City of London’s adult obesity prevalence is 21 per cent, which is higher than the national rate, 24 per cent. Figure 1 Green Spaces in City of London Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions: Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
• All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;¹² • The Green Flag Award system to improve quality and promote access to green spaces;¹³ • Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.¹⁴
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example, improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU | | Additional (for example) | • The Marmot review (2010) | | 2.6 Excess weight in 4-5 and 10-11 year olds | www.instituteofhealthequity.org | | 2.13 Proportion of physically active and inactive adults | • www.nice.org.uk | | 2.23 Self-reported well-being | • Benefit of Urban Parks, IFpra (2013): | | | www.ecehh.org | | | www.naturalengland.org.uk | | | www.hphpcentral.com | | | CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens(^\\text{16}). Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing(^\\text{17}). There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts(^\\text{18}). Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week(^\\text{19}). Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers(^\\text{20}). Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable(^\\text{21}).
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk(^\\text{22}). This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The City of London Picture
- On average 262,000 trips per day are made by people originating in City of London.(^{23})
- High numbers of people participate in active travel, with the percentage of people cycling to work above the Greater London average.
- Use of motor vehicles is the lowest in Greater London.(^{24})
- There was an average of 369 casualties and 2 fatalities per year on City of London’s roads between 2005 and 2009; but this increased by 11% in 2009-2011.
- The most heavily used road (excluding motorways) is the A3211 with an average daily flow of 73,000 motor vehicles.(^{25})
- Currently there are three cycle super highways in the Borough and three more are proposed in the Mayor’s ‘Vision for Cycling’.(^{26})
Figure 2 Journeys in the City of London by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users.
- Promoting cycling through information, maps and cycle hire schemes.
- Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality. Case Study: Cycling across Hackney
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
- Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads.
- Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created.
- Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres.
- A comprehensive free cycling training programme has targeted a range of audiences.
Contact: Ben Kennedy, Hackney Council [email protected]
Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | 2.13 Proportion of physically active and inactive adults | • NICE Walking and Cycling, Local Government Briefing | | **Additional (for example)** | • Mayors Vision for Cycling, 2013 GLA | | 1.16 Utilisation of outdoor space for exercise/health reasons | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 2.7 Hospital admissions caused by unintentional and deliberate injuries in under 18s | • What are the health benefits of active travel: A systematic review of trials and cohort studies, PloSOne, 8 | | 3.1 Fraction of mortality attributable to particulate air pollution | | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
**The City of London Picture** The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
**Potential actions:**
- Developing emergency plans to reduce effects of surface water flood risk.
- Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding.
- Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff.
- Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans.
- Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities.
See also section on green spaces and healthy food.
**Case studies:** **Purley (LB Croydon) community flood plan**
- Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan.
- The flood plan is owned by the community, and aims to reduce the impact of flooding.
- It advises the community on how to prevent flooding and what to do if it happens.
- It is a low cost but effective way of reducing a wide range of impacts of flooding.
- The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
**Surface water flooding event, London, July 2007**
- In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding.
- Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result.
- The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • Multi-Agency Flood Plan, LB Havering, 2012 | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The City of London Picture
- On many of City of London’s roads there are high concentrations of NO2 (see map) which are above the recommended limits.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, the City of London is the most affected area by poor air quality in London.(^{33})
- In 2011 the GLA identified two Air Quality Focus Areas within the City of London.
Figure 3 NO(\_2) emissions on city of London Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation(^{34}).
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport.
**Case studies:**
**Reducing exposure – City Air**
‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
*Contact: Ruth Calderwood*
[email protected]
**Mitigating impact – Croydon Air Text**
In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
**Links to Public Health Outcomes Framework**
| Primary | Suggested further reading | |---------|---------------------------| | 3.1 Fraction of mortality attributable to particulate air pollution | • GLA Local Authority Air Quality Guides | | 2.13 Proportion of physically active and inactive adults | • www.londonair.org.uk | | 1.14 The percentage of the population affected by noise | • www.comeap.org.uk | | | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution | HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering of sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence? Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The City of London Picture
- City of London’s adult obesity rate is 21 per cent. This is lower than the national average (24 per cent).
- City of London’s obesity rate among primary school children (year 6) is 23 per cent. This is higher than the national rate (23 per cent).
- Within City of London, have 48 per cent of the total population consume five portions of fruits and vegetables a day.
- 29 per cent of City of London’s population participate five times per week in physical activity for at least 30 minutes and nearly 53 per cent participate once a week. Figure 4 Healthy food consumption in City of London Model based consumption of fruit and vegetables in City of London by ward, 2006-8 LA population consuming five portions of fruits and vegetables a day.
Potential actions • Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html). • Using planning controls to manage proliferation of fast-food outlets on high streets and near schools. • Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas. • Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan. See also section on green spaces and surface flood risk. Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact
- Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes.
- A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
Achievements:
- Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission.
- HFTs in the borough have been reduced from 241 to 194
Contact: Gordon Glenday, Head of Planning Policy and Regeneration [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue. The City of London Picture
- The older population of Southwark is projected to rise from 1,100 (2012) to 1,700 (2025) and 2,800 (2040).
- A Fuel Poverty Risk score has been developed. It measures the boroughs’ fuel poverty risk by wards. Overall, the City of London is at low risk, ranking 6th out 625 London wards.
- There has been a positive trend towards improving the fuel poverty risk score in the City of London from 2006 to 2010.
Figure 5 Fuel Poverty risk in City of London
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- Housing
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- Health
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- Older people
- People aged 60 and over
- Older people claiming pension credit
- Worklessness
- Unemployment
- Poverty
- Income support claimant rate
Source: GLA (2013) Fuel Poverty Risk Indicators Tool, available on London Datastore
Potential actions: The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support. • Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation. The Mayor’s RE:NEW Programme support team can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
• Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements).
• Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
Contact: Fiona Daly, Barts Health NHS Trust, [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and blood stream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The City of London Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in City of London
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council* [email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • NHS Heatwave Plan for England | | **Additional (for example)** 3.6 Public sector organisations with a board-approved sustainable development management plan | • RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk) | | | • GLA (2011) London Climate Change Adaptation Strategy | | | • London Climate Change Partnership (2012) Heat Thresholds Project: Final Report | | | • Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org)) | | | • Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward ; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from "Marmot Review (2010) Fair Society, Healthy Lives"; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken fromwww.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation 16 London Travel Demand Survey (LTDS),2011,taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk
Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk
Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk
Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk
Most heavily vehicular used roads, 2000-2012, taken from Traffic Statistics, Department of Transport
The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk
Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk
Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk
London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk
Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk
Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england
Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk
www.phoutcomes.info
https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works
Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy: http://cieh.org/.
Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-healthy-sustainable-food/london-boroughs/takeaways-toolkit;
Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63.
Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html
New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk
Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk
Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england
Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion
Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf
Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/applications/custom-age-range-creator-tool-gla-population-projections-borough
Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/dataset/package/london-fuel-poverty-risk-indicators-wards
Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk
The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk
UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted 52 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 53 Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk 54 Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939 55 Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345 56 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 57 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
**Domain 1** Improving the wider determinants of health
| AQ | AT | GS | FR | OH | HF | FP | |----|----|----|----|----|----|----| | | | | | | | |
1.1 Children in poverty 1.2 School readiness 1.3 Pupil absence 1.4 First time entrants to the youth justice system 1.5 16-18 year olds not in education, employment or training 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation 1.7 People in prison who have a mental illness or a significant mental illness 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services 1.9 Sickness absence rate 1.10 Killed and seriously injured casualties on England’s roads 1.11 Domestic abuse 1.12 Violent crime (including sexual violence) 1.13 Re-offending levels 1.14 The percentage of the population affected by noise 1.15 Statutory homelessness 1.16 Utilisation of outdoor space for exercise/health reasons 1.17 Fuel poverty 1.18 Social isolation 1.19 Older people’s perception of community safety | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|----------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|---------------|-----------------------------|--------------|---------------|-----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
NOO (2005) Greenspace Information for Greater London CIC (GiGL) National Obesity Observatory (2010-2011) Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-------------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
## Table 4 Healthy Food Data
| LA | Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | |---------------------|--------------------------|---------------------------------------------|----------------------------------------|----------------------------------------------------------| | | | LA | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | | Barking & Dagenham | 28.7 | Once a week 45.1 | 15.4 | 22 | 8 (25.40 - 31.20) | | Barnet | 17.9 | 5 times per week 54.9 | 17.6 | 41 | 16 (43.90 - 56-10) | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 (31.20 - 37.20) | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 (38.20 - 45.30) | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 (27.20 - 45.30) | | Camden | 15.5 | 65.1 | 26 | 28 | 10 (44.60 - 55.10) | | City of London | 19.7 | 52.8 | 28.7 | 48 | | | City of Westminster | 15 | 59.3 | 25.4 | 24 | 10 (48.60 - 52.10) | | Croydon | 24.3 | 58.9 | 19.8 | 44 | 17 (35.50 - 48.8) | | Ealing | 18.1 | 48.2 | 14.6 | 39 | 15 (41.10 - 55.40) | | Enfield | 23.2 | 50.7 | 18.6 | 36 | 14 (33.90 - 41.90) | | Greenwich | 22.6 | 55.4 | 19.5 | 32 | 12 (32.70 - 42.20) | | Hackney | 22.6 | 58.9 | 24 | 27 | 10 (34.90 - 41.60) | | Hammersmith & Fulham| 15.6 | 66.4 | 27.6 | 25 | 10 (41.70 - 48.20) | | Haringey | 20.1 | 54.9 | 17.7 | 36 | 14 (39.20 - 48.00) | | Harrow | 19.2 | 51.7 | 17.1 | 31 | 12 (39.70 - 47.60) | | Havering | 27.3 | 52.5 | 16.4 | 30 | 12 (30.80 - 37.30) | | Hillingdon | 23.2 | 48.9 | 14.1 | 32 | 12 (34.20 - 45.40) | | Hounslow | 20.5 | 52.4 | 17.8 | 28 | 10 (36.90 - 47.20) | | Islington | 18 | 61.3 | 22.4 | 23 | 7 (27.60 - 40.80) | | Borough | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |-------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | 22.53 | | | | | | England | 24.2 | 19.2 | | | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| Area | Excess winter deaths 2010/11 | Population Aged 65 2012 | Population Aged 65 2025 | Population Aged 65 2040 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |-----------------------------|------------------------------|-------------------------|-------------------------|-------------------------|-------------------------------------|-----------------------------------| | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 | | | 75.8 | 28357.6 | 35872.7 | 47363.6 | 22454.5 | 22.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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b6363b760159d8e21b80bb4f584f28de5ee9480a | BETTER ENVIRONMENT, BETTER HEALTH A GLA guide for London’s Boroughs London Borough of Croydon
MAYOR OF LONDON COPYRIGHT
Greater London Authority November 2013
Published by Greater London Authority City Hall The Queen’s Walk More London London SE1 2AA
www.london.gov.uk enquiries 020 7983 4100 minicom 020 7983 4458 ISBN Photographs © Copies of this report are available from www.london.gov.uk
Please print and circulate widely
# CONTENTS
| Section | Page | |----------------------------------------------|------| | CONTENTS | 1 | | FOREWORD | 2 | | INTRODUCTION | 3 | | GREEN SPACES | 5 | | ACTIVE TRAVEL & TRANSPORT | 8 | | SURFACE WATER FLOOD RISK | 12 | | AIR QUALITY | 15 | | HEALTHY FOOD | 18 | | FUEL POVERTY | 21 | | OVERHEATING | 24 | | REFERENCES | 28 | | FURTHER READING | 31 | | PUBLIC HEALTH OUTCOMES FRAMEWORK | 32 | | DATA APPENDIX | 35 | | ACKNOWLEDGEMENTS | 42 | FOREWORD
The Mayor’s vision is for London to be the ‘greatest city on earth’ – this means making the city a great place for Londoners to live, relax, work and raise a family, whilst being attractive to investors. However there are significant inequalities in the health and quality of Londoners’ lives. 2009-11 ONS figures show that average healthy life expectancy reduces by almost one year for every stop eastwards on the District Line between the boroughs of Richmond and Tower Hamlets – a difference of 18 years. The reasons for this are complex but the evidence points strongly to the important impact of the wider determinants of health. This inequality means some Londoners are unable to benefit from and contribute to the city’s dynamism because of preventable health problems. The Mayor wants to ensure all Londoners have the chance to participate in what London has to offer.
Furthermore, if we are to maintain and improve London’s position as the attractive world city it is, we need to create a resilient city, able to deal with extreme weather events, and a city that offers a high quality of life with green spaces, a fantastic public realm and a pleasant, healthy environment.
Local authorities have a unique role to play in achieving these goals, and with their new responsibilities for public health they have a new set of capabilities and levers for catalysing change. Better Environment, Better Health offers a bespoke guide to each of London’s thirty three boroughs, describing the impact of seven wider environmental determinants of health on their specific populations and highlighting possible actions that could be taken to promote a better environment leading to better health and well-being, overall, for Londoners.
For example we know that by encouraging walking and cycling we are not only helping to improve London’s air quality but also cardiovascular health, whilst reducing levels of obesity. The guides demonstrate how such an approach can be taken on a range of issues, without necessarily adding to the financial burden on boroughs’ already squeezed budgets, just by doing things differently.
We hope you will find value in the guide and will use it to drive improvements locally to create strong environments which promote health and well-being, and are resilient.
Finally, we would like to thank the project team for writing the guides and their drive in taking this project forward.
Victoria Borwick Deputy Mayor of London and Mayoral Health Advisor
Matthew Pencharz Senior Advisor for Environment and Energy INTRODUCTION
What is likely to shape the health of our communities over the next twenty or thirty years? What will improve quality of life? What will help people live longer, particularly those most likely to die early? What will improve people’s quality of life, reducing years lost to disability and poor mental and physical health? What will improve the health and wellbeing of children and young people? The United States Center for Disease Control and Prevention (CDC) has argued that in the 20th century public health measures added 25 years to the life of an average American. In its list of top ten interventions half are closely connected to the environment. The same list would be likely to apply to the UK and London. In the 21st century public health measures, including measures seeking to improve the environment, are likely to be as important in supporting good health as improvements in healthcare. We need to prepare, assess and plan for extreme weather events and their impacts not just to improve Londoners’ health and wellbeing but to increase economic prosperity, for business and service continuity and to strengthen community resilience.
In this guide we focus on seven environmental issues and their relationship to health:
- Green spaces
- Active travel & transport
- Surface water flood risk
- Air quality
- Healthy food
- Fuel poverty
- Overheating
For each of these we ask certain questions:
- What is the issue and how do we measure it?
- What is its impact on health? What is the evidence?
- Who will experience the impact most?
- What is the local borough picture?
- What are the key actions to promote good health?
We also provide links to the Public Health Outcomes Framework and suggested further reading. The aim of the bespoke borough guides is to maximise opportunities for improving health and wellbeing, as well as enhancing community resilience. They are aimed at professionals working in health, environment, regeneration, economic development or any aspect of shaping local places, as well as local people interested in improving the quality of life in their communities. Where issues are locally relevant we hope this document will help to start a conversation which enables them to be identified and addressed in borough Joint Strategic Needs Assessments (JSNA) and health and wellbeing strategies. These guides do not cover all of the wider environmental determinants of health. For example, they do not look at some aspects of housing (such as overcrowding), workplace health, wider resource use, access to services, water resource management or noise pollution. More broadly, issues of planning and environmental control tie many of these areas together. How we shape ongoing development and use of our town centres, neighbourhoods and business districts presents opportunities to maximise the health of users: residents, employees and visitors. Similarly, environmental consideration provides the scope to address potential risk to resilience, health and well-being as well as promoting good practice amongst, for example, businesses, landlords and facilities managers. GREEN SPACES
Accessible green space has long been recognised as a wider environmental determinant of good health. Wide ranging research shows strong evidence that outdoor spaces have a beneficial impact on both physical and mental well-being. When considering green space it is helpful to think about both access and use: availability being a necessary but insufficient indicator and determinant of use. A range of data are available on both access and use including the Natural England MENE survey (frequency, mode of access, reasons); London.gov.data: ‘Access to Public Open Space and Access to Nature by Ward’; and Sport England: Active people Survey (physical activity rate).
What is the impact on health? Accessible, safe green space is shown to reduce mental distress, depression and Attention Deficit-Hyperactivity Disorder (ADHD) symptoms in children. Access to a garden or living a short distance to/from green areas, as well as having the potential to lead to improvements in the environment, are associated with a general improvement in mental health and wellbeing. Both the Marmot Review and NICE have highlighted evidence that the presence of good quality outdoor green spaces encourages physical activity which is important across a wide range of health issues such as cardiovascular diseases, obesity, type 2 diabetes and mental/physical health. Increasing and improving the proportion of green spaces in urban centres also has a secondary positive impact on health through other wider environment determinants of health such as urban heat-island effect, surface flood risk and air quality.
Who will experience the greatest impact?
- Urban residents (through impact on quality of life)
- Older people and children
- People suffering from obesity, cardio-vascular diseases, diabetes
- People suffering from mental distress and depression.
The Croydon Picture
- 37 per cent of the borough surface has green space coverage; 6 per cent above the London average.
- Within Croydon, 50 per cent of households in 7 out of 24 wards have deficient access to nature.
- 20 per cent of Croydon’s population participate 5 times per week in physical activity for at least 30 minutes and nearly 60 per cent participate once a week, above the London average.
- Croydon’s adult obesity prevalence is 24 per cent, which is higher than the London rate, 21 per cent, and equal to the national rate, 24 per cent. Figure 1 Green Spaces in Croydon Pink coloured areas are defined as area of deficiency in access to local, small and pocket parks. Proximity rate is +/- 400m from households.
http://www.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx
Potential actions:
Given the significant relationship between health and green spaces in the urban environment some key actions can be identified to improve quality and proximity in order to enhance access and use. This includes considering:
• All London Green Grid Supplementary Planning Guidance to improve biodiversity function and connectivity of green spaces;¹² • The Green Flag Award system to improve quality and promote access to green spaces.¹³ • Promoting physical activity in outdoor spaces through “outdoor gyms” and “guided walking exercise prescription” as a way to recover from cardiovascular diseases and illness.¹⁴
See also sections on surface water flood risk and healthy food. Case Study: Regenerating Burgess Park, London Borough of Southwark
The regeneration of Burgess Park, in Southwark, was underpinned by a comprehensive plan that made the focus of the park a place for healthy living, showing how to combine ‘natural’ regeneration with health promotion. This has also included opportunities for investment, growth and jobs. For example improved access to, and routes through, the park, alongside enhancements to the lakes, planting, lighting and on-site facilities, has made the park a much more attractive and welcoming place, encouraging play and informal recreation. The park also has over 10 km of running, cycling and fitness routes and a new BMX track, to cater for more formal sport and physical activity.
Contact: Ruth Miller, Burgess Park Project Manager [email protected]
Links to Public Health Outcomes Framework
| Primary | Suggested further reading | |---------|---------------------------| | 1.16 Utilisation of outdoor space for exercise/health reasons | • Planning for Health (2009) HUDU | | Additional (for example) | • The Marmot review (2010) www.instituteofhealthequity.org | | 2.6 Excess weight in 4-5 and 10-11 year olds | • www.nice.org.uk | | 2.13 Proportion of physically active and inactive adults | • Benefit of Urban Parks, IFpra (2013): www.ecehh.org | | 2.23 Self-reported well-being | • www.naturalengland.org.uk | | | • www.hphpcentral.com | | | • CMO (2011) Start Active, Stay Active | ACTIVE TRAVEL & TRANSPORT
Travel is essential for connecting people to employment, recreation, education and health and community services. Most people travel in some way every day, making it part of everyday life and therefore a factor that can greatly affect the health of all London’s citizens\\textsuperscript{16}. Travel includes walking and cycling, use of private vehicles, public transport and goods vehicles. In London more than 80 per cent of journeys take place on roads either by motor vehicle, bike or on foot; therefore road transport and street environments have a very significant impact on health and wellbeing\\textsuperscript{17}. There are inequalities in the impact of transport upon health, with the most deprived people and those using the most heavily trafficked roads experiencing the most negative health impacts\\textsuperscript{18}. Only a few London boroughs include a dedicated transport focus in their Joint Strategic Needs Assessment (JSNA), suggesting the impact of travel on health may be underestimated.
What is its impact on health?
A comprehensive public transport network provides many health benefits including access to services, reducing social isolation and increasing work and social opportunities. A major benefit of travel in London is that it enables people to maintain regular physical activity via walking (particularly as part of public transport trips) and cycling. Only around 20 per cent of Londoners currently meet the minimum recommendation for physical activity of 150 minutes per week\\textsuperscript{19}. Everyday physical activity is essential for good physical and mental health, contributing to the prevention of over 20 diseases including obesity, type 2 diabetes, cardiovascular disease and some cancers\\textsuperscript{20}. Cycling and walking can be easily incorporated into daily routines to meet physical activity needs. In London, approximately 4.3 million trips currently made by car or public transport have been identified as easily cyclable\\textsuperscript{21}.
Creating opportunities which enable Londoners to walk and cycle has other potential health benefits including access to safe, green spaces. This could lead to reductions in congestion which, in turn, may reduce overheating and improve air quality. The negative impacts of transport in London are concentrated in the London’s most heavily trafficked streets, where high concentrations of vehicles contribute to air and noise pollution and increased injury risk\\textsuperscript{22}. This can create the impression of a hostile environment for walking and cycling and can exacerbate health inequalities. Motor vehicles are responsible for 41–60 per cent of air pollutants in the UK, which have an impact on cardiovascular and respiratory diseases. People who live on or use heavily trafficked streets are the most adversely affected. The Croydon Picture
- On average 720,000 trips per day are made by people originating in Croydon.\\textsuperscript{23}
- Low numbers of people participate in active travel, with the percentage of people cycling to work below the Greater London average.
- Use of motor vehicles is 11% above the Greater London average.\\textsuperscript{24}
- There was an average of 1208 casualties and 6 fatalities per year on Croydon’s roads between 2005 and 2009: one of the highest rates in London.
- The most heavily used road (excluding motorways) is the A232 with an average daily flow of 42,000 motor vehicles.\\textsuperscript{25}
- There is no proposed cycle super highway in the Borough in the Mayor’s ‘Vision for Cycling’.\\textsuperscript{26}
Figure 2 Journeys in the Croydon by modal share
Source: London Travel Demand Survey
Potential actions:
- Designing street environments to encourage walking and cycling.
- Designing and engineering roads to reduce motor vehicle speed and implement 20mph zones where appropriate.
- Promoting a network of roads and paths that are safe and convenient for cycling and walking.
- Supporting walking and cycling by ensuring that, where possible, the needs of cyclists and pedestrians are considered before other road users. • Promoting cycling through information, maps and cycle hire schemes. • Improving safety of heavily trafficked streets where most traffic related health risk is concentrated. See also section on air quality.
**Case Study: Cycling across Hackney**
Hackney has the highest levels of cycling in London. There are more cyclists than motorists in many parts of the borough. This is evidenced by the fact that 6 per cent of journey’s originating from Hackney are on bike, higher than any other borough in London. Since 2001 the Council has sought to increase the areas that are cycle friendly by improving the design and increasing the accessibility of the road network for cyclists.
• Road safety has been improved by reducing motor traffic speeds and volumes. The aim is to enforce 20 mph speed limits across the borough on all residential roads. • Systematic improvements have been made to the public realm for pedestrians, cyclists and public transport users and a number of designated cycle routes such as the Hackney Park cycle route have been created. • Hackney has invested in a range of cycle parking bays including lockers in estates, hangars (on street bike/storage lockers), on residential streets and large bike ports at transport hubs such as railway stations and town centres. • A comprehensive free cycling training programme has targeted a range of audiences.
*Contact: Ben Kennedy, Hackney Council, [email protected]*
**Example of a cycling improvement scheme Wordsworth Road/Palatine Road, Hackney**
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Healthy Transport Healthy Lives, British Medical Association (BMA) | | 2.13 Proportion of physically active and inactive adults | • NICE Walking and Cycling, Local Government Briefing | | **Additional (for example)** | • Mayors Vision for Cycling, 2013 GLA | | 1.16 Utilisation of outdoor space for exercise/health reasons | • London Borough of Hackney Sample of Schemes for cycling & public realm (2013) | | 2.7 Hospital admissions caused by unintentional and | | | deliberate injuries in under 18s | 3.1 Fraction of mortality attributable to particulate air pollution | |---------------------------------|---------------------------------------------------------------| | | • What are the health benefits of active travel: A systematic review of trials and cohort studies, PloSOne, 8 | SURFACE WATER FLOOD RISK
Surface water flooding describes flooding on the land surface from sewers, drains, groundwater and runoff from land after a heavy rainfall event. Surface water flooding events are difficult to predict but can cause significant disruptions to local populations and to health and other services. London is vulnerable to surface water flooding because some areas have poor drainage systems and large areas of impervious surfaces. Approximately 480,000 London properties and ten hospitals are at risk of surface water flooding in London. Surface water flooding is already a considerable risk and one that, without action, will increase in London due to population growth, urban expansion and ageing of drainage systems. In addition, changing climate patterns are likely to increase the number and intensity of large magnitude precipitation events leading to a likelihood of more frequent and larger magnitude surface water flooding events. Local Flood Authorities are responsible for mapping, assessing and managing local flood risks, identifying whom and what is at risk and the vulnerability of services such as hospitals and schools to surface water flooding.
The Mayor’s Regional Flood Risk Appraisal identifies surface water flood risk as the most likely cause of flooding in London. The GLA, Thames Water, the Environment Agency and London Councils have been developing and delivering a programme to manage this risk, known as Drain London.
There are multiple ways in which flooding can create health risks:
- Fast flowing water has multiple potential hazards such as moving debris which can cause physical injury and even death. Contaminated flood water containing pollutants such as chemicals and sewage can cause disease.
- Flooding of health facilities results in disruption to access to healthcare facilities, with increased difficulty providing routine medical care and increased patient admissions in neighbouring facilities.
- Exhaust emissions from machinery operating in the clean-up process and recovery from a flood can cause carbon monoxide poisoning.
- Disruptions in flood recovery, fear of repeat events and added effects of stress due to insurance claims and refurbishing properties can cause mental health problems. Up to 25 per cent of people who experienced flooding in their homes in the major UK floods in 2007 experienced mental health issues after the event.
Who might experience the greatest impact?
Some areas in London are at risk of surface water flooding particularly where there is inadequate sewer/drainage capacity, and some groups are at greater risk. These include people with limited mobility or/and those who are dependent on medication and/or regular healthcare at home or at a health/social care facility. Those with less flood awareness due to weak social networks and limited or no access to public warning systems and/or information are also at risk.
The Croydon Picture The Environment Agency will be releasing a national surface water flood risk map for each London borough in December 2013. Whilst this will show the areas at risk it should also be noted that any low lying area could also potentially be affected but may not be visible on the maps because of the difficulty in assessing surface water flood risk. The maps will provide borough-specific assessments.
Potential actions: • Developing emergency plans to reduce effects of surface water flood risk. • Including integrated emergency planning for priority groups/services. Developing land management strategies such as green roofs to reduce likelihood of surface water flooding. • Incorporating Sustainable Urban Drainage Systems (SuDS) as an alternative to traditional approaches to managing runoff. • Identifying vulnerable and isolated people and implementing early warning systems and evacuation plans. • Planning for disruption of infrastructure and increase in patient volumes at health and social care facilities. See also section on green spaces and healthy food.
Case studies: Purley (LB Croydon) community flood plan • Purley is vulnerable to flooding and experienced a large flood event in 2007. In response the community developed a Community Flood Plan. • The flood plan is owned by the community, and aims to reduce the impact of flooding. • It advises the community on how to prevent flooding and what to do if it happens. • It is a low cost but effective way of reducing a wide range of impacts of flooding. • The community has created a number of flood wardens who play a central role in advising local citizens and businesses on the flood risk and actions they can take to reduce the impact and nature of flood events.
Surface water flooding event, London, July 2007 • In July 2007, 121mm of rainfall fell in London, mostly on July 20th, causing some significant surface water flooding. • Approximately 400 properties were flooded, 158 schools affected and two hospitals were closed as a result. • The closure of St George’s Hospital caused major disruption. | Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary:** | • GLA Regional Flood Risk Appraisal, 2013 | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • Drain London- http://www.london.gov.uk/priorities/environment/looking-after-londons-water/drain-london Programme | | **Additional (for example)** | • London Climate Change Adaptation Strategy | | 3.6 Public sector organisations with a board-approved sustainable development management plan | • Multi-Agency Flood Plan, LB Havering, 2012 | | | • Floods in the European Union, Health effects and their prevention (2013), World Health Organisation (WHO) | AIR QUALITY
Good air quality has long been recognised a basic requirement for good health. The UK Air Quality Standards Regulations 2000, updated in 2010, set standards for a variety of pollutants that are considered harmful to human health and the environment. These are based on EU limit values and are for a range of air pollutants: sulphur dioxide, nitrogen dioxide, oxides of nitrogen, particulate matter (PM$_{10}$ and PM$_{2.5}$), lead, benzene, carbon monoxide, benzo(a)pyrene and ozone.
Much of the focus of air quality action is on nitrogen dioxide (NO$\_2$) and particulate matter (PM). Particulate matter (PM10 and PM2.5) refers to a complex mixture of non-gaseous particles of varied physical and chemical composition. It is categorised by the size of the particulate. In London, road traffic is a significant source of PM mainly from exhaust emissions and wear, tyre and brake wear and dust from road surfaces.
In addition, older furnaces and boilers may have an impact on the overall air quality environment within a house. Poor air quality could potentially compromise health and well-being.
It should be noted that exceedences apply across the whole of London, particularly near built up areas and major roads.
What is the impact on health? What is the evidence?
Long-term exposure to poor air quality can contribute to the development of chronic diseases and can increase the risk of respiratory illness. In Greater London it is estimated that the equivalent of 4,267 deaths in London in 2008 were attributable to long-term exposure to PM2.5. It should be noted that this does not relate to real individuals, but is a statistical construct whereby all health impact associated with air pollution are amalgamated. Since everyone breathes the air where they are, a more realistic interpretation is that the risks are distributed across the whole population, with a total mortality impact of the concentrations equivalent to that number of deaths. At high concentrations NO$_2$ can result in inflammation of a person’s airways; long-term exposure can affect lung function and respiratory symptoms and can increase asthma symptoms. PM aggravates respiratory and cardiovascular conditions. The smaller the particle, the deeper it will deposit within the respiratory tract. The impact of PM$_{2.5}$ on health is especially significant.
Who may experience the greatest impact?
- People who live or work close to areas with poor air quality
- People with respiratory problems
- People with heart problems The Croydon Picture
- On some of Croydon’s main arterial roads there are high concentrations of NO2 (see map) which are above the recommended limits.
- Statistical tools are used by public health specialists to try to understand the comparative impact of different factors on mortality. Using these techniques, Croydon is the 5th least affected area by poor air quality in London. 33
- In 2011 the GLA identified five Air Quality Focus Areas within Croydon.
Figure 3 NO2 emissions on Croydon Roads
Potential actions:
- Promoting a modal shift to encourage higher proportions of walking, cycling and use of public transport and less use of cars. This could include a wide range of measures from systemic action within the planning and transport system to one-off events such as car free days. Such measures could lead to significant improvements in air quality.
- Promoting energy efficiency in homes, public and commercial offices. For more information see the Energy Company Obligation34.
- Individual steps could be taken to: a) reduce personal contribution to air pollution such as engine idling; and, b) reduce risk of exposure where it is potentially hazardous to health (particularly for people with underlying vulnerabilities) through systems such as airText.
See also section on active travel and transport. Case studies: Reducing exposure – City Air ‘CityAir’ was launched in May 2011 in the City of London to encourage businesses to help to improve local air quality.
Best practice guidance and case studies were produced to provide advice to City businesses on reducing emissions from buildings, encouraging staff to walk and cycle in the City, using purchase contracts to require low polluting vehicles and building air quality targets into environmental reporting. Information is available at www.cityoflondon.gov.uk/cityair. To date over 50 businesses have been engaged, representing over 40,000 employees. CityAir employee walking campaigns have been very popular.
Contact: Ruth Calderwood [email protected]
Mitigating impact – Croydon Air Text In 2005 the London Borough of Croydon developed with the European Space Agency and Cambridge Environment Research Consultants an air quality forecasting service called ‘airTEXT’. AirTEXT provides information on pollution levels in the borough using ‘low’, ‘moderate’ and ‘high’ bandings. Whenever moderate or high pollution levels are expected, subscribers to airTEXT receive a text message, call or voicemail. This enables recipients to respond, if necessary, for example by taking a different route/mode of transport to work, keeping their medication with them or not exercising outside on certain days. In 2012 a new airTEXT app was developed which provides information on four health-relevant alerts: UV, pollen, air quality and temperature. Currently around 10,000 people use the airTEXT service through text, Twitter or the website.
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|--------------------------| | **Primary** | • GLA Local Authority Air Quality Guides | | 3.1 Fraction of mortality attributable to particulate air pollution | • www.londonair.org.uk | | **Additional (for example)** | • www.comeap.org.uk | | 2.13 Proportion of physically active and inactive adults | • NICE Guidance PH41 Walking and cycling: local measures to promote walking forms of travel or recreation | | 1.14 The percentage of the population affected by noise | • Kilbane-Dawe (2012) 14 Cost Effective Actions to Cut Central London Air Pollution | HEALTHY FOOD
Access to healthy food is an important wider environmental determinant of health. Improving the food environment means enhancing the availability of affordable and nutritious food and recognising the relationship between the geography of food retailing and dietary patterns. It also means considering of sustainable production, processing and delivery. Policy attention has focused on the role of local planning measures and the impact of large supermarkets, provision of food growing places, the physical environment and education on a healthy diet. Many factors influence the availability of healthy food. The predominance of unhealthy food and low income may interact with environmental factors to limit access.
Access to healthy food can be measured through the following indicators: cost, quality, geography, mode of transportation, physical proximity and socio-economic variables.
What is the impact on health? What is the evidence? Reduced access to healthy food and the ready and cheap availability of unhealthy foods (such as fast-food and takeaway outlets) increases the risk of a diet based on high consumption of sugar, saturated fat and salt and low in vegetables and fruit. This could lead to obesity, cardiovascular disease, type 2 diabetes and some cancers associated with obesity. The National Obesity Observatory estimated the cost to the UK economy of overweight and obesity to be £15.8 billion per year (2007). This has an impact on children as well as adults. Studies have also found that an increased density of fast food restaurants is directly related to increased Body Mass Index (mass index showing body fat based on height and weight) and that having a fast food outlet within 160m of a school is associated with a 5 per cent increase in obesity.
The Croydon Picture
- Croydon’s adult obesity rate is 24 per cent. This is higher than the London average (21 per cent), and equal to the national average (24 per cent).
- Croydon’s obesity rate among primary school children (year 6) is 23 per cent. This is higher than the national and equal to the London rates (19 and 23 per cent respectively).
- In 17 out of 44 Middle Super Output Areas (two darkest blue areas on map), 36-49 per cent of the total population consume five portions of fruits and vegetables a day.
- 20 per cent of Croydon’s population participate five times per week in physical activity for at least 30 minutes and nearly 59 per cent participate once a week. Figure 4 Healthy food consumption in Croydon Model based consumption of fruit and vegetables in Croydon by ward, 2006-8 LA population consuming five portions of fruits and vegetables a day.
Potential actions • Developing schemes to promote local and easily accessible healthy food from retailers (for example www.cieh.org/healthier-catering-commitment.html). • Using planning controls to manage proliferation of fast-food outlets on high streets and near schools. • Promoting the GLA Healthy Schools London Awards Initiative (www.healthyschoolslondon.org.uk). Healthy food choice in schools is recognised as a way to tackle obesity and chronic diseases caused by poor nutrition. This includes diet, education, and healthy meals provided at schools and accessible from nearby areas. • Capital Growth (www.capitalgrowth.org) initiatives have the potential to promote community food growing. These activities reconnect people to the food system, engages them in issues such as where their food comes from, seasonality, healthy eating, and food security. • Procuring from local food suppliers and retailers, signed up to the Healthier Catering Commitment Plan. See also section on green spaces and surface flood risk.
**Case Study: Fast-food Fix – LB Waltham Forest - Tackling the Takeaways: Making an Impact**
- Community engagement on ‘takeaways’ in the borough identified dissatisfaction with the number and location of 241 local hot food takeaways (HFT). This included schools, concerned that the proximity of HFTs to schools had a negative impact on healthy eating programmes.
- A HFT corporate steering group was established to:
- Ensure existing HFT businesses operated as responsibly as possible;
- Develop strategies to tackle the wider social, environmental and economic issues associated with the proliferation of HFTs in the borough.
**Achievements:**
- Supplementary planning documents were developed restricting the opening of new HFT shops. So far, 20 applications have been refused planning permission and only 4 HFTs have been given planning permission.
- HFTs in the borough have been reduced from 241 to 194
*Contact: Gordon Glenday, Head of Planning Policy and Regeneration*\
[email protected]
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** | • NICE guidance: www.nice.org.uk | | 2.11 Diet | • Takeaways Toolkit (2012): see www.london.gov.uk | | **Additional (for example):** | • District Action on Public Health: http://districtcouncils.info/; | | 2.6 Excess weight in 4-5 and 10-11 year olds | • CIEH Food Policy, (2013): www.cieh.org | | 2.12 Excess weight in adults | • Healthy People, Healthy Lives, (2011); | | 2.17 Recorded diabetes | • Good planning for Good Food: see www.sustainweb.org/publications/?id=192 | FUEL POVERTY
There are three factors that can result in fuel poverty, often in combination: low income, poor energy efficiency in homes and increasing energy prices. A household is now defined as ‘fuel-poor’ if its total income is below the poverty line (taking into account housing energy costs) and its energy costs are higher than typical for its household type. Data on fuel poverty is collected from the English Housing Survey Domestic Fuel Inquiry and published annually by the Department of Energy and Climate Change (DECC). More than 560,000 households in London are estimated to be spending more than ten per cent of their basic income on energy (the previous official definition of fuel poverty). Fuel poverty has the potential to have an adverse impact on children already in poverty as well as to increase the numbers of children living in poverty. Fuel poverty is also known to have an impact on well-being as indicated in self-reported well-being surveys.
What is the impact on health? What is the evidence?
Fuel poverty can have a negative impact on health, especially on people with pre-existing medical conditions. Fuel poverty results in cold homes, exacerbating cardiovascular and respiratory conditions, rheumatoid arthritis and influenza, and negatively affects mental health. The effects of fuel poverty may be compounded by social isolation, poor emotional well-being, reduced mobility and poor diet. Cold homes are also known to affect cognitive performance. However, actual deaths are only one part of the problem. Age UK estimates the cost to the NHS of cold homes as £1.36 billion per year (not including additional costs to social services for subsequent care). The recent DECC fuel poverty framework attempts to monetise the health impacts of fuel poverty. It refers to a model estimating changes in people’s health from the installation of energy efficiency measures (resulting from changes in the indoor temperature and pollutant exposure).
Who might experience the greatest impact?
Fuel poverty affects vulnerable groups such as older people, the group most likely to suffer excess winter deaths. Children, people with disabilities and/or those living in deprivation are also at greater risk of suffering from the effects of fuel poverty as they often need to spend longer time indoors and require heating for longer periods of time. Additionally, private sector tenants are at significantly greater risk of encountering the worst housing quality and are also least likely to access support or feel empowered to do anything about the issue.
The Croydon Picture
- The older population of Croydon is projected to rise from 46,200(2012) to 61,200 (2025) and 84,100 (2040).
- A Fuel Poverty Risk score has been developed. There are some stark disparities between wards with Selsdon and Ballards achieving the eighth lowest risk score of all London wards but Selhurst being 596th out of 625 wards and at significantly greater risk. Nine Croydon wards are at low risk of fuel poverty and two at high risk according to the fuel poverty risk indicator. However, five wards show a negative trend of significant reduction in their score between 2006 and 2010.\\textsuperscript{18}
The Fuel Poverty Risk Index was developed by the London Assembly Health and Public Services Committee in their investigation into fuel poverty in London. It is calculated on the basis of twelve indicators across four sections:
- **Housing**
- Dwellings without central heating
- Uninsulated cavity walls
- Lofts with less than 150mm insulation
- **Health**
- Health Deprivation & Disability domain (ID2010)
- Standardised Mortality Ratio
- Incapacity benefit claimant rate
- **Older people**
- People aged 60 and over
- Older people claiming pension credit
- **Worklessness**
- Unemployment
- **Poverty**
- Income support claimant rate
**Potential actions:** The first key step to any intervention is to identify vulnerable areas/individuals and map the extent of the problem. Vulnerable individuals and households can be identified and supported through:
- Close collaboration with third-sector organisations which are working with vulnerable groups/isolated populations/people to refer or inform them of available support.
- Home energy improvements as a vital sustainable solution to fuel poverty. There are opportunities through initiatives such as the Green Deal and Energy Company Obligation\\textsuperscript{59}. The Mayor’s RE:NEW Programme support team\\textsuperscript{50} can offer advice on funding, procurement and best practice to partner with energy efficiency providers. In addition, the issue of overheating should be taken into account. when implementing any energy efficiency works especially wall and loft insulation. Whilst take up of the Green Deal to date has not been significant, it remains an important delivery mechanism to reduce fuel poverty in London. (See section on overheating).
- Promoting collaboration between local authorities and private landlords in line with upcoming energy efficiency legislation (2018 energy efficiency requirements).
- Raising awareness of benefits entitlement and support through public health campaigns, working with third sector organisations and the local community.
See also section on overheating and air quality.
**Case Study: Barts Health in Tower Hamlets – Reducing Fuel Poverty**
Barts Health has recently established a partnership project with British Gas and Global Action Plan that aims to reduce fuel poverty in Tower Hamlets. Hospital staff, GPs and community groups refer patients from vulnerable groups or those people living in hard-to-treat homes to the Energy Companies Obligation, supporting the installation of energy efficiency measures in low-income households. The project will train and support 40 health professionals (GPs, outpatient care staff and community nurses) plus community groups. The partnership initially aims to target 200 homes. The initiative is not just a referral mechanism but will raise awareness among vulnerable groups, medical practitioners and the wider community on what steps could be taken to address fuel poverty. Such an initiative could be linked with other seasonal health initiatives such as winter flu jab promotion.
*Contact: Fiona Daly, Barts Health NHS Trust, [email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary** | • Marmot Review Team, 2011 – The Health Impacts of Cold Homes and Fuel Poverty | | 1.17 Fuel poverty | • Age UK, 2012 - The Cost of Cold | | **Additional (for example)** | • Hills, 2012, Getting the measure of fuel poverty | | 1.1 Children in poverty | • DECC, 2013, Helping-households-to-cut-their-energy-bills | | 2.23 Self-reported well-being | • DECC, 2013, Fuel Poverty, A Framework for future action. | | 4.15 Excess winter deaths | • London Assembly, 2012, In from the cold? Tackling fuel poverty in London, GLA | OVERHEATING
What do we mean by overheating? How do we measure it?
Extreme weather events are more likely to be a factor affecting people’s health in future years. Heatwaves, such as the one in the summer of 2003 which caused the death of 2000 people, could become more frequent (London had an excess mortality of 42%, compared to England of 17%). The Urban Heat Island (UHI) effect means that urban areas tend to be hotter than rural areas. This is due to increased absorption of the sun on concrete compared with green or brown spaces, reduced cooling from breezes due to buildings and increased heat production from houses, industry, businesses and vehicles. This is especially relevant for London with its densely built-up central boroughs and high concentration of traffic and people. The UHI effect is not universally experienced across the city as it relates to availability of green space/water bodies, building density, amount of traffic and energy consumption. However there are particularly vulnerable spots in each borough, as well as vulnerable people across areas. (See maps below). When considering London as a whole, the costs associated with overheating mortality are expected to be around £7-78 million in the 2030s (473-712 heat-attributable deaths); by the 2050s, this could rise to £13-149 million (1200-1838 heat-attributable deaths).
What is the impact on health?
Overheating can cause heat strokes, exacerbates existing cardiovascular and respiratory conditions and affects people with respiratory conditions due to a combination of overheating and poor air quality. A heatwave can also affect mental health with peak suicide and homicide rates reported during previous heatwaves in the UK. Research has shown a direct link between a temperature rise to more than 24°C and risk of death. Additionally, people may suffer from heat-related illnesses, such as heat cramps, heat rash and heat syncope (fainting as a result of overheating). Overheating may lead to dehydration, especially in older people, and there is a strong link between high temperatures, dehydration and blood stream infections, also particularly in older people.
Who will experience the greatest impact?
Certain housing conditions (older and small top floor, purpose built flats because of the low solar protection offered by the top floor of poorly insulated flats; and newly constructed houses not suitably designed for extreme heat events and the quality of the built environment could potentially contribute to the overheating of an environment. Certain groups such as children have less efficient body cooling mechanisms and are therefore at greater risk. Similarly, the body’s thermoregulatory mechanisms could be impaired in older people and those with chronic health conditions. Those considered vulnerable to overheating may not always perceive themselves to be at risk. Simple measures to reduce the negative impacts of overheating are not always implemented which could place these groups at even greater risk. The Croydon Picture The map below shows temperature differences across the borough and also shows the effects of existing infrastructure and green space on overheating risk. Combined with data on vulnerable populations this will provide a more precise picture of the biggest risk areas.
Figure 6: Average temperatures in Croydon
Model simulations of London’s temperatures were provided by Dr. Sylvia I. Bohnenstengel (University of Reading) using the Met Office Unified Model and MORUSES (MetOffice Reading Urban Surface Exchange Scheme) (Bohnenstengel et al., 2010). Figure 7 Temperature across the capital London Average Screen Temperatures in degrees Celsius for the period 26 May-19 July 2006 Equal count mapping method: each interval; contains 7% of the total number of grid points
Potential actions: The NHS Heatwave Plan for England 2013 suggests actions to mitigate and/ or ameliorate some of the effects of future heatwaves and hot weather. Short term actions include:
- Modifying surface properties and integrating green infrastructure, for example, ‘cool roofs’, ‘green roofs’ and ‘cool pavements’ (paving materials that tend to reflect, provide cooler surfaces and increase water evaporation ratio).
- Planting trees and vegetation and creating green spaces to enhance evaporation and shading, (temperatures in and around green spaces can be several degrees lower than their surroundings). The development of ‘green spaces’ can not only help to alleviate the impact of the UIH effect but has been shown to have other positive health benefits such as improving mental health and well-being. Increasing green infrastructure also improves air quality.
- Insulating homes. This protects against hot weather as well as reducing heating needs in the winter.
- Introducing an active transport plan or car-sharing schemes. These will reduce numbers of vehicles used leading to improvements in air quality, whilst promoting healthy living.
- Using reflective paint on south-facing walls and roofs.
- Taking fuel poverty into account when implementing any energy efficiency works. • Considering using the planning process to influence planning decisions on housing and commercial properties’ heat thresholds. • Retrofitting public buildings with energy-saving technology – including low-energy lighting and high-efficiency boilers. This presents one of a number of opportunities to improve on infrastructure, growth and support local job creation.
The Plan makes the case for a medium term (10–30 years) and long term approach (30+ years). See also section on fuel poverty and air quality.
**Case Study: London Borough of Islington and the CRISP Project** CRISP is a joint project between Islington Council and North London Cares that took place in the beginning of 2013. Research among residents aged 65+ concluded that the majority of elderly people did not take hot weather issues as seriously as cold weather issues. Although levels of information were generally found to be good, there were some everyday actions being taken that might exacerbate the risk of overheating. The project identified the need for a widespread information campaign on proper use of windows, curtains and fans. The research identified challenges of communicating information about overheating. The findings and recommendations will inform Islington’s Council Seasonal Resilience Plan and the work of the Seasonal Health Interventions Network (SHINE).
*Contact: John Kolm-Murray, Islington Council*
*[email protected]*
| Links to Public Health Outcomes Framework | Suggested further reading | |------------------------------------------|---------------------------| | **Primary:** 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | • NHS Heatwave Plan for England\
• RE:FIT is the Mayor of London’s innovative scheme to reduce carbon emissions in Greater London, [www.refit.org.uk](http://www.refit.org.uk)\
• GLA (2011) London Climate Change Adaptation Strategy\
• London Climate Change Partnership (2012) Heat Thresholds Project: Final Report\
• Built Infrastructure for Older People in Conditions of Climate Change ([BIOPICCC](http://biopiccc.org))\
• Design and Delivery of Robust Hospital Environments in a Changing Climate ([De2RHECC](http://de2rhecc.org)) | | **Additional (for example)** 3.6 Public sector organisations with a board-approved sustainable development management plan | |
27 REFERENCES
1 Centre for Disease Control and Prevention (CDC), 2013, from CDC (USA); www.cdc.gov/about/history/tengpha.htm 2 Evidence demonstrating links between access to green spaces and health: Coombes, E., Jones, A P, & Hillsdon, M. (2010). The relationship of physical activity and overweight to objectively measured green space accessibility and use. Social science & medicine, 70(6), 816-822; Maas, J., Verheij, R. A., et al (2006). Green space, urbanity, and health: how strong is the relation? Journal of epidemiology and community health, 60(7), 587-592; Nielsen, T. S., & Hansen, K. B. (2007). Do green areas affect health? Results from a Danish survey on the use of green areas and health indicators. Health & place, 13(4), 839-850; Schipperijn, J., Bentsen, P et al (2013). Associations between physical activity and characteristics of urban green space. Urban Forestry & Urban Greening, 12(1), 109-116. Mitchell, R., & Popham, F. (2008). Effect of exposure to natural environment on health inequalities: an observational population study. The Lancet, 372(9650), 1655-1660. 3 MENE Survey evidencing frequency, mode and motivation in access to Green Space, (2012-2013), from Natural England www.naturalengland.org.uk/ourwork/research/mene.aspx 4 Local access to public open spaces, taken from Access to Public Open Space, (2012), London Data Store http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward; 5 Survey showing number of people participating in sport in local communities, taken from Active People Survey (2013), Sport England www.sportengland.org/research/active_people_survey.aspx 6 Use of small public urban green spaces and health benefits, Peschardt, K. K., Schipperijn, J., & Stigsdotter, U. K. (2012) Use of small public urban green spaces (SPUGS). Urban Forestry & Urban Greening, 11 (3), 235-244 7 Physical Activity and the Environment, taken from “Marmot Review (2010) Fair Society, Healthy Lives”; NICE (2008). Physical activity and the environment, PH Guidance 8 8 Toolkit showing levels of adult obesity, taken from Adult Obesity (2005) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 9 Access to Public Open Space, (2012), taken from London Data Store, http://data.london.gov.uk/datastore/package/access-public-open-space-and-nature-ward 10 Toolkit showing levels of adult obesity, taken from Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html 11 Toolkit showing levels of adult obesity, taken from Health Need Assessment Toolkit, Data Period, 2006-2008) http://hna.londonhp.nhs.uk/JSNA.aspx 12 GLA All London Green Grid Supplementary Planning Guidance, (2012) taken from, www.london.gov.uk/priorities/planning/publications/all-london-green-grid-spg; Datasets to support this guidance, taken fromwww.gigl.org.uk/Ourdatasets/Openspace/tabid/117/Default.aspx; 13 Green flag award system for green spaces, taken from Keep Britain Tidy, http://greenflag.keepbritaintidy.org/ 14 Southwark Council outdoor gym, taken from www.southwark.gov.uk/info/200435/free_outdoor_activities/2611/outdoor_gyms/1 15 Burgess Park regeneration project July 2012, taken from www.southwark.gov.uk/news/article/792/burgess_park_to_reopen_after_8_million_transformation 16 London Travel Demand Survey (LTDS),2011, taken from Transport for London, Travel in London, Supplementary Report: www.tfl.gov.uk 17 Evidence demonstrating link between transport and health, March 2013, Keeping well in hard times: Protecting and improving health & well-being in an income shortfall: taken from, London Health Inequalities Network. 18 Link between heavily trafficked streets and health impacts, 2005, taken from Health Development Agency Making the case: Improving health through transport. 19 Data showing physical activity rates in London, 2010, taken from Public Health England: Physical Activity in London: Key Facts. 20 Link between active travel and health, 2012, taken from British Medical Association, Healthy Transport= Healthy Lives, BMA, www.bma.org.uk Analysis of cycling potential, 2010, taken from Transport for London, December Analysis of Cycling Potential, Travel in London, www.tfl.org.uk
Report showing negative impacts of transport in London, 2011, taken from Mackett, R.L. & Brown, R.; Transport, Physical Activity and Health. Present knowledge and the way around. Centre for Transport Studies, University College London, www.cege.ucl.ac.uk
Number of travel trip by each modal share, 2011, taken from London Travel Demand Survey. Transport for London, www.tfl.org.uk
Reported road casualties in Great Britain, annual report 2011, taken from www.gov.uk
Most heavily vehicular used roads, 2000–2012, taken from Traffic Statistics, Department of Transport
The Mayor’s proposed cycle superhighways for London, 2013, taken from Mayor’s Vision for Cycling, GLA, www.tfl.gov.uk
Hackney’s case study showing cycling promoting measures, 2013, taken from London Borough of Hackney Sample of Schemes for cycling & public realm. www.hackney.gov.uk
Surface Water Management Plan (SWMP), 2010, taken from, Technical Guidance. DEFRA www.defra.gov.uk
London Regional Flood Risk Appraisal, October 2009, taken from GLA, www.london.gov.uk
Overall strategic plan for London, the London Plan, 2011, taken from GLA, www.london.gov.uk
Secondary impact of floods on health, 2013, World Health Organisation; Floods in the WHO European Union, Health effects and their prevention. Edited by Bettina Menne and Virginia Murray, taken from Public Health England’s website, www.gov.uk/government/organisations/public-health-england
Effects of floods on mental health, 2011, taken from Murray, V, Caldin et al (2011); The Effects of Floods on Mental Health, Health Protection Agency, www.hpa.org.uk
www.phoutcomes.info
https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works
Access to healthy food, taken from, White (2007), Food Access and Obesity. Obesity reviews, 8 (s1), 99-107.; Chartered Institute for Environment and Health, 2013, taken from Chartered Institute for Environment and Health Food Policy: http://cieh.org/.
Takeaways Toolkit, 2012, taken from, London Food Board and Chartered Institute of Environmental Health http://www.london.gov.uk/priorities/environment/promoting-healthy-sustainable-food/london-boroughs/takeaways-toolkit;
Effect of fast food restaurants on obesity and weight gain, taken from, Currie, J., Vigna, SD et al (2010), The effect of fast food restaurants on obesity and weight gain. American Economic Journal: Economic Policy, 32-63.
Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Health Needs Assessment Toolkit, (2011-2012), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Health Needs Assessment Toolkit, (2006-2008), NHS UK, Public Health England, http://hna.londonhp.nhs.uk/JSNA.aspx
Adult Obesity (2011-2012) National Obesity Observatory, NHS UK, Public Health England; http://www.sepho.nhs.uk/NOO/e-Atlas/adult/atlas.html
New Fuel Poverty Definition 2013, taken from Department of Energy and Climate Change (DECC), taken from Fuel Poverty, A Framework for future action. www.decc.gov.uk
Tackling fuel poverty in London 2012, taken from GLA - London Assembly In from the cold? www.london.gov.uk
Fuel poverty impact on wellbeing, 2011, taken from, Marmot Review Team, The Health Impacts of Cold Homes and Fuel Poverty, www.gov.uk/government/organisations/public-health-england
Cost of fuel poverty to the NHS, 2012, taken from AgeUK, The Cost of Cold www.ageuk.org.uk/latest-news/archive/cold-homes-cost-nhs-1-point-36-billion
Monetising health impacts of fuel poverty, 2013, taken from Department of Energy and Climate Change, Fuel Poverty, a Framework for Future Action- Analytical Annex https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211137/fuel_poverty_strategic_framework_analytical_annex.pdf
Custom Age Range Creator Tool for GLA Population Projections 2013, taken from GLA London Datastore www.data.london.gov.uk/datastore/applications/custom-age-range-creator-tool-gla-population-projections-borough
Fuel Poverty Risk Indicators Toolkit, 2013, taken from GLA London Datastore www.data.london.gov.uk/datastore/package/london-fuel-poverty-risk-indicators-wards
Green Deal and Energy Company Obligation information, 2012, taken from Department of Energy and Climate Change, www.decc.gov.uk
The Mayor’s RE:NEW Programme, 2013, taken from GLA, www.london.gov.uk
UK Energy Act 2011, taken from Department of Energy and Climate Change www.legislation.gov.uk/ukpga/2011/16/contents/enacted 52 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 53 Potential costs of overheating including data, 2013, taken from Department for Environment, Food and Rural Affairs, The Economics of Climate Resilience: Health and Well-being Theme CA0401 www.defra.gov.uk 54 Overheating and health, 2011, taken from Health Protection Agency, Overheating and health: a review into the physiological response to heat and identification of indoor heat thresholds www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1317133912939 55 Association of mortality with high temperatures in a temperate climate: England and Wales, Armstrong et al. (2010) Association of mortality with high temperatures in a temperate climate: England and Wales, Journal of Epidemiology and Health, vol.65:4, 340-345 56 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england 57 Heatwave Plan 2013, taken from Public Health England, Making the case: the impact of heat on health – now and in the future www.gov.uk/government/organisations/public-health-england FURTHER READING
- Local Authorities’ strategies (e.g. Planning, Transport) are monitored on an annual basis and PHOF indicators may be relevant additions to these strategies and a way of spreading a public health approach across the Council: www.phoutcomes.info provides useful borough summaries for this approach.
- The Index of Multiple Deprivation (IMD) highlights the impact of wider environmental determinants most adversely on those in more deprived areas: www.gov.uk/government/organisations/department-for-communities-and-local-government/series/english-indices-of-deprivation
- Public Health has an important role in reminding other departments about health inequalities and intra borough inequalities. Basic summaries can be found at: www.apho.org.uk/?QN=P_HEALTH_PROFILES
- The local authority planning process offers the opportunity to mainstream some of these issues through planning guidance. The Town & Country Planning Association offers a useful guide: www.tcpa.org.uk/data/files/TCPA_FINAL_Reuniting-health-planning.pdf
- The NHS London Healthy Urban Development Unit www.healthyurbandevelopment.nhs.uk and their Watch Out for Health Checklist and the Health Impact Assessment Gateway http://www.apho.org.uk/default.aspx?QN=P_HIA offers useful insight across many fields including regeneration, social infrastructure planning, housing, policy development, planning advocacy and negotiations, planning obligations, development management, master planning, environmental and health impact assessment.
- Some themes in this Guide, for example, (food, fuel poverty, active travel) are addressed in Keeping Well in Hard Times hwww.lho.org.uk/Download/Public/17975/1/Keeping per cent20well per cent20in per cent20hard per cent20times.pdf
- There is a useful guide for developers on maximising environmental benefits at: www.environment-agency.gov.uk/research/planning/147852.aspx
- Effect of exposure to natural environment on health inequalities: an observational population study http://eprints.gla.ac.uk/4767/1/4767.pdf
- Great Outdoors: How Our Natural Health Service Uses Green Space To Improve Wellbeing www.fph.org.uk/uploads/bs_great_outdoors.pdf PUBLIC HEALTH OUTCOMES FRAMEWORK
Mapping environmental determinants to the 2013-2016 Public Health Outcomes Framework
| Primary | Secondary | |---------|-----------| | Improvements or worsening will have a direct impact on the indicator | Improvements or worsening may have an impact on this indicator |
| AQ – Air Quality | AT - Active Travel and Transport | GS – Access to Green Space | |------------------|---------------------------------|---------------------------| | FR – Surface Flooding | OH - Overheating | FP – Fuel Poverty | | HF - Healthy Food | | |
### Domain 1
Improving the wider determinants of health
| AQ | AT | GS | FR | OH | HF | FP | |----|----|----|----|----|----|----| | | | | | | | |
1.1 Children in poverty 1.2 School readiness 1.3 Pupil absence 1.4 First time entrants to the youth justice system 1.5 16-18 year olds not in education, employment or training 1.6 Adults with a learning disability/in contact with secondary mental health services who live in stable and appropriate accommodation 1.7 People in prison who have a mental illness or a significant mental illness 1.8 Employment for those with long-term health conditions including adults with a learning disability or who are in contact with secondary mental health services 1.9 Sickness absence rate 1.10 Killed and seriously injured casualties on England’s roads 1.11 Domestic abuse 1.12 Violent crime (including sexual violence) 1.13 Re-offending levels 1.14 The percentage of the population affected by noise 1.15 Statutory homelessness 1.16 Utilisation of outdoor space for exercise/health reasons 1.17 Fuel poverty 1.18 Social isolation 1.19 Older people’s perception of community safety | Domain 2 | Health Improvement | AQ | AT | GS | FR | OH | HF | FP | |----------|--------------------|----|----|----|----|----|----|----| | 2.1 | Low birth weight of term babies | | | | | | | | | 2.2 | Breastfeeding | | | | | | | | | 2.3 | Smoking status at time of delivery | | | | | | | | | 2.4 | Under 18 conceptions | | | | | | | | | 2.5 | Child development at 2-21/2 years | | | | | | | | | 2.6 | Excess weight in 4-5 and 10-11 year olds | | | | | | | | | 2.7 | Hospital admissions caused by unintentional and deliberate injuries in under 18s | | | | | | | | | 2.8 | Emotional well-being of looked after children | | | | | | | | | 2.9 | Smoking prevalence – 15 year olds | | | | | | | | | 2.10 | Self-harm | | | | | | | | | 2.11 | Diet | | | | | | | | | 2.12 | Excess weight in adults | | | | | | | | | 2.13 | Proportion of physically active and inactive adults | | | | | | | | | 2.14 | Smoking prevalence – adults (over 18s) | | | | | | | | | 2.15 | Successful completion of drug treatment | | | | | | | | | 2.16 | People entering prison with substance dependence issues who are previously not known to community treatment | | | | | | | | | 2.17 | Recorded diabetes | | | | | | | | | 2.18 | Alcohol-related admissions to hospital | | | | | | | | | 2.19 | Cancer diagnosed at stage 1 and 2 | | | | | | | | | 2.20 | Cancer screening coverage | | | | | | | | | 2.21 | Access to non-cancer screening programmes | | | | | | | | | 2.22 | Take up of the NHS Health Check programme – by those eligible | | | | | | | | | 2.23 | Self-reported well-being | | | | | | | | | 2.24 | Injuries due to falls in people aged 65 and over | | | | | | | | | Domain 3 | Health Protection | AQ | AT | GS | FR | OH | HF | FP | |----------|-------------------|----|----|----|----|----|----|----| | 3.1 Fraction of mortality attributable to particulate air pollution | | | | | | | | | | 3.2 Chlamydia diagnoses (15-24 year olds) | | | | | | | | | | 3.3 Population vaccination coverage | | | | | | | | | | 3.4 People presenting with HIV at a late stage of infection | | | | | | | | | | 3.5 Treatment completion for Tuberculosis (TB) | | | | | | | | | | 3.6 Public sector organisations with a board approved sustainable development management plan | | | | | | | | | | 3.7 Comprehensive, agreed inter-agency plans for responding to public health incidents and emergencies | | | | | | | | |
| Domain 4 | Healthcare public health and preventing premature mortality | AQ | Tr | GS | FR | OH | HF | FP | |----------|----------------------------------------------------------|----|----|----|----|----|----|----| | 4.1 Infant mortality | | | | | | | | | | 4.2 Tooth decay in children aged 5 | | | | | | | | | | 4.3 Mortality rate from causes considered preventable | | | | | | | | | | 4.4 Under 75 mortality rate from all cardiovascular diseases (including heart disease and stroke) | | | | | | | | | | 4.5 Under 75 mortality rate from cancer | | | | | | | | | | 4.6 Under 75 mortality rate from liver disease | | | | | | | | | | 4.7 Under 75 mortality rate from respiratory diseases | | | | | | | | | | 4.8 Mortality rate from infectious and parasitic diseases | | | | | | | | | | 4.9 Excess under 75 mortality rate in adults with serious mental illness | | | | | | | | | | 4.10 Suicide rate | | | | | | | | | | 4.11 Emergency readmissions within 30 days of discharge from hospital | | | | | | | | | | 4.12 Preventable sight loss | | | | | | | | | | 4.13 Health-related quality of life for older people | | | | | | | | | | 4.14 Hip fractures in people aged 65 and over | | | | | | | | | | 4.15 Excess winter deaths | | | | | | | | | | 4.16 Estimated diagnosis rate for people with dementia | | | | | | | | | Table 1 – Green Space Data
| Borough Green Space Surface | Adult Obesity | Green Space Access Deficiency (% value per Ward) | Participation in Physical Activity % per week - Adult Obesity | Obesity Prevalence | |-----------------------------|---------------|--------------------------------------------------|-------------------------------------------------------------|-------------------| | | | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | | Barking & Dagenham | 33.6 | 17.0 | 4.0 | over 50% | 45.1 | 15.4 | 28.7 | | Barnet | 41.3 | 21.0 | 4.0 | over 40% | 54.9 | 17.6 | 17.9 | | Bexley | 31.7 | 21.0 | 4.0 | over 40% | 60.8 | 20.0 | 26.4 | | Brent | 21.9 | 21.0 | 4.0 | over 40% | 49.4 | 16.3 | 21.2 | | Bromley | 57.8 | 22.0 | 2.0 | over 50% | 62.4 | 21.1 | 21.8 | | Camden | 24.8 | 18.0 | 5.0 | over 50% | 65.1 | 26.0 | 15.5 | | City of London | 4.8 | 0.0 | 0.0 | 1.0 | 52.8 | 28.7 | | | City of Westminster | 21.5 | 20.0 | 4.0 | over 50% | 59.3 | 25.4 | 15.0 | | Croydon | 37.1 | 24.0 | 7.0 | over 50% | 58.9 | 19.8 | 24.3 | | Ealing | 30.9 | 23.0 | 6.0 | over 50% | 48.2 | 14.6 | 18.1 | | Enfield | 45.6 | 21.0 | 8.0 | over 50% | 50.7 | 18.6 | 23.2 | | Greenwich | 34.4 | 17.0 | 1.0 | over 40% | 55.4 | 19.5 | 22.6 | | Hackney | 23.2 | 19.0 | 5.0 | over 40% | 58.9 | 24.0 | 22.6 | | Hammersmith & Fulham | 19.1 | 16.0 | 5.0 | over 50% | 66.4 | 27.6 | 15.6 | | Haringey | 25.5 | 19.0 | 6.0 | over 40% | 54.9 | 17.7 | 20.1 | | Harrow | 34.6 | 21.0 | 8.0 | over 50% | 51.7 | 17.1 | 19.2 | | Havering | 59.3 | 18.0 | 7.0 | over 50% | 52.5 | 16.4 | 27.3 | | Borough Green Space Surface | Total Ward N. | Ward with Access Deficiency | % Households | 1 time a week | 5 times per week | LA | London | England | |-----------------------------|---------------|-----------------------------|--------------|---------------|-----------------|----|--------|---------| | Hillingdon | 49.2 | 22.0 | 2.0 | over 50% | 48.9 | 14.1| 23.2 | | | Hounslow | 39.6 | 20.0 | 5.0 | over 40% | 52.4 | 17.8| 20.5 | | | Islington | 12.4 | 16.0 | 4.0 | over 50% | 61.3 | 22.4| 18.0 | | | Kensington & Chelsea | 15.1 | 18.0 | 1.0 | over 50% | 63.5 | 21.5| 13.9 | | | Kingston upon Thames | 36.4 | 16.0 | 5.0 | over 50% | 61.2 | 23.1| 16.7 | | | Lambeth | 17.3 | 21.0 | 7.0 | over 50% | 62.0 | 30.2| 20.7 | 20.7 | 24.2 | | Lewisham | 22.5 | 18.0 | 3.0 | over 40% | 56.4 | 21.3| 23.7 | 20.7 | 24.2 | | Merton | 34.6 | 20.0 | 3.0 | over 40% | 55.0 | 17.5| 19.1 | 20.7 | 24.2 | | Newham | 23.9 | 20.0 | 9.0 | over 50% | 45.7 | 17.3| 25.3 | 20.7 | 24.2 | | Redbridge | 40.6 | 21.0 | 5.0 | over 40% | 54.5 | 19.4| 22.3 | 20.7 | 24.2 | | Richmond upon Thames | 50.8 | 18.0 | 1.0 | over 50% | 69.3 | 27.4| 14.9 | 20.7 | 24.2 | | Southwark | 24.9 | 20.0 | 7.0 | over 50% | 59.5 | 19.5| 22.5 | 20.7 | 24.2 | | Sutton & Merton | 32.0 | 18.0 | 4.0 | over 50% | 64.2 | 19.7| 21.6 | 20.7 | 24.2 | | Tower Hamlets | 15.2 | 17.0 | 5.0 | over 50% | 55.9 | 19.7| 19.4 | 20.7 | 24.2 | | Waltham Forest | 31.4 | 20.0 | 8.0 | over 40% | 56.2 | 20.3| 23.4 | 20.7 | 24.2 | | Wandsworth | 26.9 | 20.0 | 2.0 | over 50% | 66.4 | 26.9| 15.0 | 20.7 | 24.2 |
NOO (2005) Greenspace Information for Greater London CIC (GiGL) National Obesity Observatory (2010-2011) Health Needs Assessment Toolkit
### Table 2
**Active Travel and Transport Data**
| Location | Number of 'Travels per day' (000's) | Annual Casualties on the Road, 2005-2009 average | % Change 2005-2009 to 2011 | Average Fatalities 2005-2009 | Number of Vehicles | |---------------------------------|-------------------------------------|--------------------------------------------------|-----------------------------|-------------------------------|--------------------| | Barking & Dagenham | 280 | 604 | 1 | 5 | 115,178 | | Barnet | 769 | 1,344 | 3 | 13 | 97,861 | | Bexley | 357 | 644 | -12 | 4 | 107,803 | | Brent | 592 | 918 | -2 | 8 | 122,900 | | Bromley | 691 | 929 | -6 | 10 | 45,486 | | Camden | 744 | 902 | 3 | 5 | 93,779 | | City of London | 262 | 369 | 11 | 2 | 73,434 | | Croydon | 720 | 1,208 | 2 | 6 | 42,861 | | Ealing | 633 | 1,155 | -15 | 10 | 136,071 | | Enfield | 594 | 1,033 | 7 | 12 | 98,621 | | Greenwich | 428 | 919 | 1 | 9 | 95,934 | | Hackney | 404 | 948 | -8 | 5 | 123,966 | | Hammersmith & Fulham | 494 | 745 | 4 | 6 | 146,475 | | Haringey | 483 | 830 | 10 | 6 | 51,152 | | Harrow | 422 | 534 | -21 | 2 | 42,162 | | Havering | 477 | 903 | -10 | 6 | 85,344 | | Hillingdon | 563 | 1,028 | -8 | 8 | 116,844 | | Hounslow | 488 | 959 | 4 | 9 | 104,013 | | Islington | 486 | 742 | 33 | 4 | 61,866 | | Kensington & Chelsea | 472 | 818 | -2 | 5 | 114,618 | | Kingston upon Thames | 378 | 430 | 3 | 3 | 145,850 | | Lambeth | 614 | 1,234 | 6 | 8 | 70,578 | | Lewisham | 476 | 968 | 10 | 5 | 53,300 | | Merton | 431 | 522 | -2 | 3 | 110,779 | | Newham | 590 | 1,014 | -10 | 4 | 152,416 | | Redbridge | 524 | 866 | 9 | 7 | 152,241 | | Richmond upon Thames | 447 | 486 | 7 | 3 | 68,154 | | Southwark | 582 | 1,137 | 0 | 6 | 65,176 | | Sutton | 393 | 576 | -7 | 2 | 39,510 | | Tower Hamlets | 561 | 977 | -3 | 6 | 123,339 | | Waltham Forest | 387 | 865 | -6 | 3 | 152,241 | | Wandsworth | 621 | 925 | 14 | 5 | 145,850 | | Westminster | 1168 | 1,695 | -3 | 13 | 125,289 | | Average | 531 | 886 | 6 | 95,634 |
**Source:**\
London Travel Demand Survey\
Reported Road Casualties, Great Britain, gov.uk
### Table 3 Air Quality Data
| Area | Fraction (%) of mortality attributable to long term exposure to PM2.5 | Rank | % different from UK average | Number of Air Quality Focus Areas | |-----------------------------|---------------------------------------------------------------------|------|-----------------------------|----------------------------------| | Barking & Dagenham | 7.1 | 14 | 27% | 3 | | Barnet | 6.8 | 10 | 21% | 15 | | Bexley | 6.6 | 7 | 18% | 1 | | Brent | 7.2 | 17 | 29% | 6 | | Bromley | 6.3 | 1 | 13% | 1 | | Camden | 7.7 | 24 | 38% | 5 | | City of London | 9 | 33 | 61% | 2 | | Croydon | 6.5 | 5 | 16% | 5 | | Ealing | 7.2 | 17 | 29% | 5 | | Enfield | 6.6 | 7 | 18% | 10 | | Greenwich | 7.2 | 17 | 29% | 7 | | Hackney | 7.8 | 26 | 39% | 8 | | Hammersmith and Fulham | 7.9 | 27 | 41% | 5 | | Haringey | 7.1 | 14 | 27% | 9 | | Harrow | 6.4 | 3 | 14% | 5 | | Havering | 6.3 | 1 | 13% | 3 | | Hillingdon | 6.5 | 5 | 16% | 8 | | Hounslow | 7.1 | 14 | 27% | 10 | | Islington | 7.9 | 27 | 41% | 3 | | Kensington and Chelsea | 8.3 | 31 | 48% | 3 | | Kingston upon Thames | 6.7 | 9 | 20% | 2 | | Lambeth | 7.7 | 24 | 38% | 9 | | Lewisham | 7.2 | 17 | 29% | 9 | | Merton | 6.9 | 12 | 23% | 4 | | Newham | 7.6 | 23 | 36% | 6 | | Redbridge | 7 | 13 | 25% | 4 | | Richmond upon Thames | 6.8 | 10 | 21% | 4 | | Southwark | 7.9 | 27 | 41% | 7 | | Sutton | 6.4 | 3 | 14% | 3 | | Tower Hamlets | 8.1 | 30 | 45% | 6 | | Waltham Forest | 7.3 | 21 | 30% | 7 | | Wandsworth | 7.3 | 21 | 30% | 4 | | Westminster | 8.3 | 31 | 48% | 8 |
Source:
## Table 4 Healthy Food Data
| Adult Obesity Prevalence | Participation in Physical Activity % per week | Childhood Obesity Prevalence (6yrs old) | % Consumption of 5 portions of fruits and vegetables a day | |--------------------------|-----------------------------------------------|----------------------------------------|----------------------------------------------------------| | | LA | 5 times per week | LA | Total MSOA N. | Areas (MSOA) with highest % of consumption | % Intervals | | Barking & Dagenham | 28.7 | 45.1 | 15.4 | 22 | 8 | (25.40 - 31.20) | | Barnet | 17.9 | 54.9 | 17.6 | 41 | 16 | (43.90 - 56-10) | | Bexley | 26.4 | 60.8 | 20 | 28 | 10 | (31.20 - 37.20) | | Brent | 21.2 | 49.4 | 16.3 | 34 | 13 | (38.20 - 45.30) | | Bromley | 21.8 | 62.4 | 21.1 | 39 | 15 | (27.20 - 45.30) | | Camden | 15.5 | 65.1 | 26 | 28 | 10 | (44.60 - 55.10) | | City of London | 52.8 | 28.7 | 48 | 24 | 10 | (48.60 - 52.10) | | City of Westminster | 15 | 59.3 | 25.4 | 44 | 17 | (35.50 - 48.8) | | Croydon | 24.3 | 58.9 | 19.8 | 39 | 15 | (41.10 - 55.40) | | Ealing | 18.1 | 48.2 | 14.6 | 36 | 14 | (33.90 - 41.90) | | Enfield | 23.2 | 50.7 | 18.6 | 32 | 12 | (32.70 - 42.20) | | Greenwich | 22.6 | 55.4 | 19.5 | 27 | 10 | (34.90 - 41.60) | | Hackney | 22.6 | 58.9 | 24 | 25 | 10 | (41.70 - 48.20) | | Hammersmith & Fulham | 15.6 | 66.4 | 27.6 | 36 | 14 | (39.20 - 48.00) | | Haringey | 20.1 | 54.9 | 17.7 | 31 | 12 | (39.70 - 47.60) | | Harrow | 19.2 | 51.7 | 17.1 | 30 | 12 | (30.80 - 37.30) | | Havering | 27.3 | 52.5 | 16.4 | 32 | 12 | (34.20 - 45.40) | | Hillingdon | 23.2 | 48.9 | 14.1 | 28 | 10 | (36.90 - 47.20) | | Hounslow | 20.5 | 52.4 | 17.8 | 23 | 7 | (27.60 - 40.80) | | Location | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | % Obese | % Overweight | |--------------------------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------|---------|--------------| | Kensington & Chelsea | 13.9 | 63.5 | 21.5 | 21 | 8 | (50.70 - 54.30) | | Kingston upon Thames | 16.7 | 61.2 | 23.1 | 20 | 8 | (41.90 - 49.40) | | Lambeth | 20.7 | 62 | 30.2 | 35 | 13 | (36.00 - 42.90) | | Lewisham | 23.7 | 56.4 | 21.3 | 36 | 14 | (36.00 - 42.90) | | Merton | 19.1 | 55 | 17.5 | 25 | 10 | (41.40 - 55.40) | | Newham | 25.3 | 45.7 | 17.3 | 37 | 13 | (32.60 - 36.60) | | Redbridge | 22.3 | 54.5 | 19.4 | 33 | 12 | (35.50 - 43.30) | | Richmond upon Thames | 14.9 | 69.3 | 27.4 | 23 | 8 | (44.70 - 48.30) | | Southwark | 22.5 | 59.5 | 19.5 | 33 | 11 | (37.50% - 43.30) | | Sutton | 21.6 | 64.2 | 19.7 | 24 | 9 | (35.20 - 44.30) | | Tower Hamlets | 19.4 | 55.9 | 19.7 | 31 | 12 | (29.70 - 42.90) | | Waltham Forest | 23.4 | 56.2 | 20.3 | 28 | 10 | (33.70 - 37.40) | | Wandsworth | 15 | 66.4 | 26.9 | 37 | 15 | (42.30 - 46.80) | | Average | 20.6 | 57.0 | 20.7 | 30.7 | 11.6 | 48.0 | | London | 20.7 | 22.53 | | | | | | England | 24.2 | 19.2 | | | | |
Source: Health Needs Assessment Toolkit (2010-2011)
### Table 5 Fuel Poverty Data
| | Excess winter deaths 2010/11 | Population Aged 65 | Households in privately-rented 2011 | Percentage in privately-rented 2011 | |------------------------|------------------------------|--------------------|-------------------------------------|-----------------------------------| | | 2012 | 2025 | 2040 | | | | Barking and Dagenham | 60 | 19,700 | 24,700 | 35,900 | 17,000 | 22.9 | | Barnet | 90 | 49,400 | 65,600 | 88,100 | 28,000 | 20.5 | | Bexley | 90 | 38,500 | 45,100 | 56,300 | 10,000 | 10.9 | | Brent | 40 | 33,800 | 46,300 | 61,100 | 26,000 | 29.2 | | Bromley | 190 | 54,200 | 64,200 | 79,500 | 17,000 | 12.6 | | Camden | 70 | 24,800 | 30,200 | 39,300 | 29,000 | 26.8 | | City of London | 10 | 1,100 | 1,700 | 2,800 | 1,000 | 8.6 | | Croydon | 70 | 46,200 | 61,200 | 84,100 | 19,000 | 13.9 | | Ealing | 90 | 37,500 | 49,000 | 65,300 | 29,000 | 24.3 | | Enfield | 150 | 40,000 | 49,900 | 64,300 | 27,000 | 22.7 | | Greenwich | 70 | 27,300 | 38,200 | 54,100 | 18,000 | 19.7 | | Hackney | 30 | 17,900 | 23,900 | 34,500 | 21,000 | 22.8 | | Hammersmith and Fulham | 40 | 16,900 | 20,200 | 26,100 | 21,000 | 26.4 | | Haringey | 60 | 23,000 | 29,000 | 38,600 | 20,000 | 23.3 | | Harrow | 60 | 34,800 | 43,700 | 50,000 | 18,000 | 22.2 | | Havering | 130 | 44,000 | 53,800 | 64,600 | 10,000 | 9.4 | | Hillingdon | 120 | 36,400 | 44,300 | 56,100 | 21,000 | 19.8 | | Hounslow | 110 | 27,800 | 35,500 | 45,900 | 25,000 | 27.9 | | Islington | 30 | 18,400 | 22,500 | 31,000 | 22,000 | 24.2 | | Kensington and Chelsea | 50 | 20,100 | 26,600 | 33,500 | 18,000 | 23.0 | | Kingston upon Thames | 70 | 21,100 | 26,600 | 34,100 | 16,000 | 22.6 | | Lambeth | 60 | 23,700 | 31,200 | 45,600 | 29,000 | 23.2 | | Lewisham | 90 | 26,600 | 32,100 | 44,800 | 25,000 | 21.7 | | Merton | 60 | 23,800 | 29,800 | 39,800 | 19,000 | 24.4 | | Newham | 70 | 21,300 | 30,900 | 44,300 | 29,000 | 35.4 | | Redbridge | 80 | 34,300 | 41,200 | 51,400 | 25,000 | 25.8 | | Richmond upon Thames | 40 | 26,500 | 33,100 | 42,000 | 17,000 | 21.5 | | Southwark | 90 | 22,900 | 30,200 | 43,500 | 29,000 | 22.4 | | Sutton | 60 | 28,600 | 34,500 | 44,100 | 14,000 | 16.9 | | Tower Hamlets | 40 | 15,800 | 20,600 | 31,200 | 32,000 | 33.9 | | Waltham Forest | 110 | 26,500 | 34,600 | 48,100 | 24,000 | 26.6 | | Wandsworth | 150 | 27,700 | 33,000 | 43,600 | 41,000 | 34.6 | | Westminster | 20 | 25,200 | 30,400 | 39,400 | 44,000 | 35.9 |
Source: ACKNOWLEDGEMENTS
Project Team—Responsible for project management, project delivery and writing the guides: Annette Figueiredo—Principal Policy & Programme Officer, Resilience and Quality of Life Team—GLA; Jason Strelitz, Public Health Specialist, GLA Alena Ivanova; Elena Guidorzi; Joe Parsons—MA/MSc postgraduate students—University of London, Kings College, GLA work placements Dr Angie Bone—Consultant in Public Health Medicine, Extreme Events and Health Protection, Public Health England
The Project Team would like to thank everyone who has been involved in the project and contributed to the production of the guides. Particular thanks go to:
GLA Staff Helen Walters, Head of Health Alex Nickson, Policy & Programmes Manager, Resilience and Quality of Life Team Peter Massini, Principal Policy & Programme Officer, Resilience and Quality of Life Team Lucy Saunders, Public Health Specialist, Health Team Jonathan Pauling, Principal Policy Officer, Food, Economic & Business Policy Team Mark Ainsbury, Senior Policy Officer, Food, Economic & Business Policy Team Elliot Treharne, Principal Policy & Programme Officer, Resilience and Quality of Life Team Liz Prosser, Senior Project Officer, Healthy Schools London, Health Team Kat McKinlay, Policy Officer, Transport Team Gareth Baker, GIS Officer, GIS and Infrastructure Team Michael Jeffreys. GIS Officer, GIS and Infrastructure Team Alison Murray, Programme Officer, Regeneration Team Emma Williamson, Principal Strategic Planner, Planning Team Susan Pape, Internal Communications Officer, HR & Organisational Development, Communications Team Una Buckley, Employee Engagement Manager, HR & Organisational Development Charlotte Hall, Health Inequalities Programme Leader, Health Team Larissa Bulla, Principal Policy & Programme Officer, Energy & Waste Team Kevin Reid, Principal Policy & Programme Officer, Resilience and Quality of Life Team Rebecca Roper, Childhood Obesity and Health Team Support Officer, Health Team GLA Design Team
Other Colleagues Alex Trouton, Policy and Information Officer, Lambeth and Southwark Public Health Department Jonathan Hiderbrand, Director of Public Health, London Borough of Kingston Caroline Hancock, Senior Public Health Analyst—Public Health England Thomas Abeling, PhD Researcher, UNITED NATIONS UNIVERSITY, Institute for Environment and Human Security (UNU,EHS) Paul James, Director of the United Nations Global Compact, Cities Programme John Kolm-Murray, Seasonal Health Officer, Islington Council Fiona Daly—Environmental Manager, Barts Health NHS Trust Gordon Deuchars, Policy and Campaigns Manager, Age UK London Dr Anna Mavrogianni, Lecturer in Environmental Design and Engineering, UCL Jonathon Taylor, Research Associate, UCL Professor Virginia Murray, Head of Extreme Events and Health Protection, PHE Professor Sue Grimmond—Department of Meteorology, University of Reading Other formats and languages For a large print, Braille, disc, sign language video or audio-tape version of this document, please contact us at the address below:
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Greek Αν θέλετε να αποκτήσετε αντίγραφο του παρόντος εγγράφου στη δική σας γλώσσα, παρακαλείστε να επικοινωνήσετε τηλεφωνικά στον αριθμό αυτό ή ταχυδρομικά στην παρακάτω διεύθυνση.
Turkish Bu belgenin kendi diliinde hazırlanmış bir nüshasını edinmek için, lütfen aşağıdaki telefon numarasını arayınız veya adresle başvurunuz.
Punjabi ਮੇ ਦੁਆਰਾ ਹਿੰਦੀ ਸਾਹਿਤਾਂ ਦੀ ਕਵਿਤਾ ਜਾਂ ਹਿੰਦੀ ਅਧਾਰੀ ਰੂਪ ਵਿੱਚ ਲਿਖਿਆ ਹੈ, ਤਾਂ ਤੀਜਾ ਲਿੰਕ ਦੇ ਦੇਖਣ ਲਈ ਸੰਖਿਆ ਦੀ ਤਰਕ ਕਰਨ ਲਈ ਪ੍ਰਤੀ ਦੇਖਣ ਲਈ ਉਪਲਬਧ ਹੋਣਾ ਚਾਹੀਦਾ ਹੈ.
Hindi यदि आप इस दस्तावेज की प्रति अपनी भाषा में चाहते हैं, तो कृपया निम्नलिखित नंबर पर फोन करें अथवा नीचे दिए गए पते पर संपर्क करें
Bengali আপনি যদি আপনার ভাষায় এই দলিলের প্রতিলিপি (কপি) চান, তা হলে নীচের ফোন নম্বরে বা ঠিকানায় অনুরোধ করে যোগাযোগ করুন।
Urdu اگر آپ اس دستاویز کی نقل اینی زبان میں جانئیں ہیں، تو براہ کرم نئی دلی گیا نمبر پر فون کریں یا دیکھیں گیا پر رابطہ کریں
Arabic إذا أردت نسخة من هذه الوثيقة بلغتك، يرجى الاتصال برقم الهاتف أو مراسلة العنوان أدناه
Gujarati ધી તમને આ દસ્તાવેજની નક્કી તમારી ભાષામાં જીની લોકો તો, કૂટા કરી આપણે નુંબર ઉપર કોન કરી અધયા નીચેના સરળતામાં સંપર્ક સાધો.
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005d54a8aae6826ed194f2f84bf6f2126a4df9ce | Copyright Act 1911: Also known as the Imperial Copyright Act since it applied across the British Empire, with local adaptation as required. It brought together and rationalised the law on copyright which had previously been set out in many different statutes as well as previously being a part of the common law. It also enabled the UK to ratify the latest version of the Berne Convention, the principal (and at that time the only) international treaty on copyright. It came into force on 1 July 1912.
References Enrolled statute (1&2 Geo 5 c46) in C 65/6288, see s18. Not freely available online.
Treasury minute of 31 July 1912: This set out the terms for the publication of Crown copyright material by commercial companies. It drew attention to the fact that publication of any work by the Crown itself made that work Crown copyright.
References T 243/10
Official War artists: At the beginning of both World Wars, many artists were commissioned to create artistic works relating to or inspired by the War. All such artists assigned their copyrights to the Crown. After the end of each War, the resulting works were distributed to galleries and museums in the UK and the Commonwealth. Recipient institutions in the UK were given delegated authority by the Controller of HMSO to license the use of the works they had received.
References STAT 14/138 - There is a complete list of Second World War recipient institutions and works in T 162/744, file E40396/2
BBC v Wireless League Gazette Publishing [1926] LR Ch 433: In 1926, the BBC sued for infringement of its rights in the listings of radio programmes in the Radio Times. The Wireless League Gazette argued that the contents of the Radio Times were Crown copyright, but the court held that they were copyright of the BBC. Although the BBC was licensed to broadcast by the Postmaster General it was not operating under the direction or control of the Crown.
References Report published in the 1926 volume of Chancery cases in the Law Reports Series at page 433.
Book of Common Prayer and King James Bible: These are subject to perpetual protection in the UK (only) under the Royal prerogative. The Queen’s Printer (the Cambridge University Press in England, Wales and Northern Ireland, and the Scottish Bible Board in Scotland) has letters patent giving it sole authority to publish and license the use of the texts. In addition, the university presses of Oxford and Cambridge have their own letters patent authorising them to publish both works. These works are out of copyright elsewhere in the world. Advice on them was given to HM Treasury by HMSO in 1927.
References STAT 14/32; LO 3/1413 Ministry of Information: Prior to the Second World War, most Crown copyright was handled centrally by HMSO. However, during the War the Ministry of Information took over responsibility for a range of public information documents. Following the War, the Ministry of Information, then the Central Office of Information, took over responsibility under a delegation of authority from the Controller of HMSO for licensing government information services material, including film and photographs for use by the press.
Copyright Act 1956: This updated the Copyright Act 1911. The definition of Crown copyright was narrowed so that it applied to works first published by the Crown, not to all works published by the Crown regardless of whether they had previously been published by someone else. The Act came into force on 1 June 1957. Enrolled Act (4&5 Eliz2 c74) at C 65/6734, see s39.
References Online at: www.legislation.gov.uk/ukpga/1956/74/section/39/enacted
Treasury minute 9 January 1958: This updated the guidance on publication of Crown material in line with the Copyright Act 1956 and advised on the Crown copyright status of works commissioned by the Crown from private sector authors and bodies.
References T 243/32
Copyright and Designs Law: Whitford Committee report, 1977: By the mid-1970s the Copyright Act 1956 was getting out of date and Mr Justice Whitford, a High Court judge who had handled many prominent copyright cases, was asked to make recommendations. One conclusion in his report was that the definition of Crown copyright was flawed and that in any case there was no need for special provision for the Crown: it could have protection in the same way as any other employer. Only the first part of this conclusion was adopted in the subsequent legislation.
References Published as Cmnd 6732, see para 600.
Ironside v Attorney General [1988] RPC 197: In 1971 the Crown had commissioned designs for the new decimal coinage from Ironside. The Royal Mint then issued not only circulating currency but also proof sets and Ironside sued on the basis that the proof sets were unlicensed. The court held that the designs were Crown copyright not only because they had been commissioned but also because the designs were first published in newspapers at the end of an embargo. The commissioning and the publication were both held to be under the direction or control of the Crown.
References Published in the 1988 volume of the Reports of Patent Cases (itself a Crown copyright series) at page 197. Copyright, Designs and Patents Act: This statute, which has since been heavily amended, updated copyright law, in particular to take account of the development of computing. Crown copyright was given a new definition that was much more precise, was closer to the provision for other employers and gave no automatic right to works published by the Crown. Crown copyright is now applied to works created by Her Majesty or by an officer or servant of the Crown in the course of his duties. Crown copyright thus applies to, for instance, the works of civil and diplomatic servants, members of the armed forces, judges, police officers and government ministers. The Act came into force on 1 August 1989.
References Enrolled statute in C 65/7161, see s163 Online at www.legislation.gov.uk/ukpga/1988/48/section/163
Carol Anne Tullo: The first female Controller of HMSO, appointed by letters patent of 1 September 1997. The letters patent give personal authority over all Crown copyright material and all Crown-owned copyright material (ie material in which the copyright has been assigned to the Crown). Carol Tullo also has separate letters patent, dated 20 August 2001, giving similar authority over Crown database rights. No government department or agency owns Crown or Crown-owned copyrights.
Crown database right introduced 1997: The EU is alone in the world in providing a 'sui generis' (meaning 'of its own kind', ie unrelated to any other right) right resulting from a substantial investment in the creation, verification or presentation of the contents of a database. This is distinct from any copyright in the design of the database itself and from any copyright in the individual items in the database. The owner is the 'maker' of the database, and the Crown is the maker of a database created by an officer or servant of the Crown in the course of his duties. The UK’s regulations implement a directive of 1996.
References SI 1997/3032 reg 14(2) at www.legislation.gov.uk/uksi/1997/3032/contents/made
White Paper, The Future Management of Crown copyright, 1999: Some types of Crown copyright work were to be made freely available for re-use under a waiver of copyright, notably legislation and unpublished public records. Standardised licensing terms for the use of most other Crown material were to be offered.
References Published as Cm4300
Click-use licence: Introduced in 2001 as the default standard licensing terms for the majority of Crown copyright material. The terms were published online and a user needed only to register in order to be covered by them.
References www.hmso.gov.uk/copyright/licences/click-use-home2.htm
Information Fair Trader Scheme, 2002: This sets out the principles governing all licensing of Crown copyright and Crown-owned copyright material and provides an avenue of redress for re-users. It applies primarily to those departments and agencies that have been given delegated authority by the Controller to issue their own licences. Some non-Crown bodies have also joined the scheme.
References www.nationalarchives.gov.uk/information-management/ifts.htm HRH the Prince of Wales v Associated Newspapers [2007] 2 All ER 139, [2006] ECDR 244: The Daily Mail published extracts from the personal journals of the Prince of Wales, written while he was representing the Queen at the handover of Hong Kong to China. The Daily Mail asserted that the journals were Crown copyright because the Prince was standing in for the Queen. The court held that the definition of Crown copyright applied to Her Majesty herself but not to anyone representing her unless he or she was an officer or servant of the Crown. The Prince was neither the Queen nor one of her officers or servants.
References Court of Appeal judgment published in volume 2 of 2007 All England Law Reports at page 139, earlier High Court judgment published in 2006 volume of European Copyright and Design Reports at page 244
HMSO and Ordnance Survey v Green Amps, 2007-2008: Green Amps employed a person who had use of a student’s password that gave access to some of the mapping of Ordnance Survey under a licence to the student’s university. It used this access to acquire a copy of the entire set of Digimap data and proposed to exploit it commercially in the production and sale of energy from wind turbines. OS secured an injunction against Green Amps.
References Available only online at: (Court of Appeal, refusal of permission to appeal) www.bailii.org/ew/cases/EWCA/Civ/2008/588.html and (High Court) www.bailii.org/ew/cases/EWHC/Ch/2007/2755.html
OS revenue: Ordnance Survey publishes its revenue from licensing for 2009/10 as £98,164, down from £102,357 the previous year, showing how valuable copyright licensing of Crown copyright material can be, how dependent OS is on licensing income, and the benefit to the UK taxpayer in not having to finance the work of OS from taxes.
References View OS annual report and accounts at www.ordnancesurvey.co.uk/oswebsite/aboutus/reports/annualreport/09-10/os_annual_report_and_accounts_2010.pdf
Open Government Licence introduced 2010: This has replaced both the waivers of Crown copyright and the click-use licence. Standard licensing terms are available online which cover the majority of Crown copyright and Crown-owned copyright material. There is no requirement on the user to register or to apply for a licence.
References www.nationalarchives.gov.uk/doc/open-government-licence/
Hoffman v Drug Abuse Resistance Education (UK) (DARE), 2012: The Department of Health published a document on its website that was in privately-owned copyright, but failed to indicate this. DARE reproduced the document, assuming that it must be Crown copyright, and so infringed.
References Available only online at: http://www.bailii.org/ew/cases/EWPCC/2012/2.html
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29dc0bd9becfe40c89532f1901bbda40b89b5f4d | Central Bedfordshire is an area of considerable growth. The council has ambitious plans for new homes and new jobs in the area by creating new, vibrant, sustainable communities, while also enhancing Central Bedfordshire’s picturesque setting. Accommodation for older people will be an integrated part of its plans.
Central Bedfordshire’s economy is growing fast. Central Bedfordshire is generally an affluent area, with only 13 per cent of older people living in income deprived households and three quarters of older residents owning their home.
To address the housing requirements of its older population the council has developed a comprehensive and sophisticated approach to using a detailed qualitative and quantitative evidence base to produce an ‘investment prospectus’ to set out its vision for the range and mix of housing and accommodation required and to invite investment to deliver housing solutions.
The council has established a thorough evidence base to underpin its strategic approach to identifying the range of opportunities to grow and develop more refined housing choices for older people.
Like much of the rest of the UK the council is forecasting an increase in its population of older people. This rise represents both an increase in the number of older people and the proportion of older people in the local population. In 2015 people over 65 made up 17.2 per cent of the population, by 2035 they will be 23.3 per cent. The reasons for this trend are increasing life expectancy coupled with baby boomers starting to reach later life.
The effect is most significant in the 85 and over age range where the population is set to rise by 2.5 times from 5,400 in 2015 to 13,700 by 2035.
As people live longer many are living with one or more long term conditions, and for a significant number, advancing age brings frailty. Currently in Central Bedfordshire there are over 15,000 people aged 65 and over who are unable to manage at least one personal care task and by 2030 this is predicted to rise to over 24,000 people. There is a similar rise in the number of people living with a limiting long term condition, which in 2015 equated to roughly 20,000 and by 2030 will be over 32,000.
How is it innovative? The council’s approach
From this detailed evidence base, the council’s vision is to:
“Secure the best quality of life we can for our older residents both now and in the future. This means delivering a range of accommodation that enables older people to live fulfilling lives and enjoy good health in attractive homes that meet their needs and allow them to retain their independence as they age.” The detailed evidence base and this vision forms the basis for a highly attractive and sophisticated ‘investment prospectus’ document which the council is using to invite investment in a range of housing and accommodation options for older people.
The original plan was to produce a more ‘traditional’ market position statement document, however the investment prospectus was produced to provide a more attractive and engaging approach to stimulating the market.
The investment prospectus, based on evidence of housing need and this vision, sets out clearly the council’s market shaping and housing delivery objectives in the form of development opportunities:
- Facilitate the development of six affordable extra care schemes by the end of 2020. One scheme of 80 apartments or more in each locality area and two additional schemes in areas of high demand.
- Encourage the development of open market extra care schemes to provide apartments for sale and private rent.
- Encourage developers to build mainstream homes that are suitable for and attractive to older people as part of new residential developments, including changes to the design and layout of homes that can make a big difference to “future proofing” for older people without jeopardising the viability of the development.
- By the end of 2020 reprovide the capacity in the seven council-owned care homes (249 places), in homes that have modern physical and environmental standards.
- Work with current care home operators that wish to improve the physical and environmental conditions in their homes by remodelling or reproviding.
The council’s investment prospectus specifically identifies the range of opportunities that will, collectively, address the identified demographic, housing and care/support needs, as well as the aspirations and requirements of older people. These reflect the scale and type of local communities as well as older people’s aspirations:
- Develop innovative housing solutions for older people, ie signalling to architects and house builders who want to take the opportunity of a more innovative approach to designing attractive and aspirational housing.
- Developing small scale housing for older people in smaller towns and villages.
- Develop dementia friendly buildings that help people living with dementia to orientate themselves and live more independently.
The impressive investment prospectus identifies in more detail the housing and accommodation options that are required in each of the council’s four ‘localities’.
35 www.centralbedfordshire.gov.uk/housing/independent-living/dev-accom-older-people-bedfordshire.aspx?utm_source=website&utm_medium=shortcut&utm_campaign=opip Alongside its understanding of the demographic and potential care/support characteristics of its over 55 population, and the evidence from its strategic housing market assessment (SHMA), the council commissioned extensive qualitative research in order to better understand the 'drivers' and motivations behind older people’s propensity to move.
This research was specifically designed to cover the same period as the emerging local plan, 2015-2035, and it used the SHMA as a starting point of estimates of housing need for older people. The research sample was selected to be a representative cohort of residents over the age of 55 years across all housing and tenure types. Six hundred short and 80 in-depth surveys were carried out along with focus groups with stakeholder organisations.
Key findings include:
- Twenty seven per cent of respondents would consider moving to more appropriate housing before they needed care and a further 25 per cent would be prepared to move if the need arose.
- Location was by far the most important factor for those people planning or considering a move, followed by design and size, tenure and cost, and facilities.
- Most people planning or considering a move wanted a similar tenure to their existing arrangements, ie most owner occupiers (80 per cent of current 65 plus population in Central Bedfordshire) wanted to remain in the owner-occupied sector if they move.
- Most of the respondents, if they did move, would release a larger property than the one they were taking up.
This is a detailed and very thorough approach to generating a qualitative evidence base to complement the existing demographic and quantitative housing need evidence. It provides more sophisticated intelligence to guide the range of development opportunities set out in the council’s investment prospectus. It also produces a numerical estimate of the impact of rightsizing and offers a methodology for doing the same in other areas.
Outcomes
The council is responding to this evidence through directly developing housing for older people itself as well as inviting both private and social housing providers to develop housing and accommodation ‘offers’ that will be attractive to older people.
Delivery outcomes
- A council developed extra care housing scheme of 83 units in Dunstable.
- A private sector ‘rightsizer’ housing scheme of 32 units in Dunstable.
- Two new care homes with 141 beds in Dunstable enabling the council to close some of its in-house outdated care home provision.
- A housing association extra care housing scheme of 81 units in Leighton Buzzard.
- In developing its Local Plan, consult with residents to explore the opportunities for community-led housing such as co-housing for older people. Planned/required
- New and remodelled extra care housing in Houghton Regis to provide 140 units of affordable and open market apartments.
- New extra care housing scheme/s in Ampthill or Flitwick.
- New extra care housing scheme of up to 90 units at Biggleswade.
- New care home provision in Ivel Valley.
The council has also made use of the qualitative research to identify the effect on future housing need amongst older people to be included within the emerging Local Plan. The council has used the proportion of older people who state that they are planning to move and extrapolated this with population growth during the local plan timescale gives an estimated need for 3,650 specialist dwellings and 5,400 mainstream dwellings suitable for older people wishing to downsize. This estimate of 9,050 dwellings (not additional housing need as it is assumed that most of the people taking up these dwellings from the existing population) is likely to represent approximately 20 per cent of the overall need for housing growth during the Local Plan period.
Contact
Tim Hoyle MANOP Head of Service, Social Care, Health and Housing, Central Bedfordshire Council [email protected]
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cc274da729d37707ee579cb8df1eafb0cd27f577 | Annex B Central Government Police Revenue Funding 1995/6 – 2009/10: Technical Explanation
Introduction
1. The Home Office is publishing a series of consistent police revenue funding numbers from 1995/96-2009/10. This allows comparison of funding levels over time. Due to changes in funding structures over this period, we had to adjust the raw data to ensure that numbers are directly comparable. This document explains how we made these adjustments. For a general overview and the numbers themselves, please see separate Overview document.
Technical explanation
2. Over the period 1995/6-2009/10 there have been two main changes in police revenue funding:
- a move from Regional Crime Squads (RCS) funded by contributions from police forces to the National Crime Squad (NCS) which was initially funded by the forces but subsequently directly funded by the Home Office
- the creation of the Pensions Top-Up Grant in 2006/07
3. In order to compare data over the whole period (i.e. to ensure that we are comparing like with like), the raw data needs to be adjusted for these structural changes.
4. We used statistics from the Chartered Institute for Public Finance and Accountancy (CIPFA) as a base for these adjustments (CIPFA collects and publishes detailed data on police authority finances). Background information on the various funding streams referred to within this document can be found in annual publications such as the Home Office Police Grant Report.
5. Over the same timescale, there were also a number of smaller changes (e.g. removing police responsibility for dealing with stray dogs outside standard office hours). However, these changes were minor and resulted in relatively insignificant changes in police funding. As a result, we have made no adjustments for these minor changes.
Correcting for the change in crime squads
6. The first of these adjustments is also the simplest. CIPFA statistics contain detailed records of the amount of funding given by forces to the Regional Crime Squads (RCS) as direct funding, and to the National Crime Squad (NCS) through the NCS levy. We deducted total crime squads funding from the Home Office Main Grant in those years in which the RCS and NCS were funded by forces rather than by the Home Office. This gives us a series of numbers which is comparable in terms of crime squads funding. Correcting for the change in pensions payments
7. The second adjustment is more complex. In 2006/07 the way police pensions were funded changed and the Pensions Top-up Grant was introduced. To understand how we corrected for this, we first need to understand how police pensions work and what the Pensions Top-up Grant actually is.
Structure of police pensions
08. Police pensions are provided through an unfunded public service scheme. The scheme is national but each police authority administers the scheme for its officers. Each authority is responsible for ensuring that (a) serving officers pay pensions contributions and that (b) retired police officers receive their pensions.
09. Although there is no actual pension fund, the underlying actuarial model for police pensions acts as though there were. In the actuarial model, police officers pay contributions into a notional fund. At the same time, the police authorities pay an employer contribution into the same fund for each officer. These two contributions are set at a level intended to cover the cost of providing each officer with a pension on retirement.
10. Once the officer has retired, their pension is paid from this same notional fund. This is shown in Figure 1 below.
11. However, in order to reduce the amount of cash flowing through the system each individual authority uses the money it collects from employee and employer pension contributions to help to pay for expenditure on pensions in payment (i.e. to pay the pensions of people Definition of Pensions Top-up Grant
12. If the cash amount of employer and employee contributions is not sufficient to pay for pensions in payment in that year, the Home Office pay the authorities a ‘Pensions Top-up Grant’. The Pensions Top-up Grant is therefore equal to the difference between outgoing pension expenditure and incoming pension contributions in a single year. This financing arrangement protects police forces from fluctuations in the number of retirees and therefore in pension expenditure.
13. Figure 2 shows how the Pensions Top-up Grant and force pensions accounts fit together. (NB the diagram includes an additional box covering other income which usually comes from transfers into the pensions scheme from other forces as officers move between forces.)
Figure 2: Cash flow for annual police pension payments
14. Prior to 2006/07 the Pensions Top-up Grant did not exist and police authorities did not pay an explicit employer contribution into a pensions account. Rather, the police authority paid for pensions directly from its operating account. Funding for these pensions came from the core settlement and other income sources.
Calculation
15. If we want to look at a long-term series of figures for police funding, we need to make the numbers comparable. It is also most relevant to look at funding to cover current policing costs (i.e. including employer contributions), not funding related to historic policing costs (i.e. the cost of pensions for now-retired officers). 2006/07-2009/10
16. This is straightforward for the years after 2006/07 because the Pensions Top-up Grant can simply be removed from the calculation of total core government funding. The difficulty comes in the years before this when the Top-up Grant did not exist. To produce a comparable set of figures for these years we need to calculate a notional Pensions Top-up Grant.
2005/06
17. For 2005/06 (the final year before the Pensions Top-up Grant was introduced) a notional Pensions Top-up Grant figure and an adjusted Main Grant figure had already been calculated by the Government Actuaries Department as part of the process for creating the Pensions Top-up Grant. We used this figure in our calculations.
2003/04 and 2004/05
18. For the years 2003/04 and 2004/05 CIPFA statistics do not contain information on police force spend on pensions so we averaged the actual Pensions Top-up for the three years between 2005/06 and 2007/08. In the absence of other data, we believe that this is a reasonable assumption.
1995/96-2002/03
19. For the years between 1995/96-2002/03 we needed to remove pensions in payment and calculate an employer contribution (before 2005/06 police forces did not calculate employer contributions) in order to calculate a notional Pensions Top-up.
20. CIPFA provides detail of the total amount of pensions paid out by the police forces (both payments and lump sums). CIPFA also provides detail on the payments made into police pensions through employee contributions.
21. From Government Actuaries Department (GAD) assessments we knew that the total cost of the police pension scheme as a proportion of officer pensionable pay was 37% in 2009/10 and 32% in 1998/99 (no information on scheme cost exists for other years). The key driver of this increase over time was longevity.
22. To estimate the scheme costs between 1998/99 and 2009/10 we used a technique known as linear interpolation. This technique divides the change from 37% to 32% equally between the 11 years to produce an estimate of total scheme cost for each of these years.
23. For each of the years between 1995/96-1998/99 we applied the same annual change as used for the period 1998/99-2009/10. This is a reasonable assumption given longevity driver.
24. This meant that we had an estimate of total scheme cost (as a percentage of officer pensionable pay) for each year. We were then
25. CIPFA statistics contain details of the total amount (in £s) of employee contributions to pensions for all police authorities. As we already knew that this was worth 11% of pensionable pay, we were able to calculate the corresponding notional employer contribution (in £s). To do this we divided the total employee contribution (in £s) by 11% (the employee contribution rate) and multiplied this by the employer contribution rate (as a percentage of office pensionable pay) in each year.
26. The following is a worked example of this for 1998/99.
| Total scheme cost = 32% | |-------------------------| | Employer contribution = total scheme cost – employee contribution: 32-11 = 21% | | 11% employee contribution = £336m | | 21% employer contribution = (336/0.11) x 0.21 = £642m |
27. To calculate a notional Pension Top-up Grant for each year we used the following formula:
[ \\text{Top-up} = \\text{Pensions paid out (from CIPFA)} - \\text{employee contribution (from CIPFA)} - \\text{employer contributions (our estimate)} - \\text{transfers in/out (CIPFA)} ]
**Adjusting the Home Office Main Grant**
28. Having calculated notional Top-up Grant levels, we then subtracted this from the HO Main Grant for each of the years from 1995/96-2004/05. The following is a worked example for 1998/99.
| 11% Employee contribution = £336m | | 21% Employer contribution = £642m | | Pensions paid out = £1,226m | | Notional Pensions Top-up Grant = 1226-336-642 = £248m | | HO Main Grant (RCS/NCS corrected) = £3,526m | | HO Main Grant Final (RCS/NCS and Pensions Top-up corrected) = 3526 – 248 = £3,278m |
29. At the end of the process we had produced a series of comparable numbers from 1995/96 to 2009/10.
30. Comments on, or suggested improvements to, the methodology used to adjust the raw data would be welcome.
Police Finance and Pensions Unit Home Office June 2010
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e678da53d544325897bf97632b2b223edc5122b8 | This paper captures views and ideas shared by local government.
The Central List
1. The Central List, as currently constituted, is an administrative tool for the collection of rates from hereditaments. The Department for Communities and Local Government (DCLG) is the billing authority and the Secretary of State for Communities and Local Government has powers to decide who should be listed. It has a relatively stable annual income of around £1.35 billion per year. This is surrendered into HM Treasury’s consolidated fund, with the statutory obligation under the Local Government Finance Act 2012 that an equivalent amount of Central List income, as part of non-Domestic Rates income, be redistributed to local government through grants, such as Revenue Support Grant.
2. The Central List was designed and created under national business rates and was not revised for the introduction of 50% Rates Retention system. As a result, there are three main issues with the interaction of the Central List and local lists:
i. The existing criteria for the Central List essentially limit the list to network utility properties. This leaves some very large properties on local lists, such as power stations, which carry significant risks to local income from appeals, national policy changes or closure.
ii. Local authorities see no reward from growth in businesses currently assigned to the Central List. Whilst the Central List does contain some national properties, many are regionally based such as the electricity and water companies, London Underground, and Network Rail stations.
iii. The current system can also increase volatility in local income through properties moving from a local list to the Central List. The criteria for judging these requests were developed prior to rates retention and are only applied by DCLG when a request from a ratepayer is received. As a result, there is an inconsistent picture of network properties on local lists and the Central List, and a continuing risk that some ratepayers will ask to be moved onto the Central List (often having a significant impact on a local authority’s business rates income).
Looking afresh at the rating list system
3. The introduction of a 100% Business Rates Retention system is an opportunity to look afresh at the rating list system and whether changes could or should be made. Any changes would require primary legislation, on which the Government might look to consult in summer 2016. As part of any changes to the system, we will need to consider how the list and income from the list is used.
4. Any changes should aim to address the issues identified in paragraph 2 (above), recognising the trade-offs that will need to be made between reducing risk and allowing local authorities to see the benefits of growth.
5. Additionally, any reform would present an opportunity to look afresh at the position of the current listing system. This might consider issues such as some network properties’ current position on local lists, as well as clarification on the criteria and process for any movement between lists.
Are the issues outlined in paragraph 2 the appropriate issues to address for potential reforms to the rating list system?
What other potential aims could be considered?
6. Outlined below for discussion are some possible options for meeting these potential aims.
Option A: Enlarge the current Central List to form a new National List
07. The Central List could be expanded to form a new National List. This would include hereditaments that do not sit clearly within one local list (as at present), but could also include additional categories to take some of the riskier hereditaments out of local lists.
08. Local lists could retain local properties, which local areas have some input to managing, such as those that have local planning decisions, for example. This would provide a clearer link between local decisions and growth.
09. The income from the National List could be used to fund a safety net and/or handle appeal risk. Any additional funds could be redistributed to local government through tariffs/top-ups on the basis of the needs assessment formula, which might also be factored in as part of the quantum of services to be devolved.
10. Enlarging the current Central List would present a good opportunity to look again at the criteria that might be used to determine listing. Currently, the Secretary of State considers: the nature and use of the property, the size and geographical spread of the property, and the suitability of otherwise for assessment of the property on local rating lists.
11. In addition to determining whether these criteria are still appropriate, other criteria could be considered such as:
- billable size of a hereditament relative to the size of a local list;
- the extent to which national policy impacts upon a hereditament (a change in national energy policy, for example);
- other national classifications: for example, The Planning Act 2008 lists the categories of projects that are defined for planning purposes as nationally significant, where planning decisions are made centrally;
- hereditaments that are judged to be inherently volatile.
12. While Option A could help to reduce the volatility on local lists by reclassifying more volatile hereditaments onto the National List, it could perpetuate the current setup whereby local authorities would not have a share of any growth gains from those reclassified properties.
**Could a larger National List help to reduce volatility in local lists and thus ensure the stability of business rates income?**
**How large might a new National List be, and what criteria might be used to determine listing?**
**How might National List income be redistributed to local authorities?**
**How would a larger National List affect the growth incentive for local authorities?**
*Option B: Introduction of Area Lists*
13. One way to pool the risk of some of the larger hereditaments currently sitting on local lists, while also allowing areas to have a financial stake in the development of hereditaments that currently sit on the Central List, would be to introduce Area (Regional) Lists. This would, then, introduce a three tier set up:
- **Local Lists** – as currently constituted, though possibly with certain, more risky hereditaments removed (power stations, for example);
- **Area Lists** – properties that, according to new criteria, are deemed unsuitable for either a local list or the National list. These could be riskier single units, such as power stations, and regional networks such as Thames Water and TfL’s infrastructure network in London. Area Lists would therefore attempt to find the right balance between riskier and solid hereditaments. Area lists could be voluntary in nature, or the Secretary of State could have the power to create lists and appoint a billing authority. Lists could be congruent with Combined Authority boundaries, or could be developed in other areas to a suitable geography.
**National List** – national, networked properties.
14. This option would enable local authorities to pool risks and benefits and receive a share of growth gains from hereditaments on the Area List. Any income raised through the Area List could be redistributed directly to local authorities, perhaps in proportion to the size of their Local List relative to the Area List, or could potentially be used to fund Area Safety Nets. Similarly, the income from the National List could be used to fund a safety net and/or handle appeal risk.
15. However, through the introduction of an extra tier, Option B could require significant resource from both Central and Local Government to set up.
**Could Area Lists help to reduce volatility in local lists and thus ensure the stability of business rates income?**
**How might Area Lists be formed? (Geographical, Industry type, others?)**
**How might billing arrangements work for Area Lists?**
**How large might new Area Lists be, and what criteria might be used to determine listing?**
**How might both Area and National List income be redistributed to local authorities?**
**Option C: Other suggestions**
**Are there any other options that should be considered for reforming the Central List to help to reduce the volatility of Local Lists?**
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f3dfb1c9385bf70f7da004e033be224fe4b9b7e6 | Central London Rail Termini: Analysing passengers' onward travel patterns Central London Rail Termini: Analysing passengers’ travel patterns Policy Analysis Research Report September 2011
© Transport for London 2011
All rights reserved. Reproduction permitted for research, private study and internal circulation within an organisation. Extracts may be reproduced provided the source is acknowledged.
Disclaimer
This publication is intended to provide accurate information. However, TfL and the authors accept no liability or responsibility for any errors or omissions or for any damage or loss arising from use of the information provided.
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | **Executive Summary** | 8 | | **Introduction** | 13 | | **Part One** | 18 | | **Chapter 1 Who uses the central London termini** | 19 | | Rail passengers in and out of central London | 19 | | Passengers by age and gender | 21 | | Why people are travelling | 22 | | Travel by journey frequency | 24 | | **Chapter 2 Onward distribution in central London** | 26 | | Distance of onward journeys | 26 | | Mode share for onward journeys | 28 | | Onward journeys mode share and distance travelled | 29 | | The use of bus for onward journeys | 31 | | The use of Underground for onward journeys | 31 | | Underground crowding and rail passengers’ contribution | 33 | | **Chapter 3 Have travel patterns changed over time?** | 36 | | Passenger volumes and use of stations | 37 | | Demographic profile of passengers | 38 | | Rail journeys by purpose | 40 | | Mode share for onward journeys | 41 | | **Chapter 4 How do Londoners’ travel patterns differ from those of non-Londoners?** | 45 | | Overview of travel to or from outside Greater London | 45 | | Journeys to or from outside Greater London by journey purpose | 47 | | Journeys to or from outside Greater London by journey frequency | 48 | | Onward mode used – comparing Londoners and non-Londoners | 49 | | **Chapter 5 Travel patterns outside central London** | 52 | | Non-central London journeys by purpose | 53 | | Onward mode at the non-central London end | 54 | | Onward mode at the non-central London end by distance | 56 | | Travel at the five busiest non central London rail stations | 56 | Analysing passengers’ onward travel patterns
| Chapter 6 Opportunities for walking | 59 | |-------------------------------------|----| | Current walk travel to and from central London rail termini | 60 | | Onward walk journeys by trip distance | 61 | | Onward walk journeys by purpose | 62 | | Onward walk journeys by characteristics of trip maker | 63 | | Whether ever walk for their onward journey | 63 | | Potentially walkable onward journeys | 64 | | Who is making potentially walkable onward journeys? | 67 |
| Chapter 7 Opportunities for cycling | 69 | |-------------------------------------|----| | Current cycle travel to and from central London rail termini | 70 | | Distance of cycle travel | 71 | | Onward cycle journeys by purpose | 72 | | Onward cycle journeys by characteristics of trip maker | 73 | | Type of cycle | 73 | | Whether ever cycle for their onward journey | 74 | | Cycling at the non-London end of the journey | 75 | | Market segmentation of cyclists and non-cyclists | 76 | | Potentially cyclable journeys | 78 | | Who is making potentially cyclable journeys? | 79 |
| Part Two | 82 | |----------|----|
| Chapter 8 Cannon Street | 83 | |-------------------------|----|
| Chapter 9 Charing Cross | 87 | |-------------------------|----|
| Chapter 10 Euston | 91 | |-------------------|----|
| Chapter 11 Fenchurch Street | 95 | |-----------------------------|----|
| Chapter 12 King’s Cross | 99 | |-------------------------|----|
| Chapter 13 Liverpool Street | 103 | |-----------------------------|----|
| Chapter 14 London Bridge | 107 | |--------------------------|----|
| Chapter 15 Marylebone | 111 | |-----------------------|----|
| Chapter 16 Moorgate | 115 | |---------------------|----|
| Chapter 17 Paddington | 119 | |-----------------------|----| | Chapter 18 St Pancras | 123 | |-----------------------|-----| | Chapter 19 Victoria | 127 | | Chapter 20 Waterloo | 131 | | Appendix | 136 | Analysing passengers’ onward travel patterns Executive summary
Purpose of the report
There are over half a million passenger travelling through the central London rail termini in the morning peak period (07:00-10:00) with over a quarter of a million passengers in the busiest hour (08:00-09:00). Rail is a key mode for accessing central London, particularly during the peak periods. The termini are the points at which the majority of rail passengers reach central London, but although the termini are at the end of the rail line they are rarely the end of the journey. This report presents new information collected specifically about people travelling through central London’s rail termini and their onward journeys.
Catering for the efficient dispersal of the large volumes of rail passengers alighting at central London’s rail termini is of importance to the functioning of London’s economy. With the number of rail passengers travelling into central London projected to rise over the next 20 years, the need for efficient onward dispersal will become even greater.
Already, crowding is an issue at many of the termini with the capacity of some public transport (particularly Underground) services unable to meet peaks in demand. In order to improve understanding of trips through the stations and patterns of onward distribution, a survey of passengers was undertaken at each terminus on a representative weekday in either spring or autumn 2010 (not during school holidays) during the morning and evening peaks, between 7:00 to 10:00 and 16:00 to 19:00. A full passenger count was conducted and postal return origin-destination questionnaires were distributed to capture journey patterns. This report presents the results of analysis of surveys carried out at 13 central London rail termini in 2010 (Blackfriars station was not surveyed as it was affected by closures during the station redevelopment programme). The analysis presented includes the potential for the use of walking and cycling for onward travel to increase which can contribute to Mayoral targets for increasing walking and cycling in London.
Who uses the central London termini?
More than half a million passengers were observed at the central London termini over the weekday morning peak period, with a similar number observed during the evening peak period. Just over half (54 per cent) of these were arriving passengers. The busiest of the termini was Waterloo handling 20 per cent of all central London passengers during the peak periods.
The majority of people travelled to or from central London during the peak periods for work related purposes, with 72 per cent travelling to their usual workplace and a further nine per cent stating that they were travelling for ‘other work’. There were variations among the stations with those in or around the City of London having the highest proportions of commuters, while those stations with long distance connections to the UK regions saw greater numbers of business trips.
Given the high level of commuting and work related journey purposes it is not surprising that 78 per cent of peak time passengers make the journey at least three times per week. Analysing passengers’ onward travel patterns
Onward distribution
The majority of onward journeys to and from the central London termini were made either by Underground (40 per cent) or on foot (36 per cent). A further 10 per cent were made by bus while nine per cent of passengers made a rail to rail interchange at the termini.
The mode used for onward travel was closely correlated with the distance travelled, with different modes dominating different distances. Eighty-nine per cent of onward trips made on foot were shorter than 2 kilometres. Bus use was generally restricted to onward journeys between 1 and 5 kilometres, with 87 per cent of bus journeys in this range. Eighty-eight per cent of Underground journeys were longer than 2 kilometres. An individual’s mode choice is of course affected by multiple factors.
Passengers travelling to and from the rail termini during the peak periods make more than 400,000 Underground journeys and over 100,000 bus journeys in central London. This is a significant part of London’s public transport system with some stations or services suffering from severe crowding problems.
Have travel patterns changed over time?
The results of the central London termini surveys in 2010 have been compared with the rail surveys of the London Area Transport Survey (LATS) 2001. Overall, 145,000 more rail passengers arrived or departed across the two peak periods, an increase of 18 per cent. Waterloo remained the busiest station among the central London termini stations.
The demographic profile of rail passengers is changing with an increase in the percentage of women and a shift towards an older age profile.
The overall mode shares for onward journeys in central London have not changed significantly with Underground and walk remaining the most popular modes. In comparison, bus and cycling saw the greatest increase with the share for both modes increasing by one and a half percentage points.
How do Londoners’ travel patterns differ from those of non-Londoners?
Just over half of all rail journeys to and from the central London termini started or finished outside Greater London. This equates to around 580,000 daily journeys. Passengers arriving at Marylebone, King’s Cross and Euston stations are the most likely to have come from outside Greater London, closely followed by St Pancras. This of course reflects the services available at these stations.
Among non-Londoners, seven in ten trips involved commuting while one in ten journeys were for other work purposes. This compares with only one in twenty people travelling within Greater London making a journey for other work purposes (not commuting).
People starting or ending their journey outside Greater London are less likely to make the journey every day of the week than people travelling solely within Greater London. Non- Londoners are also more likely to be very infrequent travellers with one in ten people travelling once a year or less.
Non-Londoners are less likely to walk and more likely to use the Underground for their onward journey in central London compared with Londoners. They are, however, more likely to cycle both at the central London end and non central London end of their journey.
**Travel patterns outside central London**
The survey also captured access and egress patterns at the end of the rail journey outside central London. This is referred to as the ‘non-central’ end of the trip.
Over 80 per cent of journeys are between home and a usual workplace in central London while one in ten journeys has a usual workplace as its destination at the non-central end.
The most popular onward mode at the non-central end of the journey is walk at 66 per cent, followed by bus at 15 per cent. The mode share for car is nine per cent at the non-central end but is negligible as an onward mode at the central London termini. Conversely Underground, which is the most popular onward mode in central London, is used by just one per cent of people to access the non central London rail station.
Walking and cycling are more popular at the non-central end of the journey, with people more likely to have ever walked or cycled at the end of their journey outside central London. Those who ever walk or cycle also do so more frequently outside central London.
The five most used non-central stations (based on the number of trips between these stations and the central London termini) are East Croydon, Clapham Junction, Surbiton, Wimbledon and Putney, which together handle 57,000 passengers travelling to or from central London rail termini over the peak periods. This is for rail trips originating or ending at those stations and excludes interchange between rail services.
**Opportunities for walking**
At present, 36 per cent of journeys to and from central London rail termini are walked, amounting to 380,000 walk journeys during the peak periods. The walk mode share ranges from 80 per cent at Cannon Street to 12 per cent at St Pancras and largely reflects the average distances travelled for onward journeys. Ninety-one per cent of onward journeys shorter than 1km and 55 per cent of those between 1 – 2m are walked.
Analysis was carried out to identify journeys less than 2km that are currently made by a mechanised mode but could potentially be walked. In total, 123,200 potentially walkable journeys were identified – 12 per cent of journeys by all modes and 19 per cent of journeys by mechanised modes. Fifty per cent of these journeys were between 1.5 and 2km, the upper limit of what is considered potentially walkable. Opportunities for cycling
At present, 1.8 per cent of journeys to and from central London rail termini are cycled, amounting to approximately 19,000 cycle journeys during the peak periods. The cycle mode share to and from central London rail termini ranges from 0.3 per cent at Cannon Street to 4.5 per cent at Paddington, and largely reflects the average distance travelled for onward journeys. Eighty-three per cent of cycled journeys are up to 4.5km. Cycling is dominated by a particular demographic: 82 per cent of cycle journeys are made by men; 60 per cent of cyclists are aged between 25 and 44.
In the autumn surveys, questions were asked to ascertain the types of bicycles used from central London rail termini. Fifty-seven per cent of people cycled on their own bicycle, the majority of whom used a non-folding bicycle. Thirty-seven per cent of people cycling from a central London rail terminus did so using a Barclays Cycle Hire bicycle.
Market segmentation is used to group together the range of people that use TfL services to understand their current travel behaviour and the triggers for maintaining or changing future travel behaviours. Over 50 per cent of the cycle market is comprised of individuals living in postcodes categorised as ‘urban living’ and ‘suburban lifestyles’. People in these segments tend to be well educated, reasonably well off and tend to cycle for leisure as well as for commuting to work.
Further information
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Strategic Analysis, Group Planning Transport for London 9th floor, Windsor House 42-50 Victoria Street London SW1H 0TL Analysing passengers’ onward travel patterns
Introduction
This report presents the results of analysis of surveys carried out at 13 central London rail termini in 2010. Rail is a key mode for accessing central London, particularly during the peak periods: it is the most popular mode in the morning peak period, accounting for 43 per cent of people who travel into central London (CAPC survey 2010, Travel in London Report 3). The vast majority of these rail trips pass through the central London termini, and this report focuses on new information collected specifically about people travelling through those stations.
Background
The Mayor’s Transport Strategy (MTS) published in 2010 identifies the need for congestion relief and efficient onward distribution at central London termini:
“Increasing population and employment, plus the additional capacity on much of London’s rail network through the current rail investment programme, means rail arrivals into central London termini are forecast to increase by about 25 per cent by 2031. This will result in increased strain on National Rail termini, and on the transport networks and services within central London.”
- MTS, 2010
Already, crowding is an issue at many of the termini with the capacity of public transport services unable to meet peaks in demand. Crowding on the Underground can lead to closures and delays. This reduces the efficiency of onward distribution, with consequences for London’s economy. The capacity of the National Rail network into London is growing, and without intervention the further growth in London’s population and employment will exacerbate crowding at stations and on modes used for onward travel.
It is important that we improve our understanding of trips made into central London by rail and patterns of onward distribution. A survey of passengers at the central London termini was undertaken to collect information about their characteristics and travel choices. This new information will provide a useful resource in work to mitigate some of the current issues around onward travel, and will also to assist in planning for efficient distribution in light of the predicted growth in travel in central London. Central London’s rail termini: a special case in London’s transport network
Huge numbers of passengers pose unique challenges Passenger flows at some of central London’s rail termini dwarf those at London’s Underground stations, with even the busiest Underground stations handling less than half the number of passengers using Waterloo rail terminus during the morning peak period. Peak time rail passenger flows at London Bridge, Liverpool Street and Victoria also greatly exceed Underground passenger flows from Bank, Canary Wharf and Oxford Circus. Moreover, as well as catering for these vast rail passenger flows, most termini also house an Underground station – which are in many cases among London’s busiest stations in their own right.
The end of the line may not mean the end of the journey The major radial rail routes into London funnel many thousands of passengers every hour from outlying areas to the 13 central London termini. But while these stations may be the end of the rail line, they are often not the end of the journey. This means that while some passengers are able to walk the last few minutes of their journey, thousands more depend on fast, reliable onward connections to reach their ultimate destination.
Making vital connections between employees and businesses As well as handling a large proportion of commuter traffic into central London, central London’s rail termini are often vitally important gateways for business travel between central London and the UK’s most economically active areas, and many of the thousands of passengers travelling through them each day are travelling on business. The efficient onward distribution of this high value travel is therefore of significant importance for the economies of London and the UK as a whole.
Realising the benefits of line upgrades will require close collaboration With the capacity of trains on routes into central London expected to increase in coming years, the requirement for efficient onward distribution will become even greater if the maximum potential for economic growth is to be realised. Since responsibility for operations at each of central London’s rail termini is typically shared between Network Rail, one or more Train Operating Companies and TfL, these stakeholders must collaborate closely to manage large passenger flows and plan for growth. Introducing the surveys The 13 central London termini rail stations were surveyed during 2010. A survey was not carried out at Blackfriars as it was affected by closures during the station redevelopment programme. The surveys sought to obtain information on passenger journeys including origins and destinations, as well as modes used to access the station.
Surveys were carried out at each station on a representative weekday in either spring or autumn 2010 (not during school holidays) during the morning and evening peaks, between 7:00 to 10:00 and 16:00 to 19:00. A full passenger count was conducted and postal return origin-destination questionnaires were distributed to capture journey patterns. In total, over one million passengers were counted arriving and departing during the peak periods and more than 46,000 questionnaires were returned across all termini, providing a sample of 4.4 per cent of the total peak time rail passenger population. For more details on the survey methodology see the note in the Appendix. All the findings presented in this report are based on analysis of the responses expanded to the total passenger numbers at each station. The analysis generally combines the data for the AM and PM peak periods throughout the report (unless otherwise stated). The AM and PM figures are generally similar: the vast majority of passengers (9 in 10 respondents) also make a return journey through the central London termini.
Structure of the report The report is divided in two parts; part one consists of chapters presenting the analysis of the central London termini surveys under different themes while part two presents key survey results at individual stations.
Part I Chapter 1 provides an overview of travel at the termini looking at the number of passengers arriving or departing during the weekday peak period, the purpose of their journeys and how frequently they make them. It also includes some passenger demographics.
Chapter 2 presents detailed analysis of onward travel in central London, looking at the modes used and the distances travelled by passengers between the termini and the end of their trip in central London. It also looks at where these passengers contribute to or are impacted by current crowding issues on central London’s public transport network.
Chapter 3 presents a comparison of the results of the central London termini surveys in 2010 with the results of similar surveys undertaken in 2001 as part of the London Area Transport Survey (LATS). It examines at how travel patterns have changed over a decade which has seen many aspects of transport change in London.
Chapter 4 describes travel patterns of passengers travelling to and from the central London termini from areas outside the Greater London Authority (GLA) area and makes comparisons between the travel patterns of non-Londoners and those of Londoners.
Chapter 5 presents analysis of rail passengers’ travel patterns outside central London, looking at onward travel at rail stations within Greater London (but outside central London). Chapter 6 presents analysis of onward trips made on foot and explores the potential for growth in onward trips by walking.
Chapter 7 presents analysis of onward travel by bicycle in central London and looks at the potential for growth in onward trips by cycling.
Part 2
Chapters 8-20 present more detailed results for each station.
**Characteristics of the central London termini**
The central London rail termini are a product of the history of the development of London. Dating from as long ago as the 1830s in some cases, the sites of the termini were determined to allow greater numbers of people to access central London faster and from further away than had been possible ever before. The termini were developed independently and for commercial purposes, and while they act as endpoints of fast radial routes to central London, their locations were not part of an integrated plan for the development of London.
The termini can be divided into three broad groups based on their locations and the areas they serve. Five termini – Cannon Street, Fenchurch Street, Liverpool Street, London Bridge and Moorgate – are situated in or close to the City of London. Euston, King’s Cross, Marylebone, Paddington and St Pancras are situated along the northern border of the Central Activities Zone and generally have longer distance services. Finally Charing Cross, Victoria and Waterloo are situated close to the historic centre of Westminster.
**Locations of the thirteen central London termini surveyed in 2010** Analysing passengers’ onward travel patterns Part One Chapter 1 Who uses the central London termini
Key findings
- In total, just over a million people arrived at and departed from the central London termini over the weekday morning and evening peak periods. Just over half (54 per cent) of these were arriving passengers.
- Waterloo is the busiest of the termini handling 20 per cent of all central London passengers during the peaks. The other busiest stations are London Bridge, Victoria and Liverpool Street, with these four accounting for 60 per cent of passengers at the central London termini.
- The number of male and female passengers were broadly equal among the passengers surveyed, while the age profile showed around half in the 25–44 age group and a further third in the 45–60 age group.
- The majority of people travelled to or from central London during the peak periods for work related purposes, with 72 per cent travelling to their usual workplace and a further nine per cent stating that they were travelling for ‘other work’. There were variations among the stations with those in or around the City of London having the highest number of commuters.
- Given the high level of commuting and work related journey purposes it is not surprising that 78 per cent of passengers make the journey at least three times per week. The stations with the highest number of infrequent travellers are Euston, St Pancras, Paddington and King’s Cross.
This chapter presents summary results from the 2010 central London termini surveys, providing information on passenger volumes and characteristics, presenting an overview of rail travel in central London during weekday peak periods. It provides information on the total number of arrivals and departures, the characteristics of those journeys and the demographic profiles of the people making them.
Rail passengers in and out of central London
In total, just over one million (1.07 million) passengers used the central London termini during the two three-hour peak periods on the weekdays surveyed. Just over half (54 per cent) of these passengers were arriving in central London. Figure 1.1 shows the breakdown of arriving and departing passengers by half-hour periods.
Note that passenger flows quoted in this report are those observed during the surveys and are therefore a snapshot of peak period demand on just one day. Due to fluctuations in passenger numbers these may not represent the most accurate estimates of passenger flows. Estimates of passenger flows on an average weekday can be found in other datasets. Arrivals were at their greatest between 08:30 and 09:00, with a fifth of all passengers arriving in this half hour. Around two fifths of all people arriving in the AM peak period arrived between 08:00 and 09:00.
Departures in the evening peak did not reach the same level within any half hour time period as those seen at the height of the morning peak. The greatest volume of departures was seen between 17:30 and 18:00, when a fifth of passengers departed, while a similar share departed in the following half hour.
Both arrivals and departures formed definite peaks around the busiest half-hour, with volumes up to almost three times as large at these times compared with the beginning or end of the peak periods.
Rail travel to central London is particularly tidal – travel is dominated by a flow toward central London in the morning and away from London in the evening. The volumes of passengers departing in the morning peak and arriving in the evening peak were therefore relatively small. There was a slight peak in the middle of the peak periods, but the maximum volumes were less than 25,000 per half-hour period – only 15 to 25 per cent of the peak directional flow.
The number of passengers using each of the termini varies substantially. Sixty per cent of passengers arrived at or departed from just four stations, while 20 per cent of all passengers went through Waterloo, the busiest of all the termini. The other three busiest stations are London Bridge, Victoria and Liverpool Street. The least used of the termini are Moorgate and Analysing passengers’ onward travel patterns
Marylebone with each handling around two per cent of passengers arriving to or departing from central London termini during the peaks. Figure 1.2 shows the breakdown of arrivals and departures by station.
Figure 1.2 Breakdown of central London arrivals and departures by station
Source: Central London Rail Termini Surveys 2010
Passengers by age and gender
As expected, the majority of passengers using the central London termini stations during the peak periods were of working age, with around half in the 25-44 age group and a further third in the 45-60 age group. The split between male and female passengers was equal across all stations. Figure 1.3 shows the age and gender profile of rail passengers surveyed. Why people are travelling
The majority of people are travelling to or from central London for work related purposes during weekday peak periods. Figure 1.4 shows the central London purpose breakdown of arrivals and departures during the morning and evening peak periods. The vast majority of passengers (72 per cent) travelled to their usual workplace, and a further nine per cent travelled to other work destinations, meaning work related trips make up over 80 per cent of peak time rail trips at the termini.
Figure 1.5 shows the percentage of trips for work related purposes by station. Passengers travelling for work form the vast majority at stations in or in the vicinity of the City of London with more than 80 per cent travelling to their usual workplace at Cannon Street, Fenchurch Street, Moorgate, Charing Cross and Liverpool Street. At Marylebone, London Bridge, Victoria and Waterloo 7 in 10 passengers surveyed travelled to their usual workplace while at King’s Cross that fell to 6 in 10 people. The stations where commuting accounted for only around 50 per cent of the journeys at peak times were Paddington, Euston and St Pancras. St Pancras also had the lowest share of work related journeys overall at 65 per cent.
At some stations the percentage of ‘other work’ journeys was significantly higher than the average across all stations: Euston at 19 per cent, Paddington at 17 per cent, King’s Cross and St Pancras at 15 per cent and Marylebone at 13 per cent. Analysing passengers’ onward travel patterns
Figure 1.4 Breakdown of rail trips by journey purpose, all stations
Source: Central London Rail Termini Surveys 2010
Figure 1.5 Rail journeys by journey purpose and station
Source: Central London Rail Termini Surveys 2010 Travel by journey frequency
Given that a large majority of the trips reported in the survey were work related, it is not surprising that the frequency with which people made those journeys was high. Seventy-eight per cent of passengers said they made the journey at least three times per week (see Figure 1.6). Only 1 in 10 said they made the journey less than once per month. This may mean that the majority of passengers had a good level of familiarity with the station, the area and the transport options available to them.
Figure 1.7 shows the frequency of travel by station. Stations with the highest proportion of commuters, such as those serving the City of London, also saw the greatest proportion of frequent travellers. Stations with the highest volumes of infrequent travellers included Euston, St Pancras, Paddington and King's Cross. There is potential at these stations for providing more information to passengers regarding the options available to them in order to help them make the right decisions for an efficient onward journey.
Figure 1.6 Breakdown of rail trips by frequency, all stations
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Figure 1.7 Frequency of rail journeys by station
Source: Central London Rail Termini Surveys 2010 Chapter 2 Onward distribution
Key findings
- The majority of onward journeys to and from the central London termini were made either by Underground (40 per cent) or on foot (36 per cent). A further 10 per cent were made by bus while nine per cent of passengers made a rail to rail interchange at the stations.
- The mode share for onward journeys varied substantially between the different termini with Cannon Street having the highest walk mode share at 80 per cent while Paddington had the lowest at 12 per cent.
- The mode used for onward travel was closely correlated with the distance travelled, with different modes dominating different distances. Eighty-nine per cent of onward trips made on foot were shorter than 2 kilometres. Bus use was generally restricted to onward journeys between 1 and 5 kilometres, with 87 per cent of bus journeys in this range. Eighty-eight per cent of Underground journeys were longer than 2 kilometres.
- More than 100,000 bus journeys and over 400,000 Underground journeys in central London are generated by passengers travelling to and from the rail termini during the peak periods. This puts a significant burden on London’s public transport system with some stations or services suffering from severe crowding problems.
This chapter describes and analyses onward travel journeys from central London rail termini stations. It describes the modes used and the distances travelled between the rail stations and the origin/destination of the journey. It also seeks to quantify the impact rail passengers have on some of the known constraints of the public transport system in central London.
Distance of onward journeys
Figure 2.1 shows the distance travelled by passengers arriving at Cannon Street, Euston, Paddington and Waterloo as well as the average distance for all stations. Onward journeys of less than 1.5 kilometres accounted for 85 per cent of arrivals at Cannon Street but only 12 per cent of arrivals at Paddington. These two stations present two different examples of distribution patterns and reflect the station locations in relation to key employment locations. Passengers using termini in or around the City of London have shorter onward distances to travel. Figure 2.2 shows the onward distance travelled by station. Analysing passengers’ onward travel patterns
Figure 2.1 Distance travelled by arriving passengers for all stations and example stations
![Graph showing cumulative proportion of trips by distance for different stations.]
Source: Central London Rail Termini Surveys 2010
Figure 2.2 Distance travelled for onward journeys by station
![Bar chart showing distance travelled for onward journeys by station.]
Source: Central London Rail Termini Surveys 2010 Mode share for onward journeys
The most popular mode for onward journeys in central London was Underground with 40 per cent of arriving and departing passengers stating that they used it on the day of the survey, as shown in Figure 2.3. With 36 per cent mode share, walking was the next most popular mode for onward journeys in central London while bus was used by 10 per cent of passengers. Nine per cent of passengers made an interchange between rail services at the termini, continuing their journey with another rail service. Finally, five per cent used other modes, including 1.8 per cent cycling, 1.2 per cent using taxis and 0.5 per cent using car.
The use of different modes varied among stations as Figure 2.4 shows. Cannon Street for example, had an 80 per cent walk mode share for onward journeys while Paddington at the other extreme had a walk mode share of just 12 per cent. The use of Underground at these stations was at opposite extremes as well with 62 per cent of passengers using it at Paddington, while only nine per cent of passengers at Cannon Street used it for their onward journey.
Figure 2.3 Onward travel mode share, all stations
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Figure 2.4 Onward travel mode share by station
Source: Central London Rail Termini Surveys 2010
Onward journeys mode share and distance travelled
The use of different modes is closely correlated with the distances travelled. As Figure 2.5 shows, the majority of journeys (91 per cent) under 1 kilometre were made on foot. Walking was the most frequently used mode for journeys between 1 and 2 kilometres but at that distance many people also chose a mechanised mode: 19 per cent chose Underground and a further 19 per cent chose bus. Underground was the predominant mode for journeys between 2 and 5 kilometres and 5 and 8 kilometres with 68 per cent and 79 per cent of journeys respectively. For onward journeys over 8 kilometres, the share of trips made by Underground reduces to 43 per cent, and rail becomes a well used mode, accounting for 44 per cent of passengers.
Figure 2.6 shows the distribution of distance travelled by mode for those arriving at the termini in the morning peak. It demonstrates clearly the correlation between mode used and distance travelled from the rail station to the final destination. Eight-nine per cent of walk trips are up to 2 kilometres while a similar proportion of bus journeys (87 per cent) are between 1 and 5 kilometres and Underground journeys were generally longer than 2 kilometres (88 per cent). There is a ‘tipping point’ at around 1.5 kilometres, beyond which walking ceases to account for the majority of trips. Although distance travelled is not the only factor affecting mode share it is a very significant one which needs to be carefully considered when planning initiatives to achieve mode shift. Figure 2.5 Onward distance travelled by mode, all stations
Source: Central London Rail Termini Surveys 2010
Figure 2.6 Onward journeys by mode and distance travelled, AM peak period arrivals at all termini
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
The use of bus for onward journeys
As seen above, bus accounted for 10 per cent of onward journeys which is around 100,000 bus journeys to and from the central London termini. Figure 2.7 shows the bus mode share by station as well as the number of journeys made. Victoria has the highest bus mode share at 13 per cent; 17,800 bus journeys were made to and from the station during the peaks. The bus station at Victoria is crowded and these journeys can exacerbate problems there. Other stations with large numbers of bus journeys are Waterloo (23,000), London Bridge (16,600) and Liverpool Street (13,400). The bus corridors from Waterloo and London Bridge to destinations north of the River Thames suffer from crowding during the peak periods. Potential for mode shift away from the bus could be beneficial at Victoria, Waterloo and London Bridge. Chapters 7 and 8 examine opportunities for increasing walking and cycling for onward journeys.
Figure 2.7 Bus mode share and number of onward journeys by station
Use of Underground for onward journeys
Underground was the most used mode for onward journeys at the central London termini, used by 40 per cent of all rail passengers over the peak periods. This meant over 400,000 journeys on the Underground were made by arriving or departing rail passengers at the termini. This has a significant impact on the Underground operations both in terms of the lines themselves but also the Underground stations adjacent to the termini.
Figure 2.8 shows the use of different Underground lines in terms of share of onward travel at the termini. The Northern line is the most used line with 19 per cent of rail passengers making a journey on the Northern line. It is followed by the Bakerloo line at 15 per cent, the Victoria line at 13 per cent and the Jubilee line at 12 per cent. Table 2.1 shows the number of onward journeys by Underground line.
**Figure 2.8 Use of Underground lines for onward travel**
![Graph showing the use of Underground lines for onward travel]
Source: Central London Rail Termini Surveys 2010
**Table 2.1 Onward journeys by Underground line**
| Line | Arrivals | Departures | All journeys | |-----------------------|----------|------------|--------------| | Northern | 45,600 | 37,200 | 82,800 | | Bakerloo | 36,400 | 26,000 | 62,400 | | Victoria | 28,500 | 26,900 | 55,400 | | Jubilee | 23,800 | 27,700 | 51,500 | | Waterloo & City | 25,800 | 13,800 | 39,600 | | Circle | 16,100 | 13,500 | 29,500 | | Hammersmith & City | 9,600 | 12,300 | 21,900 | | District | 11,100 | 8,800 | 19,800 | | Metropolitan | 10,800 | 8,900 | 19,700 | | Central | 8,200 | 11,100 | 19,400 | | Piccadilly | 5,000 | 4,600 | 9,600 | | District/Circle | 3,500 | 4,900 | 8,400 | | Metropolitan/Circle | 400 | 800 | 1,200 | | Other/Don’t know | 4,100 | 200 | 4,400 | | **Total** | 228,900 | 196,700 | 425,600 |
Source: Central London Rail Termini Surveys 2010
Figure 2.9 shows the Underground mode share by station as well as the number of onward journeys made to and from that particular station by Underground. Waterloo, as the busiest of Analysing passengers’ onward travel patterns
the termini, had the highest number of onward journeys by Underground (112,700). Victoria had the second highest number of underground journeys (50,400) while there were over 46,400 journeys at King’s Cross and St Pancras. Other stations where high numbers of Underground journeys were generated by termini passengers include Liverpool Street, London Bridge and Paddington.
Figure 2.9 Underground mode share and number of onward journeys by station
Source: Central London Rail Termini Surveys 2010
Underground crowding and rail passengers’ contribution
The surge of rail passengers arriving at the central London termini in the morning generates significant demand for the Underground services adjacent to the termini. Here we look at this demand along with some of the known crowding issues on Underground stations and services.
Waterloo had 55,000 Underground journeys by arriving passengers in the morning peak period. Although the Waterloo Underground station does not suffer from congestion under normal conditions, several of the lines serving it do. During the morning peak there is crowding on the Northern line in the northbound direction, the Waterloo and City line to Bank and both directions of the Jubilee line, although the eastbound direction is more critical. With 4 in 10 passengers using the Waterloo and City line this is the line used for most onward journeys at Waterloo.
Victoria had 22,100 Underground journeys by arriving passengers in the morning peak. Victoria station frequently has significant congestion issues, particularly the area from the ticket hall to the Victoria line platforms. The station often shuts during the morning peak and crowd management is employed to regulate people entering the station. In terms of the lines serving Victoria station there is crowding on the District line as well as severe crowding on the Victoria line northbound. More than half of the rail passengers making an onward journey by Underground used the Victoria line (52 per cent) while a further 36 per cent used the District line.
At London Bridge there were 19,100 Underground journeys in the morning peak. The Underground station at London Bridge does suffer from congestion and a one-way system for passengers is often introduced for access to the Jubilee line. Both lines serving the station suffer from crowding with severe crowding on the Northern line northbound to Bank and the Jubilee line eastbound to Canary Wharf during the morning peak.
At Liverpool Street 16,400 arriving passengers stated they used the Underground for their onward journey in the morning peak. Liverpool Street Underground station suffers from some congestion but the most significant problem there is crowding on the Central line. During the morning peak there is severe congestion on the westbound direction of the Central line. Thirty-four per cent of rail passengers use the Central line for their onward journey. In future this station will be served by Crossrail, which will change the distribution patterns of passengers.
There were 16,800 arriving passengers at either King’s Cross or St Pancras rail stations in the morning peak who made an onward journey by Underground. Some lines serving King’s Cross/St Pancras Underground station do suffer from crowding. During the morning peak there is severe crowding on the southbound direction of both the Victoria and Piccadilly lines as well as the eastbound direction of the Northern line. Two-thirds of passengers making an onward journey by Underground use one of these three lines.
Paddington saw 13,400 arriving passengers making an onward journey by Underground in the morning peak. There are no significant crowding issues at Paddington, with the eastbound Hammersmith and City/Circle line the only line with crowding greater than three passengers per square metre during the morning peak. However, 6 in 10 passengers travelling on the Underground use the Bakerloo line at Paddington.
At Euston 12,700 arriving passengers made an onward journey by Underground in the morning peak. Euston Underground station does suffer from crowding and during peak times there are often queues of people wishing to access the station who pass through the ticket hall/gate line. Euston Square station nearby does not have any capacity related issues. However, some of the lines serving the station are crowded before reaching Euston. During the morning peak there is severe crowding on the Victoria line southbound while there is also crowding on the City Branch of the Northern line. Eight in ten passengers travelling on the Underground used one of the two lines on the day of the survey.
At Charing Cross 7,600 arriving passengers stated they made an onward journey by Underground during the morning peak. Forty-three per cent of these used the Northern line which suffers from crowding in the northbound direction. Analysing passengers’ onward travel patterns
At Marylebone there were 6,400 onward journeys by Underground (at Marylebone and nearby Baker Street stations) by arriving passengers in the morning peak, with one in two passengers using the Bakerloo line which is crowded in the southbound direction.
At Fenchurch Street 5,400 arriving passengers made an onward journey by Underground in the morning peak. There is some crowding on the District and Circle lines in the eastbound direction through Tower Hill but this is less than three passengers per square metre.
Cannon Street saw 2,200 arriving passengers making an onward journey by Underground, the majority of them using the District or Circle lines from the Underground station with 1 in 10 using the Central line (from Bank). The District and Circle lines do suffer from crowding but this is less than three passengers per square metre. Chapter 3 Have travel patterns changed over time?
Key findings
- The results of the central London termini surveys in 2010 are compared with the rail surveys of the LATS 2001. Overall, 145,000 more rail passengers arrived or departed across the two peak periods, an increase of 18 per cent.
- St Pancras saw the greatest increase in passenger numbers between 2001 and 2010 while other stations which saw significant growth include London Bridge, Euston and Waterloo.
- Passenger numbers declined at Moorgate, Fenchurch Street, Charing Cross, Cannon Street and Victoria between 2001 and 2010 particularly the number of departing passengers in the evening peak period.
- Waterloo remained the busiest station among the central London termini.
- The demographic profile of rail passengers is changing with an increase in the percentage of women and a shift towards an older age profile.
- The overall mode shares for onward journeys in central London have not changed significantly with Underground and walk remaining the most popular modes. The greatest increase was observed in the use of cycling with almost 400 per cent more journeys between 2001 and 2010 leading to an increase in the cycling mode share of 1.5 per cent.
This chapter compares the results from the central London termini survey 2010 programme with the results from the rail survey in the LATS in 2001. It provides comparison of rail passenger volumes, key traveller characteristics and onward distribution patterns in central London.
The 2001 survey had been undertaken as part of a wider survey programme and has been the key source of information for rail passengers’ travel patterns in central London, and the 2010 survey programme provided a timely update of this dataset. The 2001 data was extracted from the National Rail Travel Survey (NRTS) database, with journeys involving central London termini identified based on origin/destination station. Travel during the peak periods was identified using the First Train Departure/ Last Train Arrival times. The same dataset also contained journeys that involved an interchange at one of the central London termini. However, it was not possible to identify what time the interchange would have taken place and therefore it was necessary to exclude these from the comparison. Accordingly, journeys from the central London rail termini surveys 2010 dataset that involved an interchange with rail were excluded for the purposes of this analysis.
The two surveys employed broadly comparable methodologies but the sample sizes between them differ considerably, with the 2001 survey having a sample size 10 times larger than the Analysing passengers’ onward travel patterns
2010 survey (460,000 people interviewed). However, the analysis presented here is confined at an aggregate level which provides a reasonable degree of confidence in the data. For example, for a characteristic shared by 50 per cent of the population (such as gender) the confidence interval at the 95 per cent level with a sample size of 43,000 (the 2010 sample size) is +/-0.5 per cent, while with a sample size of 460,000 (the 2001 sample size) is +/-0.1 per cent.
Passenger volumes and use of stations
Figure 3.1 compares the total numbers of passengers arriving or departing on National Rail services, excluding interchanges, based on LATS 2001 and the central London termini surveys 2010. The data indicated an overall increase in passenger numbers across all periods. Overall, 145,000 more rail passengers arrived or departed across the two peak periods, an increase of 18 per cent. The largest increase was seen in passengers arriving in the morning peak. The largest increase in terms of percentage change was seen in arriving passengers in the evening, with numbers almost doubling between the two survey years.
The largest increase was seen at St Pancras station where the number of passengers arriving in the morning peak period grew threefold in the period between 2001 and 2010 reflecting the change in rail services now available at the station, including the addition of Thameslink and High Speed services. Other stations with substantial growth in passengers numbers include London Bridge, Euston and Waterloo. In some stations passenger numbers declined between 2001 and 2010, particularly the number of departing passengers in the evening peak period. These stations are Moorgate, Fenchurch Street, Charing Cross, Cannon Street and Victoria. Waterloo station remains the busiest station among the central London rail termini (see Figure 3.2).
Figure 3.1 Comparison of arriving and departing rail passengers
Source: Central London Rail Termini Surveys 2010 Demographic profile of passengers
There has been a significant increase in the number of women traveling into and out of central London by rail between 2001 and 2010. The overall number of women passengers increased by 138,000 in the morning and evening peak periods, representing half of the total number of rail passengers as Figure 3.3 shows. In 2001 women represented 42 per cent of the total. Analysing passengers’ onward travel patterns
Figure 3.3 Comparison of passengers by gender
Source: Central London Rail Termini Surveys 2010
Figure 3.4 shows the age profile of passengers travelling to and from the central London termini in 2001 and 2010. It shows that there was a shift towards an older age profile between the two survey years, with the share of passengers from the younger age groups declining and corresponding increases in the older age groups. In particular the percentage of passengers aged 60 and over doubled between 2001 and 2010 from four per cent of all passengers to eight per cent.
Figure 3.4 Comparison of passengers’ age profile
Source: Central London Rail Termini Surveys 2010 Rail journeys by purpose
Figure 3.5 and Figure 3.6 show the purpose of rail journeys in 2001 and 2010 respectively. There has been no change between the two survey years with work related journeys being the predominant reason for rail travel to and from central London during the peak periods.
Figure 3.5 Rail journeys by purpose, 2001
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Figure 3.6 Rail journeys by purpose, 2010
Source: Central London Rail Termini Surveys 2010
Mode share for onward journeys
Figure 3.7 shows the overall mode share for onward journeys in central London in 2001 and 2010. Although the majority of onward journeys are by walk and Underground in both survey years, both modes saw a drop in their share between 2001 and 2010. In comparison, bus and cycling saw the greatest increase with the share for both modes increasing by 1.5 percentage points. The actual number of onward journeys by pedal cycle increased by almost 400 per cent between the two survey years. Note that, as Table 3.1 shows, the number of onward journeys increased across all modes with the exception of car and taxi. These modest changes in the overall mode share for onward journeys cover a greater variation in the changes seen at different stations. Figure 3.8 shows the changes in the share of onward journeys by Underground between 2001 and 2010 by station. The stations where the greatest declines were observed are Fenchurch Street, St Pancras, King’s Cross, Paddington and Marylebone. Some of these stations – St Pancras, Fenchurch Street and King’s Cross – saw a significant increase in the share of onward journeys made by bus (see Figure 3.9). Other stations with significant increases in the use of bus for onward journeys include Moorgate, Cannon Street and Liverpool Street.
Although the cycle mode share was fairly small in both survey years some stations saw a significant increase in the use of cycling as an onward mode. Figure 3.10 shows that the stations with the greatest growth in cycling mode share are Moorgate, Fenchurch Street, London Bridge. Analysing passengers’ onward travel patterns
and Charing Cross. This increase equates to 15,000 cycling trips in central London during the morning and evening peak periods. As Figure 3.11 shows the changes in the walk mode share have been fairly small between 2001 and 2010 with the greatest increase at St Pancras and the greatest drop at Moorgate.
Figure 3.8 Share of onward journeys by Underground & DLR
Source: Central London Rail Termini Surveys 2010
Figure 3.9 Share of onward journeys by bus
Source: Central London Rail Termini Surveys 2010 Figure 3.10 Share of onward journeys by cycling
Source: Central London Rail Termini Surveys 2010
Figure 3.11 Share of onward journeys by walking
Source: Central London Rail Termini Surveys 2010 Chapter 4 How do Londoners’ travel patterns differ from those of non-Londoners?
Key findings
- Just over half of all rail journeys to and from the central London termini stations started or finished outside Greater London. This equates to around 580,000 daily journeys.
- Passengers arriving at Marylebone, King’s Cross and Euston stations are the most likely to have come from outside Greater London, closely followed by St Pancras. This of course reflects the services available at these stations.
- Seven in ten non-Londoners made a commuting journey while one in ten journeys were for other work purposes. This compares with only one in twenty people travelling within Greater London making a journey for other work purposes (not commuting).
- People starting or ending their journey outside Greater London are less likely to make that journey every day of the week compared with people travelling solely within Greater London. Non-Londoners are also more likely to be very infrequent travellers with one in ten people travelling once a year or less.
- Non-Londoners are less likely to walk and more likely to use the Underground for their onward journey in central London compared with Londoners. They are, however, more likely to cycle both at the central London end and non central London end of their journey.
This chapter describes travel characteristics of passengers travelling between the central London termini stations and locations outside the GLA boundary. It describes the characteristics of rail journeys made and of the people making those journeys and explores any key differences between Londoners – people starting or ending their journey inside Greater London – and non-Londoners – people who travel between the central London termini and stations outside the GLA boundary.
Overview of travel to or from outside Greater London
Just over half of all rail journeys to and from the central London termini stations started or finished outside Greater London. This equates to around 580,000 daily journeys. The busiest stations for passengers arriving from or departing to outside Greater London are Waterloo, Liverpool Street and Euston, which is partly reflected in the relative size of these termini (see Figure 4.1). Figure 4.1 Passengers travelling between central London termini stations and stations outside Greater London
Source: Central London Rail Termini Surveys 2010
Figure 4.2 shows the split of passengers travelling between London’s termini stations and stations inside or outside the GLA boundary. The passengers arriving at Marylebone were the most likely to have come from outside Greater London, with almost nine in ten having done so. The share was similar at King’s Cross and Euston stations, closely followed by St Pancras. The stations that saw the smallest shares of passengers coming from outside Greater London are Charing Cross and Moorgate, both of which saw less than three in ten passengers starting or ending their journey outside Greater London. This is of course a reflection of the services available at each of the stations. It also highlights which of the termini have passengers who are more likely to have travelled longer distances to reach central London and also have a higher percentage of more infrequent travellers. Analysing passengers’ onward travel patterns
Figure 4.2 Passengers with origins or destinations inside or outside Greater London
Source: Central London Rail Termini Surveys 2010
Journeys to or from outside Greater London by journey purpose
The majority of onward journeys made by non-Londoners, seven in ten, were for commuting purposes while one in ten journeys were for other work. The latter was higher for non Londoners compared with people travelling solely within Greater London, with only one in twenty having made a journey for other work purposes. As Figure 4.3 shows there was very little difference between people from inside or outside Greater London in relation to all other journey purposes. Journeys to or from outside Greater London by journey frequency
The fact that non-Londoners tend to make more ad hoc business trips by rail is supported by the reported frequency of travel. Figure 4.4 shows that people starting or ending their journey outside Greater London said they were less likely to make that journey every day of the week compared with people travelling entirely within Greater London. People making journeys on a very infrequent basis were more likely to be non-Londoners as well with one in ten respondents travelling once a year or less, compared with one in twenty people from within London. People making such infrequent journeys to central London are bound to be less familiar with the area and the transport options available to them for their onward journey from the termini stations. Analysing passengers’ onward travel patterns
Figure 4.4 Comparison of arriving passengers by origin or destinations inside and outside Greater London – frequency of making trip
Source: Central London Rail Termini Surveys 2010
Onward mode used – comparing Londoners and non-Londoners
Figure 4.5 shows the modes used by Londoners and non-Londoners to travel to and from the termini in central London. The use of different modes is not significantly different between the two sets of people, with the largest differences seen in the use of Underground, bus and walking, the first used more by non-Londoners, while the latter two used more by those travelling wholly within London. This could be due to the lack of familiarity with central London among some of the more infrequent travellers coming from outside the Capital. Route and way-finding information are key for less frequent passengers in order for them to identify the options available for an efficient onward journey.
It is noticeable that non-Londoners were more likely to use cycling as their onward mode. At three per cent it still represents a minority of the total number of journeys, however compared with only one per cent of Londoners who cycled to and from the termini it is significantly higher. There are greater differences in the modes people used at the non-central London end of their journey. As shown in Figure 4.6 travel between stations inside Greater London was most likely to be on foot (65 per cent), while a much smaller proportion of passengers outside Greater London walked to and from their rail station. Despite this, walking was still one of the two key modes used by these passengers; the other was car, which was used by two fifths of passengers outside Greater London. Compared to those from outside Greater London, car was mentioned by a minority of those from within Greater London. Cycle and taxi were also mentioned by a larger share of those from outside Greater London, while all public transport modes were mentioned by larger shares of those travelling from inside the Capital. This is partly due to the distances people outside London have to travel in order to reach a rail station, compared with Greater London.
Again, the proportion of non-Londoners cycling was significantly higher compared to those inside Greater London – five per cent compared with one per cent. It is not clear whether this is due to the distances people travel for their onward journey outside Greater London, the infrastructure, facilities, ticketing options available to them, or whether it is personal preferences. It is likely, however, that the answer is a combination of the above. Analysing passengers’ onward travel patterns
Figure 4.6 Comparison of passengers by origin or destination inside and outside Greater London – onward mode used at the non-central London end of the journey
Source: Central London Rail Termini Surveys 2010 Chapter 5 Travel patterns outside central London
Key findings
- Around 40 per cent (400,000) of the rail journeys to or from central London termini stations during weekday peak periods have a start or end point within the GLA boundary.
- Over 80 per cent of journeys are between home and work (usual workplace or other work) in central London while one in ten journeys have work at the non-central London end.
- The most popular onward mode at the non-central London end of the journey is walk, followed by bus. The mode share for car is nine per cent at the non-central London end but is negligible as an onward mode at the central London termini. Conversely Underground, which is the most popular onward mode in central London, is used by just one per cent of people to access the non-central London rail station.
- Walking and cycling are more popular at the non-central London end of the journey with people more likely to have ever walked or cycled outside central London for their onward journey. Those who ever walk or cycle are also more likely to do so more frequently outside central London.
- The five busiest non-central stations (based on the number of trips between these stations and the central London termini) are East Croydon, Clapham Junction, Surbiton, Wimbledon and Putney which handle 57,000 passengers travelling to or from central London rail termini. This is for rail trips originating or ending at those stations and excludes interchange between rail services.
This chapter describes travel patterns of passengers travelling through central London termini stations at the non-central London end of their journey. The first section gives a general overview of all journeys involving a non-central station within Greater London while the second section provides key statistics for journeys involving each of the five busiest non-central stations; East Croydon, Clapham Junction, Surbiton, Wimbledon and Putney. Note that these are the busiest stations purely in terms of volumes of rail passengers travelling between these stations and the central London Rail termini and exclude interchange between rail services.
Around 38 per cent of rail journeys to/from central London termini stations originate or terminate at rail stations within the GLA boundary. This is over 400,000 rail journeys daily. In total the busiest five stations handle around 57,000 National Rail passengers travelling to or from the central London rail termini, equating to 14 per cent of total rail passengers within the Greater London Area. The remainder are distributed across just over 290 rail stations throughout London. Analysing passengers’ onward travel patterns
Non-central London journeys by purpose
Figure 5.1 shows the non-central London purpose breakdown of journeys to and from rail stations outside central London, but within the GLA boundary, while Figure 5.2 shows the purpose at the central London end of these journeys. Unsurprisingly, over 80 per cent of journeys have home as the non-central London purpose and work as the purpose at the central London end. Around one in ten passengers, however, seem to be making the reverse type of journey from home in central London to a work location outside of central London.
Figure 5.1 Journey purpose at the non central London end
Source: Central London Rail Termini Surveys 2010 Figure 5.2 Journey purpose at the central London end
Source: Central London Rail Termini Surveys 2010
Onward mode at the non-central London end
Figure 5.3 shows the breakdown of mode used to access/egress all non-central London rail stations within Greater London, compared with the modes used by the same people for their onward journey at the central London termini.
The use of different modes varies significantly between the two ends. Around two thirds of passengers walk at the non-central London end of their journey, compared with around 38 per cent of those at the central London end. The proportions of people travelling by bus at either end of the journey are similar. Nine per cent of people travel by car to access their non-central London station while the use of car as an onward journey mode does not feature at all in central London. Conversely the use of Underground at the non-central London end is negligible while 39 per cent of onward journeys are by Underground in central London. Analysing passengers’ onward travel patterns
Figure 5.3 Onward mode at the non-central London end compared with mode used at the central London end of journey
As well as being asked to describe the trip they were making at the time of the survey, respondents were also asked whether they ever walk or cycle to access the rail station at either end of their journey. Analysis of this information reveals some differences between the propensity to walk or cycle at the non-central London end, compared with the central London end of the journey.
Eighty-two per cent of respondents said they ever walk the journey to or from the rail station outside central London compared with 57 per cent ever doing so at the central London end. Moreover, around 58 per cent of those who ever walk at the non-central London end of their journey do so five or more times per week. The equivalent figure of those walking in central London five or more times per week is 49 per cent.
The percentage of respondents who ever cycle is similar (four per cent) at both the central and non central London end of their journeys. The frequency of cycling is different, however, with 28 per cent of respondents saying they cycle five or more times per week at the non central London end compared with 16 per cent in central London.
It seems that walking and cycling are more popular outside of central London and people are prepared to use them on a more frequent basis. Onward mode at the non-central London end by distance
The use of different modes by distance outside central London is similar to that within central London to travel to or from the central London termini (see Chapter 2). Eighty-six per cent of journeys under 1 km are made on foot. As distance increases the proportion of walk journeys decreases and the use of bus and car rises. Interestingly, one in five journeys less than 2 km is made by car. Only around three per cent of journeys cover distances greater than 5 km, which reflects the number of options available within Greater London.
Figure 5.4 Onward mode at the non-central London end by distance
Source: Central London Rail Termini Surveys 2010
Travel at the five busiest non-central London rail stations
This section presents some key statistics for journeys involving each of the five busiest non-central stations; East Croydon, Clapham Junction, Surbiton, Wimbledon and Putney. East Croydon serves London Bridge and Victoria while the other four stations all serve Waterloo. Figure 5.5 shows the journey purpose of passengers boarding trains to or from the central London termini at the five busiest non-central London stations. The most common purpose for all stations is home. However, work journeys represent a significant proportion of all journeys, particularly in Wimbledon where one in five people travelling through the station are travelling to or from work. Analysing passengers’ onward travel patterns
Figure 5.5 Journey purpose at the non-central London end, busiest five stations
Source: Central London Rail Termini Surveys 2010
People travelling between these stations and the central London termini are frequent travellers with two in three people making the journey at least five times per week (see Figure 5.6). This reflects the fact that the majority of travel is for commuting or other work related purposes and indicates the familiarity passengers are likely to have with the stations and services concerned.
Figure 5.6 Journey frequency at the busiest five stations
Source: Central London Rail Termini Surveys 2010 Figure 5.7 shows the onward mode used for access or egress at the five busiest stations outside central London. Walk is the most popular mode across all five stations, although the walk mode share ranges from 68 per cent in Putney to 36 per cent in East Croydon. Surbiton has the highest cycle mode share at four per cent, followed by East Croydon at three per cent. Interestingly, these stations also have the highest car mode share; nine per cent in Surbiton and five per cent in East Croydon. This most likely reflects the distances people are travelling to access these particular stations. East Croydon has a significant share of passengers travelling by other modes, which is most likely to be tram.
Source: Central London Rail Termini Surveys 2010 Chapter 6 Opportunities for walking
Key findings
- At present, 36 per cent of journeys to and from central London rail termini are walked, amounting to 380,000 walk journeys during the peak periods.
- The walk mode share ranges from 80 per cent at Cannon Street to 12 per cent at St Pancras and largely reflects the average distances travelled for onward journeys. Ninety-one per cent of onward journeys shorter than 1km and 55 per cent of those between 1 and 2km are walked.
- Ninety-five per cent of onward walk journeys are made for work purposes and just over half those making an onward walk journey had travelled into central London from outside the GLA area.
- Half of the respondents said that they ever walk their onward journey; 72 per cent of those who said they ever walk had walked on the survey day.
- Analysis was carried out to identify journeys less than 2km that are currently made by a mechanised mode but could potentially be walked. In total, 123,200 potentially walkable journeys were identified; 12 per cent of journeys by all modes and 19 per cent of journeys by mechanised modes. Fifty per cent of these journeys were between 1.5 and 2km, the upper limit of what is considered potentially walkable.
This chapter describes onward travel patterns to and from central London rail termini. It describes the nature and extent of walk travel between rail stations and journey origins and destinations, the characteristics of journeys made and of the people making them, and also seeks to identify the potential for increasing walking for this purpose. Current walk travel to and from central London rail termini
At present, 36 per cent of journeys to and from central London rail termini are walked (see Figure 6.1), amounting to 380,000 walk journeys during the peak periods. The walk mode share ranges from 80 per cent of those arriving or departing from Cannon Street, to just 12 per cent of those travelling to or from St Pancras.
Figure 6.2 compares the share of onward journeys by station with the share of walked journeys by station showing that, for example, although Waterloo is the largest of the termini in terms of passenger flows (20 per cent), it only accounts for 11 per cent of walk travel. In comparison, although Cannon Street and Charing Cross make up a relatively small proportion of onward journeys (five and six per cent respectively), they account for a fifth of walk journeys between them. The stations generating the greatest volume of onward walk journeys were London Bridge (69,000) and Liverpool Street (65,500).
Figure 6.1 Walk mode share for onward travel of arrivals and departures at central London rail termini
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Figure 6.2 Comparison of share of walking and journeys by any mode, central London rail termini
Onward walk journeys by trip distance
In large part, the walk mode share reflects the distance travelled from the rail station to the final destination. As seen in chapter 2, 91 per cent of onward journeys shorter than 1km and 55 per cent of those between 1km and 2km are made on foot. Walk is the most commonly used mode for trips up to just over 1.5km.
Figure 6.3 compares the walk mode share with the share of onward journeys less than 1km by station. This demonstrates the clear correlation between trip distance and mode choice: the stations with the highest walk mode shares have the highest share of very short journeys, those with low walk mode shares also have a low proportion of onward journeys under 1km. It is not possible to identify any stations that stand out as having an inappropriate walk mode share given the distance profile of onward journeys.
Source: Central London Rail Termini Surveys 2010 Onward walk journeys by purpose
The vast majority of onward walk journeys are to commute to work – nine in ten – and a further five per cent are for other work purposes. Only one in twenty onward walk journeys are for a purpose other than work.
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Onward walk journeys by characteristics of trip maker
Men and women each make 50 per cent of onward walk journeys. As shown in Figure 6.5, those making onward journeys on foot were slightly more likely to be aged 25 to 60 (87 per cent) than the total population making onward journeys (84 per cent).
Just over half (54 per cent) of those making an onward walk journey had travelled into London from outside the GLA boundary, 204,600 walk journeys overall, equivalent to 116,300 arrivals and 88,300 departures during the weekday peak periods.
Figure 6.5 Onward walk journeys by age
Source: Central London Rail Termini Surveys 2010
Whether passengers ever walk for their onward journey
As well as being asked to describe the trip they were making at the time of the survey, respondents were also asked whether they ever walk for their onward journey between the central London terminus and their final destination (see Figure 6.6). In total, half of those arriving at, or departing from, the central London termini during peak periods said that they sometimes walked for their onward journey. In total, 72 per cent of those who ever walk had actually walked on the survey day. This varied significantly between stations. Typically, at stations with a high walk mode share, most of those who ever walked had actually walked on the survey day, whereas a lower proportion of those who ever walked had walked on the survey day at stations such as King’s Cross and St Pancras, which have a much lower walk mode share. It is likely that this can be explained by the average distance of onward journeys from stations with a low walk mode share. Where onward journeys are longer, it is likely that people may choose to walk occasionally, for example on a sunny summer day, but will use faster mechanised modes most of the time. Where onward journey distances are very short, walking will be the obvious or only choice for most people.
Figure 6.6 Comparison of respondents who ever walk and those who walked on the survey day
| Station | Ever walk | Walked on survey day | % of walkers who walked on survey day | |------------------|-----------|----------------------|--------------------------------------| | Waterloo | 21% | 45% | 47% | | Victoria | 33% | 48% | 68% | | St Pancras | 23% | 31% | 76% | | Paddington | 12% | 27% | 46% | | Moorgate | 8% | 31% | 84% | | Marylebone | 18% | 54% | 58% | | London Bridge | 18% | 55% | 84% | | Liverpool Street | 20% | 46% | 75% | | King’s Cross | 20% | 48% | 57% | | Fenchurch Street | 20% | 58% | 95% | | Euston | 34% | 61% | 60% | | Charing Cross | 20% | 55% | 82% | | Cannon Street | 36% | 67% | 96% | | All termini | 36% | 80% | 72% |
Source: Central London Rail Termini Surveys 2010
Potentially walkable onward journeys
Analysis has been carried out to identify journeys less than 2km that are currently made by a mechanised mode but could potentially be walked. In total, 123,000 journeys were identified that could potentially be walked but are not walked at present. This amounts to 12 per cent of onward journeys by all modes and 19 per cent of journeys by mechanised modes. Table 6.1 shows the potential for walking by station. There is greatest potential for increased walk travel at Waterloo (37,600 potentially walkable journeys), London Bridge (16,600) and Victoria (15,300). Note that where the potentially walkable trips make up a particularly high proportion of journeys by mechanised modes, this often simply reflects existing high mode shares for walk and low volumes of trips by mechanised modes. Analysing passengers’ onward travel patterns
Table 6.1 Potentially walkable onward journeys by station
| Station | Potentially walkable journeys | As a proportion of journeys by all modes | As a proportion of journeys by mechanised modes | |--------------------|------------------------------|----------------------------------------|-----------------------------------------------| | Cannon Street | 5,100 | 10% | 52% | | Charing Cross | 10,500 | 16% | 36% | | Euston | 5,300 | 8% | 10% | | Fenchurch Street | 3,200 | 7% | 18% | | King’s Cross | 3,000 | 7% | 9% | | Liverpool Street | 12,900 | 9% | 19% | | London Bridge | 16,600 | 11% | 21% | | Marylebone | 1,900 | 8% | 10% | | Moorgate | 4,100 | 21% | 46% | | Paddington | 3,000 | 5% | 6% | | St Pancras | 4,700 | 9% | 12% | | Victoria | 15,300 | 11% | 18% | | Waterloo | 37,600 | 18% | 24% | | All central London termini | 123,200 | 12% | 19% |
Source: Central London Rail Termini Surveys 2010
Notably, potentially walkable journeys tended to be at the higher end of the distance considered walkable, with 50 per cent between 1.5 and 2km and 83 per cent over a kilometre (See Figure 6.7). The average distance of potentially walkable onwards journeys was 1.4km. This suggests that it may be more difficult to realise the potential as walking will be relatively uncompetitive on time. As shown in Figure 6.8, around four in ten potentially walkable journeys were made by Underground (43 per cent) and bus (41 per cent). The vast majority of potentially walkable trips were made for commuting (78 per cent) or travel on business (nine per cent) – see Figure 6.9. Analysing passengers’ onward travel patterns
**Figure 6.9** Potentially walkable onward journeys by purpose
Source: Central London Rail Termini Surveys 2010
**Who is making potentially walkable onward journeys?**
Sixty per cent of those making potentially walkable onward journeys say that they sometimes walk for their onward journey, suggesting that there may be potential to increase the frequency with which they do so. Strikingly, although equal numbers of men and women were travelling through the termini by all modes, women were more likely to be making a short journey by a mechanised mode, with 58 per cent of potentially walkable journeys made by women. The age profile of those making potentially walkable trips was similar to the overall traveller profile, as shown in Figure 6.10. Figure 6.10 Comparison of age of traveller, potentially walkable journeys and all journeys
Source: Central London Rail Termini Surveys 2010 Chapter 7 Opportunities for cycling
Key findings
- At present, 1.8 per cent of journeys to and from central London rail termini are cycled, amounting to approximately 19,000 cycle journeys during the peak periods.
- The cycle mode share to and from central London rail termini ranges from 0.3 per cent at Cannon Street to 4.5 per cent at Paddington, and largely reflects the average distance travelled for onward journeys. Eighty three per cent of cycled journeys are up to 4.5km.
- Journeys for work purposes generate the most significant cycle demand in the morning and evening peaks – 84 per cent of cycle journeys from/to central London rail termini are made for this reason.
- Cycling is dominated by a particular demographic. Eighty two per cent of cycle journeys are made by men and 60 per cent of cyclists are aged between 25 and 44.
- Five per cent of people arriving at, or departing from, central London termini during peak periods said that they sometimes cycle for their onward journey. Of those who said that they ever cycle for their journey, 39 per cent cycled on the survey day.
- In the autumn surveys, questions were asked to ascertain the types of bicycles used at the central London rail termini. Fifty seven per cent of people cycled on their own bicycle, the majority of whom used a non-folding bicycle. Thirty seven per cent of people cycling to/from central London rail termini did so using a Barclays Cycle Hire bicycle.
- Cycling is the dominant mode used by central London cyclists to access their non-central London station. Fifty six per cent of people cycling from their central London rail terminus also cycled to their non-central London station.
- Market segmentation is used to group together the range of people that use TfL services to understand their current travel behaviour and the triggers for maintaining or changing future travel behaviours. This applies to London residents only. Over 50 per cent of the cycle market is comprised of individuals living in postcodes categorised as ‘urban living’ and ‘suburban lifestyles’. People in these segments tend to be well educated, reasonably well off with a tendency to cycle for leisure as well as for commuting to work.
This chapter describes the nature of cycle journeys between rail stations and journey origins/destinations, and the demographic composition of the people making them. The chapter also explores the potential to increase the proportion of people making cycle journeys to and from central London rail termini. Current cycle travel to and from central London rail termini
At present, 1.8 per cent of journeys to and from central London rail termini are cycled (see Figure 7.1), amounting to approximately 19,000 cycle journeys during the peak periods. Chapter 3 described how this has increased by nearly 400 per cent since 2001. The proportion of passengers cycling to and from their central London rail terminus ranges from 0.3 per cent at Cannon Street to 4.5 per cent at Paddington.
Figure 7.1: Cycle mode share for onward travel of arrivals and departures at central London rail termini
Figure 7.2 compares the share of onward journeys by station with the share of cycle journeys per station. The graph indicates locations to and from which cycling is prominent, and those to and from which cycling is a less significant mode. Waterloo, the largest of the termini in terms of passenger flows (20 per cent), also accounts for the largest share of onward cycle travel (21 per cent). Paddington and Cannon Street account for similar shares of all onward journeys (six per cent and five per cent respectively), but Paddington accounts for 15 per cent of onward cycle journeys whereas Cannon Street accounts for only 1 per cent. The stations generating the largest number of overall cycle journeys were Waterloo, Paddington and Liverpool Street.
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Figure 7.2: Comparison of share of cycling and onward journeys by any mode from central London rail termini
To a considerable degree, the cycle mode share reflects the average distance of onward travel to/from the central London rail termini. Figure 7.3 shows that 83 per cent of cycle journeys are under 4.5km, while 49 per cent of cycle journeys are between 1.25km and 3km. The distance between the point at which walking begins to decline and Underground usage peaks could be targeted as particularly suitable for cycling (see chapter 2 for distances travelled by walk and Underground). Onward cycle journeys by purpose
The vast majority of onward cycle journeys are to commute to work – eight in ten – and a further three per cent are for other work purposes. Only 16 per cent of cycle journeys to and from central London rail termini at peak times are for a purpose other than work.
Source: Central London Rail Termini Surveys 2010 Analysing passengers’ onward travel patterns
Onward cycle journeys by characteristics of trip maker
The gender demographic of onward cycling is skewed; men make 82 per cent of onward cycle journeys, women just 18 per cent. Of the total number of passengers, 50 per cent were female and 50 per cent were male. Ninety-four per cent of cyclists are aged between 25 and 60; 6 in 10 cyclists are aged between 25 and 44. In the total population making onward journeys, 84 per cent of respondents were aged between 25 and 60, with 51 per cent between the ages of 25 and 44. This suggests a slightly greater propensity to cycle among those aged between 25 and 44.
Forty-three per cent of arrivals and departures from central London rail termini are made by people travelling within the GLA boundary. Such journey-makers display a lower than average propensity to cycle, with just 0.9 per cent of this demographic cycling the central London leg of their journey. By contrast, 2.6 per cent of those travelling outside of the GLA boundary cycled the central London leg of their journey.
Type of cycle
A question was added to the surveys conducted in autumn 2010 asking what type of cycle respondents used. Data is available for Euston, King’s Cross, Liverpool Street, London Bridge, Moorgate, Paddington, Victoria and Waterloo. It is important to note that the survey was carried out before the launch of the Cycle Hire station at Waterloo.
Figure 7.5 shows the types of bicycle used by cyclists from their central London rail terminus. Thirty-seven per cent of people used a Barclays Cycle Hire Scheme bicycle which, when the survey was conducted, had been operational for three months. Fifty-seven per cent of people used their own bicycle (of whom 59 per cent used their own non-folding bike and the remaining 41 per cent used their own folding bike).
It is not clear from this data precisely how individuals using their own bicycles are doing so. It is likely that people cycling on their own fold-up bicycle use this same cycle to travel to and from both their non-London station and their central London rail terminus. Worth noting, however, is that on most services in the morning peak carrying non-folding bicycles is prohibited. People in this category may therefore be accessing their non-London station using a different mode, or using different bicycles to access their non-central London station to the ones that they use in central London. In turn, this has infrastructural implications at central London rail termini as it means that individuals within the ‘two bicycle market’ are likely to store a bike at their central London rail terminus overnight. Whether ever cycle for their onward journey
In addition to being asked to describe the trip that they were making at the time of the survey, respondents were also asked whether they ever cycle their onward journey to and from their central London terminus. Figure 7.6 shows that, in total, five per cent of those arriving at, or departing from, central London termini during peak periods said that they sometimes cycle for their onward journey. Of those who said that they ever cycle in central London, 39 per cent cycled on the survey day. The proportion of declared cyclists that cycled on the survey day varied between the termini. The highest proportion of cyclists that cycled on the survey day travelled onwards from Marylebone (74 per cent). Though Waterloo and Victoria exhibited similar proportions of passengers that ever travel by bicycle, their proportions of cyclists cycling on the day of the survey were significantly lower (31 per cent and 22 per cent respectively). Variability in figures between those who ever cycle and those that cycled on the survey day may reflect weather conditions on the survey day, or the time of year that the survey was carried out. Analysing passengers’ onward travel patterns
Figure 7.6: Comparison of respondents who ever cycle and those who cycled on the survey day
Source: Central London Rail Termini Surveys 2010
Cycling at the non-central London end of the journey
As shown in Figure 7.7, among those that cycle from their central London terminus, over three in four access their non-central London station using an active travel mode (56 per cent cycling; 20 per cent walking).
Figure 7.7: Non-central London modes used by central London cyclists
Source: Central London Rail Termini Surveys 2010 From Figure 7.8, 56 per cent of people cycling to and from their central London rail terminus had also cycled to and from their non-central London station. A higher proportion of people cycle the outer leg of their journey, that is the portion to and from their non-central London station, than cycle the central London portion of their journey, to and from their terminus.
Figure 7.8: Central London modes used by non-central London cyclists
Market segmentation of cyclists and non-cyclists
Market segmentation is concerned with grouping together the diverse range of people who use TfL services to understand their current travel behaviour and the likelihood and triggers for maintaining or changing their travel behaviours in the future. The MOSAIC Cycling segmentation was developed as an aid to cycling policy development, planning, implementation and evaluation. In its 2010 Mosaic Cycling Segmentation Report, TfL attached one of several categories to each postcode within the GLA boundary. This process drew upon data collected in the 2009 Segmentation Survey, Attitudes to Cycling Survey 2007-2009, LTDS and MOSAIC 2007.
Individuals fall into a number of categories in terms of their likelihood to cycle: it is not nearly as simple as dividing people into cyclists and non-cyclists. ‘Rejectors’ – people for whom cycling, for either physical or attitudinal reasons, is not a possible mode of travel – are a minority. The majority of people are potential cyclists, albeit that this potential is of varying degrees. In terms of a market segmentation, nearly two thirds of the population falls into the broadly positive groups and nearly a third into the harder to interest segments. Only 14 per cent are categorised as absolute rejectors. Analysing passengers’ onward travel patterns
The cycle market is segmented into seven groups, broadly categorised along socio-economic lines. Listed below are the key characteristics of each of these market segments:
- **Urban living** – these are the prime target for cycling, particularly cycling for a purpose. They tend to be quite young, well educated and reasonably well-off. They have busy lifestyles and usually live close to town or city centres. Many choose to live without a car. This segment comprises 23 per cent of London’s population.
- **High earning professionals** – people in this segment are well educated and affluent, with many working in large multinationals. They tend to use personal rather than public transport. Men in this segment are a good prospect for cycling to work while female high earning professionals present more of a challenge. This segment comprises 15 per cent of London’s population.
- **Young couples and families** – these are fair prospects for cycling because their car ownership is quite low. They are of a prime age for cycling and many have young children who are likely to be exposed to cycling initiatives at school. On the other hand, their finances are likely to be tight, and their ethnic background is not necessarily aligned with a cycling culture. This segment comprises 17 per cent of London’s population.
- **Suburban lifestyle** – those in the suburban lifestyle segment tend to earn average income and to be heavily reliant on their car (in part as a consequence of living away from a town centre). It appears that men in this segment are far more likely than women to be interested in cycling, and cycling for leisure is as likely as cycling for purpose. This segment comprises 17 per cent of London’s population.
- **Hard pressed families** – this segment offers poor prospects for cycling, in part due to greater concerns over family finances. Ethnic background is also possibly a factor. Those that live in inner city flats and tower blocks (a significant proportion) could also have problems with bike storage. This segment comprises 21 per cent of London’s population.
- **Manual trades** – one of the least attractive prospects for cycling, largely due to a social influence which seems to be linked with the manual occupations which dominate this segment. This means that, unlike most other segments, men are hardly more likely to cycle than women. This segment comprises five per cent of London’s population.
- **Comfortable maturity** – people in this segment are not generally in scope for cycling due to their age. They tend to be reasonably well off, with some time available, and live in more suburban areas near parkland, so there may be some potential for off-road leisure cycling. This segment comprises eight per cent of London’s population.
Respondents to the central London Rail Termini Survey were classified into segments based on their home postcode. Only London residents are included in this analysis (40 per cent of all passengers). Figure 7.9 shows, by market segment, the proportion of the total arrivals and departures at central London rail termini, the cyclists on the survey day and those that ever cycle.
The largest component of the cycle market from central London rail termini is derived from those categorised as ‘urban living’ and ‘suburban lifestyle’. Together, individuals from these categories represent over half of the cycle market. Those categorised as ‘high earning professionals’ represented 16 per cent of the market on the survey day and 17 per cent of those that ever cycled. By contrast, those categorised in the ‘comfortable maturity’ and ‘young couples and families’ segments represent nine per cent and eight per cent respectively of those that cycled on the survey day and seven per cent and nine per cent respectively of those that ever cycle.
Figure 7.9: Proportion of each segment of the cycle market in the total arrivals and departures from central London rail termini, those that cycled on the survey day, and those that ever cycle
Source: Central London Rail Termini Surveys 2010
Potentially cyclable journeys
Analysis was carried out to identify journeys of up to 5km by bus and up to 3.5 km by Underground, where the trip-maker is under 60 years old. These journeys, currently completed by a mechanised mode, are deemed cyclable. Using these criteria, 255,000 journeys to and from central London rail termini have been identified that could feasibly be cycled, but are not cycled at present.
Ninety-five per cent of journeys identified as potentially cyclable were between 1km and 4km (as shown in Figure 7.10). The average distance of potentially cyclable journeys was around Analysing passengers’ onward travel patterns
2.3km. Cycle journey times over such distances would typically be around the same as those by mechanised modes and may offer time savings and reliability benefits for some journeys.
**Figure 7.10 Potentially cyclable journeys by distance**
Three in ten journeys identified as potentially cyclable are made by bus, seven in ten by Underground. Nine in ten potentially cyclable trips are made for commuting or business purposes.
**Who is making potentially cyclable journeys?**
Four per cent of those currently travelling by bus or Underground over distances deemed potentially cyclable report that they ever cycle their journey to or from their central London rail terminus. Given that 1.8 per cent of journeys to and from central London are currently cycled, there is some latent potential within this four per cent to cycle more frequently than they currently do.
Although broadly equal numbers of men and women were travelling through the termini by all modes, women were slightly more likely to be making journeys over a potentially cyclable distance by a mechanised mode: 56 per cent of potentially cyclable journeys were made by women.
Trips are deemed potentially cyclable if the trip-maker is under 60. Figure 7.11 shows the age profile of all journey makers, and those making potentially cyclable journeys, with those over 60 years old excluded. It is clear that the age profile of those making potentially cyclable trips was similar to the overall traveller profile. Figure 7.11 Comparison of age of traveller, potentially cyclable journeys and all journeys
Source: Central London Rail Termini Survey 2010 Analysing passengers’ onward travel patterns Part Two Analysing passengers’ onward travel patterns
Chapter 8 Summary of findings at Cannon Street Figures quoted are for all AM and PM peak arrivals and departures based on 3,682 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 27,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 15,000 | | AM peak departures | \*1 | | scale of contraflow in proportion to arrivals | 1% | | PM peak departures | 22,500 | | PM busiest hour | 1700 - 1800 | | departures | 12,500 | | PM peak arrivals | 500 | | scale of contraflow in proportion to departures | 3% |
Share of connecting modes in central London
| Mode | Percentage | |------------|------------| | Walk | 80% | | Underground| 9% | | Bus | 7% | | Rail | 3% |
London Underground line used
| Line | Percentage | |---------------|------------| | District / Circle | 81% | | Central | 13% | | Northern | 5% |
Purpose in central London
| Purpose | Percentage | |---------------|------------| | Usual workplace | 94% | | Other work | 3% | | Home | 2% |
Journey frequency
| Frequency | Percentage | |----------------------------|------------| | 5 or more days per week | 83% | | 3 or 4 days per week | 12% | | 1 or 2 days per week | 3% | | less than one day per week| 2% |
Onward distance travelled in central London
| Quartile | Distance | |-------------------|----------| | 1st quartile | 0.6 km | | 2nd quartile (median) | 0.9 km | | 3rd quartile | 3.8 km |
Location of trip end outside central London
| Location | Percentage | |-------------------|------------| | Within GLA | 58% | | Outside GLA | 42% |
1 Less than 250. Figure 8.1 Passenger distribution at Cannon Street, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 8.2 Cannon Street passenger flows
Cannon Street saw particularly tidal flows, with fewer than 1,000 contraflow passengers across both peaks.
Figure 8.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
Cannon Street had the highest walk share among the stations, largely due to the large proportion of short onward trips. However, even among the shortest distance bands, Cannon Street saw a higher share of walking trips than other termini. Cannon Street: Frequency of cycling and walking
Very few passengers at Cannon street stated that they ever cycle their onward journey in central London. Almost all those who stated that they ever walk did so on 5 days in the week prior to the survey.
Table 8.1 Cannon Street Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 17% | 3% | | 1 | 8% | 2% | | 2 | 17% | 3% | | 3 | 6% | 6% | | 4 | - | 5% | | 5 | 52% | 81% | | 6 | - | - | | 7 | - | * |
Figure 8.4 Cannon Street passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 9 Summary of findings at Charing Cross Figures quoted are for all AM and PM peak arrivals and departures based on 3,200 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 30,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 15,500 | | AM peak departures | 1,000 | | scale of contraflow in proportion to arrivals | 4% | | PM peak departures | 29,000 | | PM busiest hour | 1730 - 1830 | | departures | 12,500 | | PM peak arrivals | 5,500 | | scale of contraflow in proportion to departures | 19% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Walk | Northern | | 55% | 42% | | Underground | Bakerloo | | 27% | 39% | | Bus | District / Circle | | 11% | 19% | | Rail | | | 6% | | | Cycle | | | 1% | | | Taxi | | | 1% | |
| Purpose in central London | Journey frequency | |---------------------------|--------------------| | Usual workplace | 5 or more days per week | | 82% | 72% | | Other work | 3 or 4 days per week | | 6% | 12% | | Home | 1 or 2 days per week | | 4% | 6% | | Leisure/ Entertainment | less than one day per week | | 3% | 11% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|--------------------------------------------| | 1st quartile | Within GLA | | 0.8 km | 70% | | 2nd quartile (median) | Outside GLA | | 1.3 km | 30% | | 3rd quartile | | Figure 9.1 Passenger distribution at Charing Cross, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 9.2 Charing Cross passenger flows
Charing Cross saw the fifth highest number of passengers arriving in the AM peak, but few departing passengers.
Figure 9.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures Charing Cross: Frequency of cycling and walking
While 59 per cent of passengers walked their onward journey on the survey day, a total of 70 per cent stated that they ever walked the onward journey. The majority of these had walked on 5 days in the previous week, although over 20 per cent walked on only two days or fewer. Few passengers at Charing Cross stated that they ever cycle their onward journey.
Table 9.1 Charing Cross Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 15% | 7% | | 1 | - | 8% | | 2 | 21% | 7% | | 3 | 12% | 6% | | 4 | 19% | 8% | | 5 | 33% | 64% | | 6 | - | - | | 7 | - | - |
Figure 9.4 Charing Cross passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 10 Summary of findings at Euston Figures quoted are for all AM and PM peak arrivals and departures based on 3,479 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 23,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 11,500 | | AM peak departures | 8,000 | | scale of contraflow in proportion to arrivals | 35% | | PM peak departures | 23,500 | | PM busiest hour | 1730 - 1830 | | departures | 9,500 | | PM peak arrivals | 13,000 | | scale of contraflow in proportion to departures | 55% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|-------------------------------| | Underground | Northern | | 53% | 46% | | Walk | Victoria | | 20% | 37% | | Rail | Metropolitan | | 12% | 8% | | Bus | Hammersmith & City | | 8% | 5% | | Taxi | Circle | | 3% | 4% | | Cycle | | | 3% | |
| Purpose in central London | Journey frequency | |---------------------------|-------------------| | Usual workplace | 5 or more days per week | 40% | | Home | 3 or 4 days per week | 14% | | Other work | 1 or 2 days per week | 12% | | Leisure/ Entertainment | less than one day per week | 33% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | | 2.1 km | 11% | | 2nd quartile (median) | Outside GLA | | 3.6 km | 87% | | 3rd quartile | | Figure 10.1 Passenger distribution at Euston, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 10.2 Euston passenger flows
At Euston more passengers were observed in the PM peak than in the AM peak. Contraflow passengers accounted for a high proportion, with over half as many arrivals as departures in the PM peak.
Figure 10.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures Euston: Frequency of cycling and walking
Only 20 per cent of onward journeys were walked at Euston, reflecting the relatively long distances of onward travel at the station. Among those who stated that they ever walked the onward journey only 30 per cent had done so on five days of the previous seven, with almost 40 per cent doing so on only two days or fewer.
While 3 per cent of passengers cycled their onward journey on the survey day, a further 3 per cent stated that they sometimes cycle the onward journey. Only 9 per cent of those who ever cycle had not done so within the previous week, but over one third did so on only one or two of the previous seven days.
Table 10.1 Euston Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |-------------------------------------------------|-------|------| | 0 | 9% | 10% | | 1 | 20% | 19% | | 2 | 17% | 10% | | 3 | 7% | 7% | | 4 | 9% | 7% | | 5 | 20% | 30% | | 6 | \<1% | 1% | | 7 | 2% | 14% |
Figure 10.4 Euston passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 11 Summary of findings at Fenchurch Street Figures quoted are for all AM and PM peak arrivals and departures based on 1,116 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 22,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 11,500 | | AM peak departures | 500 | | scale of contraflow in proportion to arrivals | 2% | | PM peak departures | 19,000 | | PM busiest hour | 1700 - 1800 | | departures | 9,500 | | PM peak arrivals | 1,000 | | scale of contraflow in proportion to departures | 6% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|-------------------------------| | Underground | District / Circle | | 58% | 87% | | Walk | Metropolitan | | 24% | 12% | | Bus | | | 9% | | | Rail | | | 5% | | | Cycle | | | 1% | | | Taxi | | | 1% | |
| Purpose in central London | Journey frequency | |---------------------------|-------------------| | Usual workplace | 5 or more days per week | 79% | | Other work | 3 or 4 days per week | 13% | | Home | 1 or 2 days per week | 3% | | Leisure/ Entertainment | less than one day per week | 5% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|--------------------------------------------| | 1st quartile | Within GLA | | 0.6 km | 28% | | 2nd quartile (median) | Outside GLA | | 1.4 km | 71% | | 3rd quartile | | Figure 11.1 Passenger distribution at Fenchurch Street, PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 11.2 Fenchurch Street passenger flows
Fenchurch Street saw pronounced tidal flows of passengers, with only 1,500 contraflow passengers across both the AM and PM peaks.
Figure 11.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures Note: due to an error in the operation of the survey some records may be inaccurate and the results shown above should be treated as indicative.
**Fenchurch Street: Frequency of cycling and walking**
Among the 61 per cent of passengers at Fenchurch Street who stated that they ever walked the onward journey, nearly three quarters did so on five of the previous seven days.
2 per cent of passengers stated that they ever cycled their onward journey, but half had only done so on one or no days in the previous week.
**Table 11.1 Fenchurch Street Arrivals – Central London mode share cycle and walk**
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 19% | 4% | | 1 | 31% | 4% | | 2 | 7% | 6% | | 3 | 8% | 7% | | 4 | 7% | 5% | | 5 | 27% | 73% | | 6 | - | - | | 7 | - | - |
**Figure 11.4 Fenchurch Street passenger demographics, AM and PM peak arrivals and departures** Analysing passengers’ onward travel patterns
Chapter 12 Summary of findings at King’s Cross Figures quoted are for all AM and PM peak arrivals and departures based on 1,873 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 15,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 7,500 | | AM peak departures | 3,500 | | scale of contraflow in proportion to arrivals | 24% | | PM peak departures | 19,500 | | PM busiest hour | 1730 - 1830 | | departures | 8,000 | | PM peak arrivals | 6,000 | | scale of contraflow in proportion to departures | 30% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|-------------------------------| | Underground | Metropolitan / Hammersmith & City / Circle | 34% | | Walk | Victoria | 30% | | Rail | Northern | 20% | | Bus | Piccadilly | 16% | | Cycle | | | | Taxi | | |
| Purpose in central London | Journey frequency | |--------------------------------------------|--------------------------------| | Usual workplace | 5 or more days per week | 549% | | Home | 3 or 4 days per week | 13% | | Other work | 1 or 2 days per week | 9% | | Shopping/ Personal Business | less than one day per week | 29% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | 10% | | 2nd quartile (median) | Outside GLA | 87% | | 3rd quartile | | | Figure 12.1 Passenger distribution at King’s Cross, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 12.2 King’s Cross passenger flows
King’s Cross saw a greater number of passengers in the PM peak than in the AM peak. Many of these passengers were travelling against the peak flow, with contraflow passengers accounting for around one quarter of all passengers in the PM peak.
Figure 12.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
King’s Cross saw relatively high cycle mode shares for onward trips between 1km and 8km. 6 per cent of onward journeys between 2km and 5km were made by bicycle. King’s Cross: Frequency of cycling and walking
While 38 per cent of passengers at King’s Cross stated that they ever make their onward journey by walking, only 23 per cent did so on the survey day. Among those who ever walk, less than 30 per cent did so on 5 or more days in the previous week.
There was a relatively high proportion of onward trips made by bicycle at King’s Cross, with 4 per cent of passengers travelling by bicycle on the survey day. 7 per cent of passengers stated that they ever make their onward journey by bicycle, but as was observed with walking, many passengers appeared only to cycle the onward journey infrequently.
Table 12.1 King’s Cross Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 29% | 24% | | 1 | 13% | 14% | | 2 | 5% | 8% | | 3 | 4% | 6% | | 4 | 12% | 8% | | 5 | 31% | 25% | | 6 | 6% | 1% | | 7 | 2% | 3% |
Figure 12.4 King’s Cross passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 13 Summary of findings at Liverpool Street Figures quoted are for all AM and PM peak arrivals and departures based on 7,359 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 63,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 32,500 | | AM peak departures | 4,500 | | scale of contraflow in proportion to arrivals | 7% | | PM peak departures | 58,500 | | PM busiest hour | 1700 - 1800 | | departures | 26,500 | | PM peak arrivals | 10,000 | | scale of contraflow in proportion to departures | 17% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Walk | Central | | 48% | 41% | | Underground | Circle | | 32% | 22% | | Bus | Metropolitan | | 10% | 19% | | Rail | Hammersmith & City | | 6% | 11% | | Cycle | Northern | | 2% | 7% |
| Purpose in central London | Journey frequency | |--------------------------------------------|------------------------------| | Usual workplace | 5 or more days per week | | 81% | 72% | | Home | 3 or 4 days per week | | 6% | 12% | | Other work | 1 or 2 days per week | | 6% | 5% | | Leisure/ Entertainment | less than one day per week | | 2% | 10% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | | 0.9 km | 35% | | 2nd quartile (median) | Outside GLA | | 1.9 km | 63% | | 3rd quartile | | | 4.2 km | | Figure 13.1 Passenger distribution at Liverpool Street, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 13.2 Liverpool Street passenger flows
Liverpool Street is among the four busiest termini with AM peak flows dominated by passengers arriving in central London.
Figure 13.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
The proximity of Liverpool Street to the City means many onward trips were relatively short, with over half under 2km. A large proportion of onward trips under 2km were walked. Liverpool Street: Frequency of cycling and walking
While 40 per cent of passengers walked on the survey day, another 17 per cent stated that they ever do so. Around a quarter of those who stated that they ever walked had only done so on two or fewer of the previous seven days.
Of the 5 per cent of respondents who stated that they ever cycle the onward journey, almost one quarter had not done so in the seven days prior to the survey.
Table 13.1 Liverpool Street Departures – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 23% | 9% | | 1 | 13% | 9% | | 2 | 9% | 6% | | 3 | 9% | 7% | | 4 | 10% | 8% | | 5 | 32% | 46% | | 6 | 1% | 1% | | 7 | 5% | 4% |
Figure 13.4 Liverpool Street passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 14 Summary of findings at London Bridge Figures quoted are for all AM and PM peak arrivals and departures based on 4,064 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 68,000 | | AM busiest hour | 0800 - 0900 | | arrivals | 31,000 | | AM peak departures | 7,000 | | scale of contraflow in proportion to arrivals | 11% | | PM peak departures | 59,000 | | PM busiest hour | 1730 - 1830 | | departures | 26,500 | | PM peak arrivals | 15,000 | | scale of contraflow in proportion to departures | 25% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|-------------------------------| | Walk | Jubilee | | 46% | 54% | | Underground | Northern | | 29% | 45% | | Rail | | | 11% | | | Bus | | | 11% | | | Cycle | | | 1% | |
| Purpose in central London | Journey frequency | |---------------------------|--------------------| | Usual workplace | 5 or more days per week | 71% | | Home | 3 or 4 days per week | 15% | | Other work | 1 or 2 days per week | 6% | | Education | less than one day per week | 8% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|--------------------------------------------| | 1st quartile | Within GLA | | 0.8 km | 62% | | 2nd quartile (median) | Outside GLA | | 1.8 km | 34% | | 3rd quartile | | Figure 14.1 Passenger distribution at London Bridge, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 14.2 London Bridge passenger flows
London Bridge is among the busiest termini. During the PM peak contraflow passengers represented one fifth of the total.
Figure 14.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
A relatively large proportion of onward trips between 1km and 2km were made by bus, mostly by passengers crossing the Thames to reach the City. Around one quarter of onward trips were between 2km and 5km, including a significant number to Canary Wharf using the Jubilee line. London Bridge: Frequency of cycling and walking
57 per cent of passengers stated that they ever walked their onward journey, the vast majority of whom did so on the survey day.
A relatively small proportion of passengers stated that they ever cycled their onward journey, and even among those who do cycle almost 60 per cent had done so on 2 days or fewer of the seven days prior to the survey.
Table 14.1 London Bridge Arrivals – Central London mode share cycle & walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 29% | 8% | | 1 | 11% | 7% | | 2 | 19% | 6% | | 3 | 9% | 7% | | 4 | 2% | 7% | | 5 | 28% | 56% | | 6 | 1% | 1% | | 7 | 1% | 7% |
Figure 14.4 London Bridge passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 15 Summary of findings at Marylebone Figures quoted are for all AM and PM peak arrivals and departures based on 1,308 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 10,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 5,500 | | AM peak departures | 1,500 | | scale of contraflow in proportion to arrivals | 14% | | PM peak departures | 9,500 | | PM busiest hour | 1730 - 1830 | | departures | 4,500 | | PM peak arrivals | 3,000 | | scale of contraflow in proportion to departures | 33% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|-------------------------------| | Underground | Bakerloo | | 62% | 59% | | Walk | Jubilee | | 18% | 18% | | Bus | Metropolitan | | 10% | 15% | | Rail | Hammersmith and City | | 4% | 4% | | Cycle | Circle | | 4% | 4% | | Taxi | | | 2% | |
| Purpose in central London | Journey frequency | |---------------------------|-------------------| | Usual workplace | 5 or more days per week | 55% | | Other work | 3 or 4 days per week | 16% | | Home | 1 or 2 days per week | 10% | | Leisure/ Entertainment | less than one day per week | 19% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | | 2.2 km | 10% | | 2nd quartile (median) | Outside GLA | | 3.5 km | 89% | | 3rd quartile | | Figure 15.1 Passenger distribution at Marylebone, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 15.2 Marylebone passenger flows
Marylebone saw passenger flows among the lowest of the termini. The busiest hour saw around 5,000 passengers arriving.
Figure 15.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
There were relatively few short onward trips at Marylebone, with onward destinations spread equally throughout central London and some in Canary Wharf. Many of the onward trips made by London Underground involved passengers making a short walk to Baker Street. Marylebone: Frequency of cycling and walking
Cycle mode share was among the highest seen at the termini, due in part to the large proportion of trips between 2km and 5km. Of the 5 per cent of passengers who stated that they ever cycle their onward journey, almost half had done so on five of the previous seven days.
The small proportion of short onward trips at Marylebone meant that the share of trips walked at Marylebone was relatively low.
Table 15.1 Marylebone Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 20% | 18% | | 1 | 10% | 15% | | 2 | 5% | 8% | | 3 | 7% | 6% | | 4 | 10% | 9% | | 5 | 48% | 44% | | 6 | - | - | | 7 | - | - |
Figure 15.4 Marylebone passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 16 Summary of findings at Moorgate Figures quoted are for all AM and PM peak arrivals and departures based on 1,489 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 10,000 | | AM busiest hour | 0800 - 0900 | | arrivals | 5,500 | | AM peak departures | 500 | | scale of contraflow in proportion to arrivals | 5% | | PM peak departures | 8,500 | | PM busiest hour | 1730 - 1830 | | departures | 4,000 | | PM peak arrivals | 1,500 | | scale of contraflow in proportion to departures | 17% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Walk | Northern | | 54% | 63% | | Underground | Metropolitan | | 35% | 18% | | Rail | Hammersmith & City | | 6% | 11% | | Bus | Circle | | 2% | 8% | | Cycle | | | 1% | |
| Purpose in central London | Journey frequency | |---------------------------|--------------------| | Usual workplace | 5 or more days per week | 73% | | Home | 3 or 4 days per week | 14% | | Other work | 1 or 2 days per week | 5% | | Education | less than one day per week | 7% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | | 0.6 km | 72% | | 2nd quartile (median) | Outside GLA | | 1.1 km | 27% | | 3rd quartile | | Figure 16.1 Passenger distribution at Moorgate, AM and PM peak arrivals and departures. Analysing passengers’ onward travel patterns
Figure 16.2 Moorgate passenger flows
Moorgate saw the lowest number of passengers among the termini. While there was a strong peak in arrivals between 0830 and 0900, the PM peak saw passengers spread across the period.
Figure 16.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
Almost half of onward trips were under 1km, 93 per cent of which were walked. Over half of trips between 1km and 2km were made by Underground. Moorgate: Frequency of cycling and walking
A high proportion of those passengers who stated that they ever walked their onward trip did so frequently.
Around one third of passengers who stated that they ever cycle the onward journey did so only once or not at all in the seven days prior to the survey.
Table 16.1 Moorgate Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |-------------------------------------------------|-------|------| | 0 | 23% | 9% | | 1 | 11% | 9% | | 2 | 7% | 5% | | 3 | 4% | 6% | | 4 | 16% | 3% | | 5 | 31% | 57% | | 6 | - | 2% | | 7 | - | 6% |
Figure 16.4 Moorgate passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 17 Summary of findings at Paddington Figures quoted are for all AM and PM peak arrivals and departures based on 3,400 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 22,000 | | AM busiest hour | 0800 - 0900 | | arrivals | 10,500 | | AM peak departures | 8,000 | | scale of contraflow in proportion to arrivals | 37% | | PM peak departures | 23,000 | | PM busiest hour | 1730 - 1830 | | departures | 10,000 | | PM peak arrivals | 10,500 | | scale of contraflow in proportion to departures | 45% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Underground | Bakerloo | | 62% | 55% | | Walk | Hammersmith & City | | 12% | 23% | | Bus | Circle | | 7% | 17% | | Rail | District | | 6% | 3% | | Cycle | Central | | 4% | 2% | | Taxi | | | 4% | |
| Purpose in central London | Journey frequency | |---------------------------|--------------------| | Usual workplace | 5 or more days per week | 44% | | Home | 3 or 4 days per week | 17% | | Other work | 1 or 2 days per week | 10% | | Shopping / Personal Business | less than one day per week | 29% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | | 3 km | 29% | | 2nd quartile (median) | Outside GLA | | 4.6 km | 70% | | 3rd quartile | | Figure 17.1 Passenger distribution at Paddington, AM and PM peak arrivals and departures. Analysing passengers’ onward travel patterns
Figure 17.2 Paddington passenger flows
Paddington saw a high proportion of contraflow passengers in both peaks. The busiest half hour in the PM peak was between 1800 and 1830.
Figure 17.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
With very few trips below 2km, many passengers relied on bus, Underground or pedal cycle for their onward journey. Paddington: Frequency of cycling and walking
An exceptionally high proportion – 10 per cent – of passengers at Paddington stated that they ever cycle their onward journey. Half of that proportion cycled their onward journey on the survey day.
Few short onward trips meant the share of trips walked was relatively low at 12 per cent.
Table 17.1 Paddington Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 24% | 24% | | 1 | 7% | 15% | | 2 | 15% | 8% | | 3 | 4% | 5% | | 4 | 12% | 5% | | 5 | 18% | 27% | | 6 | - | \*% | | 7 | 15% | 3% |
Figure 17.4 Paddington passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 18 Summary of findings at St Pancras Figures quoted are for all AM and PM peak arrivals and departures based on 2,758 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 17,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 9,000 | | AM peak departures | 7,500 | | scale of contraflow in proportion to arrivals | 44% | | PM peak departures | 19,000 | | PM busiest hour | 1730 - 1830 | | departures | 7,500 | | PM peak arrivals | 8,500 | | scale of contraflow in proportion to departures | 45% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Underground | Victoria | | 47% | 30% | | Walk | Metropolitan / Hammersmith & City / Circle | | 23% | 30% | | Rail | Piccadilly | | 15% | 24% | | Bus | Northern | | 7% | 16% | | Taxi | | | 4% | | | Cycle | | | 2% | |
| Purpose in central London | Journey frequency | |----------------------------|-------------------| | Usual workplace | 5 or more days per week | 44% | | Home | 3 or 4 days per week | 11% | | Other work | 1 or 2 days per week | 7% | | Leisure / Entertainment | less than one day per week | 38% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|--------------------------------------------| | 1st quartile | Within GLA | 16% | | 1.7 km | Outside GLA | 84% | | 2nd quartile (median) | | | 3.3 km | | | 3rd quartile | | | 8.2 km | | Figure 18.1 Passenger distribution at St Pancras, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Figure 18.2 St Pancras passenger flows
St Pancras saw a high proportion of contraflow passengers in both peaks. While the AM peak was pronounced between 0800 and 0900, the PM peak saw passengers spread across the period.
Figure 18.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
The majority of trips between 2km and 5km were made by Underground. Taxis accounted for a relatively large share of trips between 1km and 2km. St Pancras: Frequency of cycling and walking
4 per cent of passengers stated that they ever make their onward trips by cycling, although almost half of these had not done so in the seven days prior to the survey.
One third of passengers stated that they ever walked their onward journey, while 22 per cent of passengers walked on the survey day.
Table 18.1 St Pancras Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 47% | 15% | | 1 | 7% | 13% | | 2 | 7% | 9% | | 3 | 1% | 8% | | 4 | 6% | 8% | | 5 | 32% | 47% | | 6 | - | - | | 7 | - | - |
Figure 18.4 St Pancras passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 19 Summary of findings at Victoria Figures quoted are for all AM and PM peak arrivals and departures based on 2,855 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 59,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 28,500 | | AM peak departures | 7,500 | | scale of contraflow in proportion to arrivals | 13% | | PM peak departures | 50,000 | | PM busiest hour | 1730 - 1830 | | departures | 21,000 | | PM peak arrivals | 16,500 | | scale of contraflow in proportion to departures | 33% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Underground | Victoria | | Walk | District | | Bus | Circle | | Rail | | | Cycle | | | 38% | 56% | | 33% | 32% | | 13% | 10% | | 12% | | | 1% | |
| Purpose in central London | Journey frequency | |---------------------------|-------------------| | Usual workplace | 5 or more days per week | | Home | 3 or 4 days per week | | Other work | 1 or 2 days per week | | Education | less than one day per week | | 71% | 64% | | 10% | 15% | | 8% | 6% | | 3% | 14% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|--------------------------------------------| | 1st quartile | Within GLA | | 2nd quartile (median) | Outside GLA | | 3rd quartile | | | 1.1 km | 57% | | 2.7 km | 38% | | 5.6 km | | Figure 19.1 Passenger distribution at Victoria, AM and PM peak arrivals and departures. Analysing passengers’ onward travel patterns
Figure 19.2 Victoria passenger flows
Victoria was among the busiest of the termini, with 25,000 passengers arriving in the busiest hour of the AM peak.
Figure 19.3 Mode shares by distance bands of onward journey, AM and PM peak arrivals and departures
Around half of onward trips were between 2km and 5km, most of which were made by Underground. One quarter of onward trips were under 1km meaning a large number of passengers walked to their final destination. Victoria: Frequency of cycling and walking
While 5 per cent of passengers at Victoria stated that they ever cycle their onward journey, only 1 per cent did so on the survey day. Over half had not cycled the onward journey in the previous seven days.
16 per cent of passengers stated that they sometimes walk their onward journey but did not walk on the survey day.
Table 19.1 Victoria Arrivals – Central London mode share cycle and walk
| Days mode used from station to destination in week prior to survey (share of those who ever use) | Cycle | Walk | |---|---|---| | 0 | 55% | 11% | | 1 | 11% | 21% | | 2 | 7% | 6% | | 3 | 2% | 5% | | 4 | 7% | 5% | | 5 | 17% | 44% | | 6 | 2% | 1% | | 7 | - | 6% |
Figure 19.4 Victoria passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns
Chapter 20 Summary of findings at Waterloo Figures quoted are for all AM and PM peak arrivals and departures based on 9,652 responses. Passenger flows are rounded to the nearest 500.
| AM passenger flows | PM passenger flows | |--------------------|--------------------| | AM peak arrivals | 85,500 | | AM busiest hour | 0800 - 0900 | | arrivals | 45,500 | | AM peak departures | 15,500 | | scale of contraflow in proportion to arrivals | 18% | | PM peak departures | 81,500 | | PM busiest hour | 1730 - 1830 | | departures | 37,500 | | PM peak arrivals | 24,000 | | scale of contraflow in proportion to departures | 30% |
| Share of connecting modes in central London | London Underground line used | |--------------------------------------------|------------------------------| | Underground | Waterloo & City | | 55% | 35% | | Walk | Bakerloo | | 21% | 22% | | Bus | Jubilee | | 11% | 22% | | Rail | Northern | | 9% | 21% | | Cycle | | | 2% | | | Taxi | | | 1% | |
| Purpose in central London | Journey frequency | |---------------------------|-------------------| | Usual workplace | 5 or more days per week | 63% | | Home | 3 or 4 days per week | 16% | | Other work | 1 or 2 days per week | 7% | | Leisure/ Entertainment | less than one day per week | 14% |
| Onward distance travelled in central London | Location of trip end outside central London | |--------------------------------------------|---------------------------------------------| | 1st quartile | Within GLA | | 1.6 km | 47% | | 2nd quartile (median) | Outside GLA | | 2.4 km | 52% | | 3rd quartile | | Figure 20.1 Onward modes of AM peak National Rail arrivals at Waterloo station by final trip destination Analysing passengers’ onward travel patterns
Figure 20.2 Waterloo passenger flows
Waterloo is the busiest of the central London termini. Between 0830 and 0930, 24,000 passengers were counted arriving at Waterloo – more passengers than were observed over the entire AM peak at most of the termini.
Figure 20.3 Mode shares for trips made within distance bands among arriving passengers
A high proportion of onward trips were between 2km and 5km and the majority of these were made by Underground, with the Waterloo & City line carrying many passengers directly to the City. Around one quarter of trips between 1km and 2km were made by bus. Many of these involved crossing the Thames to reach areas around Holborn. Waterloo: Frequency of cycling and walking
5 per cent of passengers stated that they ever cycled their onward journey, although only 1 per cent did so on the survey day. Over half of those who ever cycle had not done so during the seven days prior to the survey.
44 per cent of passengers stated that they ever walked the onward journey, but less than one in five did so on the survey day.
Table 20.1 Waterloo Arrivals – Central London mode share cycle and walk
| | Cycle | Walk | |----------------------|-------|------| | Mode share on survey day | 1% | 19% | | Share who ever use from station to destination | 5% | 44% | | Days mode used from station to destination in week prior to survey (share of those who ever use) | | | | 0 | 52% | 32% | | 1 | 11% | 19% | | 2 | 7% | 7% | | 3 | 6% | 7% | | 4 | 6% | 5% | | 5 | 12% | 23% | | 6 | 1% | \*% | | 7 | 1% | 2% |
Figure 20.4 Waterloo passenger demographics, AM and PM peak arrivals and departures Analysing passengers’ onward travel patterns Appendix Analysing passengers’ onward travel patterns
Methodology note
The thirteen central London termini rail were surveyed during 2010. The survey sought to obtain information on passenger journeys including origins and destinations, as well as modes used to access the station.
The surveys were conducted over two phases with five stations in the first phase in spring 2010 and eight stations in the second phase in autumn 2010. Table A1 shows the stations by survey date and survey period.
Each station was surveyed on a single day, between 07:00-10:00 and 16:00-19:00, with passengers arriving and departing by all services included in the sample at each station.
Table A1 Project phases and survey dates
| Station | Survey period | Survey date | |------------------|---------------|---------------| | Cannon Street | Spring | 07/07/2010 | | Charing Cross | Spring | 08/07/2010 | | Fenchurch Street | Spring | 24/06/2010 | | Marylebone | Spring | 01/07/2010 | | St Pancras | Spring | 30/06/2010 | | Euston | Autumn | 14/10/2010 | | Liverpool Street | Autumn | 21/10/2010 | | Moorgate | Autumn | 13/10/2010 | | Paddington | Autumn | 19/10/2010 | | King’s Cross | Autumn | 20/10/2010 | | London Bridge | Autumn | 19/10/2010 | | Victoria | Autumn | 21/10/2010 | | Waterloo | Autumn | 24/11/2010 |
The survey methodology involved distribution of self-completion questionnaires at each station. These could be returned by freepost or, for some stations, respondents could alternatively complete the survey online at the web address printed on the questionnaire. The online option was taken up by only a small proportion of respondents.
While the questionnaires were generally the same at each station, they were produced separately for each station. They included the name of the station in the question text and some key station-specific differences:
- Respondents were asked to select the rail service they had/were going to use at stations serving more than one line;
- The list of access/egress modes was tailored to feature those Underground lines available from each station, as per Table A2, in order to provide additional detail on travel patterns. Different questionnaires were also produced for each direction of travel (arriving and departing), so at least two questionnaires were available for each station. This was necessary so that the order and tense of the questions were suitable for the direction of travel and enabled respondents to understand and complete the questionnaire correctly.
The questionnaire remained largely the same between the spring and autumn surveys. The only change made was the addition of the question ‘If you ever cycle to/from [name] station, what type of bicycle do you use? Tick all that apply’ (Q13c).
Questionnaires were handed out by survey staff on the station concourse. The number of staff and locations within the station were dependent on the layout of each station. The aim was to give surveys to around 1 in 4 passengers at most stations. Only rail passengers were in scope, and the exclusion of users of other modes had to be considered at stations where there were pedestrian routes and interchanges between other modes, whereby some people at the station were not rail users. Questionnaires returned by non-rail users were removed at the data cleaning stage.
______________________________________________________________________
2 Some stations also had specific questionnaires for individual services/routes Analysing passengers’ onward travel patterns
Questionnaire distribution was monitored by survey supervisors, who noted the ID of pre-numbered/ordered questionnaires by surveyor at regular periods during the survey. Table 3 summarises the details of the survey handout and the achieved sample.
Table A3 Survey handout distribution and sample
| Station | No of questionnaires distributed | Headcount | Distribution rate | No of questionnaires returned | Sample rate | |--------------------|----------------------------------|-----------|-------------------|-------------------------------|-------------| | Cannon Street | 14,000 | 51,147 | 27% | 3,694 | 7% | | Charing Cross | 13,771 | 66,091 | 21% | 3,243 | 5% | | Euston | 16,789 | 67,956 | 25% | 3,497 | 5% | | Fenchurch Street | 6,476 | 42,978 | 15% | 1,127 | 3% | | King’s Cross | 9,004 | 44,885 | 20% | 1,990 | 4% | | Liverpool Street | 34,755 | 136,936 | 25% | 7,410 | 5% | | London Bridge | 20,181 | 149,368 | 15% | 4,268 | 3% | | Marylebone | 4,907 | 24,696 | 20% | 1,331 | 5% | | Moorgate | 6,334 | 20,000 | 32% | 1,599 | 8% | | Paddington | 15,683 | 63,852 | 25% | 3,421 | 5% | | St Pancras | 15,247 | 53,638 | 28% | 2,798 | 5% | | Victoria | 20,382 | 133,539 | 15% | 3,015 | 2% | | Waterloo | 35,870 | 206,247 | 17% | 9,659 | 5% |
A headcount of rail passengers was conducted at the same time as the questionnaire handout. Additional survey staff recorded the total number of passengers entering and exiting the platforms across the peaks, broken into 30-minute periods.
This allowed distribution and response rates to be calculated, so that the data could be weighted to represent all passengers during the survey periods. The expansion factors were calculated to match the number of responses to the total passenger flow per train service, direction and 30-minute period.
Survey notes, issues, observations and interruptions
Survey supervisors noted any issues during the surveys which may have affected respondents or passenger volumes.
- Cannon Street
Between 07:30 and 08:30 most services suffered delays of just over 15 minutes. Between 08:50 and 10:00 some services were delayed (around 10 minutes). Questionnaires ran out at 09:30, due to a higher than expected handout rate. This did not affect the PM peak distribution.
Construction works were underway at the station. • **Charing Cross**
There were no delays in either period. Delays occurred on the District and Circle lines at around 08:30.
• **Euston**
There were no delays to rail services.
Minor delays to Victoria line occurred during AM peak.
There was a part suspension to the Metropolitan line and delays to the Central, Circle and Hammersmith & City lines during PM peak.
• **Fenchurch Street**
There were no delays in either period.
An error occurred in the distribution of the AM surveys, meaning that surveys were distributed the wrong way round; this was corrected at the data cleaning stage.
• **King’s Cross**
There were no disruptions to services.
Construction works were underway at the station.
• **Liverpool Street**
There were no delays to rail services.
The Jubilee line was part suspended and the Piccadilly line had severe delays in the AM peak.
There were severe delays during the PM peak on the Jubilee line, and delays on the Piccadilly and Metropolitan lines.
• **London Bridge**
There were no disruptions to services.
There was a police presence in the PM peak due to football fans using the station. The survey had to be suspended at 18:50.
Construction works were underway at the station.
• **Marylebone**
There were no delays in the AM peak period.
Two arrivals were delayed in the PM peak (less than 15 minutes). Analysing passengers’ onward travel patterns
- **Moorgate**
Due to the layout of the station, rail passengers merged with Underground passengers. A number of questionnaires were given to Underground (non-rail) passengers. These were removed at the data cleaning stage.
There were no delays to rail services.
Metropolitan line delays occurred during the PM peak.
- **Paddington**
A small number of respondents used the Central line from nearby Lancaster Gate station. This was not included on the questionnaire but was entered manually by some. This was dealt with during data cleaning.
There was an error on the survey form. Q12 of the arrivals questionnaire referred to ‘Liverpool Street’ rather than Paddington. There did not appear to be any impact on respondents.
The 07:15 service to Cardiff was delayed (around 15 minutes).
Delays to the Circle and District lines throughout the AM peak. Minor delays were also recorded on the Hammersmith & City and Metropolitan lines. Part suspensions occurred on the Northern and Victoria lines after 09:30.
Delays occurred to the Bakerloo and Metropolitan lines during the PM peak.
- **St Pancras**
The survey covered passengers using all services at St Pancras including Eurostar.
There were small delays on the Thameslink service (mostly less than 15 minutes), and one Bedford service was cancelled during the AM peak.
Some small delays occurred on Eurostar arrivals during the AM peak (less than 10 minutes).
Severe delays and suspensions occurred on the Circle and Hammersmith & City lines during AM peak.
- **Victoria**
There were delays to sign in processing so counts and survey distribution started slightly late in AM peak.
- **Waterloo**
There were no major delays. In the PM peak at around 18:30 a number of arriving services were slightly delayed. In the AM peak (at around 08:30), the Underground station was overcrowded and access was limited while the station was cleared. This caused delays on the Jubilee line and the queuing of passengers on the main station concourse.
It took longer than anticipated to get staff signed in on the morning of the survey; as a result the counts and survey distribution did not start until 07:15.
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54249bbf31ea176e4962034606ebd8ae1602f994 | CHIEF EXECUTIVE’S REPORT TO THE SEPTEMBER BOARD
GENERAL ACTIVITY UPDATE
1. Since the last Board meeting, I have continued to build on our strong working relationships with government departments, regulators and other stakeholders. I have met with representatives from the Department of Health and Social Care (DHSC), the Department for the Environment, Food and Rural Affairs (Defra), Food Standards Scotland (FSS), the Advertising Standards Authority and the Chartered Institute of Environmental Health.
2. I have also met with industry stakeholders including Moy Park and Midland Foods.
EU EXIT
3. Since my report in June, the FSA has continued to plan and prepare for exit from the European Union. Our priority continues to be to maintain the UK’s high standards of food and feed safety and consumer protection.
4. For the most part, the legislative framework within which we operate is established in directly applicable EU legislation. One of our key concerns is to make sure that the legislation continues to work as it is converted into UK law using the powers of the European Union (Withdrawal) Act 2018. The main corrections will be to provide suitable replacements for the risk management function currently undertaken by the European Commission and for the risk assessment function currently undertaken by the European Food Safety Authority (EFSA) to transfer in retained EU Law to the appropriate UK authorities. On 4 September we launched a UK consultation that runs until 14 October to seek the views of stakeholders on changes that Ministers propose to make.
5. While matters relating to food and feed safety and hygiene are devolved – meaning that the four nations of the UK can make and implement their own law in these areas - this general policy area has been designated by the UK Government for consideration for a common approach to regulation, and for a framework of regulation which extends to the whole UK¹.
6. Discussions are ongoing between the UK national authorities as to how best this framework can be arranged, and whether it needs new law to create it. The FSA has unique experience in working successfully across the devolved landscape and is engaging fully with colleagues in FSS, other devolved government departments, Defra
¹ Food & feed safety and hygiene has been identified by Her Majesty’s Government as one of 24 policy areas that are subject to more detailed discussion with the Devolved Administrations to explore whether legislative common framework arrangements might be needed, in whole or in part: https://www.gov.uk/government/publications/frameworks-analysis. and DHSC to progress an agreed and collaborative approach to the food and feed policies for which we are responsible.
7. On 23 August, the government began the process of issuing Technical Notices to set out information to allow businesses and citizens to understand what they would need to do in the unlikely event of a “no deal” scenario so they can make informed plans and preparations. The FSA will continue to engage with stakeholders as we prepare for a range of scenarios.
8. The FSA has conducted another round of consumer insight research into the views of consumers in relation to EU and food. The outcome of the most recent round has been published: [www.food.gov.uk/research/research-projects/consumers-views-on-eu-and-food](http://www.food.gov.uk/research/research-projects/consumers-views-on-eu-and-food)
**REVIEW OF MEAT CUTTING PLANTS AND COLD STORES**
09. We have now completed the evidence gathering phase of the review including surveys of food businesses, representative bodies, local authorities and a series of well received User Design Workshops with a wide range of stakeholders.
10. A range of options for change have been developed and are being evaluated against criteria which have been validated by the external Challenge Group.
11. The review team remains on track to produce the review report and accompanying Board paper for publication on 11th October, in advance of discussion and consideration of recommendations at the joint FSA/FSS Board retreat on 16th October.
**INTERNATIONAL WORK**
**Heads of Agencies (HoA)**
12. As part of our ongoing international engagement, there have been several successful inbound and outward international visits during this period. In June, the FSA hosted a delegation from Ukraine as part of a World Bank Group funded study tour to the UK and Ireland to learn about food safety and traceability, particularly in the beef and dairy sector.
13. At the end of July, Operations colleagues undertook a visit to the US, comprising site visits to a high-volume beef plant, a poultry plant to observe the New Poultry Inspection System (NSIS) and a high-volume pork plant to observe the HACCP Based Inspection Model Project (HIMP).
14. We have also continued our close working relationship with the Ministry for Primary Industries of New Zealand (NZMPI), most recently meeting with Steve Hathaway, Director of Science and Risk Assessment. This provided the opportunity to progress work updating our co-operative science work programme which sits under the wider Memorandum of Understanding (MOU) between the FSA and NZMPI. In parallel, we have had productive informal discussions with New Zealand to agree how we ramp up wider work more generally under the remit of the MOU.
15. Since the last Board meeting, I have also continued to build on our strong working bilateral relationships with other countries. I met informally with the Inspector General of the Netherlands Food and Consumer Product Safety Authority (NVWA) and discussed how to invest in future collaboration, such as developments in criminal investigation of food fraud, risk communication and data management (sharing and analysis).
16. I had a similar initial meeting with the Canadian Food Inspection Agency President to establish our relationship and form a basis for investing in future collaboration. This will seek to build on the strong working relationships we already have in place with our Canadian counterparts in the international arena.
**Codex**
17. The start of July saw the 41st session of the main Codex Plenary, the Codex Alimentarius Commission (CAC). CAC41 was busy and productive with the adoption and progression of numerous standards, progress on a huge range of other standards and ten new work items submitted by six different Committees which were approved by CAC.
18. I also wish to congratulate Steve Wearne for his first CAC as Vice Chair, where he effectively oversaw a number of discussions during the week.
19. The UK took the opportunity to build strengthened relationships with key international countries and organisations holding useful bilaterals to progress important policy issues.
20. We are now planning for two Codex Committee meetings later this year dealing with food safety, which are an FSA lead, and where we are contributing to some important work. The first is the Codex Committee on Food Import and Export Certification where the UK is chairing discussions relating to the development of Codex guidance for competent authorities that take account of third party assurance programmes to support their national food control system objectives.
21. The second is the Codex Committee for Food Hygiene (CCFH) where the UK is chairing discussions for the revision of the General Principles of Food Hygiene and HACCP guidelines. The upcoming meeting of CCFH in Panama in November is expected to make significant progress on the text. PROGRESS ON NATIONAL FOOD CRIME UNIT (NFCU) PHASE 2
22. Work continues on the implementation of the Phase 2 build for the NFCU. All project workstreams are on target to deliver a minimum viable operational capability by 31st March 2019. Recruitment into the 60 additional posts is well underway with sifts taking place during August and interviews scheduled for September.
23. Work to secure the required enforcement powers is progressing in two parallel phases. Whilst legislative change to secure the full powers required will likely be considered by Parliament in its second session, a Ministerial directive has been prepared to secure interim powers under food law. Local authorities will be consulted on the impact of the directive during September.
RAW DRINKING MILK
Triggers for Review
24. At its last meeting, the Board agreed with the recommendations proposed in the RDM paper to improve the existing controls and to adopt a proportionate escalation approach to introducing measures and controls. It was also agreed that a mechanism for data-enabled “triggers” that would prompt the Board to review the control strategy should be established.
25. The Executive is in the process of exploring possible mechanisms. A project led by a team of independent data scientists was commissioned in July. The project will consider options for establishing data driven triggers and thresholds. A paper detailing the findings and the possible mechanism for review will be presented to the Board at the meeting in December.
Labelling SI
26. At its last meeting, the Board was informed of delays that had affected a number of FSA SIs (including the RDM labelling SI) due to new central government guidance on reducing reliance on criminal sanctions in legislation.
27. The FSA has worked closely with the Cabinet Office to resolve this issue and was able to reach an agreement in July on the FSA approach, sufficient to enable ministerial agreement on the FSA measures submitted for collective agreement by DHSC. This is now going forward but it was not possible to gain ministerial agreement before Parliament rose for summer recess. This will be progressed once Parliament returns in September and a date for laying the SI will need to be identified, taking account of the level of EU Exit SIs anticipated. ALLERGENS CAMPAIGN
28. There has been an increasing focus on young people with food allergies over the last few years, due to several deaths related to food allergy incidents. We have insight that suggests young adults are reluctant to talk publicly about having an allergy, for example they are disinclined to highlight this to food businesses when they order a takeaway or eat out. This group is also more likely to take risks when eating, and sometimes don’t want to carry their Epi pen with them.
29. Earlier this month (10 September) we launched a campaign entitled #easytoASK with the aim of raising awareness among young people (16-24) of their rights when it comes to the provision of allergen information when eating out. Our research as demonstrated that this age group often don’t feel confident about speaking up about their allergy – something that we want to address and encourage them to speak up about their allergies among friends and to servers when eating out. As part of the campaign, we will also be aiming to increase food business’ understanding of the importance of complying with allergen regulations and the benefits of asking for allergen information from their customers.
LOCAL AUTHORITY ENFORCEMENT DATA
30. The 2017/18 ‘Local authority food law enforcement report for England, Northern Ireland and Wales’ and individual local authority (LA) data will be published as official statistics on 17 September. The report can be seen at; www.food.gov.uk/about-us/local-authorities
31. Trend analysis in the report is for England, Northern Ireland and Wales only as data on food law enforcement activity undertaken in Scotland over the past year have for the first time been collected on the Scottish National Database. Food Standards Scotland will publish its report in October.
32. A detailed Board paper on LA performance, including food law enforcement activity data collected electronically via the Local Authority Enforcement Monitoring System (LAEMS) and other data collected via the Balanced Score Card project is planned for December.
REVIEW OF OFFICIAL LABORATORY SYSTEM
33. A review has been commissioned on the current official laboratory system that is used by FSA, FSS, local government and other government departments to provide the scientific and analytical expertise in support of the delivery of Competent Authority responsibilities. The FSA is leading this review which will be undertaken in 2 Phases:
- Phase 1: to address the issue of access to current laboratory services available to Government departments in order for Government to undertake its competent authority functions to current requirements leading up to EU Exit.
- Phase 2: to address future requirements post EU Exit relating to official controls on feed and food for the whole laboratory system in food enforcement involving all relevant Government Departments.
34. Phase 1 of the review needs to be undertaken within a short time frame so the results and information gathered can support FSA preparations for EU Exit. It will also provide useful input to Phase 2. We will be appointing a contractor who has a clear in-depth understanding of the food and feed enforcement system and existing UK laboratory provision. The contractor would need to demonstrate that there is no conflict of interest in undertaking this work. Utilising the existing Learning Technology System Architecture (LTSA) with Fera satisfies these criteria, and provides good value for money.
ORGANISATIONAL DESIGN
35. We have undertaken a review of our current organisational structure to ensure we can both demonstrate effective governance and have the required capability to deliver in a post EU Exit environment as well as implementing key elements of RoF.
36. The main areas of our business we have focused on are: the functional separation of risk assessment and risk management; the separation of assurance and compliance from operational delivery; the expansion of our science, policy and food crime capabilities; and an increased focus on third party delivery in particular local authorities.
37. We have deliberately sought to minimise any disruption during this very busy period as we lead up to EU Exit and begin RoF implementation and we anticipate all structural changes will be implemented by December 18.
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0a70a470d4eeae9ae60e764fa9f3aab57b3dd118 | Dear Colleague,
**ORR's Sustainable Development & Environment Duties**
1. Sustainable development and environmental issues have never had a higher profile. The railway has an important role in providing a sustainable transport system and ORR must also contribute where we can add most value. I am therefore pleased to send you a copy of our conclusions on ORR's sustainable development and environment duties, which sets out how we will engage with you and other industry stakeholders to achieve the right outcomes for the rail industry and society as a whole.
2. As you are aware, in October 2006 we consulted on how we could best discharge our sustainable development and environment duties. This generated a high level of interest from industry stakeholders and other interested parties. The October document said we would issue draft conclusions followed by final conclusions. However, the general consistency of consultation responses has led us to move directly to final conclusions. I would like to thank all those who have played a part in developing our policy and are working towards identifying an industry sustainable development strategy.
3. The rail industry has traditionally been regarded as a sustainable mode of transport and this view has been supported in recent reports by Stern and Eddington. Developing and publishing industry information on rail's sustainable performance is a key element of our policy. This will demonstrate rail's benefits and inform industry's approach to delivering a sustainable railway.
4. I look forward to continuing working with you to achieve this.
Yours sincerely
Bill Emery
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6de751d2958adc2e82c3304ccd2424bc07b9f880 | Risks of species introductions in tropical forestry
COLIN E. HUGHES
Oxford Forestry Institute, University of Oxford, South Parks Road, Oxford, OX1 3PB, UK
SUMMARY
Tropical tree seed has been moved around the globe on an unprecedented scale over the last three decades. The benefits and risks associated with introductions of tropical trees are reviewed. The current approach to species introductions in forestry is summarized and the marked lack of procedures covering movement of tropical tree germplasm discussed in relation to policies covering biocontrol agents and transgenic plants. General principles and specific guidelines that might be used to formulate a more rational approach to forestry introductions are presented and the problems involved in the assessment of risks associated with introductions pointed out. A more cautious approach to species introductions is advocated and the importance of species choice and the advantages and limitations of native and exotic species and seedless varieties are discussed.
Keywords: tropical trees, species introductions, invasive species, weediness, choice of species, exotics
The only indiscretion he is known to have committed was his endeavour to add variety to the flora of Ireland by scattering seeds of exotic plants around Dublin, which earned him the disapproval of local botanists.
Introduction to Burbidge's "The Gardens of the Sun" by Francis Ng, 1989
INTRODUCTION
There is increasing concern among foresters, ecologists, botanists and conservationists about the threat of invasion of natural and semi-natural ecosystems posed by the continued, uncontrolled introduction of aggressive tree species as part of tropical forestry programmes. Although the main threat to biodiversity continues to be the direct destruction of habitats by people, invasion of natural and semi-natural habitats by alien organisms is widely recognized to be a serious and underestimated world-wide problem (Heywood, 1989; Coblenz, 1990; Soulé, 1990; Fuller and Cronk, in press). A significant proportion of invasive species is woody, and although most are the result of horticultural introductions, some are the direct result of use in forestry. These concerns have resulted in greater attention being focused on biological invasions and their control by national and international organisations over the last decade (e.g. the Species Survival Commission of IUCN (IUCN, 1987) and WWF (Fuller and Cronk, in press)). Global movement of tropical tree germplasm has increased dramatically in terms of numbers of species, levels of intraspecific variation and geographic spread over the same period, and continues largely unabated and uncontrolled at present. Large numbers of tree species have been introduced in the past; most do not naturalize, and most of those that naturalize do not become important invasives. Estimates broadly agree that an introduced plant species has about a 1% chance of becoming an invasive pest (Groves, 1986; Williamson and Brown, 1986). However, this may be an underestimate for tropical tree species introductions given that trees and shrubs make more impact as invasives than other plants (Richardson et al., 1992), and that foresters deliberately seek aggressive species (see below) such as the woody legumes that currently dominate much non-industrial tree planting (e.g. Felker, 1994; Brewbaker and Sorensen, 1994). At any rate, if woody plants are translocated in large numbers, problems of invasion will continue to arise sooner or later. A relatively small invasive fraction can cause enormous conservation problems. The realization that the current scale of translocation of organisms is too great is not confined to trees or plants; the same dilemmas are being confronted in relation to translocation of other organisms with similar calls for greater control to reduce the current rampant worldwide movement of for example freshwater fish (Horowitz, 1990).
The controversy surrounding species introductions cuts to the heart of development and conservation issues and has generated a trail of often conflicting and sometimes extreme views. Two opinions by leading exponents illustrate the degree of divergence of opinion:
... in woody plant introduction programs, is it generally assumed that we have written off Nature in any original sense, and we are now simply biologically engineering the vegetative cover to give some desired set of creature comforts to a people? ...one does wonder at what point the sergeants, privates and lieutenants in this great army of development are going to lay down their weapons and raise up a great chorus of 'this is stupid' ... (Dan Janzen, Costa Rica, pers. comm. 1984).
I do have one philosophy, to be sure, that is that Leucaenas grow so well and so rapidly that they can often provide data on aspects of domestication (and all its nuances) long before philosophers could agree about anything. Thus the best thing is to grow them and try them out. Reforestation in the tropics is so vastly behind deforestation that we cannot wait to fully appraise all the potentially negative elements of domestication. Weediness is of consequence perhaps in Honolulu, but not in Addis or Delhi. Thus I would encourage extensive and intensive testing of almost any of the Leucaena species and hybrids throughout the tropics as possible domesticates (Jim Brewbaker, Hawaii, pers. comm. 1992).
The main objective of this paper is to explore such middle ground as may exist between these two extremes and to work towards guidelines and procedures for the regulation of species introductions that are both effective and realistic, and compatible with both conservation objectives and those of forestry development. Improved dialogue between foresters, ecologists and conservationists is needed to establish rigorous and realistic procedures which will minimize the risks associated with introduction of species in forestry.
BENEFITS AND RISKS OF INTRODUCTIONS
Benefits
One part of the forester's remit has been to increase the productivity of non-arable lands through plantation of various kinds to create abuse-resistant ecosystems (Armstrong, 1992) that give first priority to provision of human needs (fuel, timber, fodder, environmental stabilization). This remains the main objective of many forestry programmes today in the belief that, in the end, it will be most effective to preserve intensively small, manageable reserves of natural ecosystems and accept that extensive areas will be colonized by ecosystems resistant to abuse to provide for human needs. Successful plantation technologies have been developed in many countries (Evans, 1992; Kanowski and Savill, 1992).
Light-demanding, colonizing exotic species have been the most successful in monocultures under plantation management. Over the last 40 years, tropical and subtropical plantation forestry has focused on a small number of fast growing, colonizing species (most notably in the genera Acacia, Eucalyptus, Gmelina, Pinus, Populus, Tectona) (Evans, 1987). Choice of species for planting for non-industrial uses in social and farm forestry, often in agroforestry combinations, has largely continued along similar lines with heavy reliance on a small number of exotic species (Hughes, 1988), although Burley (1983) recorded more than 2000 species in use somewhere. These species have the ability to capture the site rapidly and tolerate harsh soil and climatic conditions and abuse from animals, humans and fire, traits that are a pre-requisite for success on the often highly degraded sites where tree planting is needed. Large yield advantages of exotics over indigenous species have been attributed to their greater tolerance of degraded sites and their escape from specialized pests and diseases, although these may arrive later, reducing this advantage (e.g. the psyllid defoliator Heteropsylla cubana on Leucaena leucocephala; Napompeth and MacDicken, 1990). Using such species, forestry is able to rehabilitate degraded lands, of which there are large unoccupied areas in the tropics, creating robust new ecosystems that are tolerant of a high degree of use and abuse. In the quest for suitable species, 'send us anything that will grow' has emerged as a frequent plea in the face of adverse site conditions. With large planting targets and short project time horizons, seed availability itself has become and continues to be a major deciding factor in choice of species for tree planting programmes (Turnbull, 1983; Tietema et al., 1992). Precocious and prolific seed production is often another pre-requisite for species to be successfully adopted.
Movement of tropical tree seed
Over the last three decades, the search for useful tropical tree species and intraspecific genetic variation for tree improvement has intensified, with systematic exploration and seed collection programmes looking at a wider range of genera and species in many different regions. This has led to a period of unprecedented movement of tropical tree germplasm around the globe. Whereas historical spread of tropical trees was unsystematic, often casual or accidental and operated on a limited scale, recent programmes have embarked on a different scale of operation in three ways: (i) numbers of species that are being moved internationally have increased as whole woody floras are scoured for potentially valuable trees for planting (e.g. Turnbull, 1986 for the Australian flora; Hughes and Styles, 1984 in Central America), and close relatives of the few well-known species are investigated (e.g. Hughes, 1993 for Leucaena; Macqueen, 1992 for Calliandra); (ii) intensive sampling of intraspecific variation with wide- wide provenance collections of more species results in wide distribution of complete packages of genetic diversity (e.g. Barnes and Keiding, 1989 for Pinus kesiya) compared to the narrow genetic base of most historical introductions; the benefits of provenance evaluation are well known (Turnbull and Griffin, 1986), but may also increase the risks of invasion; (iii) whereas in the past species were introduced to a few locations in a small number of countries, with more efficient communications and transport, seed can now be distributed simultaneously to virtually every country in the tropics with relative ease (e.g. the Oxford Forestry Institute, OFI distribution of Glinicidia sepium seed as reported in Simons and Dunson, 1992). The Commonwealth Scientific and Industrial Research Organisation, CSIRO, Tree Seed Centre in Australia provides a good example; it maintains seed of over 1000 Australian/ Australasian tree species and distributes 15,000 seedlots of over 600 species to researchers in 100 countries per year (Vercoe and Midgeley, 1993; Booth and Turnbull, 1994). The OFI seed distribution programme has operated on a similar scale; between 1968 and 1993, 11,000 seedlots, including 233 taxa, were distributed to 128 countries (Pottinger, 1993 and pers. comm.). While the benefits of such introductions may be substantial (Barnes, 1988), if, as estimates suggest, 1% of introductions become invasives, these programmes alone have introduced at least six and two invasive pests respectively to several or potentially many countries. New and comprehensive seed collections of particular genera, such as *Leucaena* (Hughes, 1993) or *Calliandra* (Macqueen, 1992), that include a wide range of lesser-known species are now available and in great demand. Many organisations have been distributing tree seed on a similar scale over the last two decades. Notable examples in addition to CSIRO and OFI, include the Henry Doubleday Research Association (Harris, 1993), Food and Agriculture Organisation (FAO/IBPGR, 1980), Centre Technique Forestier Tropical (e.g. Corbasson et al., 1987) and the Central America and Mexico Coniferous Resources Cooperative, CAMCORE (Dvorak and Donahue, 1992).
The marked lack of procedures covering movement of tropical tree germplasm, where whole genomes are translocated between continents without regulation, stands in stark contrast to the strict policies covering movement of biocontrol agents or genetically-engineered organisms. These are treated cautiously with a case-by-case approach to risk assessment despite general agreement that genetically-engineered organisms, with their relatively minor genetic modifications, pose significantly lower risks of invasion than introduced species (Shorrock and Coutes, 1993; Raybould and Gray, 1994). It is extremely easy to move seed of little-known tree species from one continent to another. Even within those organisations that operate large scale deliberate introduction programmes, the present process is characterized by a low level of concern about the hazards of invasives. In a few cases, warnings are provided by seed suppliers (e.g. Hughes, 1993), but these, at best, shift responsibility from the supplier (often a development organisation) to the seed recipient (usually in a developing country), who is often poorly placed to judge the advisability of introductions. In most cases both seed suppliers and recipients are unaware of the hazards; complete information on species characteristics is usually lacking, and legislation covering plant introductions is non-existent or severely lacking in most tropical countries.
**Risks**
As a result of the frequent need to employ aggressive trees, often those that seed heavily, many of the species used by foresters have the capacity to spread outside the area where they are being planted and are potentially invasive. Forestry is thus often working with 'conflict' species. Forestry species are particularly problematic as invasives in open forest types, savannas, fire-dominated ecosystems and numerous semi-natural habitats (Richardsen et al., 1992; Usher, 1988), rather than in closed moist tropical forest ecosystems which are generally resistant to invasion except by highly shade-tolerant species or in species-poor island forests (Whitmore, 1991). Disturbance, whether natural or induced by man, is a key factor permitting invasion (Whitmore, 1991).
The relatively small invasive fraction of introduced trees poses huge conservation problems, with the risk of diverse natural vegetation being replaced by exotic species. An invasive plant species may be defined as 'an alien plant spreading naturally (without the direct assistance of people) in natural or semi-natural habitats, to produce a significant change in terms of composition, structure or ecosystem processes' (modified from Fuller and Cronk, in press). Invasion may cause major loss of biodiversity and species extinction either due to direct replacement by exotics or indirect effects on the ecosystem. For example, in Mauritius and Hawaii, *Psidium cattleianum* has spread and dominates areas of wet evergreen forest, replacing much of the native vegetation (Lorenze and Sussman, 1986). Similarly introduced *Acacia* and *Pinus* species have spread over large areas of fynbos vegetation in South Africa forming monospecific stands that now dominate thousands of hectares with severe impacts to the natural vegetation, leading to a reduction in biodiversity and threatening as many as 750 of the endangered species listed in the IUCN Red Data Book (Richardsen et al., 1992).
A summary list of genera that include species that are both important for forestry and the focus of eradication efforts following invasion (*Acacia*, *Acer*, *Allanthus*, *Albizia*, *Cedrela*, *Dichrostachys*, *Eucalyptus*, *Leucaena*, *Maesopsis*, *Melaleuca*, *Melia*, *Parkinsonia*, *Pinus*, *Pittosporum*, *Prosopis*, *Prunus*, *Psidium*, *Robinia*, *Schinus*, *Sesbania*, *Swietenia*, *Tamarix* and *Toona*; largely from Fuller and Cronk, in press) is indicative of the scale of the problem and the degree of overlap between species that are used in forestry and those that are invasive. Several species are the focus both of germplasm collection and distribution efforts in tree improvement and of biocontrol or eradication programmes (e.g. *Acacia nilotica* promoted in Africa and India and eradicated in Australia and Indonesia).
Concern about weediness hazards associated with continued introductions has been growing over the last decade. Many conservationists are strongly opposed to further introductions, and movement of forestry and agroforestry germplasm has been the target of specific criticism (Janzen 1987a; Surton, 1978). Conservation agencies faced with large bills for the control of invasive plants are seeking greater accountability from individuals and agencies involved in species introductions. It seems likely that the 'polluter pays' principle may be applied where invasion occurs in the future.
**GUIDELINES FOR SPECIES INTRODUCTIONS**
The challenge facing foresters and conservationists is to reduce risks of introducing new invasives without hindering valuable reforestation efforts. This will demand species that have the ability to survive, grow well under harsh conditions and provide high quality products, but that do not invade remnant natural ecosystems or interfere with wider conservation efforts.
Choice of species
As a starting point in any tree planting programme, alternative native species that might be used to provide similar benefits to the well-known exotics should first be considered. Introductions should only be contemplated if no native species are suitable for the purpose for which the introduction is being made (IUCN, 1987). In the majority of situations this simple recommendation is consistently ignored and only rarely is a thorough assessment of native alternatives undertaken.
In industrial plantation forestry, cogent arguments in terms of yield gains, economics, marginal returns and uniformity of product can be made to support widespread use of a small number of exotic species that have generally outperformed native alternatives in terms of survival, yield and product quality. These species have dominated industrial plantations to the exclusion of the majority of native alternatives. Indeed, Evans (1992) suggests that 85% of industrial plantations in the tropics are established with species from three genera: Eucalyptus, Pinus and Tectona. However, even for industrial plantations, there are many examples of successful use of native species (Kanowski and Savill, 1992). It has been argued that many valuable species have been excluded from consideration and that the growth potential of most tropical species remains unknown with only limited investment in the development of native species for plantation use. The information gap in itself favours continued use of well-known exotics (e.g. Butterfield and Fisher, 1994); 'new' species with potential for plantation establishment continue to be 'discovered' (e.g. Nichols, 1994, Butterfield and Fisher, 1994) and in the last few years proposals for 'complex' plantation forestry with use of a wider range of species have been made (discussed in Kanowski and Savill, 1992).
For non-industrial tree planting, the arguments in favour of choosing from only a handful of globally promoted exotic species appear to be less compelling. In small scale agroforestry planting, in addition to simple evaluation of species in terms of yield (the main criterion usually employed in species elimination trials), there are wider considerations of stability, security and risk reduction, sustainability, micro-site matching, product quality and timing of production in relation to seasons, compatibility with crops and livestock, market participation, and self-sufficiency and autonomy. These considerations demand use of highly diverse material that matches the diversity of products that have been traditionally harvested, in some areas, from natural forest. In general, the more diverse the forest in terms of species, the more secure the services and the wider the range of available products (Sargent, 1992). Such planting must incorporate a wide diversity of species in any one area (Marten, 1988; Sinclair et al., 1994). The 'multipurpose' tree concept in itself has mitigated against use and conservation of a wider range of species (Barnes, 1990) as a way of obtaining multiple products and reducing risks. There has also been some discussion about risk reduction through careful maintenance of a broad genetic base within multipurpose species (e.g. Simons, 1992); a much simpler and more effective way to reduce risks is simply to use a wider range of species; the arrival of the psyllid defoliator Heteropsylla cubana in Asia was devastating not because of the narrow genetic base in Leucaena leucocephala, but because certain communities had become heavily dependent on L. leucocephala, which was planted to the exclusion of all other species in some areas.
The prevalent idea of the 1970-80s that a few 'multipurpose' species could adequately meet the complex needs of resource-poor farmers, is now being overtaken by new strategies for choice of species that concentrate on a wider range of local trees (Carter and Gronow, 1992 in Nepal; Kiambi and Opole, 1992 in Kenya; Tietema et al., 1992 in Botswana). Local species have the advantages of being non-invasive, well adapted to the environment, accepted by local people, of having a wide range of existing uses supported by existing local knowledge and may be important in the local culture. Additional benefits of genetic conservation through use in agroforestry (Cooper et al., 1992, Pinental et al., 1992, Gajaseni and Jordan, 1992) also argue for wider use of native species. Conversely, wide use of exotic trees in farm and agroforestry may greatly hasten the demise of native trees that are used in traditional agroforestry systems (e.g. Hellin and Hughes, 1993 for Honduras). Indeed promotion of exotic agroforestry trees over indigenous alternatives strongly parallels the loss of traditional crop varieties following promotion of green revolution improved varieties (e.g. Aliteri and Merrick, 1987; Cooper et al., 1992). In many cases, foresters are handicapped by their limited knowledge of local floras and, under pressure to plant x trees or y hectares per year, fall back on the limited set of well-known exotics with which they are familiar and for which seed is often more readily available. Rarely is time taken to investigate the potential of lesser-known local species for which seed may not be readily available and for which reliable propagation methods and silvicultural regimes are only poorly known. In Central America, detailed field exploration over several years was needed to 'discover' some of the species with greatest potential for agroforestry, which were little known to science and often geographically restricted, although locally highly preferred and offering considerable potential for tree planting (e.g. Leucaena salvadorensis in Honduras; Hellin and Hughes, 1993). Greater attention to propagation methods for indigenous species can often yield rapid results (Tietema et al., 1992).
While native species are not risk free, and can alter seed flows into neighbouring natural vegetation when extensively planted in surrounding areas, they do not have the same potential for catastrophic invasion. A switch of philosophy from promoting species as exotics across the tropics (e.g. NAS, 1984), the common exercises of recent years of setting species priorities across regions, and reliance on standardized trial networks, to promoting greater use of and research on local tree diversity, could ameliorate the problems associated with introductions, arguably improve the sustainability and value of agroforestry planting, and make a significant contribution to in-situ conservation of biological diversity.
**Procedures for introductions**
If introduction of new species or provenances is contemplated, careful procedures need to be followed to assess risks and benefits. Draft guidelines for species introductions have been provided by IUCN (1987), and discussed by Fuller and Cronk (in press). These guidelines are presented (see box) and discussed here in relation to tropical forestry species introductions.
Fundamental to an improved approach is adequate assessment of benefits and risks prior to seed distribution. A 'guilty until proven innocent' approach, where potential introductions are considered first as potential weeds until evidence suggests otherwise, has been suggested as an alternative to the current experimental approach where species are introduced first and assessed as invasives later (Fuller and Cronk, in press). At present, species are assessed only after they have become invasive, when it is usually already too late to prevent wider spread through control or eradication. It will clearly be impossible to certify a species as 100% safe; introduction will always carry some element of risk. Assessment should proceed essentially as a cost-benefit exercise. What is important is assessment not only of risk but also of what degree of risk is acceptable in relation to likely benefits. Although a 'guilty until proven innocent' approach is unacceptably dictatorial and would undoubtedly prove impractical if strictly applied, it appears to offer the only viable framework to ensure that prior assessment of risks and benefits is undertaken in a thorough and serious way. To be effective, prior assessment needs to be supported by a permit system whereby introductions are authorized by the appropriate government agency with adequate administrative, scientific and technical support to accept responsibility for decision-making. In the absence of official authorization, agreement of liability to bear the costs of control should the introduced plant become invasive is an alternative. Assessment of introductions in this way would undoubtedly lead to a dramatic reduction in the flow of new forestry species around the globe.
**Problems with assessment of benefits and risks**
Assessment of benefits must first consider whether clear and well-defined benefits to man or natural communities can be foreseen and whether similar benefits or products could be derived from alternative native species. There would appear to be little justification for introductions of species that provide only basic products such as firewood, poles or green manure that are produced by a wide range of species. Over time, land use and production goals may change and species perceptions may be radically altered. A species that is highly preferred now may become obsolete and be perceived as a weed; for example, gorse (Ulex europaeus) has changed from a widely cultivated winter feed bush (Elly, 1846) to a pasture weed during the last century in the UK; correspondingly, a decline in demand for tannin has reduced the value of Acacia mearnsii in southern Africa. Market and technology changes may be hard to predict; a long-term perspective, although difficult to achieve, is required.
Assessment of risks relies on the ability to predict the outcome of an introduction through consideration of species characteristics, conditions (in the broadest sense) in the destination country, adequate dialogue between suppliers and seed recipients, and the use of accumulated information on invasive species from other areas and closely related species. The long-term behaviour of introduced species is complex and may be very difficult to predict.
An 'incubation' period (a few years to many decades) following introduction before species start to spread invasively, is a common phenomenon. Introduced species often only start to show invasive tendencies 50 or more years after introduction. Acacia nilotica in Queensland, Australia provides one example; introduced in the late 1890s, spread was not reported until the 1950s, and the species was declared a noxious weed in 1957 (Carter, 1994) and is currently the focus of a costly biocontrol programme. In some cases this lag may be more perceived than real, reflecting a gradual initial spread which is only noticed much later as invasion progresses. In other cases, invasion may be triggered by unusual events such as storms, flooding, fire, or mismanagement of livestock that create 'transient invasion windows' (Richardson et al., 1992), leading to massive regeneration or seed dispersal. In the case of Acacia nilotica, a series of years with above-average rainfall in the 1950s coupled with a switch from sheep to cattle grazing, appears to have precipitated dispersal and regeneration on a large scale (Carter, 1994). Many recently introduced species may be poised to spread given the 'right' combination of conditions. This pattern of invasion is important given that most legislation and assessment of plant introductions relies on schedules that prohibit import of plants that are known weeds in other regions. Current invasive problems provide a poor guide to the future. Again, assessment needs to adopt a long-term perspective, examine long-term climatic cycles, the likely effects of grazing or fire and the possible outcomes of chance events. Assessment will always depend on thorough knowledge of the autecology of the species in question; very often this is not available at the time an introduction is contemplated but is only sought much later when invasion occurs and control measures are needed (e.g. Glendenning and Paulsen, 1955 for Prosopis velutina).
Species may spread widely from the initial point of introduction. A plant introduced anywhere in Africa, for example, can over time, quite readily spread itself into most habitats it can tolerate throughout the African continent. The assumption that an introduction may be a permanent addition to the flora should examine more distant localities and their conditions. Certain areas are particularly vulnerable to introductions and invasion. These include islands, including isolated biological systems, because their ecosystems offer refugia for species that are not aggressive competitors (Vitousek, 1988). Island floras are often rich in endemic species and on many islands costly battles are now being fought against invasive plants that threaten the last remnants of these floras (e.g. Strahm, 1990 in Mauritius). Protected areas and their buffer zones are another case deserving special protection. Small reserves are particularly susceptible to invasion, although easier to monitor and patrol against invasives (Janzen, 1983; 1987b) and new introductions must be considered inappropriate in such areas.
In addition to direct invasion, interspecific hybridization and the evolution of new taxa following introductions is of concern and its likelihood should also be assessed. Introductions may bring previously isolated species into artificial sympathy with either closely related native species, or other species that are also being introduced into cultivation. New hybrid taxa may present additional unpredictable threats of weediness or invasion, and introductions may 'pollute' native species through hybridization and introgression (see review by Abbott, 1992). There are several examples of spontaneous hybridization resulting from tropical forestry activities: e.g. Leucaena in Mexico (Hughes and Harris, in press), Acacia in S.E. Asia (Sedgeley et al., 1992), and Prosopis in South Africa (Poynton, 1990). In the case of Prosopis, Poynton (1990) documents the introduction of six species to southern Africa from the New World. Spontaneous hybrids between P. glandulosa var. torreyana and both P. velutina and P. chilensis have been found to be extremely invasive, with the ability to colonize a wider range of habitats than either of the parent species. Intercontinental movement of species in a large pantropical genus such as Acacia (as promoted by FAO/IBPGR, 1980) presents many opportunities for production of novel hybrids and pollution of native species.
Given these problems, accurate evaluation of risks may be extremely difficult and in some cases impossible, prior to an introduction. These difficulties place even more emphasis on thorough assessment of likely benefits which is usually easier; if large enough benefits can be demonstrated for a proposed introduction, including comparison with native alternatives, these are likely to outweigh any possible risks. By simply avoiding introductions that are not justified in terms of clear and substantial benefits, a considerable proportion of recent and current introductions would undoubtedly have been avoided. New research on methods to predict and understand the outcome of species introductions might help to reduce these difficulties.
Guidelines for Species Introductions (modified from IUCN (1987)).
- Introductions should only be considered if clear and well-defined benefits to man or natural communities can be foreseen and demonstrated.
- Introductions should only be considered if no native species is suitable for the purpose for which the introduction is being made.
- Introductions should not be made into pristine natural or semi-natural habitats, reserves of any kind or their buffer zones and, in most cases, oceanic islands.
- Introductions should not be made until risks of weediness or invasion of surrounding areas have been assessed as far as possible, taking into account essential data on:
1. the autecology of the species (seed dispersal, reproductive ecology, factors limiting its distribution and abundance in its native habitat).
2. conditions in the area of introduction (including the likely effects of rare climatic or other events such as flood, drought and fire).
3. information on weediness form other areas and for closely related species.
4. likelihood of interspecific hybridization with closely related native or other introduced species, and risk of contamination of native gene pools through introgression or evolution of new and potentially aggressive polyploid species.
- Introductions should be made initially in small, closely monitored field trials. Monitoring needs to include assessment of seed production and dispersal and natural regeneration into surrounding areas. Collection of seed by station workers or visitors from trials needs to be controlled by harvesting all seed before it ripens. When assessment is complete, trials need to be completely destroyed, including any soil seed bank that has developed. Monitoring in trials
Once assessment is complete and a species is approved as beneficial and unlikely to be invasive, introduction initially into small scale experimental trials that would permit eradication if cause for concern arose, is the recommended process (IUCN, 1987; Fuller and Cronk, in press). However, such trials, which are normal practice in forestry introduction programmes, will provide only limited information on invasive tendencies. To be effective in controlling invasives, trials would need to be heavily protected, isolated and closely monitored for several years and in some cases decades; these conditions are rarely met in practice. Trial assessments rarely look at reproductive ecology or dispersal and regeneration; there are many cases where a few trees surplus to trial requirements are distributed to farmers; often on-farm testing of species is recommended; often trials remain in a neglected state long after assessment is complete providing a long-term source of possible invasives (Sheil, 1994); often seed is collected from trials by experimental station workers or visitors to plant in other areas or back in their gardens and farms. Thus, although trials provide scope for monitoring and control, and should be pursued with improved monitoring procedures, it is a fallacy that movement of introduced species can be reliably controlled at the stage of initial field testing of new tree species following current practice; controlled introduction trials are not an adequate substitute for thorough prior assessment of benefits and risks. Development of explicit guidelines for monitoring trials that address these inadequacies would help.
Alongside specific guidelines and procedures covering species introductions, Fuller and Cronk (in press) point out that education, awareness raising, legislation, information and record keeping can contribute to limit unwise introductions. Education of foresters and others working with trees is needed to raise awareness of the difference between native and exotic species, the importance of native trees, the dangers of exotics and the hazards associated with apparently harmless forestry activities such as testing new species in trials. Improved plant quarantine legislation is also an urgent priority with introduction of permit systems to authorize introductions. Accurate recording of introductions, invasive species, rates of spread, impact and ecological behaviour is essential in prevention and control of invasions.
This paper is about minimizing risks and damage limitation rather than cure. Methods to control invasive species include physical, chemical and biological methods and environmental management, and are amply reviewed by Fuller and Cronk (in press).
SEEDLESS VARIETIES
Species could still spread vegetatively by root suckers. Despite the attraction, there appear to be few examples of use of seedless varieties in forestry. The only example known so far is use of spontaneous sterile or very weakly fertile triploid hybrids between *Leucaena leucocephala* and *L. pulvifera* in tree planting for tea shade in Java, Indonesia, where weediness of *Leucaena* in tea plantations was a problem (Dijkman, 1950). Seedless *Leucaena* hybrids are in demand in other similar agroforestry situations, where the widely planted and heavy seeding *L. leucocephala* can become an agricultural weed. Lack of seed production in certain areas where species are introduced (e.g. for *Pinus tecunumanii* in some tropical areas; Dvorak and Lambeth, 1992), normally viewed as a problem in forestry, could provide some safeguard against invasion, but information on seed production capacity is generally unavailable prior to introduction.
The problems associated with production and use of sterile lines are obvious. First, effective, low technology vegetative propagation techniques are needed. As discussed above, tropical tree planting, particularly if community or farmer-based, relies on ease of propagation and ready access to planting material. This explains the widespread adoption of species that produce abundant seed. Considerable progress in low cost, low technology vegetative propagation techniques for some species has been made in recent years (Leakey et al., 1992; Haines, 1994). Secondly, seedless varieties or hybrids must be available for propagation. Finally, there are well-known pitfalls associated with narrowing the genetic base through widespread planting of one or a few sterile clones (Burdon, 1989). Increased research on viable options for breeding low seedling varieties and hybrids is needed.
FUTURE PROSPECTS
Species introductions will continue to take place, either accidentally or intentionally. As one of the principal agents involved, foresters must accept their responsibility and adopt a more cautious approach, guided by rigorous procedures of assessment and local testing with strict monitoring. The current lack of awareness and complacency amongst foresters about the risks of species introductions may stem from the fact that only a relatively small number of tropical trees have so far become serious weeds; this complacency is unjustified given the recent scale of introductions and the prevalent 'incubation' period before invasion becomes apparent. What is proposed here is not a complete halt to introductions but a reduction in the scale of operations and imposition of a framework that demands a more considered approach. Similarly, it is accepted that ecosystems are dynamic and continue to evolve with introduced species as part of that process; again it is the present scale of introductions that is unacceptable in terms of wholesale movement of species and potential for catastrophic invasion that may jeopardize future evolutionary potential.
Increased attention to choice of species, particularly in non-industrial tree planting programmes where there appears to be ample scope to concentrate much more on native species, offers perhaps the greatest scope to reduce the current magnitude of forestry introductions and the associated problems of invasion. Choice of species in non-industrial forestry is in its infancy and previous successes and failures have been, in many cases, accidental, lacking the sound scientific research base that is needed. Nevertheless, for industrial plantation forestry, the reliance on exotics and further introductions are likely to continue. However, in the industrial sector, with its generally well-defined, documented, controlled and managed plantations, there is greater scope to predict and control spread (e.g. Ledgard, 1994 for introduced conifers in New Zealand) and greater opportunity to seek more accountability from agencies who continue to test or introduce species that are known or potential invasives, conditions that patently do not apply in the non-industrial forestry arena.
Unfortunately, only a handful of developed countries and states which have experienced severe problems of invasion, such as Australia, South Africa and the State of Hawaii, USA (Smith, 1985), are attempting to regulate in a serious way, with legislation and policing by government agencies, the flow of non-native species into their territories. For the vast majority of tropical developing countries regulation is currently minimal. Awareness of invasive plants is low. Conservation agencies are small, in many cases embryonic, and have limited resources that are fully stretched in the establishment and management of protected areas. In many countries, there are no complete species check lists for native plants, let alone introduced species or invasives. There is a strong case for development assistance to support the establishment of effective plant import regulations and authorities in many tropical countries. In the meantime, until seed recipients in these countries are in a better position to assess, regulate and monitor their own incoming introductions, it is the clear responsibility of the supplier of seed or other material being used to introduce new trees to undertake assessment on their behalf.
ACKNOWLEDGEMENTS
I would like to thank Dan Janzen and Charles Stilton who first encouraged me to take more seriously the risks of species introductions, leading to an earlier paper on the topic by Hughes and Styles (1989), albeit too late to avoid some possibly ill-advised earlier introductions. Since that time, my views have continued to evolve, often in discussion with members of the Forest Genetics Research Group at OFI, whom I thank for their lively debate and ideas. I particularly thank Richard Barnes, Quentin Cronk, Aljos Farjon, Peter Kanowski and Alan Pottinger for their input and discussion and for many helpful comments on several drafts of this paper. I also thank Jane Thornback who was instrumental in organizing a workshop in May 1994 on tropical trees as invasive species under the auspices of the UK Tropical Forest Forum, at which an earlier version of this paper was presented. This paper was written whilst working on Research Scheme R.4524 on Leucaena genetic resources funded by the Forestry Research Programme of the Overseas Development Administration. Research on Leucaena, a genus that presents both great untapped potential for tree planting and significant risks of invasion, has forced me to reconsider the issues surrounding species introductions and prompted me to advocate a much more cautious approach. If adopted, the approach to species introductions that I am proposing in this paper would entail significant changes in many agencies, not least for the Forest Genetics Group at OFI; support for this approach is not necessarily shared by all members of the Group nor by the ODA Forestry Research Programme.
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39f89a71959f7cc04a3819d519f9ce37ccd5f630 | Appendix 14
This appendix includes draft material. This material may be added to or amended before being incorporated into the main body of this manual.
If you would like to comment on this material before it is finalised please use the following contact address [email protected]
CG73920P The charge to NRCGT and NRCG and the exemptions: Disposals from 6 April 2019
CG73920 Introduction CG73922 Interests in UK Land CG73924 Residential property gains CG73926 Dwelling and disposing of residential property CG73928 Institutional buildings CG73930P Contents page for Indirect disposals
CG73930 Indirect disposals: Overview CG73932 Indirect disposals: The basics CG73934 Indirect disposals: UK property richness CG73936 Indirect disposals: Substantial indirect interest CG73938 Indirect disposals: Establishing the level of investment CG73940 Indirect disposals: Examples; Establishing the level of investment CG73942 Indirect disposals: Linked disposals and assessing UK property richness CG73944 Indirect disposals: Related party assets and liabilities CG73946 Indirect disposals: The trading exemption CG73948 Impact of Double Tax Agreements CG73950 Indirect disposals: Calculating the gain CG73952 Indirect disposals: Targeted anti-avoidance rule CG73920 Introduction The rules from 6 April 2019 follow the basic principles of the previous NRCGT rules (see CG73700+). A basic overview of the history of the non-resident CG rules is in CG73700.
From 6 April 2019 some key features of the legislation:
The charge For a non-resident person within the scope of Capital Gains Tax the charge is created by TCGA92/S1A(3).
Also see S1G(2) where the disposal is in the overseas part of a split year. Guidance on the Statutory Residence Test and what amounts to a split-year can be found in the RDR3: Statutory residence Test.
For other persons a non-resident CG disposal is within the charge to Corporation Tax. A disposal does not come within the charge to the extent that any part of a gain accruing to the person would be chargeable to CGT under TCGA92/S1A(3)(a) (non-resident with UK branch or agency), or TCGA92/S2C (non-resident company with UK permanent establishment).
Direct and indirect disposals A disposal of an interest in UK land will be a direct disposal within the scope of the new rules. An indirect disposal is where the disposal of interest involves rights to assets that derive at least 75% of their value from UK land, see CG73930+.
Where the charge is to Capital Gains Tax (CGT):
Annual Exempt Amount This applies for a person within the scope of CGT (TCGA92/S1K and Sch 1C)
Rates of CGT TCGA92/S1H and 1I determine the rates of CGT. Where the disposal is a direct disposal that gives rise to a residential property gain (TCGA92/Sch1B) the gain would be chargeable at 18 or 28%. For direct disposal of other UK land that rate would be 10 or 20%.
Where the disposal is an indirect disposal of any UK land the rate would be 10 or 20%.
When determining the rate of non-resident CGT for individuals, consideration is taken in the same way as for UK residents of the amount of income taxable in the UK or other gains to determine whether any part of an individual’s gains are taxed at the lower rate of 10/18% or higher 20/28%.
Use of losses – CGT applies NRCGT is charged on the total chargeable NRCGT gains for a tax year after deducting certain allowable losses.
The losses that may be set against NRCGT gains comprise any allowable losses accruing to the person in the tax year in question on direct and indirect disposals of UK land, plus any allowable losses accruing to the person in previous tax years, so far as they have not already been allowed as a deduction from chargeable gains and those losses are from direct or indirect disposals of UK land, TCGA92/1E(2).
No other deductions are allowed, except as permitted by TCGA92/S62 (carry-back of losses accruing in year of death).
Temporary non-residents If an individual makes a disposal in the overseas part of a split year or in a year when non-resident any part of the gain on the disposal that is not chargeable to NRCGT may be caught by the temporary non-resident provisions and charged in the period of return. See CG26810+ for further detail on the temporary non-resident provisions.
Where the charge is to Corporation Tax (CT):
Use of losses – CT applies The restrictions that apply for CGT do not apply for CT. For CT purposes any losses are treated in the same way as any other allowable loss. Any unused ATED related CGT or NRCGT losses in the periods to 5 April 2019 can be carried forward and allowed in the same way as any other brought forward allowable loss.
CG73922 Interests in UK land For the purposes of NRCGT and NRCG an interest in UK land is defined in TCGA92\\S1C(1) as:
(a) an estate, interest, right or power in or over land in the United Kingdom, or (b) the benefit of an obligation, restriction or condition affecting the value of an estate, interest, right or power in or over land in the United Kingdom, other than an excluded interest.
From this wide definition the following are excluded from scope (TCGA92\\S1C(2)):
(a) any interest or right held for securing the payment of money or the performance of any other obligation, (b) a licence to use or occupy land, (c) in England and Wales or Northern Ireland, a tenancy at will or an advowson, franchise or manor, and (d) such other descriptions of interest or right in relation to land in the United Kingdom as may be specified in regulations made by the Treasury.
But an interest or right is not within subsection (2)(a) if it is:
(a) a rentcharge, or (b) in Scotland, a feu duty or a payment mentioned in section 56(1) of the Abolition of Feudal Tenure etc (Scotland) Act 2000.
The remainder of S1C is as follows:
(4) The grant of an option by a person binding the person to dispose of an interest in UK land is (so far as it would not otherwise be the case) regarded as a disposal of an interest in UK land by the person for the purposes of section 1A(3)(b).
(5) This does not affect the operation of section 144 in relation to the grant of the option (or otherwise).
(6) In this section— “franchise” means a grant from the Crown such as the right to hold a market or fair, or the right to take tolls, and “land” includes—
(a) buildings and structures, and (b) land under the sea or otherwise covered by water. For CGT purposes an additional consideration is whether the interest in land would give rise to a residential property gain because of the different CGT rate that may apply see CG73920.
The definition of what are residential property gains is within TCGA92\\Sch1B.
In most cases what amounts to a residential property gain will be a straightforward matter.
TCGA92\\Sch1B follows the same principles that were previously within Sch B1.
TCGA92\\Sch1B para 4 mirrors the definition of interests in UK land that are within TCGA92/S1C and also applies for the purposes of non-UK land.
To calculate what proportion of a chargeable gain is attributable to residential property the calculation is made on a time-apportionment using the fraction A/B.
A is the number of days in the applicable period on which the land to which the disposal relates consists of or includes a dwelling
B is the number of days in the applicable period (see below)
Various provisions in the non-resident CGT legislation deem that a "building" includes part of a building. This is necessary because there are differences in tax treatment between residential and non-residential property, but such property may be found within the same building.
In a case where there is mixed use the relevant fraction of the gain is adjusted on a just and reasonable basis to take account of the mixed use on the day or days.
As an example a building may comprise of a shop with a flat above. If the shop represented half of the building throughout the applicable period. In the A/B calculation, the numerator A should be adjusted to (A/2) / B
In individual cases it may sometimes be difficult to decide whether any particular part of a building should be looked at independently from other parts, or whether the building should be looked at as a whole. Such cases should be decided on their facts.
In some cases a building may become temporarily unsuitable for use as a dwelling. Such a temporary period is ignored and the building would continue to be treated as suitable for use as a dwelling.
An exception applies where the temporary unsuitability resulted from accidental damage and the building was unsuitable for use as a dwelling for a period of at least 90 consecutive days. But this exception does not apply if the damage occurred in the course of work being done to alter the building and involved or would be expected to involve the building becoming unsuitable for use as a dwelling for a period of at least 90 consecutive days. See para 6 Sch1B TCGA1992.
See also Para 7 for the rules that apply where the disposal is of a building that has undergone works. Applicable period The applicable period begins with the day on which the person making the disposal acquired the interest being disposed of, or if later the day from which the interest became chargeable. The period ends with the day before the day of disposal.
Example – Mr A has never been resident in the UK but acquired a residential property on 1 June 2009 which was disposed of on 24 April 2019. The applicable period would be 6 April 2015 to 31 May 2019.
If different interests in the land are acquired at different times the period would run from the earliest acquisition or if later, the date from which the interest became chargeable.
CG73926 Dwelling and disposing of residential property
A person disposes of residential property where:
- The land consisted or included a residential property at any time during the applicable period.
- The interest on land subsisted for the benefit of land that consisted of or included a dwelling at any time during the applicable period.
- The interest in land subsists under a contract for the acquisition of land consisting or including a building that is to be constructed or adapted for use as a dwelling.
The definition of dwelling for the Schedule is widely cast (TCGA92/SchB1 para 5) and applies where the building is used or suitable for use as a dwelling or is in the process of being constructed or adapted for use as a dwelling e.g. an off-plan purchase.
Land that at any time is, or is intended to be occupied or enjoyed with a dwelling as garden or grounds (including any building or structure) is taken to form part of the dwelling at that time.
Specific exclusions from the definition of dwelling apply for institutional buildings (CG73928). The exclusion only impacts the rate of CGT that can apply to the gains.
CG73928 Institutional buildings TCGA92\\Sch1B para 5
A building is an institutional building it is used as:
- residential accommodation for school pupils;
- residential accommodation for members of the armed forces;
- a home or institution providing residential accommodation for children; • a home or institution providing residential accommodation with personal care for people who are elderly or disabled, or who have or have had alcohol or drug dependency or mental disorders; • hospitals or hospices; • prisons or similar establishments; • hotels or similar establishments; • an institution that is the sole or main residence of its residents; • certain student accommodation in England and Wales (Para 4 of Sch 14 to the Housing Act 2004 applies or equivalent provision having effect in Scotland or Northern Ireland); • Student accommodation where: o The accommodation provided includes at least 15 bedrooms o It is purpose built or converted for occupation by students and o It is occupied by students for undertaking a course of education on at least 165 days in the year
CG73930 Indirect disposals TCGA92/S1A(3)(C), 2B(4)(B) AND SCHEDULE 1A
Non-UK resident persons are chargeable to UK tax where: • A gain arises on disposal of an interest in an asset that derives 75% or more of its gross asset value from UK land, and • The non-resident person making the disposal has a substantial indirect interest in that land.
These principles are provided for in TCGA92/s1A(3)(c) for CGT, and TCGA92/s2B(4)(b) for CT. The rules for establishing whether these conditions are met are in Schedule 1A to TCGA 1992.
The concepts referred to above are explained in brief below, together with links to more detailed guidance. There is an example demonstrating some of the core concepts at CG73932.
Disposal of a UK property rich asset The immediate asset being disposed of will be a company, and ‘company’ will include any legal arrangements, agreements, or other entities that are deemed to be companies for the purposes of capital gains (for example under TCGA92/s99 or paragraph 4 of Schedule 5AAA to TCGA92). A company is UK property rich if 75% or more of the gross asset value of the company is UK land (for the meaning of UK land see CG73922).
Measuring the gross asset value of that company will include both the directly held assets of the company itself, and also assets the company has an investment in such as those that its subsidiaries hold (see CG73936).
There is an exemption which applies where the land in the company or companies being disposed of is being used in the course of an ongoing trade which is disposed of with the land (see CG73946). Substantial indirect interest
‘Substantial indirect interest’ is explained in detail in [link], but is broadly that the person has a 25% or greater investment in the immediate company being disposed of. Investments may be traced through various entities if the person is not disposing of the shares themselves (see CG73938).
Calculating the gain
The gain or loss is calculated on the value of the asset being disposed of (for example, the shares in the company). This is under the normal rules for such disposals (CG11800, CG50200C), and no adjustment is made to reflect the assets that are not UK land.
There is an example of the basic application of these principles in CG73932.
Collective investment vehicles
There are specific rules applying to non-UK residents making disposals of interests in collective investment vehicles [draft guidance in Appendix 15]. There are also special regimes relating to these rules for collective investment vehicles [draft guidance in Appendix 15]. CG73932 Indirect disposals: The basics TCAG92/SCH1A PARA 3 AND 4
These rules will apply, in general, where:
- A non-UK resident person disposes of an interest in a company (including entities deemed to be companies for capital gains)
- That disposal is of an asset that derives at least 75% of its gross asset value from UK land (see CG73934), and
- That person holds at least 25% investment in that company (see CG73938)
This page presents an example of how these core principles apply.
The facts In the diagram below, A, B, and C are all shareholders in a non-resident company, D. All of D’s shareholders are non-UK resident and have been the only persons with any interest in D for ten years. The shares are all of one class and carry equal rights to votes, profits, and assets.
A (in grey) is a pension fund and meets the conditions to be exempt from UK tax on capital gains.
A, B, and C all dispose of their interests in D by selling the shares to a third party.
D’s assets and liabilities at the last balance sheet date, which was three months ago, were:
- An office in the UK worth £80,000, which D rents out to a third party
- Some stocks and bonds (unrelated to real estate) worth £20,000
- A loan from the bank for £10,000
UK property richness test (see CG73934) In considering whether an interest in D is an asset that derives 75% or more of its gross asset value from UK land for the shareholders, they must calculate the proportion of assets that are UK land in relation to the overall assets. Hence the shareholders will consider the office (80,000) as a proportion of the total assets (80,000 + 20,000). No account is taken of the liabilities. See also CG73944 in relation to assets and liabilities of related parties.
On the basis of this calculation D is a UK property rich asset, as 80% of its gross assets are UK land as defined (see CG73932).
**Substantial indirect interest (see CG73936)**
A, B, and C will then need to consider whether they hold a substantial indirect interest in the land that makes D UK property rich. Broadly, a person holds a substantial indirect interest in land if they have, at some point in the two years prior to the disposal, held at least a 25% investment in the company or companies owning the interest in the land.
In the example, A, B, and C have been (the only) shareholders in D for the two years prior to disposal. As the shares are all of one class and carry equal rights to votes, profits, and assets, the level of investment in this case is based on the rights of the shareholders in D (see CG73938).
On the basis of their shares, B holds less than 25% investment in D, and so does not have a substantial indirect interest. B, as a non-UK resident and not meeting this condition, is not chargeable to UK tax on their gain on disposals of their interest in D.
Both A and C hold 25% or more investment in D, and so both hold a substantial indirect interest in D. Hence the two tests in section 1A(3)(c) or 2B(4)(b) TCGA 1992 (for CGT and CT respectively) are met. A is exempt from capital gains. C will be chargeable to tax on the disposal.
**Calculating the gain (CG73950)**
C will calculate the gain on the land using the normal rules for share disposals, and the full value of the shares (as a UK resident person would). There is no adjustment to the value for the proportion of assets that are UK land.
If C held an interest in the shares at 5 April 2018 and was a non-UK resident at that time, then the rebasing rules in Schedule 4AA to TCGA 1992 will apply. See CG73960 for CGT and CG73970 for CT for more details.
**A disposal by D**
The non-UK resident company, D, is taxable on any gain arising from its disposal of the UK land in question. This is a direct disposal, and it does not matter what other assets D holds (see CG73970P). The gain will be calculated on the basis of a normal disposal of UK land by a company (subject to any rebasing, if appropriate, under Schedule 4AA to TCGA 1992). (See CG73960 for CGT and CG73970 for CT). The UK property richness test looks at whether 75% or more of the gross qualifying assets of the company being disposed of are UK land (see CG73922). Qualifying assets includes all of the assets of the company, apart from those matching related party liabilities (see CG73944). The value to use for the test is the market value of the assets at the date of disposal (see CG73950). The test is based on gross assets, so no liabilities are taken into account.
It does not matter where the company (or any entities it has an interest in) are resident, but the test is only appropriate where the person making the disposal is non-UK resident and is chargeable on the disposal because of either TCGA92/s1A(3)(c) or s2B(4)(b) (for CGT or CT respectively).
This page will give you the background to the UK property richness test. The other condition for TCGA92/s1A(3)(c) or s2B(4)(b) to apply is that the disponent must have a substantial indirect interest in UK land (see CG73936). There are examples to demonstrate both tests at CG73932.
Market value The test is considered at the point of disposal. Any method for establishing the value of UK land and other assets that would be acceptable for general capital gains purposes will be acceptable for this test.
Where values are known at or shortly before the date of disposal they should be used; for example if they were acquired as part of due diligence or other processes surrounding the sale. There will be cases where valuations of the underlying assets of the company being disposed of are not undertaken as part of the transaction, in which case a recently updated balance sheet or similar statement of assets would be acceptable.
Formal valuation will not always be necessary, and HMRC would expect the basis of the valuation to be appropriate to the value and complexity of the situation which gives rise to the disposal. Where informal valuations have been made and these are used for other commercial purposes to report to independent parties (such as reporting to shareholders of a company that was not close, or informing a bank or similar creditor), these will in many cases be acceptable.
Undertaking the test Paragraph 3 of Schedule 1A provides for the basic rules of how the 75% UK property richness test is undertaken. The market value of a company will include its own market value, and that of other assets it has a right or interest in.
A normal commercial loan is not a right or interest for this purpose; so a creditor making a normal commercial loan to a company that holds UK land is not considered to have an interest in that land, or the other assets of that company. See CTA10/ss158(1)(b) or 159(4)(b) for “normal commercial loan”.
CG73934 UK property richness TCGA92/SCH1A PART 2 Tracing asset value to include in the test
The tracing of market value can proceed through any number of companies, partnerships, trusts, or other entities, or arrangements. The attribution of assets is done at each stage – so between one company, entity, arrangement, etc. and the next – and in a way that is appropriate to each stage.
What is appropriate will depend on the facts of the situation, and in general will be a manner of attribution that is reasonable based on those facts. In some cases, such as between two companies where there is a single class of share capital with no special rights, this may be as for normal tracing of interests through corporates (such as under section 1154 CTA 2010). Alternatively, if the arrangement between the two companies being disposed of gave the holding company minimal rights to votes and income, but a significant right to UK land held by the subsidiary, then it would be appropriate to reflect the rights over the UK land assets accordingly.
Where the holding of shares is in a person’s capacity as a partner in a partnership, the partnership agreement will be relevant.
The core test looks at a person’s interests in the immediate company being disposed of, so in many cases no tracing exercise will be necessary. It would be necessary where a person is disposing of an interest other than in a company, but that interest ultimately leads to a company. Examples would be someone selling shares in a company in their capacity as a partner in a partnership.
Tracing value through companies is also necessary for the application of certain of the rules relating to collective investment vehicles [draft guidance in Appendix 15]. CG73936 Indirect disposals: Substantial indirect interest TCGA92/SCHA 1A PARA 8
Overview A non-UK resident person is chargeable on a gain on disposal of an interest in UK land under the indirect disposal rules in Schedule 1A to TCGA, in general, where:
- They are disposing of an interest in a company (including entities deemed to be companies for capital gains),
- That disposal is of an asset that derives at least 75% of its gross asset value from UK land [link to UKPR], and
- That person has a “substantial indirect interest in UK land”.
This page provides guidance on the meaning of a “substantial indirect interest in UK land”. In broad terms, it is that the person and certain connected people own, or at some point in the two years prior to the time of disposal have owned, at least a 25% investment in the company being disposed of. Guidance on establishing the level of investment is at CG73938.
The gain is calculated on the value of the person’s asset being disposed of at the point of the disposal (see the section on ‘Market value’ at CG73934) – not at the point in time where they held 25% or greater investment.
There are rules that attribute interests held by certain connected persons, and rules that mean a person does not have a substantial indirect interest if they have not held an interest for a significant period of time (see under the heading for insignificant ownership period below).
This exemption for indirect disposals of UK land by non-UK residents where they do not hold a substantial indirect interest does not apply in certain circumstances where the disposal has a link to collective investment vehicles [draft guidance in Appendix 15].
Attribution of connected persons’ interests A person is taken as having all of the rights and interests of persons who are connected with them within the meaning of paragraph 10 of Schedule 1A to TCGA 1992. The guidance at [link] deals with what the methods of measuring investment are in regard to rights and interests.
‘Connected’ in paragraph 10 takes its meaning from TCGA92/286 (see CG14580), but with the following modifications:
- A person is connected to relatives (for s286(2)) who are their spouse or civil partner, their lineal ancestor or lineal descendant, or the lineal ancestor or descendant of their spouse or civil partner (siblings are not automatically connected)
- A person is not automatically connected to their business partners or to the spouses or civil partners of business partners
Persons are not to be taken as connected purely because of being parties to a normal commercial loan (CTA10/ss158(1)(b) or 159(4)(b)). Insignificant ownership period
It will sometimes be the case that a person holds a 25% or greater investment in a company for a short period of time but only as a consequence of circumstances, and for the majority of the relevant time that person has had a less than 25% investment. This would commonly be the case where, say, a company was just acquiring investors, and during the initial seeding period that company had only a small number (sufficient that each one had 25% or greater); but once the company was established and on an ongoing basis no shareholders owned as much as 25%. Similar circumstances could arise where shareholders sell one by one, so that the last few shareholders left have 25% or more investment shortly before their own disposal.
The test considers:
- The length of time (aggregated) that a person has had a 25% or greater investment in the company,
- As a proportion of the two years prior to disposal
- Or, if a shorter period, as a proportion of the time the person has actually owned an interest in the company.
If that proportion is an insignificant proportion, then the person does not have a substantial indirect interest for the purposes of meeting the test.
As a general rule, HMRC will consider ‘insignificant’ to be 10% or less of the time (so 75 days or less for a full two year period). Where the total ownership period is very brief and the facts and circumstances indicate that the person was never intended to hold a 25% or greater investment for any length of time, this may allow a greater leeway.
Because (under paragraph 10 of Schedule 1A) a person is themselves taken to have the rights and interests of certain connected persons, the same considerations abide in looking at whether those rights were only held for an insignificant time by the connected persons. In looking to aggregate the amount of time in the relevant period a person has held a 25% or greater investment, this will interact with the aggregation of the rights and interests of others so that the test is one of how much time the disponor and connected parties have held such an investment. Indirect disposals: Establishing the level of investment
PARAGRAPH 9 OF SCHEDULE 1A TO TCGA 1992
Background
On disposal of a UK property rich asset (see CG73934), a non-UK resident is chargeable on gains under TCGA/s1A(3)(c) or 2B(4)(b) (for CGT and CT respectively) if they hold a substantial indirect interest in UK land—that is: if they hold at least a 25% investment in the company being disposed of in the transaction.
This section of the guidance looks at how to establish whether a person has a 25% investment in the company being disposed of. The wider guidance on this condition, including rules for periods of investment and aggregation of connected party interests, is at CG73936.
In the circumstances where the disposal is of several companies under one holding company, it is not necessary for the disponent to hold an effective 25% or greater investment in all of the companies being disposed of—only the immediate one which represents a UK property rich asset.
Example of establishing investment are at CG73940.
This exemption for indirect disposals of UK land by non-UK residents where they do not hold a substantial indirect interest does not apply in certain circumstances where the disposal has a link to collective investment vehicles (see [link to funds 25% rules]).
Overview
Broadly the provisions look at equity holdings in a company. They also consider chains of entities (for example if the person is making a disposal in their capacity as a partner in a partnership).
The rules will also cover establishing the level of investment in particular company further down a chain of companies, which have relevance for the rules relating to the exemption regime for collective investment vehicles [link to relevant funds guidance].
If this condition and the UK property rich condition are met for the purposes of TCGA92/s1A(3)(c) or s2B(4)(b), then the calculation of the gain or loss will be based on the normal share disposal rules and reflect the value of the asset being disposed of. This is under the normal rule for such disposals, and no adjustment is made to reflect the assets that are not UK land.
Measures of investment
A person has a 25%+ investment in a company if they have any of the following:
- 25%+ of the voting power over the company;
- Entitlement to acquire 25%+ of the voting power over the company;
- Entitlement to receive 25%+ of the proceeds of the equity on disposal of the company;
- Entitlement to 25%+ of the income on a distribution to all equity holders;
- Entitlement to receive 25%+ of the company’s assets on winding up (or otherwise), where those assets are distributed to equity holders.
“Equity” is shares (including stocks and other interests) other than restricted preference shares, and loans other than normal commercial loans. “Restricted preference shares” are as defined in CTA10/s160A, and a “normal commercial loan” is as defined in CTA10/ss158(1)(b) or 159(4)(b) (both with necessary modifications where the company does not have ordinary share capital). A person may have 25% or more investment by the measure of entitlement to proceeds from equity, income distributed, or assets in any way specified. So for example, if one shareholder in a company was entitled to 100% of the assets on winding up and another shareholder in the same company had entitlement to 100% of the assets in all other circumstances, they would both have a 100% entitlement to the assets as equity holders for the purposes of this test. Even though they both have a 100% interest in the company in terms of meeting the test, the disposal value is still based on the actual value of the interest disposed of.
Where the chain of investment is through one or more partnerships, the entitlement amongst the partners should be apportioned on a just and reasonable basis. The guidance on establishing the level of investment is at CG73938. These examples illustrate the rules set out on that page, and interactions with the UK property richness test (see CG73934).
**Example 1: Disposal of a group of companies**
A non-UK resident person, A, owns 100% of the shares in Company B. B owns 100% of the shares in C and 10% of the shares in D. All shares referred to in the example are of one class and carry equal rights.
B’s only assets are its shares in C and D. B has a loan from the bank of £500,000.
C’s assets at the last balance sheet date, which was three months ago, were:
- An office in the UK worth £700,000, which C rents out to a third party
- Some stocks and bonds (unrelated to real estate) worth £200,000
D’s only asset at the last balance sheet date, which was three months ago, was an office in the UK worth £1,000,000, which D rents out to a third party.
In considering whether A holds an interest in an asset that derives 75% or more of its gross asset value from UK land, we would aggregate:
- UK land: 100% of the £700,000 UK land in B, and 10% of the £1,000,000 UK land in D (total £800,000)
- Total assets: the above, plus 100% of the £200,000 bonds in C.
So (800,000 / 1,000,000) 80% of B’s gross asset value is in UK land. B is UK property rich, so this leg of the test in sections 1A(3)(c) and 2B(4)(b) TCGA 1992 is met.
A has a substantial indirect interest in B by any of the measures outlined in CG73938. It does not matter that A does not have a substantial indirect interest in D because we are considering the disposal by A of B. Example 2: Disposal involving a partnership
Y is a partnership with a 100% investment in company Z. Z is UK property rich.
The partners in Y have the following rights under the partnership agreement:
- V has 20% of the votes, and 20% entitlement to income, but no rights to the assets of Z on the winding up of Z
- W has 10% of the votes, and 10% entitlement to income, and 100% entitlement to the assets of Z on the winding up of Z
- X has 70% of the votes, and 70% entitlement to income, but no rights to the assets of Z on the winding up of Z
All other rights and interests follow the entitlement to income.
The partnership is not a legal person or chargeable to tax on gains. The partners’ interests in the partnership are not assets for the purposes of capital gains. Hence in considering whether V, W, or X has a substantial indirect interest in UK land, we would look through the partnership at their “investment” in Z by the measures outlined in CG73938. The rights attached to the shares and the partnership agreement will both be informative in terms of this measurement. If by any of those measures, a partner has 25% or greater investment, then that partner will have a substantial indirect interest.
V does not have a 25% or greater investment in Z by any of the measures outlined in CG73938, and so does not have a substantial indirect interest.
W has a less than 25% investment in Z in terms of votes and rights to income, but is entitled to 100% of the assets on the winding up of Z and so has a substantial indirect interest in Z.
X does not have any rights to assets on the winding up of Z, but has 70% of the votes and is entitled to 70% of the income of Z, so has a substantial indirect interest by both of those measures. Y may also invested in other assets separately to the investment in Z, and those assets may not be interests in UK land. The interests that the partners have in those assets through the partnership will not be relevant in looking at whether they have a substantial indirect interest in Z. Those other assets would also not be relevant in the calculation of whether Z is UK property rich (but see CG73942 on linked disposals). In some circumstances two or more companies will be disposed of as part of a single arrangement, and taking all of the companies into account the disposals are not representative of a UK property rich asset (see CG73934).
If the arrangement is one where the disposal is of a single company that holds subsidiaries, then the basic rules for testing UK property richness will ensure that the disposal is not taxable under these rules. If, however, the arrangement is executed—in capital gains terms—by two or more separate disposals of companies, then outside of the rules covered in this page each disposal would be considered for property richness separately.
Consider the differences between Figures 1 and 2 below:
In Figure 1, there is a holding company, D, which holds 100% interest in subsidiaries E and F (and has no other assets or liabilities). In Figure 2, the shareholders directly hold interests in companies E and F.
In both diagrams, company E only holds UK land worth £50,000 which it rents out to an unconnected third party; and company F only holds bonds (unconnected with UK land) worth £50,000. The shareholders are non-UK resident.
Functionally there is no difference between these arrangements, apart from the fact that there is the holding company D in Figure 1. A disposal of company D, however, would not be of a UK property rich asset (as the values of E and F would be amalgamated in the asset value of D), where due to the absence of D in Figure 2 the investors are making a disposal of one UK property rich asset (company E) and one asset that is not (company F).
The analysis would be similar to Figure 2 if it were D making the disposal, rather than the shareholder selling their interest in D itself. Paragraph 6 of Schedule 1A takes account of this by providing for the ability to measure property richness by aggregating several companies being disposed of where those disposals are linked. This ensures that those in a situation like Figure 2 will have the same outcome for those in a situation like Figure 1.
**When disposals are linked**
Those provisions apply where rights or interests in two or more companies are disposals of and the disposals are linked with each other.
Disposals are linked where:
- The disposals are made by the same person or by persons connected with each other and under the same arrangements,
- The person making each disposal is connected with the company they are disposing of, and
- The disposals are made to the same person or to persons connected with each other.
“Arrangements” takes its natural meaning. “Connected” takes its meaning from section 286 TCGA (see CG14580), but partners are considered connected even where the disposals or acquisitions of partnership assets are pursuant to bona fide commercial arrangements (so that partners are always connected). Connection is tested immediately before the disposals taking part in the arrangements.
One example would be if companies were disposed of by different persons within a corporate group to one or more companies in another corporate group as part of a single arrangement. Or if several partners in a partnership disposed of two or more companies to another partnership in one arrangement.
If the assets of all the companies in the linked disposals were aggregated into one of the companies, and such a disposal of that company would not be a disposal of a right or interest in an asset deriving at least 75% of its value from UK land, then none of the disposals is taken to be a disposal of a right or interest in an asset deriving at least 75% of its value from UK land.
The Targeted Anti-Avoidance Rule in Schedule 1A will apply where arrangements are entered into to take advantage of this or other provisions in that Schedule (see CG73952). The 75% property richness test is made by considering the proportion of UK land in relation to the overall qualifying assets of the company being disposed of. Qualifying assets includes all of the assets of the company, apart from those matching related party liabilities. Related party assets will include, but not be limited to, intra-group loans and derivatives.
Liabilities are not considered when performing the UK property richness test. Removing related party assets ensures that the test is performed on the consolidated gross asset value of the entities being disposed of.
It is necessary to consider related party assets and liabilities where a company (which is the target of the UK property richness test; see [link]), is disposed of along with other connected companies in one disposal (or one arrangement; see CG73944).
As noted in CG73934, the value used for the property richness test will commonly be the balance sheet or similar value. In a case where one company is leasing property to another company being disposed of in the same disposal or arrangement, it would be expected that the value of the liability on the lease would not be represented separately, but would be reflected in the asset value of the lease. In removing the value of the lease as an asset, this thereby ensures that the value of the property is only considered once.
In the example below, the shareholders are disposing of companies D, E, and F by disposing of their interests in the shares in D. In considering whether the shares in D are a UK property rich asset, the shareholders will look at the assets of E and F in addition to the assets of D. E holds £75,000 of UK land, and owes £10,000 to D. F holds bonds (unconnected to UK land) worth £25,000.
Under paragraph 4, the qualifying assets will include all of the assets apart from those linked to related party liabilities. The creditor loan balance of £10,000 in D’s hands is an asset linked to the liability in E, and as E’s assets are included in the UK property richness test performed on D the asset of £10,000 in D is not a qualifying asset. The only qualifying assets are therefore the £75,000 of UK land in E, and the £25,000 bonds in F. 75% of D’s gross assets are UK land, so the shares in D are a UK property rich asset in the hands of its shareholders. There is an exemption to the rule which taxes non-UK residents on disposals of companies that are UK property rich (see CG73934) which can apply where all, or almost all, of the UK land being disposed of is being used in the course of a qualifying trade, or if not currently being so used was acquired for the use in the course of a qualifying trade.
This provision is intended to cover situations where what is being sold is an ongoing trade that has UK land amongst the assets. In most cases, an ongoing concern is unlikely to hold 75% of its gross assets in UK land; and paragraph 5 saves the need to calculate property richness in borderline cases where it is clear to the disponer that the disposal is of an ongoing trade, rather than a disposal of UK land in a company.
Meaning of qualifying trade A qualifying trade is one:
- That is being carried on by the company owning the UK land, or persons who are connected with that company, at the time of disposal and has been so for a least a year prior to that time, and
- Which the disponer can reasonably conclude will continue to be carried on after the disposal for a more than insignificant period of time, on a commercial basis with a view to profits.
The company must be carrying on the trade at the time of disposal, or a person connected with the company must be carrying it on. Connected takes the meaning in TCGA 1992/s286 (see CG14580). The company carrying on the trade must continue to be connected at the point of disposal, but provided the trade continues after the disposal it may be transferred to another person in the purchasing group.
Whether a given trade continues is based on similar principles to those applied under Part 14 of CTA10. It is necessary for the disponer to reasonably conclude that the trade is likely to continue for a ‘more than insignificant’ period of time –‘insignificant’ in this context is a matter of degree, and should be taken in the context of these provisions to mean that the intention of the buyer is to continue to operate the trade.
There may be circumstances where the trade is in distress and at risk of closing down after the sale; providing that there is a genuine understanding that the buyer is acquiring the land and trade with the intention of making the trade profitable this can meet the conditions.
Letting out of property is not, in itself, a trade.
See also CG53000P in relation to companies disposing of trading companies or trading groups or sub-groups.
Land not being used in the trade Either all of the UK land being disposed of must be used in a qualifying trade, or all but for low-value interests in UK land. This may be the case where, for example, a small amount of the value of UK land represents a dwelling for occupation by a member of staff, or where there are derelict, low-value properties amongst otherwise occupied ones. The scale of the portfolio of property being disposed of in the arrangement will be definitive in looking at the relative value of the amount of property not used in the trade. Land can be counted as being used for trading where it is intended that it be so used. So a building that is under repair or being re-fitted can be considered—even if not occupied at the point of disposal—providing that the intention is to use it in the trade following the disposal. Domestic charging rules are subject to provision made by Double Taxation Agreements (DTAs) that the UK has entered into (see INTM150000). The UK has a substantial network of DTAs, most of which are based on the OECD Model Tax Convention (the OECD Model).
Where the UK does not have a DTA with a given territory, or where the DTA does not cover capital gains, then the UK domestic law applies unchanged. In other cases it is necessary to consider whether the provisions of the relevant DTA allocate taxing rights to the UK. It is the residence of the person making the disposal that determines the allocation of taxing rights, not the residence of the company (or companies) being disposed of.
The OECD Model and immovable property For most gains the OECD Model gives the taxing rights for gains to the state of residence of the disponent. For disposals of “immovable property”, which is left to be defined in local law, the primary taxing right for gains goes to the source state (i.e. the state where property is situated). This means that as a general principle a gain on a direct disposal of an interest in UK land by a non-UK resident will be chargeable to tax in the UK.
The OECD Model also contains a ‘securitised land provision’, which gives the source state (again, the state where the immovable property is situated) the primary right to tax gains on indirect disposals. In the 2017 OECD Model this is formulated as:
- Disposals of shares or similar interests in companies, partnerships and trusts,
- Where more than 50% of the value is derived, directly or indirectly, from immovable property in the source state.
Not all UK DTAs contain a provision comparable to the ‘securitised land provision’ in the OECD Model, and those that do will frequently be on different terms due to changes in the OECD Model and the preferences of both the UK and our treaty partners.
Variations on the OECD Model in UK DTAs The following differences will need to be noted:
- The provision only covers disposals of shares (and not “comparable interests”)
- The provision only covers “direct” indirect disposals (so the company being disposed of must, itself, be UK property rich; rather than being property rich because of the assets of its subsidiaries)
- The provision does not apply where the shares are regularly traded on a stock exchange.
In some DTAs, the asset value of the immovable property must be 75% or more. The UK property richness test CG73934 requires 75% or more, so is within these parameters.
These other differences are explained more below.
Disposals of shares but not comparable interests The 2017 OECD Model refers to “shares or comparable interests” and gives as examples interests in a partnership or trust. In the case of a partnership, UK domestic law treats the disposal of partnership interests as a disposal of the underlying assets of the partnership. So there is no need for the provisions of a given DTA to cover a disposal of partnership interests. If the partnership ‘owns’ an interest in the shares of a UK property rich company, the partners are for capital gains purposes (and in terms of the application of the DTA) directly holding an interest in those shares (see paragraph 32.4 of the Commentary to the 2017 OECD Model). The analysis may be different where a non-UK “partnership” is in fact an opaque entity (and it does not itself have shares).
Only direct interests in UK land In some of the UK DTAs the securitised land provision only applies where the asset (i.e. the shares) being disposed of directly derives more than 50% of its value from UK land. This formulation means that the DTA only allocates taxing rights to the UK on the basis of the assets that are held by the company whose shares are being disposed of – not any assets held by subsidiaries of that company.
In each of the three scenarios above, a non-UK resident is disposing of their interest in Company A. The disposal also includes the 100% direct subsidiary of company A, Company B. In all cases the disposer has a substantial indirect interest in Company A. The disposer is tax resident in a territory with which the UK has a Treaty that only allocates taxing rights to the UK on direct disposals of assets deriving more than 50% of their value from UK immovable property.
Figure 1 In this scenario, Company A has no assets, and Company B has only UK land. The disposal meets the UK domestic law test for UK property richness (see CG73934), because the asset being disposed of is 100% UK land (and so 75% or more of its gross asset value is UK land).
The DTA, however, only grants taxing rights to the UK where the immediate disposal is of an asset that derives more than 50% of its value from UK immovable property. The immediate disposal is of an asset with no UK land assets, so the DTA provision allocates the sole right to tax to the state of residence of the disposer. Figure 2 In this scenario, Company A has £75m of UK land and £25m of other (non UK land) assets; Company B has £20m of non UK land assets. A, taken alone, meets both the UK domestic test for property richness and the DTA condition.
Although the DTA allocates taxing rights to the UK on the direct disposal of Company A alone, the domestic provisions will still consider that Company B is part of the disposal and include the assets of B in the calculation for UK property richness. Including a consideration of Company B, only 63.5% of Company A’s gross assets are UK land, so the disposal is not chargeable under the domestic provisions.
Figure 3 In this scenario, Company A has £60m of UK land and £30m of other (non UK land) assets; Company B has £60m of UK land. A, taken alone, does not meet the UK domestic test for property richness, but as the proportion of UK immovable property is greater than 50% it does meet the DTA condition.
As for Figure 2, the DTA does allocate taxing rights to the UK. The domestic provisions will consider the assets of Company B within Company A, and when taken together the disposal is of an asset where 75% or more of the gross assets are UK land. This disposal would be chargeable in the UK.
The DTA has not restricted the application of domestic law, having allocated taxing rights to the UK. Similarly, the DTA will not restrict the domestic law test to only considering the non UK land assets of Company B. The first consideration is whether the DTA condition is satisfied (is the gross asset value of the asset being disposed of, taken alone, more than 50% UK land), and if this is satisfied then the domestic law test applies without restriction.
Regularly traded shares Some Treaties have a formulation that does not allocate taxing rights to the state where the land is situated where the disposal is of shares in which there is regular trading on a stock exchange.
This exclusion applies only to the shares in the company that is itself traded on a stock exchange. A disposal of shares in a subsidiary of that company would be within the UK’s right to tax, as the subsidiary’s shares are not traded. Calculating the gain
The gain or loss is calculated on the value of the asset being disposed of (for example, the shares in the company). This is under the normal rules for such disposals (see CG11800, and CG50200C), and no adjustment is made to reflect the assets that are not UK land. Similarly, if the person is disposing of the company in their capacity as a partner in a partnership, the usual rules for calculating that gain would apply.
The gain is calculated on the basis of the actual disposal and the rights that the disposer has at the time of the disposal. So in a situation where a person meets the substantial indirect interest condition (see CG73938) because they owned 25% or more of a company at a point in the two years prior to disposal, but now owns less than that. The disposal is to be calculated on the actual investment a person has and is disposing of.
It is not necessary to use the same values used in valuation of the assets of the company for calculating property richness (link to UKPR) when calculating the gain. The appropriate methods of calculating the values for the test and for the gain or loss are independent considerations. Part 4 of Schedule 1A to TCGA 1992 contains the targeted anti-avoidance rule applying to indirect disposals of UK land as charged under TCGA92/s1A(3)(c), and s2B(4)(b) (for CGT and CT respectively).
The anti-avoidance rule is based on a motive test, which looks at whether a person has sought to obtain a tax advantage either
- Directly in relation to the provisions of Schedule 1A, or
- By overriding the provisions of Schedule 1A using the provisions of a Double Tax Agreement (DTA).
“Tax advantage” takes the same meaning as in similar provisions elsewhere:
- Relief or increased relief from tax
- Repayment or increased repayment of tax
- Avoidance or reduction of a charge to tax or an assessment to tax
- Avoidance of a possible assessment to tax
- Deferral of a payment of tax or advancement of a repayment of tax, or
- Avoidance of an obligation to deduct or account for tax
Whether a person has sought a tax advantage will be a question of fact. It is not possible for someone to have sought a tax advantage in respect of the rules in Schedule 1A before a point in time when they could be aware of the tax consequences of their actions. Hence, the provisions relating to DTAs have effect for arrangements entered into on or after 22 November 2017, and for other cases on or after 6 July 2018.
Effect of the rules applying
Where the TAAR applies, the rules allow that HMRC or the customer may make just and reasonable adjustments to counteract the tax advantage. In many cases this will be by giving effect to the law as it would have applied had the arrangements giving rise to the tax advantage not been entered into.
Treaty shopping cases
In the second instance, which the legislation refers to as treaty shopping cases, the tax advantage must be contrary to the object and purpose of the DTA. This is rooted in the internationally agreed principles governing what the Commentary to the OECD Model calls “improper use of the Convention”, and is explored at length in the Commentary to Article 1 of the OECD Model (paragraphs 54 to 80 in the 2017 version).
In particular the Commentary says (paragraph 61):
“A guiding principle is that the benefits of a double taxation convention should not be available where a main purpose for entering into certain transactions or arrangements was to secure a more favourable tax position and obtaining that more favourable treatment in these circumstances would be contrary to the object and purpose of the relevant provisions.”
A DTA will always provide a tax benefit in relation to a particular state in circumstances where the allocation of taxing rights and the relative rates of tax in the contracting states means a person pays less tax in that state than they would absent the DTA. However, under the guiding principle outlined above, abuse arises where arrangements have been entered into to create that effect, and not for commercial or substantive reasons.
HMRC will consider each case on its merits, but for example would in particular consider the application of the TAAR where historically a person or group of persons had used structures for holding UK land that would become taxable in the UK under these rules, but after becoming aware of the indirect disposal rules began to structure so that DTAs would restrict the UK’s right to tax. The computational rules apply for both direct and indirect disposals by a non-UK resident person. For an individual the provisions also apply to disposals in the overseas part of a split year.
Where the asset was acquired on 6 April 2019 or later any gain or loss is calculated under normal principles.
The extension of the scope of the non-resident CG rules from 6 April 2019 means additional rules are required because the asset may have not been within the scope of non-resident CG (see CG73980) or was only partly (or for part of the period) within the scope of the non-resident capital gains tax charge between 6 April 2015 and 5 April 2019 (see CG73962 and CG73974).
For cases involving direct disposals of UK land the asset is not regarded as fully residential before 6 April 2019 if in the period beginning with 6 April 2015 (or acquisition if later) and ending 5 April 2019, there was no day on which the land consisted of or included a dwelling.
If the interest in land subsisted under a contract for the acquisition of land that at any time before 6 April 2019 consisted of or included a building to be constructed or adapted for use as a dwelling the disposal is taken to be fully residential before that date.
Where the asset was held but was not within the scope of the charge before 6 April 2019 in calculating the gain or loss on a disposal it is assumed that the asset was disposed of and immediately reacquired at its market value on 5 April 2019 (para 3 Sch 4AA). An example would be an indirect disposal.
An election can be made for this rebasing to not apply. However for an indirect disposal of UK land any loss arising as a result of the election is not an allowable loss (para 4 Sch 4AA).
If an election is made for rebasing not to apply and it is necessary to determine how much of a gain is a residential property gain the applicable period would start with the date of acquisition or if later 31 March 1982 (see CG73924).
An asset is fully chargeable if in the period from 6 April 2015 (or acquisition if later) to 5 April 2019 on every day in the period the land to which the disposal relates consisted of a dwelling.
If the interest in land subsisted under a contract for the acquisition of land that at any time before 6 April 2019 did not consist of or include a building to be constructed or adapted for use as a dwelling, the disposal is taken not to be fully residential before that date. In calculating the gain or loss on a disposal it is assumed that the asset was disposed of and immediately reacquired at its market value on 5 April 2015.
An election can be made for this rebasing not to apply. Such an election should state which of either the retrospective basis or time-apportionment method of computation should apply.
Where an election under para 8 for the retrospective basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant).
Where an election under para 9 for the time-apportionment basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant). The result of this computation is then time apportioned. The gain that relates to the post 5 April 2015 period is charged.
Example Disposal made in June 2020 (1500 days after 5/4/15) and acquisition February 2011 (1500 days before in 6 April 2015). Gain before any apportionment £1,000.
The post 5 April 2015 proportion of the gain would be £500 i.e. 1,000 x (1,500/(1,500 + 1,500))
CG73964 CGT – Computation - Direct disposals of assets partly chargeable before 6 April 2019 TCGA1992\\Sch4AA paras 12 to 17
In calculating the gain on the actual disposal it is assumed that the asset was sold and immediately reacquired at its market value on 5 April 2015 (but only if it was acquired on or before 5 April 2015) and in addition it is assumed that the asset was sold and immediately reacquired at its market value on 5 April 2019.
For the assumed sale on 5 April 2019 the gain or loss is treated as accruing on the actual disposal in addition to the gain or loss that actually accrues on the actual disposal.
Example A building was acquired in the 1990’s and comprises of a shop with a flat above. The building is disposed of in say June 2021 for £380,000. The shop represented half of the building throughout.
MV at 5 April 2015 £300,000 MV at 5 April 2019 £350,000
Gain on assumed sale 5/4/19 £25,000 (£350,000 - £300,000)/2 (see CG73924) Gain on actual June 2021 disposal £30,000 (£380,000 - £350,000) Total gain accruing June 2021 £55,000
An election can be made for this rebasing not to apply. Such an election should state which of either the retrospective basis (para 14) or time-apportionment (para 15) method of computation should apply. An election can only be made under para 14 or para 15.
Where an election under para 14 for the retrospective basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant).
Where a valid election under para 15 for the time-apportionment basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant). The result of this computation is then adjusted.
The adjustments are:
- Any pre 6 April 2015 gain or loss is not treated as accruing on the actual disposal
- For the period April 2015 to April 2019 only the relevant part of the gain is treated as accruing
Example 1
Overall gain 2021 (asset held for say 10 years) £300,000 Less Element relating to pre 6 April 2015 period say £120,000 Element relating to April 2015 to April 2019 say £120,000 Relevant proportion (see below) of this part say £100,000 Element of gain to be disregarded £20,000
Total to be disregarded £140,000
Gains to be charged if para 15 election made £160,000 An election under para 15 for time-apportionment can only be made if a 75% residential condition is met.
The 75% residential condition is only met if the relevant proportion of the amount of the April 2015 to April 2019 proportion of the gain or loss on the disposal is at least 75%.
Once the April 2015 to April 2019 gain or loss has been calculated the relevant proportion is calculated with the same approach that applies to determine the residential property gain (see CG73924).
The relevant proportion is determined using the fraction A/B.
[ A \\quad \\text{is the number of days in the period where the land consists of or includes a dwelling (see CG73926) in the April 2015 to April 2019 period} ]
[ B \\quad \\text{is the total number of days in that period} ]
Example 2
Bare land acquired in the 1990’s is held and is disposed of in 2021. From 6 April 2017 construction of a dwelling commences.
The fraction would be 730/1461 ((6/4/15 \\text{ to } 5/4/17 = 731 \\text{ days, } 6/4/17 \\text{ to } 5/4/19 = 730 \\text{ days}))
The fraction would be just under 50% and so a para 15 election cannot be made.
(The fraction in example 1 is 83.3% so the 75% test would be met.)
In a case where there is mixed use the relevant fraction of the gain is adjusted on a just and reasonable basis to take account of the mixed use on the day or days.
Example 3
A building may comprise of a shop with a flat above. If the shop represented half of the building throughout the applicable period. In the A/B calculation, the numerator A should be adjusted to ((A/2) / B).
In individual cases it may sometimes be difficult to decide whether any particular part of a building should be looked at independently from other parts, or whether the building should be looked at as a whole. Such cases should be decided on their facts.
If the actual disposal is of an interest in land subsisting under a contract for the acquisition of land consisted of or included a building to be constructed or adapted for use as a dwelling the disposal, the land is taken to consist of or include a dwelling throughout the April 2015 to April 2019 ownership period. The computational rules apply for both direct and indirect disposals by a non-UK resident person.
A simplification compared to the computational regime that applied to 5 April 2019 for a company is that ATED related CGT no longer applies. The regime follows the approach for other persons.
Where the asset was acquired on 6 April 2019 or later any gain or loss is calculated under normal principles.
The extension of the scope of the non-resident CG rules from 6 April 2019 means additional rules are required because the asset may have not been within the scope of non-resident CG (see CG73980) or was only partly (or for part of the period) within the scope of the non-resident capital gains tax charge between 6 April 2015 and 5 April 2019 (see CG73962 and CG73974).
For cases involving direct disposals of UK land the asset is not regarded as fully residential before 6 April 2019 if in the period beginning with 6 April 2015 (or acquisition if later) and ending 5 April 2019, there was no day on which the land consisted of or included a dwelling.
If the interest in land subsisted under a contract for the acquisition of land that at any time before 6 April 2019 consisted of or included a building to be constructed or adapted for use as a dwelling the disposal is taken to be fully residential before that date.
Where the asset was held but was not within the scope of the charge before 6 April 2019 in calculating the gain or loss on a disposal it is assumed that the asset was disposed of and immediately reacquired at its market value on 5 April 2019 (para 3 Sch 4AA). An example would be an indirect disposal.
An election can be made for this rebasing to not apply. However for an indirect disposal of UK land any loss arising as a result of the election is not an allowable loss (para 4 Sch 4AA).
If an election is made for rebasing not to apply and it is necessary to determine how much of a gain is a residential property gain the applicable period would start with the date of acquisition or if later 31 March 1982 (see CG73924).
An asset is fully chargeable if in the period from 6 April 2015 (or acquisition if later) to 5 April 2019 on every day in the period the land to which the disposal relates consisted of a dwelling. It follows this cannot include indirect disposals.
If the interest in land subsisted under a contract for the acquisition of land that at any time before 6 April 2019 did not consist of or included a building to be constructed or adapted for use as a dwelling the disposal is taken not to be fully residential before that date.
In calculating the gain or loss on a disposal it is assumed that the asset was disposed of and immediately reacquired at its market value on 5 April 2015. An election can be made for this rebasing not to apply. Such an election should state which of either the retrospective basis or time-apportionment method of computation should apply.
Where an election under para 8 for the retrospective basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant).
Where an election under para 9 for the time-apportionment basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant). The result of this computation is then time apportioned. The gain that relates to the post 5 April 2015 period is charged.
Example Disposal made in June 2020 (1500 days after 5/4/15) and acquisition February 2011 (1500 days before in 6 April 2015). Gain before any apportionment £1,000.
The post 5 April 2015 proportion of the gain would be £500 i.e. 1,000 x (1,500/(1,500 + 1,500))
CG73974 CT - Direct disposals of assets partly chargeable before 6 April 2019 TCGA1992\\Sch4AA paras 12 to 17
In calculating the gain on the actual disposal it is assumed that the asset was sold and immediately reacquired at its market value on 5 April 2015 (but only if it was acquired on or before 5 April 2015) and in addition it is assumed that the asset was sold and immediately reacquired at its market value on 5 April 2019.
For the assumed sale on 5 April 2019 the gain or loss is treated as accruing on the actual disposal in addition to the gain or loss that actually accrues on the actual disposal.
Example A building was acquired in the 1990’s and comprises of a shop with a flat above. The building is disposed of in say June 2021 for £380,000. The shop represented half of the building throughout.
| MV at 5 April 2015 | £300,000 | | MV at 5 April 2019 | £350,000 |
Gain on assumed sale 5/4/19 £25,000 (£350,000 - £300,000)/2 (see CG73924) Gain on actual June 2021 disposal £30,000 (£380,000 - £350,000) Total gain accruing June 2021 £55,000 An election can be made for this rebasing not to apply. Such an election should state which of either the retrospective basis (para 14) or time-apportionment (para 15) method of computation should apply. An election can only be made under para 14 or para 15.
Where an election under para 14 for the retrospective basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant).
Where a valid election under para 15 for the time-apportionment basis to apply is made, rebasing to 5 April is ignored and the gain or loss is calculated with the original acquisition cost (or rebasing to 31/3/82 if relevant). The result of this computation is then adjusted.
The adjustments are:
- Any pre 6 April 2015 gain or loss is not treated as accruing on the actual disposal
- For the period April 2015 to April 2019 only the relevant part of the gain is treated as accruing
Example 1
Overall gain in 2021 (asset held for say 10 years) £300,000
Less
Element relating to pre 6 April 2015 period say £120,000 Element relating to April 2015 to April 2019 say £120,000 Relevant proportion (see below) of this part say £100,000 Element of gain to be disregarded £20,000
Total to be disregarded £140,000
Gains to be charged if para 15 election made £160,000
An election under para 15 for time-apportionment can only be made if a 75% residential condition is met. The 75% residential condition is only met if the relevant proportion of the amount of the April 2015 to April 2019 proportion of the gain or loss on the disposal is at least 75%.
Once the April 2015 to April 2019 gain or loss has been calculated the relevant proportion is calculated with the same approach that applies to determine the residential property gain (see CG73924).
The relevant proportion is determined using the fraction A/B.
- **A** is the number of days in the period where the land consists of or includes a dwelling (see CG73926) in the April 2015 to April 2019 period
- **B** is the total number of days in that period
**Example 2**
Bare land acquired in the 1990’s is held and is disposed of in 2021. From 6 April 2017 construction of a dwelling commences.
The fraction would be 730/1461 ((6/4/15 \\text{ to } 5/4/17 = 731 \\text{ days, } 6/4/17 \\text{ to } 5/4/19 = 730 \\text{ days}))
The fraction would be just under 50% and so a para 15 election cannot be made.
(The fraction in example 1 is 83.3% so the 75% test would be met.)
In a case where there is mixed use the relevant fraction of the gain is adjusted on a just and reasonable basis to take account of the mixed use on the day or days.
**Example 3**
A building may comprise of a shop with a flat above. If the shop represented half of the building throughout the applicable period. In the A/B calculation, the numerator A should be adjusted to ((A/2) / B).
In individual cases it may sometimes be difficult to decide whether any particular part of a building should be looked at independently from other parts, or whether the building should be looked at as a whole. Such cases should be decided on their facts.
If the actual disposal is of an interest in land subsisting under a contract for the acquisition of land consisted of or included a building to be constructed or adapted for use as a dwelling the disposal, the land is taken to consist of or include a dwelling throughout the April 2015 to April 2019 ownership period.
**CG73980** Specific occasions where person was not chargeable before 6 April 2019
TCGA92\\Sch4AA A person is treated as not chargeable before 6 April 2019, if immediately before that date the person was:
- A company that was not closely-held
- A widely marketed scheme
- A company carrying on life assurance business (FA2012\\s56). Also see TCGA92\\Sch4AA para 2(4)(c).
The detail of the provisions of para 2(4) to (8) is not replicated here. Additional guidance on ‘a closely-held company’ and ‘widely-marketed scheme’ is in CG73722 onwards.
CG73982 Other specific provisions TCGA92|Sch4AA paras 18 to 24
Companies with UK land becoming UK resident after 5 April 2019 Where a company migrates to the UK and becomes resident after 5 April 2019, any previous entitlement to rebasing of the asset for the purposes of computing the gain on a disposal is preserved.
Persons with UK land ceasing to be UK resident after 5 April 2019 Where a company or a trust ceases to be resident in the UK an exit charge is not triggered (see CG73988). On a subsequent disposal the computational rules in Sch4AA do not apply to that subsequent disposal and any gain or loss is computed on normal rules.
Wasting assets Where a rebasing date is used in accordance with Sch4AA e.g. 5 April 2019, that date is not to be used for the purposes of determining if an asset is a wasting asset under Chapter 2 Part 2 TCGA 92.
Capital allowances If a valuation is used in accordance with Sch4AA to determine the deemed acquisition cost, that valuation should also apply for the purposes of capital allowance purposes in TCGA92/S41 and S47.
Making and varying of elections An election must be made in the person’s tax return. If no election is made, the default rebasing rules will apply.
An election is irrevocable if made in a person’s normal tax return. If it is made in a return relating to the 30 day payment on account rules in Schedule 2 to Finance (No 3) Act 2018, the election may be withdrawn or a new election made in a subsequent tax return (if that return is made on time). CG73984 Unascertainable consideration
TCGA92/S48A is concerned with cases where a person makes a chargeable non-resident CG disposal and all or part of the consideration for the disposal consists of a right for deferred consideration that is unascertainable (see CG14840+ for general guidance on deferred consideration). If the person subsequently receives a payment representing all or part of the unascertainable consideration, that payment is treated as not accruing on the disposal of the right, and the person’s costs in acquiring the right (or the proportionate costs in the case of a part disposal) are taken to be nil.
A right to consideration is unascertainable if the amount or value are uncertain when the right is conferred, because they refer to matters which have not yet occurred. The legislation indicates that a right to consideration is not to be regarded as unascertainable in some cases, for example where the right to receive the consideration is merely postponed or contingent, or the amount or value will be fixed by reference to values or amounts that are ascertainable (see CG14940-14950).
TCGA92/S48A lays down the following basis for computing liability to non-resident CG on subsequent receipt of payments -
- Step 1, find any amount by which the later payment exceeds the original consideration for the right, and treat any excess as consideration (or further consideration) accruing on the original disposal. (If the original consideration exceeds the later payment, the original consideration is reduced by the excess.)
- Step 2, compute the difference that the adjustment under step 1 makes to any Non-resident CG or loss, or other gain or loss accruing on the original disposal (computing this separately for each type of gain or loss). The difference is "positive" if a loss is decreased or a gain created or increased, "negative" if a gain is reduced or a loss created or increased.
- Step 3, any positive amount is treated for the purposes of TCGA92 and TMA70 as a gain (of the type appropriate to the computation) accruing to the person at the time of the receipt of the subsequent payment. Any negative amount is treated for the purposes of the legislation as a loss (of the type appropriate to the computation) accruing to the person at the time of the receipt of the payment.
CG73986 Interactions with Gifts hold-over and other reliefs
The basic principles that applied on the introduction of non-resident CG continue to apply with the extension of the scope non-resident CG.
Gifts hold-over relief
TCGA92/S165 is concerned with cases where business assets are disposed of as a gift (see CG66990+). It is extended to cover assets involved in a non-resident CGT disposal from a non-UK resident to a UK resident. Non-resident CGT gains may therefore be included as held-over gains.
TCGA92/S167A modifies the rules in TCGA92/S165 on relief for gifts of business assets. It is concerned with cases where assets are disposed of as a gift from a UK resident to a non-UK resident, and the disposal relates to an asset within S1A(3) (b) or (c). It provides that hold-over relief is not denied where the asset is chargeable to non-resident CGT in the hands of the person to whom the asset is transferred. The full amount of the held-over gain accrues as a chargeable non-resident CGT gain for that person at the point when they subsequently dispose of it. TCGA92/S260 is concerned with cases where gifts are exempt or potentially exempt from inheritance tax (see CG67040). This is amended, so that where the asset involved in disposal is a direct or indirect disposal of UK land which meets the non-residence condition as a gift from a non-UK resident to a UK resident, non-resident CGT gains may be included as held-over gains under this provision.
TCGA92/S261ZA is concerned with cases where assets are disposed of as a gift from a UK resident to a non-UK resident in the circumstances envisaged by TCGA92/S260, and the disposal is of an asset within S1A(3) (b) or (c). It provides that hold-over relief is not denied where the asset is chargeable to non-resident CGT in the hands of the person to whom the asset is transferred. The full amount of the held-over gain accrues as a chargeable non-resident CGT gain for the transferee when they subsequent dispose of the asset.
Reconstruction involving transfer of business
TCGA92/S139 is concerned with company reconstructions involving the transfer of a business. It allows companies to dispose of assets for no gain and no loss on a scheme of reconstruction (see CG52800+). This is extended so that assets which would remain chargeable to corporation tax on a subsequent disposal are included among the assets to which this provision applies.
Roll-over relief
TCGA92/S159A modifies the provisions on roll-over relief in TCGA92/S152. It provides that relief does not apply to a person chargeable to non-resident CG on a gain relating to the original assets, unless the replacement assets represent interests in UK land within the scope of the non-resident CG rules at the time they are acquired (see CG60250).
CG73988 Interactions with exit charges: Deemed disposals on exiting the UK
Deemed disposal under section 25(3)
Where a person has ceased to trade through a UK branch or agency, they are deemed (under TCGA92/S25) to have made a disposal of an asset (see CG25530). TCGA92/S25ZA applies in this case. Where the asset in question is an interest in UK land and a non-resident CG charge or loss would accrue to the person on the deemed disposal, the gain or loss will not accrue at the time of the deemed disposal, but when all or part of the interest in question is subsequently disposed of - at which point it will be treated as a non-resident CG chargeable gain or allowable loss.
The person may elect for TCGA92/S25(3) not to have effect if that is advantageous to them.
Deemed disposal under section 80
Where the trustees of a settlement have ceased to be UK resident, they may be deemed (under TCGA92/S80) to have made a disposal of an interest in UK land. Under TCGA92/S80A they may elect for the non-resident CGT gain or loss on the deemed disposal to accrue not at the time they leave the UK, but when all or part of the interest in question is subsequently disposed of. In that case the gain or loss on the deemed disposal would accrue at the time of the later disposal. Emigration of donee, deemed disposal under S168
TCGA92/S168 provides that where an individual emigrates from the UK, with a gain on an asset they had acquired held over under TCGA92/S165 or 260, the gain accrues when they cease to be UK resident (see CG25780).
TCGA92/S168A, which modifies the effect of TCGA92/S168 in cases where the asset in question is a direct or indirect disposal of UK land which meets the non-residence condition and a non-resident CGT gain would be deemed to accrue under TCGA92/S168 at the time the individual ceases to be UK resident.
The individual may elect that the held over non-resident CGT gain or loss on the deemed disposal should not accrue at the time they cease to be UK resident. Where they prefer this course, the non-resident CGT gain (or loss) on the deemed disposal would accrue when the interest in question is subsequently disposed of.
Companies migrating from the UK - deemed disposal of UK residential property interest
TCGA92/S185 deems a company which ceases to be resident in the UK to dispose of its assets at the time of migration, and immediately reacquire them at market value (see CG42370). TCGA92/S187B applies where there is a deemed disposal of a UK residential property interest by virtue of TCGA92/S185.
If a non-resident CG or allowable loss accrues to a company, if it were non-resident at the time of the deemed disposal, the gain or loss is treated as not accruing immediately at the time of the deemed disposal, but rather on a subsequent disposal of all or part of the interest. Gains or losses so deferred are aggregated with any additional non-resident CG or losses that actually accrue on the subsequent disposal.
A company may make an election not to apply this rule in relation to the deemed disposal, with the result that the gain or loss does accrue at the time the company ceases to be UK resident. Such an election must be made within two years from the day on which the company ceases to be UK resident.
CG73990 Attribution of gains to other persons
Attribution of gains to members of non-resident companies under TCGA92/S3
TCGA92/S3 contains anti-avoidance legislation, the broad aim of which is to prevent people in the UK from setting up non-resident companies which they control for the purpose of holding assets, to keep gains on those assets outside the scope of CGT and CT. Where S3 applies, it attributes gains realised by non-resident companies (which would be close if UK resident) to UK resident participators in the company (or participators that are non-UK close companies or non-UK resident trustees of a settlement).
To prevent double taxation, S3 does not apply to the part of a gain where the company would otherwise also be subject to a charge to non-resident CG. Example A non UK resident close company disposes of a residential property. The property was acquired in 2010 and disposed of in 2020.
Any part of the overall gain arising on disposal that relates to the period from 6 April 2015 would be within the scope of the non-resident CG rules. S3 would continue to apply to the part of the gain arising before 6 April 2015.
Attribution of gains to settlors with interest in non-resident settlements under TCGA92/S86
TCGA92/S86 serves to prevent people in the UK setting up non-resident trusts to keep gains outside the scope of CGT and CT (see CG38430+).
Where gains accrue to non-resident trusts in respect of any settled property "originating from the settlor", that would be chargeable gains under TCGA92/S2(2) if the trustees were UK resident, the gains are attributed to settlors who have an interest in the trust, and are chargeable to CGT.
The legislation contains provisions amending S86 to prevent possible double taxation (the trustees of a non-UK resident settlement being charged non-resident CGT on a gain accruing to them and S86 treating the same gain as accruing to a UK settlor). A disposal of settled property which is a non-resident CGT disposal is disregarded for the purposes of the S86 charging provisions, to the extent that a chargeable non-resident CGT gain accrues to the trustees. The new charge to non-resident CGT therefore takes priority over a charge under TCGA92/S86.
Attribution of gains to beneficiaries of non-resident settlements under TCGA92/S87
TCGA92/S87 imposes a charge on beneficiaries of non-resident trusts where S86 does not apply (see CG38570+). Gains accruing to non-UK resident trustees are treated as chargeable gains accruing to beneficiaries, to the extent that the beneficiaries receive matched capital payments from the trustees. TCGA92/S91 increases the tax payable by an interest-related factor where the capital payment is made more than one year after the end of the relevant tax year.
The legislation amends S87 to prevent potential double taxation (the trustees of a non-UK settlement charged non-resident CGT on a gain accruing to them, and the same gain treated as accruing to the beneficiaries of the trust under S87).
TCGA92/S87(5A) provides that where a disposal of settled property is a non-resident CGT disposal, it is disregarded for the purposes of the charging provisions in S87, to the extent that a chargeable non-resident CGT gain accrues to the trustees. In the same way as for S86, the new charge to non-resident CGT takes priority over a charge under TCGA92/S87.
Transfers of value by trustees, attribution of gains to beneficiaries under TCGA92/Sch 4C
TCGA92/Sch 4C is part of a series of anti-avoidance provisions introduced to counter 'flip flop' schemes, involving trustees of a non-resident trust borrowing funds on the value of settled property and making loans to another trust. In broad terms, gains on deemed disposals are attributed to the settlor or else are allocated to beneficiaries in receipt of capital payments (see CG39100+). The legislation contains provisions amending Sch 4C to prevent double taxation (a charge to non-resident CGT arising directly on the trustees on a disposal of a UK residential property interest, and a possible charge on beneficiaries on a deemed disposal of the same interest). Sch 4C is therefore disapplied in relation to disposals by the trustees that are non-resident CGT disposals, so that no deemed disposal accrues to the trustees at the time they make a transfer of value or there is trustee borrowing. Instead non-resident CGT would apply at the time of an actual disposal.
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85f17c97614abed27e1f14377aee257e3688339b | CG73996A Schedule 5AA TCGA92: UK property rich collective investment vehicles: Introduction
This guidance explains how the rules in Schedule 5AAA apply to disposals of UK land by non-UK resident collective investment vehicles (CIVs), and to disposals of interests in ‘UK property rich’ CIVs by non-UK resident investors. This guidance is in draft and HMRC will work with stakeholders to make further changes where required. The final version is likely to be split into smaller sections, and is expected to be included in a new Investment Funds Manual to be published in early 2019.
For guidance on the core rules on disposals of interests in UK land refer to CG73920 onwards.
Purpose and scope of the rules in Schedule 5AAA
HMRC policy with regard to taxation of investors and CIVs generally is to tax investors in a way that provides a similar outcome to direct investment in the underlying assets. Prior to April 2019, the capital gains of non-resident CIVs were only within the scope of UK tax in limited circumstances (broadly, where CIVs were closely held). From April 2019, all non-UK resident CIVs are brought into charge, and areas of difficulty thereby potentially arise for those CIVs under the core rules –
• Exempt investors would indirectly suffer tax where a CIV or entities that CIV is invested in become liable to tax on gains; and
• Investors generally could indirectly suffer from multiple charges to tax on a CIV or entities that CIV is invested in (for example, where a gain arises for a special purpose vehicle in the fund structure disposing of a property, and again when the CIV disposes of an intermediate holding company above that SPV); UK and non-resident investors would also be liable to tax on any gains on a disposal of their interest in the CIV.
The rules in Schedule 5AAA address these points by providing for two forms of election that effectively move the tax point to the investor. The Schedule also provides the default framework for how the rules for taxing non-residents’ gains on disposals of interests in UK land apply to CIVs.
CG73996C Overview of the rules for collective investment vehicles
Scope of the rules and definitions
The scope and key definitions are contained in Part 1 of the new Schedule 5AAA to TCGA 1992. The term ‘collective investment vehicle’ is defined at TCAG92/SCH5AAA/para 1(1) – see CG73996E. This is a key term as it acts as a ‘gateway’ into the treatment of entities within the definition, and of their investors. Default position for CIVs and their investors
The default position for CIVs is –
- Irrespective of their legal form, non-corporate CIVs other than partnerships are deemed to be companies and are chargeable to corporation tax on all disposals of UK land (this includes non-UK entities that are transparent for income tax purposes, such as so-called ‘Baker’ unit trusts (for example, Jersey property unit trusts (‘JPUTs’)), Luxembourg Fonds Commun du Placement (‘FCPs’) and Irish common contractual funds (‘CCFs’));
- Such ‘companies’ are treated as having shares to link in to the indirect disposal rules in Schedule 1A to TCGA 92 (see CG73930+), so that investors will hold an interest in a UK property rich asset where the CIV itself is UK property rich;
- Investors will be treated as having a substantial indirect interest (CG73936) where the CIV is UK property rich, so that investors with a less than 25% interest will still be within charge (subject to an exception for property funds that are not intended to be and are not marketed as UK real estate funds – see C73996E).
This default position for CIVs and investors can be illustrated as follows -
**Comparison with main indirect disposal rules**
| Default indirect disposal rules | CIV specific rules | |---------------------------------|--------------------| | Taxable on disposal of shares, unless holding less than 25% interest, or an exempt investor | Taxable on disposal of shares, unless an exempt investor | | Taxable on disposal of property | Taxable on disposal of property |
25% exemption not available Deemed to be a company
In the following diagram ‘x’ indicates a taxable disposal Elections for transparency or exemption
As can be seen, the default position would result in the problems described at CG73996A. Schedule 5AAA addresses those problems for UK property rich CIVs by providing (subject to certain conditions) for them to elect –
- In the case of offshore CIVs that are transparent for income, to be treated as a partnership for capital gains purposes (so a CIV that makes the election will also be transparent for capital gains purposes - see TCAG92/SCH5AAA/para 8 and CG73996L);
- For all offshore CIVs, to be treated as exempt from Corporation Tax on chargeable gains accruing on all direct and indirect disposals of land (see TCAG92/SCH5AAA/para 12 and CG73997A).
Para 12 also provides that limited partnerships (including UK based ones) that come within the definition of a collective investment scheme at section 235 Financial Services and Markets Act 2000, and UK co-ownership contractual schemes may make an election for companies in their ownership chain which are not CIVs to be similarly exempt.
The above represents the basic position only – refer to the guidance that follows for more detail.
CG73996E Definitions
Introduction
The key expressions are defined in Part 1 of Schedule 5AAA. Other terms used in the Schedule are defined in Parts 4 and 6. The Part 1 definitions are explained below; explanations of terms defined in Parts 4 and 6 are provided later in this guidance in the context of the rules they apply to.
Meaning of ‘collective investment vehicle’ (CIV)
The expression ‘collective investment vehicle’ is a key part of the rules as entities within that definition, and their investors, are subject to the specific rules set out in the Schedule. It therefore acts as a gateway test – entities that do not come within the definition are subject to the core rules, as are their investors (see CG73920 onwards). Note that being a CIV does not mean an entity is automatically entitled to make an election for transparent treatment (see CG73996L) or exemption (see CG73997A) as the relevant elections are subject to certain conditions being satisfied.
A CIV is any of the following (TCAG92/SCH5AAA/para 1(1)) –
- A collective investment scheme, as defined in section 235 of the Financial Services and Markets Act 2000;
- An Alternative Investment Fund (AIF) as defined in regulation 3 of the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773); • A UK Real Estate Investment Trust (REIT) within Part 12 of Corporation Tax Act 2010; or • A company that is resident outside the UK and meets the property income condition.
The property income condition (TCAG92/SCH5AAA/para 1(2)) is intended to include entities that are similar in nature to UK REITs and requires that –
• The company is not close, or is only close because of control by ‘qualifying investors’ (see CG73997C/TCAG92/SCH5AAA/para 46); • At least half of its income is property income from long term investments (long-term investments means property intended for letting that is held as an investment asset on the balance sheet); • Either as a result of a requirement of law, a commitment to its investors in its prospectus or similar documents made available to investors, or as a matter of established practice it annually distributes all, or substantially all, of its property income from long term direct or indirect investments in land, estates, interests or rights over land (substantially all in this context means around 90%; annually can include more frequently, such as quarterly distributions); and • It is not liable to tax on that income under the law of any territory in which it is resident (that is, it does not pay tax on that income as the result of tax rules that provide for a single-level of taxation in the hands of the investors in the company or otherwise because it is exempt or subject to a nil rate of tax).
This is adapted from the OECD definition of a real estate investment trust, with appropriate modifications for the policy. The TCGA legislation does not refer to this as a REIT equivalence test, and it should not be taken to mean the same as or affect the meaning of a UK REIT equivalent at CTA10/S528(4A)(j) or elsewhere.
Meaning of ‘offshore collective investment vehicle’ and ‘collective investment vehicle being UK property rich’
Parts of Schedule 5AAA have relevance even where a CIV is not an ‘offshore CIV’ – for example, as regards the treatment of non-resident investors in UK REITs or UK property authorised investment funds (PAIFs). The rules in the Schedule then have effect according to whether a CIV is an ‘offshore collective investment vehicle’ and whether it is ‘UK property rich’. These key terms are defined in paragraphs 2 and 3 respectively.
Offshore collective investment vehicle
An offshore CIV is any CIV, as defined in TCAG92/SCH5AAA/para 1(1), where (TCAG92/SCH5AAA/para 2) –
• if it is a body corporate, it is resident outside of the UK; • if it is a unit trust, all of the trustees are resident outside of the UK; and • if it is a co-ownership arrangement, the arrangements take effect as a result of the law of a territory outside of the UK (the term co-ownership is not restricted to having any particular meaning in UK law; as examples it would include Luxembourg or French fonds commun du placement (FCPs) and Irish common contractual funds (CCFs)).
This is a key concept as (subject to applicable conditions) only an offshore CIV can make an election for transparency or exemption – see CG73996L and CG73997A (but note also that limited partnership collective investment schemes - including UK LPs - and UK co-ownership authorised contractual schemes (CoACS) can make an exemption election in respect of companies in their ownership chain, which are not CIVs themselves, to be exempt - see CG73997A).
UK property rich Whether a CIV is UK property rich (TCAG92/SCH5AAA/para 3) at a given time is determined by applying the rules in Part 2 of Schedule 1A to TCGA 92 (see CG73930) and, other than partnerships, deeming non-corporate CIVs to be companies for this purpose (see CG73996G) and any disposal of an investor’s interest as if it were be a disposal of a right or interest in that company. CIVs that are already bodies corporate will also apply the Schedule 1A rules.
If a disposal were made of such a right or interest at a particular time and such a disposal would be regarded as a disposal of a UK property rich asset (that is, one deriving 75% or more of its value from interests in UK land) then the CIV is UK property rich at that time.
This is also a key concept affecting whether an offshore CIV can make an election for transparency or exemption, and the tax treatment of its non-resident investors.
CG73996G Basic rules
Application of rules to offshore CIVs and UK co-ownership authorised investment schemes (CoACS)
Offshore CIVs deemed to be companies Irrespective of their legal form, non-corporate offshore CIVs other than partnerships are deemed to be companies and as having shares, so that investors will hold an interest in a UK property rich asset where the CIV itself is UK property rich. This deeming does not go so far as treating them as having ordinary share capital, so they will not be able to rely on provisions that require a relationship to be established between a parent and subsidiary, or common subsidiaries of a parent, through ownership of ordinary share capital. Note that some rules in Schedule 5AAA apply in the context of actual companies and where that is the case this distinction is made clear – for example, where an election may be made under TCAG92/SCH5AAA/para 12(3) (see CG73997A). UK CoACS CoACS will continue to be treated as not being persons for UK tax purposes generally, and so nothing in Schedule 5AAA brings them within charge to UK tax for any purpose. Interests in a CoACS are deemed to be shares from the perspective of a non-UK resident investor (TCAG92/SCH5AAA/para 5(1)), purely for the purposes of considering whether those investors hold an interest in a UK property rich asset.
Default treatment for non-resident CIVs The default treatment of non-UK resident non-corporate CIVs is that they are companies for the purposes of TCGA in respect of their disposals of interests in UK land (TCGA92/s1C; CG73922), so they will be persons and chargeable to Corporation Tax on their gains on such disposals, whether or not they are UK property rich.
This default treatment is subject to the elections detailed in CG73996L (election for transparency) and CG73997A (election for exemption).
CIVs which are partnerships on first principles will remain transparent for gains.
Interaction with rules in Chapter 3 of Part 3 TCGA92 Schedule 5AAA TCGA92 and Chapter 3 of Part 3 TCGA92 set out how unit trusts and contractual funds (for example, UK co-ownership authorised contractual schemes (CoACS), Luxembourg or French fonds commun du placement (FCPs) and Irish common contractual funds (CCFs)) and their investors are treated for relevant TCGA purposes.
This is necessary because whereas funds which take corporate form are treated in the same way as any other company for TCGA purposes, unit trusts and contractual funds may on first principles be transparent for capital gains purposes and that analysis would lead to considerable complexity for investors as regards their capital gains position.
Chapter 3 of Part 3 provides rules to simplify that position. The Schedule 5AAA rules provide a basis that treats unit trusts and contractual funds in a similar way to companies for relevant TCGA purposes, specifically as regards sections 1A(3)(b)&(c) and 2B(4) TCGA 92 (broadly, non-residents’ interests in UK land, or assets that derive at least 75% of their value from UK land – see CG73920 onwards).
Some of the rules in Chapter 3 are impacted by Schedule 5AAA. The following table sets out what the two different sets of rules do and how they interact; text in *italics* refers to provisions in Chapter 3 that, for non-UK residents only, are superseded by Schedule 5AAA.
| | Ch.3 of Pt.3 TCGA92 | Sch.5AAA TCGA92 | |----------------------|---------------------|-----------------| | UK resident unit trusts | TCGA92/S99 treats the unit trust scheme as if it were a company, and the rights of | Not covered, therefore TCGA92/S99 applies | | Non-resident unit trusts that are not within the meaning of a transparent fund in SI/2009/3001\* | **TCGA92/S99 treats the unit trust scheme as if it were a company, and the rights of the unit holders as shares in the company** | **TCGA92/SCH5AAA/para 4(1),(2)&(6) apply to treat the unit trust scheme as if it were a company, and the rights of the unit holders as shares in the company** | |---|---|---| | **Note:** S99 is therefore disapplied but Sch 5AAA has the same effect |
| Non-resident unit trusts within the meaning of a transparent fund in SI/2009/3001\* | **TCGA92/S103D treats a unit as an asset for TCGA purposes and a participant's interest in the fund property (that is, the underlying assets) is disregarded for those purposes** | **TCGA92/SCH5AAA/para 4(1)&(2) apply to treat the unit trust scheme as if it were a company, and the rights of the unit holders as shares in the company.** | |---|---|---| | **Note:** In practice, this has a similar effect to S99 | | **Note:** S103D(4) to (9) (calculation of gains on disposal of units etc.) still apply for all investors, whether UK resident or not | | **Note:** TCGA92/SCH5AAA/para 4(4) disapplies this treatment where an election for transparency under para 8 has been made (see CG73996L) |
| UK authorised co-ownership contractual scheme (CoACS) | **TCGA92/S103D treats a unit as an asset for TCGA purposes and a participant’s interest in the fund property (that is, the underlying assets) is disregarded for those purposes** | **Sch 5AAA does not disturb the S103D treatment generally, but note that TCGA92/SCH5AAA/para 4(5) provides that for Sch 1A purposes (the core rules) ‘the asset’ is treated as a share in a company. This means that a CoACS is, for Sch 1A purposes, treated as a company** | when considering the UK property rich test
| Non-UK co-ownership contractual arrangements within the meaning of a transparent fund in SI/2009/3001\* | TCGA92/S103D treats a unit as an asset for TCGA purposes and a participant’s interest in the fund property (that is, the underlying assets) is dis-regarded for those purposes | TCGA92/SCH5AAA/para 4(1)&(2) apply to treat the scheme as if it were a company, and the rights of the unit holders as shares in the company
Note: TCGA92/SCH5AAA/para 4(4) disapplies this treatment where an election for transparency under para 8 has been made (see CG73996L) |
- see regulation 11 of the Offshore Funds (Tax) Regulations 2009
CG73996J Disposals by non-UK residents
Disposals by non-resident investors of interests in property funds with UK property interests: General
The term ‘property funds’ is used here in its widest sense, that is it refers to any sort of fund vehicle whether or not within the TCGA92/SCH5AAA/para 1(1) definition of a collective investment vehicle.
Property funds that are not within the TCGA92/SCH5AAA/para 1(1) definition
Examples may include non-resident listed property funds that are neither alternative investment funds (AIFs) as at TCGA92/SCH5AAA/para 1(1)(b) nor within scope of TCGA92/SCH5AAA/para 1(1)(d) as companies similar to a UK real estate investment trust. Such funds are not within Schedule 5AAA and so the core rules apply – in brief, non-UK resident investors will be within the charge to corporation tax or capital gains tax on any gains on disposal of their shares if the company is UK property rich. This is subject to any exceptions, including the availability of the 25% de minimis – see the guidance on the core rules at CG73920 onwards for further details.
Property funds that are within the TCGA92/SCH5AAA/para 1(1) definition of collective investment vehicle
In general, non-UK resident non-corporate CIVs will be treated in the same way as corporate CIVs, that is as companies, and interests in them as shares. A disposal by a non-resident investor will be chargeable as a disposal of an interest in a UK property rich company in accordance with TCGA92/SCH1A (see CG73920 onwards); see more on the treatment of investors below.
**Disposals by non-resident investors of interests in CIVs and assets with an ‘appropriate connection’ to CIVs**
Non-resident investors will be chargeable on gains on disposal of an interest where that disposal has an ‘appropriate connection’ to a UK property rich CIV regardless of their level of investment in the CIV – they will not benefit from the 25% ownership exemption provided in Part 3 of Schedule 1A. This is because where a CIV has a 75% interest in UK land it can reasonably be expected to have been marketed on the basis that it is a UK property fund and investors will accordingly be aware of that. This is the case for investment in both non-UK CIVs and UK resident CIVs such as UK real estate investment trusts (REITs) and property authorised investment funds (PAIFs), but see below for details regarding TCGA92/SCH5AAA/para 7 where the 25% ownership exemption may still be available for certain non-UK focused property funds that happen to be UK property rich in particular circumstances.
TCGA92/SCH5AAA/Para 6(1) sets out a two-part test to identify a disposal by a non-UK resident person (person here meaning legal or natural person) of a UK property rich asset, where that disposal has an ‘appropriate connection’ to a collective investment vehicle.
Where there is such a disposal then TCGA92/SCH5AAA/para 6(2) removes the exemption from charge on indirect disposals for investors holding a less than 25% interest in a company (as provided for in Part 3 Schedule 1A). This is the case for investment in both non-UK CIVs, and UK resident CIVs such as UK real estate investment trusts (REITs) and property authorised investment funds (PAIFs), as well as where a disposal has an ‘appropriate connection’ to such a CIV (see below).
TCGA92/SCH5AAA/para 6(3) to (6) defines when a disposal has an appropriate connection, and this is explained using examples below. In each case the sub-para needs to be read together with para 6(1)(a), that is the requirement for the entity in question to be UK property rich. Note also that in each case within para 6(3), (5) or (6) there is an exception at TCGA92/SCH5AAA/para 7 so that the 25% de minimis can apply subject to particular conditions being met. This is explained further below.
**TCGA92/SCH5AAA/para 6(3)**
Para 6(3) applies where the disposal is of a right or interest in –
- a UK property rich CIV as defined at para 1(1) (see CG73996E regarding the meaning of UK property rich and CIV), wherever resident
- A company (wherever resident) that is not itself a CIV but that derives at least half of its market value from being a participant in one or more CIVs, meaning effectively that the company cannot be UK property rich without reference to those CIVs. A participant is, broadly, an investor – see TCGA92/SCH5AAA/para 1(5) for the definition of participant. Example A owns 10% of the shares in UK property rich Company B, which is not a CIV. B owns units worth £4.5m in a UK property rich CIV ‘C’, and bonds worth £500,000 unconnected to UK land. As at least half of A’s value (90%) derives from UK property rich CIVs, a disposal of an interest in B will have an appropriate connection to a CIV, and A will not benefit from the 25% ownership exemption.
TCGA92/SCH5AAA/para 6(4) Para 6(4) applies where the disposal is of a right or interest in a UK property rich company (whether or not it is a CIV) where the disposal is made in respect of a person’s investment in a partnership which is itself a CIV.
Example X is a partner in a collective investment scheme limited partnership. The partnership is invested in UK property rich Company Y, which is not a CIV. The partnership disposes of its interests in Company Y. For capital gains purposes, X has made a disposal of their interest in Y; as this disposal was in Y’s capacity as a partner in a CIS limited partnership, it will have an appropriate connection to a CIV. The same analysis would apply if it were X disposing of their partnership interests. If X held an interest in Company Y directly (i.e. not through the partnership), then a disposal of that interest would not have a connection to a CIV.
Para 6(4) is not subject to paragraph 7, as explained below, so even if the CIV was marketed as something other than a UK property fund the partners would not benefit from the 25% exemption if at the point they made a disposal the company was UK property rich.
TCGA92/SCH5AAA/para 6(5) Para 6(5) applies where a non-UK resident CIV disposes of an interest in a UK property rich company. This sub-paragraph applies where the CIV is a company (including where it is deemed to be so by para 4 of Schedule 5AAA, which will not include a case where the collective investment scheme is a partnership for which see above regarding para 6(4)).
TCGA92/SCH5AAA/para 6(6) Para 6(6) applies where a company ‘A’ (which is not itself a collective investment vehicle) makes a disposal of a UK property rich company ‘B’, and two or more UK property rich CIVs have a 50% or more interest in company A. This rule is aimed at disposals by companies that are predominantly owned by one or more CIVs, including (but not limited to) CIVs that are partnerships.
Example S is a collective investment vehicle, and is UK property rich. S owns 100% of the shares in company T, a company which is not a CIV; in turn, T owns 10% of the shares in Company U, which is not a CIV but is UK property rich. The balance of the shares in Company U are owned by R, which is another UK property rich collective investment vehicle. If Company T disposes of its interests in Company U, this is one body corporate disposing of another, and neither are CIVs. However, the disposal has an appropriate connection to a CIV because 50% or more of the investment in Company U (100%) is held by UK property rich CIVs, S and R.
Establishing the percentage of investment Establishing the percentage of investment for para 6 purposes is explained in para 6(7) and (8). This relies on the tracing provisions in Schedule 1A (see CG73934) and where two or more CIVs have an interest in a company they are treated as if they are a single person.
Disapplying the ‘appropriate connection’ rules TCGA92/SCH5AAA/para 7 provides an exception to the treatment set out in para 6(3), (5) or (6) so that non-resident investors making a disposal which would otherwise have an ‘appropriate connection’ to a CIV may nonetheless benefit from the 25% ownership exemption provided by Part 3 of Schedule 1A and therefore will not automatically be considered to have a substantial indirect interest in UK land (note though that they may still do so where they have an interest of 25% or more – see CG73920 onwards).
Para 7 is subject to the following conditions –
- The non-UK real estate condition; and
- The CIV must meet either –
- the Genuine Diversity of Ownership (GDO) condition as set out in regulation 75 of The Offshore Funds (Tax) Regulations 2009 (SI 2009/3001)) or,
- if the vehicle is a company (including a deemed company as a result of paragraph 4 of Sch.5AAA), the non-close condition.
The non-UK real estate condition requires that the prospectus made available to investors in the collective investment vehicle (or vehicles for paragraph 6(3)(b)) would not lead them to believe the vehicle to be likely to hold more than 40% of its assets in UK land on an ongoing basis. This is to prevent the removal of the 25% ownership exemption where a collective investment vehicle meets the mechanical test for being UK property rich in paragraph 6(1)(a) at a given point in time, but has been marketed to investors as, for example, a pan European property fund that is not likely to be primarily UK property focused on a general basis.
See CG73997A for further guidance regarding the GDO and non-close conditions.
Paragraph 7 does not apply to disposals under paragraph 6(4), where the interest in question is held through a partnership collective investment vehicle. Where such a CIV disposes of assets that derive at least 75% of their value from UK land, for example a UK property rich company or CIV, the partners in a such a CIV will be treated as making a disposal of their fractional interest in that company or CIV (as a consequence of normal operation of the tax rules for partnerships). Regardless of the level of interest in that asset all partners will be considered as having a UK substantial indirect interest. CG73996L The transparency and exemption elections
Overview
Introduction Schedule 5AAA provides for offshore CIVs that meet particular conditions to make one of two elections (and in some circumstances, both) that are designed to address the problems described at CG73996A that could otherwise adversely affect their investors (broadly, taxation of exempt investors, and multiple charges at different tiers within CIVs generally).
Both elections are explained in detail in the following guidance. This section gives an overview of each and the differences between them.
The transparency election An election under TCGA92/SCH5AAA/para 8 provides, subject to certain conditions being met, for offshore collective investment vehicles which are transparent for income tax purposes (for example, ‘Baker’ unit trusts, Luxembourg or French fonds commun du placement (FCPs), and Irish common contractual funds (CCFs)) to elect to be treated as partnerships for the purposes of TCGA 1992.
The effect of the transparency election is to treat the offshore CIV as a partnership for the purposes of capital gains (and related provisions), with the result that –
- the CIV itself is not within charge to tax on its gains;
- an interest in the CIV is not an asset for capital gains purposes, so the investors are taxed on disposals of the underlying assets of the partnership and not on a disposal of their interest in the CIV itself.
An investor who is exempt from capital gains would therefore be able to directly engage that exemption on disposal of assets by the CIV, as for capital gains purposes they will be disposing directly of those assets rather than the disposal being by the CIV.
This exemption was not designed for, and is unlikely to be suitable for, CIVs that are widely held and have regular changes of investors, as the effect of investors investing or disposing of interests is likely to trigger regular disposals of other investors’ interests in the underlying assets (see section 4 of Statement of Practice D12). HMRC would anticipate the likely users of this election to be smaller, joint-venture arrangements where the investors are predominantly or wholly exempt investors and/or are unlikely to change regularly. It may also be appropriate where the CIV is essentially a captive vehicle in the structure of a larger fund.
The exemption election An election under TCGA92/SCH5AAA/para 12 provides, subject to certain conditions being met, for managers of certain collective investment vehicles to treat the vehicle and/or entities it has at least a 40% interest in as exempt on gains on disposals of interests in UK land (both direct and indirect disposals).
The investors are already, and remain, chargeable on their gains on disposals of interests in the CIV (see CG73996J regarding the 25% ownership exemptions not generally being available).
The transparency election in detail
TCGA92/SCH5AAA/para 8(1) enables non-resident UK property rich CIVs that are transparent for income tax purposes to elect to be treated as transparent for gains (except partnerships, for which an election is unnecessary).
TCGA92/SCH5AAA/para 8(7) explains when a CIV is considered to be transparent for income tax purposes. Paragraph 8(7) does not attempt to define what makes a CIV transparent for income, and that remains something to be determined by reference to case law principle. Instead, it assumes that analysis has already been applied and that as a conclusion of a CIV being transparent for income a hypothetical UK resident individual invested in the CIV would be chargeable to income tax on his or her share of the vehicle’s income.
TCGA92/SCH5AAA/para 8(5) removes the need to consider whether or not an income transparent CIV would, on first principles, already be transparent for gains.
Making an election is subject to the CIV being UK property rich at the time of the election, or having published scheme documents at that time clearly stating the intention of the CIV to invest predominantly in UK land.
How and when the election must be made
The election must be made by the fund manager (TCGA92/SCH5AAA/para 8(2)), and must be accompanied by the consent of all of the investors in the fund at the time of making the election (TCGA92/SCH5AAA/para 9(1)(a)). The election must be made within 12 months of the CIV first acquiring a direct interest in UK land or an asset that is UK property rich (TCGA92/SCH5AAA/para 9(1)(c)). In the case of a fund with such interests that exists at 6 April 2019, the election must be made by 5 April 2020.
Investor consent may be assumed where it is evident that it has been made clear to investors in fund documentation or other relevant material that they are buying an interest in a fund that intends to make a transparency election. For funds that exist at 6 April 2019, evidence of investor consent can be retained in any form (for example, email, web form, note of telephone call or in writing). Effect of election
Once the election is made the CIV will be treated as a partnership for the purposes of TCGA generally, so that the investors will be treated as if they directly held an interest in the underlying assets of the fund. The transparent treatment will apply for all investors in the fund, both UK and non-resident, and TCGA92/SCH5AAA/para 8(8) therefore disapplies TCGA92/S99 (application of TCGA to unit trusts) and S103D (tax transparent funds treated as an asset for TCGA purposes).
The CIV is also considered a partnership, and so transparent, for the purposes of establishing a group relationship for capital gains purposes. So for example, Company A owns 100% of the units in a CIV which is subject to the transparency election, and that CIV owns 100% of the shares in Company B. For the purposes of establishing a group relationship for TCGA92/s171, and looking at a chain of ownership as per CTA10/s1154, Company A will be treated as directly holding the shares in Company B. This would not apply for purposes other than capital gains (such as group relief).
The TCGA rules for partnerships and the principles of Statement of Practice D12 will apply to assist in calculating the gains of the investors.
The election will have retrospective effect to cover any disposals by the CIV from commencement of the non-resident gains rules on 6 April 2019, or if the CIV is formed after that date, from the date it is formed.
CGT at the upper rate on disposals of UK residential land will apply where, as a consequence of the transparency election, an investor is treated as making a direct disposal of an underlying asset of the CIV that is liable at that rate.
Once made, the election cannot be withdrawn (TCGA92/SCH5AAA/para 9(3)). If the investors in the CIV change, or it ceases to be 75% UK property rich, it will remain a partnership for gains. There will be no need to make a new election or provide the consent of the new investors, who should be aware of the CIV’s status when they acquire an interest in it.
Interaction with rebasing rules in Schedule 4AA TCGA
The rebasing rules for non-UK residents disposing of interests in UK land that were held at 5 April 2015 and/or 5 April 2019 are covered in detail in CG73960P and CG73970P (for CGT and CT respectively).
A non-UK resident disposing of an interest in a UK property rich CIV would be making an indirect disposal, and so would fall within Part 2 of Schedule 4AA to TCGA 92; hence the default position would be for them to calculate their gain or loss using the 5 April 2019 market value as the base cost.
Where the CIV has made an election for transparency, the effect will be that an investor disposing of an interest in the CIV will be treated as disposing of the underlying assets directly. This may mean in some cases that the investor is therefore making a disposal that would fall into Part 3 or Part 4 of Schedule 4AA (such as an individual disposing of an interest in a residential property), and may have an earlier rebasing date or a mixed-use calculation.
TCGA92/SCH5AAA/PARA 11 provides that the 5 April 2019 rebasing date be retained, so that if a person would (absent the transparency election) have fallen into Part 2 as making an indirect disposal, then they will still fall into that Part.
Where the CIV itself is making the disposal (rather than the investor making a disposal of their interests in the CIV), and that disposal would have fallen into Part 3 or 4 anyway – such as a direct disposal of UK residential land by a closely-held corporate CIV – then para 11 will not apply.
**Effect of the election on UK tax resident investors**
Under existing provisions in Chapter 3 of Part 3 of TCGA, UK resident investors will already have an interest in the CIV as an asset for the purposes of capital gains. The transition for investors between holding an interest in the CIV as an asset and holding an interest in the underlying assets, including UK resident investors under current rules, will be done by deeming the underlying assets to always have been so held for the purposes of calculating the gain.
Statement of Practice D12, and principles such as those in section 43 TCGA, will assist in calculating any gain or loss when the investor or the CIV makes a disposal. There is no deemed disposal on making the election, and no need to substitute market value for base cost as a consequence of the disposal.
**UK insurance companies**
To prevent complexity and ensure insurers maintain the current tax treatment under section 212 of TCGA 1992, TCGA92/SCH5AAA/para 10 treats an election under paragraph 8 as having no effect from the perspective of any investors in the offshore CIV which are UK insurance companies holding the units for the purposes of their long-term business. The affected insurance companies will continue to hold an interest in the vehicle itself as a capital gains asset rather than in the underlying property of the vehicle. This is the only exception to the transparency principle once an election has been made.
**Interaction with 30 day reporting and payment on account rules**
Where a CIV has yet to make an election, it will remain opaque and chargeable on gains arising from its own disposals. Non-resident investors chargeable to Capital Gains Tax will therefore, at that stage, not be within the rules for 30 day reporting and payment on account (set out in Schedule 2 to Finance Bill 2019) in respect of a disposal by the CIV. The election for transparency has retrospective effect, so that a disposal by the CIV will become chargeable on the investor.
In these circumstances, the investor’s 30 day time limit for reporting and paying tax on any gain begins on the day the election for transparency is sent to HMRC, rather than the normal time limits. Once the election has been made, the normal time limit applies. The normal rules for the 30 day reporting and payment on account provisions will apply for any disposal by the investors themselves, regardless of whether the CIV is transparent (a disposal of underlying property) or opaque (a disposal of an interest in the fund itself).
CG73997A The exemption election - Overview
Offshore CIVs Eligible offshore CIVs that –
- are UK property rich companies (including deemed companies under paragraph 4, see CG73996G);
- meet certain qualifying conditions in TCGA92/SCH5AAA/PARA 13; and
- commit to report certain information on annual basis to HMRC
can make an election under TCGA92/SCH5AAA/PARA 12 to provide exemption for the CIV itself and for entities in which it has at least a 40% investment.
This addresses the problems described at CG73996A where the default position could otherwise adversely affect such CIVs and their investors (broadly, taxation of exempt investors, and multiple charges at different tiers within CIVs generally).
Commercial restructuring to facilitate an election for exemption Constitutional or structural changes that are needed to meet the relevant conditions, or to enable an investor to benefit from its own tax exemptions, in particular where all of the ultimate investors are tax-exempt or otherwise qualifying investors, will generally not be caught by the anti-avoidance rules (paragraph 11 of Sch.1A to TCGA; see CG73952) or otherwise be considered to be unacceptable planning. The following examples will specifically be accepted:
- Changing terms in a prospectus or fund document to clarify the GDO position,
- Changing distribution provisions to ensure that the fund manager does not trigger a deemed disposal as a result of making a payment to investors that would come within paragraph 21 (payments not otherwise taxable, see CG73887J).
- Changing distribution rights so that the full benefit of tax exemptions may pass to the tax exempt investors who effectively enabled such tax exemptions, with underlying tax being allocated to taxable investors.
There may be other examples that would also be acceptable but each case must be considered on its own merits.
Limited partnership collective investment schemes and UK co-ownership authorised investment scheme (CoACS) An election can also be made under paragraph 12 by –
- a CIV which is a partnership collective investment scheme (based in any jurisdiction, including the UK); or • a UK co-ownership authorised investment scheme (CoACS).
in respect of one or more companies that it wholly owns or almost wholly owns (see CG73997L—broadly that it is at least 99% invested in), and which are UK property rich. Elections cannot be made in respect of companies that are CIVs, but CIVs in the ownership chain can make an election themselves if eligible to do so.
Other UK property funds There are existing special tax regimes for other types of UK property funds, specifically UK real estate investment trusts (REITs; see the GREIT Manual) and property authorised investment funds (PAIFs; see CTM48800), and these funds are unable to make an election under paragraph 12(2), or to be the company covered by an election under paragraph 12(3) by a CIS limited partnership or a CoACS. As a result of the provisions brought in by Schedule 5AAA, certain changes were made to the rules for UK REITs. The most significant of these was to extend exemption to gains arising on disposals of UK property rich companies. HMRC guidance for REITs will be updated to reflect these changes, and a draft of that amended guidance is included at Annexe 2.
Paragraph 12 elections – further detail
Collective investment vehicles – election under TCGA92/SCH5AAA/PARA12(2) Only offshore CIVs as defined at TCGA92/SCH5AAA/PARA 2 are eligible to make an election. Once an election is made, the CIV is referred to in the legislation as a “qualifying fund”. A company that is within the TCGA92/SCH5AAA/PARA 1 definition of a CIV only by being an alternative investment fund may not make the election. In order to be eligible to make an election a CIV must therefore be –
• an offshore collective investment scheme as defined at FSMA2000/S235 (this will include transparent for income entities, such as Jersey property unit trusts for example, that have not made an election under paragraph 8 and therefore remain opaque for capital gains purposes) or • a non-UK resident company that comes within TCGA92/SCH5AAA/PARA 1(1)(d), so that it will be similar to a UK real estate investment trust.
The entities in which the CIV has an interest and which are covered by the election as a result of TCGA92/SCH5AAA/PARA16 may be UK or non-UK resident, bodies corporate or deemed companies under TCGA92/SCH5AAA/PARA4, and may themselves be CIVs. The exemption covers direct or indirect disposals of UK land.
The CIV must have an investment of at least 40% in an entity for that entity to benefit from exemption. Where the investment is less than 100% the gain or loss is exempted proportionately to the level of investment the electing CIV (referred to as the ‘qualifying fund’ in Schedule 5AAA) has in the entity. The level of investment is established using the tracing rules in TCGA92/SCH1A/PARA 9 (see CG73938).
The CIV must continue to meet certain qualifying conditions for the election to have effect. If the circumstances of the CIV change so that it does not meet the conditions, this will trigger a deemed disposal and reacquisition of the interests of the investors. In some circumstances any gains triggered by the deemed disposal will be brought into charge immediately, and in some the gain will not come into charge until the investors receive funds from the CIV, the CIV winds up, or a period of three years elapses (whichever is earliest) - see CG73997J for further detail.
Companies invested in by limited partnership collective investment schemes and UK co-ownership authorised contractual schemes
Nothing within Schedule 5AAA treats a limited partnership CIS (LP CIS) or a UK co-ownership authorised contractual scheme (CoACS) as a company for TCGA purposes, and as they are not otherwise legal persons they are not within the charge to tax. LP CISs remain transparent for gains, and so interests in them are not assets for their investors; units in a CoACS are treated as shares in a company for the purposes of considering whether non-UK resident investors hold an interest in a UK property rich asset, and for UK investors the units are a CG asset (TCGA92/s103D).
Investors in LP CISs and CoACS used in property fund structures would however, as a result of the default position for companies in those structures, face the problems described at CG73996A in respect of tax being charged on those companies. TCGA92/SCH5AAA/PARA 12(3) therefore provides for a manager of such funds to make an election on behalf of companies that are wholly or almost wholly owned by LP CISs and CoACS (that is companies that the LP CIS or CoACS holds at least a 99% investment in; see CG73997L).
The company and the collective investment vehicle that holds it between them must meet the qualifying conditions in paragraphs 12 and 13 (see CG73997C). Companies invested in by the electing LP CIS or CoACS are referred to in Schedule 5AAA as ‘qualifying companies’.
The 40% minimum interest required for an entity in the fund structure to be eligible for exemption is considered in respect of ownership by the company for which the election has effect.
LP CISs
A LP CIS may make an election in respect of one or more companies that are not CIVs themselves and that it wholly or almost wholly owns (broadly, at least a 99% interest - see TCGA92/SCH5AAA/PARA40, and CG73997L), providing the qualifying conditions are met in respect to each company. This rule applies only in the case of a single LP CIS having such an interest; it would not apply where two or more LP CISs wholly or almost wholly owned a company between them (but where two or more partnerships wholly or almost wholly own a company through a common LP CIS, that LP CIS could meet the requirements).
Where a LP CIS has an interest in a company that is a CIV itself then that CIV can make its own election under TCGA92/SCH5AAA/PARA 12(2), provided the relevant conditions are met. A LP CIS need not be UK property rich for an election to be made, but the investors’ interests in the company directly underlying the LP must be an interest in a UK property rich asset (so the company must be UK property rich).
CIVs that have made the transparency election at TCGA92/SCH5AAA/PARA 8 (see CG73996L) and that are therefore deemed to be partnerships may also make an election under TCGA92/SCH5AAA/PARA 12(3) on behalf of one or more companies which they wholly or almost wholly own, where they consider it appropriate to do so.
- Either:
- The CIS LP must meet GDO, or
- The company must be not-close and meet the UK tax condition
- The company must be UK property rich
- The company must not be a CIV
**UK CoACS**
A UK CoACS may also make an election in respect of one or more companies that are not CIVs themselves and that it wholly or almost wholly owns. Purely for the purposes of applying these rules and considering whether the fund and underlying companies qualify, TCGA92/SCH5AAA/PARA 12(7) treats the CoACS as transparent for gains (for example when looking at the not-close condition).
It is the CoACS that must be UK property rich to meet the eligibility requirements for the election as (unlike for the partnership) it is the CoACS’ units not the shares in the underlying companies that are capital gains assets in the hands of the investors. Intermediate holding vehicles
TCGA92/SCH5AAA/Para 33 provides for a company (other than one that is also a collective investment vehicle) to have exemption on any gains on disposals of an interest in a qualifying fund or qualifying company under paragraph 12 of this Schedule, if that company is wholly owned by persons listed in paragraph 33(4). These persons are those, as in TCGA92/SCH7AC/Para 30A, who are themselves not chargeable on gains or subject to special regimes for gains. The persons must be direct participators in the company. This rule is necessary as such persons often invest through wholly owned holding companies. See CG73997G for further details. “Wholly owned” is covered in CG73997L.
The persons who are eligible to be owners of such companies are:
- Qualifying Institutional Investors (see CG53012)
- Qualifying funds and qualifying companies (within Schedule 5AAA to TCGA 92)
- Life assurance businesses where the right or interest in the para 33 company is an asset which, applying the rules in section 138 of the Finance Act 2012, is wholly matched to a liability of its life assurance business that is not BLAGAB, or
- Companies carrying on long-term business, none of which is BLAGAB where its right or interest in the para 33 company is an asset held for the purposes of its long-term business.
Inter-dependency between para 12 and para 33
A holding vehicle may be eligible to fall within para 33 because it is wholly owned by the persons above, but the CIV or company it is invested in may not be eligible for a para 12 election purely because the holding company is resident in a territory that would make the CIV or company fail the UK tax condition (see CG73997C). If making the holding vehicle exempt through para 33 would mean the CIV or company would be eligible for a para 12 election (because the interest held by that vehicle would no longer be out of charge to UK tax for reasons other than the application of the Double Tax Agreement), then the CIV or company may make the para 12 if the holding vehicle applies para 33. Example Holding Company A is a body corporate and not a CIV and is resident in a territory with which the UK has a Double Tax Agreement that does not allocate taxing rights to the UK for indirect disposals of UK land (see CG73948).
Holding Company A has a 50% investment in Fund B, a CIV which is tax resident outside the UK. Fund B meets the not close condition, but not GDO, so is required to meet the UK tax condition. All of the other investors in Fund B are UK tax resident.
Pension fund C holds a 50% investment in Holding Company A, and is a non-UK resident pension fund, which meets the conditions to be exempt from UK capital gains and is eligible to be a Qualifying Institutional Investor under TCGA92/SCH7AC/PARA3A. The other 50% is held by Fund D, which is a qualifying fund within the meaning of TCGA92/SCH5AAA, and is subject to a para 12 election under that Schedule.
Holding Company A meets the conditions to fall within para 33 in terms of being wholly owned by the right investors. Fund B, however, does not meet the UK tax condition due to the tax residence of Holding Company A. If Holding Company A were already subject to para 33, then Fund B would meet the UK tax condition.
Fund B is eligible to make an election under TCGA92/SCH5AAA/PARA12(2), at which point para 33 will apply to Holding Company A and will meet the UK tax condition.
CG73997C The exemption election - Qualifying conditions
Summary of conditions
The conditions that collective investment vehicles (CIVs), limited partnerships collective investment schemes (LP CISs) and UK Co-ownership authorised contractual schemes (CoACS) must meet in order for an election to be made under TCGA92/SCH5AAA/PARA 12(2) or (3) are shown in the following table.
| CIVs (Election under para 12(2)) | | |----------------------------------|--| | Para 12(2)(a) The vehicle must be offshore | | | Para 12(2)(b) The vehicle is a company (including deemed companies under para 4) | | | Para 12(2)(c) The vehicle is UK property rich (see para 3 / CG73996E) | | | Para 12(2)(d) All of the qualifying conditions at para 13 are met | | | Para 12(2)(e) If the vehicle is an alternative investment fund it must also be either a collective investment scheme or meet the property income condition at para 1(2) | | | Para 13 If the CIV is a collective investment scheme (under FSMA2000/S235) it meets either - | | (1)(a) the genuine diversity of ownership test (see Annexe 1), or (1)(c) it meets the UK tax condition (at para 13(7) – see below) and the non-close condition (at para 13(5) – see below)
If the CIV is a company (excluding entities deemed to be companies by para 12(4), see CG73996G) it meets either – (1)(b) the recognised stock exchange condition (at para 13(4) – see below) and the non-close condition (at para 13(5) – see below), or (1)(c) it meets the UK tax condition (at para 13(7) – see below) and the non-close condition (at para 13(5) – see below)
LP CISs and CoACS (Election under Para 12(3)) – conditions to be satisfied by companies for which an election is to be made
Para 12(3)(a) The company is wholly or ‘almost wholly’ (which para 41(1) defines as at least 99%) owned by the LP CIS or CoACS (in the case of a CoACS, para 12(7) disapplies TCGA92/S103D so that for the purposes of applying this test the CoACS is treated as being transparent for capital gains purposes)
Para 12(3)(b) In the case of a LP CIS, the company is UK property rich (see para 3 / CG73996E); In the case of a CoACS, the CoACS is UK property rich (see para 12(4)(b))
Para 12(3)(c) All of the qualifying conditions at para 13 are met
Para 13 (2)(a) Either – (2)(b) the company meets the UK tax condition and the non-close condition, or the CIS that owns it meets the genuine diversity of ownership test
All elections made under paragraph 12 are subject to initial and ongoing reporting obligations as set out in paragraphs 14 and 15; see CG73997N for details.
TCGA92/SCH5AAA/PARA 12 and 13 elections – further detail
The genuine diversity of ownership (GDO) condition TCGA92/SCH5AAA/PARA 13(3) points to regulation 75 of The Offshore Funds (Tax) Regulations 2009 (SI 2009/3001) and applies the rules therein as if any CIV were within the definition of an ‘offshore fund’ at TIOPA2010/S355. A collective investment scheme meets the condition if it meets either –
- conditions A to C of regulation 75, or
- the condition in regulation 75(5)
Regulation 75(5) moves the requirement for meeting conditions A to C to a feeder fund investing in the CIV where that feeder fund is an offshore fund, an open-ended investment company or an authorised unit trust scheme. There is existing HMRC guidance on the GDO as the condition has relevance for offshore funds and UK authorised investment funds in the Offshore Funds Manual and Company Taxation Manual respectively. A rewrite of that guidance, which does not make significant changes but provides additional commentary and examples, will be published in a new Investment Funds Manual in 2019 and a draft of that rewrite is included at Annexe 1.
The non-close condition
The meaning of ‘close company’ is provided at TCGA92/SCH5AAA/PARA 46(2) for the purposes of the non-close test at TCGA92/SCH5AAA/PARA13(5). The test is modelled on the test at CTA10/S528(4) and (5) which applies to UK real estate investment trusts (REITs; see GREIT02015).
A CIV or company is (broadly) close if it is controlled by five or fewer participators, but it may pass the non-close test if it is only close because control can only be established by the inclusion of qualifying investors (see below).
The close company rules in CTA10/PART10/CHAP2 are further modified as follows –
- CTA10/S442(a) (non-UK resident companies not to be regarded as close) is disapplied;
- CTA10/S444 (companies involved with non-close companies not to be regarded as close) is disapplied;
- CTA10/S447(1)(a) (shares in quoted companies beneficially held by non-close companies) is disapplied.
Qualifying investors
TCGA92/SCH5AAA/PARA46(3): For the purposes of paragraph 46 ‘qualifying investors’ are as set out at CTA10/S528(4A), and also includes a qualifying fund or company (that is, one that is subject to an election for exemption under paragraph 12). There is an additional requirement in that certain entity types listed in section 528(4A) must themselves either not be close or meet the genuine diversity of ownership test (‘GDO’, see above for details):
- Authorised unit trust schemes or their overseas equivalents;
- Open ended investment companies or their overseas equivalents;
- Limited partnership collective investment schemes (LP CIS);
- UK REITs or their overseas equivalents.
In the case of a LP CIS, the test for ‘qualifying investor’ applies at the level of the LP CIS itself. Accordingly, the LP CIS will need to meet the GDO test. If the LP CIS fails to meet the GDO test then an election under paragraph 12(3) may nonetheless still be made provided the company that is the subject of the election is not close on a separate analysis. So, if the LP CIS fails to meet the GDO test, the LP CIS is subject to look through and the test for closeness of the company concerned will depend on the interests of the partners themselves. Where the general partner of the LP CIS controls the company in question by virtue of its powers as general partner to manage the affairs of the partnership, the company would remain close notwithstanding the disregard for attribution of partner rights at paragraph 46(2)(d). For the purposes of paragraph 46(5) HMRC will nevertheless regard the company in question as not being close provided it is not close for any other reason.
UK REIT equivalence takes its meaning from CTA10/S528(4A)(j) and does not entirely align with a company that meets the UK property income condition at TCGA92/SCH5AAA/PARA 1(1)(d) (but note that a para 1(1)(d) company is a qualifying investor if it is exempt as a result of an election under paragraph 12).
Unlike the test in section 528 the non-close test for the exemption election allows a look-through of immediate investors to establish whether control is ultimately established through institutional investors. The look-through must be through bodies corporate. For example a company which is a direct investor in the CIV could count toward the level of control held by qualifying investors if it were itself owned by sufficient qualifying investors.
Example Holding Company A is a body corporate and has a 60% investment in Fund B, a CIV which is tax resident outside the UK. Fund B does not meet the GDO test, so is required to meet the UK tax condition and the not-close test. The remaining 40% investment in Fund B is held by three other investors, none of whom can exert control within the meaning of the CTA10/PART10/CHAP2 close company rules.
Holding Company A controls Fund B, and is not itself a Qualifying Investor within TCGA92/SCH5AAA/PARA46.
Pension fund C holds a 50% investment in Holding Company A, and is a non-UK resident pension fund, which meets the conditions to be exempt from UK capital gains and is eligible to be a qualifying investor under TCGA92/SCH5AAA/PARA46.
The other 50% is held by Fund D, which is the overseas equivalent of an authorised unit trust scheme. Fund D is eligible to be a qualifying investor only if it, itself, is either not close or meets the GDO. Fund D meets the not-close condition, so is eligible to be a qualifying investor.
Holding Company A is 100% invested in (wholly owned) by qualifying investors. The control exerted by Holding Company A therefore counts as control by qualifying investors, and as that is the only reason that Fund B is close, Fund B will meet the not close test.
The UK tax condition The test at TCGA92/SCH5AAA/PARA 13(7) must be met in certain cases by the qualifying fund or qualifying company in order for the election under paragraph 12 to be made (see table above).
To meet this test the manager of the CIV must reasonably believe that, should all of the assets of the fund be liquidated and the proceeds returned to investors at that point, no more than 25% of the total value returned would not be subject to UK tax in the hands of the investors because of the allocation of taxing rights under Double Tax Agreements. This percentage is to be calculated with regard to the holdings of all of the investors in the fund, including exempt investors and taxable UK resident investors. So where a manager can be sure that more than 75% of the investors are UK residents and, or, exempt investors, they can meet the condition. See above under heading ‘Corporate feeder vehicles wholly owned by institutional investors’ for details of how investors that are companies within TCGA92/SCH5AAA/PARA33 are treated for the purpose of this test. Wholly owned is covered in CG73997L.
In many cases the manager will have no reason to know the tax residence of its investors, particularly for funds already in existence at 6 April 2019. The manager is not required to obtain information in order to perform a test of this condition, but if they are aware of the tax residence of their investors for other reasons - such as for due diligence, the Common Reporting Standard, or Anti Money Laundering procedures, then they should use the information they hold in order to establish whether the condition is passed.
CG73997E The exemption election: Making & revoking an election, and effect of election
Timing and form of election
Making the election - TCGA92/SCH5AAA/PARA17 The election must be made by the CIV manager ‘to an officer of HMRC’; in practice this will be to a mailbox – this guidance will be updated to include the relevant details. The election should include details of the name and address of the CIV making the election, the names and addresses of entities included in its structure which are also to be treated as exempt and the level of interest the CIV making the election has in them. HMRC will publish a form for this in due course.
Timing of election There is no time limit for making an election but it is assumed that managers of CIVs will generally want to make an election as soon as possible to gain certainty about the treatment of gains arising to a fund or to an entity in the fund structure.
The election must specify the day from which it is to have effect. That day may be up to 12 months before the date of the election. HMRC will consider cases where the specified day is more than 12 months before the date of the election and may give consent in specific cases and, based on cases seen, may in future specify in guidance that where particular circumstances apply then consent may be assumed.
There is an interaction with the requirement in paragraph 14 for an election to be accompanied by a report about disposals made by investors of their interests in the CIV for the two years preceding the date of the election (but only in respect of disposals on or after 6 April 2019); see CG73997N for further details of that requirement. Where an election is made prospectively for a newly formed fund the requirement under paragraph 14 will clearly not apply, although as for all CIVs or companies for which a valid election is made, there will be ongoing reporting requirements under paragraph 15 as explained at CG73997N.
Revocation of election
Revocation by manager of a CIV - - TCGA92/SCH5AAA/PARA18(3) The manager of a CIV may revoke a paragraph 12 election by written notice to HMRC. A notice must state the day from which the election is to cease to have effect. The paragraph 12 election will cease to have effect for disposals made on or after that date. A notice may have retrospective effect with HMRC consent, and guidance may be published in future setting out the circumstances in which that consent will apply based on reviews of the circumstances in any such revocation requests.
Revocation by HMRC - TCGA92/SCH5AAA/PARA15(5) and PARA18 A designated officer of HMRC may revoke the election for exemption if –
- there is a breach of the reporting requirements (TCGA92/SCH5AAA/PARA15(5) - see CG73997N for further details); or
- a designated officer of HMRC considers it appropriate to do so in order to protect the public revenue.
This revocation must be given in writing to the manager of the CIV in question and specify the day from which the election is to cease to have effect, and state the grounds for revoking the election. There is an appeal process, as set out in TCGA92/SCH5AAA/PARA19 – an appeal notice must be sent to the designated officer within 30 days from the day on which the notice of revocation is given.
The designated officers of Revenue and Customs are:
(a) a Director with policy responsibility for the taxation of collective investment vehicles, and
(b) any Deputy Directors under the line management of that Director.
Protect the public revenue In general, HMRC expect that the use of the power in regulation 18 to revoke an election to protect the public revenue will only be used in exceptional circumstances. The gateway tests into the exemption election should ensure that only genuine commercial investment arrangements are within the regime. HMRC will not revoke an election except in response to a set of arrangements undertaken by the CIV or its investors where tax avoidance is the main object, or one of the main objects, of those arrangements. Arrangements will not be considered to have such an object where they can reasonably be regarded as consistent with the principles on which the provisions in Schedule 5AAA are based (see CG73996A).
Effect of revocation Where an election is revoked, a deemed disposal and reacquisition of all the investors’ interests in the CIV will occur immediately before the revocation. Tax on any gain so arising is immediately brought into charge; see CG73997J for further details.
Effect of making an election
Exemption for gains on direct and indirect disposals A combination of TCGA92/SCH5AAA/PARAS 12 and 16 mean that a gain, or an appropriate proportion of a gain, on a direct or indirect disposal of UK land made by –
- ‘Q’ - a UK property rich qualifying fund or a qualifying company for which a paragraph 12 election has been made, and
- A company ‘C’ that Q has a 40% or more interest in immediately before the disposal
will not be a chargeable gain.
The “appropriate proportion” means the proportion of the gain as relates to the direct or indirect interest held in the asset disposed of by Q.
Rebasing assets owned by company disposed of TCGA92/SCH5AA/PARA31 provides for a proportionate, market value rebasing of qualifying UK land assets of a company ‘C’ where it is disposed of by a qualifying fund or qualifying company ‘Q’, or another company owned by such a fund or company, and the assets being rebased have been covered by the paragraph 12 election (whether wholly or to an appropriate proportion in accordance with paragraph 16(4)) for a period of 12 months prior to disposal. This ensures that the value of the exemption is preserved within the relevant fund structure; without rebasing a purchaser of the company disposed of might discount the purchase price to reflect the unrealised gains on the underlying assets. The company being disposed of may also be a company because of the deeming provisions in paragraph 4 of Schedule 5AAA.
Rebasing is applied by deeming C to have disposed of and having reacquired every asset the disposal of which would have been a direct or indirect disposal of UK land at market value immediately before it was sold by Q. Hence the disposal is covered by the exemption election.
Where the company being disposed of owns other UK property rich companies, the deemed disposal of those companies under paragraph 31 triggers the same effect on them, so that there is a cascade effect to rebase that subsidiary company’s UK land assets.
Rebasing is proportionate to the level of interest held in the relevant asset by Q. Example Fund A is subject to an election under paragraph 12(2). Fund A holds 100% of the units in Company B, which in turn owns 100% of the units in Company C, which in turn owns 50% of the units in Company D, which owns 50% of the units in Company E. All of the entities have been so held and subject to the exemption election for some years.
Fund A has a 40% or greater investment in Company D (50%), so Company D is 50% exempt on its gains on direct and indirect disposals of UK land. Fund A only has a (50% x 50% =) 25% investment in Company E, so Company E is not covered by the exemption election. A disposal of Company E by Company D would also not be covered by the exemption election (as, again, Fund A does not have a 40% or greater investment in Company E).
Fund A disposes of its interest in Company A. Paragraph 31 applies so that immediately before the disposal, Company A is deemed to have disposed of all of its UK land assets to the extent that:
- Company A (or another company in the fund) has held them for at least a year prior to the disposal, and
- The disposal of the asset would be covered by the exemption.
Company A’s interests in Company B is such an asset, so Company A is deemed to have disposed of its interest in Company B. This, in turn, means that paragraph 31 will apply to Company B so that it is deemed to dispose of all of its UK land assets meeting the conditions above, and so on down the chain.
Fund A has a 50% investment in Company D, so Company D is only 50% exempt on its gains on direct and indirect disposals of UK land. Hence when Company D is affected by paragraph 31 only 50% of the asset is rebased. This means that Company D is, effectively, deemed to have disposed of and reacquired 50% of its UK land assets. The base cost for those assets will be based on 50% of the existing base cost and 50% of the market value of the assets at the date of the deemed disposal.
Company E is not covered by the exemption, and a disposal of Company E by Company D would not be exempted. Therefore Company D is not deemed to dispose of its interest in Company E by paragraph 31.
Establishing a 40% investment For the purposes of this paragraph, Q has a 40% investment in a company if, applying the rule in paragraph 9 (but ignoring paragraph 10) of Schedule 1A, references to 25% were references to 40%, and Q would be regarded as having a 40% investment in the company immediately before the disposal (see CG73938).
Limiting the exemption HMRC may make a just and reasonable adjustment to the appropriate proportion of a gain accruing to any person to prevent the application of paragraph 16 resulting in the total proportion of an exempt gain exceeding the whole of the gain. This may occur where, for example, different measurements of ‘investment’ (per TCGA92/SCH1A/PARA9; CG39938) lead to a total investment of greater than 100% -particularly where a company is a joint venture and benefits under paragraph 16 from paragraph 12 elections by two separate funds.
Investors in CIVs Regardless of whether a CIV is within the exemption regime or not, investors in the CIV remain taxable under first principles on any disposal of an interest in a CIV that is a UK property rich entity, subject to any exemption that an investor may itself have. Note that in certain circumstances a deemed disposal of investors’ interests in a fund that has elected for exemption will arise, for example where a fund no longer meets the conditions for exemption; see CG73997G for further details.
Corporate feeder vehicles wholly owned by institutional investors TCGA92/SCH5AAA/PARA33 provides that where a company is wholly owned (see TCGA92/SCH5AAA/PARA40, and CG73997L) by certain specified investors, any gain accruing on a disposal by that company will not be a chargeable gain. This rule allows entities with their own exemption, immunity, or similar non-taxable status to pass it down to wholly owned companies that are invested in a qualifying fund or company that is the subject of an exemption election under paragraph 12.
The specified investors are –
- qualifying institutional investors, as listed in TCGA92/SCH7AC/PARA30A (the substantial shareholder exemption rules, see CG53012),
- a company carrying on life assurance business where, immediately before the disposal, its right or interest in the participant is an asset which, applying the rules in section 138 of the Finance Act 2012, is wholly matched to a liability of its life assurance business that is not BLAGAB,
- a company carrying on long-term business none of which is BLAGAB where, immediately before the disposal, its right or interest in the participant is an asset held for the purposes of its long-term business, and
- another qualifying fund or qualifying company in respect of which an election under paragraph 12 has effect.
A company that is directly investing in an exempt qualifying fund or company will therefore be exempt on any gains arising from disposal of an interest in the CIV, providing that all of the participants in the company would themselves not be liable to tax on the gain by reason of exemption or immunity.
In addition, a deemed disposal under TCGA92/SCH7AC/PARA21 (payments not otherwise taxable, see CG73997J) will not result in a deemed disposal by any investor mentioned above. A deemed disposal will arise for the paragraph 33 company itself but as any gain arising will be exempt this should have no practical effect. Note that for the purposes of TCGA92/5AAA/PARA13(7), the UK tax condition, a company that would be a paragraph 33 company assuming all of the other relevant conditions were met by an entity contemplating a paragraph 12 exemption election will be treated as a ‘good’ investor no matter where it is resident for tax purposes. So, for example, a Luxembourg corporate vehicle that is wholly owned (see CG73997L) by investors within paragraph 33(4) will not be considered to be an investor for whom a disposal of shares in the prospective paragraph 12 exempt entity would be left out of account for TCGA purposes.
Interaction of different exemptions
It is possible for a gain arising from a single disposal to be exempted as a result of the application of more than one of the exemptions available under TCGA92/SCH5AA/PARA16, TCGA92/SCH7AC/PARA3A (the substantial shareholding exemption) and CTA10/S535 or 535A (exemption for certain disposals by UK real estate investment trusts (REITs)). Paragraphs 34 to 37 therefore set out priority rules, as well as limiting the overall exemption available to the correct aggregate amount. The rules work in a similar way for losses – the guidance below refers only to gains.
Interaction of TCGA92/SCH5AA/PARA16(3) and TCGA92/SCH7AC/PARA3A
TCGA92/SCH5AAA/PARA34 provides that where -
- a gain arising on an indirect disposal of UK land made by an investing company owned by a qualifying fund or qualifying company (both referred to as ‘Q’) is exempted under TCGA92/SCH5AAA/PARA16(3), and
- one or more qualifying institutional investors (‘QIIs’, as defined in TCGA92/SCH7AC) has an interest in the disposing company as a result of their interest in Q, then
the QIIs’ interest in the investing company is ignored so that any exemption under TCGA92/SCH7AC is disapplied. In other words, TCGA92/SCH5AAA/PARA16(3) takes priority.
Interaction of TCGA92/SCH5AA/PARA16(2) and (3) and the REIT rules in CTA10/PART12
TCGA92/SCH5AAA/PARA35 provides that where a company that is both –
- a UK REIT, or a member of a UK REIT, and
- a company in the ownership chain of a qualifying fund or qualifying company
makes a gain on a direct or indirect disposal of UK land and that gain might otherwise be exempted under both TCGA92/SCH5AAA/PARA16(2) or (3) and CTA10/S535 or 535A, the exemption under paragraph 16 is disapplied. In other words, the exemption provided by the REIT rules takes priority.
This does not apply in the case of a joint venture company – see below.
TCGA92/SCH5AAA/PARA36 applies where a company makes a gain on a disposal and is – • a member of a UK REIT group as a result of a notice under CTA10/S586(1) or 587(1) (a joint venture company), and • is also in the ownership chain of a qualifying fund or qualifying company (both ‘Q’), and • both that company and the principal member of the UK REIT are covered by an election made by Q under TCGA92/SCH5AAA/PARA12,
then any exemption provided by TCGA92/SCH5AAA/PARA16(2) or (3) is reduced by the exemption provided under the REIT rules because of sections 535 or the new 535A of CTA 2010. In other words, the exemption provided by the REIT rules takes priority.
Separate application and limiting of exemptions In addition to the rules described above that apply for an order of priority as between exemption under Part 4 of Schedule 5AA, the substantial shareholding exemption, and the REIT rules, PARA37 of Schedule 5AAA provides for how the different exemptions are to be calculated generally.
That is – • each exemption must be calculated separately without regard to any of the other exemption provisions, and • (bearing in mind the priority rules) the total proportion of a gain which is exempted is the total of those sums, except that the total can never exceed the whole amount of the gain.
CG73997G The exemption election: Ceasing to have effect
Introduction Where a CIV ceases to meet any of the applicable conditions, or an election is revoked by either the fund or HMRC, the election ceases to have effect. A deemed disposal and reacquisition of the interests of the investors (including those that are UK resident) will generally be triggered but see below for an exception and CG73997J regarding the timing and effect of a deemed disposal.
Revocation of election See CG73997E for guidance regarding revocation of an election by the fund manager or HMRC.
Ceasing to meet the applicable exemption conditions Where an election has been made in respect of a qualifying CIV or a qualifying company and there is a time when it ceases to meet the applicable conditions at TCGA92/SCH5AAA/PARA 12(2) and (3) respectively, the election ceases to have effect from that time. (TCGA92/SCH5AAA/PARAs 20(2)). The applicable conditions include those at paragraph 13; see CG73997C for further details.
Where this is the case, TCGA92/SCH5AAA/PARA 22 provides that there is a deemed disposal and reacquisition of all investors’ (including UK residents) interests in the CIV or company in question; see CG73997J for further details regarding such deemed disposals.
This is subject to the following –
**Temporary period when applicable exemption conditions not met for up to 30 days**
Where a CIV or company fails to meet an applicable condition but intends to meet the relevant condition(s) within a 30 day period and does in fact do so, TCGA92/SCH5AAA/PARA 27 provides that –
- a paragraph 12 election for exemption remains valid, and
- there is no deemed disposal of investors’ interests
There is one exception to this; in order to protect UK taxing rights the 30 day temporary period does not apply when a CIV or company ceases to be UK property rich as required by paragraph 12(2)(c) or (3)(b).
Additionally, there can be no more than four failures to meet any of the other applicable conditions in aggregate in a rolling 12 month period - a fifth or subsequent will not benefit from the temporary period.
**Temporary period when applicable exemption conditions not met for up to 9 months**
Where paragraph 27 does not apply, TCGA92/SCH5AAA/PARA 28 may apply instead.
Paragraph 28 provides for an election under paragraph 12 to remain valid for up to nine months if the CIV or company fails to meet an applicable condition but intends to meet the relevant condition(s) within that time and does in fact do so. If the CIV does not meet the conditions again within that time then the exemption election is considered to have ceased to have effect at the point the CIV no longer met the first applicable condition.
The rules for this 9 month period differ to those for the 30 day period in the following respects -
- whilst a qualifying CIV or company cannot benefit from the 30 day exemption / no deemed disposal rule if it ceases to be UK property rich, it can benefit from the 9 month exemption if it ceases to be UK property rich but there will be a deemed disposal for investors, and
- a deemed disposal under paragraph 22 will also arise at the point where any of the other conditions are not met, with any gain being subject to paragraph 23 (see CG73997J).
**Manager winding up relevant fund**
TCGA92/SCH5AAA/PARA 30 maintains exemption under a paragraph 12 election where an applicable condition is no longer met in respect of a qualifying fund or a qualifying company if the fund manager is actively taking steps to dispose of the assets of the fund so that it can be wound up.
In the case of a qualifying company, the fund means the limited partnership collective investment scheme (including a deemed partnership as a result of an election for transparency under paragraph 8; see CG73996L) or co-ownership authorised contractual scheme that owns the company and the fund manager is the person that manages that fund (TCGA92/SCH5AAA/PARA 39).
Note however that whilst the exemption continues to have effect a deemed disposal and reacquisition of the investors’ interests will arise at the time of the first failure to meet one of the applicable conditions.
Rebasing on leaving the paragraph 12 exemption regime Where an election under paragraph 12 ceases to have effect, TCGA92/SCH5AAA/PARA32 provides for a proportionate, market value re-basing of qualifying UK land assets of the qualifying fund or qualifying company (‘Q’) where Q leaves the paragraph 12 exemption regime other than as a result of a revocation notice being issued by HMRC under TCGA92/SCH5AAA/PARA15(5)(a) or 18(1) (see CG73997E). This ensures that the value of the exemption from tax on gains on UK land is preserved within the relevant fund structure as without rebasing the value of the UK land assets held by the fund would be discounted to reflect the unrealised gains.
In order for rebasing to apply, the election under paragraph 12 must have had effect for a continuous period of at least five years, and the rebasing will only affect assets that have been held by the fund for at least a year prior to disposal and which are covered by the election.
Rebasing similarly applies where the fund manager is taking steps to wind up a fund so that an applicable condition is not met but exemption nonetheless continues as a result of TCGA92/SCH5AAA/PARA30 (see above).
Rebasing is applied by deeming Q to have disposed of and reacquired at market value every asset the disposal of which would have been a direct or indirect disposal of UK land and covered by the exemption election. The disposal is deemed to occur immediately before the election ceased to have effect or the fund manager started to take steps to wind the fund up.
Rebasing also applies at the level of a company in the ownership chain of Q where that company holds an asset that has been covered by the paragraph 12 election for at least 12 months (for example, a company holding a UK property asset, where that company is owned by another company that is in turn owned by Q).
Rebasing is proportionate to the level of interest held in the relevant asset by Q. CG73997J The exemption election - Deemed disposals
Introduction
When a paragraph 12 election ceases to have effect as a result of TCGA92/SCH5AAA/PARA 20 because the applicable conditions are no longer met, or the election is revoked, there is a deemed disposal and reacquisition at market value of all of the investors’ interests in the qualifying fund (CIV) or qualifying company. The deemed disposal and reacquisition arises immediately before the point the election ceases to have effect. This is subject to one exception in respect of a failure to meet certain conditions for temporary periods lasting no longer than 30 days, see CG73997G for details.
A deemed disposal will also arise under TCGA92/SCH5AAA/PARA 21 where a return of value is made to investors and the amount in question is of a revenue nature; see below for further details.
Any tax due as a result of a deemed disposal of an interest in a qualifying fund or a qualifying company is generally not due until funds are paid to the investor in respect of their interest in the fund or a period of three years elapses from the deemed disposal, other than in a case of revocation of the election; see below for further details.
Occasions that will result in a deemed disposal
Ceasing to be UK property rich
If a qualifying fund or qualifying company ceases to be UK property rich the deemed disposal of investors’ interests occurs immediately before that point (but see CG73997G for details where the fund or company itself may nonetheless continue to be exempt in respect of its disposals of UK land where it is not UK property rich for temporary periods lasting no longer than 30 days).
The fund or company ceases to be UK property rich as a question of fact, rather than at the point when it becomes aware that it is no longer UK property rich. HMRC would expect entities that have made a paragraph 12 election for exemption to regularly value their assets so that they know within a reasonable timeframe if they are no longer UK property rich. HMRC will accept for this purpose that quarterly appraisals would be sufficient (that is, taking a view of the market and making reasonable adjustments to the previous formal valuation), supplemented with periodic formal valuations as provided for in the fund’s documentation.
See the table below regarding the time when gains are treated as accruing. Payments not otherwise taxable An election under TCGA92/SCH5AA/PARA12 has the effect of exempting gains on direct and indirect disposals of UK land within a fund structure, but whilst disposals are exempt at fund level the investors remain taxable on gains on disposal of their interests in the fund. Without specific provisions, value arising from realisation of UK land assets within an exempt fund could be returned to non-resident investors in a form that would not be subject to UK tax and that would reduce any gain on a subsequent disposal by investors.
For example, if a corporate fund made a distribution to its investors that represented value deriving from gains on UK land and that payment was of a revenue nature it would not give rise to a charge under TCGA92/SCH1A and the value of those gains would also no longer be represented in the value of the interest held by the investors in the fund when they subsequently made a disposal of the whole or part of that interest.
TCGA92/SCH5AA/PARA21 therefore provides that where a qualifying fund or a qualifying company makes a return of value, and that amount is of a revenue nature and is representative of gains on disposals of UK land, there is a deemed disposal and reacquisition of the investors’ interest. Note that this is not a condition that the fund or company must meet; if it does make such a return of value its exemption is not affected but a deemed disposal and reacquisition will arise for its investors.
The disposal occurs immediately before the payment is made and reacquisition immediately after. The deemed disposal only arises for investors who would be subject to tax on that distribution.
See the table below regarding the time when gains are treated as accruing.
Election ceasing to have effect TCGA92/SCH5AA/PARA22 provides for a deemed disposal and reacquisition if a paragraph 12 election ceases to have effect. An election may cease to have effect because –
- the applicable conditions are no longer met (subject to an exception in respect of a failure to meet certain conditions for temporary periods lasting no longer than 30 days, see CG73997G for details), or
- the election is revoked by either the fund manager or HMRC.
There is a deemed disposal and reacquisition at market value of all of the investors’ interests in the qualifying fund (CIV) or qualifying company immediately before the point the election ceases to have effect.
See CG73997E and CG73997G for further details regarding revocation of election, and ceasing to meet the applicable conditions for exemption. See the table below regarding the time when gains are treated as accruing.
**Revocation of election by fund manager or HMRC** Where an election is revoked, a deemed disposal and reacquisition of all the investors’ interests in the CIV will occur immediately before the revocation.
See the table below regarding the time when gains are treated as accruing.
**Calculation of the gain or loss on a deemed disposal and reacquisition**
The basis of the gains or losses arising on a deemed disposal will be the market value of the interest at the time of the deemed disposal.
For the purposes of calculating the gain or loss arising on a deemed disposal, no account is taken of any later changes to the value of an investor’s interest in the relevant fund or company after the point it loses its exempt status. So, if there is a deemed disposal any gain or loss is calculated at that time and cannot be adjusted to reflect any future change in value of an investor’s interest in the fund (this does not affect the possible availability of any relievable losses).
TCGA92/SCH5AA/PARA24 does however provide for relief for any costs that could reasonably be expected to have been incurred in the event of an actual rather than a deemed disposal. This will be relevant where, for example, a fund ceases to be UK property rich because the manager is disposing of assets as part of a process of winding up the fund; any gain or loss will include realised and unrealised gains on the underlying assets of the fund and in such circumstances relief is available under TCGA92/S38(1)(c) in respect of anticipated costs of disposing of the remaining assets. See CG15150 for general guidance on items of expenditure that can be deducted in calculating a gain or loss.
**Time at which gains accrue**
In some circumstances, a gain on a deemed disposal is brought into charge immediately. A gain realised on an actual disposal will always be treated as accruing at the time of the actual disposal. In other cases, TCGA92/SCH5AA/PARA23 provides for gains on deemed disposals to be deferred and brought into charge at some time later. The table below summarises the position.
| Occasion of deemed disposal | Time gain treated as accruing | |-----------------------------|-------------------------------| | 1) Paragraph 21: Payments of a revenue nature not otherwise taxable | • The appropriate portion\* of the deemed gain is treated as accruing to the person at the time of an actual disposal or otherwise the time of the receipt | Any balance of gains remaining is brought into charge on the occasion of an actual disposal or when the fund winds up
| 2) Paragraph 22: Para 12 exemption election ceases to have effect – revocation of election under para 15 or 18 | Immediately prior to the para 12 election ceasing to have effect | | 3) Paragraph 22: Para 12 exemption election ceases to have effect – ceasing to meet applicable exemption conditions | When the fund winds up or, if sooner –
- on an actual disposal, or
- three years after the deemed disposal |
* The proportion which the consideration for the amount of the receipt bears to the amount of the deemed gain.
In the case of (3) above, where a qualifying fund or company ceases to meet the applicable conditions for a temporary period of up to 9 months so that –
- paragraph 28 applies (see CG73997G) but
- a deemed disposal nonetheless arises
and the fund or company then meets the applicable conditions within the 9 month period, the three year period is switched off and any deemed gain will only be chargeable when an investor receives funds from the CIV, makes an actual disposal or at the point the fund is wound up. If the CIV again ceases to meet the condition, there is another deemed disposal and reacquisition, and the rules above apply again.
As there may be a number of deemed and actual disposals depending on the circumstances, paragraph 23 contains rules to ensure gains charged cannot exceed the overall total gains. If some of the deemed gain has accrued on one or more previous occasions, the appropriate portion is restricted so that, when added to the appropriate portion or portions on the previous occasion or occasions, it does not exceed 100%.
**Notification to investors on the event of a deemed disposal**
TCGA92/SCH5AA/PARA25 provides that in certain cases the manager of a relevant fund must notify the investors that a deemed disposal and reacquisition has occurred. This is because investors may not be aware of the event giving rise to the deemed disposal. A notification must be made within 30 days of the event leading to the deemed disposal.
Paragraph 25 specifies that notifications must be sent in the following cases (see guidance above for further details regarding these deemed disposal events) -
- There is a deemed disposal under TCGA92/SCH5AA/PARA21 (gains on UK land are distributed as revenue payments). In such cases, the fund manager is very unlikely to know how each investor is impacted by the rules in paragraph 21 because that will be dependent on each investor’s own tax status. The fund manager, however, must notify all investors to ensure that they are aware there may be a capital gains liability and can accordingly assess their own positions.
- There is a deemed disposal under TCGA92/SCH5AA/PARA22 where either the fund manager or HMRC has revoked a paragraph 12 exemption election.
- Where the balance of a deferred gain has come into charge at the end of a three year period or because the fund has wound up
Given that the deemed disposal will in some cases mean that the investors are immediately liable to pay tax on the gain, and in some cases the gain will accrue at a later date, whilst there is no legal requirement to do so the fund manager may wish to supplement the notification to provide further helpful information for its investors. It will though remain the responsibility of the investors to determine their own tax positions in any case.
In the case of a deemed disposal and reacquisition, investors in the CIV who are required to make a return and payment on account to HMRC within 30 days of making a disposal of UK land will instead have 30 days from receiving notice of the deemed disposal to make a report and payment.
TCGA92/SCH5AA/PARA26 provides for the fund manager being liable to a penalty not exceeding £3,000 where there is a failure to make a notification and HMRC assess the penalty and notify the manager within a period of 12 months from the date HMRC become aware of that failure. Paragraph 26 provides for an appeal process.
CG73997L Meaning of wholly owned and almost wholly owned
Paragraph 40 of Schedule 5AAA to TCGA 92
A company (including a deemed company under para 4 of Schedule 5AAA) is “wholly owned” if a person or persons have a 100% investment in the company. Investment is measured using the rules in paragraph 9 of Schedule 1A TCGA 92 (see CG73938), but assuming that the level is 100% rather than 25%. Where necessary, a CIV is considered a person in terms of whether paragraph 9 applies to test whether they have a 100% investment (such as for a limited partnership under paragraph 12(3) of Schedule 5AAA; see CG73997A).
Similarly, a company is “wholly owned or almost wholly owned” if a person or persons have a 99% or greater investment in that company. CG73997N Reporting requirements
Introduction The effect of an election for exemption under paragraph 12 of Schedule 5AAA is to move the point of taxation on gains on UK land from the relevant fund to its investors. It is therefore necessary for HMRC to have access to information regarding a fund’s non-resident investors and Schedule 5AAA provides for information to be reported in two regards –
- TCGA92/SCH5AAA/PARA14 requires that in order for an election for exemption to have effect, information regarding disposals of investors’ interests in the fund in the two years prior to the date of the election (or, if shorter, since the fund was constituted) must be provided to HMRC; and
- TCGA92/SCH5AAA/PARA15 of Schedule 5AAA provides that information or documents must be provided to HMRC in respect of every period of account ending at a time when the election has effect.
Paragraph 15 provides that HMRC may specify what information is to be reported in respect of participants in the fund and that –
- The information must be provided in relation to the fund’s period of account,
- within 12 months of the end of the period of account.
This is subject to paragraph 16(8), which provides that for reporting a period of account may not be longer than 12 months.
This means that reporting requirements are not specified in Schedule 5AAA and are instead set out in this guidance. HMRC stated in the Technical Note published on 7 November 2018 that they will consult relevant stakeholders prior to making material changes to the information to be reported.
Reporting is done at fund level. This means that, where an election is made by a limited partnership or UK co-ownership authorised contractual scheme under paragraph 12(3), reporting is to be done at the level of the LP CIS or CoACS.
Where the requirements of paragraph 15 are not met as regards the provision of information and documents (a breach) without a reasonable excuse, a designated officer of HMRC may revoke the election. Notwithstanding the absence of a reasonable excuse, if a breach is considered insignificant it may be ignored. In considering whether a breach is insignificant HMRC will take account of the number and seriousness of previous breaches. See below for further detail.
This guidance will be updated to provide details of how to make the required reports and contact details for queries regarding reporting requirements.
Reporting for the exemption election Contents of the report for CIV established on or after 1 June 2019
For CIVs set up on or after 1 June 2019, the report should contain the information listed below. This may require the insertion of suitable wording in the fund’s terms and conditions to ensure investor consent to the sharing of their information.
The report should be accompanied by a statement that the CIV meets the qualifying conditions for the period the report covers, or in the case of a report where the exemption is not being claimed for the period, the conditions that are met.
There is no legislative significance to 1 June 2019. This date is to allow for a period of time after the rules come into force. Information in respect of the CIV making the election and entities in its structure.
Information in respect of the CIV making the election and entities in its structure
1. Name and address of the CIV making the report (the ‘top-level’ entity)
2. Total value of disposals by the top-level entity in the period (or £Nil)
3. Overall gain or loss on disposals (if appropriate)
4. Name and address of entities in the structure under the top-level entity which are covered by the exemption, and for each of the entities: • The percentage interest the top-level entity holds in them • The total value of their disposals • Overall capital gain or loss on their disposals
Information in respect of the investors in the CIV making the election
First name and surname or company name of all investors, and for each of those investors so reported:
1. Their address
2. Their UK Capital Gains Tax Unique Taxpayer Reference (if held)
3. Their UK Corporation Tax Unique Taxpayer Reference (if held)
4. The total value of their disposals
5. Their overall capital gain or loss (if this is calculable)
6. Whether the investor is not liable to UK tax on the disposals by reason of exemption, immunity, or other similar status (if held)
For the total value of disposals, the CIV must report on the basis of information it can reasonably be expected to obtain given the terms of its agreement with the investor and the information it has available.
This would at the least be any redemptions made by the investor in respect of their interest in the top-level entity, but in some cases may be secondary market transactions where the CIV’s agreement with the investor would mean this information is available.
Contents of the report for CIV established before 1 June 2019
Established CIVs may be restricted in disclosing personal information about their investors under their local information law, and not have terms in their agreement with the investors that allows them to override those restrictions. To the extent that they are prevented from providing information to HMRC for legal or regulatory reasons, or because of the contractual impediments of their agreement with the investors, there are easements to what is required to be reported in respect of the investors.
In general, provision of information is subject to reasonable excuse. If an existing CIV - set up without being able to take account of these requirements - legally cannot obtain information pertaining to an investor because of existing agreements or local law or regulations, it is reasonable that they not be able to supply that information to HMRC.
All information in respect of the CIV making the election itself and entities in its structure must still be reported.
Subject to the above, the same information regarding the investors set out above must be supplied in the report.
**Breaches of requirement to make a report**
**Incorrect reporting**
In general, HMRC will expect the CIV to take reasonable care to ensure that information reported to HMRC is complete and correct.
A designated officer of HMRC may revoke the election for exemption if there is a serious breach of the reporting requirements. Where the election is so revoked, there will be a deemed disposal and reacquisition of all of the investors’ interests in the fund which occurs immediately before the revocation.
Where there is a reasonable excuse, the election will not be revoked. Otherwise, HMRC will consider the number and seriousness of breaches made in reporting.
HMRC will consider there to have been a serious breach where the CIV reports incorrect information with respect to the disposals by any investor who is taxable and:
- holds a 25% or greater interest in the CIV, or
- the value of whose investment in the CIV is £1,000,000 or greater
In other circumstances, a designated officer of HMRC may revoke the election if the information provided is consistently incorrect to a significant degree, and in particular with regard to information on the disposals by investors.
**Late reports and failure to report**
HMRC may allow an extension to the time limit where there is a reasonable excuse. If an extension is agreed then the election remains valid and there is no deemed disposal and reacquisition.
A simple failure to report at all will be treated as a serious breach and HMRC will revoke the election. Annexe 1
IFM17050 Common Themes: Genuine Diversity of Ownership (GDO)
Foreword
This guidance has been drafted for the purposes of the tax rules for authorised investments funds, offshore funds (see below) and their investors. It brings together guidance from the HMRC Company Taxation Manual and Offshore Funds Manual and will be included in a new Investment Funds Manual in due course.
From 6 April 2019, the GDO test will also have relevance for the purposes of the non-resident capital gains rules in Schedule 5AAA of TCGA 1992. The GDO condition, where it applies for Schedule 5AAA purposes, is as set out in regulation 75 of The Offshore Funds (Tax) Regulations 2009 (SI 2009/3001) but the GDO condition for authorised investment funds operates in a similar way.
The guidance below is not yet final but is produced here as, aside from the parts that are clearly relevant only to authorised investment funds or offshore funds, it will have relevance for Schedule 5AAA purposes as well. The guidance should be read in that context.
Note that one of the key differences between the GDO rules for Schedule 5AAA purposes is that there is no clearance procedure as to whether the GDO condition is met for the latter. The original clearance procedures were introduced when the GDO condition first appeared in legislation; customers and advisers are now more familiar with how the condition operates, particularly as the guidance has developed, and this is evidenced by a steep decline in clearance requests. HMRC will continue to work with stakeholders to refine the guidance where necessary.
Contents
| IFM17100 | Introduction | | IFM17200 | When does the Genuine Diversity of Ownership condition (GDO) apply? | | IFM17300 | Conditions to meet the Genuine Diversity of Ownership condition (GDO) | | IFM17400 | Advance clearance procedure | What is the genuine diversity of ownership condition (GDO)? Some tax rules for collective investment schemes and investors only apply if a fund meets the GDO condition – for authorised investment funds see regulation 9A of SI 2006/964 and for offshore funds see regulation 75 of SI 2009/3001. See IFM17200.
To meet the condition a fund must be set up and managed to enable a diverse range of investors to benefit from the expertise of the investment manager and from the economy of scale that comes from pooling funds.
This protects against tax manipulation using funds controlled by a small number of investors (such as members of a family or companies in common ownership).
There are three conditions (Conditions A, B and C) which a fund must meet throughout an accounting period to qualify as having genuine diversity of ownership. Conditions A, B and C are explained at IFM17300.
A fund may also meet the GDO if an investor in the fund is an authorised investment fund or offshore fund (a “feeder fund”) and conditions A to C are met in relation to the fund when taking into account the fund documents and investors of the feeder fund. Both funds must be under the same manager for this to apply.
When does the Genuine Diversity of Ownership condition (GDO) apply? Authorised Investment Funds – regulation 9A of SI 2006/964 The GDO applies in determining the tax treatment of investment transactions carried out by diversely owned AIFs under Part 2B SI 2006/964 (see IFM02260).
It also applies to authorised investment funds (AIFs) that are (or will be applying to be):
- Property AIFs (see IFM04050).
- Tax Elected Funds (see IFM06050).
- Qualified investor schemes (QISs) (see IFM02300).
Offshore Funds – regulation 75 of SI 2009/3001 The GDO applies in determining the tax treatment of investment transactions carried out by offshore funds that are reporting funds (see regulation 80 SI 2009/3001).
Where an offshore reporting fund can demonstrate compliance with the GDO it will benefit from certainty of treatment with regard to investment transactions and in calculating the amount of reportable income arising to investors (see IFM12500 for further details on the calculation of reportable income).
To qualify for this treatment, an offshore reporting fund must be of a kind that meets the equivalence condition in regulation 74.
Optional advance clearance application form An AIF or an offshore fund can apply to HMRC for an advance clearance for the GDO. (See IFM17400).
IFM17300 Common Taxation Themes: Genuine Diversity of Ownership (GDO) Conditions
| IFM17310 | Condition A | |----------|-------------| | IFM17320 | Condition B | | IFM17330 | Condition C |
IFM17310 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Conditions: Condition A
Condition A: The fund documents (authorised investment funds: Regulation 9A(3) SI2006/964 or offshore funds: Regulation 75(2) SI 2009/3001)) The purpose of Condition A is to ensure that access to the fund is made widely available to the intended categories of investors. To achieve this the fund must have committed to targeting the categories of investors it has specified and to market the fund and make it available to those target categories. This commitment should be binding and public.
Specifying in the fund documentation that the fund will be marketed and made available to a target market, which includes a large number of unconnected persons will always meet the requirements of this condition. For example, fund documents could state:
“The fund is suitable for investors looking to make a medium to long term investment and who are looking for capital growth returns. Units in the fund will be marketed to these types of investors and will be made available to them by a network of distributors appointed by the fund.” Unconnected persons in this context means any persons who are not connected under s1122 CTA 2010 for companies and ITA07/S993 and S994 for individuals.
For offshore funds, evidence of meeting the GDO does not have to be in a prescribed form; Condition A only requires that the fund produces ‘documents’ that contain the relevant statements and undertakings and that are made available to investors (including potential investors) and HMRC.
A fund may have one or more categories of investor and reference to categories is meant to be widely drawn. Some typical examples may include one or more of:
- General retail investors - individual investors, who may be tax exempt ISA investors, with no requirements as to wealth levels.
- High net worth investors - individual investors, where there is a significant minimum investment level.
- Institutional investors - investors such as pension funds, sovereign wealth funds and insurance companies.
In determining whether condition A has been met, HMRC will look at the fund documents to ensure that they contain a statement that the units in the fund will be marketed and made widely available. The documents should also clearly specify the intended categories of investor. HMRC will consider whether these are sufficiently wide to ensure that the fund is not limited to a few specific persons named or implied by the given categories.
IFM17320 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Conditions: Condition B
Condition B: Terms and conditions of the fund (authorised investment funds: Regulation 9A(4) & (5) SI2006/964 or offshore funds: Regulation 75(3) SI 2009/3001)
The purpose of Condition B is to exclude funds which (notwithstanding anything contained within the fund’s documents designed to meet condition A) are ‘private’ or only available to specific individual or corporate investors. Such a limitation may be achieved by a specific rule in the fund documentation or by imposing terms and conditions that would deter investors outside the limited group.
The terms and conditions of the fund should not be set in such a way as to limit investment to a select group within the stated categories of investors and they should not deter a reasonable investor within the target market from investing in the fund.
For example, Condition B may not be met where charges differ for particular investors and the charges are such that a potential investor within a target category could not reasonably be expected to invest. The condition is not intended to prohibit normal commercial variations in charges. It is aimed at situations where the target market is stated to include a particular category of investor but either the charges or the minimum investment are applied in a discriminatory way so as to effectively exclude all but a select few, such as quoting a reasonable market rate annual management charge for favoured persons but a much higher charge for another person within the same category of investor. Fund documentation may cover possible future extension of the target market, but that will not be taken into account in determining whether Condition B is met: the test is by reference to the current position.
IFM17330 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Conditions: Condition C
Condition C: Marketing requirements, providing information and selling units (AIF Regulation 9A(6) SI2006/964 or OFs Regulation 75(4) SI 2009/3001)
The purpose of Condition C is to exclude any fund that, despite meeting Conditions A and B, does not act in a way that supports the statements it has made as to the intended categories of investor – even where that is contrary to the statements in its own documentation.
Detailed guidance on Condition C can be found in the sections below.
| IFM17335 | Marketing Requirements | | IFM17340 | Feeder Funds | | IFM17345 | Temporary Circumstances where Condition C is met | | IFM17350 | Continuing Requirements | | IFM17375 | Checking Condition C |
IFM17335 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Criteria to meet the GDO: Condition C: Marketing requirements
‘Marketing’ for this purpose includes any activity that is designed to bring the fund to the attention of investors within the target market.
Where there are a substantial body of unconnected investors in a fund then HMRC accept that this condition has been met.
Generic marketing may include (but is not limited to):
- Advertisements mentioning the fund in relevant publications, online or on posters.
- Direct mail packs sent to the target market and/or their advisers which specifically promote the fund. • Events for intended categories of investors and/or their advisers featuring content relating to the fund. • Active representation to IFA firms and/or other distributors to add one or more individual funds/sub-funds to their fund offering for investors.
Specialist marketing: Marketing to institutional and sophisticated investors may be more narrowly targeted. For example, a qualified investor scheme (QIS) may be aimed at a particular type of institutional investor, such as life insurance companies. Any activity designed to attract the specified category of investor will constitute marketing for this purpose. This could include:
• Direct contact such as presentations to or meetings with institutional or high net worth investors or their consultants. • Advertisements in specialist or financial publications to attract sophisticated investors or their advisers.
HMRC would expect that the fund manager would retain records to show that such activity had taken place.
Marketing activity that may not be continuous: HMRC also recognises that marketing is not necessarily a continuous activity. For example:
• it may not begin immediately on launch of a fund because, for example, there is a need to establish a short term performance record; or • the fund’s marketing strategy may be more active when initially launched and then decline as the fund reaches maturity or decline stage; or • while marketing activities have been undertaken, for instance in the form of meetings with high net worth individuals, there may be a period of no meetings because of a fall in the markets.
However, where there is no continuous marketing activity then there must be a clear and continuing intention to make the fund available to its target market or to wind it up. A marketing plan that is documented or recorded may help to satisfy condition C in these instances.
HMRC would not seek to exclude a case where a fund starts out with a low number of investors (for example, cornerstone investors), as long as there is subsequently a clear and continuing intention to market and make available the fund to all categories of investors specified.
Marketing activities not required: Some specialist funds may not need active marketing to gain the investors identified in the target market, for instance because of the reputation of the fund manager. In this situation, HMRC will accept that condition C is met where the information about the fund is made available to all investors within the target market and is made accessible to them on request. In these circumstances, as long as there is no evidence of a ‘privately owned fund’ and there are a number of unconnected investors in the fund, then condition C will be considered to be met. IFM17340 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Criteria to meet the GDO: Condition C: Feeder Funds
Feeder funds (authorised investment funds: Regulation 9A(8) SI2006/964; offshore funds: Regulation 75(5) SI 2009/3001) This provision allows HMRC to take into account the intended categories of investors in an associated investor fund of an AIF (a ‘feeder fund’) in establishing whether the GDO is met. The feeder fund and the fund must have the same manager.
For example, HMRC would not seek to exclude an AIF or Offshore Fund where the only beneficial investor was a unit trust scheme (feeder fund), providing that the funds together satisfy the GDO and the two entities have the same manager.
If a fund meets the GDO without needing to rely on a feeder fund then there is no need for it also to demonstrate that any feeder fund(s) meet the condition.
IFM17345 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Criteria to meet the GDO: Condition C: Temporary Circumstances where Condition C is met
Temporary circumstances where Condition C will still be met (AIF Regulation 9A(7) SI2006/964) or OF Regulation 76(2) SI2009/3001) With Condition C it is recognised that there will be times where a fund reaches a limit on its capacity to absorb further investments. In this case it will be treated as meeting these conditions even though the scheme may not be marketed or made available temporarily, until there is further capacity to do so. (Regulation 9A(7) SI2006/964.)
There are two exceptions to this: Where the capacity of the fund to accept investments is fixed by the fund documents; Where a fund limits investment to pre-determined investors who buy all or substantially all of the units in the fund at, or shortly after, the fund’s launch.
In either case, condition C will not be met.
The exceptions are not intended to prevent pre-launch marketing of a fund, but a fund should retain evidence that a range of investors in the target market have had the opportunity to invest in case access to the fund becomes temporarily limited.
HMRC also recognises that the manager of the fund may not be able to accept investment for regulatory or legal reasons. For example, it may not have been possible to complete customer due diligence under the money laundering regulations or in the case of a QIS the intending investor does not meet the ‘Eligible Investor’ test. Exclusion of a particular investor in such circumstances will not in itself cause condition C to be failed.
**IFM17350 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Criteria to meet the GDO: Condition C: Continuing Requirements**
Where a fund is already established, HMRC would not expect the fund documents (or draft fund documents) supplied to be in conflict with the fund’s normal practice of marketing and making available the units or shares in the fund. If there is any conflict then the fund should include an explanation as to why this is the case and where necessary set out proposed changes in practices (to comply with condition C), with their application.
Where the fund documents meet Conditions A ([IFM17310](#)) and B ([IFM17320](#)) and clearance has been given to a newly established fund on the basis of meeting these two conditions, then HMRC expects that Condition C will normally be met because the fund’s own documentation will require this in accordance with Condition A.
**IFM17375 Common Taxation Themes: Genuine Diversity of Ownership (GDO): Criteria to meet the GDO: Condition C: Checking Condition C**
HMRC accept that this condition has been met where there is clear evidence that a substantial part of the fund investors are unconnected, as the marketing would have had to be sufficiently wide to achieve this outcome.
If an HMRC officer believes that a fund may not have satisfied Condition C in accordance with the relevant statements in the fund documents then they should seek advice from the Collective Investment Schemes Centre or Business, Assets and International Directorate.
**IFM17400 Common Taxation Themes: Genuine Diversity of Ownership (GDO): advance clearance procedure**
| IFM17410 | Introduction | |-----------|--------------| | IFM17420 | Application | | IFM17430 | Reliance on a clearance | IFM17410 Common Taxation Themes: Genuine Diversity of Ownership (GDO): advance clearance procedure: Introduction
Authorised investment funds: regulation 9B of SI 2006/964; offshore funds: regulations 77-79 of SI 2009/3001
A manager or proposed manager of a fund can apply in writing for a clearance from HMRC that the fund meets the genuine diversity of ownership condition (GDO) (IFM17100). The manager or proposed manager is advised to use the GDO advance clearance application form to make this clearance request. The form provides a ‘checklist’ which it is hoped will, when followed, reduce the chance of an application being refused.
The pro forma application form (CISC5) is available on the gov.uk website.
If a fund plainly meets the GDO, for example where:
- a fund has or is intended to have a wide range of unconnected investors
- a professional adviser can confirm compliance with the condition
then it will not need clearance.
Where a fund is planning to become a Property AIF (see IFM04050) or a Tax Elected Fund (see IFM06050) then advance clearance will simplify the notification or application process.
IFM17420 Common Taxation Themes: Genuine Diversity of Ownership (GDO): advance clearance procedure: Application
Applications for clearances must be made in writing in respect of an accounting period for which clearance is sought to HMRC’s Collective Investment Schemes Centre whose address can be found on the gov.uk website.
The application should be accompanied by:
- the instrument constituting the fund (the instrument of incorporation for an open-ended investment company or the trust deed for an authorised unit trust) or other document which outlines the form the fund will take; and
- the current prospectus or proposed prospectus (including any supplements to the prospectus).
A fund may find it helpful to explain in the application the reasons for particular terms and conditions, such as variations in management charges or minimum investment levels for different categories of investors. Where the fund relies on an associated feeder fund structure to meet the GDO, in addition to the fund documents stated above, the manager must also submit the fund documents of the feeder fund.
HMRC will consider the application within 28 days of its receipt and will respond in writing to:
- request further information (the 28 day period to respond will re-start once all the relevant information has been received by HMRC);
- give clearance (which may be subject to stated conditions);
- refuse to give clearance. HMRC will explain the reasons for refusal. Refusal does not prevent a further application, but HMRC would expect that the reasons for the refusal would be addressed before a further application is made.
IFM17430 Common Taxation Themes: Genuine Diversity of Ownership (GDO): advance clearance procedure: Relying on clearance
A fund may only rely on a clearance in any period of account if the relevant statements in fund documents are in accordance with such statements made in the documents provided to HMRC with the fund’s clearance application. The fund must not act in any way that contravenes such statements, and must continue to meet the GDO condition.
If the fund materially amends any of the documents sent with its original application then it must make a new application if it wishes to rely on the clearance.
The fund will be able to rely on the clearance from the date on which the fund documents became effective in the form supplied to HMRC for clearance (even if that is earlier than the date clearance was given).
If GDO clearance is given for one purpose then it is also applies for others. For example, if a qualified investor scheme (see IFM02300 onwards) has obtained GDO clearance it will also be treated as a diversely owned AIF if it carries out investment transactions (see IFM02260). Annexe 2
GREIT05005 Capital gains: general: CTA2010/S535 and S535A
Exemption from tax of gains As well as exempting property rental income from tax, gains made on assets that are used in the property rental business (GREIT05006) and, for accounting periods beginning on or after 6 April 2019, on disposals of UK property rich companies (GREIT05007) are not chargeable gains (CTA2010/S535 and S535A). If such a disposal results in a loss, that loss will not be an allowable loss (TCGA1992/S8(2)).
The amount of gain or loss on any disposal is calculated following the normal rules in TCGA, including indexation. Other terms and expressions used in connection with the calculation also take their meaning and interpretation from TCGA given CTA2010/S535 and S535A are to be read as if contained in TCGA 1992 (CTA2010/S535(9) and S535A(9)).
GREIT05007: Capital gains: Indirect disposal of property rental business assets: CTA2010/S535A For accounting periods beginning on or after 6 April 2019 an appropriate proportion of gains arising on disposals of interests in UK property rich companies by a UK REIT, or a member of a UK REIT, are not chargeable gains (CTA2010/S535A).
Section 535A also applies to entities within TCGA92/SCH5AAA/Para 8 (see CG73996L), referred to in the legislation as a ‘relevant fund’. These are offshore collective investment vehicles which are transparent for income tax purposes, excluding partnerships, and that have not made an election for transparency for TCGA purposes under paragraph 8.
Whether a company or relevant fund is UK property rich is determined by reference to the rules in Schedule 1A of TCGA 1992 (see CGM73920 onwards).
The appropriate proportion is the proportion that (in respect of the company in which the interest is disposed of) assets deriving value, directly or indirectly, from assets used for the purposes of the UK PRB, bear to the total assets. For this purpose the values are taken at the beginning of the accounting period, or the date of acquisition if later, valued in accordance with international accounting standards, using fair value where there is a choice and ignoring any liabilities secured against or otherwise relating to the assets.
Example A gain of £1000 arises in the accounting period ending 31/12/21 on a disposal by UK-REIT company A of its interest in subsidiary company B. Company B’s assets at 1/1/21 consist of residual business assets value 20 and PRB assets 80. Using the value of PRB assets/value of total assets x gain (80/100x1000) results in £800 not being a chargeable gain. The chargeable gain is therefore £200. Where the disposal is of a relevant fund then the appropriate proportion is the proportion the value of the fund’s assets, derived directly or indirectly from assets used in the PRB, bears to the value of its total assets.
Example A gain of £1000 arises in the accounting period ending 31/12/21 on a disposal by UK-REIT company A of its units in Jersey property unit trust (JPUT). JPUT’s assets at 1/1/21 consist of property rental business assets £400 and 80% of the shares in company B, value £500 from PRB assets and £100 from residual business assets. The value of JPUT’s assets, derived directly or indirectly from assets used in the PRB, is (400 + 80% of 500) £800 and total assets (400+80% of 600) £880. Using the value of PRB assets/value of total assets x gain (800/880x1000) results in £909 not being a chargeable gain. The chargeable gain is therefore £91.
Pre-April 2019 residual business losses or deficits A company may use any unused residual business losses or non-trade deficits at 6 April 2019 in computing the amount of the gain not chargeable under CTA2010/S535A (CTA2010/S535B).
It may appear strange to use losses against a gain which is not chargeable. However by doing so the UK REIT may reduce the level of property income distribution which is paid under deduction of withholding tax. A distribution from gains, covered by losses brought forward at 6 April 2019, would be a normal dividend.
Where the gain is not covered by losses then the amount not chargeable under CTA2010/S535A will contribute to reserves under category (d) of CTA2010/S550 (Attribution of distributions). This means that any distribution from the proceeds of the disposal may need to be attributed to pot(d) (see GREIT08035) and is then a property income distribution to which the withholding tax provisions of SI2006/2867 Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 apply (see GREIT08060).
Where the company’s accounting period straddles 6 April 2019 then, for the purpose of determining losses at 6 April 2019, the accounting period is treated as 2 separate accounting periods. Any losses are time apportioned between the period ending 5 April and the period beginning 6 April. If such an apportionment produces an unjust or unreasonable result then the apportionment may be carried out on a just and reasonable basis. GREIT04050 Property rental business income: investment/trading borderline: 3 year development rule: CTA2010/S556
If a UK-REIT develops a property with the intention of disposing of it, before or following completion of the development, any gain, loss or profit arises to the residual business. Likewise a disposal of property by disposing of the shares in a holding company before 6 April 2019 also falls to the residual business.
If a UK-REIT disposes of property used wholly and exclusively in the property rental business, any gain or loss arising on its disposal may be exempt (CTA2010/S535 & S535A). However if a UK-REIT develops a property with the intention of retaining it as part of the portfolio, but sells it within three years of completion, the disposal may be taken out of the property rental business and any gain, loss or profit arises to the residual business. (CTA2010/S556(3) & S556(3A)).
Conditions The rule in CTA2010/S556(3) applies to a direct disposal of property if:
- the property has been developed since acquisition
- the cost of the development exceeds 30% of the fair value of the property at the later of the date the company acquired the property and the date the company joined the regime, and
- the company disposes of it within three years of completion of the development.
CTA 2010/S556 does not apply to developments completed before entry into the REIT regime. ‘Fair value’ is to be determined in accordance with international accounting standards (see GREIT02040). None of the other terms have any specific definition for the purposes of this rule. Broad descriptions of how HMRC will interpret them in applying this rule are set out in GREIT04060.
The rule in CTA2010/S556(3A) applies to the indirect disposal of property, on or after 6 April 2019, by a company C if:
- one or more properties acquired (directly or indirectly) by a relevant UK property rich company B have been developed since acquisition
- the cost of the development exceeds 30% of the fair value of the property (determined in accordance with international accounting standards) at entry or at acquisition, whichever is later,
- C disposes of any of its rights or interests in B, not intra-group, within three years of completion of the development The rules apply in respect of developments completed after entering the UK-REIT regime, irrespective of when they commenced. Simply transferring the property from one member of a Group REIT to another would not trigger this rule. The rule does not say that the disposal is automatically to be taxable as a trading transaction. The transaction moves to the residual business where the normal rules apply to decide if the disposal is by way of trade or capital in nature.
If the property was owned when the company joined the regime, the deemed sale and reacquisition at entry are ignored. The cost of acquisition will therefore be the original cost of the property to the company, as enhanced by any subsequent capital expenditure. As well as the property reverting to its original cost, the company can claim repayment of any Entry Charge paid in respect of the property (see GREIT04055).
Examples
Case 1 Company C acquired property P on 1 July 2015 for 800, which it rents out for 50 per year net of expenses. C enters the UK-REIT regime on 1 January 2016, the market value (and fair value) of P is 1,000, and the market value of the rest of the property rental business properties is 9,000.
In May 2017, the company completes an extension to the building, which cost 350. A too-good to miss offer is made and C sells the property for 2,500 in November 2017.
The developed property is sold within three years of completion of the development, and the cost of development exceeds 30% of the fair value of the property at entry to the regime. The disposal therefore moves to C’s residual business. In the circumstances, this would probably be regarded as capital and not a trading transaction.
The gain before indexation of is 1,350 = 2,500 – (800 + 350) (deemed sale and reacquisition at 1 January 2017 is ignored). The gain accrues to and is taxable as part of C’s residual business.
Note that although the deemed sale and reacquisition on entry to the REIT regime is ignored, no adjustment is made to the profits of the property rental business for the period 1 January 2017 to November 2017 to reflect the 50 annual rent.
Case 2 Company B, a UK property rich member of UK-REIT group, acquired property P on 1 July 2019 for 800, intending to rent it out. B also has rental property Q. B has no residual business assets.
In May 2021 B completes an extension to property P at cost 400.
In November 2020 Parent Company C sells B to an unconnected party and makes a gain of £2000. The gain attributed to P on disposal is 1500 and to Q 500.
The disposal of B is within 3 years of completion of development of P and the cost of that development at £400 is more than 30% of the value of P on acquisition £800. The gain relating to B £1500 is taxed in the residual business. The gain relating to Q £500 is not charged to tax (CTA2010/S535A).
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dd7bf517e64b43c356d14f07b8bd856c1ef06fdb | Taxable on disposal of shares, unless holding less than 25% interest, or an exempt investor
Taxable on disposal of property
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5f48eb2a9053e94e740842909a2de1bb58268eef | Disseminating Research Results to University Stakeholders: The Child Health project at Mbarara University
Doreen Omony Akello Public Relations Officer Mbarara University of Science and Technology Uganda The Core functions of a University
- Teaching
- Research
- Community Service
Research forms an important foundation of a university. The strength of any university is measured by the volume.
Unfortunately dissemination of research findings has been limited to only journals and academia. University activities are influenced by both the internal publics and external publics.
- Students
- Employees
- Media
- Community
- Service providers
- Policy makers
- Non Governmental organizations The role of PR
- Act as a link between all university stakeholders by providing information through various medium website, newsletters, brochures, events, open days, exhibitions, mass media Project Objectives
- To improve child survival through a comprehensive community based health education program
The project trains and supports Village Health Volunteers (VHV) in rural Southwestern Uganda to support child health activities in their local communities. Medium of Communication
- Mass media
- Website
- Nomination for competitions
- Brochures
- Exhibitions
- Newsletters
- Open days Challenges
- Inadequate funding for the PR department resulting in inconsistency. It is important for information to flow consistently.
- No funding for PR research
- Personnel
- Understanding the importance of PR Why PR is Important
- PR training provides the skills of packaging and communicating information to a wider audience in a simple way unlike in academia or journals.
- Because PR has the ability to package and tell the story in detail to a wider audience, PR departments in universities need to be supported. Thank You! www.healthychilduganda.org
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3792d94290657b3f2c134583b4e83e6cef6493c9 | This form is for Departmental Records Officer (DRO) or Authorised Deputies to request the setting up of a DORIS account on The National Archives Government Secure Intranet (GSI) network.
ALL SECTIONS MUST BE READ, UNDERSTOOD AND COMPLETED IN FULL
As the designated primary user of TNA portal for government services for name of department accept the following conditions of use:
(i) All users of this service are cleared to a minimum level of Baseline Personnel Security Standard (BPSS) (ii) All users of this service agree to keep their username and password secure and agree not to share with any third party unless previously agreed with The National Archives. (iii) All actions carried out under this account will be attributable to name of department and improper use may result in withdrawal of the service. (iv) Any information derived from the service will be secured in a manner commensurate to its content.
Please note the following:
- Please check the spelling of the preferred username of the user before you submit this form. Changes to correct mistakes can be complicated and take time
- Please remember to inform The National Archives’ DORIS Helpdesk [email protected] – of changes to the user's details, and also when the user leaves.
User:
Name: Position:
Email address: Tel.no.:
Reader’s ticket associated with this login… Number:
Name:
Preferred login username:
User’s signature: Date:
Authorising officer:
Name: Position:
Email address: Tel.no.:
Authorising officer’s signature: Date:
Please return the completed form to: Government and Remote Services The National Archives, Ruskin Avenue Kew, Richmond TW9 4DU
Or email: [email protected]
A username and password will be issued in two separate emails to the email address of the user.
PTO Check list for Staff use:
| Step | Check | |------|-------| | 1. | Date form sent to user for completion: | | 2. | Date completed form received from user: | | 3. | Details provided by user vetted and correct by: | | | Date: | | 4. | Date username and password created by The National Archives Systems: | | 5. | Date The National Archives Database team associated reader’s ticket with username: | | 6. | Date username and password **sent to user in two separate emails:** |
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47c9998077407bb0d027f685dddd7efe36fdd867 | Dorset History Centre Digital Content Research Findings
Katie Moffat, Head of Digital Jacqui Fortnum, Consultant July 2017
## Contents
**Part 1 - Overview & Summary** ................................................................. 2
**Introduction** .......................................................................................... 2
- Context ................................................................................................. 3
- Research Objectives & Methodology ..................................................... 4
**Key Findings** .......................................................................................... 6
**Part 2 - Results in Detail** ....................................................................... 8
**Focus Group Research** .......................................................................... 8
- Overall perceptions of archives .......................................................... 8
- Routes to engagement and potential barriers ....................................... 10
- Exploring engagement with online content ....................................... 15
**Situational Analysis** ............................................................................. 20
- Google Analytics .................................................................................. 20
- Social Media & Other Digital Channels .............................................. 21
**Wider Sector Analysis** .......................................................................... 23
**Best Practice Examples** ....................................................................... 26
- Serving the needs of multiple audiences ........................................... 26
- Using social media effectively ............................................................. 26
- Curated content & narratives ............................................................... 27
**Final Recommendations** ...................................................................... 28
**Acknowledgements** ............................................................................ 29
**Afterword - Dorset History Centre** ....................................................... 30
**Appendix 1 - Focus Group Participants** ..............................................
**Appendix II - Customer Circles** ..........................................................
**Appendix III - Options & Resources Matrix** ........................................
**About the Audience Agency** ............................................................... Part 1 - Overview & Summary
Introduction
The Dorset History Centre is the county archives service and local studies library for the local authority areas of Bournemouth, Dorset and Poole. In common with many archive services, Dorset History Centre faces a number of issues; on-going pressures on budgets and resources, a general decline in the use of archives, together with the additional challenges of the digital world, which bring expectations from users that archival content will be available online.
Research commissioned by Dorset History Centre in late 2016 supported the view, both from users and non-users, that there is an appetite for an increased amount of online digitised material. However, the remit of that research project didn’t include an investigation into exactly what kinds of material people wanted to access online. The aim of this piece of work therefore is to provide clarity on how the Service should prioritise the digitisation of archival material. The research will be used to help inform the future digital strategy.
The Brief
The brief as presented by Dorset History Centre was for consultants to explore the options available to Dorset History Centre as it seeks to understand and respond to the demand for ‘online content’. As audience habits change and more archive service users seek material online, it is vital that the service is fully confident of the rationale and purpose for the approach it takes to online content provision and that the approach is firmly based upon evidence rather than on opinion. Where at all possible it is our wish to align audience expectations with our ability to meet them. It is equally important that the digital content strategy pursued is affordable within the parameters of the service’s budget and that full costings for its creation and maintenance are clearly understood. The findings of this research will be shared with other archive services as part of the project, and reported in a published document that they can use when scoping their own particular solutions to this question. Context
According to the most recent statistical release from the Taking Part survey, there has been a general decline in the percentage of adults visiting archives, from 5.9% in 2005/2006 to 3.1% in 2016. It also appears that the archive audience is an aging one, with decreases in the proportion of adults who visited an archive centre across all age groups, except for adults aged 75 and above.
This decline in the use of archives, together with an aging audience, represents a significant challenge to Dorset History Centre and the wider archives sector. As noted in the report produce by CDC Consulting, “Less than 20% of users are new to archives, this coupled with a decrease in the ages of users except those who are over 75, suggests that the market is not renewing itself very well.”
However, despite the fact that the Taking Part survey indicates that visits to archive websites have also dropped, from 9.7% in 2005/2006 to 8.3% between October 2015 and September 2016, in the previous report it does note that, “In contrast to all other cultural sectors, a higher proportion of adults visited an archive or records office online than in person.”
The latest ‘National Survey of Visitors’ report carried out by The Public Services Quality Group for archives and local studies does show the increasing importance of archive websites to the process of planning a visit. And for several related questions, Dorset History Centre scores above the national average.
| Which of the following did you do to prepare for your visit today? | Survey of visitors to UK archives 2014 - All | Survey of visitors to UK archives 2016 - All | Survey of visitors to UK archives 2016 - Dorset History Centre | |---|---|---|---| | Went online to check opening times/find directions etc | 44% | 47% | 60% |
1 Taking Part 2016/2017 quarter 2 https://www.gov.uk/government/collections/sat--2 2 Taking Part 2015/2016 quarter 4 https://www.gov.uk/government/statistics/taking-part-201516-quarter-4-statistical-release 3 PSQG National Survey of Visitors, Headline Report 2016 Conducted online research | 42% | 44% | 52% Searched archive’s online catalogue to find records/reserve documents | 30% | 33% | 45%
Of course this research only addresses the behavior of current users and if the archives sector is to attract new audiences, it needs to also develop strategies to reach non-users.
In conducting desk research to inform the final recommendations for this report, we researched and consulted beyond the immediate archives sector, to include museums and libraries. This is because there are synergies between the activities of these types of organisations and museums in particular have made significant advances in the last few years in terms of engaging audiences with online collections. Indeed the most recent Taking Part data indicates that the proportion of adults who visited a museum website has increased significantly increased from 15.8% in 2005/06 to 28.7% in the year to September 2016.
It is acknowledged that Dorset History Centre operates under the umbrella of Dorset County Council and currently the website for the archives service is part of the main Council website. It is somewhat limited in functionality and difficult for the archives team to make significant changes to how digital content is presented. However, we are aware that a procurement process is underway to redevelop the website and the aim is for Dorset History Centre to have a separate website (albeit using the same CMS system as the main Council website). This will be hugely beneficial in helping the archives service to move forward with the development and presentation of its digital content.
Research Objectives & Methodology
What we investigated
- The motivations of users to engage (with Dorset History Centre content) online and how this may change depending on the platform, for example, the website as compared with social media engagement.
- The opportunities for engaging with different types of audiences.
- The relationship between the physical archive and online content.
- The impact of the physical location of the archive on the online needs of users.
- What exactly “more” online content means to different types of users. • The basis on which content should be prioritised for digitisation • Audience expectations in relation to paying for services/material together with the potential opportunities.
The approach we took
The work was divided into two areas: primary research, which involved running a number of focus groups with users and non-users and desk research, to explore in more detail Dorset History Centre’s current approach to digital work including on social media platforms and the different approaches taken by a range of organisations, including museums and libraries.
Primary Research
A total of four discussion group sessions took place. These were conducted at 3pm and 6pm on Monday 8 and Tuesday 9 May 2017. Two were conducted in Bournemouth, at the central library, and two in Dorchester, at Dorset History Centre; one session for current users of the DHC archives, and one for non-users, was conducted at each location.
14 current users and 16 non-users of the Dorset History Centre archive participated in the research.
A screening survey was used in the recruitment process, to ensure that all participants met the necessary criteria. To meet the research objectives it was essential that the participants were either current users of the collections at Dorset History Centre or had the potential to become so (i.e. had used other archive sources, or indicated an interest in subjects reflected by the Dorset History Centre collections).
Each session lasted approximately 90 minutes and was facilitated by a member of staff from The Audience Agency (a topic guide is given in Appendix 1).
All participants were given £30 to thank them for their participation. Where quotes are used the participant is identified using a pseudonym; these pseudonyms may be matched with the participant profile given in the table in Appendix 1.
Desk Research
This involved a situational analysis of Dorset History Centre’s current digital platforms, research into relevant approaches taken by the wider archives, libraries and museums sectors and consultations with several related organisations. Key Findings
Curating and contextualising digital content will engage more users & ensure long term relevance of archives
From the primary research, responses to the word ‘archive’ were generally matter-of-fact; ‘records’, ‘information’ and ‘history’ being the most used words - but it was apparent from the discussions that it is the stories held within those historical records that engage people on an emotional level and create enthusiasm and passion. For non-users in particular, the stories that come from archives are the route to engagement
Therefore, taking a curatorial approach to the presentation of digital content will be more likely to engage a non-professional audience in particular, and help to ensure the long-term relevance of archives to the general public. This is an approach already being taken by many museums and libraries. Social media also provides an opportunity to present content to audiences in more contextually relevant ways.
In addition, some larger archives are experimenting with providing contextualised content using automatic tools i.e. when a search returns an item it suggests other relevant items alongside it. While this may be too technically challenging for smaller archives to implement now, the feasibility of presenting online content in this way could be explored for the future.
Understanding & expectations of what is meant by ‘digitisation’ are varied
There were a variety of different thoughts about what the term ‘digital content’ means (and therefore what the expectation is about online availability). To many participants it appeared to mean adding a catalogue record, transcription, or thumbnail capture, rather than a high-quality reproduction, which can be fully accessed online.
What is evident from research is that in practice it would be incredibly difficult and somewhat meaningless, to try and prioritise digitisation in relation to collection or item types, indeed, there was no clear conclusion that focusing on digitising a particular item type or collection would serve the needs of all audiences.
Rather the key may be to divide audiences into segments based on their propensity and motivation to engage and aim to meet the overarching needs of those segments e.g. regular users/first-time users/non-users (but with potential to engage). Digital content can help provide much needed support
Although some regular users, who know exactly what they are looking for, indicated they would be interested in accessing more digital archive material online, others, particularly non-users, primarily wanted online material to help them understand more about using and accessing the archive (whether online or at the physical archive). Several participants in the focus groups suggested that they would be apprehensive about using an archive because they didn’t really understand how it works or why they might want to use it themselves. Therefore good explanatory content that helps to demystify archives would be hugely beneficial.
Research purpose & personal connection determine the importance of physical versus online
In most regional archives some material is informational, for example, business or land ownership records and some has more personal resonance, for example, letters relating to family history.
It appears that those doing research on behalf of others (who also tended to be more experienced users of archives) would be happy to access material online if they had confidence that the information they could access was accurate and thorough, whereas those undertaking personal research were more likely to want to access material physically. However this was a particularly complex issue with many factors impacting on opinions around physical and online access.
Key findings summary
- Careful curation and presentation of digitised content online will help archives to appeal to a broader audience and ensure longer-term relevance of archives to the general population.
- Audiences have varying degrees of understanding about what digitisation is and mixed expectations. For this reason is not possible to create a formulaic way to decide what should be prioritised for digitisation.
- It is important to also consider the role of the website in supporting a visitor, whether with a visit to the physical archive or helping them understand how to access digital material. Part 2 - Results in Detail
Focus Group Research
Overall perceptions of archives
Reflecting on what ‘an archive’ means to them, participants were asked to write down the first three words or phrases that came to mind.
The responses are shown below as word clouds, with more frequently used words appearing in a larger font. Selected quotes from the discussions following this exercise are included to offer further context (all quotes are included in Appendix 2).
In each of the groups the words that participants used to describe an archive were largely fact-based, with ‘history’, ‘records’ and ‘information’ being the most commonly used words. This indicates that the participants essentially see archives as repositories of historical documents; awareness of the other types of material held by an archive, such as oral histories and objects, appears to be less prevalent and very few emotional or experiential responses were given at this point.
In the discussions that followed the exercise, the main theme to emerge from the non-user groups was that of being overwhelmed by the sheer amount of material held in an archive, and not knowing where to start in accessing it. User responses were more varied, ranging from the difficulties they face in reading hand written documents and those in Latin or other languages to a more philosophical discussion around what is history, and how is the history of the present day being documented and archived.
Current user responses “I expect them to hold things of historical value, whether that be 24 hours ago, or 2000 years ago” (UD6)
“I’ve written down that it’s an original resource, because it’s the only place you can really get that” (UD5)
Non-user responses
“I just feel like I wouldn’t know where to start” (NUD1)
“I feel that if I came here, I’d have to spend a few hours before I actually started looking at it and it seems a bit of a daunting task” (NUD4)
Combined responses Routes to engagement and potential barriers
Ratings exercise
Participants were asked to make a mark on a scale from Very Important to Not at all important to indicate how influential a range of factors are when making their decision to use an archive. The factors were: that it is local\*, that it is easy to get to, that online access to information about the collections is available, that pre-visit support is available, and the potential costs of accessing and using the archive.
The responses were largely similar from both the current users and non-users, with online access to collections information being the most significant factor for both groups. That it was easy to get to was also important to both groups; that it is local was of more importance to current users than to non-users.
In the discussions that followed it emerged that many of the elements considered in the rating exercise have interdependencies that impact on the level of importance they have in any given situation; for example, the issue of locality is more complex than a question of whether people are willing to travel to use an archive or not.
The participants in Bournemouth didn’t give any strong indication that they would be unwilling or unable to travel further (i.e. to Dorchester) to access material in principle, but they were concerned about the practicalities of being able to do so. This was particularly in terms of parking availability and the potential costs of using the archive. They also indicated that being confident that their time would be well-spent was a vital factor in determining whether they would be willing to make the journey; this would mean knowing in advance that the material they were interested in seeing actually contained information of interest and use to them, which is in turn linked to the issue of the online content, and what they expect and need from that, and also the pre-visit support.
This suggests that having clear information about practicalities such as parking, accurate descriptions of collection content, and costs clearly and easily available to new and potential users is more important than the location of the archive.
The users in the Dorchester group indicated that they highly valued having the archive on their doorstep, and their responses demonstrated a sense of ownership that seemed to be linked to this and their ability to visit frequently.
\*Locally sited rather than containing locally-specific collection materials Thinking about when you have used an archive collection, please indicate how important each of these elements was in making your decision to do so:
**Current user ratings**
| Element | Very Important | Not at all important | |-------------------------------------------------------------------------|----------------|----------------------| | That it's local | | | | That it's easy to get to | | | | That I have online access to the collections | | | | That pre-visit support is available | | | | The potential costs | | |
**Non-user ratings**
| Element | Very Important | Not at all important | |-------------------------------------------------------------------------|----------------|----------------------| | That it's local | | | | That it's easy to get to | | | | That I have online access to the collections | | | | That pre-visit support is available | | | | The potential costs | | |
**Combined ratings**
| Element | Very Important | Not at all important | |-------------------------------------------------------------------------|----------------|----------------------| | That it's local | | | | That it's easy to get to | | | Locality & ease of access
A number of participants in the non-user groups noted that they were unaware of Dorset History Centre until taking part in the research, despite having an interest in the subject areas and type of material held by the archive. It was commented that raising the profile of the archive, would help to engage more people with the collection. This supports the research carried out in late 2016 by CDC, which concluded, “many non users are not aware of the service and what it can offer”.
“I didn’t even know there was a Dorset History Centre, and I’ve lived here all my life” (NUB6) [general agreement from the Bournemouth non-user group to this statement]
“Just get people’s attention - I didn’t know you were even here” (NUD8)
“If you just put in Dorset History Centre, I’m not going to come down because I’ve got no connection with Dorset. Need to think about what is there to draw them in, if the town is not local to their history” (NUD2)
“Drop Dorset or have local history centre or something and then immediately you broaden your base” (NUD6)
“I don’t think it’s well enough publicised ... when I was doing my degree I wouldn’t have even thought to look in an archive. It’s not only about being accessible, it’s telling people you’re accessible - it makes a difference” (UD3)
Some participants highlighted that the parking difficulties may put them off visiting.
“Dorchester’s not the easiest place to park. So there are practical issues as well” (NUB7) Pre-visit and visit support
In relation to pre-visit support, and particularly in relation to the non-user groups, it became clear that information about what to expect of a visit to the archive - what the set-up is, what you are expected to bring and not bring, how you will access the material - is as important as information about the collections.
“[would be good to have information about] the archive itself, or where you’d be going, rather than just information about the collections” (NUB8)
“Maybe if you’ve got a Q&A of frequently asked questions - how much does it cost? Where do I park? (NUB2)
“I don’t know if I’m walking into a room and helping myself, or if I then have to ask someone who’s got white gloves on, who goes and gets it and makes me put white gloves on” (NUD3)
“Do I just walk in, or do I need an appointment?” (NUD2)
“How long it might take, is a follow-up visit needed? Is there a cost involved if I needed someone to help me personally, to spend their time going through?” (NUD3)
“I still don’t understand what the difference is between a place like this, and the museum” (NUD3)
“I’m interested in going to museums, but here, is it worth me coming here? What’s my incentive, I don’t understand that still” (NUD7)
Both non-users and users also expressed the importance of getting support with how to use the archive. And so although less about the online experience there were key points made about the importance of helping people with their first time visit.
“If I knew I was allowed to [come in and look at materials seen online] and someone could help me, because I’d be terrified to come here with this massive old artefact on my own” (NUD5)
“I’d have to know what you can and can’t do, so if there are records that you’re not allowed to touch or photograph ... because I don’t know what the rules are ... is that something you find out when you get here?” (NUD1) “Until you get started sometimes you don’t even know what questions to ask … I think it’s important to have someone to help the novices through the process” (UD3)
“I think there should be an induction … the other day I was getting a document out and someone came rushing out and said ‘no - don’t do that! You want to use these…’ and gave me glass weights - nobody told me I had to do that, it was a bit embarrassing and I’ve been coming here for quite a while” (UD6)
“There is so much, having some sort of area where there is a general breakdown of we carry this, this and this, would help me know where to start” (UD3)
Costs
There were varying opinions about the perceived and actual costs of using the archive (both onsite and online). The cost of photographing or downloading material prompted quite a heated discussion amongst both users and non-users. It was generally felt that a charge for downloading or having content photographed or copied was expected, but participants were not supportive of paying to take their own images.
“I went to Dorset History centre when I was looking at this house and … copied [it] with an IPAD - I had to pay £7 for that … that aggrieved me, I don’t agree with that … the national archives don’t charge and a lot of record offices don’t charge” (UB4)
“I photograph many things. When I go to the National Archives in London, they always say I can photograph things for free. Last time I photographed over 400 documents … here you pay £7 a time I think … that’s high when you’re only photographing” (UD6)
“I would be upset if they started charging for the services [research support, rather than reprographic services]” (UD2)
“Rather than paying a daily rate, could you pay an annual rate or monthly … something that works out if you were interested in coming regularly” (UD3)
All participants felt it was important that costs (whether for digital material or on-site charges) were transparent.
“It would be good to know the cost attached to finding out the information and perhaps if you wanted to take printed copies, so you could take them away with you” (NUB6) When specifically discussing potential costs for online material, there were a number of different opinions and suggested approaches.
“Scotland’s history they do a pay a certain amount and you can look at everything and the amount comes off your account and keeps coming off. That system would work” (UB3)
“Essex … do the same don’t they? They’ve got a special online system where you can pay so much and look at all their parish registers” (UB4)
“As I say, I’ve never quibbled at paying £3 a day to the National Archives … I mean because a lot of things like say the service records, they aren’t anywhere else and what’s it going to cost these days to drive up to London and copy them and that. So I’m quite happy to do that … they don’t charge you per page they charge you per document … the cost of going to look at the original is far and away over the cost of downloading for £3.50” (UB2)
“I think the public records stuff should be free” (NUB8)
“I would like to have a choice of a one-off payment so I can use something just once, or if I’m tracing my family tree and I need say a three, six or twelve month payment. It would be good to have this difference in price” (NUB4)
“You could have a scale of costs … so different prices depending on the resolution you have” (NUB5)
“Free to view, but pay to download for you to keep - I wouldn’t be surprised to see that there was a cost involved in that” (NUD7)
Exploring engagement with online content
A range of facsimile collection items were made available to the groups to explore and consider. The participants were asked to look at the example items and think about how they would expect or want to access them.
The example items included personal and documentary photographs, illustrative material from the Poole Pottery archive, newspapers, illustrative and documentary maps, personal and documentary letters, a diary, and a range of both hand-written and printed documentation including parish registers and committee minutes.
In the discussion that followed the participants were asked to respond to a number of questions relating to how they would expect, or want to, access different types of material, with a focus on the relative benefits of online or physical access.
In contrast to the initial perceptions exercise, participants in all the groups began to talk about the archive materials in a more personal and emotional way. It became clear that the stories that the objects can tell are the key to engaging people with them, and the participants in all groups expressed the view that these stories are a way to encourage more people to access the archive material including non-traditional users.
“I was really surprised by the Poole pottery stuff ... I was thinking of dark dusty official documents and not these fantastic designs ... that was quite inspiring to want to look at more of that” (NUD4)
Throughout both the user and non-user groups no clear indications emerged in terms of what types of material they would prefer or expect to access online. As with the ratings exercise, there are a number of factors involved that impacted on their preferred access route. For example, those conducting research on behalf of others would be quite happy to access what they needed online if it was available, whereas those conducting personal research are more likely to want to visit the archive in person.
“Only if it was related to your particular family. This one was written by your great aunt or Grandpa, then yes, it’s nice to hold it, but other than that” (UB4)
“It is fascinating to see the original document, especially if it is very old. You can’t make a statement, it depends on what the purpose of your research is, to an extent” (UB1)
“If it belonged to a member of the family ...to actually see something which he kept and risked his life for - to actually handle and say this belonged to my uncle, you know. Rather than just having a photocopy of it” (UB2)
“If it’s not personal, then I think online will do. Unless it’s something really historical maybe” (NUB4)
“If I saw a document online, if it was related to my family, I probably would want to see it” (NUB3) “If you were just looking for a specific article [in a newspaper] then no need to see the original” (NUD2)
“If I need an almost business approach - find what I’m looking for, turn it into a source, stick it in my essay, move on - then fine, stick it all online and that would suit me for time saving and efficiency. If I’m doing something more personal, more nostalgic, then I would like a hands-on experience - seeing someone’s handwriting and the dog-eared corners” (UD3)
“If it’s just a list of names or burials ... then that’s better online, but original documents and newspapers - you’ve got to see the original because it can lead onto other things” (UD2)
“I’m quite happy to see newspapers online” (UD6)
There was consensus however, in wanting to have access to more than a simple catalogue record online. Participants suggested taking a layered approach to presenting the collections online, perhaps starting with headline content and an image which would then link through to more narrative content with further images, and finally the full catalogue record.
“Some sort of combination approach would be good, where for those less interested in finite details but looking for an overall one sentence or a piece of information an online version would be enough” (UD3)
“I think perhaps just to say it is available to be seen in the flesh. You’ve got the digitised photograph, if you want to come and have a look at it you can, you’re welcome to do so” (NUD6)
“Internet resources are an additional rather than locking something away never to be seen again ... making it accessible, having the option to do what suits you - that’s what will work best” (UD3)
“Pick something massive and lead us through the event ... the Bloody Assizes ... the Tolpuddle Martyrs” (NUD3)
“It would be good to have one of those little videos showing you where you can go into the next part of the archive ... from your point of interest ... a video that would piece together the story of how you would bring it all together ... this is such and such’s house, this is the school they went to” (NUD8) “I think being able to search spatially [collection items linked to a particular geographic area] is really important” (NUD5)
“Could you give categories of types of information? So it’s not bespoke, but it’s enough to send you in the right direction” (NUD8)
“How many people have used it [a particular resource] would be good, because if it’s got loads of likes then you would know that this is maybe one for you” (NUD5)
“Well I’m quite interested in the history of my house, but I don’t know how to find out … case studies on the website might help” (NUD5)
“I could be really quite interested in getting lost in an archive of history or photographs, but the visual things were the most interesting to me” (NUD5)
There was also general agreement that the current website does not offer a good user experience, and would need to be improved in order to support greater online access. Linked to this, the issue of quality arose in both groups and participants expressed the feeling that any digital content should be of the highest quality if users are expected to access collection material online.
“I think one thing that’s really important is that the Dorset History Centre has a decent website … the ‘Dorset for you’ links are atrocious … it doesn’t tell you anything you want to know” (NUD3)
“And make it more interesting, more inviting … you go through the council website, you come here on sufferance - like ‘we’re tolerating you being here’, you know” (NUD5)
“And it feels very static … I don’t know whether you’ve got audio or video in your collections, but it would be nice to experience that … it would make it seem less dark and dusty” (NUD8)
Along with the idea of using the archive material to tell stories, perhaps linked to notable local or national events or figures, the use of social media - particularly Facebook - emerged as a channel the participants in both user and non-user groups felt would engage more people and encourage them to use the archive. There were also suggestions of ways to use content as a means to attract people to using the archive.
It points to an opportunity to use social media and other marketing to widen awareness. In connection with messaging and encouraging new users. “Social media might be a good idea. Facebook” (UB4)
“You’ve got to be far enough along the research road to say, ‘can you send me you newsletter’. So, you’ve got to find out. But again, social media would help that” (UB2)
“If it came up on your Facebook feed ‘today in history’ from the Dorset History Centre” (NUD3)
“It may also be of interest [to have information available at relevant sites] like you say, Kingston Lacy House. If you could somewhere on the grounds have a terminal where you could look at some of the archive material that’s here and then that would interest you more.” (NUB2)
“Appeal to the recent history of the people who are still alive and want to see their own lives reflected in the history centre, because people are curious about people and themselves” (NUD7)
“You could have a gem of the month or something like that ... it makes a reason to go back to the website because it would change” (NUD8)
“I guess there’s something here with the maps as well, that almost tell the story, so almost the years as they go by, you click through records and see when things change. I think that would draw people in” (NUB8)
Participants in both groups identified audio and video recordings as being ideal content for online provision, along with maps and photographic materials. It was generally felt that the more visual content, such as the Poole Pottery archive, might attract more users if it was presented through social media although a number of participants commented that they expected people who wanted to use it to inform art practice would also like to see it in person.
“I think photographs are a good one that can go online, they tend to be quite good and even things like maps” (UD4)
“I’d support maps - maps are beautiful I think and they work wonderfully online, all the maps!” (UD7)
“Are there recordings? The Dorset dialect is so rich, I’d love to have access to an audio” (NUD7)
“I know that they’ve taken quite a lot of oral history and audio of people singing and stuff - I don’t know how much of that is accessible online... any more of that, if they can get that up, that would be a good thing” (UD5) Situational Analysis
Google Analytics
The Dorset History Centre website is part of the main Council website and is several years old. As a result the functionality is not currently as good as it could be and there are some difficulties in getting comprehensive statistics on website usage. However, an analysis of the Google Analytics provides the following insights (figures are for 1st June 2016 to 1st June 2017):
- After the home page of Dorset History Centre, the three most popular pages are Parish Registers, Online and Collections.
- On average users spend 2 mins 23 seconds on the Parish Registers page (compared with 1 min 25 seconds to all Dorset History Centre pages. This indicates that Parish Registers are an important starting point for those conducting research. From that page, most users go back to the home page (/dorsethistorycentre) but the second most popular page (from Parish Registers) is the Research Service page, suggesting that many people are looking for assistance with how to access and search the registers.
- Overall, pageviews to any part of the Dorset History Centre website have gone down 34%, when compared to the previous 12 months. This mirrors the findings from the Taking Part survey (referenced in Section 3) that visits to archive sites have fallen year on year.
- The Collections page has an extremely low dwell time of only 34 seconds, which may indicate that people expect different content to that which is currently on the page (specific user testing would be useful to explore this further).
- 59% of traffic to the Dorset History Centre homepage arrives via Google search, indicating the importance of people using Google to start or assist them with their research. 22% is via a referral e.g. from The National Archives ‘discovery’ section. 12% of traffic is direct. This may include referrals from email newsletter but is also likely to be people who have bookmarked the website in their browser. Currently there is very little traffic being referred via social media channels and this presents a key opportunity. Social Media & Other Digital Channels
Dorset History Centre has two Twitter accounts (a main account @DorsetArchives - 1245 followers and @RSM_GBeck - 833 followers, which is live tweeting a WW1 diary). It does not have a dedicated Facebook page but periodically posts content via the main Dorset For You Facebook page. The service also sends out a monthly email newsletter, which at the time of writing has 2,500 subscribers.
Social media channels offer a significant opportunity to reach and grow audiences and are likely to be a particularly effective way of engaging non-users. The previous research conducted by CDC supports this view with ‘advertising, social media & promotional material’ being given as the top answer by users and non-users, to the question of how Dorset History Centre could better support them (as a means to make them more aware of what the service can offer).
The following word cloud shows the most commonly used words in the bios of @DorsetArchives’ followers. It appears that many followers are themselves archivists or other organisation/business accounts in the area (use of words: official, charity, business). However the word ‘history’ also appears prominently.
Anecdotally, many organisations in the archives, heritage and museums sectors find that Twitter is increasingly a channel to connect with peers and professionals, rather than members of the public, whereas Facebook connects organisations with a much wider and more general audience. When considering whether or not to start a dedicated Dorset History Centre, the service will need to weigh up the benefit in terms of audience engagement against the required resource to update and maintain a specific page. Having a page dedicated to the archive and its stories (rather than via the Dorset For You Facebook page) would provide a more focused content set which arguably would have a stronger impact than when combined with other Council news.
The potential can be seen by looking at pages such as https://www.facebook.com/skyearchives/ and https://www.facebook.com/northumberlandarchives Despite the growth in prominence of social media over the last 10 years, email newsletters remain a hugely important digital communication tool for most organisations. Analysis of reports from five of Dorset History Centre’s email newsletters (distributed between Oct 2016 and March 2017) show an average open rate of 44%, this is extremely high when compared to general benchmarks⁴ and indicates that subscribers are loyal readers. In most cases, the most popular link in each newsletter relates to an event or open evening at the archive, illustrating the importance of physical events to audience development.
⁴ https://mailchimp.com/resources/research/email-marketing-benchmarks/ Wider Sector Analysis
By reviewing the approaches taken by other archives, libraries and museums we can identify the key issues and themes in relation to digitisation strategy and online collections. For smaller or regional archives, these themes can provide useful insight to help inform future direction.
Context & Curation
As stated by The National Archives in their most recent Digital Strategy⁵ “Most people using our website do not understand how archives organise their collections and many find searching our catalogue bewildering.” So while professional and experienced users of archives may be comfortable searching online catalogues, new users can find the experience confusing and disorientating. Many archives have digitised their catalogue and provide a search function but as Tom Scott from The Wellcome Collection says, “Search only works if you know what you’re looking for” in addition, for many users, even once they’ve found an item, “the content has been atomised to such an extent that it become meaningless”, which is to say that people may carry out a search, find themselves viewing a catalogue entry for an item but not really understand what they’re looking at.
Looking wider than archives, some museums and galleries are exploring new approaches to the presentation of their online collections, specifically to make them more accessible to a wider audience. The Barnes Foundation for example, is following the approach of its founder and working on grouping artworks not by historical connections but by groupings such as light, colour, space or line. As Shelley Bernstein from the Barnes says, in a recent Medium post⁶ traditionally museum collections, “...often catered to the research audience, with rich semantic search and comprehensive metadata for every object, but almost no connections between works themselves. This works well for a sophisticated, goal-oriented user with a deep understanding of art and art history which, coincidently, describes most museum staff, but leaves most visitors without a way to explore the collection beyond searching for the names of artists that they’ve heard of or for words they like.”
These issues are not easy to resolve, there are significant technical and practical challenges to, for example, presenting search results in a contextualised manner but one
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⁵ https://www.nationalarchives.gov.uk/documents/the-national-archives-digital-strategy-2017-19.pdf (opens pdf) ⁶ https://medium.com/barnes-foundation/rethinking-the-museum-collection-online-e3b864d8bb39 increasingly common way to help new users find a way into the archive is to take an ‘editorial’ approach and curate selected content into themed collections. For a regional archive this may relate to a particular area, local estate or significant historical event. The additional benefit of curated collections is that this type of content often works well on social media, helping to engage new audiences.
**Partnerships, Collaboration & Open Access**
Archives of all sizes often enter partnership arrangements in order to help fund the digitisation of archive material. It is likely that with increased pressures on budgets, collaborative ways of working will become more common. While partnerships can open up new sources of funding, one note of caution is that that sometimes these agreements involve significant licensing restrictions in terms of how that material can then be used. This may be an issue for those organisations moving towards a more open access model. A model that is increasingly popular. For example the New York Public Library⁷, Wellcome Images⁸ and Rijksmuseum⁹ have all adopted this approach, believing that making digital content available for unrestricted use will ensure it remains relevant and used.
Other opportunities for collaboration includes the Google Cultural Institute, who are now working more actively to help archives digitise and present digital content. UK examples include the Yorkshire Film Archive¹⁰, Black Cultural Archives¹¹ and Alexandra Palace¹².
Imogen Bakelman, from Google Cultural Institute explains the process of working with archives as follows, “The first step is to create a ‘partner page’ complete with assets (images and videos) and exhibits that help to tell the stories of the collection. In this, we really encourage our archive partners to really make the most of the exhibit feature to help to unpack their archives, pulling out the stories that help to tell a broader narrative of how archives work within our society.
We can also offer digitising services to partners who do not have digital content already. We’re in the process of on boarding more and more archives and the way we work with them will be informed by the needs and requirements of our partners.”
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⁷ https://www.nytimes.com/2015/11/01/arts/design/new-online-openness-lets-museums-share-works-with-the-world.html?\_r=0 ⁸ https://wellcomeimages.org/indexplus/page/News.html ⁹ https://www.rijksmuseum.nl/en/rijksstudio ¹⁰ https://www.google.com/culturalinstitute/beta/partner/yorkshire-film-archive ¹¹ https://www.google.com/culturalinstitute/beta/partner/black-cultural-archives ¹² https://www.google.com/culturalinstitute/beta/partner/alexandra-palace Focusing on the needs of users
As already noted, many archives, libraries and museums are experimenting with ways of presenting online content for different types of users. For professional and experienced users, being able to search online for catalogue entries will be important but in order to ensure long-term relevance of archives to a wider audience, archives need to become more aware of the needs of less experienced or engaged users.
To this end, many archives are taking an audience centric approach to developing their digital strategies, in order to ensure they are catering for all types of users.
As explained by the US Archives, “...we did a lot of work developing digital personas to identify the types of users using our catalog and website. That helps us build exciting, dynamic pages using our digital content.”
Future-proofing
Digital tools and technologies offer many opportunities but also significant challenges, not least the rapid pace of change. Trying to entirely future-proof your digital strategy is impossible but at each stage of development, careful consideration needs to be given to the likely longevity of a particular approach. As noted by the National Archives, “Digital archives must ride the rise and fall of successive waves of technological change and make decisions about where best to apply their efforts.”
One-off project funding can be at the root of stand alone digital assets (like microsites or apps) and while there may be good reasons to develop specific digital projects, the danger is that an organisation creates something that become unsupportable in the longer term and does not integrate with other digital activity. Best Practice Examples
Serving the needs of multiple audiences The Wellcome Library at Wellcome Collection provides a clear example of best practice in terms of serving (differing) audience needs. And while the organisation will have significantly higher budgets than small regional archives, the overall principles of how they approach the online user experience can be followed, to a certain extent, by any archive services.
Most notably Wellcome Library provides clear options for both experienced users of archives and for new visitors. This is demonstrated by:
- **Searchable catalogue**: For those users who are familiar with archives and/or who have a clear idea about what they are looking for, an online searchable catalogue is an important feature. The Wellcome Library has a particularly user friendly catalogue search option with useful options that help a user to refine a search and, once they have found a key item, giving researchers the option export to specialist services like EndPoint and RefWorks).
- **Online collections**: In common with many archives and libraries, Wellcome has digitised a portion of its entire holding, “...based on the strengths of our holdings and the interests of current or potential audiences. We also aim to create significant online resources that will stimulate research in the global health themes that underpin our collecting strategy”. The homepage for the online collections presents a range of user journey options that aim to serve both more experienced users plus first time visitors.
- **Online support**: It should be noted that not only do Wellcome aim to serve differing audience needs by the functionality of the website, it also provides clear support to first-time users with, for example, a prominent prompt on the catalogue search homepage linking to a page with additional help and advice.
Using social media effectively The John F Kennedy Library & Museum uses social media to bring alive the material in its collections and to drive engagement with the material. The library is active on several different social platforms but its biggest audience is on Facebook. The Facebook posts use a number of different methods to encourage engagement, including; focusing on
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13 https://www.facebook.com/JFKLibrary/ content that generates an emotional response, linking to key historical or significant calendar dates eg Father’s Day, sharing facts about JFK that are interesting but likely to be less well known (and are therefore surprising) and asking the Facebook audience questions that invite their own reflections on material.
Aside from Facebook, the JFK Library is active across a number of different social media platforms including Instagram, Twitter, YouTube and Pinterest(^\\text{14}). However, managing multiple social accounts, to a high standard, can be resource intensive so smaller archives are best advised to focus on maintaining accounts only across one or two platforms.
The JFK Library, along with many other libraries, museums and archives is also using History Pin(^\\text{15}) to contextualise archive material, particularly photographs, within geographical locations. Examples of other relevant History Pin accounts include Tyne & Wear Archives & Museums(^\\text{16}) and Leeds Libraries(^\\text{17})
**Curated content & narratives**
Carefully curating digitised material can be a particularly effective way of reaching an audience who may not be current archive users.
The Wellcome Library curates online content in the form of “digital stories” showcased from their home page and that are designed to engage both archive users and non-users. The production values are fairly high and the text written by a professional writer but the same impact can be achieved without that resource.
Archives+ in Manchester(^\\text{18}) provides a number of digital stories on its website which are themed by locally relevant topics(^\\text{19}). Using a mixed media approach, including audio interviews, as appropriate, this curated content is presented in such a way to make it highly engaging to anyone interested in the history of the city.
(^{14}) https://www.jfklibrary.org/About-Us/Social-Media.aspx (^{15}) https://www.historypin.org (^{16}) https://www.historypin.org/en/connections-tyne-wear (^{17}) https://www.historypin.org/en/connections-leeds (^{18}) http://www.archivesplus.org/about-archives (^{19}) http://www.archivesplus.org/stories Final Recommendations
• Ensure that the website offers clear, practical support and advice for those who have never visited or used an archive before. Where possible include photographs of the inside of the building so that those who are planning a visit, have a sense of what to expect.
• Identify themes and content collections that are likely to have resonance with an audience wider than experienced archive users. For example, key historical material relating to notable places, buildings and individuals from the county. Use this material as the starting point to create themed online collections. Where possible, include associated narrative to provide context and bring the material to life.
• Continue to develop the online catalogue so that it is as user-friendly as possible.
• Resource allowing, set up a standalone Dorset History Centre Facebook page and post regular updates. Follow the examples within this report for ideas on effective social media content.
• Explore working with Google Cultural Institute in order to benefit from their support and experience in the field of curated online content.
• Continue to develop the audience-centric approach, being clear how different types of online content are serving the needs of both experienced archives users and those that are new to archives. Acknowledgements
We would like to thank the following organisations and individuals for providing their time and insights for the purpose of this report:
Pamela Wright, US Archives
Tom Scott & Christy Henshsaw, The Wellcome Collection
Jessica Green, The Wiener Library for the Study of the Holocaust & Genocide
Imran Ali, consultant and partner on The Pararchive Project
Oliver Vicars-Harris, consultant
Imogen Bakelmun, Google Cultural Institute
John Stack, The Science Museum
Ash Mann, Substrakt Afterword - Dorset History Centre
The process of thinking through the brief, commissioning the work and then collaborating with the Audience Agency as the consultancy took place was a very interesting process. The service considered careful analysis of the question of digital content to be critical to the way it evolves over the next few years, both in terms of core business but also projects. Some of the responses that were received were not at all surprising, others less so. Some of our assumptions have been proven correct, but equally others have been challenged. We certainly feel that the process has been valuable as it has provided us with solid, empirical evidence of audience needs and preferences - rather than our previous reliance upon anecdotal evidence or gut instinct.
The findings of this report will strongly influence the way we seek to develop a digital strategy for Dorset History Centre. We will be focussing upon place-related information and aiming to curate content online rather than simply pointing users at a mass of information. The report will form an evidence base for funding applications and will be used as an advocacy document with senior managers and politicians. It provides a key reference point for all future online activity. We hope it has broader applications within the sector and that other services can take something from it to help inform their approach to the provision of digital content. Appendix 1 - Focus Group Participants
Topic guide
A topic guide was used to facilitate each group discussion. The table below shows the question areas, materials, and exercises used at each session.
| Topic Area | Format /Materials/Exercises | |------------------------------------------------|-------------------------------------------------------------------------------------------| | 1: Introductions | TAA meet and greet, overview of research and format for the session, participant information sheets | | 2. Ice-breaker | Participant introductions, areas of interest and experience of using archives | | 3. Archive perceptions exercise | 3-word exercise, individual Facilitated group discussion | | 4. Routes and barriers to engagement | Ratings exercise, individual Facilitated group discussion | | 5. Exploring engagement with different types of material | Consideration of facsimile materials, individual Facilitated group discussion | | 6. Conclusions | Final thoughts and incentive distribution |
Participant profiles
The table below gives a profile of each participant alongside a pseudonym.
| Pseudonym | Group | Profile | |-----------|------------------------|-------------------------------------------------------------------------| | UB1 | Current users (U) | Male; White British; aged 55-64; BH24 resident | | | Bournemouth group (B) | Interested in: local history, social history, and legal records | | Code | Group | Gender | Ethnicity | Age | Residence | Interests | |------|-------|--------|-----------|-----|-----------|-----------| | UB2 | Bournemouth | Male | White British | 65+ | BH9 resident | Local history and family history | | UB3 | Bournemouth | Female | White British | 55-64 | BH14 resident | Local history and family history | | UB4 | Bournemouth | Female | White British | 65+ | BH5 resident | Local history, family history, regional topography and mapping, legal records, and social history | | UD1 | Dorchester | Female | White British | 65+ | DT9 resident | Local history and social history | | UD2 | Dorchester | Male | White British | 65+ | DT1 resident | Local history and family history | | UD3 | Dorchester | Female | White British | 25-34 | DT4 resident | Local history, family history, regional topography and mapping, and religious history | | UD4 | Dorchester | Male | White British | 65+ | DT1 resident | Local history, family history, regional topography and mapping, and social history | | UD5 | Dorchester | Male | White British | 16-24 | DT1 resident | Local history and social history | | UD6 | Dorchester | Male | White British | 55-64 | DT1 resident | Local history and family history | | UD7 | Dorchester | Male | Rather not say | Rather not say | DT1 resident | Local history | | UD8 | Dorchester | Female | Rather not say | 55-64 | DT1 resident | Local history, family history, and religious history | | UD9 | Current users (U) | Male; White British; aged 55-64; DT2 resident | |-----|------------------|---------------------------------------------| | | Dorchester group (D) | Interested in: local history, family history, regional topography and mapping, and social history | | UD10 | Current users (U) | Female; rather not say; rather not say; DT1 resident | | | Dorchester group (D) | Interested in: local history and family history | | NUB1 | Non-users (N) | Male; White British; aged 16-24; BH3 resident | | | Bournemouth group (B) | Interested in: family history | | NUB2 | Non-users (N) | Female; White British; aged 45-54; BH18 resident | | | Bournemouth group (B) | Interested in: local history, family history, and social history | | NUB3 | Non-users (N) | Male; White British; aged 55-64; BH14 resident | | | Bournemouth group (B) | Interested in: local history, regional topography and mapping, and social history | | NUB4 | Non-users (N) | Female; White other; aged 25-34; BH4 resident | | | Bournemouth group (B) | Interested in: local history, family history, regional topography and mapping, religious history, and social history | | NUB5 | Non-users (N) | Female; White British; aged 45-54; BH10 resident | | | Bournemouth group (B) | Interested in: family history and social history | | NUB6 | Non-users (N) | Female; White British; aged 35-44; BH22 resident | | | Bournemouth group (B) | Interested in: local history and family history | | NUB7 | Non-users (N) | Male; White British; aged 35-44; BH8 resident | | | Bournemouth group (B) | Interested in: local history and family history | | NUB8 | Non-users (N) | Male; White British; aged 16-24; BH8 resident | | | Bournemouth group (B) | Interested in: local history and regional topography and mapping | | NUD1 | Non-users (N) | Female; White British; aged 65+; DT1 resident | | | Dorchester group (D) | Interested in: local history, family history and religious history | | NUD2 | Non-users (N) | Male; White British; aged 55-64; DT1 resident | |------|---------------|---------------------------------------------| | | Dorchester group (D) | Interested in: local history, family history, regional topography and mapping, and religious history | | NUD3 | Non-users (N) | Female; White British; aged 45-54; DT2 resident | | | Dorchester group (D) | Interested in: family history | | NUD4 | Non-users (N) | Female; White other; aged 55-64; DT2 resident | | | Dorchester group (D) | Interested in: local history, family history, regional topography and mapping, and social history | | NUD5 | Non-users (N) | Female; White British; aged 35-44; DT1 resident | | | Dorchester group (D) | Interested in: local history, regional topography and mapping, religious history, and social history | | NUD6 | Non-users (N) | Male; White British; aged 55-64; DT10 resident | | | Dorchester group (D) | Interested in: local history, family history, and regional topography and mapping | | NUD7 | Non-users (N) | Female; White British; aged 35-44; DT3 resident | | | Dorchester group (D) | Interested in: religious history and social history | | NUD8 | Non-users (N) | Female; White British; aged 45-54; DT6 resident | | | Dorchester group (D) | Interested in: local history and social history | Appendix II - Customer Circles
Overview
While we would recommend that in-depth primary research is conducted by trained and experienced researchers, customer circles is a method that cultural and heritage organisations can use to talk to, and gather direct feedback from, their audiences or participants. Typically this is achieved through group discussion sessions attended by 5-10 participants. These would be facilitated by someone from the organisation and last about 1.5 hours.
In research terms they follow the focus group methodology, but not necessarily with the same levels of rigour or analysis that would be applied by a trained research facilitator.
Customer circles can be carried out as ‘one offs’ to address particular issues or as part of a wider feedback strategy.
What are they good for?
- Gathering opinions and feedback that is attitudinal in nature. This may include for example, user experiences of a space or set of resources, testing ideas and gathering reactions to marketing materials
- By having a group together, discussing a topic, ideas develop and are discussed in a more fluid way than is possible through other types of research such as surveys.
- What you won’t get from a customer circle is robust feedback from a large sample of audience members. It is about depth rather than statistical robustness.
How do you set up a group?
Recruitment:
- You will need to recruit people to attend. The most common way of doing this would be to contact your attenders and ask them whether they would be interested.
- Calling by telephone works well because you can control the recruitment process and limit the number of participants that you need to contact. It also allows the potential participants to be put at ease about the nature of the research and what is required of them.
- Calls can be made by briefed members of your team who are confident in talking to customers.
- Depending on the nature of your discussion group, you will need to decide whether there are any particular audiences that you want to talk to; for example, local history enthusiasts, commercial researchers, personal researchers, lapsed users, frequent users or younger / older users.
- If you are looking to gather information from people who are not currently using your service, you may find it helpful to identify who you want to talk to in the first instance (e.g. special interest groups, particular demographic profiles etc.) and then go through existing networks and channels in order to recruit them. Open calls can be made through services such as Gumtree or local media advertising.
- You may also want to ask some questions when recruiting so that you know more about the profile of your potential group.
- You must not invite under 16’s to a group without parent/guardian consent. We would strongly advise that you should use a trained researcher for any groups that consist of under 16’s.
Incentives:
You may also want to provide an incentive for people to attend. You will have to gauge to what extent you think this is necessary, but typically a payment of £20-£30 as a thank you for their time and to cover any expenses is sufficient.
Follow up:
- When you have an agreement from someone that they are happy to attend, take any further contact details required and send them a confirmation of the group time and location.
- Two days before the group is held, you should contact them again as a reminder.
- Be very clear about where the sessions will be taking place, what time participants are expected to arrive, and the arrangements upon arrival (i.e. will they be met at the door etc.)
- One of the biggest issues around recruitment is that some people will fail to attend. It is worth recruiting ten for a group of seven or eight.
Group size:
- Do not be tempted to make your group large, with more than ten attending the discussion can become very unwieldy and hard to manage. You will find that in smaller groups people open up more and provide deeper feedback.
- It is better to run two small groups of five than one large group of ten. It’s actually a good idea to run more than one group on a topic (if you have time) as this will give you two discussions to compare. It will also ‘even out’ the affect you may have of strong characters influencing one of the discussions.
- If you are running a mix of sessions for different user types (i.e. frequent / non-users) it can be helpful to separate them out, as the experiences of the participants are likely to be different. Also, less frequent users may feel less confident about contributing if more experienced users are in the same group.
Setting up the space:
- Think about the area that you are going to use for the group, whether it is adequate for setting out the required number of chairs in a circle. It is also a good idea to have some type of coffee table in the middle of the circle to break up the space. Try to avoid sitting around a full size table, it can feel too much like a meeting.
- Offer refreshments on arrival and take a break half way through the group so that people can top up.
How do I facilitate a group?
Write a topic guide:
- To get the most out of a group you will need to be prepared. The best way to do this is by designing a topic guide in advance. This gives a structure to the session that you can follow.
- You may also want to think about any materials you need for the group, such as marketing literature. It is much better to show people information to respond to than to just tell them about it.
- Don’t be too ambitious with what you think you can cover in a session, try to cover a small number of topics in depth. Having said that, definitely have some topics ‘up your sleeve’ just in case.
- Try to combine discussion with other activities, such as using stickers to indicate strong likes and dislikes on marketing materials or using post-it notes to capture and share responses to specific questions.
Introduce the group:
- At the start of the session introduce yourself to the group and set the scene for the discussion. It is a good idea to also state some ‘house rules’, about respecting opinions, not talking over one another etc. If you have an info regarding exits in the event of an emergency also tell them. • If you intend to record the session then ask permission of the participants.
Guide the discussion:
• The facilitator should allow the conversation to flow naturally, and steer it through the topic guide.
• Try not to impose your views and opinions on the group, as a representative from the organisation, you will get in to a position where participants start to seek your views and ask you questions.
Draw out the key themes:
• Once the group has finished you will need to draw put the key themes and make conclusions. To help you do this, you should try to make some notes as soon as possible after the group.
• It can also help to have another member of your team present at the group to take down key points. Don’t assume one person can facilitate and take notes at the same time.
• You may also find it helpful to record the sessions, to help with writing up the findings. If you want to do this, you will need to ensure that the participants are happy for you to do so.
Overall, you may want to consider working with a research professional to mentor you through the first group with a view to working independently later.
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c57404a8b09c6b491c28e993626c421ebf3f5952 | National Procurement Strategy for Local Government in England 2014 Executive summary
This strategy sets out a vision for local government procurement and encourages all councils in England to engage with the delivery of outcomes in four key areas.
1 Making Savings
Councils are dealing with significant financial pressures resulting from reductions in government funding and rising demand. They need to make savings. This means using spending power wisely and strategically and setting targets for procurement and contract management by the effective use of:
- **Category management** in key areas of spend – like energy, ICT and construction – to make savings by maximising the value of spend. This includes developing and using more standard specifications for appropriate goods and services. Spend and supplier analyses provide a broad understanding of the local government supply market.
- **Partnering and collaboration.** By aggregating spend through effective collaboration or by sharing services on common goods and services without compromising the need for social value. Shared procurement services and shared procurement posts should allow all councils to recruit, develop and retain the best procurement resource and avoid unnecessary competition between individual councils for procurement expertise.
A corporate approach to **contract management.** Councils should demonstrate their effectiveness in gaining most value from contracts. They should obtain best value from supply chains through proper relationship management.
Implementing effective **performance monitoring and transparency.** This includes sharing commercial and performance data on common goods and services. Councils should ensure that published data, under the transparency code opens new markets for local business, the voluntary and community sectors, and social enterprises to run services or manage public assets.
Having an appropriate approach to **risk management** that is integral to the council’s corporate processes. Identifying and reducing fraudulent procurement practices in pre contract and post contract award and through the supply chain.
Finding alternative ways to meet user needs through **Demand management** Reducing costs and oversupply within the procurement and commissioning cycle. 2 Supporting Local Economies
Councils need to maximise the economic, social and environmental benefits to communities from every pound that is spent, and we believe that spend with SMEs and VCSEs can make a very significant contribution to local economic growth. This includes Social Value Act duties. Councils can do more to remove barriers faced by SME’s and VCSE’s bidding for council contracts such as by:
- **Inclusion of economic, environmental and social value criteria in all contracts.** Councils should be reducing waste by making sustainable choices when procuring products and services – helping them to cut costs, and meet their social, economic and environmental objectives.
- **Improving access for SME’s and VCSE’s.** Councils should ensure a wide range of suppliers are encouraged to do business with them through use of portals to advertise tender opportunities. Barriers to doing business with the council removed without compromising due process. SME’s and VCSE’s are encouraged to identify potential ‘partners’ with whom to form consortia to bid for council contracts. Councils should identify forward spend wherever possible and use this data to inform pre-market engagement and supplier planning.
3 Leadership
To be able to deliver, local government procurement needs to demonstrate leadership to increase its impact and influence across the public sector, councils need to:
- **Speak clearly with a single cohesive voice** to ensure Central Government policy takes into account the needs and differences of local government.
- **Signal commitment from the top** in each council and recognise the strategic importance of procurement. Procurement should be supported in each authority through the appointment of a councillor champion. Procurement should be seen as a driver to implement council policy.
- **Seeing procurement as part of a strategic commissioning cycle.** Delivery of this strategy requires stronger engagement and alignment of procurement with commissioners. Councils should identify strategic outcomes in relation to assessed user needs, and design and secure appropriate services to deliver these outcomes.
- **Developing a more commercially-focused procurement culture.** Councils should build better procurement competencies across the organisation by ensuring staff are equipped with the knowledge, training, and practical skills needed to derive maximum benefit from procurement practices. Councils will then be more influential with suppliers through taking a more commercial approach to procurement. 4 Modernising Procurement
To rise to the challenge local government procurement needs to modernise in terms of scope, use of technology and practices and procedures by ensuring that:
Procurement helps councils respond to financial pressures through commercialisation and income generation. Councils’ procurement staff are more commercially minded, and understand and realise benefits from all funding streams including how contracts can be developed to generate income.
Using outcome specifications and other methods to encourage supplier innovation to meet new challenges, including encouraging suppliers to demonstrate innovation through all stages of the procurement cycle.
Adopting e-procurement to increase efficiency and productivity and realise full benefits through the use of appropriate e-procurement solutions in procurement processes. In particular councils should consider how e-invoicing will help them and their suppliers to streamline administrative processes and improve supplier liquidity.
Taking advantage of the opportunities presented by the new EU directives which will allow council procurement processes to be quicker, simpler and less costly to run.
Section 2 of this strategy contains detailed recommendations for district councils, single tier and county councils and for professional buying organisations (PBO’s) to enable the outcomes to be achieved.
## Contents
| Section | Page | |----------------------------------------------|------| | Preface | 7 | | Foreword | 8 | | Section 1: Introduction and background | 10 | | Our vision | 10 | | The story so far | 11 | | The new policy context | 12 | | How national and regional bodies will support delivery | 13 | | Section 2: Outcomes and recommendations | 15 | | Making savings | 16 | | Supporting local economies | 22 | | Leadership | 26 | | Modernisation | 31 | Preface
Procurement in Local Government has never been more important than it is today. Our sector will have experienced a 42% cut in central government funding by the time this Parliament ends.
If we are going to manage our way through a further period of budget reductions and put life back into local economies, we must get better value from the £38 billion of revenue funding we spend each year with our suppliers.
Let’s be clear, we are not talking here about getting a better deal on paperclips. We are talking about how we commission major public services that affect the lives of millions of local people and how we commercially manage the suppliers with whom we contract.
In the past, there has been a poor perception across the whole public sector of the value that strategic procurement can bring, but now is the time for councils to recognise this and lead the drive to realise those benefits. It is time for councils to use procurement and commissioning to work together with a focus on developing strategic improvements that will help reduce costs and improve community benefits for our localities.
In short, if you want to make savings and garner benefits for your community this strategy is for you. I commend it to you.
I encourage you strongly to signal your council’s support for this strategy. Naturally, given the diversity of the local government community, you will not subscribe to every dot and comma. But your signature means you commit to the broad approach and are willing to play your part.
Councillor Shirley Flint Deputy Chair, Improvement and Innovation Board (2013-14) Local Government Association July 2014 Foreword
Local government is the best performing part of the public sector when it comes to procurement: we pay our prime suppliers on time; we place almost half of our business with local SME’s; and we use procurement to consider how it can improve the economic, social and environmental well-being of our communities. We remain committed to improving that performance, to get better value from our biggest suppliers, and to further streamline our processes for SME’s.
This is an essential element in our ambition to thoroughly ‘rewire’ local public services to benefit local people and save money for taxpayers. However, we are doing this in the context of unprecedented financial pressures, which will last until at least 2018-19, and amidst the pressing need to promote local growth in order to repair the damage done to local economies by the recession.
Clearly local government’s spending with suppliers has a pivotal role to play. It is a very significant amount of money. In revenue terms the sector spends around £38 billion a year (based on figures for 2012/13). Capital expenditure amounted to a further £18.9 billion in the same period.
This National Procurement Strategy (NPS) for Local Government sets out a number of ideas and recommendations that form a challenge to ourselves and Government. I see the following challenges as being key to improving procurement in local government:
1. Being more effective at commercial and contract management. Even before we let new contracts we need to ensure we’re getting the best out of the ones we’ve already entered into; we need to be more commercially minded in our dealings with suppliers - training our procurement staff will be key, and you will see our proposals later in this document.
2. Having a more strategic relationship with the professional buying organisations. And they in turn need to be more specialised, developing leading-edge practice in a specified field. We can learn a lot from the US Communities model, a procurement co-operative that asks suppliers to commit to (amongst other things) providing the lowest available pricing to councils.
3. Ensuring our prime contractors commit to prompt payment throughout the supply chain, we should no longer tolerate our SME’s having to wait longer for invoices to be paid than has been agreed for prime contractors.
4. Getting to grips with e-invoicing. There is legislation due on this in 2016, but there is no good reason to wait until then to implement e-invoicing. We need to push our suppliers towards this new technology now.
5. Sending a clear message about increasing the threshold for OJEU procurement to something more sensible around €5m. There is no evidence of significant cross border tendering to justify the imposition of such an onerous bureaucratic regime on local government procurement. Raising the threshold would really help us to simplifying procurement process and help us to drive economic growth. To meet the challenges before us we need a more strategic and commercial approach to the largest areas of spend, energy, construction and ICT and better contract management of key suppliers once we’ve let those contracts. This means engaging early with both markets and stakeholders in the major public services.
As part of this, of course, we need to balance the demand for savings with the necessity to promote local economic growth.
All of the key participants in the local government sector have come together to speak with a single voice in this strategy and to support its delivery. It is also very encouraging that we have received input from private sector and VCSE umbrella organisations including the Federation of Small Businesses (FSB), National Federation of Builders (NFB), Confederation of British Industry (CBI), Federation of Master Builders (FMB), National Council for Voluntary Organisations (NCVO), National Association for Voluntary and Community Action (NAVCA) and Social Enterprise UK (SEUK).
As procurement champion my role is to promote the strategy, oversee its implementation and challenge colleagues on progress. I expect colleagues to challenge me in return.
I will also ensure that local government increases its influence at the 'top table' nationally, when procurement decisions are being made that affect us all.
Councils cannot work in isolation. We need to collaborate on procurement and wider commercial activities and to gain maximum benefit we need to work with partners from right across the public sector. Collaboration will be a major theme for me as procurement champion.
Martin Reeves Chief Executive, Coventry City Council National Procurement Champion July 2014 Section 1: Introduction and background
Our vision
Local communities and taxpayers depend on councils to commission essential public services and to commercially manage suppliers. Procurement’s role is ‘strategic’ but it is not always recognised as such either from within or outside our own organisations.
Our strategic vision for local government procurement is:
• Commitment from the top in each council (from both the executive and senior managers) • more efficient use of the sector’s procurement resources • speaking with a single cohesive voice nationally and • exerting influence right across the public sector
Suppliers are also central to the vision. At their best they can help us solve problems, harness innovation and unlock savings. So a better, more strategic relationship with our suppliers and their trade or umbrella bodies is a further key tool for achieving our vision.
The National Advisory Group for Local Government Procurement (NAG) is the catalyst for turning this vision into a reality. It includes stakeholders from all the English regions and works closely with the Society of Procurement Officers (SOPO). The sector’s Professional Buying Organisations (PBOs) are crucial delivery partners, they will provide tactical delivery of framework contracts, advice and support to councils.
Through NAG and wider local government networks we have developed a strategy to bring the vision alive. Section 1 describes the background and policy context. Section 2 sets out the strategy in detail under four major themes. A new microsite, www.lgprocurement.org launched with this strategy, will bring together guidance documents, case study examples of good practice and a host of other resources to enable local government to share with and learn from each other as well as check their progress against this strategy.
Our objectives are that from 2014 all councils should be:
1 Making Savings
Councils are dealing with significant financial pressures resulting from reductions in government funding and rising demand. They need to make savings. This means using spending power wisely and strategically and setting targets for procurement and contract management. 2 Supporting Local Economies
Councils need to maximise the economic, social and environmental benefits to communities from every pound that is spent, and we believe that spend with SMEs and VCSEs can make a very significant contribution to local economic growth. This includes Social Value Act duties. Councils can do more to remove barriers faced by SME’s and VCSE’s bidding for council contracts.
3 Demonstrating Leadership
To be able to deliver, local government procurement needs to demonstrate leadership to increase its impact and influence across the public sector.
4 Modernisation
To rise to the challenge local government procurement needs to modernise in terms of scope, use of technology and practices and procedures.
The strategy includes a number of recommendations and councils are strongly encouraged to commit their support for considering and implementing these recommendations if they have not done so already, and sharing good practice through the LGProcurement microsite. They are there simply to focus collective effort.
Councils are called upon to start ‘raising the bar’ for their own organisations. But help is at hand. National and regional bodies and networks and PBOs have committed to play their part in supporting the delivery of the strategy.
We will gauge progress across local government in periodic update reports and revise commitments and actions as appropriate in consultation with the sector.
The story so far
Over the years a great a deal has been achieved in local government procurement.
The roots of today’s strategy can be traced back to the development of purchasing consortia in the 1970s (today’s PBOs) and the establishment of the Society of Purchasing Officers.
Through the first National Procurement Strategy (2003-06), to the establishment of Regional Centres of Excellence/Regional Improvement and Efficiency Partnerships and on to the current configuration of national and regional bodies and networks, the sector has sought to respond to the procurement challenges of service improvement and the efficiency agenda.
The economic crisis and public sector budget cuts provided the impetus for a yet more ambitious programme, and a new chapter was opened when the LGA published the Local Government Procurement Pledge followed by consultation on a new strategy Rising to the Challenge (March 2013). Over the past year LGA has, through NAG and with support of councils, been working on the three national categories of spend in ICT, Construction and Energy, a National ICT Commercial Category Strategy for Local Government and was launched in April. The ICT strategy aims to support councils procure the necessary technology systems and tools more cost effectively. Category strategies for construction and energy will follow.
In parallel, LGA has worked with the Audit Commission on a guide to Making Savings from Contract Management, that was launched in November 2013 and updated and published the Councillor Guide to Procurement. LGA also initiated and funded a programme to encourage councils to develop innovative and replicable category management procurement initiatives, their stories were published as a set of case studies as Procurement Category Management Projects, the story so far in October 2013.
LGA continues to engage with Government on national issues such as the Lord Young reforms and the new EU procurement directives and is working closely with the Cabinet Office and Crown Commercial Service in the development and delivery of the Commissioning Academy.
Through broad-based consultation it became clear that there is support for a more strategic approach to procurement and supplier management in the major categories of local government expenditure (strategic category management), alongside a desire to speak with a single, cohesive voice on these matters and exert more influence ‘at the top table’. These are among the major themes addressed in the present strategy.
The new policy context
The procurement policy landscape in 2014 is represented in the graphics below. This illustrates the major policy-related developments which form the context into which this new strategy is being launched. How national and regional bodies will support delivery
This strategy is endorsed by the LGA’s Improvement and Innovation Board. Martin Reeves, Chief Executive of Coventry City Council, is its senior most champion and represents the sector’s interests in relation to procurement issues at the top table nationally.
On a day-to-day basis NAG owns the strategy and is responsible for overseeing its implementation including the preparation of periodic update reports.
NAG will work with SOPO to promote the approaches and good practice set out in the strategy and will provide peer help and support where appropriate.
The LGA has developed a microsite for the strategy and publication of good practice resources to support implementation. LGA will also tailor existing programmes to align with the commitments in the strategy (including the Leadership Academy, Productivity Experts and Peer Challenge).
As a sector-led strategy a major role will fall to regional head of procurement networks which will take a sector-led approach to supporting each other including developing programmes of support tailored to the needs of councils in the region including regional conversations
Further, more detailed, outcomes and recommendations are set out in Section 2 of this strategy. Section 2: Outcomes and Recommendations
Councils and groups of councils should be setting their own time frames and outcomes within the context of the overall outcomes set out in this strategy.
A number of formal and informal groups exist within the local government procurement landscape, throughout the consultation phase of this strategy we engaged inter alia with the following:
- North East - NEPO acts as a procurement service for all 12 councils in the North East. NEPO are also referred to as a Professional Buying Organisation
- North West - AGMA and Connected Procurement
- Yorkshire and Humber – YORProcure
- West Midlands – West Midlands Heads of Procurement Group
- East Midlands – East Midlands Heads of Procurement Group
- East of England – EELGA Procurement Group
- London Councils – London Procurement Strategy Board
- South East - SE7 group of Heads of Procurement
- South West – Devon Procurement Partnership, South West Procurement Board
- Professional Buying Organisations, YPO, ESPO and CBC.
All of the groups were keen to continue their engagement with implementation of the strategy and signalled their commitment to continue group discussions, self help and support and to highlight to NAG any areas where national support, signposting and lobbying would be helpful.
Councils are strongly encouraged to commit to consider the recommendations, but it is recognised that given the complexity of the sector one strategy does not fit all, and a localist approach is encouraged. Whilst the recommendations for district and single tier level councils are sometimes different, all councils are encouraged to meet the higher recommendation where they can. It is expected that councils will incorporate the recommendations in their own procurement strategies.
Councils should also commit to sharing information and good practice in order that local government can improve through a sector-led approach. Theme A: Making Savings
Overview
Councils are dealing with significant reductions to finances and increasing demand. They recognise the need to use their spending power wisely and strategically and are therefore setting spend targets for procurement and contract management.
In order to demonstrate leadership of key spend categories to address financial pressures, drive market management and to develop new models of service delivery through procurement, councils are increasingly adopting a ‘category management’ approach as a starting point to identify key spend areas.
Category Management in procurement can help to reduce the cost of buying goods and services, reduce risk in the supply chain, increase overall value from the supply base and gain access to more innovation from suppliers. It is a strategic approach that focuses on the vast majority of organisational spend on both services and supplies and if applied effectively seeks to reduce demand, simplify the way we buy and aggregate spend across the entire organisation or multiple organisations. The results can be significantly greater than traditional transactional based purchasing.
As part of the work underpinning this approach NAG is exploring a category management approach in three main categories of spend, Energy, ICT and Construction all of which will have their own category strategies underpinning this national procurement strategy.
Councils have been encouraged to establish partnering and collaboration arrangements for at least a decade and many have been doing just so for much longer. Much has been done already, including a move to more joint and integrated commissioning but the increasing issues relating to financial pressures and the need to demonstrate the impact that improved efficient procurement can have on outcomes for communities makes this even more important going forward. We can learn from the many councils that have already entered into shared service relationships.
Working with the wider public sector is becoming more and more normal practice, councils need to consider integration of their demand and supply chains with their colleagues in fire, health, police and other wider public sector organisations to appropriately aggregate spend, use wider experience and greater expertise and to reduce duplication of work.
Councils spend significant and increasing amounts via contracts with suppliers, often as part of their transformation to meet financial challenges. Councils need to be more effective in contract and supplier management to ensure they maximise both the opportunities for additional income generation and the potential savings these bring. Contract management is more than ensuring suppliers meet their contractual obligations, it can also help councils to identify and manage their own and their suppliers’ risks, and achieve savings and continuous improvement throughout the life of the contract.
Councils should be engaging more with each other to manage performance and transparency of suppliers as long as this is proportionate to the budget and level risk in the contract. Councils should actively manage major/common suppliers and build higher volume of orders to reduce supplier prices. Councils should proactively discourage the use of long or inflexible contracts and single supplier arrangements. In order to reduce additional costs through the procurement cycle, councils need to understand and develop a proportionate Risk management approach. They need to maintain reliable, up to date information about risk, put in place a monitoring and decision making process and decide the most appropriate person to deal with the risk. This does not mean that councils should be risk averse, they should take a balanced approach, thinking about the likelihood of the risk happening against the impact and the cost of action.
Councils need to better understand, manage and reduce demand, addressing several outcomes through provision of services that better targets scarce resources and shifts away from ‘universal’ services approach including reducing the levels of services provided. Demand management changes the roles and relationships between service provider and customer. Procurement and commissioning teams should understand and find alternative ways of meeting customer needs. Demand management practices often involve changing the respective roles of provider and customer and the relationship between them, such as by promoting independence, facilitating peer to peer support and by empowering customers to decide how budgets are spent.
What should LGA and NAG be doing? • Setting out the rationale for a strategic approach for the top three spend areas (Energy, Construction and ICT) including sharing of good practice and agreeing further spend areas • Commissioning and using a national, high level spend analysis to inform strategic discussions with local government’s major suppliers • Engaging with PBO’s to facilitate strategy development through acting as an ‘intelligent client’ • Providing advice and assistance on procurement of major projects, for example PF2 • Setting out standard clauses for councils and PBO’s to use in contracts which allows for data to be shared • Making further guidance available on how to mitigate against procurement risks and fraud • Considering how greater transparency in contracts can be achieved.
What should regional groups be doing? • Encouraging the use of local and regional spend analysis tools to improve visibility and potential for savings • Helping councils and groups of councils to compare performance and costs with each other and making available national performance data • Signposting to good practice and potential sources of help with procurement expertise
Outcomes and Recommendations
1. Category Management
Outcomes • Category management helps councils to make savings by maximising value from areas of spend • Councils achieve savings through developing and using more standard specifications for appropriate goods and services • A broad understanding of the local government supply market is gained through appropriate spend and supplier analyses Recommendations
For district councils
- Recognise the benefits and tap into category management plans of other public sector organisations and through PBO’s
- Review existing framework arrangements at early stages of procurement to reduce duplicated effort
- Recognise the benefits from engaging with a national approach and ensure timely publication of data to ensure a robust analysis can take place
For single tier and county councils
- Set out the rationale for a category management approach in the corporate procurement strategy
- Invest in category managers or, as a minimum, commit to the outputs from the national or regional strategies where appropriate
- Identify the main spend categories in their council and have a clear category management strategy in place to ensure value for money (VFM) for these categories of spend
- Review existing framework arrangements at early stages of procurement to reduce duplicated effort
- Recognise the benefits from engaging with a national approach and ensure timely publication of data to ensure a robust analysis can take place
For PBO’s
- Highlight good practice examples through case studies
- Engage with NAG to develop category management approaches and be integral to the approach
- Develop outline business cases for a category approach
- Develop outcome based specifications through early engagement with councils and the market
- Analyse spend through frameworks and publish data on spend
2. Partnering and Collaboration
Outcomes
- Councils make savings by aggregating spend through effective collaboration or via a shared service on common goods and services without compromising the need for social value and providing opportunities for local businesses
- Shared procurement services and shared procurement posts allow all councils to recruit, develop and retain the best procurement resource and avoid unnecessary competition between individual councils for procurement expertise
Recommendations
For district councils
- Set out the approach to partnering and collaboration in the corporate procurement strategy
- Explore opportunities to procure through existing routes to market, in particular harnessing existing shared service or PBO resources
- Explore the options relating to sharing services or posts with appropriate partners
For single tier and county councils
- Set out the approach to partnering and collaboration in the corporate procurement strategy
- Explore opportunities to procure through existing routes to market and each key procurement is objectively justified • Set targets for savings or income generation from collaborative spend • Consider the business case for new models of delivering procurement services • Maximise the use of all available procurement resources including across council boundaries.
For PBO’s • Engage with councils to develop strategies for common goods and services • Work together at a national level • Simplify the issues relating to finding suitable framework agreements • Act as the ‘glue’ between framework users and providers, ensuring best value is achieved from collaboration on contracts and evidence of this is available and transparent • Actively engage with councils and national bodies to build into partnering and collaboration strategies
3 Contract and supplier management
Outcomes • A corporate approach to contract management means councils can demonstrate their effectiveness in gaining most value from contracts • Local authorities obtain best value from supply chains through proper relationship management
Recommendations For district councils • Measure contract outputs and key performance indicators to ensure competitiveness over the life of the contract • Ensure visibility of supply chains • Expect main contractors to act fairly with supply chains and mandate timely payment to subcontractors through contract clauses
For single tier and county councils • Contract management is part of the responsibilities of the councillor champion • Integrate contract management within the council’s procurement and commissioning models • Invest resources in developing and sustaining a capacity for good contract management • Demonstrate efficiency savings through better contract management • Scrutinise strategic contracts post award and ensure benefits are achieved • Monitor and enforce internal compliance to ‘on contract spend’ • Understand key suppliers and develop and implement performance indicators that are aligned with business outcomes • Identify second tier spend and activity for high value/high risk contracts • Develop and agree exit strategies within all major contracts • Expect main contractors to act fairly with supply chains and mandate timely payment to subcontractors through contract clauses For PBO’s • Undertake proactive management of framework contracts with and on behalf of framework users • Expect main contractors to act fairly with supply chains and mandate timely payments to subcontractors through contract clauses • In consultation with NAG, take a lead on appropriate key strategic relationships across the sector
4 Performance and Transparency
Outcomes • Supplier performance on contracts increases, and costs decrease across the whole sector through effective performance monitoring and transparency • Innovation and transparency is improved because councils share commercial and performance data on common goods and services • Published data, under the transparency code opens new markets for local business, the voluntary and community sectors, and social enterprises to run services or manage public assets.
Recommendations
For district councils • Baseline contract spending and outcomes internally over time and with other councils and use this information to inform their contingency planning and re-competition strategies • Join together with other councils and partners to share information that makes prices and performance more open and transparent • Publish data in relation to contracted-out services in accordance with the Transparency Code • Ensure the rights to the data created as a result of a service being contracted out remains with the council
For single tier and county councils • Put systems in place to map contracts, measure spend, collect feedback and measure the benefits achieved • Engage with regional or national information and data sharing • Insist on transparency throughout the supply chain • Set savings targets that are performance managed. • Publish data in relation to contracted-out services in accordance with the Transparency Code • Ensure the rights to the data created as a result of a service being contracted out remains with the council • Extend the requirement to publish information on performance and costs to contractors
For PBO’s • Make performance data on major PBO framework contracts available • Make pricing models and rebates transparent and available • Share framework tender documents and user guides with framework customers in order to properly inform mini-competitions • Provide framework contract data to councils in a format that can be published 5 Risk and Fraud Management
Outcomes • Risks are identified and managed through an approach to risk management that is integral to the council’s corporate processes • Fraudulent procurement practices are identified and reduced in both the supply chain and post contract award.
Recommendations For district councils • Where no dedicated procurement resource exists, risks and the implications of poor procurement is identified through corporate risk processes • Proactively audit contracts to check for fraud • Include whistleblowing policies as part of contract conditions
For single tier and county councils • Risk management should be integrated into Procurement processes. It is considered early, discussed with suppliers and regularly monitored • Identify strategically important (high value and/or high risk) contracts on the risk register and regularly monitor both by officers and members • Proactively audit contracts to check for fraud • Include whistleblowing policies as part of contract conditions • Require main contractors to mirror these policies in their subcontracting arrangements
For PBO’s • Demonstrate how risk can be minimised for councils whilst still providing best commercial outcomes
6 Demand Management
Outcomes • Costs and oversupply are reduced through implementation of demand management techniques within the procurement and commissioning cycle.
Recommendations For district councils • Councils build in a demand management approach before procurement begins • Councils seek alternative mechanisms to procure customer needs
For single tier and county councils • Councils build in a demand management approach before procurement begins • Ensure procurement and commissioning strategies and processes take account of demand management techniques • Involve procurement teams at an early stage in developing alternative ways to meet demand Theme B: Supporting Local Economies
Overview
Councils must focus on providing the maximum benefit into their communities from every taxpayer pound that is spent and with their economic development role, take responsibility for generating economic, environmental and social growth in local communities. The Public Services (Social Value) Act of 2012 requires councils to consider social value in all services contracts with a value above the EU threshold. Social Value can mean many different things, for example the inclusion of targeted recruitment and training opportunities in public contracts that can make a contribution to addressing the issue of poverty and reduced social mobility.
The private and the voluntary sector organisations that are so important to local and regional economies need to view council contracts in a positive way and want to do business with their local authorities. Councils need to continue to make better use of their purchasing power to create opportunities; for jobs and training, for regeneration and to maximise value for money.
Through the arrangements they make for procurement councils can develop essential local infrastructure. They enjoy wide powers in this area including the power to promote ‘community wellbeing’ and through the Localism Act 2011 have a ‘general power of competence’. Through the Localism Act, councils - often working together and through Local Economic Partnerships - are able to take on new functions that help them in this task.
In order to encourage a mixed range of suppliers to deliver value for money services councils need to encourage suppliers to bid for new or emerging requirements, to be innovative and to work collaboratively with other providers in the economy.
Councils can help to remove barriers to effective working by improving access to council tendering opportunities, being open and transparent about what we have already procured and as far as possible by identifying and publishing future requirements.
What should LGA and NAG be doing?
• Ensuring PBO’s support the needs of local government • Capturing and disseminating best practice • Developing a locality based approach of sustainable procurement across the sector • Engaging with national portal providers to reduce duplication and improve understanding of best practice • Working at a national level with trade organisations such as FMB, FSB, and VCSE umbrella bodies such as NCVO, NAVCA, SEUK to agree how to disseminate best practice to councils and to providers, including helping groups of providers to form consortia • Highlighting issues relating to lateness of Government funding that create barriers to allowing councils to identify forward spend • Setting out standard clauses for councils to use in relation to fair payments to sub-contractors
What should regional groups be doing?
• Helping to identify the right balance between those goods and services that should be procured regionally or nationally to obtain aggregation and those that are best provided locally to support local sustainability and business development. Outcomes and Recommendations
1 Economic, Environmental and Social Value
Outcomes • Councils gain maximum value from procurement through inclusion of economic, environmental and social value criteria in contracts for good/services and works • Councils reduce waste by making sustainable choices when procuring products and services - helping them to cut costs, and meet their social, economic and environmental objectives.
Recommendations For district councils • Consideration is given as to how to obtain social value in all contracts over the EU threshold • Sustainability is considered at the 'identify need' stage of the procurement cycle
For single tier and county councils • An officer social value champion is appointed and provides leadership on issues relating to social value. • Social value opportunities are assessed in all tenders, including those below the EU thresholds and for goods where appropriate • Bidders are requested to demonstrate community benefits through the whole supply chain • Consider and describe how the economic, social and environmental well-being of communities can be improved • Ensure that social value requirements do not cause unintended consequences (eg apprentices being unable to complete their apprenticeships as contracts always require ‘new’ apprentice places to be created). • Take account of the powers in the EU regulations that encourage use of mutuals, social enterprises and supported factories • Build in sustainability into the whole procurement cycle • Social, Economic, Environmental assessments are undertaken for each procurement project • Consider ethical issues, including fair pay, zero hours contracts, child labour and animal testing throughout the supply chain
For PBO’s • Ensure framework contracts allow for social value evaluation criteria to be included in mini-competitions based on differing council needs • Encourage delivery of best possible services by mutual dialogue that focusses on reducing duplication, increasing efficiency and achieving community benefits • Make framework contracts more accessible to smaller suppliers and VCSE’s • Make more use of area based lots in framework contracts • Build in sustainability into framework contracts 2 Improving access for SME’s and VCSE’s
Outcomes • A wide range of suppliers are encouraged to do business with councils through use of portals to advertise tender opportunities • Barriers to doing business with the council are removed without compromising due process • SME’s and VCSE’s are able to identify potential ‘partners’ with whom to form consortia to bid for council contracts • Councils identify forward spend wherever possible and use this data to inform pre-market engagement and supplier planning
Recommendations For district councils • Identify all procurement opportunities over £5,000 through regional portals • Ensure websites make it clear which portals are being used to advertise tender opportunities and how suppliers can register. • Measure the amount of local spend as a way of identifying and reducing the barriers for smaller organisations in bidding for council contracts • Develop or update and publish the ‘selling to the council’ guide • Mandate payment by suppliers to their subcontractors be no greater than those in the primary contract, through contract clauses. • Engage with single, simplified PQQ’s such as PAS91 for construction • Learn from and engage with the supply base and other councils on a regional basis through market days • Ensure that lotting strategies do not create unwanted barriers for smaller businesses • Link into existing framework contracts which outline how consortia can be encouraged
For single tier and county councils • Identify all procurement opportunities through local or regional portals and national portals where appropriate • Encourage suppliers to sign up to regional and national portals as appropriate • Ensure websites make it clear which portals are being used to advertise tender opportunities and how suppliers can register. • Measure the amount of local spend as a way of identifying and reducing the barriers for smaller organisations in bidding for council contracts • Engage with local umbrella bodies such as FSB to ensure that procurement and engagement strategies will not inadvertently discourage suppliers • Ensure procurement processes are not overly-rigid, cut off from day to day service provision or contain disproportionate requirements (eg insurance levels) • Require prime contractors to report any failure to comply with payment terms and mandate payment by suppliers to their subcontractors be no greater than those in the primary contract, through contract clauses. • Engage with single, simplified PQQ’s such as PAS91 for construction • Learn from and engage with the supply base and other councils on a regional basis through hosting market days for future projects • Ensure that lotting strategies do not create unwanted barriers for smaller businesses • Engage in proactive pre-market engagement with the supplier base and through the commissioning process with users and advocates • Allow sufficient time in the procurement process for suppliers to form consortia • Make suppliers aware of trading opportunities and secure their input and expertise
For PBO’s • Advertise procurement frameworks through appropriate portals • Develop portals in conjunction with councils • Ensure procurement processes help smaller organisations win business • Engage in market days • Mandate timely payment to subcontractors through contract clauses • Ensure lotting strategies are locally focussed where appropriate • Encourage consortia through market days. Theme C: Leadership
Overview
Councils have led the way in the public sector, demonstrating initiative and resourcefulness to rise to the social, economic and environmental challenges that our communities are facing. It is this willingness to think about doing things differently, then actually take action, that has made local government the most efficient part of the public sector.
In order to pursue the sector’s interest nationally and act as a national intelligent client, the sector should speak with a single cohesive voice through the National Advisory Group for Local Government Procurement.
There should be a commitment from the top at each council to procurement excellence. Councils should recognise the strategic importance of procurement and how it can help in improving the delivery of public services. Chief executives, elected members and senior officers should oversee and support a strategic approach to procurement. Procurement professionals themselves must demonstrate a corporate contribution and be seen as a corporate resource but procurement should not be viewed as something only procurement professionals do, councils should ensure that all staff involved in the procurement and commissioning cycles strive for procurement excellence.
Councils are increasingly using a strategic commissioning approach to the delivery of services for their communities. There has been a lot of debate on definitions of and distinctions between ‘commissioning’ and ‘procurement’, this strategy recognises that procurement is a core part of a commissioning cycle.
- Commissioning is the process of ensuring that outcomes identified in the council’s needs analysis, are delivered through the right service, and the right models of delivery (whether public, private or other sectors through voluntary service sector, or through social enterprises)
- Procurement is the process of acquiring goods, works and services. It includes acquisition from third parties and also from in-house providers. The process spans the whole cycle from identification of needs, through to the end of a service contract or the end of a useful life of an asset. It involves early stakeholder engagement, assessing the impact on relationships and linkages with services internally and externally, options appraisal and the critical ‘make or buy’ decision and determining the appropriate procurement strategy and route to market.
In order to make the most of our influencing role, there needs to be early and stronger engagement with markets, and in particular with commissioners of services, to decide on whether a procurement route is the best option for the service being commissioned. Procurement staff should use their understanding of existing markets to help commissioners make a value for money decision and, if necessary, to help consultation with the market to appraise the potential delivery models, within the fairness and transparency rules.
Councils should be engaging with the development and delivery of commercially-focused training. This might include professional training eg through CIPS, as well as more technical skills-focused training. Councils should also be considering succession planning. Some councils and PBO’s have worked hard at encouraging their staff to become professionally qualified and are committed to continuing with this. A number of councils and PBO’s also have apprenticeship programmes which encourage entry into the profession. Local government could take advantage of the relatively untapped wealth of skills, for example by helping non-procurement staff engage with PBO’s, for example by sharing academic dissertations or by hosting work experience events for apprentices. What should LGA and NAG be doing?
• Providing a focal point for ‘one cohesive voice’ through the National Advisory Group, taking the lead in highlighting the role of procurement is not just about cash savings, but using procurement to deliver on economic growth and other council objectives
• Providing national leadership and direction on procurement matters and highlighting the importance of a strategic approach through the NAG national sponsor
• Building alliances with other national organisations, trade bodies and umbrella bodies to jointly lobby on issues that impact on procurement/commissioning processes
• Showcasing and sharing good practice, through promotions of this national strategy to influence Government and the wider public sector
• Helping councils to better understand new models of service delivery, eg mutuals, trading, outsourcing
• Updating and disseminating guidance and hosting events and leadership development for councillors in relation to procurement
• Continuing to support and encourage engagement with the Commissioning Academy that supports greater collaborative/place based commissioning
• Developing, in partnership with CIPS and others, a syndicated ‘Corporate Award’ for formal procurement training
• Developing template training materials for suppliers on the new EU directives
What should regional bodies be doing?
• Providing peer help and support to procurement officers through the Society of Procurement Officers in Local Government
• Joining together as groups of councils commission technical focused training such as negotiation skills, contract law
Outcomes and Recommendations
1 Single Cohesive voice
Outcomes
• Central Government policy takes into account the needs and differences of local government because local government procurement speak clearly with one cohesive voice
Recommendations
For district councils
• Engage with procurement networks to ensure visibility of and input into policy
• Join with PBO’s to showcase and share good practice and to influence Government and the wider public sector
For single tier and county councils
• Engage with networks to encourage discussion and input into NAG as a national voice
• Join with PBO’s to showcase and share good practice to influence Government and the wider public sector For PBO’s • Engage with NAG as a stakeholder on behalf of councils • Co-ordinate forums for policy voices • Join with NAG and councils to showcase and share good practice to influence Government and the wider public sector
2 Commitment from the top
Outcomes • Procurement is recognised as strategically important by chief executives, members and senior officers within local authorities • Procurement is supported in each authority through the appointment of a councillor champion • Best overall value has been considered in all council’s addressable third party spend • Procurement is a driver to implement council policy
Recommendations For district councils • Provide periodic updates senior managers and elected members on implementation of good practice (set out in this NPS) and its relevance to the organisation • Encourage an elected member champion for procurement • A senior level director takes overall strategic responsibility for procurement and ensures full value is extracted from all procurement decisions • Link the procurement strategy to the corporate strategy
For single tier and county councils • Overall strategic responsibility for procurement rests at Director level and councils are committed to a strategic approach to procurement and delivering outcomes from this NPS • Ensure there is a strategic alignment of procurement with Finance Director/s151 Officer or Director of Business Transformation • Provide periodic updates to senior managers and elected members on implementation of good practice (set out in this NPS) and its relevance to organisation • An elected member champion from the executive has procurement, commissioning and contract management as a substantial part of their portfolio • Procurement professionals influence all third party spend • Procurement professionals work closely with their commissioning colleagues to ensure best possible outcomes are achieved • The procurement strategy underpins the corporate strategy and a commitment to achieving the wider corporate objectives of the council is demonstrated
For PBO’s • Highlight good practice and provide evidence of the impact of good collaborative procurement. • Where elected members are part of PBO Board Structures, they support and promote good procurement practice in their own councils • Adopt this NPS and engage with NAG on how to support policy 3 Commissioning
Outcomes • Councils identify strategic outcomes in relation to assessed user needs, and design and secure appropriate services to deliver these outcomes • Councils better understand and manage demand through the commissioning process to better target services efficiently and effectively
Recommendations For single tier and county councils • Use a strategic commissioning approach to appraise new service delivery models • Procurement and Commissioning staff work together to ensure best outcomes for service users • Demonstrate a willingness to move to multi-functional delivery • Set out a corporate approach to decommissioning services that includes:
- Clear objectives
- Co-produced products and strategy
- Communications strategy
- Transparency
- Timescales and timetable
- Risk management
- Defined roles for those involved
4 Procurement Training
Outcomes • Councils build better procurement competencies across the organisation by ensuring staff are equipped with the knowledge, training, and practical skills needed to derive maximum benefit from procurement practices. • Councils are more influential with suppliers through taking a more commercial approach to procurement • Council officers understand and implement the flexibilities afforded by the new EU Procurement Directives
Recommendations For district councils • Engage with other councils to ‘piggy back’ onto training and development programmes • Ensure senior officers are involved directly in high value contracts. • Recruit consultants with commercial skills to help with developing a more commercial approach. Knowledge transfer should be part of the consultancy contract. • Engage with training on new EU Procurement Directives either through other councils or directly
For single tier and county councils • Invest in officers having the professional, leadership and interpersonal skills required to deliver council objectives through better procurement. • Implement a development programme that takes into account the new context and models for good procurement • Encourage councillors to engage with procurement and commissioning training being offered through the LGA Leadership Academy • Invest in developing commercial skills including costs and profit, the market and service quality, relationship building and renegotiation skills • Engage with training on new EU Procurement Directives • Cascade training where appropriate across the council and to districts
For PBO’s • Continue to develop professional and technical skills in procurement • Publish academic dissertations where appropriate for the benefit of the sector • Support councils with skills and expertise in supplier relationship management • Engage with training on new EU Procurement Directives • Cascade training where appropriate to councils and to districts Theme D: Modernisation
Overview
Recognising the importance of political drive and vision behind increasing commercial activity to drive financial self-sufficiency, there is an increasing role for procurement in commercialisation and income generation. Renegotiation of existing contracts could be a useful source of further savings or income but procurement officers need to see each new contract they negotiate as an opportunity for a more commercial approach which may also include, exploiting assets, selling services and understanding and reducing costs through cost/benefit analysis.
In order to get best value from the market, the best councils are encouraging supplier innovation. This may be through hosting supplier or provider innovation days on specific procurement projects, through allowing for innovative tenders in the procurement process or by moving towards outcome based specifications that focus attention on the results – or outcomes – that the services are intended to achieve. We should be sharing information about innovation through case studies, discussion forums and sharing templates.
A wide range of e-procurement tools already exist, for example e-marketplaces, e-tendering and e-invoicing. Studies have concluded that the UK public sector falls behind our European counterparts, particularly the Scandinavian countries and particularly in the area of e-invoicing which is due to be adopted as a new EU Directive in 2016. Councils should be looking to realise the benefits from e-invoicing and should now be encouraging their suppliers to embrace this technology at the earliest opportunity.
The Government is expected to transpose the new EU Directives into UK Law late in 2014, the new directives will bring increased flexibilities for councils and businesses, freeing up markets and facilitating growth. There will also be a new light touch concessions directive ie where the consideration consists in the right to exploit works or services or that right together with payment (eg toll bridges, canteen services) and operating risk is transferred to the supplier. A new innovation partnerships procedure will be introduced which allows authorities to encourage suppliers to develop works, supplier or services not currently available on the market, through long term partnerships.
What should LGA and NAG be doing?
• Promoting the Trading Powers that councils have through the Localism Act • Promoting good practice and innovation through the microsite, conferences and regional sharing • Setting out a business case and develop a toolkit for e-invoicing • Engaging with CCS to promote and deliver training in the use of the new EU Directives • Making the case to Government for an upward revision of the EU Thresholds to €5,000,000 Outcomes and Recommendations
1 Commercialisation and income generation
Outcomes • Councils procurement staff are more commercially minded, and understand and realise benefits from all funding streams including how contracts can be developed to generate income
Recommendations For all councils • Invest in training and developing commercial acumen for new and existing staff • Develop forward savings and income generation plans
For PBO’s • Share commercial strategies and insights with councils
2 Supplier Innovation
Outcomes • Suppliers are able to demonstrate innovation through all stages of the procurement cycle.
Recommendations For district councils • Join with other councils and PBO’s to engage in supplier market and innovation days • Ensure terms and conditions are flexible enough to allow for changes in technology during the life of the procurement • Use outcome-based specifications that include the minimum technical and performance requirements and focus on a statement of the problem that needs to be solved
For single tier and county councils • Use early market engagement, and set out well-structured procurement processes, to allow for innovative approaches to be put forward • Harness and proactively encourage supplier innovation • Develop and run innovation workshops with supply base • Ensure terms and conditions are flexible enough to allow for changes in technology during the life of the procurement • Use outcome-based specifications that include the minimum technical and performance requirements and focus on a statement of the problem that needs to be solved
For PBO’s • Engage in council’s and their own market days 3 Using technology
Outcomes • Councils increase efficiency and productivity and realise full benefits through the use of appropriate e-procurement solutions in procurement processes • Use of e-invoicing helps councils and suppliers streamline administrative processes and improves supplier liquidity
Recommendations For district councils • Use electronic means for tendering processes in line with EU Directives • Work with suppliers to encourage a move to more e-business • Consider making e-invoicing a contractual requirement
For single tier and county councils • Use electronic means for tendering processes in line with EU Directives • Work with suppliers to encourage a move to more e-business • Outline the benefits of e-invoicing to suppliers helping them to do business electronically • Implement e-invoicing and move quickly to realise benefits of 100% take-up • Set a performance target and report on value and time to pay via e-invoicing • Consider making e-invoicing a contractual requirement
For PBO’s • Use electronic means for tendering processes in line with EU Directives • Outline benefits to suppliers and help them to do business electronically • Develop a framework contract for e-invoicing solutions available to suppliers
4 EU Directives
Outcomes • Council procurement process are quicker, simpler and less costly to run through use of the new EU Procurement directives
Recommendations For all councils and PBO’s • Take full advantage of the free face to face and e-learning available through CCS • Cascade training to council officers and elected members outside of the ‘procurement team’ • Maximise the flexibilities afforded in the new EU Directives
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eb3afd12fff1b3814ce9f1a670a1763cd555fcf8 | The potential for energy efficiency and renewable energy
A guide for councillors and officers
## Contents
| Section | Page | |--------------------------------------------------------------|------| | Foreword | 4 | | Executive summary | 5 | | Introduction | 7 | | The potential for energy efficiency | 11 | | The potential for renewable energy | 15 | | Key questions for councillors and senior officers to consider| 24 | Foreword
Over the previous Parliament councils saw their central government funding cut by 40 per cent. The Comprehensive Spending Review has handed down a further £4.1 billion funding cut over this Spending Review period and comes on top of almost £10 billion in further demand-led cost pressures facing councils by the end of the decade.
It continues to be a very challenging time for local government and it is widely accepted that in terms of making savings, the easy wins have been carried out and councils are now having to find new and more innovative ways of saving money and generating income.
I am therefore pleased to introduce this report which sets out the scale of the financial opportunities available from energy efficiency and renewable energy sources. The report shows that the potential savings for low cost, quick payment energy efficiency measures alone range from £60,000 to £2.4 million a year for an individual council.
A large number of councils have already begun realising the potential for energy-related savings and income, but there is still huge untapped potential. And most exciting of all are the possibilities in what is still an evolving market with new technologies being developed and existing technologies becoming increasingly more affordable. I encourage you to read on to find out more about the different technologies councils are using, and to explore what the scale of opportunity is for your council using the handy checklist of questions for councillors and senior officers to ask.
Councillor Shirley Pannell Deputy Chair, Improvement and Innovation Board Executive summary
Councils have long been at the forefront of the move to a low carbon economy by adopting energy efficiency and renewable energy technologies. This has already led to impressive cost savings and a wide range of additional benefits. As local government continues to suffer cuts to its budgets there is an even stronger incentive for councils to maximise the potential for energy-related income and savings.
Recent years have seen councils invest time and energy in making better use of their land and property assets in response to the reduced resources available to them. In 2012/13 the total value of local government land and property was estimated by the Audit Commission to be almost £170 billion and in 2012 councils’ total energy spend was estimated to be approximately £900 million with a further £190 million spent on transport fuels in vehicles. Although many councils have made significant strides in adopting energy efficiency and renewable energy technologies there is still a large untapped potential within these local government assets.
Even for councils that have been championing sustainable energy for some time, new opportunities are constantly becoming available through technological development, changing project economics and maturing supply chains.
This report explores the opportunities councils have to make direct cost savings or additional revenue for councils through energy efficiency and energy generation. For this reason it focuses in on council owned assets and operations where the council pays the energy bill, or renewables projects within their boundary where the council can bring in a revenue stream. The report also considers schools and leisure centres as councils still play an important support role in energy matters despite outsourcing, devolved budgets and an increasing numbers of academies.
The potential for energy efficiency
Annual energy costs range from £150,000 for a small rural district council to £25 million for the largest city council. Straightforward, low-risk measures such as lighting controls, lighting upgrades, heating controls, boiler replacements and building fabric insulation typically result in a 10-18 per cent saving with an average payback of 2-3 years on the cost of the measures. Opportunities of this nature should exist for all councils to varying degrees depending on the nature of their assets and their existing level of efficiency.
This equates to between £60,000 and £2.4 million per year in energy cost savings depending on council size. Projects with longer payback periods can achieve even greater levels of savings. The wider benefits of energy efficiency make opportunities even more attractive, such as reduced maintenance, supporting the local economy, improved comfort for building occupants and local energy resilience. The potential for renewable energy
Renewable energy is now the fastest growing source of energy worldwide and supplies 7 per cent of the UK’s total energy including nearly one fifth of the UK’s electricity needs in 2014. However the financial performance of renewable energy projects is highly location-specific and the policy and incentive framework is subject to frequent changes.
Renewable energy projects are characterised by higher upfront capital costs and longer payback periods than is commonly achievable through energy efficiency. Stand-alone projects, such as wind turbines and solar farms, have a high degree of risk in the pre-planning stages and development costs may run high. Nonetheless projects can generate substantial revenue streams for successful developers and a valuable asset that can be refinanced or sold on if the owner wishes to exit. Therefore although the potential rewards can be high the decision to develop a 100 per cent council owned project should not be taken lightly.
This report contains estimates of income potential for councils based on a representative portfolio of renewable energy projects under different development options for illustrative purposes. Many combinations of renewable energy deployment can be considered depending on local circumstances. The table below shows the income generation potential of a portfolio of solar and medium wind scaled to the size of the council under three generic development scenarios, based on current subsidies. It is important to note that subsidies change frequently, impacting on potential revenues.
Income generation potential of a portfolio of solar and medium wind
| Benefit to the council | County council (£k/yr) | Metropolitan council/unitary (£k/yr) | Rural district council (£k/yr) | |------------------------|------------------------|-------------------------------------|-------------------------------| | **Option 1:** Council owned and operated | 790 | 220 | 366 | | **Option 2:** Income from loan to a third party developer for 25% of the capital cost. | 38 | 11 | 17 | | **Option 3:** Land rent and business rates from third party owned projects and free electricity from roof mounted solar | 97 | 28 | 38 |
1 Solar projects only, on the assumption the wind projects are more likely to be applicable in rural areas Introduction
In 2012/13 the total value of local government land and property was estimated by the Audit Commission to be almost £170 billion and in 2012 councils’ total energy spend was estimated to be approximately £900 million with a further £190 million spent on transport fuels in vehicles. Through this combination of assets and energy use there is a large untapped potential for energy efficiency and renewable energy.
For councils that have been championing sustainable energy for some time, new opportunities are constantly becoming available through technological development, changing project economics and maturing supply chains.
This report highlights the opportunities for councils in England to make financial savings and increase revenue through energy efficiency measures and renewable energy generation schemes. The focus is on income that can be realised in the short term, to help councils reduce their costs and find new sources of income.
Drivers for energy efficiency and renewables
In addition to efficiency savings and income, energy efficiency and renewable energy opportunities can provide a wide range of other benefits:
- Financial: reduction in utility costs, mitigating the impact of future price rises and the creation of new long-term sources of income. Income to community funds from community renewables to support local projects.
- Local economy: creation of local jobs and improved skills.
- Health and wellbeing: improving building environments and the comfort of building occupants. A growing body of evidence suggests that this improves productivity and reduces absenteeism. Active travel options (walking and cycling) can have a similar effect.
- Carbon reduction and renewable energy targets: contribution to national and local targets.
- Reducing fuel poverty: through increasing access to low cost energy and energy efficiency of council housing stock (if relevant) and wider private sector stock.
- Creating a safer environment: through improved lighting, reduced equipment failure and better building management systems to identify issues.
- Local energy resilience and security of supply.
2 ‘The Business Case for Green Building, World Green Business Council’, 2013. http://www.worldgbc.org/files/1513/6608/0674/Business_Case_For_Green_Building_Report_WEB_2013-04-11.pdf Report scope and structure
This report is focused on opportunities that can lead to direct cost savings or additional revenue for councils. The scope is thus drawn around council owned assets and operations where the council is the counterparty to energy supply contracts, or renewables projects within their boundary where the council can obtain a revenue stream. Reference is also made to schools as council’s still play an important support role in energy matters, despite a system of devolved budgets and increasing numbers of academies.
The report is structured as follows:
• **Section 1**: The introduction contains background information, including the breakdown of typical energy spend by three generic council types, and a summary of the current regulatory framework for energy efficiency and renewable energy.
• **Section 2**: The potential for energy efficiency, providing an estimate of the financial saving potential of energy efficiency projects within the three generic council types.
• **Section 3**: The potential for renewable energy, including descriptions of the renewable technology options relevant to council assets. It goes on to present estimates for the potential income of an assumed portfolio of renewable energy assets within the generic council types.
• **Section 4**: Key questions for councillors and senior officers to consider.
• Standalone appendices with glossary, references and sources for further information.
Generic council types
There are three generic council types used throughout this report. This is for illustrative purposes in order to reflect the diversity of councils in terms of scale, activities and assets. However the potential for each technology may be very different even within each type.
1. **County councils**: which cover the whole county and provide 80 per cent of services in these areas. Their annual energy spend is typically in the range of £4 million to £18 million. Energy uses include children’s services, adult social care, schools, corporate buildings, leisure centres, vehicle fleet business travel and street lighting.
2. **Metropolitan borough councils and unitary councils**: these typically have an annual energy spend in the range of £3 million to £15 million, although the largest, Birmingham City Council, spends in excess of £25 million. Typical energy uses are similar to that of county councils, though with less business travel and street lighting.
3. **Rural district councils**: these typically have an annual energy spend of £150,000 to £1.5 million. Energy uses typically include offices, vehicle fleets and business travel. Leisure centres are sometimes also present, and being energy intensive buildings, can account for a substantial share of total energy spend.
______________________________________________________________________
3 Local Government Information Unit http://www.lgiu.org.uk/local-government-facts-and-figures/ Assessing the potential
Figure 1 shows a typical breakdown of energy spend for each generic council type. This breakdown of energy spend is not centrally recorded and therefore has been estimated using a range of sources. The diversity of councils means that this provides an indication only and individual circumstances may differ. For individual councils, the total energy spend can be identified from financial records allowing the council to assess the areas of opportunity by looking at the number and type of buildings that the council owns and operates.
Energy use in schools and leisure
Leisure centres and schools account for a large proportion of energy use for councils, however these are usually outside the direct control of councils, with energy use being managed and paid for by private sector operators or the schools themselves.
Schools, for example, may include council-maintained schools, academies and free schools with different levels of council involvement.
The degree of outsourced management of these assets can have a large impact on the total energy spend. The generic figures shown in the report cover all schools, but assume that a proportion of leisure centres are outsourced.
Regulatory framework
The regulatory context for energy efficiency and renewable energy in the UK has been a constantly evolving landscape over the last 15 years. The regulatory framework inherited by the current Conservative Government (2015-2020) is considered to be relatively complex and crowded. Consolidation and simplification is likely to be preferred over the introduction of new policies over this period. Some policies may be phased out either due to policy overlap or having fulfilled their original purpose. However the Climate Change Act 2008 creates an overarching,
______________________________________________________________________
4 Camco ibid page 8; ‘Saving energy in local authority buildings’, Carbon Trust Guide CTV028; anonymised data from Verco’s council clients and information posted on a sample of council websites. long-term driver for energy efficiency and renewable energy. The Act places legally binding targets of at least a 34 per cent reduction in greenhouse gas emissions by 2020, and 80 per cent by 2050, against a 1990 baseline. Many councils have adopted their own ambitions in line with this target.
The most important policies and initiatives for energy efficiency are currently:
- Energy Performance of Buildings Directive
- Part L Building Regulations, CLG, 2013
- Carbon Reduction Commitment Energy Efficiency Scheme
For renewable energy, the important policies and incentives are:
- UK Government Renewable Energy Strategy to 2020
- Renewables Obligation (RO), which is now being phased out
- Feed-in Tariffs with Contracts for Difference (CfD), for generation over 5MW to replace the RO
- Feed-in Tariffs (FiTs), for generation less than 5MW
- Renewable Heat Initiative (RHI)
- local authority powers to sell energy.
Frequent tariffs reviews are carried out for the FiT and RHI, therefore the level of incentive of individual technologies may change rapidly. The potential for energy efficiency
Many councils have been developing and implementing energy efficiency programmes for more than a decade, with government funded support available through the Carbon Trust’s Local Authority Carbon Management Programme between 2003 and 2013. Every council will therefore be at a different point in their energy management maturity.
Regardless of a council’s starting point, the fast changing background of technology innovation and energy market reforms, combined with constant operational challenges, means there is a good chance that opportunities to realise cost savings will still be available.
Figure 2 shows the typical energy saving potential for the three generic council types based on the typical opportunities applicable to their energy uses and assets. This assumes a proportion of the measures have already been realised, or are not applicable in some cases, such as planning restrictions or technical barriers. As such Figure 2 provides an indication of the potential for energy efficiency only. Detailed analysis on an asset-by-asset basis would be required to estimate the potential within individual councils.
Approximately half of the savings potential in metropolitan and county councils is within schools. Leisure centres and community buildings are other large energy spend areas and significant areas of opportunity. Office buildings make up a relatively small proportion of energy spend, although these are under the direct council of the council, unlike schools and potentially leisure centres. Savings potential in rural district councils covers fewer asset types and is dominated by fleet transport and, where present, leisure centres.
______________________________________________________________________
5 The applicability of measures has been estimated for different building types, based on the consultants’ experience of undertaking energy audits of non-domestic buildings. The types of measures included in the potential are outlined in Figure 3, indicating their typical payback period for different energy uses. The measures covered have an average payback period of three years, and few measures have been included that have a payback period over five years, so the potential shown can be considered as the quick wins of the cost effective measures.
Longer payback period projects also have relevance within a strategic approach to energy efficiency, unlocking long-term savings. Packages of measures (including renewable energy projects) with varying payback periods can be created that result in greater cost reduction and income generation than quick wins alone, but are still economically viable.
Councils with mature energy management programmes may have implemented the majority of these quick win projects. Nonetheless, new opportunities will arise, through equipment replacement cycles and as technologies advance and reduce in cost. Despite the recent dramatic fall in oil price, over the long term energy prices are also expected to follow an upward trend ahead of inflation, due to increasing global demand for energy and, more locally, the substantial investment required to renew the UK’s aging energy infrastructure. This is likely to reduce the simple payback period of energy efficiency projects over time.
Another important area of opportunity is asset rationalisation, however it is outside the scope of this report to provide extensive detail on the opportunities this provides. It is worth noting that from April 2018, privately rented buildings (domestic and non-domestic) will need to be EPC-rated E or above, unless exempt on a cost effectiveness basis or through being listed. This is expected to impact on the asset value of buildings rated F and G and stimulate investment in energy efficiency refurbishment.
______________________________________________________________________
6 Private Rented Sector Minimum Energy Efficiency Standard Regulations (Non-Domestic), Department of Energy and Climate Change, 5 February 2015. Figure 3: Typical energy efficiency measures
| Typical payback period | Office buildings | Primary schools | Secondary schools | Leisure/sports centres | Community buildings | Streetlighting | Fleet | Business travel | |------------------------|------------------|-----------------|-------------------|------------------------|---------------------|----------------|-------|----------------| | Less than 3 years | | | | | | | | | | 3 to 5 years | | | | | | | | | | Over 5 years | | | | | | | | | | Not appropriate | | | | | | | | |
Air conditioning upgrades Building fabric insulation measures Building Management System (BMS) fine tuning Building Management System (BMS) upgrades Boiler replacement Heating controls Heating pipework insulation Lighting controls Replacement light fittings Ventilation upgrade ICT upgrades, eg 'thin clients' Miscellaneous, eg awareness-raising Vehicle measures, eg load optimisation Fuel management, eg monitoring and reporting Travel policy, eg minimising journeys Car policy, eg moving to low emission models
Figure 4 overleaf summarises the potential costs and savings of a package of the energy efficiency measures considered above, applied to the generic council types. Councils can save between 10 and 18 per cent by implementing typical energy efficiency measures with shorter payback periods. This equates to £60,000/year – £2.4 million/year in energy cost savings depending on council size. The potential savings increase if councils implement technologies with longer payback periods. The wider benefits of energy efficiency can further improve the business case for investment, including reduced maintenance costs, supporting the local economy, improved comfort for building occupants and local energy resilience.
7 The costs and savings of energy efficiency measures has been taken from a number of differences sources, including Salix Energy Efficiency Loans Scheme guidance, the researchers’ experience of undertaking energy audits and supporting clients with energy efficiency programmes and peer review comments. Figure 4: Typical costs and savings for a package of energy efficiency projects
| Council type | Rural district council (no leisure centres) | Rural district council (with leisure centres) | Metropolitan borough, London borough, and unitary | County councils | |--------------|--------------------------------------------|-----------------------------------------------|--------------------------------------------------|-----------------| | Example energy spend | £600k | £1m | £8m | £14m | | Capital cost | £90k | £300k | £4m | £6m | | Typical potential annual savings through energy assuming savings shown in Figure 2 are achieved | £60k | £120k | £1.3m | £2.3m | | Typical energy/cost savings (%) | 10% | 13% | 16% | 17% | | Typical average payback time | 2 years | 2 years | 3 years | 3 years | | NPV\* (3.5% discount rate over 10 years) | £400k | £700k | £7m | £13m |
\*Net Present Value (NPV): sum of the incoming and outgoing cash flows. This can be considered as the total lifetime value of the projects in today’s money. The potential for renewable energy
This section provides brief descriptions of the main renewable technology options relevant to councils and presents estimates of the potential within the generic council types introduced in Section 1.
Stand-alone renewable energy technologies
Ground mounted solar photovoltaic (PV) (‘solar farms’): Solar PV panels generate electricity silently from sunlight with no moving parts. Ground mounted panels can be installed in secure open areas including those that have limited potential for other land uses, such as capped land fill sites, airfields and under-used agricultural land. There are currently three solar farms directly owned and operated by councils in England, and one in Wales, but many more are at various stages of development.
- Kernow Solar Park, Cornwall Council (2012): 5MW, adjacent to council-owned airport.
- Wheat Leasows, Telford & Wrekin Council (2014)\*: 4MW, on agricultural land owned by the council. Generates a profit of approximately £150k/year with a project lifetime of 25 years.
- Rochdale Borough Council (2015): 250kW on a former waste disposal site\*.
- Legacy Solar Farm, Wrexham Borough Council (2015): 2.65MW with £2.5m capital cost.
A typical 5MW project would require 26 acres of land and have a capital cost of £3.75 million. The net annual income would be approximately £350,000(^{10}) over a 20-25 year lifetime, providing a project return on investment of seven per cent. Project development would have a ‘medium’ level of complexity and take one to three years depending on issues such as grid connection availability, planning sensitivity and land ownership.
Wind turbines: Large wind turbines are one of the most mature and cost effective renewable energy technologies. Turbine output increases dramatically with size, for example, a single medium-sized turbine (76m tip height) might generate the same as fifty or more ‘school size’ (25m height) turbines, owing to the larger swept area of the rotor and the better wind resource available at that height.
From a technical perspective wind turbines are best located in exposed upland areas. However there are a large number of constraints on the sites used that mean wind turbines are only appropriate for small pockets of land, if at all. Common constraints include; environmental designations, site access, noise, proximity to a grid connection and the cumulative impact of other wind turbines. Areas of unconstrained land for wind turbines may have been explored via GIS constraints mapping in Planning Policy Statement 22 renewable energy studies, commonly carried out by councils in the last decade. Onshore wind is currently facing
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8 Extensive details available on council website: www.telford.gov.uk/info/20222/solar_farm 9 www.link4life.org/news/2243-council-shows-flair-over-solar-farm-build
10 Based on a FiT rates available for stand-alone PV 1 April-30 September 2015 of 4.44p/kWh, export tariff of 4.85p/kWh and assumed O&M costs of 0.5p/kWh giving a net operating revenue of 8.8p/kWh. an uncertain future following the removal of Renewable Obligation Subsidies in 2016 and a pending review of associated Feed-in Tariffs in late 2015.
Project examples:
- Avonmouth, Bristol City Council (2013): Two 2.5MW turbines.
- Oakdale Wind Energy Park, Caerphilly Council (2012): Two 2MW turbines installed on council land by a private developer. The project was financed by the developer. The project provides land rent to the council and a £10,000/year payment into a community fund.
- Rochdale Council wind pilot project, former Hill Top School, approximately 15kW.
The performance of small scale turbines has proven to be highly variable. This has usually been caused by poor turbine siting and the technical immaturity of some products. Trials of building-mounted turbines have not been successful due to inherent turbulent airflow around buildings.
**Hydro power** uses water dropping through a height (‘the head’) to turn a turbine connected to a generator. Small hydro projects are generally complex to develop, with many technical and legal issues to consider, including fisheries, flood risk, river laws and the engineering solution itself. They can be viable however, where the right geographical conditions exist.
**Anaerobic Digestion:** Anaerobic digestion (AD) facilities break down biodegradable organic matter to produce biogas, which can be used in a variety of ways: exported to the gas grid, converted to transport fuel or used to generate electricity and/or heat. Municipal food waste can be used as feedstock for AD plants. However AD plants require approximately 60,000 tonnes of feedstock per year to be viable and therefore are likely to require waste streams from a number of councils and other sources to be viable. As a result, anaerobic digestion plants are normally owned and operated by waste and water companies, dedicated AD developers, and private companies with suitable feedstock, such as farms and food manufacturers.
Councils can potentially take a stake in projects and/or facilitating projects to derive most value for the community. For example, councils can potentially encourage AD developers to specific locations where the electricity and heat generated can be used locally eg connected to district heating. Councils can also offer food waste as feedstock and avoid landfill taxes, if their waste collection and disposal arrangements permit.
There are currently no council-owned and operated anaerobic digestion plants in England. Shropshire Council ran a small (5,000 tonnes/year, 200kWe) demonstration project with grant funding support between 2005 and 2012. This is now operated by the charity Cwm Harry.
**Costs and benefits of standalone renewable energy projects**
It is important to note that the financial performance of renewable energy projects is highly location-specific and the policy and incentive framework is subject to frequent changes. This section thus provides an ‘order of magnitude’ indication of the financial parameters based on technology costs and subsidies available, July-September 2015. The capital costs are exclusive of land costs.
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11 A case study is available on the LGA website: www.local.gov.uk/web/guest/home/-/journal_content/56/10180/3511241/ARTICLE
12 www.planningresource.co.uk/article/1305142/lt-winning-approval-wind-energy-scheme Technology options – building integrated technologies
A variety of renewable energy technologies can be integrated into buildings. They are most effectively integrated at the design stage, but some can also be retro-fitted where conditions allow. For electricity generating technologies, any mismatch between generation and demand can be absorbed by grid import or export. Renewable heat technologies in contrast need to be carefully matched to the heat demand of the site, potentially in tandem with a conventional heating system to supplement the supply.
Roof mounted solar PV panels: These are suitable for most types of council buildings, but particularly buildings with large flat or pitched roofs such as schools, leisure centres, depots and offices. An advantage over ground-mounted PV is that the electricity generated can be used on site, which helps the business case by displacing grid electricity consumption at retail prices. The main constraints to their deployment are: available roof area, roof orientation, over shading by trees or other buildings, planning in conservation areas and the ownership of buildings. Since April 2015, installations of up to 1MW on non-domestic buildings are ‘permitted development’ in planning terms.
| Technology | 5 MW Solar PV farm | 500kW medium sized wind turbine | 15kW small wind turbine | 50kW Small Hydro | 2MW Anaerobic Digestion | |------------|-------------------|--------------------------------|------------------------|-----------------|------------------------| | Capital cost (excluding land cost) | £3.75m | £1.6m | £75k | £300k | £9.5m | | Annual revenue potential | £390k | £170k | £5.5k | £35k | £790k | | Return on investment (percent) | 9 | 11 | 7 | 12 | 8 | | Development complexity | High | Medium | Low | High | Medium | | Performance risk | Low | Medium | High | Low | Medium |
Figure 5: Typical costs and benefits of standalone renewable energy technologies
Key: High, Medium, Low The capital cost of roof mounted solar is currently £800-£1,500 per kW installed, depending on variables such as scale, suitability of roof structure and ease of access.
- Keynsham Civic Centre, Bath and North East Somerset Council (2014), 243kW, council-owned and operated, installed as part of a new build civic centre.(^{13})
- Northacre Resource Recovery Centre in Westbury, Wiltshire Council (2014) 318kW, council owned and operated(^{14}).
- Heywood Sports Village, Rochdale Council (2014), a 100kW array retro-fitted to an existing leisure complex.
- Solar Schools Project is a crowd funding scheme run by the charity 10:10 which helps schools raise finance for solar PV installations(^{15}).
**Solar Hot Water (SHW) panels:** SHW panels collect solar energy to heat water and are typically mounted on building roofs. Their application to council buildings and schools is limited to niche applications, owing to the relatively small domestic hot water demand in these buildings and the difficulty of integrating SHW with existing hot water systems. SHW may also compete for roof space with solar PV panels. Open air swimming pools (lidos) may present a good application. The privately-owned Bristol Lido has installed 80m(^2) of solar collectors for the 24m pool which supplies up to 70 per cent of the annual hot water needs(^{16}).
**Biomass boilers:** Biomass boilers use wood pellets, wood chips or occasionally logs as fuel that is burned to produce heat, in a similar way to a standard boiler. They are available from domestic to commercial scale. Biomass boilers are best suited to buildings with a constant heat load, such as leisure centres or within communal heating systems. This is because they take time to heat up and do not work well when operated at part load. They are most cost-effective in off-gas areas as an alternative to oil, LPG or electric heating.
There are a range of issues to consider when investigating potential for biomass boilers, such as: having sufficient space for installation, careful boiler sizing, matching the fuel to the boiler, fuel delivery and storage arrangements, maintenance requirements and air quality. The market for biomass is more local than fossil fuels; biomass can be more expensive than the fossil fuel alternative, depending on local supply chains and quality of fuel. The RHI income is designed to provide a certain return on investment including fuel costs.
Biomass boilers have commonly been installed as a relatively low (capital) cost method to meet sustainability targets in new public buildings. Some of these have proved a poor match to the building and have fallen into disuse. This highlights the need for careful consideration of the whole life cost of ownership and operation, including fuel supply and maintenance costs.
**Ground source heat pumps (GSHPs):** GSHPs use buried pipes to extract heat from the ground for domestic hot water and space heating via radiators or underfloor heating. A ‘ground loop’ used to absorb low grade heat from the ground can either be installed in horizontal loops in trenches or in vertical boreholes in more constrained sites. Heat can also be extracted from water sources such as lakes, rivers and canals(^{17}). In some areas it may be possible to directly extract and re-inject water from an aquifer, known as an ‘open-loop’ system, subject to Environment Agency approval.
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(^{13}) [www.solarsense-uk.com/news/latest-news-comment/posts/2014/solarsense-complete-keynsham-civic-centre-pv-system.aspx](http://www.solarsense-uk.com/news/latest-news-comment/posts/2014/solarsense-complete-keynsham-civic-centre-pv-system.aspx)
(^{14}) [www.solarsense-uk.com/media/104116/uks_largest_local_authority_rooftop_pv_system_installed_by_solarsense.pdf](http://www.solarsense-uk.com/media/104116/uks_largest_local_authority_rooftop_pv_system_installed_by_solarsense.pdf)
(^{15}) [www.solarschools.org.uk/](http://www.solarschools.org.uk/)
(^{16}) [www.kingspansolar.ie/casestudies/bristol-lido.aspx](http://www.kingspansolar.ie/casestudies/bristol-lido.aspx)
(^{17}) The Department for Energy and Climate Change has published a water source heat map to highlight the opportunities for deploying innovative heat pump technology: [https://www.gov.uk/government/publications/water-source-heat-map-layer](https://www.gov.uk/government/publications/water-source-heat-map-layer) GSHPs are most suitable in well-insulated buildings with underfloor heating and high hours of occupation, such as day care centres or residential homes. They typically need to be an inherent part of the design of a new building or major renovation, rather than retrofitted. They are also most suitable in off-gas areas as an alternative to oil, LPG or electric resistive heating. Heat pumps can also be used in reverse to provide cooling in summer months. This can improve the efficiency of the system, using the ground as a form of inter-seasonal heat store and avoiding the need for a separate air conditioning system.
Examples:
- **St Edmundsbury Borough Council, Suffolk (2009)**. 463kW heating, 430kW cooling open loop GSHP installation providing all heating needs and 90 per cent of the cooling to a 6,430m² four-storey new build office block. Total cost was £435k.
- **Stoke Local Service Centre, Stoke on Trent Council (2009)**. 90kW closed loop GSHP system providing heat to a 1,314m² new build extension with underfloor heating. Total cost was £149k. The contractor’s defects and liabilities period was extended to include the first full heating season, meaning that during the extended handover, complications caused by further heating demands could be fixed.
**Air source heat pumps (ASHPs):** ASHPs are similar to GSHPs but absorb heat from the outside air rather than from the ground (see above). ASHPs are typically less efficient than GSHPs (ie produce less heat than GSHPs for the same electrical consumption) but are cheaper to install, and do not require an area of land to be excavated or the drilling of vertical boreholes. ASHPs can have poor performance during the coldest periods of the year and require careful system integration and design.
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**Figure 6: Typical costs and benefits of building integrated renewable energy technologies**
| Building-integrated technologies | 10kW roof mounted Solar PV | 20kW solar hot water heating system | 100kW biomass boiler | 100kW ground source heat pumps system | 100kW air source heat pump system | |---------------------------------|-----------------------------|-----------------------------------|---------------------|--------------------------------------|----------------------------------| | **Technology** | 10kW roof mounted Solar PV | 20kW solar hot water heating system | 100kW biomass boiler | 100kW ground source heat pumps system | 100kW air source heat pump system | | **Capital cost** | £13k | £25k | £60k | £125k | £100k | | **Annual revenue potential** | £1.2k | £1.2k | £5.3k | £1.2k | £3.8k | | **Return on investment** | 10% | 5% | 9% | 10% | 4% | | **Development complexity** | High | Medium | Low | Low | Low | | **Performance risk** | High | Medium | Low | Low | Low |
Key: High, Medium, Low Is renewable energy a mature industry?
Renewable energy is now the fastest growing source of energy worldwide supplying an estimated 19 per cent of global energy consumption. Its share is growing fastest in the production of electricity, where 59 per cent of the net additions to generating capacity in 2014 were from renewable sources, meeting an estimated 23 per cent of the global electricity demand. Closer to home, renewables supplied 7 per cent of the UK energy needs and nearly a fifth of electricity needs in 2014.
Renewable energy is big business in the UK employing approximately 100,000 people. However supply chain maturity varies by technology.
Solar PV and medium/large scale wind power are mature industries. From a financing point of view the technologies and supply chain are ‘bankable’ with substantial companies able to provide the obligations and warranties required by lenders of project finance. The industry is sufficiently large for healthy competition, meaning that procurement exercises can set tough criteria on price and post-sales support. Once developers (including councils) have got a scheme to the point of financial close, they can have a high degree of confidence that it will operate as intended. Hydro power and solar hot water heating are also well established and mature industries, though the market in the UK and average project size are much smaller.
Other technologies (small wind, biomass, heat pumps, and anaerobic digestion) are smaller industries and there is a higher level of technology, procurement and operational risk. Renewable heat technologies have the added complexity of needing to integrate into a building’s heating system, and in the case of biomass, require a reliable fuel supply matching the type of boiler installed. Nonetheless several thousand new biomass boilers have been installed in the UK since the introduction of the RHI, helping the industry to mature. Heat pumps have yet to see the same level of uptake.
What level of income might renewables bring to a council?
To estimate the potential revenue streams from renewable energy, we have considered a portfolio of renewable energy investments for each of the generic example councils. This is for illustrative purposes only. Many combinations of renewable energy deployment could be considered depending on local circumstances. It is based on the market conditions and subsidies available in late 2015 and focuses on what could be achieved in the short to medium term.
We have assumed a small number of standalone projects in each council type and building integrated renewables in 5-10 per cent of council buildings including schools. The portfolio includes the following:
- one solar farm, with the size depending on the council type
- one or two medium sized turbine (2 for a country council, 1 for metropolitan borough/unitary and rural district councils)
- ten per cent of buildings with 10kW PV roof
- ten per cent of buildings with a 100kW biomass boiler
- five per cent of buildings with a 50kW ground source heat pump.
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20 Page 18 of REN 15 Renewables 2015 global status report. www.ren21.net/status-of-renewables/global-status-report/ 21 Department of Energy and Climate Change, Renewable energy in 2014: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/437937/Renewable_energy_in_2014.pdf 22 Renewable Energy View 2015, published by the Renewable Energy Association: www.r-e-a.net/resources/rea-publications We have chosen to exclude small wind turbines, hydro power, air source heat pumps and solar hot water heating as these technologies provide less income generation potential for councils than other options.
It is recognised that air source heat pumps and solar hot water heating in particular have a large market potential, but they are not currently stimulated by the RHI-subsidy to the same extent as other technologies. Anaerobic digestion is excluded owing to the lack of precedents of council-owned projects.
Figure 7 above shows the breakdown of total capital expenditure for the chosen scenario. The large standalone projects account for the majority of the capital spend. The cumulative expenditure of biomass and GSHPs is also significant in the case of metropolitan and county councils owing to the larger building stock in comparison to rural district councils.
Figure 8 overleaf shows the annual net income of the portfolio(^{23}) (income minus operational costs, not including financing costs). The payback period of projects is typically circa 10 years, therefore financing would have to be structured to provide an income in the short-term. The potential income is strongly dependent on subsidies which are subject to frequent change.
(^{23}) The figures are based on the prevailing rates as of July 2015. Development options
Councils have the opportunity to use development options which share the risk and reward with third party developers, such as commercial or community energy developers. This option is not applicable to all technologies in present market conditions and in this example, is assumed to be available only to solar PV and medium-scale wind turbine projects, reflecting the activity of the large majority of commercial renewable energy developers.
For the purposes of quantifying the approximate revenue potential, three options are shown in Figure 9:
- **Option 1: Council owned and operated**, as per Figure 8, but for solar PV and medium-scale wind turbine projects only.
- **Option 2: Part financed by council**, where a council provides debt finance to a project developed by a third party, such as a community energy developer. In this example we have assumed that the council provides a loan to projects, covering 25 per cent of the capital cost and makes a 2 per cent return on capital invested(^\\text{24}).
- **Option 3: Land rent and concessions**. In this option the council receives a land rent for the solar farm and wind turbine, and benefits from free electricity from the solar PV roofs, of which it uses 50 per cent of the generation. Business rates are also included for the solar PV farms and wind turbine(^\\text{25}).
Note that option 2 and 3 are not mutually exclusive and could be applied to the same project. A breakdown of the revenue potential by technology is shown in the appendix.
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(^{24}) For example, a loan is offered to a community project at 6.5 per cent return and the council borrows at 4.5 per cent from the Public Works Loan Board. If the council lends from its own reserves then higher rates of return are possible.
(^{25}) Business rates amount to £19,000 and £3,400 a year for the 5MW solar and 500kW wind projects respectively in this example. This may not be additional if displacing another rateable activity on the land in question. Council owned and operated projects have a dramatically greater income potential for the council. However, the upfront cost and risk to a council is substantial. Development costs for stand-alone renewable projects can run into hundreds of thousands of pounds with no guarantee of success or residual value to a failed project. Key questions for councillors and senior officers to consider
There are a number of financial solutions to fund projects. The greater challenge is often identifying and developing projects with a strong business case. By understanding the value of their assets from an energy perspective, councils will be better placed to form a rational strategy and where relevant, obtain the most benefit from partnerships with third parties. The key questions below provide areas for exploration to draw together the key information councils should hold to build a strong business case for energy efficiency or renewable energy projects.
Foundation steps
- Do you know how your energy expenditure breaks down across assets and operations?
- Have you reviewed your internal capacity to manage energy, for example using an energy management self-assessment tool?26
Developing strategy
- Have your assets and operations been mapped from an energy perspective to identify the main areas of opportunity for energy saving and renewable energy generation?
- Has the geographical area of the council been mapped from an energy perspective, ie renewable resources, heat mapping, strategic projects and energy infrastructure?
- Do you have a strategy for extracting maximum value from them for the council and the local community?
Business cases
- Is there a close working relationship between your finance and operational teams when developing business cases for energy efficiency and renewables?
- Do you consider the internal rate of return of energy projects as well as the simple payback when evaluating business cases? Are all co-benefits considered? (see section 1)
- Are you aware of the various sources of finance available?
- Are you aware of what an Energy Performance Contract (EPC) is? Do you understand the advantages and disadvantages and how these apply to the specific situation of your council?
- Is there an opportunity to aggregate projects and programmes either across the council or with partners to achieve economies of scale and share risk?
Wider engagement
- Do you know what your local public sector partners are doing in this area? Is there potential to collaborate (for example, knowledge share, joint studies and procurement frameworks)?
- Are you aware of community energy groups in your area and do you have a forum to communicate with them? Do you have a strategy of how to work with them towards mutual goals?
26 Such as www.carbontrust.com/resources/tools/energy-management-self-assessment-tool or benchmarking information via http://laenergyindex.co.uk Acknowledgements
The Local Government Association’s (LGA) Productivity team would like to thank Verco for their input into this work.
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5f022820e16bfa07d294f7d14dda41cdc802da63 | CHILDHOOD OBESITY TRAILBLAZER PROGRAMME
PROSPECTUS Foreword
Undoubtedly, childhood obesity is one of the biggest public health challenges we face as a country. It is a problem which unjustly affects children in the more deprived areas, who are more than twice as likely to be obese. That is why, in the second chapter of government’s childhood obesity plan, we set the ambition to halve childhood obesity and significantly reduce the gap in obesity between children in the most and least deprived areas by 2030.
We need you alongside us. Where we live plays a huge role in our health and when it comes to improving the health of local communities, local leaders are the real experts. I know you are committed to this issue, which is why I am excited for the opportunities this programme brings.
This trailblazer programme is about supporting innovation, harnessing the full potential of local levers and sharing learning. It is about tackling obstacles head on and finding solutions together, including actions government can take to enable ambitious local action.
This is your opportunity to not only improve the health of children and families in your community, but across England.
Steve Brine MP Parliamentary Under Secretary of State for Public Health and Primary Care
The transfer of responsibility for public health in 2013 to councils has sparked a surge in innovative programmes. Examples include working with schools and early years settings, supporting families and their children who are living with obesity and funding specialised weight management programmes.
We must now build on this to make sure the health and wellbeing of children is protected. We look forward to seeing many more examples of local energy and innovation in the months and years to come, and to seeing the measurable impact it will have.
This trailblazer programme is a great opportunity for councils to work with local partners to develop innovative projects to tackle obesity, particularly amongst those groups most vulnerable to it and health inequalities. We encourage councils to submit an expression of interest for a funded discovery phase to scope out these new ideas.
Councillor Ian Hudspeth Chair of LGA Community Wellbeing Board Context
Childhood obesity is one of the biggest health problems this country faces. Around a fifth of children in England are overweight or obese by the time they start primary school aged five, and this rises to one third by the time they leave aged 11.
The burden of childhood obesity is being felt the hardest in more deprived areas - low income households are more than twice as likely to be obese than those in higher income households and this inequality gap is increasing. Children from black and minority ethnic families are also more likely than children from white families to be overweight or obese. We must address these disparities to ensure that all children, regardless of background, have the best start in life.
Being overweight seriously affects quality of life and health. It increases the risk of heart disease, stroke, type 2 diabetes, non-alcoholic fatty liver disease and some cancers in adults. It is also associated with bullying in children and stigma in both adults and children and is associated with common mental health disorders. Children who live at home with at least one parent or carer who is obese are more at risk of becoming obese themselves.
Obesity is a complex problem with different but often interlinked causes. No single measure is likely to be effective on its own in tackling obesity.
In June 2018, government published the second chapter of the Childhood Obesity: Plan for action. The plan includes promotion of an active mile initiative in primary schools and consultations on a range of measures including restricting promotion and advertising of food and drink products high in fat, salt and sugar; introduction of mandatory calorie labelling food served outside the home; banning the sale of energy drinks to children and strengthening of nutrition standards in the Government Buying Standards for Food and Catering Services.
The plan sets the bold ambition to halve childhood obesity by 2030 and significantly reduce the gap in obesity between children from the most and least deprived areas.
This ambition requires a concerted effort and a united approach across councils, businesses, schools, health professionals and families up and down the country.
There is real determination among councils to tackle childhood obesity but there are very real obstacles. To address this, government committed to a three year trailblazer programme to work with council-led projects in England to tackle childhood obesity at a local level, with a particular focus on inequalities. We are looking for councils to take bold action, harnessing existing powers and overcoming barriers to address this significant challenge. The Programme
Aims
The trailblazer programme aims to:
• test the limits of existing powers through innovative and determined action to tackle childhood obesity • share learning and best practice to encourage wider local action and • develop solutions to local obstacles and consider further actions government can take to enable ambitious local action and achieve changes at scale.
The programme model
The programme encourages a service design approach to be used by councils. This will start with a discovery phase with up to 12 councils and be followed by up to five trailblazer councils selected to tackle childhood obesity over a three year period. There will be £100,000 worth of funding and project support available to each trailblazer per year. Councils will be asked to budget for £75,000 of expenditure each year with £25,000 allocated for delivery support and subject matter expertise arranged in collaboration with the Local Government Association (LGA).
This funding is to support trailblazer councils to participate in the programme without disrupting usual service delivery and it is not intended to cover core service delivery.
The programme will be managed by the LGA commissioned by the Department of Health and Social Care (DHSC). The DHSC, Public Health England (PHE) and the Association of the Directors of Public Health (ADPH) will help steer the programme.
Call for action
Councils are invited to submit an expression of interest to carry out a discovery phase. Within the expression of interest the lead council will be expected to describe the drivers and aspects of childhood obesity to explore, the evidence of local need and inequalities and the approach for the discovery phase including community partner involvement.
Who can apply
The programme is open to all English councils, either individually or as a partnership. If you are forming a partnership of councils (and other organisations), a single council must lead the project. District councils are encouraged to participate and should work in partnership with their county council who will lead the bid.
Expressions of interest will need to be signed by the principal council’s lead member for public health, chief executive and director of public health using the form provided. You are also encouraged to include the signature of leaders from partners relevant to the area you are looking to address.
Councils that are in receipt of government funding for initiatives that are related to childhood obesity, eg increasing physical activity rates, will be required to state this in their applications. This will not automatically exclude councils from selection, but the impact of other initiatives and funding will be considered where there is overlap in the local project aims. Further information from councils may be requested in such cases. Discovery phase
The first stage of the programme is a 12 week discovery phase which will support councils to research and understand the needs, behaviours and experiences of users (such as families, parents, professionals and businesses).
Up to 12 councils will receive funding of £10,000 to bring local partners through the whole systems approach, undertake discovery and develop a detailed proposal for the three year programme.
Councils will be supported to apply learning from existing programmes and approaches, such as the Whole Systems Approach and behavioural insights techniques to refine and tailor local plans. Projects will also be supported to develop their discovery approach by a delivery support partner.
The discovery phase will conclude with the submission of an application for three year funding by Friday 5 April.
Final applications will include an implementation plan for the three year programme and will be expected to demonstrate innovation, how your community is at the centre of the approach, scalability, sustainability and methods of measuring success. We then intend to visit your site to learn more about your proposal before selecting the five councils to move forward to implementation. Trailblazer three year programme
In early May 2019, up to five councils will be selected to lead projects to implement their plans. At the end of the discovery phase milestones will be agreed for the three year programme which will include triggers to release funding. The programme will feature three phases, though they will be flexible according to each of the trailblazer project plans. It is expected that there will be a delivery that can be evaluated in the first year of the programme.
Programme timeline
| Phase | When | |--------------------------------------------|---------------------------| | Discovery phase kick-off event | January 2019 | | 1 - Discovery | Undertaking user research and planning | January-April 2019 | | Review applications for three year funding and on-site visits | April 2019 | | 2 - Develop and deliver | Project set-up, design, making and testing solutions | 2019-20 | | 3 - Delivery | Iterating and strengthening a solution | 2020-21 | | 4 - Deliver, review and expand | Embedding and reviewing solutions, share knowledge and improve | 2021-22 |
Project support resources
**Government expert support** – A group of experts across government is committed to support the trailblazer programme. They will meet regularly to help find solutions to local challenges and consider the implications for future policy.
**Delivery support partner** – To provide support and coaching from the discovery phase onwards. The support partner will advise on user engagement and use service design principles to assist the development of your project. This partner will be commissioned by the LGA.
**Subject matter expert** – Expert individual or consultancy support will have technical/commercial expertise in your area and provide constructive challenge. The LGA will work with the council to find the right expertise for the particular project. Shared Commitments
The LGA, DHSC, PHE and the delivery support partner are keen to support the trailblazer projects develop ground-breaking and innovative initiatives.
Our commitment to you:
• we will support and assist you to creatively address the issues you are exploring • we will encourage you to consistently focus on the beneficiaries of your work • we will provide on-site support, practical workshops, subject matter experts, service design and evaluation support • we will facilitate opportunities to engage with the other local areas • we will help you consider and develop solutions to local obstacles and consider further actions government can take to enable ambitious local action • we will promote the outcomes and learning from your work with the rest of the sector.
In return we are asking for commitment from funded councils.
Your commitment to us:
• you will work as a multi-disciplinary team in addressing the issues you are exploring • you will commit to putting the needs of beneficiaries and communities at the heart of your work, with a focus on local inequalities (ie disparities across ethnic groups and areas of deprivation) • you will evaluate your project(s) and engage with the overall programme evaluation • you will ensure that senior leadership is engaged in the programme • you will work openly with other trailblazers • you will commit to sharing the learning with the rest of the sector via events, workshops, webinars, blogs and other methods. Areas to explore
The drivers of childhood obesity are varied, including social, environmental, individual, physiological and structural components. It is acknowledged that systemic change is required, especially to support families in the most deprived areas who are faced with a disproportionate impact of these drivers.
While councils do not have full control of these drivers, they have a range of levers and opportunities to influence them, including through local policies, partnerships, shaping the local environment and service delivery. We want to test the boundaries of local action, understand how levers can be used together to best effect and importantly, how they can be improved.
Below, we set out examples for some of the key drivers and a vision for improvement. They are broad and could encompass a variety of levers and approaches to achieve them. While we will be looking for the overall trailblazer programme to capture activity across a range of areas, this is not exhaustive, nor is it intended to limit your ambitions.
- Children’s exposure to food advertising can have immediate and long-term impact on their health by encouraging greater consumption after seeing adverts and altering their food preferences. With marketing for food and drink high in fat, salt and sugar dominating many public spaces, children’s exposure is high. We want to see a reduction in children’s exposure to advertising of products high in salt, sugar and fat across the local area including high streets, street furniture, transport systems and local events, particularly in areas of high child footfall.
- Many high streets are densely populated with fast food outlets, cafés and restaurants that offer food and drink that can be high in salt, sugar and fat and have limited healthier options. The accessibility and convenience of such foods, which are inexpensive and quick to prepare, can be enticing for families. We want to see the local food and drink offer redressed, with diversity across high streets, town centres and shop parades so that healthier food and drink is accessible for the whole community and can become the default option.
- Only one in five children meet the chief medical officer’s recommendation of 60 minutes of physical activity a day. With reservations around active travel due to accessibility and safety concerns, limited access to green space and cost barriers to leisure facilities in some areas, opportunities for physical activity can be limited. We want to see increased opportunities for physical activity locally that are accessible and safe for families and young people to become more active.
- Key public health, health and children’s services can be disjointed and opportunities for prevention and intervention may not be fully utilised. With disparities in the provision of weight management services across England, many children living with obesity do not have access to appropriate services. We want to see existing services linked effectively and opportunities to provide both prevention and intervention support maximised, with accessible and effective care that meets the needs of each high-risk child.
We encourage councils to look across their local system, consider the levers, and how they can be galvanised to deliver their vision of a healthier generation of children in your community.
With families in more deprived areas and certain ethnic groups disproportionately carrying the burden of childhood obesity and the inequalities gap widening, it is paramount that councils carefully consider the local demographic and specifically tackle these inequalities through their chosen approach. How to apply?
The Childhood Obesity Trailblazer Programme is now open for expressions of interest. Please email [email protected] to request a form. The deadline for submission of your expression of interest is Friday 30 November 2018.
Each expression of interest must address each question directly, not exceeding the stated maximum word length of 500 words for the assessed questions.
Expression of interest questions
Project title
1. Which driver(s) do you plan to address and how would this positively impact the local inequalities profile (ie disparities across ethnic groups and areas of deprivation)?
2. What is the vision for your local area in tackling this issue and why is this important for your area?
3. During the discovery phase, what are the levers you would like to explore and how will you involve key stakeholders and target groups?
4. What are the key outputs, milestones and measures of success for the discovery phase?
5. Who are the key members of your project team for the discovery phase including name, position, organisation, role in this phase?
Expressions of Interests will be evaluated by representatives from the DHSC, PHE, ADPH and LGA. Up to 12 discovery phase councils will be announced by early January 2019.
If successful, lead councils are expected to agree and sign the funding agreement by 9 January 2019.
What we are looking for
You are the experts for your local area. We are looking to you to identify the actions during the discovery phase that will have the greatest impact on childhood obesity. While there is no single solution to the issue of childhood obesity, we will consider applications that focus on addressing a specific driver of childhood obesity, as well as those that aim to address multiple drivers. For the trailblazer programme to explore a cross-section of drivers and test a variety of levers, we will aim to select a group of councils who, as a collective, represent a range of activity.
Discovery phase Expression of Interest
| What we are looking for? | What we are not looking for? | |--------------------------------------------------------------|------------------------------------------------------------------| | Clear description of ‘problem’ to tackle with careful consideration of local needs and inequalities. | An overview of the national issue | | An outline of the levers you think would help achieve your local vision and openness to refining these through the discovery phase | Pre-defined set of limited actions and levers to deliver the project | | Outputs from the discovery phase | Pre-defined outcomes for the whole project | | Methods of user engagement described with external support if required | Unclear user engagement methodology | | Partnership and community participation arrangements | Councils working in silo without forming partnerships and engaging the community | | Multi-disciplinary teams | Council dominated teams |
If you have any questions about the programme or expression of interest process, please visit www.local.gov.uk/cotp or contact: [email protected]. Regularly updated Frequently Asked Questions are also available on our webpage.
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1fa18f6618ffc8657009f6ced70d5f52fd278724 | Future Funding Outlook 2014 Technical Annex
2014 Funding outlook for councils: methodology, assumptions and data sources
Local Government Association July 2014 FUTURE FUNDING OUTLOOK - TECHNICAL ANNEX
Methodology
This section explains the methodology used to prepare the LGA Future Funding Outlook Model 2014.
The majority of base data on the financial positions of councils was taken from Communities and Local Government finance statistics. Key data sources include:
- 2010/11 Revenue Outturn (RO)
- 2011/12 Revenue Outturn
- 2012/13 Revenue Outturn
- 2013/14 Revenue Account (RA)
- Data from the 2014/15 final local government finance settlement, and indicative 2015/16 settlement
A full list of data sources is provided in 0.
The model calculates the individual position of each council based on a number of assumptions and cost projections and then aggregates each individual case up to provide a national picture.
Funding Assumptions
The model projects the likely path of council revenue, based on a number of assumptions:
**Council tax:** Figures for 2010/11, 2011/12 and 2012/13 are taken from the RO, for 2013/14 from the RA and for 2014/15 from CLG Council Tax levels. We have assumed that council tax will increase by 1 per cent in 2015/16 and will thereafter grow by 1.5 per cent per year.
Tax base growth in 2014/15 is based on CLG tax base data. We have assumed a modest growth in the tax base from 2015/16 that is calculated from the geometric mean of current tax base trends and projected household growth in each local authority area. This works out at an average of 0.5% annual growth.
**Business Rates:** For 2013-14 and 2014/15 we have taken estimates of the local share from CLG’s National Non-domestic rates: local authority level data – we add top-ups, tariffs, levy and safety net payments where applicable
We have assumed for 2015/16 and beyond that Business Rates grow by retail price index (RPI) plus a local growth estimate that combines a two year local trend in rateable value with the 0.3 GDP fan from the OBR predictions. This works out at an average growth of 0.5% by 2017/18. We have uprated tariffs and top-ups by RPI inflation and calculated levy and safety net payments where applicable
**Grant funding:** Figures for 2010/11, 2011/12 and 2012/13 are taken from RO; for 2013/14 from RA and for 2014/15 from the final local government finance settlement and for 2015/16 from the indicative local government finance settlement. Other specific grants from CLG specific grant data are either individually listed or combined dependent on size.
For 2016/17 and later the grant funding trajectory is based on a calculation of the overall reduction in Settlement Funding Assessment. The central assumption is an 8% cut in 2016/17 reducing to a 7% cut in 2017/18 and onwards. The New Homes Bonus is projected separately using a rolling average to project current year amount summed with the preceding years, up to a total of six years.
The Better Care Fund is assumed to benefit social care authorities by £1.0 billion in 2015/16, rising to £1.5 billion in 2016/17 and each year thereafter. This is distributed on the basis of 2013/14 social care funding allocations.
**Public health:** We have used the public health funding allocation for 2013/14 and 2014/15 and for following years have assumed that the overall level of funding rises in line with CPI inflation.
**Investment income:** We have used the RO returns for 2010/11, 2011/12 and 2012/13, and RA returns for 2013/14. We have thereafter assumed that investment income will rise in line with RPI inflation.
**Transfers to and from reserves:** We have used the RO returns for 2010/11, 2011/12 and 2012/13, and RA returns for 2013/14. The model assumes that where a funding gap exists each authority will draw up to 5 per cent of their reserves each year to plug the gap, with the reserve level never going below 5 per cent of total annual expenditure. If the funding level is above predicted expenditure then all surplus will be added to reserves for that year.
**Expenditure**
The funding model then projects the path of council spending between 2011/12 and 2019/20 in ten major service blocks:
- education (excluding the Dedicated Schools Grant)
- social care
- highways, roads and transport
- housing (not including housing revenue account (HRA) or housing benefit)
- culture, recreation and sport
- environment including waste
- regulatory
- planning and development
- other services
- public health
Net Expenditure was split into its four composite parts and then drivers were applied to each as applicable. The four parts to net expenditure are
- employee expenditure • running Costs • sales, fees and charges • other income
The RA data that forms the baseline for 20113/14 does not include data on fees and charges, so we assumed a consistent level of income from 2012/13 RO forms and used RO data to provide a split in expenditure categories.
We assumed that additional income from sales, fees and charges would be sensitive to prevailing economic conditions and applied a multiplier derived by calculating the difference between consumer price index (CPI) and the output gap to market-facing services.
Sales, fees and charges and other similar income are treated as reductions to gross expenditure to arrive at ‘net expenditure’ within the model, rather than being treated as a source of funding. This means that an increase in sales, fees and charges would reduce the funding gap by reducing total expenditure rather than by increasing total funding.
Spending has been excluded on Fire (as a group of single-service authorities with their own precept), Police (for the same reason, as well as reflecting the likelihood that they will continue to receive differential treatment in the Spending Review and future council tax frameworks). The exceptions to this are where Fire Services are provided by a county or unitary authority – in such authorities it is impossible to isolate the funding for fire services separately so we have included this expenditure within “other” services. The total of such expenditure nationally is £0.3 billion, which is immaterial in terms of the overall funding gap. The model also includes within “other” expenditure spending on Police services by the City of London – again this amount is immaterial nationally at £77 million.
Spending has been excluded on HRA and housing benefit spending (as self- or separately-funded areas), and schools spending funded by the Dedicated Schools Grant and pupil premium.
For each service area, baseline spending has been set using 2013/14 Revenue Accounts and projected using the major drivers of cost for those services.
Drivers essentially break down into two categories:
• drivers of unit cost (e.g. inflation, pay drift, efficiencies, etc.) • drivers of service usage (e.g. population change, increased traffic miles, etc.).
The model also builds in efficiency assumptions. In this version of the model, the assumption is uniform for most services: councils start by achieving 2 per cent annual efficiency savings which tapers to 1 per cent by the end of the period. This is increased for Central Services. It is sensible to assume diminishing returns from efficiency as recent LGA research has shown that the well of efficiencies is running dry.
______________________________________________________________________
1 Under Pressure, LGA 2014 Cost Drivers in Service Expenditure
This section sets out the primary cost drivers that have been applied to each service area and identifies other factors which are likely to drive costs but which we have not been able to quantify.
All service expenditure has, where possible, had local authority level data applied.
Education
- Expenditure excludes services funded by Dedicated Schools Grant, Pupil Premium, and Further Education Funding.
- CPI inflation, Pay Drift and the Office for National Statistics (ONS) projections for child population were applied as cost drivers in the model.
- Child population numbers were used rather than pupil numbers because education-related services that are funded from outside the Dedicated Schools grant have a user base that extends beyond pupils.
- The impact of central government policy decisions such as increased number of academies and knock-on effects of any future changes to the schools funding formula are not reflected in the model.
Children’s social care
- Health and social care unit costs remain constant in real terms to 2015 and then rise by 2% per year in real terms (but non-labour non-capital costs remain constant in real terms). This follows the approach taken by the PSSRU when modelling future social care costs for the Dilnot report. This is intended to reflect key unquantifiable cost drivers such as changes to the length of time spent in care, increase in referrals, use of agency staff, complexity of care needs, etc.
- Service usage is projected based on the change in child population in each local authority area.
- The Children and Family Court Advisory and Support Service also report that there has been a sustained increase in the number of councils applying to the courts for Care Order since the Baby P case, but the numbers are still too volatile for a trend to be predicted and the average costs for councils leading up to a court application have not been accurately determined.
Adult social care
- Health and social care unit costs remain constant in real terms to 2015 and then rise by 2% per year in real terms (but non-labour non-capital costs remain constant in real terms). This follows the approach taken by the PSSRU when modelling future social care costs for the Dilnot report.
- Service usage is projected based on the change in either over 65 (for older people services) or working age (for other adults) population in each local authority area.
- The impact of changes to the types of care that people receive, Dilnot proposals/ government changes to funding of ASC, changes to NHS spending on reablement and other services, and the impact of shortfalls in Disabled Facilities Grant funding have not been applied to the model.
**Highways, roads and transport**
- For concessionary fares, CPI inflation, pay drift and the projected increase in people over the State Pension Age are applied as cost drivers.
- For other transport spending, we applied CPI inflation, pay drift and vehicle miles based on the Department for Transport’s (DfT) 2011 Road Traffic Forecasts.
**Housing**
- CPI inflation, pay drift and the change in the number of households are applied as cost drivers.
- The model includes an adjustment designed to take account of the impact of housing benefit changes and the economic downturn on demand for housing advice, applications for homelessness, demand for Disabled Facilities Grant, etc. This is based on a report by the Cambridge Centre for Housing and Planning Research.
**Culture, recreation and sport**
- CPI inflation, pay drift and the change in population are applied as cost drivers.
**Environment**
- CPI inflation, pay drift and the change in population are applied as cost drivers to non-waste management areas.
- Inflation, pay drift and the change in households are applied as cost drivers to waste collection and recycling.
- Cost of landfill: Based on DEFRA modelling that overall waste arisings will decrease and the amount of waste landfilled will decrease. Landfill tax will remain at £80 per tonne from 2015/16 and landfill gate fees will increase with inflation only.
- Cost of EFW: Based on DEFRA modelling that overall waste arisings will decrease, but the proportion of waste arisings sent as EFW will increase. EFW gate fees will increase with inflation only.
- Cost of composting gate fees (organics): Based on DEFRA modelling that overall waste arisings will decrease and the proportion of waste arisings composted will remain constant. Composting gate fees will increase with inflation only.
**Planning and development**
- CPI inflation, pay drift and the change in population are applied as cost drivers.
- It also projects that the number of planning applications will stay constant to 2013/14 but will thereafter increase by 5 per cent a year as a result of economic recovery and will climb gradually back to the levels received by councils at the start of the last decade.
**Other services** • CPI inflation, pay drift and the change in population are applied as cost drivers. • The model assumes that councils will continue to target corporate and back office functions to achieve maximum savings, but will soon reach a point when they see diminishing returns, given the high levels of efficiency savings from these functions they have already realised. The efficiency savings applied to Central services are hence double those applied to all other services. • The cost of servicing capital financing costs has also been included as an expenditure item and assumed to stay flat throughout the period. This may be an underestimate since borrowing costs can be expected to return to higher levels over the decade. Higher interest rates would only apply to a small proportion of total local authority borrowing and the resulting cost pressures are not expected to have a material impact on expenditure for councils at a national level.
Public Health • As the service only started to be provided by local government in 2013/14 the projected expenditure is the same as agreed funding, increasing by inflation only. This makes it cost neutral within the model.
## Summary of Cost Drivers
| Cost Driver | CPI Inflation | Pay drift | Population | Sales, Fees and Charges | Efficiencies | |------------------------------|---------------|-----------|------------|-------------------------|--------------| | | | | All | Child | | | | | | Working Age| SPA & over | | | | | | 65 & over | Households | | | | | | | Other | | | Education | X | X | X | | 2.8 - 2% | 2-1% | | Transport | X | X | | | 2.8 - 2% | 2-1% | | Maintenance and Winter Service| X | X | | | 2.8 - 2% | 2-1% | | Parking | X | X | X | | 1.1-2.5% | 2-1% | | Road Safety Education | X | X | X | | 2.8 - 2% | 2-1% | | Street Lighting | X | X | X | | 2.8 - 2% | 2-1% | | Concessionary Fares | X | X | X | | 1.1-2.5% | 2-1% | | Social Care | X | X | X | | 2.8 - 2% | 2-1% | | Children | X | X | | | 2.8 - 2% | 2-1% | | Older People | X | X | X | | 2.8 - 2% | 2-1% | | Other adults | X | X | X | | 2.8 - 2% | 2-1% | | Housing | X | X | X | X | 2.8 - 2% | 2-1% | | Cultural | X | X | X | | 1.1-2.5% | 2-1% | | Libraries | X | X | X | | 1.1-2.5% | 2-1% | | Environmental | X | X | X | | 2.8 - 2% | 2-1% | | Waste Disposal | X | X | X | | 1.1-2.5% | 2-1% | | Waste Collection | X | X | X | | 1.1-2.5% | 2-1% | | All other Waste | X | X | X | | 1.1-2.5% | 2-1% | | Regulatory | X | X | X | | 2.8 - 2% | 2-1% | | Planning and Development | X | X | X | | 1.1-2.5% | 2-1% | | Planning Policy | X | X | X | X | 1.1-2.5% | 2-1% | | Central Services | X | X | | | 2.8 - 2% | 4-2% | | Capital Financing | | | | | n/a | 0% | | Public Health | X | | | | n/a | 0% | Appendix 1: Comparison with previous models
There are key differences in both the data sources and functionality of the 2012 preliminary model and the 2013 model, which inevitably lead to different outcomes. The differences between the 2014 model and its immediate predecessor are less pronounced but nonetheless have an impact on the outputs. This section is intended to highlight the key differences between models. It is difficult to quantify the effect that each of these has on the final funding gap as many of them are inter-related. Table 1: Differences between current and previous expenditure methodologies
| 2012 Preliminary Model | 2013 Model | 2014 Model | |------------------------|------------|------------| | Uses 2010/11 RO data and 2011/12 RA data. | Uses 2010/11 and 2011/12 RO data and 2012/13 RA data. | Uses 2010/11, 2011/12 and 2012/13 RO data, and 2013/14 RA data. | | Excludes Public Health | Includes Public Health | Includes Public Health | | Figure for English Councils is calculated at the aggregate level (i.e. cost drivers applied to national figure) | Figure for English Councils is derived from each council figures being totalled (i.e. local cost drivers applied at local level and then aggregated). | Figure for English Councils is derived from each council figures being totalled (i.e. local cost drivers applied at local level and then aggregated). | | Cost drivers were applied to Net Expenditure gross of SFC and SFC then totalled to reach Net Expenditure figure. | Cost drivers are applied to each element of next expenditure (employee costs, other running costs, SFC and other income) and then combined. | Cost drivers are applied to each element of next expenditure (employee costs, other running costs, SFC and other income) and then combined. | | Expenditure was divided into 13 aggregate elements and then cost drivers were applied. | Expenditure is split into the most granular elements possible given the data which equates to 77 lines of expenditure. | Expenditure is split into the most granular elements possible given the data which equates to 77 lines of expenditure. | | Cost drivers were based on policy assumptions and data as at May 2012. | Some cost drivers were updated based on new available data or shifts in policy/economic assumptions. | Some cost drivers were updated based on new available data or shifts in policy/economic assumptions. | | Used inflation projections as at May 2012. | Uses updated CPI inflation figures from the OBR forecast March 2013. | Uses updated CPI inflation figures from the OBR forecast March 2014. | | 2012 Preliminary Model | 2013 Model | 2014 Model | |------------------------|------------|------------| | Uses 2010/11 RO data and 2011/12 RA data and data from the March 2012 Budget. | Uses 2010/11 and 2011/12 RO data and 2012/13 RA data and data from the March 2013 Budget. | Uses 2010/11, 2011/12 and 2012/13 RO data and 2013/14 RA data, data from the 2014/15 final settlement and 2015/16 indicative settlement. | | Excludes Public Health | Includes Public Health | Includes Public Health | | Reserve levels from 2013/14 estimated to decrease by £300 million then increase by £600 million over the next six years. | Reserves are used or invested based on need – if a funding gap exists up to 5% of reserves would be used each year with level never going below 5% total annual expenditure. Where funding greater than expenditure reserves are increased. | Reserves are used or invested based on need – if a funding gap exists up to 5% of reserves would be used each year with level never going below 5% total annual expenditure. Where funding greater than expenditure reserves are increased. | | Interest and investment income was increased by the Gilt Market rate each year. Gilt rate taken from March 2012 budget. | Interest and investment income was increased by the Gilt Market rate each year, but a small proportion was affected by changes to reserves to reflect equity profile. Gilt rate taken from March 2013 budget and was lower than previous year. | Interest and investment income increased by RPI inflation projection each year. | | Council Tax was estimated for 2013/14 and then increased by 0.5% (base) and rate frozen till 2014/15 then increased at 2%. | Council Tax data for 2013/14 from requirement. Base increased based on local base calculation incorporating adjustment for projected local household change. Rate increased by 1% in 2014/15 then by 1.5% per annum. | Council Tax for 2014/15 calculated from CLG council tax statistics. Base increased based on local base calculation incorporating adjustment for projected local household change. Rate increased by 1% in 2015/16 then by 1.5% per annum. | | Business rates estimated for 2013/14 and then increased by standard 3.5% a year. | CLG Headline information is used for 2013/14 and 2014/15. Rates increase by RPI plus estimate of local growth based on two year average trend and projected GDP growth. | 2013/14 and 2014/15 Business Rates data taken from CLG NNDR data. Rates then increase by RPI plus estimate of local growth based on two year average trend and projected GDP growth | | Grant funding up to 2012/13 taken from RO and RA. For 2013/14 and 2014/15 assumptions made based on assumed settlement. For years beyond assumed a constant rate | Grant funding up to 2012/13 taken from RO and RA. For 2013/14 and 2014/15 figures from CLG headline figures from LG finance settlement. 2015/16 headline reduction applied as per Spending Round | Grant funding up to 2013/14 taken from RO and RA. For 2014/15 and 2015/16 figures from LG finance settlement. For years beyond calculated based on a decrease in Settlement Funding Assessment of | of decrease at same rate as previous spending review period. announcement of June 2013. For years beyond assumed a constant rate of decrease (adjustable) but accounted for level of grant funding for new homes bonus. 8% in 2016/17 and 7% each year thereafter.
Appendix 2: References and Data Sources
2010/11 Data 2010/11 Revenue Outturn (DCLG) https://www.gov.uk/government/publications/local-authority-revenue-expenditure-expenditure-and-financing-england-2010-to-2011-individual-local-authority-data--5
2011/12 Data 2011/12 Revenue Outturn (DCLG) https://www.gov.uk/government/publications/local-authority-revenue-expenditure-expenditure-and-financing-england-2011-to-2012-individual-local-authority-data--2
2012/13 Data 2012/13 Revenue Outturn (DCLG) https://www.gov.uk/government/publications/local-authority-revenue-expenditure-expenditure-and-financing-england-2012-to-2013-individual-local-authority-data-outturn
2013/14 Data 2013/14 Revenue Account (DCLG) https://www.gov.uk/government/publications/local-authority-revenue-expenditure-expenditure-and-financing-england-2013-to-2014-individual-local-authority-data
2014/15 and 2015/16 Data 2014/15 final local government finance settlement, and 2015/16 indicative settlement https://www.gov.uk/government/collections/final-local-government-finance-settlement-england-2014-to-2015
Council Tax levels in England 2014/15: Council Tax Base statistics:
https://www.gov.uk/government/collections/council-taxbase-statistics
Population and Household Projections
2011 Population projections (ONS) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-270247
2011 Household projections (DCLG) https://www.gov.uk/government/publications/household-interim-projections-2011-to-2021-in-england
Other Background Data
Rateable Value statistics (VOA) http://www.voa.gov.uk/corporate/statisticalReleases/120517_CRLFloorspace.html
Economic and Fiscal Outlook (OBR) http://budgetresponsibility.org.uk/economic-fiscal-outlook-march-2014/
Road Transport Forecasts (DfT) https://www.gov.uk/government/publications/road-transport-forecasts-2011-results-from-the-department-for-transports-national-transport-model
Written Reports
PSSRU, 2011. Projections of Demand for Social Care and Disability Benefits for Younger Adults in England http://www.pssru.ac.uk/pdf/DP2880-3.pdf
PSSRU, 2011. Projections of Demand for and Costs of Social Care for Older People in England, 2010 to 2030, under Current and Alternative Funding Systems http://eprints.lse.ac.uk/40720/1/2811-2.pdf
OBR, 2014. Economic and Fiscal Outlook March 2013 http://budgetresponsibility.org.uk/economic-fiscal-outlook-march-2014/
CCHPR, 2010. How will changes to Local Housing Allowance affect low-income tenants in private rented housing? http://england.shelter.org.uk/\_\_data/assets/pdf_file/0016/290041/CCHPR_final_for_web_2.pdf
DEFRA, 2012. Forecasting 2020 waste arisings and treatment capacity https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/18186/pb13883-forecasting-2020-waste-arisings.pdf.pdf
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a0fe1d4e903601520c433479b722cdab6e50f8ad | Using and discharging conditions – Ten best practice principles
July 2015
About this advice note
This advice note has been written by a group representing interests from across the development sector and local government. It’s intended to complement policy and guidance with ten good practice principles. If followed by all stakeholders in the planning process, these principles should help improve the way conditional planning permissions work for everyone. Their goal is to help reduce the uncertainty and cost that can result from over reliance on conditions. They should also ensure that all conditions are better tailored to the purpose and encourage a more streamlined discharge process.
For each principle the reader should consider the action points described and embed these good practices into their work.
Introduction
Local Planning Authorities (LPAs) grant permission for most planning applications and there has been a significant improvement in the speed of determination. However, where it exists, poor practice around conditions on planning permissions impacts on development viability and delays in bringing forward developments. It adds to the costs for LPAs, developers and statutory consultees; and can cause local communities to feel that the process of considering applications is opaque and confusing.
In summary the criticisms are:
- LPAs paying too little attention to the conditions that are applied to planning permissions.
- Too little priority is given to managing the discharge of these conditions by developers, LPAs and consultees.
All sectors involved in planning and development agree that the flexibility offered by conditions, when used well, facilitates development. They enable developers to spread cost and risk by providing information about detailed considerations after the principle of development has been accepted and provide a mechanism for restricting unacceptable aspects of a development rather than refusing the whole proposal.
The policies for the use of conditions are defined in the National Planning Policy Framework (NPPF) para 203 and 206. The 6 tests (para 206) provide a robust and familiar framework against which proposed conditions should be tested. Further practical guidance about the wording of conditions and detail of how and when certain types of conditions can be used is in the government’s Planning Practice Guidance (PPG). These should be referred to along with the 10 good practice principles. The ten principles
Principle 1
The number of conditions imposed through a planning permission should be kept to the minimum necessary to ensure good quality sustainable development.
Planning conditions should comply fully with NPPF’s six tests. LPAs need to ensure that all case officers are fully familiar with them and are encouraged to be rigorous in the case of each proposed condition. It's equally the case for the officers of statutory consultees, who may not be planners, but who should nonetheless be familiar with the tests in relation to the conditions they recommend.
In practice, while standard conditions can be a useful aid for consistency and supporting enforceability, there is a danger that not enough thought is given to whether the condition is necessary: i.e. will it be appropriate to refuse planning permission without the requirements imposed by the condition?
The reason for imposing a condition is often not clearly set out in decision letters. A local plan policy does not of itself justify the imposition of a condition. More consideration given to explaining why a condition is needed (rather than relying on a simple reference to a policy number, or generalisation such as to preserve the amenity of the area) will result in conditions honed to specify what is actually required in order to make a development acceptable.
Planning officers should add value by rationalising the conditions requested by various consultees so that the submission of a detail for approval will take account of various requirements for linked aspects of the development e.g. where the EA have ground water contamination concerns and environmental health are concerned about the impact of contamination for human habitation, there will be benefit in a co-ordinated approach to the design solution. The best such solution and clearest conditions will be reached through conversation between the parties about what is required.
Actions for LPAs:
- Be robust in testing your proposed conditions against the 6 tests.
- Use standard conditions as a guide rather than a pick and mix.
- Give better reasons for the conditions you are imposing and relate these to the development.
- Rationalise conditions that relate to similar matters where appropriate.
Actions for statutory consultees:
- Be robust in testing your requested conditions against the 6 tests.
- Explain clearly what the requested condition is designed to achieve in relation to this development
- Be open to rationalising the form of conditions where requirements overlap. Principle 2
Better detail submitted = fewer conditions.
When a planning submission contains full detail relating to the proposed development, impact analysis and mitigation measures; fewer conditions will be required to ensure the quality of the resultant development. As long as there’s sufficient information to allow for the proper consideration of the proposal, there is an element of choice for the applicant about whether some matters of detail are submitted up front (giving more certainty) or after the principal of development is established and conditions imposed (managing the cash flow and timelines in the planning process). Where the submission includes material or notes that are purely illustrative, this needs to be clearly indicated.
LPAs should not impose or statutory consultees request conditions that, in effect, duplicate the information or detail already supplied as part of the application. The PPG advises that a condition requiring resubmission and approval of details that have already been submitted as part of the application is unlikely to pass the test of necessity. It may in some limited circumstances be necessary to require that a particular aspect of a development be completed as part of the development e.g. to ensure that mitigation required as part of a flood risk assessment submitted with the application is carried out.
If information or detail is to be submitted later through approval of detail or reserved matter application, discussing when in the delivery programme will avoid compromising the quality of the development.
Actions for applicants:
- Use pre-application discussion to agree your submission material and reserved matters.
- Don’t reserve matters where there is not a practical reason for delaying the submission of these details in the planning application.
- Share your prospective development programme with planners so that timing of detail conditions doesn’t hold up development.
- Be clear about what material is simply illustrative and what is to be considered within the application.
Actions for LPAs:
- Don’t impose a condition that in effect duplicates material in the application submission.
- Publish your list of standard conditions on your website.
Principle 3
Positive dialogue between applicant/planning authority/statutory consultees/community is likely to result in fewer conditions being imposed as issues can be resolved as they arise.
Pre-application discussions and regular conversations about matters to be covered by a condition will help streamline the planning process, and aid transparency about what is being granted permission. Such conversations should take place early and drafts of proposed conditions shared with the applicant as early as is practical, not just when the council officers’ report is being drafted. As per the NSIP regime, it could be helpful for clarity if the applicant includes a schedule of expected conditions in an application submission. In some cases it may not be possible to rely on a condition to provide information needed before planning permission can be granted, such as a flood risk assessment or land contamination issues. Pre-application discussions can help identify information requirements and save time and wasted effort during the application stage.
Decision letters should clarify why a condition is necessary (to make the development acceptable). For additional clarity and transparency, it could also explain, if applicable, that an applicant has requested that this detail be considered later.
When an application is submitted, any omission or ambiguity in the application submission should, wherever possible, be discussed with the agent or applicant and sorted out rather than be left to condition.
If an element of the proposed development shown on the submitted plans is unacceptable and a modification is required to make the proposal acceptable, giving the applicant a chance to amend the application or to delete reference to the problem element can avoid a condition and make the proposal clearer for the community. A condition requiring approval (before the relevant phase of the construction) of a substitute detail can be imposed provided that the amendment does not change the nature of the development sought, and the applicant is able to confirm that the amendment is capable of delivery. Compliance with the plans in other respects can be assured by standard conditions such as that used by PINS.
By the time the officer’s report is written up, the applicants should be familiar with all the conditions that are being proposed by the LPA. The cost of making and considering applications to vary conditions or to take enforcement action should a condition be breached, provides another compelling argument for making sure that all parties are up to speed and in agreement about the conditions prior to the determination of the application.
Actions for LPAs:
- Discuss with an applicant where a modification to the application might avoid a condition.
- Give applicants the chance to amend an unacceptable feature rather than impose a condition.
- Encourage applicants to discuss post application timing for the submission of reserved details.
- Share the list of proposed conditions with the applicant as early as possible and certainly before the report is finalised.
Actions for applicants:
- Discuss proposed conditions with the LPA and statutory consultees at the earliest opportunity.
- Respond promptly to modify the application submission if amendment will avoid an approval of detail application later.
- Provide a list of planning conditions that you feel would be appropriate for your proposal. Principle 4
If a matter is controlled under other regulatory regimes then it should not be the subject of a planning condition.
Planning is not the safety net for controlling all matters pertaining to a development. The second NPPF test requires conditions to be relevant to planning and the PPG warns against conditions that require compliance with other regulatory regimes.
The wide scope of planning considerations leaves the NPPF test fairly open to interpretation. However, where matters are capable of control under other legislation, there is good reason to let the control lie there. Duplicating conditions in planning permissions and other consents can lead to overlap and confusion. Moreover, conditions relating to other regimes are also often tricky to draft in a manner to make them enforceable under planning.
The best mechanism for avoiding confusion or dispute over such conditions is an active discussion with statutory consultees and other relevant agencies including other council services. Applicants are encouraged to have pre-application discussions with other regulators and make parallel applications where possible so that the different regulatory regimes can be ‘dovetailed’ so far as possible. Many of the statutory consultees offer advice services to help applicants to integrate the various requirements of planning and non-planning consenting regimes.
An informative may be sufficient to draw attention to a requirement under another regime, rather than using a condition requiring details to be submitted.
Actions for third parties, including statutory consultees:
- Do not duplicate requirements where it is possible to control development or regulate use under other regimes or permits.
- Be prepared to participate in an LPA led “development team” discussions to ensure that your requirements can be integrated into proposals alongside the requirements of others.
Actions for LPAs:
- Be prepared to challenge conditions recommended by statutory consultees and other third parties where these relate to matters that can be controlled through other regimes.
- Encourage applicants to ‘parallel track’ applications for planning permission and other permits and licences
- Use informatives to draw attention to the requirements of other regimes
Actions for applicants:
- Avoid inconsistencies and additional conditions by considering all the relevant development requirements including non-planning consenting regulations when preparing your proposals.
- ‘Parallel track’ applications for planning permission and other consents and permits wherever possible. Principle 5
A prescriptive condition setting out what would make the detail of a scheme acceptable is often a better option than an approval of detail condition.
Approval of detail applications create uncertainty and are more costly and time consuming for the applicant, the LPA and statutory consultees. As a general guide, approval of detail applications are a tool more appropriate for major schemes where the complexity and longer design/delivery phases mean that some significant issues will be finalised after the application determination process (see Principle 2).
In many instances it will be practical to say what would constitute an acceptable detail/method and embody this in a prescriptive condition rather than using an approval of details condition to ask for a drawing or a specification to be submitted.
Often it is possible to refer to an accepted standard to be achieved or a methodology: e.g. for tree protection there is a relevant British Standard BS 5837:2012. For design details it may be possible to refer to a design code for an area to describe an acceptable approach or material. This approach can both save time and make the expectation clear to all. It can also provide a degree of flexibility for the developer where, for example, a pallet of materials would be acceptable rather than a single brick or roofing material.
Actions for LPAs:
- Consider using prescriptive conditions in preference to approval of details conditions where what is required can be specified.
- Design standard conditions that refer to locally acceptable design approaches or national standards where appropriate.
Actions for third parties and statutory consultees:
- Consider whether it is possible to formulate standard format conditions that specify appropriate standards to be achieved in order to meet a given requirement.
Actions for applicants:
- Let the LPA and others know what you consider would be possible or practical to specify in a given situation
Principle 6
Consider the impact of a condition on deliverability: inappropriate timing or lack of clarity about phasing can increase risk and cost.
It is clear in the PPG that consideration must be given to the impact of a condition on the deliverability of a development. Conditions that require the submission and approval of details prior to commencement of some aspect of a development should take account of the development process and such conditions should be discussed with the applicant. The DMPO 2015 now specifically requires reasons to be given for using pre-commencement conditions.
Equally, although not required by legislation, it is good practice for the LPA to ensure that all such conditions precedent are grouped on the decision notice, and that the conditions themselves make absolutely clear which conditions relate to which phase of a multi-stage development and which to the development as a whole. Similarly, in the case of hybrid applications seeking detailed permission for development on one part of a site and outline permission for another part of the same site, grouping the conditions into those that apply to each and those that apply across the site and/or to all phases of development will give greater clarity.
Actions for LPAs and statutory consultees:
- Fine tune your requirements for submission of details to take account of development and construction sequencing.
- Group conditions on the decision notice to make clear which conditions relate to which phase or part of the development and which relate to the development as a whole.
- Use the reasons for a condition to also explain the timing for submission of details.
Actions for applicants:
- Share the development project planning with the LPA and other parties if timing of conditions will affect deliverability.
**Principle 7**
**Wherever practical, frame a requirement as a condition rather than require a planning obligation.**
It is vital that all parties do their utmost to ensure that the process of considering a planning application should take no longer than is necessary. Where it’s required that something is in place in order to make a development acceptable, all parties should take an active role in ensuring that the means of resolution is clearly agreed before determination. Resolving an issue by using a condition to secure acceptable development avoids the potential for delay in completing a planning obligation.
But where a planning obligation is required, all parties should follow the planning guidance and work to finalise the obligation in a timely manner. Thus both applicants and councils should strive to complete the S106 agreement within the government’s 13 week target or any agreed extension date.
A condition requiring completion of the S106 agreement before development commences will not be appropriate in the majority of cases. However, in exceptional circumstances, for example if completion of the S106 agreement for complex strategic development is not immediately possible but there is clear evidence that a lack of a planning permission would risk deliverability of the development, such a condition could be considered if it is negatively worded. Clearly in such cases use of the condition should be agreed between the council and the applicant. Transparent decision making will require the terms of the S106 to be clear when the application is determined, albeit that the agreement has not yet been completed.
Actions for LPAs:
- Use a condition to secure a requirement in preference to a planning obligation to save time and cost.
- Use every effort to enable the S106 agreement to be completed expeditiously.
- If such a condition is used ensure clarity about the terms prior to determination and discuss the condition with the applicant.
Actions for applicants:
- Use every effort to enable the S106 agreement to be completed expeditiously. • Be clear about what is deliverable in your discussion of planning obligations prior to determination of your application. • Work towards completion of a S106 agreement within the government’s targets or the alternative date you have agreed with the LPA.
**Principle 8**
**Informatives are put on a decision notice as guidance for the developer. They are not conditions and are not enforceable, but do provide an insight.**
Informatives are the additional comments from the local authority, usually listed at the end of planning permissions. They don’t form part of the planning permission, but are used as a useful means for providing guidance to the developer (who may not in the end be the applicant) about other requirements of the council and third parties, such as statutory consultees.
Confusion arises when informatives are used to set out additional detail as to what is required in order to satisfy a condition or make a development acceptable in planning terms. If a particular detail or treatment is necessary in order to make a development acceptable, then that information should be conveyed in the condition, otherwise it is not enforceable. But in a situation where there is more than one potentially acceptable option, an informative can give advice about what would not be acceptable e.g. brick or stone is acceptable but render is not.
Informatives may be useful as a means of raising awareness of the developer about other regulatory requirements but these are essentially advisory rather than regulatory.
**Actions for LPAs:**
• Don’t use informatives to set out mandatory requirements. • Do use them when signposting to requirements of other regulations or to permit as they will help a developer to step through the development process.
**Actions for applicants:**
• Heed the signposts and advice contained in informatives in order to save time and cost
**Principle 9**
**Adopt a robust systematic approach to discharging conditions and seeking approval of details applications and consider using a PPA to agree project management milestones and resources.**
A wide range of practices for registering and recording the discharge of conditions applications exists in LPAs. Often this needs to be tightened up as a first step to better management of this part of an LPA’s workload. The deemed consent for conditions provisions of the DMPO 2105 will provide a backstop date to encourage LPAs to give greater priority to discharge of conditions applications generally. But, for larger applications, it is much more effective for all parties to agree a sensible timescale for their consideration; taking into account the complexity of the details requested and the need to consult with other experts. Where the applicant and the LPA have agreed an alternative date in writing, the deemed discharge consent provisions in the DMPO 2015 do not apply. In dealing with complex developments where (despite good practice) there are still a number of conditions on the permission, all stakeholders stand to gain from agreeing a programme for the submission, consideration and approval of conditions.
Agreeing a PPA to cover the discharge of conditions is a positive step to project planning this stage as it provides clear agreed milestones and a mechanism to input the necessary resources to deal with the applications more expeditiously. Where a PPA already exists this could be extended to cover the approval of details phase. Otherwise a new PPA could be agreed. Other parties such as statutory consultees should be offered a chance to input into such discussions.
Actions for LPAs:
- Have clear processes to register and track applications for discharge/approval of conditions.
- Encourage PPAs to cover the post application phase as well as management of the application process.
- Encourage pre-submission discussion of details required by condition in order to iron out any potential issues.
Actions for applicants:
- Support a clearer approach to discharge of conditions by making separate applications for the discharge of conditions/approval of details relating to similar matters.
- Discuss with the LPA the likely timing for submission of details pursuant to conditions.
- Participate in pre-submission discussions including with statutory consultees where the conditions relate to their area of expertise.
Actions for statutory consultees and other third parties:
- Give appropriate priority to expediting the discharge of conditions and approval of details, particularly when the condition has been imposed at your request and requires your expertise to assess the detailed submission.
**Principle 10**
*If an approval of detail application involves consulting with the community/parish/neighbourhood planning forum, this should be flagged and explained in the reason for the condition.*
It has been unusual to consult with the community over the approval of details which have been required by a condition, but in light of the increasing numbers of communities that are engaged in neighbourhood planning, it is probable that this will increase. Whether it is necessary to consult on approval of details applications will be a matter of judgement for the LPA having regard to the circumstances.
For reasons of transparency and good project planning, it would help to have such conditions flagged as such. This will enable an applicant to be proactive and speak with the community when working up proposals in relation to this condition. For their part, the community representatives who are consulted should demonstrate responsiveness to the need for speedy consideration of submissions.
Actions for LPAs:
- Consider whether third parties, especially neighbourhood planning groups, should have an ongoing engagement role in the approval of details applications • Flag with the applicant instances where community involvement will be desirable so the applicant is advised that pre-submission engagement is appropriate and can allow time for this.
Actions for applicants: • Be proactive and engage with the community when working up proposals in relation to conditions. • Be sure that you give enough time in your schedule to allow communities to engage with your proposals.
Actions for communities: • Take a positive role in discussions with applicants regarding submissions required by conditions and provide timely responses when the details are submitted.
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4eb351f3c1a34ebda1eff51bc6d1c45f5e6b9c7b | Disabled people’s protection policies – a regulatory statement
July 2014 Disabled people’s protection policies – a regulatory statement
Introduction
1. In October 2013, responsibility for approving and monitoring train and station operators’ disabled people’s protection policies (DPPPs) transferred to us from the Department for Transport (DfT). Since then, we have been engaging with stakeholders, including operators and groups representing those with disabilities to understand how well the current arrangements work and the role of DPPPs in supporting confident use of the railway.
2. This statement sets out our approach to our approval and monitoring role following this engagement.
Background
3. Access to public transport is for many a necessity of everyday life. As the regulator, we recognise the importance of the rail network being open to everyone regardless of disability. It is our role to oversee that the operators of trains and stations enable passengers with a disability to make their journeys easily and confidently, whether those journeys are made independently or with assistance.
4. Train and station operators are required by their operating licences to establish and comply with a DPPP approved by the Office of Rail Regulation (ORR). A DPPP sets out, amongst other things, the arrangements and assistance that an operator will provide to protect the interests of disabled people using its services and to facilitate such use. Further details on the content and structure of DPPPs, the scope of our role and the legislative and regulatory background to this, are available on our website. Guidance to operators on how to produce DPPPs was published by DfT in 2009 and is available on our website.
Key issues arising from our engagement with stakeholders
5. We are grateful to all those who have engaged with us since October 2013. We have noted the following issues and themes arising from this engagement:
(a) whilst there is good practice amongst operators, this is not being applied consistently across the industry;
(b) feedback that, in the majority of cases, the assistance provided by operators is delivered successfully, but that there are still too many cases where things go wrong;
(c) whilst the assistance available tends to work well for those with more visible disabilities, this was not so good for those with less visible disabilities;
______________________________________________________________________
1 How to write your Disabled People’s Protection Policy: A guide for Train and Station Operators, available at: http://orr.gov.uk/\_\_data/assets/pdf_file/0015/5604/how-to-write-your-dppp.pdf. (d) there is inconsistency in the quality of service provided by staff towards those requiring assistance; and
(e) a view that more could be done – both by the rail industry and those representing disabled people – to promote awareness of the rights of disabled people when travelling and the assistance that is available.
6. It was also emphasised to us that whilst the majority of customers generally have positive experiences from using the assistance provided, a negative experience when something goes wrong can have a profound impact on a disabled person’s confidence of travelling by rail and sense of independence.
Our policy objective
7. We are aware that significant investment over the last decade has led to greater accessibility at many stations, improving the experience of disabled travellers and enabling more journeys to be made independently of any assistance. We also recognise from our recent engagement that there is a determination amongst operators to provide a better quality service to customers with disabilities.
8. However, the evidence available to us shows that, for those who rely on assistance to enable them to make their journeys, the systems in place do not deliver consistently good levels of service. Furthermore, there is relatively little awareness of the support and facilities available to disabled people who wish to travel by rail. We are clear that this must improve as soon as possible. Accordingly, our key focus is for operators to:
(a) assist and enable people to use the railways confidently, taking account of the wide range of different impairments or needs of disabled and other passengers; and
(b) continuously improve the quality and awareness of the assistance available.
More specifically, our overall policy objective is to:
Empower confident use of the railway by disabled passengers and promote awareness of the advice and help available
Policy development
9. In considering how best to deliver our objective, we have been mindful of the conversations we had with operators in 2012-13 to understand how they engage with their customers. We know from this that many operators have put a lot of effort into developing
______________________________________________________________________
2 This is informed by both our engagement and also Passenger Focus’s report on Passenger Assist, published in March 2014 and available at http://www.passengerfocus.org.uk/news/articles/industry-heads-slowly-in-the-right-direction-in-improving-assistance-for-disabled-rail-passengers.
3 See Disabled travellers’ awareness of rights – final report, March 2014, prepared by Accent Scotland for ORR, available at http://orr.gov.uk/\_\_data/assets/pdf_file/0010/11710/disabled-travellers-rights-awareness.pdf.
4 The Passenger Engagement report can be found on our website at http://www.orr.gov.uk/\_\_data/assets/pdf_file/0003/13989/passenger-engagement-report.pdf. arrangements to help them to deliver their DPPP obligations effectively. We recognise the importance of this in creating a framework for delivering good outcomes for passengers.
10. Bearing this in mind we intend to implement an approach based on improving organisational culture. This will involve focusing on the internal arrangements that an operator has in place to deliver its obligations. When approving DPPPs we want operators to demonstrate to us that their arrangements and approach reflect an organisational culture which drives effective delivery and continuous improvement. When monitoring DPPPs, we will look at how well these arrangements are delivering by focusing on the outcomes that are being achieved.
11. Currently, there is little data to indicate how well operators are performing against their DPPP obligations. This has meant that those operators that do perform well are not recognised, nor is it clear who needs to improve. It has also led to people with disabilities often having to rely on anecdotal information on the experience they can expect if they travel by rail.
12. To address this we will work with stakeholders to establish a core data set of measures for operators to report against to provide a robust evidence base for our monitoring. We will then use this evidence, alongside any other relevant information, to inform whether we need to carry out closer scrutiny of an operator.
13. We set out below in more detail how this will work in terms of the approval, monitoring and enforcement of DPPPs.
Our approach
Approval of DPPPs
14. In line with the 2009 guidance, DPPPs are currently structured in two parts: a passenger-facing document providing information to customers; and a separate policy document which sets out internal arrangements. In particular, parts D2, D3 and D8 of the guidance already set out expectations for what should be included in the policy document. However, we have noted that existing policy documents tend not to be as clear, or specific, as they should be.
15. When reviewing DPPPs submitted to us for approval, we will pay particular attention to the internal arrangements described in the policy document. We will expect these to demonstrate convincingly that the operator has embedded arrangements to deliver effectively in the interests of disabled passengers, along with the means to identify how well it is performing. For example, we will want to understand:
(a) the arrangements in place (and the robustness of these) for:
______________________________________________________________________
5 This policy document covers matters such as: the operator’s strategy regarding accessibility; the management arrangements for the provision of services to disabled people; how the operator communicates its DPPP; and the monitoring and evaluation of the DPPP. (i) delivering assistance, promoting awareness of the assistance available and facilitating travel by those with disabilities (including those with less visible disabilities);
(ii) monitoring and evaluating performance in respect of the above (for which we will want to understand the operator’s own benchmarks for what it considers to be a successful performance), and the processes in place for acting on this to drive continuous improvement;
(iii) capturing and responding to feedback from customers and making improvements as a result of this; and
(iv) how the organisation is structured to deliver these arrangements;
(b) the extent to which the operator has the right organisational values and behaviours towards disability. This includes the extent to which its senior management team is engaged with and provides leadership and support to the frontline staff that deliver assistance, and ensures that the right processes and systems are in place.
16. To provide transparency over our own consistency in reviewing and approving DPPPs we will produce decision letters and publish these on our website along with approved DPPPs. We will also publish indicative timescales for how long we expect to take to approve new or amended DPPPs to help operators to plan (also note paragraph 30 on timescales for implementation below).
Passenger-facing DPPPs
17. There is currently an annual practice of operators submitting their DPPPs for review and re-approval. Through reviewing a number of DPPPs that have been submitted to us since October 2013 we have noted scope for improvement in the clarity of the description of assistance available and also that some of the commitments are not fully consistent with the level expected by the 2009 guidance. We are also aware from stakeholder feedback that:
(a) greater consistency amongst operators in respect of their public-facing DPPP documents may help promote greater understanding of the assistance that is available; and
(b) elements of the guidance may be discouraging operators from feeling that they can provide more customer focused DPPP information.
18. We intend to write to stakeholders about these issues. In particular, it is important that passenger-facing DPPPs are as clear as possible and we can see merit in achieving greater consistency across the industry. We will seek views on options for achieving this, including for example whether a standard DPPP document should be produced, or a template set of obligations can be developed and included within each operator’s DPPP.
19. Should some form of standardisation be introduced we would envisage existing operators then amending their documents at the next appropriate opportunity for republishing. If DPPPs remain entirely bespoke, we would want to satisfy ourselves that all DPPPs are sufficiently clear and set out the minimum level of obligations envisaged by DfT’s 2009 guidance, and would write to operators about the process for achieving this.
**Process of submitting DPPPs to ORR for annual review**
20. Our longer term intention, once we are satisfied that all DPPPs express the minimum level of obligations clearly and the policy documents fully describe internal arrangements, is to end the practice of operators submitting their DPPPs to us for review and re-approval each year where no material changes have been made. We will consider what help we can give to operators on what may or may not be considered ‘material’ and what this means in terms of process at the point this change is implemented.
21. In the interim and until further notice following the outcome of our consultation on the passenger-facing documents, where DPPPs are submitted to us for re-approval, we will flag any particular concerns to the relevant operator.
**Consultation process and arrangements for obtaining re-approval of DPPPs**
22. Where operators seek approval of any material changes to their DPPP, we will expect them to provide a description and reasons for any changes and an explanation of the impact these changes are expected to have on passengers (and the basis of this assessment).
23. The 2009 guidance requires that Passenger Focus, London TravelWatch (where relevant) and the disabled persons transport advisory committee (DPTAC) be consulted on new or materially amended DPPPs. Until now, DfT has carried out this consultation. Once our regulatory approach is fully implemented in April 2015, we will expect the operator to do this, providing us with details of the outcome of its consultation and any subsequent changes to its proposed DPPPs. We will discuss this further with the above three organisations before implementation and then make a minor change to the guidance to reflect this process change.
**Monitoring and reporting**
24. In place of carrying out reviews of each operator as part of an annual DPPP re-approval process, our monitoring approach will be built around operators providing ongoing assurance that their internal arrangements are delivering good outcomes for their customers.
25. As mentioned earlier, to support this we intend to establish a core data set that each operator will report against, to provide a consistent means of measuring key elements of performance. We will develop this collaboratively and in consultation with operators and passenger representatives to ensure that it contains meaningful and appropriate measures. We envisage that the core data set will mostly draw on information that operators should already be collecting to assess their own performance. It will focus on outcomes and as part of this we expect that it will include some measure of passenger satisfaction. We also envisage that it will include information on complaints about passenger assistance, which would then be recorded separately from general complaints.
26. We will then report periodically on how operators are performing. This will be informed by a range of evidence, including the core data set, feedback from representative bodies and any relevant research that we or others have commissioned. In producing these reports, we will recognise those operators that are performing well and highlight good practice and innovative approaches amongst operators. These reports will also help to raise the profile and awareness of the DPPPs and the assistance available. We will also highlight any recent improvements in station accessibility to support efforts by operators to improve awareness of opportunities for making independent journeys.
27. We recognise that it is not always appropriate to make like-for-like comparisons between operators given the varying circumstances of different operators and the nature of the routes and stations that they serve. For this reason it will be important for us to capture more of the context around the data to ensure this is presented fairly. Nonetheless, our expectation will be that operators should deliver continuous improvement against their own performance over time. Where we have concerns that this is not being achieved in the interests of customers, we would then discuss this with the operator concerned and potentially carry out closer monitoring. This could, for example, include carrying out an audit of an operator’s internal procedures.
28. We understand that, on their own initiative, some operators are already considering publishing information on their own DPPP performance. We welcome this initiative and the creation of the core data set should not discourage operators from doing this. Indeed, when approving and monitoring DPPPs we will take account of meaningful transparency as an indication of cultural maturity.
Implementation
29. We will implement our regulatory approach in two stages:
30. The first stage (from now to March 2015) is as follows:
(a) Development of the core data set: alongside this statement we are issuing a letter to stakeholders setting out the process for developing the DPPP core data set. This includes some initial thoughts on what this might look like, invites comments and proposes a working group to take this forward. Responses are sought by 29 August. We aim to finalise the core data set in time for this to be established by 1 April 2015.
(b) Seeking views on greater consistency and clarity in DPPP documents: as discussed above, following publication of this statement we will write to stakeholders on the options for achieving greater consistency in the public-facing DPPP documents and invite comments on how the guidance may inhibit more customer-focused information being provided. If there are clear benefits from greater consistency, we will begin working on this in early autumn. Alternatively, we will carry out a review of all DPPP passenger-facing documents to ensure they are sufficiently clear.
(c) Review of internal arrangements by operators: we are asking operators to satisfy themselves that they have effective arrangements in place to monitor and evaluate their performance against their DPPPs (consistent with paragraphs 14 and 15 of this statement) and that this is reflected in their policy documents. Our aim is for all policy documents to have been reviewed with any changes approved in advance of April 2015. To make this as straightforward as possible:
(i) for those operators with DPPPs currently with us for re-approval we will respond to them shortly with the aim of ensuring that these are consistent with the approach we are taking through this regulatory statement (for both passenger-facing and policy documents of the DPPP). Our intention is that any changes are approved by October 2014. We will work closely with operators to assist them in this process. Operators that have not reached their annual review period as of the date of this statement should continue to rely on their existing DPPPs, which will be reviewed as set out in (ii) below; and
(ii) following the approval of the DPPP documents referred to in (i) above, we will then ask other operators to review their policy documents. To facilitate this, we will flag any common issues arising from our review of the first batch of documents. We expect that these policy documents are then approved by no later than 1 April 2015.
(d) Promoting greater accessibility of DPPPs and DPPP performance on our website: we will review our website with the aim of providing greater transparency of information relating to DPPPs. In time this will include performance information from operators’ core data sets, the DPPP documents, and other information such as our decision letters on approval applications.
31. The second stage, which we expect to begin on 1 April 2015, will mark full implementation with the core data set established. Operators will then report against this as well as continuing to publish any other relevant information. We will carry out a review of performance later in that business year and aim to publish a report by the end of March 2016. We will then continue to report periodically following this. From this point we will also expect operators to carry out the consultation required under their DPPPs (see paragraph 23 above).
Facilitating industry initiatives
32. We have set out above that we will seek views on whether greater consistency in passenger-facing documents would be appropriate. More generally, we recognise that there is a balance to be struck between encouraging greater consistency in the approach taken by operators and not inhibiting operators from innovating or being able to take into account the specific needs of their customers. We stand ready to facilitate and support common approaches developed by the industry where these will benefit passengers, including by amending the guidance where necessary.
Regulatory impact
33. In terms of regulatory impact, we are not imposing any major new requirements beyond those already in place in the licence and guidance. Rather, we are seeking assurance on the effectiveness of operators in delivering their existing obligations. We will be asking operators to report using the core data set; however, we envisage that this will be based on data that operators should be collecting already as part of their own monitoring and evaluation arrangements, so this should not create an undue burden. In any case, the licence condition makes clear that licensees are under no obligation to undertake any action that entails excessive cost.
34. We will also be reducing the administrative burden of the current arrangements by ending the practice of operators resubmitting non-material changes to us on an annual basis (from April 2015). We will look for additional ways to reduce any regulatory burdens arising from our monitoring, provided that we can take assurance that DPPPs will continue to be implemented in line with our objective.
**Enforcement**
35. We want all operators to deliver their DPPP obligations to a high standard consistent our policy objective, relying on reputational incentives as far as possible. We are not setting specific targets and we will draw on a range of data when assessing an operator’s performance and compliance with their licence condition.
36. Where there is evidence to suggest that an operator is not achieving good outcomes for passengers in respect of its DPPP obligations, we will discuss this constructively with the operator concerned. We may then carry out more regular monitoring of that operator. This might include requiring additional information, carrying out an audit, or using our existing power within the licence to require an operator to conduct a review of its DPPP and report its findings, potentially leading to changes to existing DPPPs or practice. Ultimately, if an operator does not comply with its licence obligation, we would follow our enforcement policy.
37. We recognise that a number of operators have concerns around the potential for them to be subject to enforcement action by different authorities in relation to the same matter (‘double jeopardy’), or be subject potentially to other obligations by different authorities (e.g. franchises). In such cases, if enforcement by ORR were a possibility, we would expect to discuss the issue with the other authority to avoid a situation where an operator faces conflicting obligations.
38. We also recognise the concern that a franchise authority, for example, may grant an operator a derogation in respect of a particular commitment, with ORR then taking enforcement action for non-compliance under the DPPP licence condition. Should an operator find itself in the position that it is given such a derogation, it should make us aware of this at the time, so that we can discuss any issues with both them and the franchising authority.
______________________________________________________________________
6 Economic enforcement policy and penalties statement, July 2012, available at: [http://orr.gov.uk/\_\_data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf](http://orr.gov.uk/__data/assets/pdf_file/0018/4716/economic-enforcement-statement.pdf). Linkages to our wider role
39. Whilst DPPPs and our regulation of them have an important role to play in improving access to rail services, they will not in themselves solve all challenges relating to accessibility. Investment is crucial.
40. Through our 2013 periodic review, a significant amount of funding has been made available by the Westminster and Scottish Governments for the industry to continue to improve accessibility at stations(^7). Separate to our DPPP responsibilities we have an oversight role in ensuring that this funding is spent efficiently so that value is achieved for passengers.
41. More broadly, within ORR, we will adopt an integrated approach to ensure that the interests of disabled people are taken into account across all our functions. This includes our wider role on investment projects. For example, we will encourage the industry to engage with disabled passengers and their representatives at the planning stage when stations are being built or developed. Amongst other things this will help to ensure that impediments to accessibility are not inadvertently included in station design.
42. We will also take the opportunity when operators’ licences are next revised to replace the dated “Disabled People’s Protection Policy” terminology with something that is more consistent with “Making Rail Accessible” branding of the existing guidance.
(^7) See paragraph 24.7(f) of our Final determination of Network Rail’s outputs and funding for 2014-19, available at: http://orr.gov.uk/what-and-how-we-regulate/regulation-of-network-rail/how-we-regulate-network-rail/periodic-review-2013/pr13-publications/final-determination.
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353a635bdfb993e6121c4793bdc826e223019eee | Behavioural insights for improving resident decision making
Dr Barbara Fasolo Associate Professor Behavioural Science | Head of Behavioural Research Lab [email protected]
A talk prepared for the LGA – 12 March 2019 Nudges for social good – using behavioural insights in local government
Thanks to Grace Abel & Umar Taj What’s she like? We cannot change, or improve, residents’ decisions unless we know their decision mindware (how, and why they decide, or not) Human “decision mind-ware” is made of 2 systems designed to see the waitress smiling, first.
**SYSTEM 1**
*FAST!* Automatic Effortless Avoids too much thinking Loss averse Confused by info Forgets own values, long term goals Biased
**SYSTEM 2**
... slow ... deliberate .. Reads all information ... balancing losses and gains) ...remembers deep, long term goals Aware of biases
Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.
© Dr Barbara Fasolo What’s the difference between nudging behaviour vs decision?
“Behaviour”
- normally a binary action (“I recycle or not”)
- well-known but not appealing (e.g. I know recycling means using a recycling sack or bank, but my habit is not to recycle).
- Nudging behaviour is about breaking habits, or creating new.
“Decision” (choice)
- many possible options (often more than 2 (“I choose a payment method to pay for rent arrears”))
- some options are new and need to be discovered by new information
- Nudging decisions is also about creating informed decision-making and educating ‘conversations’ (I chose X because...) The fundamental conflict for all of us who help others decide better
How others decide
How we wish others to decide
© Dr Barbara Fasolo Most decision helpers are optimistic
Citizens choose by System 1
But we offer choice for System 2 Decision helpers need to be realistic
offer choice architecture for System 1 Boyce, Dixon, Fasolo and Reutskaja (2010)
offer training For System 2 Fasolo & Taj 2019 Case: Helping to choose a high-quality hospital for elective surgery
What do you think residents care most about when choosing a hospital online? Hospital Choice was offered for System 2
We are not primed by the postcode, discount distance and choose by quality.
We are not overloaded by choice, have the time and resources to compare all 365 hospitals.
We are not afraid or stressed by the statistics.
We can understand numbers, invert scales, combine conflicting information, map indicators to our preferences, scroll down… Which Choice Architecture could...
- Increase # residents choosing Best Quality Hospital
- (Government)
- Improve transparency, *informed* choice (taking into account diff't age, numeracy etc)
- (King’s Fund)
- Decrease Effort for online user
- (NHS choices team) The 3 stage project (for your later reference)
Focus Groups
- simpler and more consistent format of data;
- clearer and more consistent definitions of indicators;
- more balanced scorecard
Phase 1 5 choice architectures Effect of designs on:
- a) Choice outcomes (Prop People choosing best)
- b) Awareness of information
- c) Post-choice perceptions
- d) Information search (heatmaps)
Phase 2 2 architectures Any long-lasting effect of Phase 1 on subsequent choice and choice perceptions?
March 2009 44 people
January 2010 1168 valid participants
February 2010 744 valid participants
Dr Barbara Fasolo © Dr Barbara Fasolo Before nudging a decision, structure it!
Create “Choice Menus”:
2-5 Options (e.g. hospitals)
2-3 Clusters of Criteria
- First the most important that is forgotten
- Last the one that people overweigh/think most about
- Easy labels+checks + numbers Before implementing a choice architecture:
Consider Decision Mindware,
Design Choice (Not information) Architectures for System 1
Test them before choosing the one to implement (here, just 4)
1. Best first, Sort by Quality
Best Quality is First Active Choice Required 2. Opt-out Default (Highlight the best overall on all the criteria and set as opt-out default)
Same Scorecard as Sort-by-Quality
Best is highlighted pre-selected 3. Sort by distance, best in the ‘hotspot’
Best is 4th (away from edge and close to middle). Active choice required
Scorecard Pre-sorted by Distance (Quality not Mentioned) 4. Preference Articulation (list all objectives that are relevant and ask to rank them by own preferences)
...No Hospital is excellent across all indicators... You will need to make trade-offs...
The first indicator tells you how good the quality is... Numbers greater than 100 mean...
Rank all indicators from 1 (most important) to 9 (least important to you)
Then Scorecard (same as Best-in-Hotspot) When did most residents choose the highest quality hospital?
Best First? Opt Out Default? Hotspot? Preference Articulation? Prop ‘best quality hospitals’ choices
| Condition | Number of Observations | Proportion of best choices | |--------------------|-------------------------|----------------------------| | Default | 214 | 0.44 | | Best-First | 254 | 0.35 | | Best-In-Hotspot | 256 | 0.52 | | Preference | 219 | 0.48 |
(Reutskaja & Fasolo, 2013) When were residents making most informed choices?
With opt-out default
When preferences are asked Going back to your decision, can you...
1. Present your residents a simple menu/scorecard laying out 2-5 options available?
2. Highlight the option recommended?
3. Include the do-nothing/no-decide option (as choosing not to choose is a choice!)?
4. Include a checklist of objectives?
5. Ask to interact and rate these objectives by importance?
Thank you, and keep in touch: [email protected]
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466ff0d31a8f0ff6be2f2b09bd72ef6e3a0effda | 1 Purpose
1.1 The purpose of the Scrutiny Panel was to look at how partners locally, including the private sector, can work together to influence the local economy.
Key lines of Inquiry:
- How can schemes, such as Apprenticeship Programmes, be developed and expanded so that they deliver for both local employees, employers and local residents?
- What is the vision for skills and learning issues, particularly low skills?
- What support is there for those that are in long term unemployment?
- What are the areas for potential growth in jobs?
- What can other organisations/groups/individuals do to help?
- Whether a mapping skills gap exercise has been undertaken to identify the type of skills that are in short supply; and what the findings of this exercise are
- How specific servicers can be used to generate business investment
- How can the offer of commercial land in the borough be improved to ensure a steady stream of quality premises that are accessible by new and established organisations?
- What could feasibly be done to improve the physical infrastructure in and around the town?
- How it can be ensured that those who are seldom heard or isolated are engaged with?
1.2 A copy of the scope of the review is attached at Appendix A. 2 Context and Background
2.1 The Overview and Scrutiny Committee, at its work programming event in June 2015, agreed to include a review of the health check of the local economy. The Overview and Scrutiny Committee commissioned Scrutiny Panel 1 to undertake the review. An in-depth review commenced in July 2015 and concluded in March 2016.
2.3 This review links to the Council’s corporate priorities, particularly corporate priority 1 – Northampton Alive - A vibrant town.
2.4 The Scrutiny Panel established that the following needed to be investigated and linked to the realisation of the Council’s corporate priorities:
Background data, including:
- Presentation to set the scene: “To identify the issues locally – The Northampton Picture”
- Relevant national and other background research papers, such as:
- Mitigation Advisory Committee: Skilled Shortage Sensible (2013)
- UK Commission’s Employer Skills Survey 2013: UK Results (2014)
- Future of Apprenticeships in England: Implementation Plan (2013)
- Winning the Global Race: Jobs, Skills and the importance of vocational education (2014)
- Department for Business, Innovation and Skills – Evaluation of Apprenticeships: Employers (2012)
- Warwick Institute for Employment Research: Review of Apprenticeships Research (2013)
- SEMLEP – Strategic Economic Plan 2014
- NEP – Northamptonshire Strategic Economic Plan 2014
- Survey data in relation to skills and skill shortages, including equality data within the wards • Relevant data, such as ONSA and other statistical data, including Government statistics on apprenticeships • Best practice and successful initiatives in both Northampton and elsewhere • Witness evidence: **Internal**
- Leader of the Council, Northampton Borough Council (NBC)
- Cabinet Member for Finance, NBC
- Cabinet Member for Regeneration, Enterprise and Planning, NBC
- Director of Regeneration, Enterprise and Planning, NBC
- Director of Workforce and Development, LGSS **External**
- Academic, University of Northampton, Northampton College and Moulton College
- Director, Northamptonshire Enterprise Partnership
- Director, Adult Learning, Northamptonshire County Council
- Chair, Northampton Town Centre BID
- Chair, Markets Action Group
- Chair, Brackmills BID
- Director, Northamptonshire Connexions
- Director, Talent Match, Northamptonshire
- Director, Northamptonshire Growth Hub
- Director, SEMLEP
- Director, Northamptonshire Chamber of Commerce
- Assistant Director, Transport Highways & Infrastructure, Northamptonshire County Council
- Key employers in the town
- Skills Funding Agency (SFA)
- Apprentice Training Agency
- Local employers 3 Evidence Collection and Desktop Research
3.1 Evidence was collected from a variety of sources:
3.2 Background reports
- **Presentation to set the scene: “To identify the issues locally – The Northampton Picture”**
- **Mitigation Advisory Committee (MAC): Skills Shortage Sensible (2013)** A copy of the report can be located [here](#).
- **Inspiring grown – CBI/Pearson Education and Skills Survey 2015** A copy of the full report can be located [here](#).
- **UK Commissioner’s Employer Skills Survey 2013: UK Results (2014)** A copy of the full report can be located [here](#).
- **Future of Apprenticeships in England: Implementation Plan (2013)** A copy of the full report can be located [here](#).
- **Winning the Global Race: Jobs, Skills and the importance of vocational education (2014)** A copy of the full report can be located [here](#).
- **Department for Business: Innovation and Skills – Evaluation of Apprenticeships: Employers (2012)** A copy of the full report can be located [here](#).
- **Warwick Institute for Employment Research: Review of Apprenticeships Research (2013)** A copy of the full report can be located [here](#). • **SEMLEP – Strategic Economic Plan** A copy of the full report can be located [here](#).
• **NEP – Northamptonshire Strategic Economic Plan 2014** A copy of the full document can be located [here](#).
**National Careers Services (NCS)**
Northampton Careers Services (NCS) reports that Northamptonshire Enterprise Partnership (NEP) follows the Northamptonshire county boundaries and has one of the fastest growing populations of all LEP areas. Its key economic sectors which provide high numbers of jobs are:
- high performance technologies
- logistics
- food and drink
**Northamptonshire’s Labour Market**
NCS goes on to report that the Northamptonshire labour market is relatively buoyant, with above average employment rates (75% of working age population employed compared to 70% nationally) and below average levels of economic inactivity (19% of working age population compared to 23% nationally. This data was reported in the Annual Population Survey 2012.
**Skills Shortages**
Northamptonshire has been rated in the top three LEPs nationally for a tight labour market. NCS highlights that this means that recruiters find it difficult to get staff and there is competition for labour due to a low number of unfilled vacancies per claimant. NCS goes on to state that this indicates that the labour market is working well to match people to jobs and that the local economy is creating a significant number of jobs. NCS reports that skills shortages in hard to fill vacancies are particularly high in associate professional occupations, elementary staff and skilled trades. Continued employment growth is forecasted in higher skilled, white collar occupations, including managers, professionals and associate professional roles. An estimated two million additional jobs in these occupations are expected to be created by 2020 nationally.
Skills and Sectors in Northamptonshire
Food and Drink Sector
NCS advises that the food and drink sector in Northamptonshire is a significant employer with around 46,000 jobs supported by prospering businesses. In this sector the challenge is to attract skilled and semi-skilled labour.
High performance technologies
NCS reports that there are 21,000 people currently employed within high performance technology in the county. However, there are key concerns around maths’ abilities at all levels. Manufacturing provides employment for 12.3% of the working population in Northamptonshire. This data was published in the Northampton Waterside Enterprise Zone Skills Strategy and Plan, March 2013. Statistics for people starting Apprenticeships within the science, engineering and manufacturing sector for 2012/13 are relatively high (proportionally) with 139 starts within the sector and 172 science, engineering and manufacturing frameworks being undertaken. This indicates that this area of expertise is being sought from businesses who consider themselves outside of the sector.
Logistics
NCS reports that considerable demand is predicted for managers, customer service positions and transport and machine operatives. It advises that there are a large number of near-to-retirement drivers (16% of LGV drivers are 60 or over) and there has also been a decline in the number of people taking and passing their Large Goods Vehicle test, which is a decline of 31% from 2006/07 to 2010/11). NCS highlights that as a sector which provides a high percentage of employment in Northamptonshire these national issues also affect the local area and need to be addressed to maximise job creation and employment locally. Human resources departments have tried to train staff and reduce the amount of agency staff used, preferring instead to use temporary staff. Apprenticeships can provide trained staff and generally raise awareness of career opportunities in the sector.
**Health & Social Care**
NCS advises that there is a strong supply of jobs in the sector in the county, though not with matching interest from jobseekers. The increase in jobs is due to the growth in population over the last decade and future planned growth within the county. The majority of jobs in this sector are at entry level and providers and employers struggle to attract suitable young people into the Apprenticeship opportunities.
**Main areas of growth in Northamptonshire**
NCS reports that there is significant employment growth potential in the high performance technology and logistics sector. However, more needs to be done to address the skills gap highlighted above – both in terms of working with employers to develop career pathways to address skills gaps and to encourage more young people into these sectors.
The Northampton Enterprise Zone is one of the largest enterprise zones in the country. It aims to become a centre of excellence for high performance technologies, construction and financial services.
The further development of industry in the county depends on a skilled workforce. Science, technology, engineering and maths (STEM subjects) are essential. These subjects are the foundation which will help our local economy to grow. Low carbon technologies fall within these growth sectors in the county. We need to ensure that young people are getting the right types of skills and knowledge associated with these new and emerging technologies. Construction skills are also likely to be in demand due to significant development plans within the county. Significant housing growth within the county is likely to generate a demand for these types of skills. In logistics around 8,250 jobs between 2010 -2021 are expected to be created (an increase of approximately 20%).
Northampton Waterside Enterprise Zone – Research into collaboration opportunities to make a difference May 2013
The findings and conclusions from this report can be located at Appendix C to the report.
National Apprenticeship Service
The National Apprenticeship Service (NAS) website is the official website for general information about apprenticeships in England. NAS supports, funds and co-ordinates the delivery of Apprenticeships throughout England. The website is a source of information on apprenticeships. All vacancies are advertised. The website contains information including training opportunities and information for organisations providing apprenticeships.
Apprenticeships - GET IN. GO FAR
This website provides details of providers of apprenticeships, such as:
- PWC
- Sandander
- Specsaver
- Sky
- Royal Air force
Prospective apprentices can view vacancies, which includes higher apprenticeships; apply and speak to an advisor if they have a query. It also provides information for employers on how they can engage an apprentice. Apprentices and organisations that offer apprenticeships provide information on the website.
**GOV.UK**
Gov.Uk contains a webpage where prospective apprentices can search for apprenticeship vacancies and learning providers.
### 3.2.1 Background statistics
The economic context:
- Northampton accounts for 18.1% of the total East Midlands GVA (gross value added) - £149,979 billion
- 63.32% of Northamptonshire is of working age, aged 16-64; of which 77% is in employment. There are 117,500 economically active people in Northampton of which 112,600 are currently employed (96,000 are considered employees whilst the remaining 15,500 are self-employed).
- Employment by occupation change from 2011-2014 – The largest increase was within the professional field at plus 3.7%; followed by caring, leisure and other occupations at .9%. The largest decrease was within the process plant and machine operatives sector with a decrease of 2.2%; followed by the skilled trade at a decrease of 1.8%
- 80.4% of Northampton’s working age population are economic active; leaving 27,800 inactive
- As of February 2015, there were 16,700 working age benefit claimants in Northampton
- Northampton’s location offers networks for various universities with a commute of one hour
- There are lower levels of skills achievement at every level in Northampton compared within the East Midlands and Great Britain statistics. The population of Northampton that have no qualifications has reduced from 15.1% in 2004 to 11.6%
- Skills capital projects in the surrounding areas include:
- Northampton College
- Engineering Futures
- Advanced Integrated-Engineering Centre for Transport
- Engineering and Construction Skills Centre
- Smart City Thinking
- Banbury and Bicester College
- Apprenticeships and traineeships in Northamptonshire have increased from 2,790 in 2005/6 to 7,690 in 2013
- Northampton delivered 2,020 apprenticeships starts in 2013-14
- 6.1% of Northamptonshire population are NEETs (16-18)
- Long term unemployment is marginally higher in Northampton at 0.5% than at GB level (0.4%)
**Graduates in Northampton**
Of the 2,200 leavers who responded to the 2013/14 DLHE survey and were in work:
500 (23%) work in Northampton and a further 265 (12%) work in Northamptonshire.
35% work in Northamptonshire.
During 2014/15, 625 (graduates from 2013/14) went into full-time employment in the county and a further 140 had part-time employment in the county as their main activity. Northamptonshire’s Service Sector Outperforms Manufacturing
Service sector firms in the county outperformed manufacturers during the second quarter of 2015, according to a report by Northamptonshire Chamber of Commerce.
The Quarterly Economic Survey (QES) revealed that Northamptonshire manufacturers faced a slowdown in growth; however confidence remains high in both sectors.
According to the latest QES published on 8 July, 96% (up 2% on Quarter 1) of service businesses said UK sales had increased or stayed the same. Compared to manufacturing, 63% (down 11% on Quarter 1) of businesses in this sector reported static levels or increases during Quarter 2.
For exports, 82% of firms in both service and manufacturing sectors reported level or increased export sales over the last three months.
Firms are still facing difficulties recruiting staff - 73% of manufacturing businesses and 78% of service sector firms’ stated that they’d experienced challenges hiring suitable employees. Manufacturers reported a shortage of skilled manual/technical staff whilst service sector respondents indicated challenges in recruiting skilled professional/managerial employees.
Firms in both sectors showed investment activity which was consistent with Quarter 1 with 22% of manufacturers stating they had an increased investment in plant and machinery whilst a third of service sector firms’ reported they had increased investment in training. Other overhead, for example energy costs, was the main pressure on prices for businesses in both sectors.
A copy of the full report can be located here. Northampton Demography
A copy of the briefing note can be located here.
3.3 Core questions
3.3.1 The Scrutiny Panel devised a series of core questions that it put to key witnesses over a cycle of meetings (Copy at Appendix B).
3.3.2 Key witnesses provided a response to these core questions at the meetings of the Scrutiny Panel held on 15 October 2015, 30 November 2015 and 14 January 2016.
3.3.3 Salient points of evidence:
Director of People, Transformation and Transactions, Local Government Shared Service (LGSS)
- Northampton Borough Council (NBC) is currently reviewing and developing its Business Strategy for 2015-2018 to include its vision for their Workforce Strategy moving forward. It is anticipated that apprenticeships will be a part of this strategy moving forward. NBC promotes and supports apprentices locally in service areas, in both their customer service and facilities team.
- Partners can, through their own workforce strategies, take a lead in growing their own, via apprenticeships and engaging a lower skill in the employment market.
- NBC has experienced changes in national policy and legislation, unprecedented funding reductions and cuts in public spending and technological innovation impacting on customer’s expectations for service delivery; this has all intrinsically changed how services can be delivered now and in the future. The authority has changed fundamentally how it operates and is becoming more creative and innovative, engaging with customers, communities, private, public and voluntary sector partners to find solutions to ensure delivery of its vision: ‘Northampton alive with innovation, enterprise and opportunity’. The Council is currently working to re-published its Corporate Plan for 2015-2018 to clearly articulate its priorities and set out what NBC wants to achieve.
- Workforce changes have included in 2013 the transfer of 222 NBC staff into LGSS, to deliver a variety of professional services within a shared service offering and also the recent transfer in Jan 2015 of 260+ staff in the formation of Northamptonshire Partnership Homes (NPH), an Arm’s Length Management Organisation that is wholly owned by the Council but which has its own board of Directors.
- More changes for the workforce have included changes to employee terms and conditions, including pay and working hours and developments with technology including EDRMS and Agresso. LGSS OWD was commissioned to deliver a ‘Workforce Training and Development Plan’ to develop the skills and learning required within the workforce, to continue to deliver services in this changing environment.
- An agreed approach to first phase (to meet immediate skills gap – May 2015-March 2016) is in place.
- Each partner could start their own skills mapping as part of a longer term workforce development strategy, a second phase for NBC from May 2015 and ongoing has been agreed.
Service Manager, Adult Learning, Northamptonshire County Council (NCC)
- The Government wants to achieve 3 million apprenticeship starts by 2020. Government money for apprenticeships will be released and re-directed as part of the Government’s plans for the Skills Funding Agency (SFA) to support Local Enterprise Partnerships (LEPs) to review local provision and merge colleges, where appropriate, creating Technical Institutes.
- NEP is doing a lot of work with schools to engage schools in promoting apprenticeships at levels 3, 4 to ensure that young people who don’t want to proceed to A levels, will progress to higher level skills.
- NCC’s Adult Learning Service (NCCALS) has a role through a number of its programmes to engage with this group.
- Creative industries are a potential growth sector. The self-employment rate is also relatively high in Northamptonshire compared to neighbouring counties.
- Learners have a range of options to use the skills they have gained to progress to further training and qualifications in a further or higher education provider, get a job, become self-employed, or use the skills for the benefit of their community by volunteering.
- Approximately 7,000 learners are engaged each year. All courses are delivered in local communities. A number of targeted learning programmes are entirely delivered in the most disadvantaged wards where these groups are more likely to be accessed. Approximately 3,500 (of the 7,000) learners are in the targeted programme. NCCALS also has a significant role to play in engaging older NEETs (19 years plus).
- Partnerships with local organisations, who exist to meet the needs of the seldom heard or isolated, are vital to engage with this target group and enter into a dialogue in which people can voice their aspirations, needs and issues and a bespoke programme of learning can be arranged. Key partners include: Kettering centre for the Unemployed (KCU), Wellingborough Homes, Bridge, Papworth Trust, Good Will Solutions and Ground Work. Director, Northampton Enterprise Partnership (NEP)
- Northamptonshire Enterprise Partnership (NEP) has involved in brokering apprenticeships for some considerable time, initially to address the significant number of young people Not in Education, Employment or Training (NEETs), and more recently to respond to the address the significant and growing demand from employers for apprentices. The major Bright Futures campaign has promoted apprentices by showing real young people in real companies in priority sectors. NEP has recruited a team of apprentice ambassadors to promote apprenticeships on a peer to peer basis.
- NEP recognises that in order to meet the needs of employees, employers and local residents it is important to ensure that there are much stronger links between the world of education and the world of work. NEP applied for national pilot status for Enterprise Advisers together with a contract for Careers Inspiration, which sitting alongside Bright Futures promotes careers in Northamptonshire’s key sectors.
- NEP’s vision for skills and learning is outlined within the Strategic Economic Plan (SEP), and is summarised below:
- The SEP can be stripped back to ‘serious about skills’ as it is recognised that the availability of skilled labour is a serious challenge for most Northamptonshire businesses. Skills alongside, investment, innovation, enterprise and competition, is one of the five drivers of productivity and as such it is essential that Northamptonshire has sufficient skills and talent to meet current and future workforce demand, given our productivity ‘under-performance’.
- Serious about skills translates into the following ambitions:
- Best in class –
- Matching supply and demand
- Apprenticeships
- ‘Full’ employment
- 21st Century learning -
- Better Co-ordinated system
- Northamptonshire’s Gross Value Added (GVA) is lower than the national average and as such there is a desire to upskill the workforce to ensure higher value added jobs and increased earnings. This is being delivered by addressing the future pipeline through strategic iag; and the current workforce by supporting employers and key sectors to develop the skills of their workforce through the Sector Strategy Boards and NEP’s Productivity Plan; and by encouraging new inward investment in higher value added employment sectors.
- NEP is also looking to administer grants for the Sir Thomas White Northampton Charity to specifically support younger workers improve their skills and secure work in high demand sectors such as logistics.
- Support of those that are in long term unemployment is important as on the latest statistics long term unemployment is marginally higher in Northampton at 0.5% than at GB level (0.4%).
- DWP operates national programmes to support the long term unemployment back into work. However, alongside these the European Structural and Investment Fund (ESIF) Strategy will provide further support for the long term unemployed to re-enter the labour market, which is really important given Northamptonshire’s high job density, which is higher than national average. This is particularly relevant for Northampton, which has a jobs density of 0.99, in comparison with 0.80 nationally, meaning that not using all of available work force may result in serious labour shortages
- NEP is looking at how grant support, such as that available from the Sir Thomas White Northampton Charity can help support the long term unemployed back into employment. • NEP has formed an Employment and Skills Strategy Board to bring together all key partners to drive forward the work of the employment and skills element of the Strategic Economic Plan.
• NEP is aware of the skills that are in short supply, which given are very tight labour market are pretty much across the board and cover the breadth of occupational types. All sectors are currently facing both growth and replacement demand.
• In terms of immediate demand this appears particularly acute in engineering, HGV driving, construction trades and professions, ICT and food and drink technician and processing.
• Northampton Borough can use the retained business rates from the Enterprise Zone (EZ) and all business rates when these become available for the speculative development of new premises.
• There is an opportunity for preferential borrowings from Public Works Loans Board (PWLB) to be used to provide long term loans to developers to undertake speculative development, as the speculative market still needs to be ‘de-risked’.
• The next round of Local Growth Fund monies could be used to provide enabling funds to open up sites to encourage subsequent investment by developers.
• There is opportunity to develop joint ventures with commercial developers to bring forward sites
• Applications can be made to the next round of Local Growth Fund to support investment in the physical infrastructure, where this has proven economic benefits in terms of jobs and homes.
• Preferential borrowings from Public Works Loans Board (PWLB) could to be used to develop the physical infrastructure in the town. Funding is available in the current financial year to facilitate this.
• Key investment decisions are made for a number of reasons including location, access to markets, supply chain considerations, access to R&D, innovation, skills, labour availability, consistent and can do public leadership, enabling investment, education and training offer, surety of planning, and cultural and quality of lifestyle. • International investors will also be interested in taxation, security and stability and consistency of political processes. • NEP is working with VCSE partners to ensure that those that are harder to reach are engaged in economic growth activity. • The Big Lottery opt-in of the European Structural and Investment Fund (ESIF) also specifically targets groups that are furthest from the labour market. • NEP has been involved in Northampton Alive, which brings together the public and the private sector to move forward Northampton’s growth. Mechanisms such as the Enterprise Zone Board also bring together both sectors to address economic growth issues.
Acting Chief Executive, South East Midlands Local Enterprise Partnership (SEMLEP)
• One of the key challenges is to encourage more SMEs to take on an apprentice. Businesses are often disappointed by the lack of suitable candidates. If they are unable to fill a vacancy then they form a negative experience of apprenticeships. • There is a need to do more to try and close the gap between recruitment expectations from businesses and young people’s awareness of job opportunities. • The many changes to the system, including the introduction of an apprenticeship levy on employers, are not helping the situation. • There is a need to support intermediary organisations to feel confident about advising their clients with regard to apprenticeships and ensure that support/brokerage roles are clear about signposting quickly and accurately. • Enhancing the role and function of the South East Midlands Apprenticeship Ambassador Network to engage with more business leaders would influence ‘decision makers’. SEMLEP would need to ensure that the support is then in place to support businesses through to introducing an apprenticeship programme. • SEMLEP is planning an ‘SME Apprenticeship Brokerage’ service which will be aligned with the Velocity Growth Hub and funded by the European Social Fund and Skills Funding Agency. • SEMLEP has two skills related strategic objectives in their Business Plan. Objective 5: To develop a skilled and adaptable workforce and Objective 6: To address barriers to the labour market for disadvantaged groups.
• SEMLEP’s Business Plan outlines a series of targets to contribute towards these strategic objectives, including to work with a diverse range of partners to increase the number of SEMLEP residents with at least a Level 1 qualification by 2% per annum, increase the number of apprenticeship starts by 150 per annum and reduce the number of reported skills gaps by employers by 5% per annum.
• SEMLEP has a significant allocation of European Social Funding for the period 2015-2020, which is has begun to be rolled out after a national delay. SEMLEP’s vision is that this fund will enable a certain amount of targeting of niche provision in hard to reach areas and will support low-skilled workers to develop their English and Maths skills in a vocational context.
• SEMLEP is currently working closely with NEP and with DWP to develop a Support Into Employment programme using SEMLEP’s allocation of European Social Funding.
• The Government’s Work Programme for long term unemployed is provided by A4E and Ingeus in Northampton
• SEMLEP’s Strategic Economic Plan and evidence base highlights four particular showcase sectors that have the capability, the major assets and the greatest potential to rapidly grow across the SEMLEP area. These are: ➢ High Performance Technology ➢ Logistics ➢ Advanced Manufacturing (including Food and Drink) and ➢ Cultural and Creative Sectors (including the visitor economy and sport)
• SEMLEP is very keen to work in partnership with other organisations/groups to support its ambitious growth plans, particularly those who have local knowledge and understanding of the needs of employers and individuals. SEMLEP’s quarterly Skills Forum meetings provide a very good platform to become involved.
• Skills challenges facing showcase sectors are: ➢ High Performance Engineering – an ageing workforce and shortage of young people with technical engineering skills ➢ Logistics – 18 vacancies for every individual seeking an HGV role, attracting young people a problem
- Manufacturing & Advanced Technology, including Food and Drink – 137,000 new recruits needed by 2020 to replace those retiring or leaving the sector, specific skill requirements around food technology (courses unviable without collaboration?)
- Arts, Heritage, Sports, Visitor Economy Cultural and Creative Sectors - 2 in 5 employers unable to fill vacancies
- SEMLEP’s 2015 Business Survey has reported:
- 33% of employers experiencing a gap between the skills available in the local workforce and the skills that they need (compared to 38% in 2014)
- Job specific (29%) and technical or practical skills (25%) are the two most frequently mentioned skills that have been difficult to obtain when recruiting from outside the organisation
- Advanced IT skills (11%), sales and marketing skills (11%), technical or practical (10%) and/or job specific skills (10%) were the most commonly cited skills lacking within the existing workforce.
- The Velocity Growth Hub helps existing businesses to grow. The SEMLEP Inward Investment Group focuses on encouraging businesses to locate in this area.
- There is already some supply of land suitable for new commercial development some cases there is new speculative development being undertaken.
- The type of premises being constructed are large distribution warehouses designed to cater for the regional and national market, rather than for those companies who are - necessarily – already based in Northampton.
- Existing businesses in Northampton might take a small amount of the space either recently/currently built, but the target audience for the developers is not the local market.
- In order to provide suitable facilities for businesses who require manufacturing, R&D facilities - and even offices - there needs to be both land allocated for this through the planning system, and the development community needs to be enabled and encouraged to build the properties required. The climate for development funding has rapidly improved in the last two years.
- Funding for small scale speculative development is still limited, but there is a significant ‘weight of money’ in the market for the right schemes • The challenges are many and varied, but broadly the limiting factors to prevent development (without a pre-sale or pre-let) include; construction costs, availability of skilled staff and materials, business rates burden on vacant premises and in many cases the headline rental levels are still not yet robust or make appraisals profitable.
• There may be little the local authority can do to unlock these issues, but the feedback SEMLEP receives regularly from the commercial agents operating in this market is that the initial hurdle most face is insufficient land being allocated for employment uses – notwithstanding the offer at J15/J15a.
• Walking routes around the town, particularly from the station to the town centre could be improved. The new location of the University Campus within the Waterside Enterprise Zone will provide an impetus to improve and upgrade the pedestrian areas in the town centre. Strategic road links across Northamptonshire from the M1 to A14 would benefit from upgrading in some parts. Improved public transport links between Northampton, Wellingborough and Kettering would help young people and apprentices access jobs and training opportunities.
• Primary drivers for investment in Northampton are location and accessibility, including access to the M1 and rail, availability of suitable commercial development and employment land space, proximity to Silverstone and being situated within one of the largest Enterprise Zones in England.
• SEMLEP makes a considerable effort to engage with a diverse range of partners across the Voluntary, Community and Social Enterprise Sectors (VCSE). SEMLEP coordinate VCS, Social Enterprise and Rural LEP Board Sub-Groups that meet at least quarterly.
• SEMLEP’s allocation of European Social Funding for the period 2015-2020, includes a £5m ‘Opt-In’ with the Big Lottery, focusing on Support Into Employment, Financial Inclusion and Community Investment (enterprise). In addition, SEMLEP supports the Northamptonshire LEADER Local Action Group to help stimulate enterprise and employment in rural areas.
• SEMLEP is very keen to meet with any employer, organisation or individual who would like to work together to support our challenging and ambitious growth plans. Manager, Northamptonshire Growth HUB
- Apprenticeships are now offered to a higher level, up to degree level and are offered by Northampton College. There are limited higher level apprenticeships but the number is grow.
- Northampton University had 96% employability (those available for work and undertaking work or further study) 6 months after graduating. One of the technology courses (computing/engineering) achieved 100% employment last year.
- Enterprise in Northampton University is very well established.
- There is an established programme with Northampton Library for start-up business support with some ICT support available in the library.
- Santander Bank offers an internship scheme which is part funded. The internship can be for a period of 3 months full time or six months part time.
- A high percentage of interns are taken on, on a permanent basis.
- The majority of under-graduates have some work experience.
- Northampton University offers strategic support for the wider community regarding health and wellbeing, business and education. The University works with students on volunteering projects too.
- Inspire to Enterprise is a national programme that is run from the University.
- Goodwill solutions (of which the University is a partner) train disadvantaged people, including ex-offenders. These obtain work experience and employment.
- Hope Enterprise offers practical support and work experience for individuals to acquire the Food Hygiene Certificate.
- The University is working with all further education colleges regarding funding for an integrated transport system for the county - a research based project by co-ordinating all public and voluntary sector transport.
- There are a lot of large warehouses and distribution centres in Northampton employing large numbers of low skilled workers. • To raise the skills level, businesses are encouraged to look at all products and services delivered. They are also encouraged to apply for funding to take high level skills forward.
• Northampton University and Northamptonshire Growth Hub are working together to enable employers to access funding for skills from universities worldwide.
• The Knowledge Transfer Partnership for businesses is looking to employ graduates to work on a programme. The business is funded with £20,000 for the graduate. The business also has access to University skills.
• A high percentage of under graduates are mature and a lot of training courses are open to all ages.
• The Inspire to Enterprise programme has been in existence since 2011.
• There is a limited fund for marketing purposes. Growth Hub publishes funding information on its website and circulates a newsletter.
• Higher apprenticeships are currently in limited subjects, such as engineering and technology. The Higher level apprenticeships must be developed and led by employers.
• Northamptonshire Growth Hub receives around 120 enquires each month. It is expected that this will increase during the winter months.
**Project Manager, Talent Match Northants**
• More information about apprenticeships should be given to employers and the different frameworks available in order to give more incentive. More access to funding in order to deliver them and a scheme to fast track applications or help with filling them out is needed.
• Talent Match Northants offers an in house life skills programme and we feel more accessibility to English and maths should be available for all age ranges and not delivered by colleges, the environment and location needed careful consideration for different people. • Talent Match Northants’ project helps long term unemployed young people find employment with local employers. Focusing on 18 to 24 year olds who have been out of paid employment for one year.
• Talent Match Northants is funded by the Big Lottery and it tackles youth unemployment in Kettering and Wellingborough
• Other organisations could help by supporting and promoting Talent Match in the local areas, for those with an invested interest, attend our partnership board.
• The physical infrastructure in and around the town should be made more appealing, more attractive, lower rents, more funding to encourage business start-ups, offer free business start-up advice, invest in the town, make the residents feel special, more housing.
• Businesses invest in Northampton as it is the biggest town in the county and has more opportunity for business
• There is a need to educate the community, priority group work, more access, more funding, create more jobs and more acceptability
• There is a need to educate the people of Great Britain, make sure they know EU migrants can boost the economy. Create more help for EU entrepreneurs and easier access to funding to start businesses. Employers and partners working together for the benefit of the community. Ensure people are at the heart of changes that affect them.
Executive Director, Skills Funding Agency (SFA)
• In the 2015/16 financial year to date, there have been 524 new apprenticeship starts across Northampton.
• Just over 200 of these were Higher Apprenticeships (Level 3 and above) and just over 300 were Intermediate Apprenticeships (Level 2).
• The Government’s ambition is for three million apprenticeship starts in the lifetime of this Parliament.
• In the five years of the last Parliament, a total of 2.3 million apprenticeship starts were achieved. • However, to reach 3 million new apprenticeship starts by 2020, this is the equivalent to more than one apprentice – starting every minute – of every day – over the next five years.
• The Government has been very clear that apprenticeships will continue to be at the heart of the drive to equip people of all ages with the skills that employers need to compete and prosper in a challenging global marketplace.
• Apprenticeships contributed £34 billion to the UK economy in 2014.
• Nine out of every ten apprenticeship employers hoping to achieve business benefits tell the National Apprenticeship Service that apprenticeships make good commercial sense – helping to drive productivity and growth.
• Equally, public sector bodies – such as councils – need to embrace apprenticeships.
• Apprenticeships provide access to a wide pool of talented individuals with the skills to improve the services offered by local councils across a huge variety of roles.
• Apprenticeships across Northampton are being delivered by both public and private training providers including:
- Northampton College
- Learndirect
- Babcock Training
- Starting Off (Northampton)
- Lifetime Training
- HIT Training
- Telford College
- Elmfield Training
- First4skills ltd
- JHP Group
- ESG (Skills) Ltd
• Employers are now in the driving seat for apprenticeships. Over 1,300 employers nationally are developing and designing new apprenticeship standards to ensure they meet the needs of business.
• Apprenticeships are available in more than 750 sectors. • Local councils can work with their Local Enterprise Partnerships to ensure that local skills needs can be met through apprenticeships.
• Local Enterprise Partnerships are responsible for identifying and prioritising local business skills needs.
**Assistant Director – Environment, Development and Transport, Northamptonshire County Council (NCC)**
• Work is being undertaken within the county to promote apprenticeships including work undertaken by NEP on the Bright Futures campaign, Connexions information evenings, the Skills Show and the Information and Advice Conference for IAG Teachers. Other promotion through providers and the provider network already occurs.
• Apprenticeships are delivered by a mix of private and publicly funded organisations. It is anticipated that 90% of SMEs within Northamptonshire do not participate in the employment of an apprentice.
• In a piece of work undertaken in 2014 the following issues were highlighted by stakeholders:
➢ Employability skills ➢ Promoting the vocational route ➢ Basic skills ➢ Intermediate and technical skills ➢ Information, advice and guidance
• Residents, young people, workers, business owners, entrepreneurs and visitors will benefit. Northamptonshire will have cemented its reputation as the ‘location of choice’ for ambitious firms, both in the UK and globally. A comprehensive programme of new infrastructure will be put in place including the introduction of countywide Superfast Broadband
• There has been for a long time the Government funded Work programme run by Ingeus and A4E.
• Long term unemployment within the county has become less of a concern. The greatest concern is in helping those furthest away from the labour market and who may be on Employment Support Allowance. Welfare reforms are expected to hit these groups hardest.
- Some of the European Social Fund programmes (ESF) will look at providing support for these client groups through DWP and Big Lottery matched provision.
- A number of Voluntary and Community organisations help support people into employment. Organisations such as ENABLE have run these courses and support for a long period of time.
- The colleges are currently pulling together Labour Market information as part of the area based review.
- The LEPs have been looking at different forecast models and undertook broad analysis as part of the SEP development:
- Replacement demand for skills and employment must be borne in mind in terms of existing key sectors such as manufacturing.
- The County Council has been proactive in developing a flexible approach to the delivery of economic development activities across the county, encompassing areas of skills, business support and infrastructure provision. Such activities are underpinned by an evidence base, which highlight areas of need, barriers and opportunities for future growth.
- The Strategic Economic Plan and the Local Economic Assessment for Northamptonshire are more wide-ranging documents, ensuring these are kept refreshed and up to date will be invaluable in helping to shape future activities as well as evaluate the impact of past programmes.
- A partnership approach has been key to achieving a more holistic, strategic programme of intervention, working closely with the University of Northampton, LEPs and others to identify appropriate mechanisms to help deliver the right outcomes for the county. Some of these activities include: The development of the Northamptonshire Growth Hub (NGH) is an integral part of Northamptonshire’s Strategic Economic Plan (SEP) and is identified for support from 2015 onwards in the SEP and in the county’s European Structural Investment Fund (ESIF) and Local Growth strategies.
In 2015/16, NGH secured new funding of £250,000 from Government to continue to develop the service; a Growth Hub Manager has been recruited.
NGH operates a brokerage model based on the proposition that the county’s businesses could use one telephone or e-mail to access support to meet their needs.
- A review of the Growth Hub and wider business support provision across Northamptonshire was undertaken during 2015. It mapped provision, identified gaps and duplications, highlighted examples of best practice and put forward a number of proposals to enhance and improve the service provided, with the specific strategic target of increasing the county’s GVA and productivity levels. The Growth Hub has supported over 1,600 unique callers with Business Advice.
- The Council has played a crucial role in supporting ambitious businesses in Northamptonshire with the potential to grow.
- The high levels of competitiveness and successes achieved through these programmes is clear, with INV-ENT alone delivering 105 local projects, which together have the potential to create 489 new jobs, 137 new apprenticeships and support over 1,000 people with their skills development through an initial £1.4m investment.
- Building on the success of these programmes, the Council is working with partners to continue to support innovative and ambitious Northamptonshire businesses –with a strong focus on smart targeting of resources to produce high impact with minimal financial impact, recognising that the availability of public sector funding is increasingly limited.
- The Business & IP Centre Northamptonshire supports entrepreneurs, inventors and small businesses from that first spark of inspiration to successfully launching and developing a business. • Since it’s inception, the Enterprise Hub has supported over 1,000 people and supported over 120 new businesses to start trading. • The Council is working with partners to identify opportunities to work collaboratively on new and emerging funding programmes. • European funding has an important role to play in supporting growth and creating prosperous communities. The new ESIF programme will see €55m directly allocated to the county for 2014/20 to support priority growth areas, including innovation, research and development, support for small and medium sized enterprises, low carbon, skills, employment and social inclusion. • A further £79m has been allocated to the South East Midlands Local Economic Partnership (SEMLEP) which also covers parts of Northamptonshire. None of this funding is ring-fenced for the county. • ESIF funding provides an opportunity to bid for additional funding to support new, or the enhancement of existing, activities; but it cannot be used to replace existing funding for current activities. ESIF provides the potential to explore and deliver proposals associated with the move to a new way of delivering economic development. • Through the prioritisation process, a number of projects put forward by the Council have been identified for commencement in the 2015/16 period, including: A43 Northampton-Kettering Improvements; A45 Daventry-Development Link; Stanton Cross Access works. A number of provisional schemes have been approved for contracting and delivery during 2016/17. • The development of a range and choice of suitable office accommodation for businesses at all stages of growth is a strategic imperative. • Opportunities exist for the reuse and regeneration of current vacant spaces (including empty, redundant or derelict units and open spaces) across the borough – whether in public or private ownership. Working with local communities, charities, residents and businesses as well other partners in the public and private sector to identify these spaces and appropriate uses, as well as creating a simple mechanism for doing so, will be critical in enabling others to bring forward improvement initiatives without relying on investment from the public purse. The Council is responsible for delivering a number of key infrastructure projects in and around the town centre. A number of mechanisms exist that are currently delivering infrastructure projects of scale; these include:
- The Superfast Northamptonshire
- A complementary programme of digital related activities
- The county was successful in securing funding through the Northamptonshire Growing Places programme to support delivery of several schemes across the county. In Northampton.
- Project Angel is the new public sector headquarters situated in the middle of Northampton town centre.
Leader of the Council, Cabinet Member for Finance and Cabinet Member for Regeneration, Enterprise and Planning Northampton Borough Council (NBC)
- The development of a fully skilled workforce is fundamental to the future economic vitality of Northampton.
- Apprentices are employed at NBC, LGSS and NPH.
- A mapping exercise is being undertaken, matching skills required for Northampton. The three colleges in Northampton are also ensuring there are the right skills for the area. A lot of work is being undertaken.
- Students at St John’s have helped the economy.
- Any economic market is not perfect and will have inherent failings. The origin of any forthcoming programme must be an in-depth understanding of the local economic geography. Such a comprehensive view highlights the intrinsic market failures at play and can therefore guide policy towards specific interventions. Such an understanding is apparent within the Northampton Alive programme; a diverse range of projects aimed at intervening and catalysing the Northampton economic market and skills agenda. Individually, each project will enhance a specific (and ultimately restricted) position; a programme of many individual projects will identify and addresses market failures across the town as a whole.
- Northampton Borough Council (NBC) is working with South East Midlands Local Enterprise Partnership (SEMLEP) and Northamptonshire Enterprise Partnership (NEP) to ensure that skills are improved through schemes such as apprenticeship programmes that can be successfully developed and delivered across Northampton.
- The skills agenda is hugely important for Northampton. The Borough Council understands the current skills issues and is working with partners and stakeholders to ensure that the resident population has the necessary access to skills to meet the demand of current and investing companies. With 1.9% claiming unemployment related benefits within the town, Northampton is above the level of the rest of the East Midlands (1.6%) and Great Britain as a whole (1.7%). The amount of people with qualifications below NVQ 4 (NVQ 1-3) is at a lower level to both the rest of the East Midlands and Great Britain. This could point towards a low skilled base equating to a higher level of unemployment.
- Unemployment does not necessarily directly equate to a low skills base and with Northampton’s average weekly wage lower than the other two benchmarks make an assumption can be made that the volume of jobs in Northampton are at a lower skilled level; therefore opportunities for this skill level do exist.
- In order to raise the average Northampton wage there is a need to diversify the business base and attract companies with a high employment percentage of higher skilled jobs. Arguably, a higher skills base is required to attract the companies to the town.
- The Enterprise Zone is the most successful in the country.
- Two key benefits of the Enterprise Zone:
- Simplified Planning process
- Business rate “holiday” for five years up to 355,000 a year
- £330m relocation and expansion of the University into the Enterprise Zone, as part of the Northampton Alive programme, will be a huge step to increasing the volume of highly qualified individuals within the local labour market. Such an increase will attract businesses, increasing the demand and so follows an upwardly spiralling economic skills base.
- Business rate relief will enable the Council to develop Four Waterside. Expressions of interest have been received for this space and a large company is looking for office space. • By 2020 the Council will be able to keep 100% of its business rates. • It is necessary to continue to upskill those with the lowest level of qualifications; the disenfranchised and those with little or no experience. DWP work programme is in place to intervene at a generic level, introducing core employability skills to all those that claim out of work benefits. NBC adds value to this service by connecting companies to the Job centre and promoting the use of the Job Centre as a free recruitment agency for businesses. • The Council goes out four times a year to speak with businesses. • NBC works with companies to help them secure growth and ultimately increasing the employment base of the Borough. • Business support has many facets within NBC, supporting businesses both individually and as a collectively. The Business Incentive Scheme (BIS) is a grant based support mechanism aimed at aiding businesses to physically grow their operation or improve the look of their premises. Grants of up to £10,000 are available, with the level of grant achieved depending on the amount of investment going in alongside the grant and the amount of jobs created within each project. • To date, the BIS has committed just over £600,000 to over 60 businesses. This funding will create over 250 jobs and leverage in over £3,000,000 of additional private sector finance. • Inward Investment is another core delivery priority for the Council. • As identified in the NEP and SEMLEP Local Economic Plan’s, Northampton and the surrounding areas have a strong skills base in the High Performance Technology, Logistics and Food and Drink sectors. The sustained growth of these sectors will continue to support the bulk of jobs within the town and continue to attract either competing businesses, or businesses within the supply chain. • An example of how NBC can support these sectors and individual businesses within it is the work undertaken with Cosworth. Located within the Enterprise Zone, Cosworth is one of Northampton’s most prestigious brands, having previously been at the epitome of engine design and build in motor racing and performance road vehicle’s. In 2012 NBC worked with Cosworth to secure funding land and a building to ensure they were able to gain an engine build contract and secure a further 75 jobs in the town.
- NBC works closely with NEP and SEMLEP to unlock investment in the town. A combination of NBC’s in-depth knowledge of the local economy and the LEP’s expertise regarding securing national and European funding is a successful approach to channelling additional finance into individual projects within the town.
- Other key players within the local economy include the Colleges and the University.
- NBC regularly meet with businesses to gauge how the Borough Council can assist with their future ambitions and also any barriers/difficulties they are currently facing.
- The manufacturing sector, in particular, regularly talks about the difficulties they have in recruiting individuals with the relevant skills to what they require. This issue tends to be exasperated the more niche the business, or the more specific the skills requirement; particularly highly skilled individuals.
- NBC sits on the Brackmills BID Board. The main concern regularly raised is the lack of available and qualified drivers for HGV’s and the lack of qualified fork lift drivers. NBC continues to support the BID in addressing this skills gap.
- A business’ decision to invest in an area will be driven by market forces and based upon three broad areas: the location in relation to competition and customers, the availability and cost of land and property, and the availability of labour at the correct skill levels. For NBC services to enable business investment, the services need to be positively affecting one of these areas.
- Regeneration investment service allows for businesses to obtain information on all of these areas and therefore inform an investment decision. The majority of this is produced through the account management service and is assisted by NBC’s CRM; the property and enquiry database.
- The BIS can be utilised to address funding issues within specific investments. The funding can make the difference between a business choosing Northampton over another close-by district. • When making decisions regarding investment, a business needs as much certainty as possible about the outcome of such an investment, including certainty regarding several service areas of NBC; including regeneration, planning, environmental health and parking. A business will not necessarily seek a change in policy to fit with their requirements; however assistance to help alleviate specific issues will be reflected in their investment decision.
• The availability of commercial land is paramount to the delivery of inward investment and ensuring organic growth of the existing business base. Northampton has a relatively constrained geography, with few available large sites for development.
• NBC continues to invest in the physical infrastructure of the town. The opening of the bus and train stations were the core initial assets to improve the towns infrastructure, the opening of Abington Street. The future opening of St James Mill Rd will continue to improve the road infrastructure serving both the residents and the businesses.
• The location and subsequent investment of a business rests on three motivators - Location: proximity to competition and customers.
• Depending on the business, they will want to be located within a certain proximity to either their customers or their competition. The logistics sector is strong in Northampton, arguably because of the town’s central location within the country. HPT is strong in the area arguably because the skills for that sector are within the area - operating costs: costs of land/property and employees.
• A business will only invest if it makes financial sense to do so. The wages a company has to pay its workforce will depend on the wage paid by other similar businesses within the geography - Labour: the availability of labour at the correct skill levels.
• A business will not invest or locate in an area if it will not be able to recruit the right people. Depending on the skill levels required, businesses will usually look at other local businesses first to gauge skill levels. If recruiting at a lower skill level, they will also look at the local unemployment levels.
• NBC regularly consults with both the business community and residents. For the Greyfriars development an early consultation took place to get an understanding of the visions of the public for the site. The findings will be put to developers during the procurement process. A further consultation will take place later in the procurement stage to keep the public informed of progress and to revaluate their expectations.
- The Greyfriars development will be an opportunity to immeasurably enhance the town centre through a mixed use development aimed at bringing more people and spend into Northampton town centre as a whole.
- It is important for NBC to be able to regularly consult with the private sector so as to help form strategies and policy to continue to positively intervene in the local economy. The availability and willingness of the private sector to meet with us is paramount to our ability to have a positive impact.
**Principal, Moulton College**
- Young people face too many barriers to becoming apprentices. Apprenticeship programmes are not given the same priority as other educational choices for young people.
- Moulton College and Northampton College - their curriculum offer is complementary to each another. There is no duplication and referrals are made in respect of apprenticeships.
- Schools careers advice and guidance is not comprehensive nor does it provide the right information and support for young people to understand the choices and routes they have to employment. Too many careers advisors and staff in schools have limited knowledge of apprenticeships and the benefits they can bring to developing the right skills needed to add value to any business.
- There needs to be better promotion of apprenticeships, and traineeships as a direct progression route coupled with impartial careers guidance at secondary school level, and more employer involvement, particularly from SMEs will lead to high quality apprenticeship training opportunities.
- Too many young people in Northamptonshire are leaving school without 5 GCSE’s A\* - C including English and Maths and finding it difficult to meet the demands of apprenticeships. Apprenticeship schemes are demanding and provide high quality opportunities that help to develop apprentices’ careers, while simultaneously improving their skills and knowledge.
- Employers and training providers need to collaborate more effectively as this is a key factor in producing high-quality provision.
- Apprenticeship schemes must add long-term value to the individual companies and help tackle skills shortages effectively. They should be developed in tandem with industry needs and designed to meet local needs of both young people and employers.
- Employers need to make sufficient contributions to the costs of delivering these and supporting apprentices in the workplace.
- Training providers need to link more effectively with industry to ensure that the training they receive off the job is linked closely with on-the-job experience that naturally occurs in the workplace. Colleges and Training Providers need sufficient funding to be able to deliver high quality apprenticeships and vocational training.
- Apprenticeship training needs to focus more effectively on the sectors with skills shortages and this can be provided by training providers better understanding the needs of the sector through effective working with the Local Enterprise Partnership, Local Authorities and other agencies.
- Moulton College has 95% positive progression into employment, further or higher education of all its students.
- 98% of the businesses that Moulton College deals with employ less than 5 people; some of the businesses are in remote locations. The challenge is how to get young people to these work places.
- There is an inconsistency of information about skills requirements and labour market intelligence being distilled across training providers.
- SMEs are not sufficiently involved in apprenticeships and often find it difficult to employ an apprentice.
- Information about any such training scheme (apprenticeships, full-time vocational education and training) needs to be clear, transparent and make employers, employees, local community and other interested parties fully aware of all opportunities available route into employment. • It is difficult to see how the new funding model will be able to support micro-businesses.
• Moulton College’s vision for skills and learning is to provide “outstanding teaching and learning opportunities for all who will benefit from them and break down any barriers to young people being given the opportunity to excel and progress”.
• Moulton College provides apprenticeship training and a comprehensive study programme which includes young people and adults following a substantial Vocational Award, Certificate or Diploma at levels 1-3, developing skills in English and maths to a minimum standard of grade C or above at GCSE level; employability skills developed through work experience undertaken on colleges commercial enterprises and with local employers.
• Moulton college also offers university degrees at undergraduate and post graduate level in Agriculture, Animal Management, Equestrian, Countryside Management, Construction Management, Sports Therapy and Sports Performance and Coaching.
• Moulton College works with other partners to offer short courses that develop employability skills. Offering a taster of the industries it serves
• Moulton College has developed short courses with other partners that focus on those not in education employment or training (NEET). It offers a wide range of short courses that provide industry specific qualifications which are for individuals working in the industry
• Potential areas for growth at Moulton College - Maths and English teachers, Vocational specialists e.g. in the Construction Industry, Food and Drink specialist including technologists, teachers, technicians and product developers, Welding specialists, General administration and support staff
• Other organisations can help by offering better impartial information, careers advice and guidance and work experience opportunities.
• More employers should offer opportunities for apprentices at Intermediate, Advanced and higher level apprenticeships.
• Focussing on the specialisms that Moulton College offers, there is a shortage of construction workers food technologists, agricultural workers (at all levels). The College has worked very closely with Northamptonshire Enterprise Partnership (NEP) and has been instrumental in the Construction Skills Task and Finish group which is identified a strategy for growth and to meet the needs of this industry. Working with the Northamptonshire NEP; and the Food and Drink Strategy Board and the Northamptonshire Food & Drink Forum has identified that this Food and Drink industry has a low skills and workforce and specific development is required to meet the needs of this growing and buoyant industry. Moulton College will be developing a Food and Drink Innovation Academy which will focus on food manufacturing to meet this key strategic skills area in Northamptonshire and the wider region.
There needs to be more engagement with rural communities in and around Northampton from the county-wide agencies.
The Food and Drink Forum and work undertaken by NEP has established task and finish groups such as the Construction Skills Task and Finish group.
There needs to be a countywide Education Strategy to ensure there is not an uncontrolled proliferation of education providers; therefore, reducing the likelihood of duplication and to ensure that public investment provides best value for money and high quality training and education.
There is a need to ensure that all partners locally promote the benefits of living and working in this beautiful part of the country.
Assistant Principal, Northampton College
There are 1,100 apprentices in learning in a range of sectors 90% of learners who completed apprenticeships stayed with the employer and were promoted The apprenticeship framework is different for each employer. Apprenticeships range from level 2 to level 7 and each are tailored 70% of the College’s work is repeat business The College’s range of services along with its flexibility ideally places the College to support the skills development needs identified, but to further complement this the College offers via additional programmes of training. There are challenges as the education sector is judged by subject sector areas, of which there are 15, whilst there are many more categories of industries that employers represent which causes a mismatch when trying to compare provision to that with industries and priorities, and could therefore mis-represent how responsive the provision is to the priorities.
All of the College employer based work is in response to the employer needs identified and therefore could suggest is 100% responsive to meeting the needs of those we engage within the area, and great focus should be provided to engaging those who have not considered training or apprenticeships.
Short courses and pre-apprenticeship programmes are offered. The College works closely with Horizons regarding tailored need, the requirement of shorter courses etc. All courses are available for over 50s.
Northamptonshire businesses approach to skills and training identifies the skills that are found difficult to obtain from applicants, such as 8% written communications skills, 8% oral communications skills, 10% customer handling skills and 3% basic computer literacy, ICT using skills.
Employers sign up to the College’s values in respect of apprenticeships.
Connexions Targeted Support Manager, Northamptonshire Connexions
Government target for 3 million Apprenticeships by 2020. There is a need to make sure Northamptonshire has its fair share of this growth.
From April 2017 - 0.5% Levy on employers with salary bill over £3 million per annum. A small number of employers fall into this group. All employers can access financial support for employing/training an apprentice.
Funding will be directly accessible by employer rather than by training provider. Need to make sure employers are aware of this, particularly small employers.
Need to raise awareness of Apprenticeships with young people, parents as well as employer. Often seen as “third choice” after school or college. It needs to be targeted to all abilities, not just those who are not expected to progress to University etc. • Some young people are not ready/suitable to progress to Apprenticeships. Provision for this group (other than school or college) has reduced but is needed to help bridge the gap and meet employers’ needs for Apprenticeships. Currently, Apprenticeship vacancies can remain unfilled.
• Connexions’ vision is to help people “succeed, achieve and grow”. Skills are a key part of this giving people better employment prospects, leading to financial independence, security and greater resilience in difficult times. Better and higher skills give more protection in the labour market and make Northamptonshire a more attractive destination for employers, driving prosperity for the area.
• Support to 16-19 year old NEET (particularly those in vulnerable groups) - provide job clubs, vacancy services and key worker support to remove barriers to employment and learning.
• Connexions works closely with other partners, including training providers, colleges, Job centre and other support agencies e.g. accommodation, social care/looked after team.
• Like many public sector organisations Connexions has reduced in size/employment. It has however recently recruited 2 new Apprentices.
• Schools/Colleges provide effective careers education programmes to support young people to make well informed decisions about their career ideas and the routes needed to achieve. This should include opportunities to meet employers/experience the work place and discuss their ideas with an impartial adviser. Schools/Colleges have a statutory duty to provide access to IAG but are not provided with any funding to do this, as a consequence the access varies from place to place. There is a need to help schools/colleges understand that a good careers programme supports achievement agenda by giving young people a goal and motivation.
• Employers provide employment opportunities for young people but also help young people learn about their industry and what employers want by offering work experience, visits, talks in schools etc. This can be difficult for small businesses but these make up the majority of local employers. • Funding bodies/education providers/Third sector develop the range of pre-employment opportunities to help engage young people into learning and prepare them for employment.
• Young People take up the opportunities available to them, develop resilience to cope in the work place
• Industry sectors that report difficulties in filling Apprenticeship vacancies – construction, engineering and care
• Employers highlight concerns with generic skills such as problem solving, initiative, dealing with customers, telephone skills and work place behaviour e.g. attitude, motivation and team working
• Those who are seldom heard or isolated could be engaged with via outreach activities and community groups.
**Brackmills Industrial Estate BID**
• Brackmills Industrial Estate BID vision for skills and learning issues is to support businesses and staff who work on Brackmills through the provision of facilities, services and benefits which attract skilled people and which promote a positive and productive working environment and encourage and support relationships and schemes between businesses and organisations which seek to develop skills.
• Brackmills Industrial Estate BID’s vision is “to create a highly effective and functional operating environment for businesses on the estate which supports and attracts businesses and inward investment” through four key objectives.
• Its fourth objective is to support businesses and staff who work on Brackmills through the provision of facilities, services and benefits which attract skilled people and which promote a positive and productive working environment. Encourage and support relationships and schemes between businesses and organisations which seek to develop skills.
• Brackmills Industrial Estate consists of 150 businesses and 11,000 people.
• The road network in and out of the estate experiences congestion at peak due insufficient road network capacity. This could be intensified if applications are approved for housing developments in Hardingstone and Collingtree which will impact on the A45 between J15, Brackmills Gateway Roundabout and Barnes Meadow Roundabout, which already reach heavily congested levels at peak times as a result of traffic movements in and out of Brackmills. As a result, some modifications have been planned for roads and junctions surrounding the estate. It is essential that these go ahead and are completed before the additional housing is built.
- The surface of carriageways throughout the estate are rutted and present a hazard to HGV’s and Cyclists. Current Highway Inspection Standards do not include a consideration for cyclists and although some defects are less of a hazard to HGVs and cars, they can force a cyclist to be dismounted and have an accident. Investment is required in the infrastructure of the current road network for safety and to support the retention of businesses in the location.
- The reasons that business invest in Northampton include geographical location, ease of access to key road infra-structure and relatively cheaper property and business rates than further south.
**Northampton Town Centre BID**
- The Northampton Alive brand needs to be used more to act as a marketing vehicle for inward investment supported by the BID which has within its new Business Plan the activity of ‘Working with partners, landlords and property agents to market the town centre to potential new retailers and investors in line with recommendations from an updated retail strategy for the town centre’.
- The BID can provide support by meeting with the Council lead and the investor/business interested in locating in the town centre to provide a business perspective on the current situation in the town centre.
- There needs to be a co-ordinated approach to any enquiry being made by businesses who are seeking to locate in Northampton through the Economic Regeneration team, NBC.
- The largest site in the town centre, which is the area of concern for the BID, is the old Bus Station site. The Grosvenor Shopping Centre has had a limited make-over and there are a number of properties around the town centre which offer potential development opportunities.
- The key to ensuring that there is a steady stream of quality premises in the town centre is for there to be a clear vision and plan for the town centre and evidence to support the fact that the plan is being implemented. This will provide confidence to potential investors and businesses who are considering investment and growth in Northampton.
- The BID has a key role to play in working with the Council in providing a business input into the development of the town centre and providing the confidence for businesses to invest in refurbishment and development of properties and sites.
- The key elements of the town centre’s infra-structure which need to be improved are the standards of the street surfaces, notably in Abington Street, and the Market Square.
- Businesses invest in Northampton due to geographical location, ease of access to key road infra-structure and relatively cheaper property and business rates than further south
**Market Action Group (MAG)**
- The National Market Traders Federation operates various start up schemes as well as working with an Academy to enable market traders to recruit apprentices throughout the United Kingdom. Schemes such as this need to be actively promoted by the local employment centres to encourage people into this sector therefore ensuring its sustainability.
- Market traders should complete regular skills audits to identify areas they need to be developed in order to sustain and grow their business. Specifically, traders need to embrace technology in order to capitalise on new and existing customers such as social media.
- Within the market sector there is always scope for new stalls with commodities not already represented meaning there is a wealth of untapped potential. • Learning establishments and Local Enterprise Partnerships need to embrace the local market as the perfect place for start-up businesses. Job Centres could then refer individuals to these organisations to provide skills and knowledge in conjunction with the Market Officers.
• Businesses invest in Northampton because of its position within the country and its transport links. The reason retail businesses may not invest is because there are not enough big name retailers within the town and poor access to the centre.
• To engage with those seldom heard or isolated, regular Town Centre forums with all businesses invited, Newsletters to businesses from NBC, NCC and the BID
• There is a need for Town team meetings to include all public bodies, services and businesses
5 Community Impact Assessment
5.1 This Scrutiny Review investigated how partners locally, including the private sector, can work together to influence the local economy. It sought to put forward informed recommendations to all relevant parties on the most appropriate approaches in influencing the local economy
5.2 The Scrutiny Panel, in having regard to the general equality duty, was mindful of the protected characteristics when undertaking this scrutiny activity; so that any recommendations that it made could identify disproportionate and unintended potential positive and negative impacts on any particular sector of the community, including any potential mitigation required. This was borne in mind as the Scrutiny Panel progressed with the review and evidence is gathered.
5.3 In order that the Scrutiny Panel obtained a wide range of views, a number of key witnesses provided evidence as detailed in section 3 of this report. 5.4 Any recommendations regarding the health check of the local economy would consider impact and potential mitigation as appropriate and relevant across all protected characteristics. Impact assessments are integral to any reports including actions plans.
5.5 Details of the Community Impact Assessment undertaken can be located on the Overview and Scrutiny webpage.
6 Conclusions and Key Findings
6 After all of the evidence was collated the following conclusions were drawn:
6.1 From the evidence received, the Scrutiny Panel highlighted that, in accordance with its key lines of enquiry, there were three key themes of information that came from the evidence gathered:
- Physical environment
- Economic environment
- Social aspect of the economy – Workforce, the support of the workforce and how it comes together
The Scrutiny Panel was pleased to note that from the evidence received from the expert advisors, there was very little, if any duplication of services provided.
Social aspect of the Economy
Apprenticeship Programmes
6.1.1 The Scrutiny Panel acknowledges that apprenticeships contributed to £34 billion to the UK economy in 2014.
6.1.2 There is a variety of information available for both prospective apprentices and employers looking to offer apprenticeships. This information is contained in various locations. There is not however one central location where information can be obtained.
6.1.3 Evidence received details that it is envisaged by Government that there will be 3 million apprenticeships by 2020. There are 150 apprenticeships in Northamptonshire at any one time, delivered by both public and private training providers. The split of the funding is approximately, 60% for apprentices aged 16-18 and 40% for those aged 19 plus. Nationally, the retention rate of apprentices on programme aged 19 plus is generally higher than those aged 16-18 years. The Scrutiny Panel felt that small businesses perceive it is difficult to take on an apprentice. It is estimated that 90% of SMEs within Northamptonshire do not participate in the employment of an apprentice.
6.1.4 The Scrutiny Panel is pleased that Northampton Borough Council, Local Government Shared Services and Northampton Partnership Homes all employ apprentices.
6.1.5 The sectors that create a lot of interest from potential apprentices are hairdressing, ICT and the motor vehicle trade.
6.1.6 The Scrutiny Panel realises that the level of demand for apprenticeships cannot be met solely by young people; there is a need to investigate how adults can be supported to train or re-train.
6.1.7 There is a need to raise the profile of vocational education and apprenticeships so that it is held in the same esteem as further education courses and qualifications. The Scrutiny Panel acknowledges the need for further work with employers to encourage the take up of apprenticeships especially in SMEs. 6.1.8 Evidence received alludes to a lack of consistent high quality careers advice in schools.
**Economic environment**
**Areas for potential growth in jobs**
6.1.9 The Scrutiny Panel acknowledges and commends the success of the Enterprise Zone, and work undertaken by larger employers in the town such as Cosworth and Churches; recognising the need to publicise their importance to both the local and national economy.
6.1.10 The Scrutiny Panel acknowledges that Northampton has a very competitive labour market with a jobs density of 0.99.
6.1.11 The Scrutiny Panel is pleased to note that NEP is actively involved in the skills agenda and “serious about skills” as NEP recognises that the availability of skilled labour is a serious challenge for most Northamptonshire businesses.
6.1.12 The Scrutiny Panel highlights that it is essential that Northamptonshire has sufficient skills and talent to meet current and future workforce demand, particularly given our productivity “under-performance”.
**What other organisations/groups/individuals can do to help**
6.1.13 NBC works with companies to help them secure growth and ultimately increasing the employment base of the Borough. The Scrutiny Panel acknowledges that NBC can support these sectors and individual businesses within it. 6.1.14 The Scrutiny Panel welcomes the frameworks of both SEMLEP and NEP; recognising it could have greater influence over skills policy in the future. It further welcomes the work that the Council does with these organisations.
6.1.15 Evidence received highlights the important roles of the two Colleges and the University in the town in the future of the local economy. The Scrutiny Panel felt that schools and employers could work closely to provide work place experiences for young people that are still in education.
6.1.16 The Scrutiny Panel welcomes the links that SEMLEP has with the colleges in the county and that from 2016 SEMLEP will employ two Enterprise Co-Ordinators that will work with schools and businesses.
6.1.17 The Scrutiny Panel acknowledges the amount of funding available but suggests there was a need for this to be publicised. It realises that there is a limited fund for marketing purposes.
6.1.18 Evidence highlights the success of the programmes led by Northamptonshire County Council (NCC), for example, INV-ENT delivered 105 local projects that have the potential to create 489 new jobs, 137 new apprenticeships and support over 1,000 people with their skills development through an initial investment of £1.4 million.
**Mapping skills gap exercises to identify the type of skills that are in short supply; and what the findings of this exercise are**
6.1.19 The Scrutiny Panel highlights that the skills agenda is very important for Northampton. It notes that the manufacturing sector in Northampton has difficulties in recruiting individuals with the relevant skills to what they require. There is also a lack of available and qualified drivers for HGV’s and also the lack of qualified fork lift drivers.
6.1.20 The evidence received further highlights that it is difficult to recruit people to certain sectors such as ICT and engineering. There are a lot of warehouses and distribution centres in Northampton, employing large numbers of low skilled workers.
**How specific servicers can be used to generate business investment**
6.1.21 The Scrutiny Panel welcomes that SEMLEP encourages Universities and Colleges to work with businesses such as South Bedfordshire College working and linking to Vinci.
6.1.22 The Scrutiny Panel acknowledges the Business Incentive Scheme (BIS) can be utilised to address funding issues within specific investments. The funding can make the difference between a business choosing Northampton over another close-by district.
6.1.23 The Scrutiny Panel welcomes the work undertaken by Northamptonshire Growth Hub and Northamptonshire University to enable employers to access funding for skills from universities worldwide.
6.1.24 Evidence received highlights that Northamptonshire County Council has been proactive in developing a flexible approach to the delivery of economic development activities across the county, this includes areas of skills, business support and infrastructure provision.
6.1.25 The Scrutiny Panel acknowledges that the £330 million relocation and expansion of the University into the Enterprise Zone, as part of the Northampton Alive programme will be a big step to increasing the volume of highly qualified individuals within the local labour market. How can the offer of commercial land in the borough be improved to ensure a steady stream of quality premises that are accessible by new and established organisations?
6.1.26 Evidence received details that the availability of commercial land is paramount to the delivery of inward investment and ensuring organic growth of the existing business base. Northampton has a relatively constrained geography, with few available large sites for development such as FOUR Waterside in the Enterprise Zone.
How it can be ensured that those who are seldom heard or isolated are engaged with
6.1.27 The Scrutiny Panel welcomes the Big Lottery opt-in of the European Structural and Investment Fund (ESIF) that specifically targets groups that are furthest from the labour market.
6.1.28 The Scrutiny Panel further welcomes that some voluntary and community organisations help support people into employment. A number of courses have been run for a long period of time.
Vision for skills and learning issues, particularly low skills
6.1.29 The Scrutiny Panel supports the rollout of the Enterprise Advisors Pilot and that the Northampton model has been adopted for the national roll out.
6.1.30 The Scrutiny Panel recognises that, in accordance with the European Social Fund, people of all ages can be re-skilled and trained.
6.1.31 Evidence received shows that Northampton is low skilled area. Aylesbury Vale is high skilled. Northampton is similar to Corby and Luton. Northampton does however have huge opportunities that need to be realised. 6.1.32 The Scrutiny Panel notes the reported conclusion from the Chamber of Commerce quarterly survey:
“The results from the Q2 2015 QES signals continued growth by firms in the county – but with noticeable differences between manufacturing and services.
“The service sector appears to be making good progress but there has been a slowdown in the pace of growth experienced by manufacturers in Northamptonshire however this is consistent with the national trend indicated by our national partners at The British Chambers of Commerce.
“We still need to secure long-term sustainable growth which will help drive the economy. The Government must support firms across the board by reducing the cost of doing business and tackling issues such as high business rates and energy costs as well as provide support for investments which can increase productivity and exports.”
Support for those that are in long term unemployment
6.1.33 The Scrutiny Panel emphasises that developing skills and employability is not just about apprentices and young people, it is also about helping adults who are not employed and those who need to re-skill. The European Social Fund apprenticeship grant will enable a lot of work to be done with those furthest away from the job market; targeting the hardest to reach groups. The Scrutiny Panel acknowledges that support of those that are in long term unemployment is important as on the latest statistics long term unemployment is marginally higher in Northampton at 0.5% than at GB level (0.4%).
6.1.34 The Scrutiny Panel acknowledges the importance of the partnerships with local organisations, who exist to meet the needs of the seldom heard or isolated. It realises that they are vital to engage with this target group and enter into a dialogue in which people can voice their aspirations, needs and issues and a bespoke programme of learning can be arranged. Evidence provided highlights that key partners include: Kettering centre for the Unemployed (KCU), Wellingborough Homes, Bridge project, Papworth Trust and Ground Work.
**Physical infrastructure in and around the town**
6.1.35 Funding was received by SEMLEP for infrastructure, £46.7 million for 2017/18.
6.36 Analyse indicates that development is taking place, but it is primarily focused upon the large logistics sites at M1 J15 and J15a; Grange Park and Swan Valley. Further, the type of premises being constructed are large distribution warehouses designed to cater for the regional and national market, rather than for those companies who are - necessarily – already based in Northampton. Existing businesses in Northampton might take a small amount of the space either recently/currently built, but the target audience for the developers is not the local market.
6.1.37 Evidence received highlights that any economic market is not perfect and will have inherent failings. The origin of any forthcoming programme must be an in-depth understanding of the local economic geography. The Scrutiny Panel realises that such an understanding is apparent within the Northampton Alive programme; a diverse range of projects aimed at intervening and catalysing the Northampton economic market and skills agenda.
6.1.38 The University, together with all further education colleges, is carrying out a research based project regarding an integrated transport system for the county. The Scrutiny Panel felt that it would be useful to obtain the results of this research when it is finalised. 6.1.39 The evidence highlights that NBC continues to invest in the physical infrastructure of the town. The opening of the bus and train stations were the core initial assets to improve the town's infrastructure, however the opening of Abington Street and the future opening of St James Mill Rd will continue to improve the road infrastructure serving both the residents and the businesses.
6.1.40 From the evidence received the Scrutiny Panel acknowledges that the location and subsequent investment of a business rest on three motivators:
- Location: proximity to competition and customers.
- Operating costs: costs of land/property and employees.
- Labour: the availability of labour at the correct skill levels.
7 **Recommendations**
7.1 The purpose of the Scrutiny Panel was to look at how partners locally, including the private sector, can work together to influence the local economy. Scrutiny Panel 1 therefore recommends to Cabinet that:
7.1.1 The Council, together with its partners, develops a Skills Strategy for Northampton. This should include mechanisms for colleges and employers, especially SME’s to signpost vacant apprenticeships across the town, whilst raising the profile of apprenticeships and vocational training in Northampton.
7.1.2 Cabinet investigates ways that the Council, and its partners, can continue to raise the profile of the economic growth and investment in Northampton through the Northampton Alive Programme, in particular the success of the Enterprise Zone, and work undertaken by larger employers and investors in the town. 7.1.3 It is recommended to Northamptonshire County Council and partners that schools and employers work closely to provide work place experiences for young people that are still in education.
**Overview and Scrutiny Committee**
7.1.4 The Overview and Scrutiny Committee, as part of its monitoring regime, reviews the impact of this report in six months’ time.
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123183e47549ce0d830a78598c5458d5db574165 | LOCAL SUPPLIERS PROCUREMENT POLICY
August 2010 Table of Contents
1 Introduction........................................................................................................... 3 2 Corporate Vision and Strategic Priorities ......................................................... 4 3 Objectives of the Policy .................................................................................... 4 4 The Policy........................................................................................................... 4 5 Procurement Rules and Best Practice .............................................................. 6 6 Conclusion......................................................................................................... 9 APPENDIX 1 Glossary............................................................................................ 10 APPENDIX 2 Links to Other Policies and Strategies........................................... 12 APPENDIX 3 External Organisations................................................................. 13 1 Introduction
1.1 The Procurement function is fundamental to the Council fulfilling its obligations and its long-term plans. As these future plans are essentially strategic, the Procurement function must therefore act and advise at a strategic level.
The Council recognizes the importance of supporting local suppliers and the many advantages of purchasing works, goods and services in ways that minimize environmental impact, make best use of local produce and labour, support and maximize local employment and training initiatives, and encourage economic development.
At the same time, the Council has a duty to ensure that public money is spent both responsibly and in a manner that is fair, honest, transparent and legal and does not discriminate in any way.
One of the key roles of Procurement is to balance these interests to best effect in developing and stimulating a varied and competitive market place.
The aims of this policy are in line with the Council’s corporate vision and strategic priorities, as embodied within various strategies and policies, particularly those relating to:
- the IDEA Equality Framework and its predecessor, the Equality Standard;
- sustainability;
- the NBC Sustainable Communities Strategy;
- best practice in procurement;
- for a more detailed list, please refer to Appendix 2.
The intent is to ensure that works, goods and services purchased are fit for purpose whilst seeking to provide benefits for the wider community and delivering high quality public services.
1.2 ‘Procurement’ operates at several levels. Strategic Procurement embraces decisions as to how major Council services are provided and structured for effective and efficient delivery, whilst at an operational level the commissioning of, and contracting for, individual supplies of goods, services and works nevertheless collectively also reflects major expenditure. 1.3 Best Procurement Practice will:
- Generate the most advantageous balance of quality, time and cost;
- Ensure that no organisation (e.g., SMEs or voluntary groups) is precluded from contracting with the Council due to onerous internal processes;
- Give due and legally compliant consideration within tender processes to the needs of the local supplier community, and seek to minimize barriers;
- Encourage the participation of high quality tenderers from all sections of the community to the benefit of the Council;
- Encourage the incorporation of community benefits within tender processes, where this is relevant and legal;
- Comply with the Council’s regulatory framework and all applicable legislation;
- Be transparent and accountable.
2 Corporate Vision and Strategic Priorities
2.1 The Council acknowledges the importance of partnerships and shared services in delivering Best Value – partnerships with the private and voluntary sectors, or with other public bodies and central government.
For this reason, the Council is a key partner within the Northamptonshire Area Procurement Service (‘NAPS’), working alongside a number of other district authorities within a formal arrangement and developing strong working relationships with other local public sector organizations such as the County Council and the Police.
3 Objectives of the Policy
3.1 To obtain maximum economy, efficiency and effectiveness to the Council through the planned and informed management of the Procurement and Supply Chains for materials, works and other facilities and services provided for the Council and the entire community, whilst taking account of the Council’s wider environmental, social and economic responsibilities towards its local population and the community in general.
4 The Policy
4.1 The Council commits itself to encourage local suppliers to take advantage of procurement opportunities by:
- engaging with key community organisations;
- monitoring, and not detrimentally impacting upon, its proportion of works, goods and services spend with SME organisations; • providing detailed information and guidance to local organisations via its website and through printed materials;
• encouraging the strategic development of the local economy through economic development and regeneration initiatives, as well as best procurement practice;
• publishing all low value tender opportunities on the Source Northamptonshire web portal(^1), regardless of any other public notice placed for that opportunity;
• use contracts or include requirements which encourage and promote job creation in the local community
• keeping abreast of current good practice in procurement as it relates to these issues.
4.2 The Council cannot give preference to local suppliers, as there are legislative constraints(^2) and such a policy would be incompatible with Best Value. Nor can the Council incorporate community benefits where these are not relevant to a proposed contract.
The Council recognises that there can be barriers limiting or restricting the ability of smaller suppliers to compete for Council business(^3). The Council will seek to reduce the impact of such barriers, where it can do so legally, without discrimination, and without placing unacceptable levels of risk on the Council.
For example, the council should simply ascertain a contractors willingness to improve their insurance cover to a specified limit, should they win the contract, rather than request a specific level of cover at pre-qualification stage.
In summary, the Council can facilitate, inform, encourage and act as a conduit to external organisations providing specialist support and expertise, but it cannot decide that a contract must be awarded to a local supplier and it can only specify community benefits in a proposed contract where these are relevant.
4.3 The Council will participate in, and contribute to, the East Midlands Public Procurement Opportunities Plan published by the East Midlands Development Agency (EMDA) through working closely with the East Midlands Improvement and Efficiency Partnership (EMIEP) who represent local authorities on the East Midlands Procurement Forum.
4.4 The Council will seek to ensure greater awareness of procedures and opportunities generally. It will seek to work collaboratively with external organisations, such as Northamptonshire Enterprise(^4) and Business Link(^5), to achieve this and to support initiatives such as ‘Meet the Buyer’ events.
4.5 The Council will seek to ensure greater awareness amongst its officers and
______________________________________________________________________
(^1) Source Northamptonshire Web Portal (^2) EU and UK legislation on competition and public procurement (^3) Eg insurance limits; funding streams; cash flow; financial history; joint and several liability within partnerships (^4) Northamptonshire Enterprise (^5) Business Link East Midlands Members of current Best Procurement Practice, using various approaches (such as Open Days, and its Good Practice Summary) to achieve this.
4.6 The Council will seek to ensure that SMEs and voluntary/community groups are not unfairly disadvantaged through its procurement and purchasing policies and procedures, and that the benefit to the whole local economy is maximised within the principles of Best Value and relevant legislation.
4.7 The Council will seek to increase, by at least 25%, the level of local advertising of tender opportunities, principally via the Source Northamptonshire web portal, and to increase the use of such local advertising for higher-value opportunities (in excess of £20,000).
4.8 The Council will seek to increase the level of participation of local firms and SMEs by inviting at least one SME and/or at least one local firm to apply or provide a quotation for work, when publishing tender notices or requesting quotations for lower value spend.
4.9 The Council will seek to avoid any detrimental impact upon the proportion of SMEs within its 100 highest spend suppliers, taking 2008/09 as a baseline.
4.10 Equality Impact Assessments will generally be undertaken by NAPS on strategic issues and by the Council on operational issues, as appropriate, and will be made available to the general public via the Council’s website.
4.11 The Council will periodically review its methods of operation with a view to ensuring a more community oriented, and environmentally aware, approach to procurement decisions.
4.12 All future specifications for works, goods or services that are influenced by procurement will progressively require suppliers to maintain and comply with the Council’s standards and requirements in relation to Equality and Diversity, and Community Benefits generally, including requirements which encourage and promote job creation in the local community.
5 Procurement Rules and Best Practice
The following rules and best practice shall apply:
5.1 The framework of rules for procurement will be those determined by EU and UK law, the Council’s Contract Procedure Rules and those set out within any presented Procurement Strategy, Policy or Code of Practice (in that order of precedence).
5.2 In dealing with all suppliers, the Council will ensure that there is an equal opportunity, for all who meet the stated criteria, to participate in tendering for any Council requirements. Whenever requested, unsuccessful applicants will be provided with the reasons why, and unsuccessful tenderers will receive feedback.
5.3 In appointing suppliers, the Council will appraise offers received on the basis of whole life costing and will seek an appropriate balance between cost and quality in any evaluation having regard to the Most Economically Advantageous Tender 5.4 In any procurement activity the Council will consider the impact upon the market of particular ways of packaging and presenting requirements so that, as far as is consistent with the needs of users, these are as attractive as possible, are environmentally friendly, meet Health & Safety requirements etc. as detailed within pre-qualification questionnaires and will purchase Fairtrade goods where this option is available and can be afforded.
5.5 Procurement will develop a programme of research on best practice within Procurement, to produce advice for purchasers on the ways that they can:
- in accordance with the Council’s Sustainable Purchasing Guide, promote sustainability factors and other community benefits into buying decisions (where these are both relevant and legal) e.g. review our purchase of timber & timber products, non-recycled paper, pesticides, etc;
- assist colleagues in critically appraising alternatives to existing provision (such as creative graphic design, open source(^6) software, specialist works suppliers), which would increase the diversity of the relevant supplier base, as these goods and services are more likely to be offered by smaller and/or local suppliers;
- encourage colleagues to give due consideration to ‘niche’ specialist suppliers, which would also increase the diversity of the relevant supplier base, as well as ‘generalist’ companies providing a wide range of goods or services;
- encourage colleagues not to specify brands (such as ‘Ford Transit’ vans) or technical features (such as computer hardware containing Intel microprocessor chips) where this is not a material aspect of the proposed contract(^7);
- consider the possibility of incorporating new employment, apprenticeships or training opportunities as part of the specification;
- seek to minimise barriers to the participation of SMEs and local suppliers in seeking to do business with the Council and with its partner authorities;
- seek to ensure that suppliers are compliant with all current legislation on equalities and diversity, and encourage them to achieve this;
- make use of model contract clauses to ensure compliance with legislation and best practice;
- use environmental labelling schemes wherever feasible;
- ensure specifications comply with the Council’s Sustainable Procurement policy and Sustainable Communities Strategy, where appropriate;
- comply with local, national and EU legislative and regulatory requirements;
______________________________________________________________________
(^6) see, for example, [http://en.wikipedia.org/wiki/List_of_free_and_open_source_software_packages](http://en.wikipedia.org/wiki/List_of_free_and_open_source_software_packages)
(^7) [http://www.ogc.gov.uk/documents/NonDiscriminationInTechnicalSpecifications.pdf](http://www.ogc.gov.uk/documents/NonDiscriminationInTechnicalSpecifications.pdf) • promote community awareness among our suppliers, this will inform future policy and build on current guidance;
• encourage the publication of forward procurement plans to enable potential suppliers to plan for responding to contract opportunities 6 Conclusion
6.1 This Policy seeks to outline the Council’s commitment to fairness and transparency in working with local suppliers, by outlining the key principles of how the Council procures works, goods and services.
Recognising that many of these companies will be SMEs and social enterprises, and that many such suppliers will be representative of a diverse range of communities, it also outlines the measures that the Council will adopt to ensure that they are not placed at a disadvantage when bidding for Council contracts.
There still, however, remains a requirement to demonstrate Best Value and to be mindful of the constraints of the EU Procurement Rules. The policy and legislative framework that regulates public procurement is complex and detailed, and cannot be disregarded or altered.
However, in developing this policy, the Council seeks to ensure
- that all companies who wish to become suppliers to the Council can understand the basis on which decisions are taken;
- that barriers to the participation of smaller companies can be minimised, without according them preferential treatment; and
- that all prospective suppliers, regardless of size, location or other circumstances, would also benefit from such measures.
It is the Council’s belief that this approach will benefit us all.
Head of Procurement Northampton Borough Council/Northamptonshire Area Procurement Service
August 2010
## APPENDIX 1 Glossary
| **Community Benefits** | Elements within a proposed contract which provide benefits to the wider community, and not just the Council or its suppliers. These can be broadly categorised into one of the following areas of benefit:
- ensuring equalities and diversity are taken into account;
- promoting measures which support or stimulate the local economy;
- promoting social benefits such as employment or training opportunities;
- promoting measures which protect the environment.\
Examples might be the provision of training schemes or apprenticeships, or increased use of recycled materials. Specification of such benefits can only be legally done where the benefit would be relevant to the contract. | | **Fairtrade** | ‘Fair Trade is an organized social movement and market-based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as social and environmental standards.’ (from Wikipedia)\
It is Council policy to promote the use of Fairtrade products and this is included in the Sustainable Purchasing Guide. However, please note that Fairtrade products can only legally be specified where this would be relevant to the contract, which is almost never the case in practice. | | **Local Suppliers** | Suppliers whose primary base
- lies within the County of Northamptonshire;
- lies within 50 miles of Northampton; or
- has a postcode beginning with ‘NN’. | | **Locally Sourced Goods** | For the purposes of this Policy, these are defined as goods procured from Local Suppliers (qv). | | **Most Economically Advantageous Tender (MEAT)** | The tender which will bring the greatest benefit to the Council taking into account a variety of factors, principally around quality and price | | **SME** | see ‘Small and Medium Enterprises’ | | --- | --- | | **Small and Medium Enterprises** | Definitions vary. However, the EU has now started to standardize the concept. Its current definition categorizes companies as follows:
- fewer than 10 employees as ‘micro’;
- those with fewer than 50 employees as ‘small’;
- those with fewer than 250 as ‘medium’;
- those with 250 or more employees as ‘large’.\
This definition is also used by the Federation of Small Businesses. | | **Social Benefits** | see ‘Community Benefits’ | | **Sustainability** | Elements within a proposed contract which relate to the choice of works, goods or services in ways which minimise harmful impacts, or maximise beneficial impacts, on the environment or the community. Examples might be the specification of organic foodstuffs, or minimising road miles within delivery cycles.\
Specification of such benefits can only be legally done where the benefit would be relevant to the contract.\
**Note:** specifications requesting Fairtrade goods do not comply with this requirement. | | **Whole Life Cost** | The cost of ownership of an asset is incurred throughout its whole life and does not all occur at the point of acquisition(^8).\
Whole life costing allows us to determine if it is cost effective to invest in a more expensive product initially to reduce costs in the long run. |
______________________________________________________________________
(^8) NBC Procurement Code of Practice APPENDIX 2 Links to Other Policies and Strategies
Statement of Procurement Policy Procurement Strategy Procurement Code of Practice Equality in Procurement Checklist Contract Procedure Rules Sustainable Purchasing Guidelines Single Equality Scheme Level 3 Equality Standard/Equality Framework Sustainable Communities Strategy APPENDIX 3 External Organisations
Northamptonshire Enterprise Ltd (NEL) http://www.northamptonshireenterprise.ltd.uk/default.asp
Business Link East Midlands http://www.businesslink.gov.uk/eastmidlands/
East Midlands Improvement and Efficiency Partnership (EMIEP) http://www.eastmidlandsiep.gov.uk
East Midlands Development Agency http://www.emda.org.uk/businesssupport/procurement-plan.asp
Black and Minority Ethnic Sub-Regional Partnership (BME SRP) for Northamptonshire http://www.bmesrp.com/
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c526a9e121b5be594cb98b0e4da2ae9d4c3a4960 | Violence against Women and Girls Crime report contents
Foreword by the Director of Public Prosecutions 1–2
10 years at a glance 3
Violence against Women and Girls Crime report 4–19 VAWG subset 5 Domestic abuse 5 Stalking and harassment 7 Rape 8 Sexual offences (excluding rape) 11 So-called ‘honour-based’ violence, forced marriage, and female genital mutilation 12 Child abuse 14 Human trafficking and modern slavery 15 Prostitution 16 Pornography and obscenity 17
Violence against Women and Girls data report A1–A43 The VAWG data report provides detailed data analysis on each of the VAWG strands.
Annex 1 Prosecutions by CPS Area and police force area B1–B8 Annex 1 provides detailed data by CPS Area and police force areas on domestic abuse, rape and sexual offences.
Annex 2 Ministry of Justice data on stalking, harassment, restraining orders and Rape National Statistics B9–B12 Annex 2 provides the MoJ data on stalking, harassment, restraining orders and Rape National Statistics to contextualise CPS data.
Glossaries Glossary of terms and acronyms B13–B21 The Glossaries provide definitions of terms used within the report and acronyms. Foreword by the Director of Public Prosecutions
This is the tenth year of our publication of an annual Violence against Women and Girls (VAWG) crime report. We are committed to publishing the analysis and assessment of our performance each year, to assist in improving the effectiveness of our VAWG prosecutions. Over this ten year period VAWG convictions have risen from 51,974 to 84,565 – a 63% rise.
We have worked in partnership across the Criminal Justice System, and with our stakeholders, to encourage victims to report these crimes and prosecutions of domestic abuse, rape and sexual offences now account for one in five of the CPS’ total caseload. In 2007–08, prosecutions related to VAWG accounted for 7.1% of the CPS’s total caseload; in 2016-17, this rose to 19.3%
In 2016–17, tackling VAWG continued to be a priority for the CPS. We prosecuted and convicted more defendants for sexual offences (including rape and child sexual abuse) than ever before. More than 13,500 defendants were convicted – 1,670 (14%) more than in the previous year and more than a third of these convictions were for sexual abuse of children. For the first time the data on the age of rape victims is robust enough to publish, indicating that more than half of victims are under 24 years of age, and nearly one in five aged 14–17 years. We are addressing the targeting of young people through our work on child sexual abuse, as well as making use of new offences to deal with the increase in the extreme nature of sexual abuse, such as ‘possession of extreme pornographic images portraying rape’, the streaming of indecent images of children and the ‘possession of a paedophile manual’.
The volume of rape defendants prosecuted and convicted following an initial allegation of rape reached the highest level ever, with a steady conviction rate. In the coming year we are committed to contributing to a cross-government ‘Deep Dive’ exercise to identify ways to further reduce attrition rates in cases of serious sexual offences. Specifically within the CPS we aim to further improve performance through revised guidance and training, for both prosecutors and advocates. We are developing training on acquaintance rape involving intoxicated individuals as well as a psychological evidence toolkit for prosecutors.
Our prosecution of cases involving social media has increased, not only for sexual offences but also for domestic abuse, stalking and harassment. We prosecuted more than 460 offences of disclosing private images without consent (so-called ‘revenge pornography’). There have been prosecutions of more than 300 offences of coercive and controlling behaviour, since the law was introduced last year, with many involving control of victims through the internet, tracking software and social media platforms. We have also prosecuted a higher proportion of domestic abuse-related offences of indecent or grossly offensive communications. During the year we met with groups supporting male victims of crimes identified as ‘VAWG’ offending and published a public statement on CPS support for men and boys - part of our overall strategic approach to secure justice for all. We outlined our commitments to update our legal guidance, training and case studies for prosecutors to include details of the experience of male victims, as well as help challenge myths and stereotypes and provide details of specific support services available for men.
In 2016–17 we recognised that the overall volume of domestic abuse prosecutions had fallen from 100,930 in the previous year to 93,590, following fewer cases being referred by the police. We are working closely with our police colleagues, locally and nationally, to ensure that we address the fall in volume and take forward appropriate cases. We have raised the issue through the Ministerial Domestic Abuse Working Group, Her Majesty’s Inspectorate of Constabulary and the Home Office National Oversight Group to ensure it is addressed at the highest level. By the end of the year the conviction rate rose to 75.7%. We are also working more widely across the Criminal Justice System in developing a domestic abuse best practice model for use in all courts and will provide further training to all of our prosecutors in 2017–18.
I would like to thank stakeholders in our VAWG External Consultation Group and the Community Accountability Forum who have continued to provide their national support and expert advice during 2016–17. In addition, thanks to our dedicated Area VAWG Coordinators, staff in our Rape and Serious Sexual Offence Units and all CPS staff who deal with these cases, as well as the organisations that have supported our local scrutiny panels.
As ever, there is still more to be done in the coming year. We will continue to build on our achievements, implementing changes from the lessons we have learned and working with our partners to ensure an even better service for the victims of these crimes and our society as a whole.
Alison Saunders CB
Director of Public Prosecutions
November 2017 10 YEARS AT A GLANCE
In 2007–08, VAWG crimes accounted for 7.1% of the CPS’ total caseload. In 2016–17, this rose to 19.3%; now almost one in five cases are VAWG related.
There has been a 48.8% rise in prosecutions for VAWG crimes since 2007–08, and a corresponding 62.7% rise in convictions.
In 2016–17 there were 5,715 more convictions for sexual offences including rape and child sexual abuse than in 2007–08. A 71.5% increase over 10 years.
This year there were 26,876 more convictions for domestic abuse related offences than 2007–08.
The CPS commenced 3,241 more prosecutions for child sexual abuse in 2016–17 than in 2007–08, securing 2,534 convictions – a rise of 89.2%.
\*VAWG crimes’ includes domestic abuse, rape and serious sexual offences Violence against Women and Girls Crime report
The Violence against Women and Girls (VAWG) report for 2016–17 is the tenth edition published by the CPS. It is an analysis of the key prosecution issues in each VAWG strand – domestic abuse (DA), stalking, harassment, rape(^1), sexual offences, forced marriage, so-called ‘honour-based’ violence, female genital mutilation, child abuse, human trafficking for sexual exploitation, prostitution and pornography.
VAWG work continued to be a key priority within the CPS National and Area business plans in 2016–17. In line with the four pillars of the overall CPS Business Plan, we focus on: success of our people; continuing improvement; high quality casework and public confidence.
The CPS VAWG strategy is part of the overarching cross-government VAWG strategic framework, based on the United Nations conventions that the UK has signed and ratified. The report provides an assessment of prosecution performance on crimes that have been grouped together under the heading ‘VAWG’, as they have been identified as being committed primarily, but not exclusively, by men against women within a pattern of coercion, power or control. However, these offences can also be targeted at men and boys and, in 2017, a public statement was published on our approach and support for male victims. The linked VAWG data report includes total data on all perpetrators and victims, irrespective of gender. It outlines further information on gender and explains the overall VAWG approach.(^2)
This report provides key data, commentary and case studies in separate sections for each of the VAWG strands.
Please note that the data details and analysis are provided in the VAWG data report. This data report also provides further details on CPS activity and next steps.
______________________________________________________________________
(^1)A ‘rape’ flag is applied to CPS files from the start of a case, following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended.
(^2)This report provides outcomes by defendant and cannot provide separate information on outcomes based on victims or offences. To that end, data cannot be provided separately for the outcome of cases faced by female and male victims; nor is it possible to correlate the gender of the defendant with the gender of the victim. VAWG subset
Please link to page A4 of the data report for detailed data and analysis
The ‘VAWG subset’ specifically groups together DA, rape and sexual offences. It is recognised that there will be some overlap of flagged data(^3) for DA, rape and sexual offences, but this is not significant in volume.
Prosecutions of DA, rape(^4) and sexual offences now account for almost one in five of the CPS’ total caseload, up from 7.1% in 2007–08. Over the ten year period, since the first VAWG report, there has also been a 63% rise in convictions.
Similar to previous years, the majority of prosecutions of crimes grouped under VAWG, for performance management purposes, are DA at 83.4%, rape at 4.6%, with a rise in the proportion of sexual offences, excluding rape, at 12.0%. In 2016–17, the slight fall in VAWG volumes prosecuted and convicted was due, primarily, to a fall in police referrals of DA defendants. The fall in referrals was identified at the end of 2015–16 and impacted on CPS cases progressing to prosecution during 2016–17. Actions to address this are outlined in the DA section.
- Between 2007–08 and 2016–17, conviction volumes have risen from 51,974 to 84,565 – a rise of 32,591 convictions – a 63% rise over this ten year period.
- In 2016–17 the volume of ‘VAWG’(^5) referrals from the police fell from 124,737 in 2015–16, the highest volume recorded, to 117,444 in 2016–17 – a fall of 7,293 referrals (5.8%).
- The volume of ‘VAWG’ crime prosecutions completed(^6) fell from 117,568 in 2015–16, the highest volume recorded, to 112,270 in 2016–17 – a fall of 5,298 defendants (4.5%).
- The volume of convictions fell from 87,275 in 2015–16, the highest volume recorded, to 84,565 in 2016–17 – a fall of 2,710 convictions (3.1%). The conviction rate increased from 74.2% to 75.3%.
Further information on VAWG issues and detailed data analysis is provided in the data report pages A1–A6
Domestic abuse
For detailed domestic abuse (DA) data and analysis please link to the DA section of the data report pages A7–A12
In 2016–17 a DA ‘Deep Dive’ exercise developed and tested a best practice framework for use across all Magistrates’ Courts. The National Criminal Justice Board will evaluate outcomes in 2017–18 to consider rolling out nationally, with a revision of the Specialist DA Court resource manual.
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(^3)Defendant data is flagged in the CPS data system for domestic abuse and rape.
(^4)A ‘rape’ flag is applied to CPS files from the start of a case, following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended.
(^5)CPS records do not include details of pre-charge decisions regarding sexual offences (excluding rape) and therefore cannot provide data on police referrals. ‘VAWG’ police referrals in this text include only DA and rape.
(^6)Note the numbers of defendants charged covers those cases, by suspect, forwarded to CPS during 2016–17 for charging decisions and are not directly comparable in numbers with those prosecuted which covers cases, by defendant, finalised during 2016–17. Two new mandatory DA e-learning modules on evidence-led prosecutions and controlling or coercive behaviour were developed in 2016–17 for all prosecutors in 2017–18.
The fall in police referrals of DA, identified at the end of 2015–16, has had an impact on the volumes of prosecutions and convictions in 2016–17. We have worked closely with the National Police Lead on DA and Her Majesty’s Inspectorate of Constabulary to identify the reasons for the fall and are addressing ways to ensure referrals are made appropriately. We are sharing our learning with the police on offences related to coercion or control and are providing them with an aide memoire based on our DA e-learning modules. In addition, we have raised the issue through the Ministerial Level DA Working Group and the Home Office National DA Oversight Group to ensure it is addressed at the highest level. Details are outlined in the DA data section (link below).
The CPS will work with other government departments in 2017–18 in the development of the Domestic Violence and Abuse Bill to bring more perpetrators to justice as well as further protect victims of abuse.
The DA ‘Deep Dive’ exercise is assessing the use of police body worn videos to provide effective evidence to help prosecutions.
The daughter of a victim rang the police when her mother was stabbed by her father. When the police arrived at the scene the victim was in the street and refused to engage with the police and made no statement. The daughter also refused to make a statement. Other family members present refused to comment. At the scene the defendant made two significant comments “I stabbed her” and “I didn’t wanna kill her but she provoked me.” The second comment was captured on body worn video. He had blood on his clothes and hands and there was a blood stained knife found at the scene. The defendant was interviewed and made no comment. The case was prosecuted entirely on the basis of circumstantial evidence. The 999 recording was subject to a hearsay application. The body worn video was evidenced, including the admission. In addition medical statements and forensic evidence were used. The defendant initially pleaded not guilty but changed his plea at the pre-trial review. He was sentenced to 9.5 years’ imprisonment.
- Between 2007-08 and 2016–17, conviction volumes have risen from 43,977 to 70,853 – a rise of 26,876 convictions – a 61% rise over this ten year period.
- In 2016–17, the volume of DA referrals from the police fell from 117,882 in 2015–16 to 110,833 – a fall of 7,049 referrals (6.0%), with a corresponding fall of 3.3% in suspects charged.
- The volume of DA prosecutions completed fell from 100,930 in 2015–16 to 93,590 in 2016–17 – a fall of 7,340 defendants (7.3%).
- The volume of convictions fell from 75,235 in 2015–16 to 70,853 in 2016–17 – a fall of 4,382 convictions (5.8%). The conviction rate increased from 74.5% in 2015–16 to 75.7%, the highest rate ever recorded.
- Since the introduction of the offence of controlling or coercive behaviour 309 offences have been charged and reached a first hearing.
Link to the DA section of the data report pages A7–A12 for details of CPS activity, next steps and detailed data analysis The following case is an example of the cases we are now prosecuting under the Controlling or Coercive behaviour offence.
A defendant was sentenced to 20 months’ imprisonment and an indefinite restraining order after pleading guilty to an offence of controlling or coercive behaviour which included violence. The victim attended court for the sentence with the specialist support of an Independent Domestic Violence Advisor and provided a strong Victim Personal Statement.
She had been in a relationship with the defendant for three years, during which he controlled her, demanding money for alcohol, gambling and for another woman. He called her names, including ‘fat’ and ‘unattractive’ as well as racial slurs. He tracked her phone, insisted on her sending pictures to prove where she was and show her location on messaging services. He assaulted her and demanded sex.
In 2016–17, the CPS convicted 70,853 domestic abuse cases.
Stalking and harassment
For detailed stalking and harassment data and analysis please link to the stalking and harassment section of the data report pages A13–A15 Ministry of Justice data is provided in Annex 2 pages B9–B10
CPS social media guidelines were published in October 2016 containing a section on stalking. The CPS stalking and harassment working group revised training for prosecutors for implementation in 2017-18. Overall there was a fall in stalking and harassment prosecutions and a rise in prosecution of breaches of restraining orders. In response to Her Majesty’s Inspectorate of Police/Her Majesty’s Crown Prosecution Service Inspectorate (HMIC/HMCPSI) thematic inspection of stalking and harassment, in 2017–18 we will revise our joint police/CPS stalking protocol, update our legal guidance on restraining orders and acceptance of pleas. We will also ensure training is undertaken by all prosecutors.
Note CPS stalking and harassment data is only available from the offence-based data system and therefore cannot include data on police referrals, charging, outcomes and victims. • Prosecutions were commenced for 11,889 stalking and harassment offences in 2016–17; this was a fall of 1,097 offences (8.4%) from 2015–16 when 12,986 prosecutions were commenced. 71.0% were DA-related, a slight rise from 69.9% in 2015–16.
• There were 959 prosecutions commenced under the newer stalking offences (a fall from 1,102 in 2015–16). Of these 64.8% were DA-related, a fall from 67.6% in 2015–16.
• 16,614 prosecutions commenced for breaches of restraining order offences, a rise of 8.0% from 15,384 in 2015-6 and the highest ever recorded volume. 86.2% of these were DA-related, a rise from 85.7% in the previous year.
• 6,505 breaches of non-molestation orders started prosecution, compared with 6,672 in the previous year, a fall of 2.5%. 94.8% of these were DA-related, a slight rise from 93.6% in 2015–16.
Link to the Stalking and Harassment section of the data report pages A13–A15 for details of CPS activity, next steps and detailed data analysis
The following case study illustrated the effective use of s.4A Protection against Harassment Act – stalking involving serious alarm or distress.
A police officer was convicted of s.4A Protection against Harassment Act and given a restraining order for stalking a partner, who was also a police officer, causing serious anxiety and distress. The defendant pretended that he was being stalked by a fictitious ex-girlfriend. He spun a web of lies designed to destroy the victim’s self-confidence and mental well-being. The forensic computer evidence established that the ex-girlfriend did not exist and that the emails from her were, in fact, sent from the defendant’s Internet Protocol (IP) address. He sent emails implying that the ex-girlfriend had been in the house or had somehow been listening to their conversations. The messages soon took on a sinister, overtly sexual, tone and content with undermining and insulting words about the victim, who became so paranoid and scared that she was frightened to even walk to her car alone. Police were able to trace and obtain statements from two previous girlfriends in Scotland to show that this was repeat behaviour. He was sentenced to 18 months’ imprisonment.
Rape
CPS and Ministry of Justice Data Explained
For detailed rape data and analysis please link to the rape section of the data report pages A16–A22
Ministry of Justice data is provided in Annex 2 pages B11–B12
The Ministry of Justice provides the official National Statistics on rape while CPS data is primarily collected for case management purposes.
It should be noted that there are important differences as to how rape offences are recorded between the different data systems. These differences include: MoJ data is on a calendar year basis, rather than financial year; data on offenders convicted for rape only includes cases where the final
8 Many victims of sexual offences, including rape, are children and therefore also flagged as child abuse – so there is an overlap of rape, sexual offences and child sexual abuse data.
9 The official statistics relating to crime and policing are maintained by the Home Office and the official statistics relating to sentencing, criminal court proceedings, offenders brought to justice, the courts and the judiciary are maintained by the Ministry of Justice. conviction was for a specific offence of rape. Cases initially charged as rape resulting in a conviction for an alternative charge such as a serious sexual assault, will be recorded by MoJ for the alternative offence. It is not possible to separately identify such cases in MoJ figures.
CPS data below differs, as successful rape prosecutions include not only cases resulting in a conviction for rape, but also cases initially flagged as rape where a conviction was obtained for an alternative or lesser offence. The flag is applied to CPS files from the start of the case following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended. This is for case management purposes to ensure that the principles of the rape and sexual offence policy are considered throughout the life of all relevant cases. The differences in recording leads to CPS reporting a higher number of prosecutions than recorded in MoJ data. The CPS method of recording has been used consistently in the annual VAWG report.
Further detail in respect of MoJ data and the differences between the datasets is provided in Annex 2.
The table below provides a summary of MoJ and CPS data together, for ease of comparison.
| Descriptions used by MoJ: | Published statistics: | Descriptions used by CPS: | |---------------------------|-----------------------|---------------------------| | Cases of Rape: | MoJ: 2016 | CPS records flagged as rape: | | Proceeded against | 3716 | Prosecutions completed | | Convicted for rape | 1352 | Conviction for rape, an alternative or lesser offence |
Key CPS Issues
In 2016–17 a co-ordinated programme of work was implemented by the Police and CPS Joint National Rape Steering Group, led by the Director of Public Prosecutions and National Policing Leads, and supported by a joint Delivery Board. A comprehensive programme of training for specialist lawyers was delivered by all CPS Areas.
This led to a rise in the volume of prosecutions and convictions, in cases initially flagged as rape, reaching the highest volumes ever recorded by CPS. There was a slight fall in police referrals and charged defendants which the CPS will continue to monitor in order to assess their appropriateness and address any issues across the criminal justice system.
For the first time, the data on the age of victims is robust enough to publish, indicating more than half of victims are under 24 years of age, nearly one in five aged 14-17 years. This information together with the child abuse data, the information on the use social media and prosecution of new offences on pornography helps in our understanding of key emerging prosecution issues, the increase in the extreme nature of sexual abuse and the targeting of young victims.
CPS Data
- Between 2007-08 and 2016–17, convictions have risen from 2,021 to 2,991, a rise of 970 convictions, and the highest volume since records began – a 48% rise over this ten year period.
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10The MoJ figures given relate to defendants for whom these offences were the principal offences for which they were dealt with. The following case study outlines a domestic abuse rape case where consent was challenged.
A defendant forced vaginal sexual intercourse on his partner after an incident of domestic abuse. He bit the victim’s upper thigh, tried to strangle her and threatened to tie her up. She stated that she knew he would not let her go unless she submitted to his demands and replied “yes” when he asked if they could have sex. The defendant argued consent. At trial the victim’s attendance was secured by way of witness summons, following a retraction statement and she gave evidence to the court that she did not believe that she had been raped as she ‘agreed’ to have sex with the defendant. Robust prosecution and skilful re-examination of the victim outlined the legal case of rape and consent. The defendant was subsequently convicted of Rape and Actual Bodily Harm. He was sentenced to eight years’ imprisonment.
In 2016–17, the volume of rape referrals from the police fell from 6,855 in 2015–16 to 6,611 – a fall of 244 referrals (3.6%), with a corresponding fall of 6.1% in suspects charged. MoJ do not hold data on referrals from the police.
The completed rape prosecutions rose from 4,643 in 2015–16 to 5,190 in 2016–17 – the highest volume ever recorded – a rise of 547 prosecutions (11.8%). 45.0% of rape flagged prosecutions in 2016–17 were perpetrated against child victims. Note MoJ data indicated that 3,716 defendants were proceeded against for a principal offence of rape in 2016 - not the highest volume ever.
The data on the age of rape victims indicates that over 3,000 (52.3%) of rape victims with recorded age were under 24 years of age – 24.7% were aged 18-24 years (1,425); 18.3% were 14-17 years (1,059); 7.5% 10-13 years (435 victims) and 1.8% (103 victims) under ten years old.
Convictions for rape rose from 2,689 in 2015–16 to 2,991 in 2016–17 – the highest volume ever recorded – an increase of 302 convictions (11.2%). The CPS conviction rate stayed steady at 57.6% in 2016–17, compared with 57.9% in 2015–16. Data from the MoJ shows that 1,352 offenders were convicted specifically for rape, the highest volume ever.11 12
From CPS data 2016–17, 5,045 (98.9%) of cases initially flagged as rape were finally prosecuted for the principal offence categories of ‘sexual offences, including rape’ or more serious13 principal offences of ‘homicides’ or ‘offences against the person’. Of these, 4,240 were for sexual offences including rape; 17 for homicide and 788 for offences against the person.
Link to the Rape section of the data report pages A16–A22 for details of CPS activity, next steps and detailed data analysis
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11The MoJ conviction ratio for 2016 was 36%. MoJ conviction ratios are calculated as the number of convictions as a proportion of the number of proceedings. This gives a measure of the relative number of defendants who are found guilty within a given year for a certain offence, when compared with the number who are prosecuted that year for the same offence. As trials can span more than one year, offenders found guilty in a calendar year are not always the same defendants who were prosecuted in that year. Further, defendants may be found guilty of a different offence to that offence for which they were originally prosecuted.
12To contextualise the difference in conviction ratios/rates between MoJ and CPS, it is useful to compare CPS figures with a MoJ analysis from 2013, which assessed the proportion of defendants prosecuted for rape offences in 2009 ultimately convicted of any offence between 2009 and 2011. This analysis indicated that, of those initially prosecuted for rape, 56% were convicted for any offence, including 33% who were convicted for rape. The proportion convicted for any offence was more comparable to the CPS conviction rates in 2008–09 of 57.7%; 2009–10 of 59.4% and 2010–11 of 58.6%.
13CPS principal offence category: charged offences are allocated one of twelve offence categories to indicate the type and seriousness of the charges brought against the defendant. The Principal Offence Category indicates the most serious offence with which the defendant is charged at the time of finalisation. The order of ‘seriousness’ of the top three key principal offences is: homicide; offences against the person; sexual offences. Sexual offences (excluding rape)\\textsuperscript{14, 15}
For detailed data and analysis of sexual offences (excluding rape) please link to the sexual offences section of the data report pages A23–A25
Special measures were introduced through the Youth Justice and Criminal Evidence Act 1999 to support vulnerable or intimidated victims to give their best evidence. Section 28 allows for cross-examination to happen earlier than the trial-stage helping improve memory recall because evidence is given closer to the time of the offence. It can also be less distressing as victims would not have to give evidence in person at court.
In 2016-17, following a pilot of Section 28 for children under 16 across three Crown Courts (Liverpool, Leeds and Kingston), the CPS supported other criminal justice agencies to evaluate the pilot’s impact and take steps for national rollout. In January 2017, the CPS also supported the pilot being extended to include vulnerable witnesses under 18 and will work to extend it even further for cases involving rape, serious sexual assault and modern slavery.
In 2016–17 the volume of prosecutions and convictions rose to the highest volumes ever recorded, with the highest conviction rate ever.
- Between 2007-08 and 2016–17, conviction volumes have risen from 5,976 to 10,721, a rise of 4,745 convictions, and the highest volume since records began – a 79% rise over this ten year period.
- In 2016–17, the volume of sexual offences’ prosecutions completed, excluding rape, rose from 11,995 in 2015–16 to 13,490 – a rise of 1,495 defendants (12.5%); reaching the highest volume ever recorded. 37.5% of sexual offences prosecuted in 2016–17 were perpetrated against child victims.
- The volume of convictions rose from 9,351 in 2015–16 to 10,721 in 2016–17 – a rise of 1,370 (14.7%). The conviction rate increased from 78.0% in 2015–16 to 79.5% – the highest volume and rate ever recorded.
Link to the SO section of the data report pages A23–A25 for details of CPS activity, next steps and detailed data analysis
This case study illustrates a complex sexual offences cases involving social media.
A man was prosecuted for 30 incidents where he was posing as a teenage girl and sending images across the internet to young boys to get them to send pictures of themselves and inciting them to commit sexual acts on their younger siblings and the family pets. The offences started when he was a youth and spanned various countries across the globe. He was sentenced to eight years in total to reflect his age at the time but also capture the seriousness of the criminality. He was given an indefinite Sexual Harm Prevention Order (SHPO) and placed on the Sexual Offenders Register.
\\textsuperscript{14}Sexual offences excluding rape may range from offences of non-consensual sexual touching to serious sexual assaults. It is recognised that many victims of sexual offences, including rape, are children and therefore flagged as child abuse – so there is an overlap of rape, sexual offences and child sexual abuse data.
\\textsuperscript{15}CPS records do not include details of pre-charge decisions regarding sexual offences (excluding rape) and therefore cannot provide data on police referrals or charged defendants. So-called ‘honour-based’ violence, forced marriage, and female genital mutilation
For detailed data and analysis of so-called ‘honour-based’ violence and forced marriage, please link to the HBV/FM section of the data report pages A26–A28
So-called ‘honour-based’ violence
The first ever joint police/CPS investigation and prosecution protocol for so-called ‘honour-based’ violence (HBV) and forced marriage (FM) was published in 2016. An HBV and FM action plan was developed for implementation in 2017–18 and a working group of specialist organisations was set up to oversee its delivery. Actions include updating the CPS Legal Guidance; revising the list of CPS Area HBV and FM Leads; providing training and the development of a CPS communications strategy around these crimes.
There was a fall in HBV and FM referrals, charged defendants and prosecutions in 2016–17, with a steady volume of convictions. The action plans aim to improve prosecution outcomes in 2017–18.
- The volume of referrals from the police of HBV related offences fell from 216 in 2015–16 to 200 in 2016–17, with a corresponding fall from 145 to 136 in the volume of defendants charged.
- The volume of prosecutions completed fell from 182 in 2015–16 to 171 in 2016–17.
- The volume of convictions stayed steady – 91 in 2015–16 and 90 in 2016–17. The conviction rate increased from 50.0% to 52.6%.
Link to the HBV section of the data report pages A26–A28 for details of CPS activity, next steps and detailed data analysis
16The small number of cases indicates the need for caution in interpreting data in relation to these offences. Forced marriage
The volume of forced marriage referrals from the police fell from 90 in 2015–16 to 56 in 2016–17, with a corresponding fall in the volume of defendants charged from 57 to 36.
The volume of prosecutions completed fell from 53 in 2015–16 to 44 in 2016–17.
The volume of convictions stayed steady at 32, as in 2015–16. The conviction rate increased from 60.4% in 2015–16 to 72.7% in 2016–17.
Link to the FM section of the data report pages A26–A28 for details of CPS activity, next steps and detailed data analysis
This case study illustrates a successful prosecution for a breach of a Forced Marriage Protection Order.
The victim took out a Forced Marriage Protection Order against her father, the defendant, as she believed he was going to force her to marry someone, after he found out she was in a relationship with someone from another religion. The victim and her boyfriend received a series of threatening text messages and phone calls from the defendant after this order was made, over a four week period. The defendant admitted sending the messages and breaching the order claiming he had not read the order properly. The defendant pleaded guilty at the first hearing and was sentenced to 18 weeks’ imprisonment suspended for two years, a 20 day RAR and 120 hours of unpaid work. A restraining order was imposed preventing the defendant from also contacting the victim’s boyfriend directly or indirectly for two years. Female Genital Mutilation
- Lead Female Genital Mutilation (FGM) prosecutors for each CPS Area provided early investigative advice to police following any FGM reports and were involved in local training and safeguarding events, to support community engagement.
- Whilst mandatory reporting by front line professionals has not resulted in a significant increase in cases being investigated and referred for prosecution, they have led to safeguarding measures being put in place with families and/or FGM Protection Orders being granted as preventative measures.
Link to the FGM section of the data report page A29 for details of CPS activity and next steps
Child abuse
For detailed data and analysis of child abuse please link to the child abuse section of the data report pages A30–A33
The CPS continued to play a central role in the Home Office-led cross government strategy to respond to sexual violence against children. This included engaging with a young witness initiative to expedite cases involving child witnesses under the age of 10 years. The CPS was also involved with the Centre of Expertise on Child Sexual Abuse and Exploitation.
The CPS network of child sexual abuse (CSA) specialists was reinvigorated to act a source of expertise for colleagues dealing with CSA cases, both locally and nationally. Guidelines on prosecuting indecent images of children were updated in 2016.
Child abuse referrals and defendants charged rose in 2016–17. Child abuse and CSA prosecutions and convictions reached the highest volumes ever.
- Between 2007-08 and 2016–17, CSA conviction volumes have risen from 2,840 to 5,374, a rise of 2,534 convictions, and the highest volume since records began – an 89% rise over this ten year period.
- In 2016–17, the volume of child abuse referrals from the police increased from 13,282 in 2015–16 to 13,310 – an increase of 28 referrals (0.2%). 8,974 (67.4% of referrals) were charged, a rise of 85 from 2015–16, the highest volume ever recorded.
- The volume of prosecutions completed rose from 11,130 in 2015–16 to 11,793 in 2016–17 – a rise of 663 (6.0%), the highest volume ever recorded.
- The volume of convictions rose from 8,439 in 2015–16 to 8,999 in 2016–17 – a rise of 560 (6.6%) – the highest volume ever recorded.
- CSA offence prosecutions completed in 2016–17 rose from 6,217 to 7,181 – a rise of 964 (15.5%) and the highest volume ever recorded.
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17 There is an overlap of rape, sexual offence and child sexual abuse data due to the volume of rape and sexual offences against children.
18 The Centre of Expertise was set up by Barnardo’s and the London Metropolitan University Child and Woman Abuse Study Unit. The volume of CSA convictions rose from 4,643 in 2015–16 to 5,374 in 2016–17 – a rise of 731 (15.7%) – the highest volume ever recorded. The conviction rate stayed steady at 74.8%.
Link to the child abuse section of the data report pages A30–A33 for details of CPS activity, next steps and detailed data
This case study illustrates a successful prosecution from abroad, using a remote video link, to convict a perpetrator of severe child abuse, including child sexual abuse that was carried out over many years.
From 2004 until 2012, a defendant subjected all of his children to a campaign of physical violence and, in the case of two of the children, sexual abuse. The sexual abuse included repeated rape of one of his sons, who was then eight years old, over a period of several months, as well as repeated sexual assaults upon him and his brother who was then seven years old. The mother (who was also assaulted) was previously unwilling to report any offence because of the shame in her community of reporting another member to the authorities. However she and her children fled the country and in 2016 she was approached by the police abroad and reported the offences for the first time. They were granted special measures to give their evidence by remote link. The public gallery was closed to all except the press when the children gave evidence. He was sentenced to 22 years’ imprisonment.
7,181 cases of child sexual abuse were prosecuted by the CPS in 2016–17, 15.5% more than in 2015–16, while the conviction rate remained steady at 74.8%.
Human trafficking and modern slavery
For detailed data and analysis of human trafficking and modern slavery, please link to the HT and MS section of the VAWG data report pages A34–A38
The CPS worked with a range of investigative, prosecutorial and governmental partners to improve the domestic and international response to trafficking and modern slavery. The CPS International Justice and Organised Crime Division provided capacity building support in priority countries. (including the 2016–17 deployment of a Criminal Justice Advisor to Nigeria). Prosecutors assisted international colleagues to enforce assets on behalf of the CPS, through asset sharing agreements, as well as helping them develop their own capacity for asset recovery. This is important in ensuring that assets are confiscated to support reparation orders for victims.
The volume of police referrals rose, with a steady volume of defendants charged and prosecuted. The volume of convictions fell slightly.
- The volume of human trafficking police referrals rose from 246 in 2015–16 to 271 in 2016–17 – the highest volume ever recorded, with a steady volume of defendants charged (188).
- The volume of human trafficking prosecutions completed in 2016–17 stayed steady at 295, as in 2015–16.
- The volume of human trafficking convictions fell from 192 in 2015–16 to 181 in 2016–17. The conviction rate fell from 65.1% to 61.4%.
**Link to the human trafficking and modern slavery section of the data report pages A34–A38 for details of CPS activity, next steps and detailed data**
**This case study is an example of human trafficking for sexual exploitation.**
Three defendants forced a group of Hungarian women to work as prostitutes. The women were trafficked to the UK with the promise of legitimate jobs. Their identity documents were taken and they were forced into sex work. Two of the women had up to ten customers every day, while a third was ordered to have sex with men at car washes. The victims, who were aged between 19 and 24, came from poor backgrounds and spoke little or no English. One of the defendants convinced two of the women that he was in a romantic relationship with them in order to manipulate them. The defendants were convicted – one was sentenced to over 13 years’ imprisonment; the second to over eight years for human trafficking and forcing prostitution and the third was sentenced to over three years for controlling of prostitution for gain.
**Prostitution**
**For detailed data and analysis of prostitution please link to the prostitution section of the VAWG data report pages A39–A40**
The CPS focuses on the prosecution of those who force others into prostitution, exploit, abuse and harm them. Our joint approach with the police, with the support of other agencies, is to help those involved in prostitution to develop routes out.
- The volume of prostitution related offences related to the control of prostitution stayed steady in 2016–17 (99 from 100 in 2015–16) against a fall in prosecutions for brothel keeping (90 from 111) and kerb crawling (148 from 153).
- Prosecution of street offences fell to 127 in 2016–17 from 163 in 2015–16.
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19 Note CPS prostitution data is only available from the offence-based data system and therefore cannot include data on police referrals, charging and outcomes. Pornography and obscenity
For detailed data and analysis of pornography and obscenity please link to the pornography and obscenity section of the data report pages A41–A43
The CPS published revised guidelines for prosecuting indecent images of children (IIOC) in 2016 to streamline and rationalise the use of images in prosecutions. This has allowed prosecutions to proceed more efficiently with fewer offences per defendant prosecuted, but allowing the court sufficient sentencing power to cover the gravity of the offending.
There was a rise in obscenity offences prosecuted, with a higher proportion of indecent or grossly offensive prosecutions related to domestic abuse. Prosecutions for so-called ‘rape pornography’ and so-called ‘revenge pornography’ increased.
- In 2016–17 there was a fall in the prosecution of child abuse image offences(^{21}) from 22,545 in 2015–16 to 20,803. These included prosecutions commenced for 14,691 offences of sexual exploitation of children through photographs, a fall from 16,672 in 2015–16 (a fall of 11.9%).
- There was a rise in obscenity offences prosecuted from 6,940 in 2015–16 to 8,049 in 2016–17 (16%).
- There were 24 prosecutions of rape pornography in 2016–17, a rise from three in 2015–16.
- There were 465 prosecutions commenced of the offence of disclosing private sexual images without consent (so-called revenge pornography) a rise from 206 in the previous year.
- There were fourteen prosecutions commenced of the offence of possession of a paedophile manual, a rise from one in the previous year.
Link to the pornography and obscenity section of the data report pages A41–A43 for details of CPS activity, next steps and detailed data
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(^{20}) As in previous footnote for pornography and obscenity offences.
(^{21}) CPS is not deprioritising prosecution of these offences, rather we are able to use fewer offences per defendant prosecution, following the revised guidelines relating to the streamlining of images in prosecutions. The following case studies illustrate the range of ways in which exploitative sexual images are used – they cover indecent images of children including sexual abuse of babies; heterosexual and same sex disclosing of private images without consent.
A defendant was convicted of sexually abusing his baby daughter, recording her abuse and sharing it on the internet with others. He denied taking the images but experts identified bedrooms in the house, clothing and items such as the defendant’s watch, which proved it was him who had taken the photos. Electronic items were seized from the defendant’s address including images of sexual abuse of babies, from new born through to girls aged nine years. He was convicted and sentenced to 13 years’ imprisonment plus one year extended licence and Sexual Harm Prevention Order.
Another defendant assaulted and abused his partner on numerous occasions, over a period of months. He forced her to allow him to take a photograph of her semi-clothed and give him her social media account passwords. When she separated from him he posted the image of her and doctored it, advertising both her and her mother as prostitutes. He also sent doctored pornographic images with the victim’s features superimposed on them to her parents. The lawyer prosecuting the case identified that it was a controlling and coercive (C&C) relationship and added that charge and an offensive communications charge. The defendant pleaded guilty to the C&C count including posting the images of the victim and her mother. He was sentenced to two years’ imprisonment with a five year restraining order.
In a third case, a couple separated after a short sexual relationship, during which the victim had shared naked pictures of herself with the defendant. The defendant then sent one of the pictures to the victim’s work colleagues by email and made threats to send further pictures and text messages with a sexual content. The victim was particularly distressed as this was her first same sex relationship and she had not come out to her friends, family or colleagues. The nature of the employment of both parties meant the case attracted media attention and the case involved very sensitive handling and applications at court to ensure the victim was not named or identified in media reporting. The defendant received a 12 month community order and a restraining order.
The following case is an example of the cases we are now prosecuting under the offence of possession of a paedophile manual.
An offender’s computer and mobile phone were examined by the police following the conviction for other offences. Police examination found a 170 page paedophile manual detailing how to have a sexual relationship with a child, including advice on how not to get caught by law enforcement agencies. He pleaded guilty to possession of the paedophile manual and other sexual offences and was given two years’ custody as part of a total sentence of six years and an extended licence of four years. The court also imposed a lifetime Sexual Harm Prevention Order. In 2016-17 the CPS commenced 465 and 309 prosecutions for the new offences of ‘disclosing private sexual images without consent’ and ‘controlling or coercive behaviour’, respectively.
Please link to the data report for the performance data for all VAWG prosecutions and good practice
Please link to Annex 1 for Areas and police force data, Annex 2 for MoJ data and Glossaries for terms and acronyms:
Annex 1 Area data Annex 2 MoJ data Glossaries of terms and acronyms VIOLENCE AGAINST WOMEN AND GIRLS DATA REPORT
The VAWG data report provides detailed data analysis on each of the VAWG strands. VAWG data report
Introduction
The VAWG data report provides an assessment of prosecution performance in domestic abuse (DA), stalking, harassment, rape(^1), sexual offences, forced marriage, so-called ‘honour-based’ violence, female genital mutilation, child abuse, human trafficking for sexual exploitation, prostitution and pornography. These crimes have been grouped together under the heading ‘VAWG’, recognising that they have been committed primarily, but not exclusively, by men against women; with a disproportionate volume of female victims. There is a gendered pattern of power, coercion or control. However, these offences can be targeted at men and boys and in 2017 a public statement was published on our approach and support for male victims. Legal guidance and training for prosecutors will be updated to include details of the experience of male victims, to help challenge myths and stereotypes and provide details of support services for male victims. In addition work is underway to improve the recording of the gender of victims in order to provide better data around the prevalence of victims, by gender.
The CPS is committed to securing justice for all victims of crimes grouped together as ‘VAWG’. To that end, we are inclusive in our approach. All our VAWG policies are applied fairly and equitably to all perpetrators and victims of crime – irrespective of their gender.
Freedom from violence and abuse is explicitly recognised in international law with respect to both human rights and gender. VAWG is recognised worldwide, and by the UK Government, as a form of offending where gender plays a part. As the United Nations(^2) describes it:
*Violence against women is a manifestation of historically unequal power relations between men and women, which have led to domination over and discrimination against women by men and to the prevention of the full advancement of women, and ... violence against women is one of the crucial social mechanisms by which women are forced into a subordinate position compared with men.*
The CPS VAWG strategy is part of the overarching cross-government VAWG strategic framework, based on the United Nations conventions that the UK has signed and ratified. In March 2016, a cross government strategy – *Ending Violence against Women and Girls 2016–2020* – was launched outlining actions the Government is taking forward. The implementation of these actions, including those for CPS, will continue to be overseen by the VAWG Inter-Ministerial Group. We have committed to bringing more perpetrators to justice and improving the support for victims through reviewing our guidance, training, best practice and performance across VAWG strands and engaging with stakeholders. The CPS VAWG strategy has been updated for 2017–2020.
This data report is therefore an analysis of the key prosecution issues in each VAWG crime strand – detailed above. The data that forms the basis of the report is derived from the CPS’ Case Management System (CMS), CPS’ Witness Management System (WMS) and its associated Management Information System (MIS). The data are held within three separate databases within the MIS(^3), based on defendants, offences and victims or witnesses. Data cannot be correlated
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(^1)A ‘rape’ flag is applied to CPS files from the start of a case, following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended.
(^2)In 2003, the UN published reference: [http://www.ohchr.org/Documents/Issues/Women/15YearReviewofVAWMandate.pdf](http://www.ohchr.org/Documents/Issues/Women/15YearReviewofVAWMandate.pdf)
(^3)As with any large scale recording system, data is subject to possible errors in data entry and processing. The figures are provisional and subject to change as more information is recorded by the CPS. between the separate databases. The report includes total data on all perpetrators and victims, irrespective of gender. Where possible, data is broken down, in the body of the report, by gender as well as overall volumes and proportions.
DA, rape, forced marriage, honour-based violence, child abuse and human trafficking cases are identified by flags applied to defendants in the CMS and reported through MIS. This data is recorded on a suspect (pre-charge) or defendant (post-charge) basis and therefore provides data on police referrals and charged defendants as well as outcomes. In addition, it provides equality profiles of defendants. We analyse the outcomes of prosecutions using the defendant database and therefore this report annex reflects that throughout. Further detail is provided in each section on the proportion of defendants prosecuted by gender where available.
Stalking, harassment, sexual offences, prostitution, pornography and obscenity data can only be provided using the offences data recorded in the CMS and reported through the MIS. This data comprises the number of offences in which a prosecution commenced at Magistrates’ Courts, and does not include any information on the number of referrals from the police, charged by CPS and the prosecution outcomes. In addition data on victim profiles is not available for these offences.
The CPS Witness Management System (WMS) is a bespoke case management system designed by and for specialist Witness Care Unit (WCU) staff to effectively manage their cases. The WMS records victim and witness data and, where recorded, the system includes data reporting equality profiles of victims (and witnesses). The WMS can only provide data on the volumes of victims associated with prosecution proceedings, by gender (where available), rather than the outcome of those prosecutions. It does not include any data which reports the volumes of alleged victims associated with pre-charge proceedings and therefore cannot include data on police referrals and CPS charging.
The CPS collects data to assist in the effective management of its prosecution functions. The CPS does not collect data which constitutes official statistics as defined in the Statistics and Registration Service Act 2007. The purpose of this report is to provide an assessment of performance based on the best available data from the CPS Management Information System.
Further information and deeper analysis of the prevalence of DA, rape, sexual offences, child abuse and stalking is available in the Crime Survey of England and Wales (CSEW).
Equality profiles of defendants, by gender, ethnicity and age are assessed and reported on in this annex. Data on the equality profiles of victims are reported where available and we continue to look for ways in which to improve the victim related data held in the CJS. In line with government policy, we publish the underlying data used in our reports. The underlying data for this report can be found on the CPS website, in the Publications section under Underlying Data/Violence Against Women.
Link to Glossary of terms and acronyms.
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4 This report provides outcomes by defendant and cannot provide separate information on outcomes based on victims or offences. To that end, data cannot be provided separately for the outcome of cases faced by female and male victims; nor is it possible to correlate the gender of the defendant with the gender of the victim.
5 Equality profiles of defendants include data on their gender, age and ethnicity.
6 Sexual offence data (excluding rape) is an exception as it is derived from the principal offence category of ‘sexual offences’ by excluding rape flagged defendants and can therefore provide outcome of prosecutions.
7 The official statistics relating to crime and policing are maintained by the Home Office and the official statistics relating to sentencing, criminal court proceedings, offenders brought to justice, the courts and the judiciary are maintained by the Ministry of Justice.
8 Data is reported throughout this report; any additional underlying data is provided in the annex available on the CPS website – link provided. VAWG Governance
A Chief Crown Prosecutor acts as a national CPS VAWG Champion, linking across Headquarters and all CPS Areas, as well as chairing the External Consultation Group (see below). National CPS VAWG strategy managers, in the Operations Directorate of CPS Headquarters, oversee the VAWG work across CPS Areas. They oversee the delivery of the VAWG strategy, especially through the VAWG assurance scheme outlined below. The national VAWG leads publish quarterly CPS VAWG newsletters, outlining updates of work across all VAWG strands.
In 2016–17 CPS Area VAWG Coordinators continued to lead VAWG prosecutions locally and worked with Area Inclusion and Community Engagement Managers (ICEMs) in the running of Local Scrutiny and Involvement Panels (LSIPs). All Areas have panels covering VAWG issues – predominantly addressing DA and rape prosecutions. In 2016–17 some specifically focused on performance data, coercion and control cases, FM and HBV, ethnicity or mental health issues.
The VAWG Coordinators work with their Chief Crown Prosecutors in providing bi-annual reports on performance directly to the DPP through the VAWG assurance scheme. They meet bi-annually as a network – roundtable meetings were held in September 2016 and April 2017 to discuss the implementation of actions at a local level. VAWG sections have been set up within the CPS casework and knowledge hubs of the internal website to ensure that prosecutors have practical assistance related to casework preparation as well as good practice examples, links to local leads, legal guidance, toolkits and VAWG newsletters.
In 2016–17 at a national level the CPS VAWG External Consultation Group (ECG), as a subgroup of the wider CPS Community Accountability Forum, involved key VAWG expert groups to advise the CPS VAWG team. Locally stakeholders provide feedback and offer advice through CPS LSIPs.
VAWG Assurance Scheme
In 2016–17, CPS Areas continued to monitor their performance using the VAWG assurance scheme, assessing a broad range of measures, including consideration of trends in performance on caseloads and conviction rates in comparison to the national average for DA, rape and sexual offences. Where possible, this involves detailed analysis of police referrals, charging, prosecutions and outcomes, including convictions, attrition linked to victim issues and, for all sexual offences, jury acquittals. The CPS Areas provide commentary on their overall performance and identify actions to address improvements. CPS Areas also provide details of their work across all other VAWG strands. Areas receive feedback on their assurance reports from the DPP and the central VAWG team and are required to draw up and deliver at least three action points following each bi-annual assessment.
Social Media
The CPS published revised guidelines on social media in October 2016 to include a new section on VAWG, following consultation. The new section addressed prosecution of VAWG offences involving the use of the internet, social media platforms, emails, text messages, smart-phone apps, spyware and GPS tracking software. It specifically included cyber-stalking, disclosing private sexual images without consent and controlling or coercive behaviour. The CPS also addressed the emerging trend of potentially grossly offensive communications, containing images of women with very serious injuries, being raped or being subjected to sadistic acts of violence. Advice has been added to the guidelines about the use of false online profiles and websites which are being set up in the victim’s name, with false and damaging information. Details of prosecutions are included in the Pornography and Obscenity section of this report. On 3 April 2017, s.67 of the Serious Crime Act 2015 was brought into force. It is now a criminal offence for anyone aged 18 or over to intentionally communicate with a child under 16, where the person acts for a sexual purpose and the communication is sexual or intended to elicit a sexual response. The offence applies to online and offline communication, including social media.
The CPS VAWG approach looks at the whole pattern and picture of offending, recognising the power and control dynamics based on gender, which are so often at play in these cases. It ensures we can also address appropriate support to victims.
**VAWG performance data**
For performance management purposes, the CPS has grouped together a sub-set of offences – DA, rape and sexual offences. Data for the sub-set of ‘VAWG’ crimes is included within this section of the report, with the caveats as outlined in the introduction. As in previous years, the majority of prosecutions of crimes grouped under VAWG for performance management purposes are DA (83.4%), with rape at 4.6%, with a rise in the proportion of sexual offences, excluding rape, at 12.0%.
The data provided below relates to all ‘VAWG’ defendants and victims, irrespective of gender, with details of gender where available.
- In 2016–17, there was a fall in police referrals compared to the previous year from 124,737 to 117,444. However this fall is assessed against a rise in the proportion of cases charged from 69% in the previous year to 70.7%, resulting in 83,084 defendants charged.
- The volume of VAWG cases, as a proportion of the total CPS caseload, is assessed as the ‘VAWG caseload’. The VAWG caseload rose in 2016–17, reaching the highest level ever recorded, at 19.3%. This is up from 7.1% in 2007–08.
| Table 1: VAWG caseload as % of total caseload, 2010–11 to 2016–17 | |-----------------|-----------------|-----------------|-----------------|-----------------|-----------------|-----------------| | | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | | CPS NATIONAL | 9.9% | 10.2% | 10.3% | 12.5% | 16.3% | 18.6% | 19.3% |
- The volume of VAWG crime prosecutions completed fell from 117,568 in 2015–16 to 112,270 in 2016-18. This represents a fall of 5,298 or 4.5%.
- The volumes of convictions fell from 87,275 in 2015–16 to 84,565 in 2016–17, with a 75.3% conviction rate.
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9 A ‘rape’ flag is applied to CPS files from the start of a case, following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended.
10 A fall of 2.5% from the previous year.
11 A rise of 0.7% from the previous year.
12 A rise of 1.8% from the previous year.
13 Police referrals do not include sexual offences, excluding rape.
14 Note the numbers of defendants charged covers those cases, by suspect, forwarded to CPS during 2016–17 for charging decisions and are not directly comparable in numbers with those prosecuted which covers cases, by defendant, finalised during 2016–17. Graph 1 (left): Volume of pre-charge decisions Graph 2 (right): Volume and trend of convictions and charged defendants 2010–11 to 2016–17 and prosecutions for VAWG crimes 2010–11 to 2016–17
Graph 3: Conviction volumes and rates for VAWG crimes, 2010–11 to 2016–17
- 67.0% of successful outcomes were due to guilty pleas and out of all VAWG prosecutions contested at trial (excluding mixed pleas(^{15})), 51.4% were convicted.
- 27,705 prosecutions were unsuccessful – 15.8% due to prosecutions dropped (including decisions to discontinue, withdraw or offer no evidence).
- Out of all unsuccessful outcomes, 47.0% were due to victim issues(^{16}); however out of all VAWG cases prosecuted, the proportion that was unsuccessful due to victim issues has fallen from 12.1% in 2015–16 to 11.6% in 2016–17.
The underlying data is provided in the linked annex at Underlying Data/Violence Against Women. The CPS Area and police force data is at Annex 1.
(^{15})‘Exclusive of mixed pleas’ are defendant cases where only ‘not guilty’ pleas are entered to all charges and a trial ensues.
(^{16})‘Victim issues include victim retractions, victim non-attendance and where the ‘evidence of the victim does not support the case’. Equalities issues
Gender
- Of the 112,270 defendants prosecuted, 103,960 defendants were male, 8,152 were female and in 158 cases the gender of the defendant was not recorded. Where the gender of the defendant was recorded, 92.7% were male and 7.3% were female.
- Data from the Witness Management System showed that 104,698 victims were recorded. Of all victims 68,196 were female, 13,818 were male and in 22,684 cases the gender of the victim was not recorded. 78.3% of victim gender was recorded in 2016–17 – a fall from 82.1% in 2015–16. This is not robust enough to calculate proportions by gender accurately. In 2017–18 measures will be considered to ensure more robust recording of gender.
Ethnicity
- In 2015–16, 70.9% of VAWG crime defendants were categorised as White, of which 65.3% were identified as White British. 5.7% of defendants were identified as Asian, and 6.3% were identified as Black. Just under half of victim ethnicity was not recorded (45.7%), so this data is not robust enough to be reported on within this report.
Age
- From those defendants where age was recorded, the majority of defendants were aged 25-59 (74.2%) and 18-24 (19.2%). 22.1% of defendants (24,780) were 24 years old or under, with 3,059 (2.7%) of defendants being 14-17 years old and 226 (0.2%) aged 10-13.
- From those victims where age was recorded, the majority were aged 25-59 (67.6%) and 18-24 (21.1%). 27.3% of victims (25,679) were under 24 years old, with 4,264 (4.5%) of victims being 14-17 years old, 1,244 (1.3%) aged 10-13 and 336 under 10 (0.4%).
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17 It is not possible to provide data on the gender of victims in relation to the gender of the defendant from the current data systems. 18 The figure is similar if calculated out of total, including unrecorded gender (92.6% male defendants and 7.3% female defendants). 19 The victim data includes DA and rape, but data for victims related to sexual offences, excluding rape, is not available from the data systems. 20 Ethnicity data on defendants is collected by the CPS in accordance with the agreed CJS definitions for the 16+1 ethnic categories. 21 6.1% of defendants did not state an ethnicity on arrest and 8.1% of defendants’ ethnicity was not provided to the CPS by the police. 22 99.7% of defendant ages were recorded in 2016–17 – a rise from 99.6% in 2015–16. 23 90.0% of victim ages were recorded in 2015–16 – a rise from 82.7% in 2015–16. Domestic Abuse
Introduction
In 2016–17 CPS worked across the CJS in developing and testing best practice for use across all Magistrates’ Court systems. Two new mandatory DA e-learning modules were developed for training of prosecutors. There was an increase in the prosecution of the offences of controlling or coercive behaviour and disclosing private sexual images without consent in DA cases.
The fall in police referrals of DA identified in 2015–16 has had an impact on the volumes of prosecutions and convictions in 2016–17. We worked closely with the police and Her Majesty’s Inspectorate of Constabulary (HMIC) to identify the reasons for the fall and are addressing ways to ensure referrals are made appropriately.
Data provided below relates to all DA defendants and victims, irrespective of gender, with details of gender where available.
Summary of CPS activity
- Exploration into the drop in police referrals of DA suspects has been carried out in collaboration with the police locally through all police forces and our CPS VAWG Coordinators as well as nationally with the National Police Chiefs’ Council lead on DA, police Regional DA leads and HMIC. The possible reasons impacting on progression of cases and victim involvement may include difficulties and changes in data capture and delays in police responses and arrests. The HMIC is addressing a number of these issues through their inspection and will report later in 2017.
- We are working closely with our police colleagues to address the fall and take forward appropriate cases, through the National Police Regional DA leads. We are sharing our learning with the police on coercive or controlling (C&C) offences and are providing them with an aide memoire based on our DA e-learning modules, addressing C&C behaviour and evidence-led prosecutions.
- In addition, together with the National Police Chiefs’ Council lead on DA, we have raised the issue through the Ministerial Level Domestic Abuse Working Group and the Home Office National DA Oversight Group to ensure it is addressed at the highest level.
- A DA ‘Deep Dive’ was undertaken in 2016–17 for the National Criminal Justice Board to identify and test a best practice framework for use in Magistrates’ Courts to improve performance and service to victims of DA. The components of the framework were tested in Bradford, Highbury and Nottingham. This included consideration of different models for early listing and ‘clustering’ of DA cases to understand any impact on outcomes.
- The ‘Deep Dive’ exercise has also informed a revision to the Specialist Domestic Abuse Courts (SDACs) resource manual which is intended to be the gold standard for accredited SDACs.
- Two new mandatory DA e-learning modules on evidence-led prosecutions and controlling or coercive behaviour were developed in 2016–17 for mandatory training of prosecutors. The Prosecution Domestic Abuse e-Learning Modules were refreshed for new prosecutors. Throughout the year, CPS prosecutors were also involved in training Independent Domestic Violence Advisors (IDVAs) to further improve their understanding of the prosecution process.
- Early analysis of the implementation of s.76 of the Serious Crime Act 2015: Controlling or Coercive Behaviour in an Intimate or Family Relationship was carried out in spring 2016. A further review was carried out in April 2017. Both reviews confirmed appropriate application by prosecutors of the legal guidance. It was noted however that the majority of victims of controlling or coercive behaviour were waiting until a violent act had occurred before they made a report to the police.
- We shared learning from the cases we reviewed with the police and have developed a bespoke e-learning course which all prosecutors had to complete before July 2017.
- A Revised Out-Of-Court Disposal (OOCD) Framework pilot that began in November 2014 concluded in October 2015. The forces were granted an exemption to the DPP’s guidance on conditional cautions which allowed them to use this disposal in place of a simple caution, when it was an appropriate course of action. The findings are being analysed by Ministry of Justice (MoJ) and partners.
- In September 2016 the DPP’s guidance on charging was amended to make clear that where prosecutors, outside the pilot Areas, felt that a conditional caution was an exceptionally appropriate course of action for DA cases, this could be authorised with the agreement of the VAWG strategy team.
- A Justice Select Committee was held in 2016 on Restorative Justice and their findings, including their potential use in DA cases, were published in July 2016. The MOJ is leading discussions to create a cross-government position paper which will outline the criteria for any potential use, including safety issues and risk assessments.
- A number of local initiatives have been identified as good practice throughout 2016–17, for example:
- CPS Area LSIPs addressed DA case issues including coercive or controlling behaviour, ethnicity and Black and Minority Ethnic (BAME) victims.
- Many CPS Areas work closely with IDVAs, e.g. CPS Cymru-Wales and CPS North West held specific IDVA engagement sessions.
- The majority of CPS Areas ensured DA cases in Magistrates’ and Crown Court were prosecuted by specialist trained lawyers; where trials were unavoidably conducted by agents, Areas instructed selected experienced agents. CPS West Midlands insisted that trial advocates consulted with managers before they spoke with victims or witnesses on any case progression proposals.
- DA courts in CPS Mersey Cheshire worked closely operationally (for example discussing summonses and risk on individual cases) as well as at a strategic level, with good performance.
- Some CPS Areas endeavoured to list DA cases for trial with 14 days of the first hearing which reduced victim attrition.
- In CPS North West the Divisional Court reaffirmed the CPS approach to the use of res gestae24 in DA cases when challenged.
- CPS North West has also introduced a specific court to hear all DA custody cases, enabling specialist prosecutors, police officers and support agencies to attend.
24See glossary for definition. Next steps
- The CPS will work with government departments in 2017–18 in the development of the Domestic Violence and Abuse Bill to bring perpetrators to justice as well as further protect victims of abuse.
- CPS will continue to work closely with the police locally and nationally to ensure appropriate referrals are made by the police to CPS and address the fall in referrals where needed.
- The National Criminal Justice Board will evaluate outcomes from the ‘Deep Dive’ in 2017–18 to consider rolling out nationally, with a revision of the SDAC resource manual.
- Legal guidance, training and case studies for prosecutors will be updated to include details of the experience of male victims to help challenge myths and stereotypes and provide details of support services for male victims. In addition work is underway to improve the recording of the gender of victims.
DA data
Data provided below relates to all DA defendants and victims, irrespective of gender, with further details of gender where available.
- The volume of DA referrals from the police fell from 117,882 in 2015–16 to 110,833 in 2016–17 – a fall of 7,049 referrals (6.0%). Of these 71.7% were charged (up from 69.7% in the previous year) resulting in 79,413 defendants charged (a fall of 3.3% from 2015–16).
- The average number of days to charge in 2016–17 reached 6.7 days, from 4.6 days in the previous year.
Graph 4 (left): Volume of Police DA referrals Graph 5 (right): DA prosecution and conviction and charged defendants, 2010–11 to 2016–17 volumes 2010–11 to 2016–17
- The proportion of DA cases(^{25}) has stayed steady – 16% in 2015–16 and 16.1% in 2016–17.
(^{25}) DA caseload is the volume of DA cases as a percentage of all court prosecutions. Table 2: DA caseload as % of total caseload 2009–10 to 2016–17
| | 2009–10 | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |----------|---------|---------|---------|---------|---------|---------|---------|---------| | CPS NATIONAL | 7.5% | 8.6% | 8.9% | 8.9% | 10.7% | 14.1% | 16.0% | 16.1% |
- The volume of prosecutions(^{26}) completed fell from 100,930 in 2015–16 to 93,590 in 2016–17 – a fall of 7,340 defendants (7.3%). 1.7% of DA prosecutions were also flagged as rape and 3.5% were also flagged as child abuse.
- The volume of convictions fell from 75,235 in 2015–16 to 70,853 in 2016–17 – a fall of 4,382 convictions (5.8%). The conviction rate increased from 74.5% in 2015–16 to 75.7% in 2016–17, the highest rate ever recorded.
Table 3: Completed DA prosecutions by outcome 2010–11 to 2016–17
| | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |----------|---------|---------|---------|---------|---------|---------|---------| | Vol % | 59,101 | 58,138 | 52,549 | 58,276 | 68,601 | 75,235 | 70,853 | | Convictions | 71.9 | 73.3 | 74.3 | 74.6 | 73.9 | 74.5 | 75.7 | | Unsuccessful | 23,086 | 21,130 | 18,153 | 19,795 | 24,178 | 25,695 | 22,737 | | Vol % | 28.1 | 26.7 | 25.7 | 25.4 | 26.1 | 25.5 | 24.3 | | Total | 82,187 | 79,268 | 70,702 | 78,071 | 92,779 | 100,930 | 93,590 |
- Between 2007-08 and 2016–17, conviction volumes have risen from 43,977 to 70,853 – a rise of 26,876 convictions – a 61% rise over this ten year period. Over the same period, conviction rates have risen from 68.9% to 75.7% - just under 7 percentage points (ppt).
Graph 6: DA volume and proportion of convictions, 2010–11 to 2016–17
- In 2016–17, 81,934 cases (87.5% of all DA cases prosecuted) were concluded within the Magistrates’ Court. Of these, 76.1% were convicted.
(^{26})Note the numbers of defendants charged covers those cases, by suspect, forwarded to CPS during 2016-17 for charging decisions and are not directly comparable in numbers with those prosecuted which covers cases, by defendant, finalised during 2016–17. • 72.9% of the 11,656 defendants prosecuted in Crown Courts were convicted.
• In 2016–17, there was a rise in guilty pleas, out of all DA cases prosecuted, reaching 68.7% (90.7% of all successful outcomes). There was also a rise to 53.0% convictions out of all DA prosecutions contested at trial (excluding mixed pleas27).
• Prosecutions dropped have fallen to the lowest level recorded at 17.1% of all prosecuted DA cases, from 18.2% in the previous year.
• Unsuccessful outcomes that were due to victim issues28 rose from 52.5% in 2015–16 to 54.0%. This was mainly due to a slight rise in victim non-attendance (from 25.5% in 28.3%).
• However, out of all DA cases prosecuted, the proportion that were unsuccessful due to victim issues29 remained steady at 13.1% compared to 13.4% in the previous year. Support for victims through the court process is important in reducing retractions and work with IDVAs or equivalent local support services are key to improved prosecutions.
• Since the introduction of the offence of controlling or coercive behaviour, 309 offences have been charged and reached a first hearing. 7.4% of these offences were flagged as rape.30
The underlying data is provided in the linked annex at Underlying Data/Violence Against Women. The CPS Area and police force data is at Annex 1.
Equalities issues
Gender
• Of the 93,590 defendants prosecuted, 85,280 defendants were male, 7,656 were female and in 114 cases the gender was not recorded31. In 2016–17, where the gender of the defendant was recorded, 91.8% were male and 8.2% female32, a slight rise in female defendants from 7.9% in the previous year.
• For victim data, from the Witness Management System, 97,497 victims were recorded. Of all victims, 63,539 were female, 13,064 were male and in 20,894 cases the gender was not recorded. The recording of victim gender fell slightly from 82.6% in 2015–16 to 78.6% and is therefore not robust enough to calculate proportions by gender accurately. In 2017–18 measures will be considered to ensure more robust recording of gender.
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27 ‘Exclusive of mixed pleas’ are defendant cases where only ‘not guilty’ pleas are entered to all charges and a trial ensues. 28 Victim issues include victim retractions, victim non-attendance and where the ‘evidence of the victim does not support the case’. 29 As in previous footnote. 30 A ‘rape’ flag is applied to CPS files from the start of a case, following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended. 31 It is not possible to provide data on the gender of victims in relation to the gender of the defendant from the current data systems. 32 The figure is similar if calculated out of total, including unrecorded gender (91.7% male defendants and 8.2% female defendants). Ethnicity
- In 2016–17, 72.5% of DA defendants were categorised as White (a fall from 76.4% in 2015–16\\textsuperscript{33}), with 67.0% being identified as belonging to the White British category. 6.2% of defendants were identified as Black, the same as the previous year and 5.7% were identified as Asian, a slight rise of 0.1ppt from the previous year\\textsuperscript{34}.
- Just under half of victim ethnicity is still not recorded and therefore the data is not included in this report.
Age
- From those defendants where age was recorded\\textsuperscript{35}, the majority of defendants were aged 25-59 (75.9%) and 18-24 (19.6%). 22.1% of defendants (20,648) were aged 24 and under, with 2,266 (2.4%) of defendants being 14-17 years old and 123 (0.1%) aged 10-13.
- From those victims where age was recorded\\textsuperscript{36}, the majority were aged 25-59 (69.0%) and 18-24 (20.8%). 25.6% of victims (22,657) were 24 years old and under, with 3,205 (3.6%) of victims being 14-17 years old, 809 (0.9%) aged 10-13 and 233 under 10 (0.3%).
Relationships
- Recording of the relationship between the perpetrator and victim is not yet robust enough to assess. The recording within the CPS database fell from 57.6% in 2015–16 to 54.2% in 2016–17. In 2017–18 measures will be considered to ensure better recording of relationships.
\\textsuperscript{33}The fall reflected the increase in ethnicity ‘not recorded’ rather than any substantial change in the volume of BAME defendants.
\\textsuperscript{34}5.0% of defendants did not state an ethnicity on arrest (a rise since 2015–16 of 1.2ppt) and 7.6% of defendants’ ethnicity was not provided to the CPS by the police (a rise since 2015–16 of 2.2 ppt).
\\textsuperscript{35}99.7% of defendant ages were recorded in 2016–17 – similar to 99.6% in 2015–16.
\\textsuperscript{36}90.7% of victim ages were recorded in 2016–17 – a rise from 83.3% in 2015–16. Stalking and harassment
Introduction
The CPS performance data shows that there has been an overall fall in prosecutions commenced in relation to stalking, harassment and breaches of non-molestation orders (NMOs) in 2016–17, compared with 2015–16. There was a rise in prosecutions commenced for breaches of restraining orders. There was a higher proportion of DA-related harassment offences, breaches of NMOs and breaches of restraining orders on conviction commencing prosecutions in 2016–17.
Following the HMIC/HMCPSI thematic inspection on stalking and harassment in 2016–17 the CPS is committed to improving performance in 2017–18 through updating guidance, training, monitoring and consultation with victims’ groups.
Summary of CPS activity
- The CPS stalking and harassment working group, consisting of cross-government CJS specialist and third sector agency representatives, revised stalking training for prosecutors.
- CPS social media guidelines were published in October 2016 containing a section on stalking and harassment.
- Six CPS Areas were inspected by HMIC/HMCPSI in 2016–17, with a report published in July 2017, outlining issues for improvement in the coming year.
- The CPS worked collaboratively with the MoJ in their consideration of the stalking and harassment sentencing penalties within the Policing and Crime Bill, resulting in the maximum sentence for stalking being increased from 5 to 10 years. The Police and Crime Act 2017 received Royal Assent on 31 January 2017.
- In December 2016, the Home Secretary announced her intention to introduce new stalking protection orders which will help protect victims, at the earliest possible stage, particularly prior to prosecution.
- A number of local initiatives have been identified as good practice throughout 2016–17:
- CPS Cymru/Wales carried out a stalking deep-dive exercise and CPS Mersey and Chesire dip sampled stalking cases during 2016–17.
- Following the HMCPSI inspection, local specialist training is planned in CPS Cymru/Wales, Mersey and Cheshire, North East, North West and South East.
- Joint action plans with the police have been/are being developed in CPS North West and CPS South West; CPS North West is also holding a scrutiny panel.
Next steps
- Reinvigoration of the CPS Area leads on stalking and harassment.
- Holding a webinar/face-to-face meeting with the CPS Area leads to share the results of the HMIC/HMCPSI thematic inspection of stalking and harassment and the actions to take forward improvements. • Implementation of the recommendations from the HMIC/HMCPSI thematic inspection of stalking and harassment, including: o working with the police to update and improve the joint Police/CPS protocol; o working across government (including with specialist NGOs) to develop a cross-government definition of stalking, so there is clear recognition of what constitutes a case of stalking; o consulting with victims’ groups more effectively at a local and national level; o revising the stalking and harassment legal guidance to improve the distinction between stalking and harassment, to add in sentencing changes and include more case studies; o revising the legal guidance on restraining orders and acceptability of pleas; o delivering mandatory training for prosecutors.
• Legal guidance, training and case studies for prosecutors will be updated to include details of the experience of male victims to help challenge myths and stereotypes and provide any details of support services for male victims.
• Consideration will be given to supporting the development of a stalking ‘app’ by academics.
Stalking and harassment data
In 2016–17:
• Prosecutions were commenced for 11,889 stalking and harassment offences in 2016–17; this was a fall of 1,097 offences (8.4%) from 2015–16 when 12,986 prosecutions were commenced. 71.0% were DA related.
• Prosecutions commenced in respect of 9,276 offences charged for harassment without violence – a fall from 10,073 in 2015–16. 72.1% of these offences were DA related.
• 1,654 prosecutions were commenced for harassment putting people in fear of violence – a slight fall from 1,811 in 2015–16. 68.3% of these offences were DA related.
• There were 959 prosecutions commenced under the stalking offences – a fall from 2015–16 when 1,102 prosecutions commenced; o 510 of these offences were with fear/alarm/distress (a slight fall from 643 in the previous year). 68.6% were DA related; o 449 of these offences involved fear of violence/serious alarm or distress (a slight fall from 459 in the previous year). 66.3% of fear of violence and 59.0% of those with serious alarm or distress were DA related.
• 16,614 breaches of restraining order offences started prosecution, a rise of 8.0% from 15,384 in 2015–16. 86.2% were DA related; the highest volume ever recorded: o of these, 15,937 were breaches of restraining orders that were made on conviction, a rise of 7.2% from 2015–16. 86.3% were DA related; o of all the breaches, 677 were breaches of restraining orders that were made on acquittal, a rise of 29.9% from 2015–16. 82.9% were DA related.
37Note CPS stalking and harassment data is only available from the offence-based data system and therefore cannot include data on police referrals, charging and outcomes.
- 6,505 breaches of NMOs started prosecution, compared with 6,672 in the previous year, a fall of 2.5%. 94.8% were DA related.
- Offence data is not available by gender of defendant or victim.
- The national official statistics from the MoJ on defendants prosecuted and convicted for the calendar year 2016 are provided in Annex 2. The data outlines the prosecution outcomes by defendant. It reflected the pattern of CPS data overall, with fewer prosecutions of stalking and harassment offences and fewer convictions. More restraining orders on conviction were issued, but fewer on acquittal. There were more prosecutions and convictions of breaches of restraining orders on conviction and acquittal.
Table 4: Stalking and Harassment offences charged and reaching a first hearing in Magistrates’ Courts – Total Volume and Percentage of total flagged as DA 2011–12 to 2016–17.
| Family Law Act 1996 (42A(1) and (5)) | Breach a non-molestation order - Family Law Act 1996 | 2011–12 | 2012 - 13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |--------------------------------------|------------------------------------------------------|---------|-----------|---------|---------|---------|---------| | | Vol | % DA | Vol | % DA | Vol | % DA | Vol | % DA | Vol | % DA | Vol | % DA | | Family Law Act 1996 (42A(1) and (5)) | 5,323 | 81.4 | 5,563 | 79.3 | 6,498 | 85.9 | 7,013 | 89.7 | 6,672 | 93.6 | 6,505 | 94.8 | | PHA 1997 (2(1) and (2)) | Harassment without violence | 7,713 | 61.1 | 7,159 | 58.9 | 8,303 | 63.3 | 9,180 | 68.0 | 10,073 | 70.9 | 9,276 | 72.1 | | PHA 1997 (4(1) and (4)) | Harassment - put in fear of violence | 1,632 | 64.7 | 1,398 | 55.4 | 1,489 | 63.9 | 1,839 | 66.6 | 1,811 | 65.7 | 1,654 | 68.3 | | PHA 1997 (2A(1) and (4)) | Stalking with fear / alarm / distress | - | - | 72 | 72.2 | 529 | 72.6 | 676 | 69.7 | 643 | 70.9 | 510 | 68.6 | | PHA 1997 (4A(1)(a)(b) (i) and (5)) | Stalking involving fear of violence | - | - | 9 | 88.9 | 65 | 75.4 | 133 | 73.7 | 128 | 67.2 | 83 | 66.3 | | PHA 1997 (4A(1)(a)(b) (ii) and (5)) | Stalking involving serious alarm / distress | - | - | 10 | 70.0 | 149 | 55.7 | 294 | 66.0 | 331 | 61.3 | 366 | 59.0 | | PHA 1997 (5(5) and (6)) | Harassment - breach of a restraining order on conviction | 8,447 | 73.0 | 9,962 | 71.8 | 11,329 | 77.3 | 13,126 | 82.2 | 14,863 | 85.8 | 15,937 | 86.3 | | PHA 1997 (5(5) and (6)) | Harassment - breach of a restraining order after acquittal | 286 | 70.6 | 313 | 70.3 | 322 | 76.1 | 433 | 77.6 | 521 | 85.2 | 677 | 82.9 |
PHA – Protection from Harassment Act. Rape
Introduction
In 2016–17 a co-ordinated programme of work was implemented by the Police and CPS Joint National Rape Steering Group, led by the DPP and national policing leads and supported by a joint Delivery Board. A comprehensive programme of training for specialist lawyers was delivered by all CPS Areas as recommended in the previous joint CPS Police National Rape Action Plan.
This led to the rise in the volume of prosecutions and convictions, reaching the highest volumes ever recorded. There was a slight fall in police referrals and charged defendants which CPS will continue to work with the police to monitor and assess their appropriateness, addressing any issues across the CJS.
Summary of CPS activity
- During 2016–17, the Police and CPS Joint National Rape Steering Group, supported by a joint Delivery Board continued to implement a co-ordinated programme of work including:
- standardised casework processes;
- national file quality standard for rape cases;
- strengthening the requirements and training support for CPS advocates and advocates from the external bar, through liaison with the Bar Council and Criminal Bar Association;
- improved scrutiny of pre-charge casework volumes and timeliness of decision making;
- a pilot in collaboration with key partners to develop streamlined and effective use of medical forensic evidence in rape cases;
- work with key partners to improve joint handling of disclosure relating to third party protocol in rape cases.
- During 2016–17 the national forum of RASSO Heads met on a bi-monthly basis to share and consult on best practice, lessons learned and to inform the delivery of recommendations from both internal and external reviews. The Director of Legal Services and the Director’s Senior Legal Adviser have delivered RASSO workshops in Areas to support effective prosecutions.
- CPS RASSO staff were supported with a comprehensive training package and welfare support programme. The training consisted of face to face workshops, e-learning and podcasts across a range of relevant topics including consent, myths and stereotypes, understanding victim vulnerabilities and offender tactics.
- By the end of 2016–17 a significant recruitment exercise was completed to ensure that RASSO units were equipped to meet the substantial increase in the volume of case referrals from the police. Rotation principles, for specialist staff moving between RASSO units and Crown Court or Magistrates’ Court units were also developed.
- In 2016–17 the CPS implemented an Internal Quality Assurance regime to quality assure decision-making by RASSO lawyers and ensure compliance with CPS policies and guidance.
- During 2016 membership of the Rape and Child Sexual Abuse Panel was renewed. Only specialist in-house advocates or counsel who have been selected to join the Panel, are instructed to appear in court on behalf of the CPS in these cases. • The CPS was also part of the National Rape Monitoring Group, chaired by HMIC. In November 2016, CPS rape data from 2010–11 to 2015–16 was released with that of the police and MoJ for every police force area. The data was provided to Police and Crime Commissioners and local CJS agencies to analyse and scrutinise how rape is dealt with in their local area and address further improvements.
• An internal audit of five RASSO units, undertaken by the Government Internal Audit Agency, led to recommendations for improvement in the areas of organisation and structure, skills, training and support which are being addressed in 2017–18.
• A number of local initiatives have been identified as good practice throughout 2016–17, for example: o CPS Area Rape LSIPs addressed technology, communication with victims, support from ISVAs and cases within domestic abuse scenarios. o In rape cases some CPS Areas held Case Management Hearings or provided lawyers with individual feedback on their decisions. This improved the quality of decision-making. o CPSD, CPS North East and CPS North West developed clear escalation policies with the police to deal with non-compliance with their action plans. They also used IQA and spot reviews. This has improved timeliness and in turn maintained good performance. o CPS London developed the outline of a toolkit to address myths and stereotypes using expert evidence and built relationships through the local ISVA group. o CPS North West successfully used live links to obtain evidence from witnesses abroad.
Next steps
• The CPS will be contributing to a cross-government ‘Deep Dive’ exercise to identify ways to reduce attrition rates in cases of serious sexual offences.
• The CPS will work with the Criminal Bar Association and Bar Council to ensure that essential CPS training required for the accreditation of external advocates is delivered.
• Training on the handling of vulnerable witnesses will be delivered to all advocates dealing with serious sexual offences by the end of 2018.
• A new face-to-face training course is being developed to support prosecution of acquaintance rape cases involving intoxicated victims.
• Specialist Youth Training will be delivered in 2017–18 to all RASSO prosecutors including a specific section on RASSO youth cases.
• Training on protecting victims of sexual offences by restricting evidence or questions about their previous sexual history (s.41 YJCEA 1999) will also be delivered.
• The legal guidance will be updated to include details of the experience of male victims to help challenge myths and stereotypes and provide details of support services for male victims. In addition work is underway to improve the recording of the gender of victims.
• The CPS will work with a leading consultant forensic psychiatrist to develop a psychological evidence toolkit for prosecutors. • There will be further development of the knowledge hub on the internal CPS Intranet site, for prosecutors to share casework examples and provide them with additional reference material to assist in case building.
Rape data
CPS data on successful rape prosecutions includes not only cases resulting in a conviction for rape, but also cases initially flagged as rape where a conviction was obtained for an alternative or lesser offence. The flag is applied to CPS files from the start of the case following an initial allegation of rape. This flag will remain in place even if the decision is taken to charge an offence other than rape, or where a rape charge is subsequently amended. This is for case management purposes to ensure that the principles of the rape and sexual offence policy are considered throughout the life of all relevant cases. The accuracy of flagging of cases stayed steady at 98.4% in 2016–17 compared with 98.8% in 2015–16.
Data provided below relates to all rape defendants and victims, irrespective of gender, with further details of gender where available. Data reported here will overlap with that in the Child Abuse section of the report related to child sexual abuse as 45.0% of rape flagged prosecutions were perpetrated against children.
The Ministry of Justice provides the official National Statistics on rape while CPS data is primarily collected for case management purposes to ensure that the principles of the rape and sexual offence policy are considered throughout the life of all relevant cases. It should be noted that there are important differences as to how rape offences are recorded between the different data systems. These differences include: MoJ data is on a calendar year basis, rather than financial year; data on offenders convicted for rape only includes cases where the final conviction was for a specific offence of rape. Cases initially charged as rape resulting in a conviction for an alternative charge such as a serious sexual assault, will be recorded for the alternative offence. It is not possible to separately identify such cases in MoJ figures. The differences in recording leads to CPS reporting a higher number of prosecutions than recorded in MoJ data.
Further detail in respect of MoJ data and the differences between the datasets is provided in Annex 2 page B11.
• The volume of rape referrals from the police fell from 6,855 in 2015–16 to 6,611 – a fall of 244 referrals (3.6%).
• The average number of days to charge in 2016–17 reached 67.3 days, from 52.7 days in the previous year. However the number of cases submitted to the CPS for a pre-charge decision, where no advice had been given for a period between 28 days and 3 months, fell from 307 in April 2016 to 125 in March 2017. The number of cases submitted to the CPS for a pre-charge decision where no advice had been given for a period in excess of 3 months fell from 40 to one. This indicated that where CPS alone has responsibility for the delay in the charging process, improvements have been achieved.
39The official statistics relating to crime and policing are maintained by the Home Office and the official statistics relating to sentencing, criminal court proceedings, offenders brought to justice, the courts and the judiciary are maintained by the Ministry of Justice.
40This data reports on the average number of calendar days that has elapsed since the first decision was sought by the police, to the date in which the last decision was made to charge. The data will include cases where the police were required to submit further evidence prior to a decision to charge. • 3,671 defendants were charged, a fall in volume of 239 charged defendants (6.1%) from 3,910 in 2015–16. Of all police referrals, 55.5% were charged compared with 57.0% in 2015–16.
• The proportion of rape flagged cases, as a percentage of all indictable-only prosecutions, has risen year on year to 15.6% in 2016–17 from 13.2% in 2015–16.
Table 5: Rape caseload as % of total Crown Court indictable only outcomes 2010–11 to 2016–17.
| | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |----------|---------|---------|---------|---------|---------|---------|---------| | CPS NATIONAL | 10.0% | 9.9% | 9.8% | 11.1% | 12.8% | 13.2% | 15.6% |
Graph 7 (left): Volume of Police rape referrals Graph 8 (right): Rape prosecution and conviction and charged defendants, 2010–11 to 2016–17 volumes 2010–11 to 2016–17
Table 6: Completed rape prosecutions by outcome
| | 2010 - 11 | 2011 - 12 | 2012 - 13 | 2013 - 14 | 2014 - 15 | 2015 - 16 | 2016 - 17 | |----------|-----------|-----------|-----------|-----------|-----------|-----------|-----------| | Volume | % | Volume | % | Volume | % | Volume | % | | Convictions | 2,465 | 58.6 | 2,414 | 62.5 | 2,333 | 63.2 | 2,348 | 60.3 | 2,581 | 56.9 | 2,689 | 57.9 | 2,991 | 57.6 | | Unsuccessful | 1,743 | 41.4 | 1,450 | 37.5 | 1,359 | 36.8 | 1,543 | 39.7 | 1,955 | 43.1 | 1,954 | 42.1 | 2,199 | 42.4 | | Total | 4,208 | 3,864 | 3,692 | 3,891 | 4,536 | 4,643 | 5,190 |
• In 2016–17(^{41}) the number of prosecutions completed rose from 4,643 in 2015–16 to 5,190 – the highest volume ever recorded and a rise of 547 defendants (11.8%).
• The volume of convictions rose from 2,689 convictions in 2015–16 to 2,991 in 2016–17(^{42}) – a rise of 302 (11.2%). This was the highest volume of convictions ever recorded.
• The CPS rape conviction rate(^{43}) stayed steady at 57.6% in 2016-17 from 57.9% in 2015-16. This should be assessed against the significant rise in the volume of rape prosecutions and convictions.
(^{41})Note the numbers of defendants charged covers those cases, by suspect, forwarded to CPS during 2016–17 for charging decisions and are not directly comparable in numbers with those prosecuted which covers cases, by defendant, finalised during 2016–17.
(^{42})Data on conviction outcomes is not currently broken down by gender of defendants.
(^{43})Outcomes from charge to conviction; see details at start of data section. • Out of all the rape flagged defendants, 31% were also flagged as domestic abuse with 58.3% of defendants being convicted; 45.0% were also flagged as child abuse with 67.7% convicted.
• Of the 309 offences of controlling or coercive behaviour charged and reached a first hearing, 23 were flagged as rape cases (7.4%). There was at least one offence in every CPS Area.
• Between 2007-08 and 2016–17, conviction volumes have risen from 2,021 to 2,991, a rise of 970 convictions, and the highest volume since records began – a 48% rise over this nine year period.
• Graph 9 illustrates the trend of CPS convictions, following an initial allegation of rape, over the past seven years. The rise in conviction rate from 2011–12, reaching the highest rate in 2012–13, coincided with a fall in conviction volumes to the lowest level since 2009–10.
• From CPS data 2016–17, 5,045 (98.9%) of cases initially flagged as rape were finally prosecuted for the principal offence categories of ‘sexual offences, including rape’ or more serious principal offences of ‘homicides’ or ‘offences against the person’. Of these, 4,240 were for sexual offences including rape; 17 for homicide and 788 for offences against the person.
Graph 9: Rape conviction rates 2010–11 to 2016–17
• There were 33.3% guilty pleas out of all rape cases prosecuted (57.7% of all successful outcomes), a fall from 35.0% in 2015–16. 46.3% out of all rape prosecutions contested at trial (excluding mixed pleas) were successful, a rise from 45.6% in 2015–16.
• Prosecutions dropped have fallen to the lowest level recorded, at 12.4% of all prosecuted rape cases, from 13.1% in the previous year.
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44Recording of rape data started later than that of DA. 45See glossary for the CPS definitions of ‘principal offence’ and the different categories. The principal offence category data recorded by the CPS in the Case Management System are understated when compared to overall prosecution volumes in the same period. Outcomes which resulted in an administrative finalisation or incomplete proceedings, where a principal offence category is not allocated, have been excluded. 46‘Exclusive of mixed pleas’ are defendant cases where only ‘not guilty’ pleas are entered to all charges and a trial ensues. • Out of all unsuccessful outcomes, those due to victim issues\\textsuperscript{47} remained steady at 16.8% in 2016–17 (compared with 17.1% in 2015–16); of which 9.5% was due to victim retraction. Out of all rape flagged cases prosecuted, the proportion that was unsuccessful due to victim issues has stayed steady at 7.1% in 2016–17 (7.2% in 2015–16).
• Out of all unsuccessful outcomes in rape flagged cases, the proportion due to jury acquittals\\textsuperscript{48} has risen slightly from 61.4% in 2015–16 to 62.3% in 2016–17.
The underlying data is provided in the linked annex at Underlying Data/Violence Against Women. The CPS Area and police force data is at Annex 1.
**Equalities issues**
**Gender**
• Of the 5,190 defendants prosecuted, 5,118 defendants were male, 64 were female, and the gender was not recorded for eight defendants\\textsuperscript{49}. Where the gender of the defendant was recorded, 98.8% were male and 1.2% female\\textsuperscript{50}, similar to that recorded over the past five years.
• For victim data, from the Witness Management System, 7,201 victims were recorded. Of all victims 4,657 were female, 754 were male and the gender was not recorded for 1,790 victims. The recording of victim gender at 75.1%, although improved since 2015–16, is not robust enough to include gender proportions in this report. The volumes of both genders rose. In 2017–18 measures will be considered to ensure more robust recording of gender.
**Ethnicity**
• In 2016–17, 56.4% of defendants were categorised as White, of which 50.9% were identified as belonging to the White British category, 1.2ppt less than in the previous year\\textsuperscript{51}. 5.8% of defendants were identified as Asian – a fall of 1.5ppt from 2015–16, and 9.7% were identified as Black – a rise of 0.4ppt\\textsuperscript{52}. 61.3% of victim ethnicity is still not recorded, although improved from 2015–16; therefore the data is not included in this report.
**Age**
• From those defendants where age was recorded\\textsuperscript{53}, the majority of defendants were aged 25-59 (59.9%) and 18-24 (21.3%). 29.6% of defendants (1,526) were aged 24 and under, with 371(7.2%) of defendants being 14-17 years old and 54 (1%) aged 10-13.
\\textsuperscript{47}Unsuccessful cases due to victim issues includes those due to victim retraction; non-attendance or where the victim’s evidence does not support the case.
\\textsuperscript{48}All ‘unsuccessful reasons due to acquittals’ outlined in previous reports prior to 2014–15 included ‘Jury acquittals’ and ‘dismissed after full summary trial’ – this rose to 63.6% in 2016–17 from 62.9% in 2015–16
\\textsuperscript{49}It is not possible to provide data on the gender of victims in relation to the gender of the defendant from the current data systems.
\\textsuperscript{50}The figure is similar if calculated out of total, including unrecorded gender (98.5% male defendants and 1.4% female defendants).
\\textsuperscript{51}The fall reflected the increase in ethnicity ‘not recorded’ rather than any substantial change in the volume of BAME defendants.
\\textsuperscript{52}12.4% of ethnicity was not provided by the police in 2016–17 and 12.5% not stated by the defendant.
\\textsuperscript{53}99.5% of defendant ages were recorded in 2016–17 – a rise from 99.1% in 2015–16. For the first time the age of victims was robust enough to provide the proportions of victims by age. From those victims where age was recorded\\textsuperscript{54}, the largest groupings of victims were aged 25-59 (45.9%) and 18-24 (24.7%). 52.3% of victims (3,022) were aged 24 and under, with 1,059 (18.3%) of victims being 14-17 years old, 435 (7.5%) aged 10-13 and 103 (1.8%) under 10. Out of all the male victims there was a greater proportion under 14 years compared with female victims. Of all the female victims there was a greater proportion aged 14-24\\textsuperscript{55}, compared with male victims.
\\textsuperscript{54}80.2% of victim ages were recorded in 2016–17, a rise from 73.0% in 2015–16. \\textsuperscript{55}Of all victims with recorded age and gender. Sexual offences (excluding rape)
Introduction
In 2016–17, the volume of prosecutions and convictions of sexual offences (excluding rape) rose to the highest volumes ever recorded, with the highest conviction rate.
Summary of CPS activity
- During 2016 the use of pre-trial recorded cross-examination was piloted in Leeds, Liverpool and Kingston Crown Courts. This latest special measure, available under the Youth Evidence and Criminal Evidence Act 1999, is for particularly vulnerable victims. This is especially helpful for victims of sexual offences who often find cross examination distressing. The recording is carried out as soon as possible after the alleged offence and shown as evidence at the trial, which reduces the stress and trauma for young or vulnerable victims.
- The CPS is engaging with CJS partners to build on this work undertaken during 2016. The Government is committed to rolling out such arrangements across England and Wales during 2017–18.
- CPS Area Sexual Offence LSIPs included addressing communication with victims and clearance of the public gallery.
Next steps
- The CPS is engaging with CJS partners to build on work undertaken during 2016 on the use of pre-trial recorded cross-examination of victims.
- Legal guidance for prosecutors and the knowledge hub will be updated as in the Rape section of the report.
Sexual offences (excluding rape) data
CPS records do not include data relating to pre-charge decisions regarding sexual offences (excluding rape), as the principal offence category of ‘sexual offences’, which includes rape and all sexual offences, is only allocated to cases at the conclusion of prosecution proceedings. Data provided below relates to all defendants of sexual offences (excluding rape), with further details of gender where available. Data reported here will overlap with that in the Child Abuse section of the report related to child sexual abuse, as 37.5% of sexual offences are perpetrated against child victims.
______________________________________________________________________
56 Particularly vulnerable victims’ include those who are under 16 at the time of the hearing; suffer from a mental disorder within the meaning of the Mental Health Act 1983; have a significant impairment of intelligence and social functioning; or have a physical disability or a physical disorder and the quality of their evidence is likely to be diminished as a result.
57 CPS sexual offences data (excluding rape) is derived from the principal offence category ‘sexual offences’ by excluding the rape flagged defendants. There is no separate monitoring flag for ‘sexual offences’ that is applied, either when the CPS receives a request to make a pre-charge decision or at receipt of the charged case file. The principal offence is allocated only at the conclusion of a prosecution proceeding, based on the most serious offence the defendant is charged with at the time of finalisation.
58 Data on victims is extracted from the Witness Management Service which includes no record of the victims of sexual offences, other than rape, as that information is compiled only at defendant level. • The volume of sexual offences’ prosecutions completed, excluding rape, rose from 11,995 in 2015–16 to 13,490 in 2016–17 – a rise of 1,495 defendants (12.5%) – reaching the highest volume ever recorded.
• Out of all the sexual offence defendants, excluding rape, 37.5% were also flagged as child abuse, with 78.3% convicted.
• The proportion of CPS caseload attributed to sexual offences (excluding rape) rose from 1.9%(^{59}) in 2015–16 to 2.3% in 2016–17.
Table 7: Sexual offences (excluding rape) caseload as % of total caseload
| Year | 2009–10 | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |----------|---------|---------|---------|---------|---------|---------|---------|---------| | CPS NATIONAL | 0.8% | 0.9% | 0.9% | 1.0% | 1.2% | 1.5% | 1.9% | 2.3% |
Table 8: Completed sexual offence prosecutions by outcome
| Year | 2010 - 11 | 2011 - 12 | 2012 - 13 | 2013 - 14 | 2014 - 15 | 2015 - 16 | 2016 - 17 | |----------|-----------|-----------|-----------|-----------|-----------|-----------|-----------| | Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | | Convictions | 6,588 | 74.3 | 6,308 | 75.7 | 5,971 | 76.8 | 6,756 | 79.0 | 7,591 | 77.5 | 9,351 | 78.0 | 10,721 | 79.5 | | Unsuccessful | 2,274 | 25.7 | 2,026 | 24.3 | 1,800 | 23.2 | 1,798 | 21.0 | 2,198 | 22.5 | 2,644 | 22.0 | 2,769 | 20.5 | | Total | 8,862 | 8,334 | 7,771 | 8,554 | 9,789 | 11,995 | 13,490 | | | | | | |
• The volume of convictions rose from 9,351, in 2015–16 to 10,721 in 2016–17 – a rise of 1,370 (14.7%). The conviction rate increased from 78.0% in 2015–16 to 79.5% – the highest volume and rate ever recorded.
• There were 68.2% guilty pleas out of all sexual offence prosecutions, excluding rape, (85.8% of all successful outcomes), a rise from 66.0% since 2015–16. 49.4% out of all prosecutions contested at trial (excluding mixed pleas(^{60})) were successful, also a rise from 48.8% since 2015–16.
• Prosecutions dropped have fallen to the lowest level recorded at 8.4% of all prosecuted cases, from 8.9% in the previous year.
• Out of all unsuccessful outcomes, those due to victim issues remained steady at 14.3% in 2016–17 (compared with 14.6% in 2015–16); of which 8.3% was due to victim retraction.
• Out of all unsuccessful outcomes in sexual offences prosecutions, excluding rape, the proportion due to jury acquittals(^{61}) has fallen slightly from 45.0% in 2015–16 to 43.0% in 2016–17.
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(^{59})Sexual offence caseload as a percentage of all CPS prosecutions.
(^{60})Exclusive of mixed pleas’ are defendant cases where only ‘not guilty’ pleas are entered to all charges and a trial ensues.
(^{61})All ‘unsuccessful reasons due to acquittals’ outlined in reports prior to 2014–15 included ‘Jury acquittals’ and ‘dismissed after full summary trial’ – this fell from 53.9% in 2015–16 to 52.3% in 2016–17. Graph 10: Sexual offences (excluding rape) volumes 2010–11 to 2016–17
The underlying data is provided in the linked annex at Underlying Data/Violence Against Women. The CPS Area and police force data is at Annex 1.
Equalities issues
Data on victims is extracted from the Witness Management Service which does not record data relating to the victims of sexual offences, other than rape.
Gender
- Of the 13,490 defendants prosecuted, 13,022 defendants were male, 432 were female and the gender was not recorded for 36 defendants. Where the gender of the defendant was recorded, 96.8% of defendants were male and 3.2% female, a slight rise in female defendants compared with the previous five years.
Ethnicity
- In 2016–17, 59.1% of defendants prosecuted for a sexual offence were identified as belonging to the White British category and 65.2% were categorised as White (similar to 2015–16). 5.9% of defendants were identified as Asian (0.7ppt fewer than the previous year) and 5.6% were identified as Black (the same as in the previous year).
Age
- From those defendants where age was recorded, the majority of defendants were aged 25–59 (67.6%) and 18-24 (15.9%). Just under a fifth of defendants (2,606) were aged 24 and under, with 3.1% of defendants (422) being 14-17 years old and 0.4% (49) aged 10–13 years old.
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62 The figure is similar if calculated out of total, including unrecorded gender (97.2% male defendants and 2.7% female defendants). 63 Just over 11% of defendants did not state an ethnicity on arrest and just under 10% of defendants’ ethnicity was not provided to the CPS by the police – the former a rise since 2015–16; in total a rise of 0.7% not recorded. 64 99.7% of defendant ages were recorded in 2016–17 – a rise from 99.3% in 2015–16. So-called ‘honour-based’ violence, forced marriage, and Female Genital Mutilation
So-called ‘honour-based violence’ and forced marriage
Introduction
The first-ever joint police/CPS investigation and prosecution protocol for so-called ‘honour-based’ violence (HBV) and forced marriage (FM) was published in 2016. An HBV and FM action plan was developed for implementation in 2017–18 and a working group of specialist organisations was set up to oversee its delivery.
There was a fall in HBV and FM referrals, charged defendants and prosecutions in 2016–17, with a steady volume of convictions. The action plan aims to improve prosecution outcomes in 2017–18 and the support provided to victims and witnesses.
Summary of CPS activity on so-called ‘honour-based’ violence and forced marriage
- The Director of Public Prosecutions (DPP) held a workshop in October 2016 with third sector experts to discuss the delivery of a HBV/FM action plan. A working group was set up to oversee the delivery of this, actions include: updating the CPS Legal Guidance; revising the list of CPS Area HBV and FM Leads; providing training and the development of a CPS communications strategy to support the prosecution of these crimes.
- The CPS worked in partnership with the National Police Chiefs Council (NPCC) lead to develop a joint investigation and prosecution protocol for HBV and FM as recommended in the HMIC report65 inspection into the police response to HBV, FM and FGM. It was published in December 2016.
- A number of local initiatives have been identified as good practice throughout 2016–17, for example:
- In CPS Cymru/Wales the quarterly HBV leadership group addressed implementation of the HBV/FM protocol as well as the lack of referrals.
- CPS East Midlands held an LSIP to discuss the challenges of prosecuting abuse within BAME communities, the impact of cultural/societal expectations on them, their vulnerabilities, the influence of faith communities and the CPS safeguarding responsibilities.
- CPS North West are working with their HBV/FM Scrutiny Board to prepare a local protocol which will include screenshots to access CPS policy, local authority and police training materials and will be used by professionals as a guide to action to be taken.
- In February 2017 CPS West Midlands participated in a HBV/FM conference led by the Office for Police and Crime Commissioner (PCC).
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65 The Depths of Dishonour: Hidden voices and shameful crimes. Next steps
- The HBV/FM action plan has been updated for 2017–18 to include updating legal guidance and training, including information on other Harmful Practices.
- Legal guidance, training and case studies for prosecutors will be updated to include details of the experience of male victims to help challenge myths and stereotypes and provide details of any support services for male victims.
- The working group will monitor the delivery of the action plan including the impact of the HBV and FM protocol through a quarterly return from CPS Areas and through the bi-Annual VAWG Assurance scheme.
So-called ‘honour-based’ violence data
CPS Areas prosecuting the greatest number of HBV and FM prosecutions were London, the North West, the South East, Thames and Chiltern and the West Midlands.
The data below relates to all cases flagged as so-called ‘honour-based’ violence. It relates to all defendants and victims, irrespective of gender, with further details of gender where available. The small number of cases indicates the need for caution in interpreting this data in relation to these offences.
- The volume of referrals from the police of flagged HBV-related offences fell from 216 in 2015–16 to 200 in 2016–17. 136 were charged (68.0%), a fall from 145 in 2015–16. More than 90% were flagged as DA.
Table 9: Completed so-called ‘honour-based’ violence prosecutions by outcome, 2011–12 to 2016–17
| | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |----------|---------|---------|---------|---------|---------|---------| | | Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | | Convictions | 86 | 50.0 | 126 | 63.0 | 123 | 59.7 | 129 | 57.3% | 91 | 50.0 | 90 | 52.6% | | Unsuccessful | 86 | 50.0 | 74 | 37.0 | 83 | 40.3 | 96 | 42.7% | 91 | 50.0 | 81 | 47.4% | | Total | 172 | 100.0 | 200 | 100.0 | 206 | 100.0 | 225 | 100.0 | 182 | 100.0 | 171 | 100.0 |
- The volume of prosecutions completed fell from 182 in 2015–16 to 171 in 2016–17. Of the 171 defendants prosecuted, 147 defendants were male (86.0%) and 23 defendants were female (13.5%), with the gender of one defendant not recorded.
- 171 victims were recorded in the Witness Management System. Of all victims, 93 were female, 36 were male and the gender of 42 victims was not recorded. 75.4% of victim gender was recorded in 2016–17 – a fall from the previous year of 82.0%. This is not robust enough to include gender proportions in this report.
- The volume of conviction stayed steady – 91 in 2015–16 and 90 in 2016–17. 52.6% of prosecutions resulted in a conviction, a slight rise from 50.0% in 2015–16.
- Prosecutions dropped fell from 66 in 2015–16 to 61 in 2016–17. • There was a similar number of unsuccessful outcomes due to victim issues (42 in 2015–16 and 41 in 2016–17).
**Forced marriage data**
The data below includes all cases flagged as ‘forced marriage’ and not just those related to the new forced marriage legislation introduced in 2014.
Data provided below relates to all defendants and victims, irrespective of gender, with further details of gender where available. The small number of cases indicates the need for caution in interpreting this data in relation to these offences.
• The volume of FM referrals from the police fell from 90 in 2015–16 to 56 in 2016–17. 36 of these referrals were charged, a fall from 56 in 2015–16. All cases of FM were flagged as FM and DA in 2016–17.
• The volume of prosecutions completed fell from 53 in 2015–16 to 44 in 2016–17.
• There were 41 male defendants and three female; there were 29 female victims and five male (with unrecorded gender for ten victims).
**Table 10: Completed forced marriage prosecutions by outcome, 2011–12 to 2016–17**
| | 2011 - 12 | 2012 - 13 | 2013 - 14 | 2014 - 15 | 2015 - 16 | 2016 - 17 | |----------|-----------|-----------|-----------|-----------|-----------|-----------| | Volume | % | Volume | % | Volume | % | Volume | % | | Convictions | 23 54.8% | 29 70.7% | 32 71.1% | 29 63.0% | 32 60.4% | 32 72.7% | | Unsuccessful | 19 45.2% | 12 29.3% | 13 28.9% | 17 37.0% | 21 39.6% | 12 27.3% | | Total | | | | | | |
• 32 prosecutions were successful (the same as in 2015–16), with a rise in conviction rate from 60.4% in 2015–16 to 72.7% in 2016–17.
• Prosecutions dropped fell from 15 cases in 2015–16 to ten in 2016–17.
• Out of all unsuccessful outcomes, those due to victim issues fell from 14 cases in 2015–16 to six cases in 2016–17.
• There was only one defendant prosecuted for the specific offence of forced marriage under s.121 of the Anti-Social Behaviour, Crime and Policing Act 2014.
• There were eight defendants prosecuted for a breach of a Forced Marriage Protection Order (FMPO).
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66Forced marriage cases are flagged as both FM and DA when the defendant is within the family, as defined under the DA definition. Some cases previously have included defendants from outside the family and such cases would only be flagged as FM.
67Data on conviction outcomes is not broken down currently by gender of defendants. Female Genital Mutilation
Summary of CPS activity on FGM
- There are lead FGM prosecutors for each CPS Area who provided early investigative advice to the police following reports and were involved in local training and safeguarding events, to support community engagement.
- Whilst mandatory reporting by front line professionals has not resulted in a significant increase in cases being investigated and referred for prosecution, they have led to safeguarding measures being put in place with families and/or FGM Protection Orders being granted as preventative measures. These provisions are being used effectively to support safeguarding of girls identified as being at risk.
- We have strong links with health professionals – Royal College Midwives and Royal College of Gynaecologists – to ensure we reflect medical expert opinion and we provide input into medical guidelines. The FGM policy lead has given a number of presentations at public health events to explain the law and to reinforce the role they play in reporting.
- A number of local initiatives have been identified as good practice throughout 2016–17, for example:
- CPS Cymru/Wales organised a stand at Cardiff airport during holiday times, with the support of the airport and Uk Border Forces. Awareness events were organised at ‘check-in’ to raise awareness of FGM, with excellent feedback from travellers including midwives and teachers.
- CPS Cymru/Wales also developed a video with youth groups, health services and BAME women’s groups winning a Midwifery award in 2017.
- CPS East Midlands organised FGM events with partners.
- CPS North West devised a local protocol with professionals and NGOs.
- CPS North West also presented at community engagement events at Lancashire Police HQ “Out of the Shadows”; contributed to panel member sessions and supported presentations by the PCC.
- CPS North East met with paediatricians to discuss the law and some of the challenges faced by them in children they encounter.
- CPS Mersey Cheshire presented at an NHS-funded conference on FGM held in Cheshire.
Next steps
- The national joint CPS and Police protocol will be revised in 2017–18 to reflect:
- notification and monitoring arrangements;
- victim protection measures, including safeguarding and anonymity;
- requirement for expert examination and evidence; and
- FGM Protection Orders.
- Legal and policy guidance on the approach to be taken in cases of female genital cosmetic surgery are being developed. Child abuse
Introduction
In 2016–17 CPS worked with CJS partners to address improvements in the prosecutions of child abuse cases, including child sexual abuse (CSA). This led to the highest volumes of child abuse referrals and defendants charged. Child abuse and child sexual abuse prosecutions and convictions reached the highest volumes ever recorded.
Summary of CPS activity
- The CPS continued to play a central role in the Home Office-led cross government strategy to respond to sexual violence against children. This included:
- Engaging with government stakeholders on the development of a strategy to safeguard vulnerable 16 and 17 year olds.
- Supporting the young witness initiative to expedite cases involving child witnesses under the age of 10 years.
- The CPS network of child sexual abuse specialists, comprising of representatives from each CPS Area and specialist divisions, served as a source of expertise, guidance and good practice for colleagues dealing with child sexual abuse cases, both locally and nationally.
- During 2016 membership of the Rape and Child Sexual Abuse Panel was renewed. Only specialist in-house advocates or counsel who have been selected to join the Panel, are instructed to appear in court on behalf of the CPS in these cases.
- The CPS published revised guidelines for prosecuting indecent images of children (IIOC). Updates were also provided on Section 176 of the Policing and Crime Act 2017, revising the definition of child sexual exploitation. Both are outlined in the pornography section of this report.
- The CPS is part of the Home Office Board to oversee the activity and progress of the Centre of Expertise (COE) on Child Sexual Abuse and Exploitation. In spring 2017, CPS was involved in workshops scoping the scale and nature of abuse and exploring options for gathering information and data across government and NGOs.
- The CPS is a core participant in five strands of the Independent Inquiry into Child Sexual Abuse. We have provided material and witness statements and engage with it on a regular basis.
- The National Child Sexual Abuse Review Panel is a joint Police and CPS initiative. The panel considers whether an allegation of child sexual abuse should be reinvestigated by the police, or whether the prosecution decision should be reviewed by the CPS. Between 1 April 2016 and 31 March 2017, 51 referrals were received.
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68 The COE was set up by Barnardo’s and Metropolitan University Child and Woman Sexual Abuse Unit. 69 The Child Sexual Abuse Review Panel looks again at cases where a person is concerned that they have made previous allegations of being a victim of a sexual offence when they were under the age of 18, and the police or CPS decided that no action should be taken at the time, but the person is not satisfied that the original allegations were dealt with appropriately. • Prosecutors have been encouraged to consider all available charges when considering a prosecution of gangs, including those which might be available under the Modern Slavery Act 2015. These may be particularly appropriate where there has been deliberate targeting, recruitment and significant exploitation of young and vulnerable people.
• A number of local initiatives have been identified as good practice throughout 2016–17, for example: o Child sexual exploitation partnerships were set up in CPS Cymru/Wales and CPS North West. o CPS London is involved in the development of the Children’s House70, for opening in 2018.
Next steps
• The internal CSA group will continue to meet on a quarterly basis bringing together CPS area leads to discuss best practice and emerging issues, such as internet vigilantes.
• A stakeholder forum on child sexual abuse will be considered which will include addressing issues related to boys as well as girls.
• The legal guidance on child sexual abuse will be updated in 2017 to include: o internet vigilantes and child sexual abuse cases, which arise out of the on-line grooming of children; o sexual communications with a child; o amendments to the definition of Child Sexual Exploitation to include streaming or otherwise transmitting an image of a child.
• Work is also underway looking at the introduction of the streamlined forensic approach to low level IIOC offences and the sharing of best practice.
• The Sentencing Council has published overarching principles and offence specific guidelines for sexual offences: Sentencing Children and Young People. These came into effect from June 2017.
• The CPS will continue to work with the Centre of Expertise to further explore child sexual abuse and exploitation issues to help further improve prosecutions.
• Any updates of legal guidance, training and case studies for prosecutors will include details of the experience of male victims to help challenge myths and stereotypes and provide details of any support services for male victims.
• A Youth RASSO module has been distributed to CPS Areas for training of RASSO staff in relation to specific issues involving Youths in RASSO cases.
Child abuse data
Prosecutors are required to flag all cases of child abuse; with those of CSA being identified according to any sexual offence flagged as child abuse. Recent reports of sexual abuse that occurred in the past,
70Led by NHS England using funding obtained by MOPAC from the Home Office Transformation Fund. when the victim was under 18 years of age, are recorded as child sexual abuse, regardless of the age of the victim at the time the report is made.
Data provided below relates to all child abuse defendants and victims, irrespective of gender, with further details of gender where available. Child sexual abuse data reported here will overlap with that in the Rape and Sexual Offence sections.
- The volume of child abuse referrals from the police increased from 13,282 in 2015–16 to 13,310 in 2016–17 – an increase of 28 referrals and the highest level ever recorded.
- 8,974 of these referrals were charged, the highest volume recorded, a rise of 85 defendants from 8,889 in 2015–16. 67.4% of referrals were charged, a slight rise from 66.9% in the previous year.
- The volume of prosecutions completed rose from 11,130 in 2015–16 to 11,793 in 2016–17 – a rise of 663 (6.0%), reaching the highest volume recorded.
- The volume of convictions in overall child abuse rose from 8,439 in 2015–16 to 8,999 in 2016–17 – the highest volume ever recorded and a rise of 560 (6.6%) from the previous year. 76.3% of prosecutions resulted in a conviction in 2015–16 a rise of 0.5ppt from the previous year and the highest rate recorded.
- There were 37 homicides flagged as child abuse with 89.2% conviction rate; there were 3,213 offences against the persons flagged as child abuse with 72.6% conviction rate.
- Child sexual abuse offence prosecutions completed in 2016–17 rose from 6,217 to 7,181 – a rise in volume of 964 (15.5%). Convictions rose from 4,643 to 5,374, also the highest volume ever recorded and a rise of 731 (15.7%), alongside a steady conviction rate of 74.8% in 2016–17.
- 2,122 (29.6%) of child sexual abuse offence prosecutions were flagged as both child abuse and rape. Of these prosecutions, a conviction was obtained in 1,412 cases – the highest volume ever recorded and representing a 66.5% conviction rate.
- Of the child sexual abuse offence prosecutions where the rape flag was not applied, (5,059 or 70.4%), a conviction was obtained in 3,962 cases – the highest volume ever recorded and representing a 78.3% conviction rate.
Table 10a: Child abuse prosecutions – Total child abuse
| | 2010 - 11 | 2011 - 12 | 2012 - 13 | 2013 - 14 | 2014 - 15 | 2015 - 16 | 2016 - 17 | |----------|-----------|-----------|-----------|-----------|-----------|-----------|-----------| | Volume | % | Volume | % | Volume | % | Volume | % | | Convictions | 6,855 | 74.2% | 6,444 | 75.1% | 5,755 | 76.1% | 6,096 | 76.2% | 7,469 | 74.4% | 8,439 | 75.8% | 8,999 | 76.3% | | Unsuccessful | 2,380 | 25.8% | 2,137 | 24.9% | 1,803 | 23.9% | 1,902 | 23.8% | 2,576 | 25.6% | 2,691 | 24.2% | 2,794 | 23.7% | | Total | 9,235 | 100% | 8,581 | 100% | 7,558 | 100% | 7,998 | 100% | 10,045 | 100% | 11,130 | 100% | 11,793 | 100% |
71Information is available from the Case Management System (CMS) to show the number of prosecuted defendants, flagged as child abuse, and whose principal offence was categorised as sexual offences. Table 10b: Child abuse prosecutions – Sexual Offences
| Year | Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | Volume | % | |--------|--------|-----|--------|-----|--------|-----|--------|-----|--------|-----|--------|-----| | 2010 - 11 | 3,551 | 74.1% | 3,530 | 75.8% | 3,070 | 75.8% | 3,344 | 76.5% | 3,975 | 73.8% | 4,643 | 74.7% | | 2011 - 12 | 1,243 | 25.9% | 1,125 | 24.2% | 981 | 24.2% | 1,027 | 23.5% | 1,412 | 26.2% | 1,574 | 25.3% | | 2012 - 13 | 4,794 | 4,655 | 4,051 | 4,371 | 5,387 | 6,217 | 7,181 | | | | | |
- The defendant was male in:
- 90.6% of child abuse prosecutions (0.2% of defendants did not have gender recorded)
- 56.8% of homicide prosecutions (21 out of 37) – the gender of all defendants was recorded;
- 73.2% of offences against the person (2,346 out of 3,205 defendants where gender was recorded – 99.8% recorded); and
- 98.1% of sexual offences (7,026 out of 7,163 defendants where gender was recorded – 99.7% recorded). There were more male defendants than in 2015–16.
- Victim data(^{72}), from the Witness Management System showed that 13,034 victims of child abuse were recorded – 7,441 were female and 2,559 were male (there were 3,034 victims where gender was not recorded). The recording of victim gender (at 76.7%) is not robust enough to include gender proportions in this report.
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(^{72})Gender of victims is only available for child abuse victims overall and not broken down into homicide, offences against the person and sexual abuse. Human trafficking and modern slavery
Introduction
The CPS is working with a range of investigative, prosecutorial and governmental partners to improve the domestic and international response to modern slavery in support of the Prime Minister’s Modern Slavery Task Force.
The CPS International Justice and Organised Crime Division provide capacity building support in priority countries (including the 2016–17 deployment of a Criminal Justice Advisor to Nigeria). The CPS Proceeds of Crime Division restrains, confiscates and realises the assets of those convicted of modern slavery offences. Prosecutors assist international colleagues to enforce assets on behalf of the CPS, through asset sharing agreements, as well as helping them develop their own capacity for asset recovery. This is important in ensuring that assets are confiscated to support reparation orders for victims.
In 2016–17 the volume of referrals rose to the highest ever recorded, with a steady volume of charged defendants and completed prosecutions. The volume and rate of convictions fell slightly.
Summary of CPS activity
- A network of over 30 Specialist Prosecutors, based overseas, continued to help improve mutual legal assistance and extradition co-operation. They worked with authorities in those countries to improve their local capability to counter serious crime affecting the UK.
- The CPS criminal justice advisors, based overseas on Organised Immigration Crime Taskforce, assisted with casework and investigations, effectively disrupting trafficking cases.
- The CPS continues to provide resources on modern slavery to support prosecutors and share good practice on the CPS online knowledge hub.
- The CPS participated in 18 national and local law enforcement training events during 2016–17 to improve the knowledge of powers and legislation, share best practice and help drive up case referrals.
- Police and prosecutors also worked closely with law enforcement and prosecutors overseas in Joint Investigation Teams (JITs) which resulted in prosecutions not only in the UK, but also in other countries – often the source countries – which will not be reflected in CPS data.
- The CPS continued to work closely with prosecutors, officials and national policing leads from Northern Ireland and Scotland to ensure a consistent approach and a more robust UK prosecution response in these cases. The UK participated in a significant number of joint investigations for trafficking within the EU.
- Slavery and Trafficking Prevention Orders and Risk Orders, which were introduced in the Modern Slavery Act, were used increasingly and effectively against convicted defendants. They were extended in some cases to restrictions overseas where defendants continued to pose risks on deportation. A number of local initiatives have been identified as good practice throughout 2016–17, for example:
- CPS Cymru-Wales is part of the Wales leadership group linking to the NCA and Home Office. CPS Cymru-Wales also chairs the Modern Slavery training group.
- CPS East Midlands successfully prosecuted a large scale human trafficking case with multiple victims.
Next steps
- National mandatory training on modern slavery for designated prosecutors working in Complex Casework Units is being developed, to build further resilience.
- A national Police/CPS Modern Slavery Joint Investigation Team meeting is being held in September 2017 involving Europol, Eurojust and Romanian Authorities.
- Legal guidance, training and case studies for prosecutors will be updated to include details of the experience of male victims to help challenge myths and stereotypes and provide details of support services for male victims.
- The CPS has a significant role to play in supporting victims who are giving evidence in trials, many of whom have extreme vulnerabilities. Pre-recorded cross-examination of victims of trafficking and slavery (s.28 YJCEA 1999) is to be piloted in three pilot sites of Liverpool, Leeds and Kingston from September 2017.
Human trafficking and modern slavery data
The small number of cases indicates the need for caution in interpreting this data in relation to these offences.
- The volume of human trafficking referrals from the police rose from 246 in 2015–16 to 271 in 2016–17, the highest volume ever recorded. 188 (69.4%), of these referrals were charged; similar to the previous year where 189 referrals were charged, however a fall from 76.8% charged.
- The volume of human trafficking prosecutions completed in 2016–17 stayed steady at 295 as in 2015–16.
- Of the 295 defendants prosecuted, 251 defendants were male, 44 defendants were female. All gender of defendants was recorded. 85.1% were male and 14.9% female. The majority of defendants (68.8%) were aged 25-59 years.
- In respect of data extracted from the WMS, 232 victims were recorded. Of all victims, 91 were female, 47 were male and the gender of 94 was not recorded. The recording of victim gender at 59.5% was not robust enough to include gender proportions in this report. Data from the National Referral Mechanism is provided below to add further information on the gender patterns of potential victims.
- The volume of human trafficking convictions fell from 192 in 2015–16 to 181 in 2016–17. The conviction rate fell from 65.1% to 61.4% over the same period.
- Convictions after contest (exclusive of mixed pleas) fell from 62.0% in 2015–16 to 56.0%. • 65 cases (22.0%) were unsuccessful due to a prosecution being dropped. There was a rise in unsuccessful outcomes due to victim issues (from 31.1% in 2015–16 to 43.9% in 2016–17).
• As cases often involve multi-defendants and numerous victims, any spikes in casework trends could be attributed to one or two substantial cases involving significant numbers of defendants/victims.
Table 12: Completed human trafficking prosecutions by outcome
| | 2010 - 11 | 2011 - 12 | 2012 - 13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |----------|-----------|-----------|-----------|----------|----------|----------|----------| | Volume | % | Volume | % | Volume | % | Volume | % | | Convictions | 73 | 70.9% | 94 | 66.2% | 99 | 71.2% | 155 | 68.6% | 130 | 69.5% | 192 | 65.1% | 181 | 61.4% | | Unsuccessful | 30 | 29.1% | 48 | 33.8% | 40 | 28.8% | 71 | 31.4% | 57 | 30.5% | 103 | 34.9% | 114 | 38.6% | | Total | 103 | 142 | 139 | 226 | 187 | 295 | 295 |
• Table 13 below outlines human trafficking offences, for which prosecutions were commenced, from 2010–11 to 2016–17. In 2016–17, in total there were 46 offences of labour exploitation, similar to 49 the previous year and 162 offences of trafficking for sexual exploitation, ss.57, 58, 59, 59a, Sexual Offences Act 2003, a fall from 248 in the previous year. However the other offences in the table are linked to either labour exploitation or sexual exploitation.
73The table does not include conspiracy to commit any of the offences. 74Under s.71 Coroner’s and Justice Act 2009 and s.1 Modern Slavery Act 2015 75Perpetrators may also be prosecuted and convicted for serious offences other than trafficking and slavery, where there are links to trafficking, including, for example, conspiracy to traffic, false imprisonment, controlling prostitution for gain and rape. Alternative offences may be more representative of the actual offending and carry more serious penalties.
### Table 13: Human trafficking offences
| Act and Section | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |-----------------|---------|---------|---------|---------|---------|---------|---------| | Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 { 4 } | 21 | 37 | 26 | 32 | 60 | 68 | 29 | | Trafficking for labour and other exploitation | | | | | | | | | Coroners and Justice Act 2009 { 71 } | 0 | 15 | 20 | 18 | 31 | 40 | 23 | | To hold another in slavery or servitude or require them to perform forced or compulsory labour | | | | | | | | | Modern Slavery Act 2015 { 1 } | 0 | 0 | 0 | 0 | 0 | 9 | 23 | | Slavery, servitude and forced or compulsory labour | | | | | | | | | Modern Slavery Act 2015 { 2 } | 0 | 0 | 0 | 0 | 0 | 5 | 73 | | Human trafficking | | | | | | | | | Modern Slavery Act 2015 { 4 } | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Committing an offence with intent to commit trafficking offence | | | | | | | | | Sexual Offences Act 2003 { 57 } | 41 | 45 | 24 | 26 | 41 | 70 | 17 | | Trafficking into the UK for sexual exploitation | | | | | | | | | Sexual Offences Act 2003 { 58 } | 55 | 61 | 16 | 94 | 31 | 72 | 105 | | Trafficking within the UK for sexual exploitation | | | | | | | | | Sexual Offences Act 2003 { 59 } | 0 | 7 | 3 | 8 | 0 | 9 | 5 | | Trafficking out of the UK for sexual exploitation | | | | | | | | | Sexual Offences Act 2003 { 59A } | 0 | 0 | 0 | 12 | 13 | 97 | 35 | | Trafficking into, out of and within the UK for sexual exploitation | | | | | | | | | TOTAL HUMAN TRAFFICKING OFFENCES | 117 | 165 | 89 | 190 | 176 | 370 | 312 |
- For trends in trafficking, CPS also has access to the National Referral Mechanism (NRM) published data, based on potential victims referred to them. Data is available through the National Crime Agency website. This data also allows exploration of the gender of potential victims.
The NRM in England and Wales received slightly more referrals of cases in 2016 with 1,844 female victims compared with 1,773 male victims. The data indicates differences in gender and trends under different types of claimed exploitation of trafficking and modern slavery:
- From 2015 to 2016, labour exploitation of men and boys rose from 931 to 1254 potential victims (a rise of 34.7%).
- From 2015 to 2016, sexual exploitation of women and girls rose from 946 to 1164 potential victims (a rise of 23.0%); domestic servitude of women and girls fell from 314 to 310 potential victims (a fall of 1.3%).
- Of 1,705 potential female victims, 86.5% were victims of sexual exploitation or domestic servitude.
- Of the 1,450 potential male victims 86.5% were victims of labour exploitation.
- Intelligence on the increasing numbers of potential victims referred through the NRM reveals that this is not necessarily reflective of an increase in the threat posed by Modern Slavery to
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76S.59A Sexual Offences Act 2003 replaced ss.57, 58, 59 SOA 2003 in 2013–14. 77NRM Data refers to potential victims, not persons who have received a positive conclusive grounds decision that they are a victim of trafficking. 78Note there was a greater rise in the % of potential male victims of labour exploitation in 2016 (from the previous year) than potential female victims for sexual exploitation and domestic servitude – but the overall volumes were lower (1254 potential male victims of labour exploitation and 1474 potential female victims of sexual exploitation and domestic servitude). 79Of 1,705 potential female victims – i.e.1,844 excluding 139 of unknown exploitation or organ harvesting. 80Of 1,450 potential male victims – i.e.1,773 excluding 323 of unknown exploitation. the UK, but that there is better identification of victims referred. A large number of trafficking referrals into the NRM claim exploitation outside of the UK and therefore fall outside of our jurisdiction to prosecute. Prostitution
Introduction
The CPS charging practice is to tackle those who recruit others into prostitution for their own gain or someone else’s, by charging offences of causing, inciting or controlling prostitution for gain, or trafficking for sexual exploitation. In addition to attracting significant sentences, these offences also provide opportunities for seizure of assets through Proceeds of Crime Act orders and the application of Trafficking Prevention Orders.
For those offences which are summary only – loitering and soliciting, kerb crawling, paying for sexual services and advertising prostitution, the police retain the discretion not to arrest or report those suspected of committing an offence, or they can charge the offence without reference to a prosecutor, regardless of whether the suspect intends to plead guilty or not guilty.
In 2016–17 the CPS prosecuted those who force others into prostitution, who exploit, abuse and harm them and our joint approach with the police, with the support of other agencies, was to help those involved in prostitution to develop routes out.
Summary of CPS activity
- The CPS continues to work closely with the NPCC Sex Workers Working Group in development of National Policing Sex Workers Strategy with the aim of addressing strategic enforcement but also protecting vulnerable sex workers.
- During 2016–17 the VAWG External Consultation Group was consulted on revised legal guidance on prostitution.
- A number of local initiatives have been identified as good practice throughout 2016–17, for example:
- CPS Cymru/Wales is part of the Sex Worker Support group, they are involved in the Welsh government framework and in research in Swansea.
Next steps
- The revised Prostitution legal guidance will be published in 2017–18.
- Legal guidance, training and case studies for prosecutors will be updated to include details of the experience of male victims to help challenge myths and stereotypes and provide details of support services for male victims.
Prostitution data
- In 2016–17 there were 99 prosecutions commenced for controlling prostitution compared to 100 in the previous year. The number of kerb crawling prosecutions commenced fell from 153 to 148. Brothel keeping offences fell from 111 to 90. Prosecutions commenced for
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81Note CPS prostitution data is only available from the offence-based data system and therefore cannot include data on police referrals, charging and outcomes. Offence data is also not available by gender of defendant or victim. offences of advertising prostitution (through distribution of cards in public places) fell from 37 to 25.
- The number of prosecutions started that related to street prostitution fell from 163 to 127.
Table 14: VAWG crime prosecutions: prostitution offences, 2010–11 to 2016–17
| A Control of prostitution | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |---------------------------|---------|---------|---------|---------|---------|---------|---------| | Sexual offences act (2003) (52) | 24 | 19 | 11 | 9 | 25 | 13 | 7 | | Sexual offences act (2003) (53) | 87 | 61 | 39 | 49 | 58 | 87 | 92 | | **TOTAL** | **111** | **80** | **50** | **58** | **83** | **100** | **99** |
| B Brothel keeping | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |-------------------|---------|---------|---------|---------|---------|---------|---------| | Sexual offences act 1956 (33) | 48 | 35 | 31 | 19 | 19 | 28 | 24 | | Sexual offences act 1956 (33A of and schedule 2) | 106 | 92 | 54 | 31 | 72 | 75 | 63 | | Sexual offences act 1956 (34) | 0 | 1 | 2 | 0 | 1 | 1 | 1 | | Sexual offences act (35(1)) | 3 | 3 | 1 | 2 | 2 | 2 | 1 | | Sexual offences act (36) | 0 | 2 | 1 | 3 | 2 | 3 | 0 | | Sexual Offences Act 2003 (53A) | 40 | 7 | 8 | 0 | 3 | 2 | 1 | | **TOTAL** | **197** | **140** | **97** | **55** | **99** | **111** | **90** |
| C Kerb crawling | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |-----------------|---------|---------|---------|---------|---------|---------|---------| | Sexual offences act 1985 (1(1)(a)) | 161 | 7 | 2 | 0 | 0 | 0 | 0 | | Sexual offences act 1985 (1(1)(b)) | 5 | 0 | 0 | 0 | 0 | 0 | 0 | | Sexual offences act 1985 (2(1)) | 38 | 2 | 1 | 0 | 0 | 1 | 0 | | Sexual offences act 2003 (51A) | 123 | 305 | 230 | 237 | 227 | 152 | 148 | | **TOTAL** | **327** | **314** | **233** | **237** | **227** | **153** | **148** |
| D Advertising prostitution | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |---------------------------|---------|---------|---------|---------|---------|---------|---------| | Criminal Justice and Police Act 2001 (46) | 331 | 149 | 80 | 91 | 37 | 37 | 25 |
| E Street Prostitution | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |-----------------------|---------|---------|---------|---------|---------|---------|---------| | Street Offences Act 1959 (1) | 586 | 484 | 396 | 553 | 456 | 163 | 127 | Pornography and obscenity
Introduction
In 2016–17 offences related to child sexual abuse were streamlined to improve the efficiency of prosecutions. There was a rise in obscenity offences prosecuted, with a higher proportion of indecent or grossly offensive prosecutions related to domestic abuse. Prosecutions for disclosing private sexual images without consent and possession of an extreme pornographic image portraying rape/assault by penetration increased.
Summary of CPS activity
- The CPS published revised guidelines for prosecuting indecent images of children (IIOC) using the new Streamlined Forensic Reports, which in addition to improving the timelines of charging decisions, removed the need for lawyers and judges to view the images of children in certain cases, prior to sentence.
- Section 176 of the Policing and Crime Act 2017 revised the definition of Child Sexual Exploitation set out in s.51 Sexual Offences Act 2003 to include situations where indecent images of a child are ‘streamed or otherwise transmitted’ as well as where they are recorded, making the offences more robust in the light of technological changes.
- S.67 of the Serious Crime Act 2015 (Sexual Communication with a Child) came into force on 3 April 2017. This is an either-way offence carrying a maximum sentence of 2 years’ imprisonment. The Act inserted a new section 15A (1) and (2) into the Sexual Offences Act 2003. The communication, by e-mail, text message, written note or verbally, has to be sexual or intended to encourage the child to make a communication that is sexual. The circumstances must be that the adult does not reasonably believe the child to be aged 16 years or over.
Next steps
- Any update of legal guidance, training and case studies for prosecutors will include details of the experience of male victims to help challenge myths and stereotypes and provide details of any support services for male victims.
Pornography and obscenity data
- From 1 April 2016 the CPS, police and judiciary jointly adopted a new approach to the prosecution of indecent image offences in relation to certain offenders. The police use the Child Abuse Image Database (CAID) and provide a Streamline Forensic Report (SFR) setting out examples of images from each sentencing category (typically three). This still allows the Judge sufficient sentencing powers and information about the offending. It enables low risk cases to be progressed more quickly, meaning more offenders can be prosecuted in shorter time. Revised CPS legal guidance on IIOC was published in July 2016.
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82Note CPS pornography and obscenity data is only available from the offence-based data system and therefore cannot include data on police referrals, charging and outcomes. • The number of offences fell from 22,545 in 2015–16 to 20,803 in 2016–17, a fall of 7.7%. The CPS is not de-prioritising prosecution of these offences, rather we are able to use fewer offences per defendant prosecution, following the revised guidelines relating to the streamlining of images in prosecutions. There was a rise in the prosecutions commenced of the offence of the possession of a prohibited photograph of a child.
• Offence data is not available by gender of defendant or victim.
Table 15: Child abuse image offences, 2010–11 to 2016–17
| Offence Description | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |------------------------------------------------------------------------------------|---------|---------|---------|---------|---------|---------|---------| | Criminal Justice Act 1988 (160) - Possession of an indecent photograph of a child | 4,543 | 3,885 | 3,849 | 4,265 | 4,820 | 5,248 | 5,141 | | Coroners and Justice Act 2009 (62) - Possession of a prohibited image of a child | 21 | 179 | 394 | 534 | 631 | 625 | 971 | | Sexual exploitation of children through photographs of which: | 16,851 | 15,599 | 14,694 | 15,574 | 16,129 | 16,672 | 14,691 | | Protection of Children Act 1978 (1 (1)(a)) - Making an indecent photograph of a child | 15,768 | 14,570 | 13,596 | 14,443 | 14,518 | 14,930 | 13,324 | | Protection of Children Act 1978 (1 (1)(b)) - Distributing an indecent photograph of a child | 670 | 695 | 803 | 907 | 1,318 | 1,422 | 1,155 | | Protection of Children Act 1978 (1 (1)(c)) - Showing indecent photographs of children | 410 | 333 | 294 | 224 | 292 | 319 | 209 | | Protection of Children Act 1978 (1(1)(d)) – publishing an advertisement likely to suggest that the advertiser distributes or shows indecent photographs of children | 3 | 1 | 1 | 0 | 1 | 1 | 3 |
Table 16 below outlines CPS data on obscenity offences. There was a rise of 16.0% in obscenity offences prosecuted from 6,940 in 2015–16 to 8,049 in 2016–17.
Table 16: Obscenity offences, 2010–11 to 2016–17
| Offence Description | 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | 2016–17 | |------------------------------------------------------------------------------------|---------|---------|---------|---------|---------|---------|---------| | Malicious Communications Act 1988 Sections (1 (1)(a) & (1)(b)) - Indecent or grossly offensive material | 1,273 | 1,301 | 1,250 | 1,210 | 1,586 | 2,094 | 2,634 | | Obscene publications Act 1959 (2 (1) ) - Obscene publications | 71 | 76 | 34 | 33 | 88 | 26 | 36 | | Communications Act 2003 (127 (1)(a), (1)(b) & (3))Grossly offensive or indecent communications | 1,869 | 1,924 | 1,909 | 1,190 | 1,680 | 2,026 | 2,227 |
83 s.62 of the Coroners and Justice Act 2009 (‘the Act’) created a new offence of possession of a prohibited image of a child, punishable by up to three years’ imprisonment. This offence came into force on the 6 April 2010. The majority of offences under the Malicious Communications Act 1988 (indecent or grossly offensive material) and Communication Act 2003 (grossly offensive or indecent communications) were DA-related (53.2% and 65.4% respectively).
**Disclosing Private Sexual Images without Consent**
- There were 465 offences starting prosecution in 2016–17 of the criminal offence of disclosing private sexual photographs and films without the consent of an individual who appears in them, with intent to cause that individual distress. This was a rise from 205 in 2015–16. These cases involving so-called 'revenge pornography' may be considered under the social media legal guidelines which have been updated to reflect this new offence. The offence carries a maximum prison sentence of two years on conviction.
**Possession of an extreme pornographic image portraying rape/assault by penetration**
- There were 24 prosecutions commenced in relation to Criminal Justice and Immigration Act 2008 (63(1), (7A), the offence of possession of an extreme pornographic image portraying rape/assault by penetration in 2016–17; a rise from three in 2015–16. The offence was implemented in April 2015.
**Paedophile manuals**
- From May 2015 s.69 of the Serious Crime Act 2015 created a new offence of possession of a paedophile manual, which is any item that contains advice or guidance about abusing children sexually, including grooming. 14 offences commenced prosecution in 2016–17, compared with one in the previous year.
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84 Only a sub-section of s.63 data was reported in previous VAWG Crime Reports 2007-08 to 2010–11 – data was amended since then to incorporate all offences under s.63.
85 The offence contrary to s.33 of the Criminal Justice and Courts Act 2015 has an overlap with s.1 of the Malicious Communication Act 1988, s.127 of the Communications Act 2003 and s.2 and s.4 of the Harassment Act 1997. ANNEX 1 PROSECUTIONS BY CPS AREA AND POLICE FORCE AREA
Annex 1 provides detailed data by CPS Area and police force areas on domestic abuse, rape and sexual offences.
ANNEX 2 MINISTRY OF JUSTICE DATA ON STALKING, HARASSMENT, RESTRAINING ORDERS AND RAPE NATIONAL STATISTICS
Annex 2 provides the MoJ data on stalking, harassment, restraining orders and Rape National Statistics to contextualise CPS data.
GLOSSARIES GLOSSARY OF TERMS AND ACRONYMS
The Glossaries provide definitions of terms used within the report and acronyms. Annex 1: Prosecutions by Area
Data for the 13 CPS Areas will not fully align with the data for the constituent police forces as there will be a small number of cross-border prosecutions between Areas as well as data from the BTP.
VAWG prosecutions by CPS Area:
| Area | Convictions | Unsuccessful | Total | |-----------------------------|-------------|--------------|--------| | | Volume | % | Volume | % | | | Cymru Wales | 5,598 | 75.6% | 1,811 | 24.4%| 7,409 | | East of England | 5,902 | 78.6% | 1,607 | 21.4%| 7,509 | | East Midlands | 6,682 | 77.8% | 1,908 | 22.2%| 8,590 | | London | 11,383 | 66.0% | 5,871 | 34.0%| 17,254 | | Merseyside & Cheshire | 5,157 | 81.0% | 1,213 | 19.0%| 6,370 | | North East | 4,609 | 74.3% | 1,595 | 25.7%| 6,204 | | North West | 8,951 | 79.4% | 2,323 | 20.6%| 11,274 | | South East | 5,068 | 74.6% | 1,729 | 25.4%| 6,797 | | South West | 4,454 | 76.9% | 1,341 | 23.1%| 5,795 | | Thames & Chiltern | 4,649 | 71.7% | 1,836 | 28.3%| 6,485 | | Wessex | 3,984 | 83.6% | 783 | 16.4%| 4,767 | | West Midlands | 9,341 | 74.6% | 3,177 | 25.4%| 12,518 | | Yorkshire & Humberside | 8,787 | 77.8% | 2,511 | 22.2%| 11,298 | | **Total** | **84,565** | **75.3%** | **27,705** | **24.7%** | **112,270** | | Police Force Area | Convictions | Unsuccessful | Total | |---------------------------|-------------|--------------|--------| | | Volume | % | Volume | % | | | Avon & Somerset | 2,229 | 76.4% | 690 | 23.6%| 2,919 | | Bedfordshire | 649 | 72.8% | 243 | 27.2%| 892 | | British Transport Police | 316 | 78.8% | 85 | 21.2%| 401 | | Cambridgeshire | 1,095 | 79.2% | 288 | 20.8%| 1,383 | | Cheshire | 2,083 | 79.8% | 527 | 20.2%| 2,610 | | Cleveland | 1,128 | 75.4% | 369 | 24.6%| 1,497 | | Cumbria | 855 | 85.1% | 150 | 14.9%| 1,005 | | Derbyshire | 1,575 | 79.5% | 407 | 20.5%| 1,982 | | Devon & Cornwall | 1,666 | 78.6% | 454 | 21.4%| 2,120 | | Dorset | 1,102 | 84.8% | 197 | 15.2%| 1,299 | | Durham | 990 | 80.7% | 237 | 19.3%| 1,227 | | Dyfed-Powys | 600 | 78.9% | 160 | 21.1%| 760 | | Essex | 2,572 | 76.7% | 780 | 23.3%| 3,352 | | Gloucestershire | 564 | 73.9% | 199 | 26.1%| 763 | | Greater Manchester | 5,609 | 79.0% | 1,489 | 21.0%| 7,098 | | Gwent | 819 | 80.5% | 199 | 19.5%| 1,018 | | Hampshire | 2,036 | 82.5% | 433 | 17.5%| 2,469 | | Hertfordshire | 1,353 | 74.4% | 466 | 25.6%| 1,819 | | Humberside | 1,573 | 82.5% | 333 | 17.5%| 1,906 | | Kent | 2,390 | 74.5% | 820 | 25.5%| 3,210 | | Lancashire | 2,503 | 78.6% | 683 | 21.4%| 3,186 | | Leicestershire | 1,192 | 79.6% | 305 | 20.4%| 1,497 | | Lincolnshire | 1,102 | 79.6% | 283 | 20.4%| 1,385 | | London Police | 11,360 | 65.9% | 5,871 | 34.1%| 17,231 | | Merseyside | 3,065 | 81.7% | 686 | 18.3%| 3,751 | | Norfolk | 1,309 | 80.4% | 319 | 19.6%| 1,628 | | Northamptonshire | 970 | 77.2% | 287 | 22.8%| 1,257 | | Northumbria | 2,487 | 71.6% | 987 | 28.4%| 3,474 | | North Wales | 1,244 | 78.2% | 347 | 21.8%| 1,591 | | North Yorkshire | 916 | 78.8% | 247 | 21.2%| 1,163 | | Nottinghamshire | 1,833 | 74.5% | 628 | 25.5%| 2,461 | | South Wales | 2,927 | 72.6% | 1,107 | 27.4%| 4,034 | | South Yorkshire | 1,886 | 73.7% | 673 | 26.3%| 2,559 | | Staffordshire | 1,820 | 73.0% | 674 | 27.0%| 2,494 | | Suffolk | 934 | 81.0% | 219 | 19.0%| 1,153 | | Surrey | 1,100 | 73.4% | 398 | 26.6%| 1,498 | | Sussex | 1,570 | 75.4% | 512 | 24.6%| 2,082 | | Thames Valley | 2,643 | 70.2% | 1,124 | 29.8%| 3,767 | | Warwickshire | 625 | 78.7% | 169 | 21.3%| 794 | | West Mercia | 1,722 | 78.7% | 467 | 21.3%| 2,189 | | West Midlands | 4,867 | 73.2% | 1,780 | 26.8%| 6,647 | | West Yorkshire | 4,413 | 77.8% | 1,259 | 22.2%| 5,672 | | Wiltshire | 867 | 84.9% | 154 | 15.1%| 1,021 | | **Total** | **84,559** | **75.3%** | **27,705** | **24.7%** | **112,264** |
### DA prosecutions by CPS Area:
| Area | Convictions | Unsuccessful | Total | |-----------------------------|-------------|--------------|--------| | | Volume | % | Volume | % | | | Cymru Wales | 4,832 | 75.9% | 1,534 | 24.1%| 6,366 | | East of England | 4,972 | 78.8% | 1,341 | 21.2%| 6,313 | | East Midlands | 5,646 | 77.6% | 1,629 | 22.4%| 7,275 | | London | 9,377 | 65.6% | 4,909 | 34.4%| 14,286 | | Merseyside & Cheshire | 4,471 | 82.1% | 972 | 17.9%| 5,443 | | North East | 3,866 | 74.7% | 1,312 | 25.3%| 5,178 | | North West | 7,484 | 80.1% | 1,857 | 19.9%| 9,341 | | South East | 4,218 | 75.9% | 1,340 | 24.1%| 5,558 | | South West | 3,607 | 76.6% | 1,100 | 23.4%| 4,707 | | Thames & Chiltern | 3,838 | 72.1% | 1,482 | 27.9%| 5,320 | | Wessex | 3,299 | 83.9% | 633 | 16.1%| 3,932 | | West Midlands | 7,715 | 75.2% | 2,548 | 24.8%| 10,263 | | Yorkshire & Humberside | 7,528 | 78.4% | 2,080 | 21.6%| 9,608 | | **Total** | **70,853** | **75.7%** | **22,737** | **24.3%** | **93,590** | | Police Force Area | Convictions | Unsuccessful | Total | |---------------------------|-------------|--------------|-------| | | Volume | % | Volume | % | | | Avon & Somerset | 1,842 | 76.2% | 576 | 23.8%| 2,418 | | Bedfordshire | 533 | 73.7% | 190 | 26.3%| 723 | | British Transport Police | 139 | 85.3% | 24 | 14.7%| 163 | | Cambridgeshire | 898 | 79.0% | 239 | 21.0%| 1,137 | | Cheshire | 1,813 | 81.3% | 418 | 18.7%| 2,231 | | Cleveland | 935 | 75.4% | 305 | 24.6%| 1,240 | | Cumbria | 702 | 85.2% | 122 | 14.8%| 824 | | Derbyshire | 1,342 | 79.5% | 346 | 20.5%| 1,688 | | Devon & Cornwall | 1,301 | 78.2% | 362 | 21.8%| 1,663 | | Dorset | 969 | 85.2% | 168 | 14.8%| 1,137 | | Durham | 826 | 81.2% | 191 | 18.8%| 1,017 | | Dyfed-Powys | 522 | 81.7% | 117 | 18.3%| 639 | | Essex | 2,226 | 76.8% | 673 | 23.2%| 2,899 | | Gloucestershire | 472 | 74.1% | 165 | 25.9%| 637 | | Greater Manchester | 4,731 | 80.1% | 1,174 | 19.9%| 5,905 | | Gwent | 704 | 81.3% | 162 | 18.7%| 866 | | Hampshire | 1,630 | 82.7% | 342 | 17.3%| 1,972 | | Hertfordshire | 1,117 | 74.1% | 390 | 25.9%| 1,507 | | Humberside | 1,348 | 84.4% | 250 | 15.6%| 1,598 | | Kent | 2,099 | 75.0% | 698 | 25.0%| 2,797 | | Lancashire | 2,062 | 78.6% | 561 | 21.4%| 2,623 | | Leicestershire | 995 | 80.6% | 240 | 19.4%| 1,235 | | Lincolnshire | 939 | 78.7% | 254 | 21.3%| 1,193 | | London Police | 9,360 | 65.6% | 4,910 | 34.4%| 14,270| | Merseyside | 2,651 | 82.7% | 555 | 17.3%| 3,206 | | Norfolk | 1,059 | 80.8% | 252 | 19.2%| 1,311 | | Northamptonshire | 774 | 76.6% | 236 | 23.4%| 1,010 | | Northumbria | 2,104 | 72.1% | 814 | 27.9%| 2,918 | | North Wales | 1,017 | 77.8% | 291 | 22.2%| 1,308 | | North Yorkshire | 726 | 79.2% | 191 | 20.8%| 917 | | Nottinghamshire | 1,591 | 74.2% | 554 | 25.8%| 2,145 | | South Wales | 2,584 | 72.8% | 965 | 27.2%| 3,549 | | South Yorkshire | 1,617 | 74.0% | 568 | 26.0%| 2,185 | | Staffordshire | 1,506 | 73.2% | 552 | 26.8%| 2,058 | | Suffolk | 798 | 81.9% | 176 | 18.1%| 974 | | Surrey | 895 | 74.3% | 310 | 25.7%| 1,205 | | Sussex | 1,224 | 78.5% | 335 | 21.5%| 1,559 | | Thames Valley | 2,182 | 70.8% | 898 | 29.2%| 3,080 | | Warwickshire | 512 | 79.3% | 134 | 20.7%| 646 | | West Mercia | 1,352 | 79.4% | 351 | 20.6%| 1,703 | | West Midlands | 4,203 | 73.9% | 1,484 | 26.1%| 5,687 | | West Yorkshire | 3,836 | 78.2% | 1,071 | 21.8%| 4,907 | | Wiltshire | 717 | 85.4% | 123 | 14.6%| 840 | | **Total** | **70,853** | **75.7%** | **22,737** | **24.3%** | **93,590** | Rape prosecutions by CPS Area:
| Area | Convictions | Unsuccessful | Total | |-----------------------------|-------------|--------------|-------| | | Volume | % | Volume| % | | Cymru Wales | 139 | 55.4% | 112 | 44.6%| 251 | | East of England | 169 | 61.5% | 106 | 38.5%| 275 | | East Midlands | 208 | 65.0% | 112 | 35.0%| 320 | | London | 463 | 54.7% | 383 | 45.3%| 846 | | Merseyside & Cheshire | 138 | 56.8% | 105 | 43.2%| 243 | | North East | 156 | 54.7% | 129 | 45.3%| 285 | | North West | 370 | 61.6% | 231 | 38.4%| 601 | | South East | 232 | 52.7% | 208 | 47.3%| 440 | | South West | 181 | 61.1% | 115 | 38.9%| 296 | | Thames & Chiltern | 162 | 53.5% | 141 | 46.5%| 303 | | Wessex | 133 | 72.3% | 51 | 27.7%| 184 | | West Midlands | 345 | 53.6% | 299 | 46.4%| 644 | | Yorkshire & Humberside | 295 | 58.8% | 207 | 41.2%| 502 | | **Total** | **2,991** | **57.6%** | **2,199** | **42.4%** | **5,190** | | Police Force Area | Convictions | Unsuccessful | Total | |---------------------------|-------------|--------------|-------| | | Volume | % | Volume | % | | | Avon & Somerset | 86 | 59.3% | 59 | 40.7%| 145 | | Bedfordshire | 16 | 42.1% | 22 | 57.9%| 38 | | British Transport Police | 2 | 50.0% | 2 | 50.0%| 4 | | Cambridgeshire | 29 | 61.7% | 18 | 38.3%| 47 | | Cheshire | 60 | 54.5% | 50 | 45.5%| 110 | | Cleveland | 40 | 59.7% | 27 | 40.3%| 67 | | Cumbria | 29 | 76.3% | 9 | 23.7%| 38 | | Derbyshire | 49 | 68.1% | 23 | 31.9%| 72 | | Devon & Cornwall | 78 | 67.8% | 37 | 32.2%| 115 | | Dorset | 16 | 69.6% | 7 | 30.4%| 23 | | Durham | 40 | 63.5% | 23 | 36.5%| 63 | | Dyfed-Powys | 12 | 35.3% | 22 | 64.7%| 34 | | Essex | 67 | 59.8% | 45 | 40.2%| 112 | | Gloucestershire | 18 | 47.4% | 20 | 52.6%| 38 | | Greater Manchester | 222 | 58.7% | 156 | 41.3%| 378 | | Gwent | 18 | 54.5% | 15 | 45.5%| 33 | | Hampshire | 76 | 71.0% | 31 | 29.0%| 107 | | Hertfordshire | 42 | 64.6% | 23 | 35.4%| 65 | | Humberside | 50 | 52.6% | 45 | 47.4%| 95 | | Kent | 79 | 55.6% | 63 | 44.4%| 142 | | Lancashire | 121 | 64.7% | 66 | 35.3%| 187 | | Leicestershire | 33 | 53.2% | 29 | 46.8%| 62 | | Lincolnshire | 32 | 76.2% | 10 | 23.8%| 42 | | London Police | 462 | 54.7% | 382 | 45.3%| 844 | | Merseyside | 78 | 58.6% | 55 | 41.4%| 133 | | Norfolk | 46 | 61.3% | 29 | 38.7%| 75 | | Northamptonshire | 37 | 67.3% | 18 | 32.7%| 55 | | Northumbria | 75 | 48.7% | 79 | 51.3%| 154 | | North Wales | 43 | 61.4% | 27 | 38.6%| 70 | | North Yorkshire | 31 | 66.0% | 16 | 34.0%| 47 | | Nottinghamshire | 54 | 62.8% | 32 | 37.2%| 86 | | South Wales | 66 | 57.9% | 48 | 42.1%| 114 | | South Yorkshire | 62 | 52.5% | 56 | 47.5%| 118 | | Staffordshire | 55 | 43.7% | 71 | 56.3%| 126 | | Suffolk | 27 | 65.9% | 14 | 34.1%| 41 | | Surrey | 48 | 51.1% | 46 | 48.9%| 94 | | Sussex | 105 | 51.7% | 98 | 48.3%| 203 | | Thames Valley | 107 | 52.5% | 97 | 47.5%| 204 | | Warwickshire | 29 | 54.7% | 24 | 45.3%| 53 | | West Mercia | 85 | 63.0% | 50 | 37.0%| 135 | | West Midlands | 174 | 53.2% | 153 | 46.8%| 327 | | West Yorkshire | 153 | 63.2% | 89 | 36.8%| 242 | | Wiltshire | 39 | 75.0% | 13 | 25.0%| 52 | | **Total** | **2,991** | **57.6%** | **2,199** | **42.4%** | **5,190** | Sexual offence prosecutions by CPS Area:
Data for the 13 CPS Areas will not fully align with the data for the constituent police forces as there will be a small number of cross-border prosecutions between Areas as well as data from the BTP.
| Area | Convictions | Unsuccessful | Total | |-----------------------------|-------------|--------------|--------| | | Volume | % | Volume | % | | | Cymru Wales | 627 | 79.2% | 165 | 20.8%| 792 | | East of England | 761 | 82.6% | 160 | 17.4%| 921 | | East Midlands | 828 | 83.2% | 167 | 16.8%| 995 | | London | 1,543 | 72.7% | 579 | 27.3%| 2,122 | | Merseyside & Cheshire | 548 | 80.1% | 136 | 19.9%| 684 | | North East | 587 | 79.2% | 154 | 20.8%| 741 | | North West | 1,097 | 82.4% | 235 | 17.6%| 1,332 | | South East | 618 | 77.3% | 181 | 22.7%| 799 | | South West | 666 | 84.1% | 126 | 15.9%| 792 | | Thames & Chiltern | 649 | 75.3% | 213 | 24.7%| 862 | | Wessex | 552 | 84.8% | 99 | 15.2%| 651 | | West Midlands | 1,281 | 79.5% | 330 | 20.5%| 1,611 | | Yorkshire & Humberside | 964 | 81.1% | 224 | 18.9%| 1,188 | | **Total** | **10,721** | **79.5%** | **2,769** | **20.5%** | **13,490** | | Police Force Area | Convictions | % | Unsuccessful | % | Total | |---------------------------|-------------|-----|--------------|-----|-------| | Avon & Somerset | 301 | 84.6% | 55 | 15.4% | 356 | | Bedfordshire | 100 | 76.3% | 31 | 23.7% | 131 | | British Transport Police | 175 | 74.8% | 59 | 25.2% | 234 | | Cambridgeshire | 168 | 84.4% | 31 | 15.6% | 199 | | Cheshire | 210 | 78.1% | 59 | 21.9% | 269 | | Cleveland | 153 | 80.5% | 37 | 19.5% | 190 | | Cumbria | 124 | 86.7% | 19 | 13.3% | 143 | | Derbyshire | 184 | 82.9% | 38 | 17.1% | 222 | | Devon & Cornwall | 287 | 83.9% | 55 | 16.1% | 342 | | Dorset | 117 | 84.2% | 22 | 15.8% | 139 | | Durham | 124 | 84.4% | 23 | 15.6% | 147 | | Dyfed-Powys | 66 | 75.9% | 21 | 24.1% | 87 | | Essex | 279 | 81.8% | 62 | 18.2% | 341 | | Gloucestershire | 74 | 84.1% | 14 | 15.9% | 88 | | Greater Manchester | 656 | 80.5% | 159 | 19.5% | 815 | | Gwent | 97 | 81.5% | 22 | 18.5% | 119 | | Hampshire | 330 | 84.6% | 60 | 15.4% | 390 | | Hertfordshire | 194 | 78.5% | 53 | 21.5% | 247 | | Humberside | 175 | 82.2% | 38 | 17.8% | 213 | | Kent | 212 | 78.2% | 59 | 21.8% | 271 | | Lancashire | 320 | 85.1% | 56 | 14.9% | 376 | | Leicestershire | 164 | 82.0% | 36 | 18.0% | 200 | | Lincolnshire | 131 | 87.3% | 19 | 12.7% | 150 | | London Police | 1,538 | 72.6% | 579 | 27.4% | 2,117 | | Merseyside | 336 | 81.6% | 76 | 18.4% | 412 | | Norfolk | 204 | 84.3% | 38 | 15.7% | 242 | | Northamptonshire | 159 | 82.8% | 33 | 17.2% | 192 | | Northumbria | 308 | 76.6% | 94 | 23.4% | 402 | | North Wales | 184 | 86.4% | 29 | 13.6% | 213 | | North Yorkshire | 159 | 79.9% | 40 | 20.1% | 199 | | Nottinghamshire | 188 | 81.7% | 42 | 18.3% | 230 | | South Wales | 277 | 74.7% | 94 | 25.3% | 371 | | South Yorkshire | 207 | 80.9% | 49 | 19.1% | 256 | | Staffordshire | 259 | 83.5% | 51 | 16.5% | 310 | | Suffolk | 109 | 79.0% | 29 | 21.0% | 138 | | Surrey | 157 | 78.9% | 42 | 21.1% | 199 | | Sussex | 241 | 75.3% | 79 | 24.7% | 320 | | Thames Valley | 354 | 73.3% | 129 | 26.7% | 483 | | Warwickshire | 84 | 88.4% | 11 | 11.6% | 95 | | West Mercia | 285 | 81.2% | 66 | 18.8% | 351 | | West Midlands | 490 | 77.4% | 143 | 22.6% | 633 | | West Yorkshire | 424 | 81.1% | 99 | 18.9% | 523 | | Wiltshire | 111 | 86.0% | 18 | 14.0% | 129 | | **Total** | **10,715** | **79.5%** | **2,769** | **20.5%** | **13,484** | Annex 2: Ministry of Justice data
Stalking and harassment, restraining orders and breaches
To note: CPS data differs from that of MoJ in that:
- CPS data is for the financial year; MoJ data for the calendar year.
- CPS data includes all offences starting a prosecution rather than completed. The data is by offence and does not provide data by defendant. There may be a number of offences carried out by each defendant.
- MoJ statistics on restraining orders relate only to where defendants were issued restraining orders in relation to their principal offence.
- MoJ statistics on breaches of restraining orders relate only to defendants prosecuted for such a breach as their principal offence. CPS data includes all offences starting a prosecution, not just those where the restraining order or breach relates to a principal offence.
- MoJ offenders prosecuted data covers cases completed in Magistrates’ Court in 2016, and therefore includes both completed and live cases in the Crown Court.
- MoJ offenders convicted data covers those convicted in 2016, who may have been prosecuted in previous years.
- MoJ conviction ratio is the number of defendants convicted divided by the number of defendants prosecuted (there may be some convictions in 2016 for cases that were prosecuted prior to 2016; and there will be some prosecutions in this data that are not yet completed at the Crown Court).
Stalking and Harassment
In 2016, the MoJ figures(^1),(^2),(^3),(^4) for England and Wales show that 6,678 defendants were prosecuted for s.2 of the Protection of Harassment Act 1997 (s.2 PHA) offences of harassment without violence,
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(^1)The figures given relate to defendants for whom these offences were the principal offences for which they were dealt with. When a defendant has been found guilty of two or more offences, it is the offence for which the heaviest penalty is imposed. Where the same disposal is imposed for two or more offences, the offence selected is the offence for which the statutory maximum penalty is the most severe - although this does not apply to the number of restraining orders issued since this takes into account those given as secondary or tertiary disposals for the principal offence.
(^2)Every effort is made to ensure that the figures presented are accurate and complete. However, it is important to note that these data have been extracted from large administrative data systems generated by the courts and police forces. As a consequence, care should be taken to ensure data collection processes, and their inevitable limitations, are taken into account when those data are used.
(^3)The number of defendants found guilty in a particular year may differ from the group proceeded against if the proceedings in the magistrates’ court took place in an earlier year and the defendants were found guilty at the Crown Court in the following year; or the defendants were found guilty of a different offence to that for which they were originally proceeded against.
(^4)Due to updates following quality assurance in the latest year, including the reclassification of some offences, pre-2016 results may not match those previously published. compared with 7,243 in 2015. The conviction ratio(^5) has increased slightly since 2015, from 76% to 80% in 2016.
912 defendants were prosecuted for s.4 PHA offences of harassment – putting people in fear of violence in 2016, compared with 1,176 in 2015; with 699 convicted, compared with 835 convicted in 2015. The conviction ratio rose from 71% to 77%.
348 defendants were prosecuted for the s.2A PHA offences of pursuing a course of conduct which amounts to stalking with fear/alarm/distress in 2016, compared with 481 in 2015. 239 were convicted, compared with 335 convicted in 2015. The conviction ratio decreased slightly, from 70% to 69%.
38 defendants were prosecuted in 2016 under the s.4A PHA offences of stalking involving fear of violence, compared with 74 in 2015; with 25 convicted, compared with 45 in 2015. There was a rise in the conviction ratio to 66% compared with 61% in the previous year.
212 defendants were prosecuted in 2016 under the s.4A offences of stalking involving serious alarm or distress compared with 225 in 2015; with 148 convicted, compared with 149 in 2015. There was a rise in the conviction ratio to 70% compared with 66% in the previous year.
**Restraining orders and breaches**
MoJ figures(^6,7,8,9,10) show that in 2016, 23,132 restraining orders were issued on conviction in England and Wales (compared with 20,693 in 2015) and 2,117 were issued on acquittal (compared with 2,328 in 2015).
During 2016, there were 9,921 defendants prosecuted for breaches of restraining orders that had been imposed on conviction, with 8,953 convicted. This was an increase from 9,292 prosecutions and 8,395 convictions in 2015.
There were also 358 defendants prosecuted for breaches of restraining orders issued following the acquittal of the defendant, with 277 convicted. This was an increase from 302 prosecutions and 236 convictions in 2015.
There was a 90% conviction ratio(^11) across all prosecutions for breaches of restraining orders this year, remaining stable compared to 2015.
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(^5)Conviction ratios are calculated as the number of convictions as a proportion of the number of proceedings. This gives a measure of the relative number of defendants who are found guilty within a given year for a certain offence, when compared with the number who are prosecuted that year for the same offence. As trials can span more than one year, offenders found guilty in a calendar year are not always the same defendants who were prosecuted in that year. Further, defendants may be found guilty of a different offence to that offence for which they were originally prosecuted.
(^6)See Footnote 1
(^7)See Footnote 2
(^8)See Footnote 3
(^9)See Footnote 4
(^10)There are a small proportion defendants with an unknown gender post 2010, therefore the total number of defendants does not exactly equal male plus female defendants following this date.
(^11)See Footnote 5 MoJ Rape National Statistics
To note: CPS data differs from that of the MoJ in that:
- CPS data is for the financial year; MoJ data for the calendar year.
- CPS data is for completed prosecutions in 2016–17; MoJ defendants prosecuted data covers cases completed in Magistrates’ Court in 2016, and therefore includes both completed and live cases in the Crown Court.
- CPS convictions are for rape flagged cases convicted for rape, or for an alternative or lesser offence; MoJ offenders convicted covers only those convicted of rape in 2016, who may have been prosecuted in previous years. This difference in recording leads to CPS reporting a higher number of prosecutions than that recorded in the MoJ data.
- CPS conviction rate is the proportion of convictions out of completed rape flagged prosecutions in 2016–17; MoJ conviction ratio is the number of offenders convicted of rape in 2016 divided by the number of defendants prosecuted for rape in the same year (as defined in footnote 5).
National Statistics from the MoJ include the official statistics on defendants prosecuted for rape. These figures show that in the calendar year 2016 there were 3,716 defendants, on a principal offence basis,12, 13, 14, 15, 16 prosecuted for rape at Magistrates’ Courts in England and Wales, with 3,510 cases sent to the Crown Court for trial. This is slightly lower than in 2015 when 3,851 defendants were prosecuted. In 2016 there were 1,352 offenders convicted of rape in England and Wales, with a conviction ratio of 36%.17 These figures are slightly higher than in 2015, when 1,297 were convicted; with a conviction ratio of 34%. This ratio only compares numbers prosecuted for a principal offence of rape with numbers convicted of rape; some of those prosecuted for rape may go on to be convicted of other offences at the Crown Court.18 MoJ prosecution data is where the hearing has been completed in the Magistrates’ Court in 2016, and therefore includes both completed and live cases in the Crown Court. Almost 100% of defendants prosecuted and offenders convicted for rape were male.19
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12The figures given relate to defendants for whom these offences were the principal offences for which they were dealt with. When a defendant has been found guilty of two or more offences, it is the offence for which the heaviest penalty is imposed. Where the same disposal is imposed for two or more offences, the offence selected is the offence for which the statutory maximum penalty is the most severe. 13See Footnote 2 14See Footnote 3 15See footnote 4 16Rape figures here include offences of rape and attempted rape, against males and females, for consistency with the rest of this report. 17See Footnote 5 18To contextualise the difference in conviction ratios/rates between MoJ and CPS, it is useful to compare CPS figures with a MoJ analysis from 2013, which assessed the proportion of defendants prosecuted for rape offences in 2009 ultimately convicted of any offence between 2009 and 2011. This analysis indicated that, of those initially prosecuted for rape, 56% were convicted for any offence, including 33% who were convicted for rape. The proportion convicted for any offence was more comparable to the CPS conviction rates in 2008–09 of 57.7%; 2009–10 of 59.4% and 2010–11 of 58.6%. 19The figures for those defendants with recorded gender are rounded up to 100%, noting that a very small number were women defendants. Timeliness from charge to trial
Overall data on the timeliness of rape cases from charge to completion, across England and Wales, has been provided from the MoJ from 2010–16. This revised data now includes cases over ten years and therefore has been updated since the CPS 2015–16 VAWG report.
From the MoJ data, the timeliness from charge to completion appears to have risen slightly over the last few years.
| MoJ data – Median(^{20}) time in days from charge to completion(^{21}) | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |---|---|---|---|---|---|---|---| | 213 | 226 | 225 | 225 | 238 | 258 | 259 |
(^{20})The median is the value at the middle of the data distribution; half of the recorded durations in the time period are longer than the median, and half are shorter. The median is relatively unaffected by extreme values and is better suited as a measure of the ‘average’ for heavily skewed data.
(^{21})The figures in this table have been revised to incorporate a new methodology that was put into place in 2016, and therefore no do not match previous versions prior to this year. The new methodology now includes cases that take longer than 10 year from the offence to completion which had previously been excluded. Glossary of terms
Violence against women and girls strands
Each section is alphabetical unless stated otherwise.
Child abuse: Any criminal offence which falls within the criteria set out in Working Together to Safeguard Children and involves a victim under the age of 18.22
Child abuse includes physical, emotional and sexual criminal offences, as well as neglect, of a child. Such cases would normally include, for example:
- parental assault where reasonable chastisement is not a defence;
- sexual offences;
- child homicides;
- child cruelty, including neglect;
- child prostitution;
- harassment;
- abandonment of a child;
- forced marriage involving an under 18 year-old;
- child pornography;
- trafficked children;
- familial abduction; and
- historical child abuse where victim is now an adult.
Cases that would not normally be included:
- motoring offences where the child has been injured or killed;
- medical negligence; and
- property offences.
Domestic abuse: From April 2013:
any incident or pattern of incidents of controlling, coercive or threatening behaviour, violence or abuse between those aged 16 or over who are or have been intimate partners or family members, regardless of gender or sexuality. This can encompass, but is not limited to, the following types of abuse: psychological; physical; sexual; financial; emotional.
Controlling behaviour is: a range of acts designed to make a person subordinate and/or dependant by isolating them from sources of support, exploiting their resources and capacities
22Working Together to Safeguard Children – A guide to interagency working to safeguard and promote the welfare of children, 2015. https://www.gov.uk/government/publications/working-together-to-safeguard-children--2 for personal gain, depriving them of the means needed for independence, resistance and escape and regulating their everyday behaviour.
Coercive behaviour is: an act or a pattern of acts of assaults, threats, humiliation and intimidation or other abuse that is used to harm, punish, or frighten their victim.
Family members are defined as mother, father, son, daughter, brother, sister and grandparents whether directly related, in-laws or step-family. However this is not an exhaustive list and may also be extended to uncles, aunts, cousins et.
This definition, which is not a legal definition, includes so called 'honour' based violence, FGM (FGM) and forced marriage, and is clear that victims are not confined to one gender or ethnic group.
Forced marriage: The definition of forced marriage is: “A marriage without the consent of one or both parties and where duress is a factor”. Duress is: “whether the mind of the applicant has been overborne, howsoever that was caused”. Where forced marriage is within the family, and/or involves child abuse, and/or a young offender, then all appropriate flags must be applied.
The flag should be applied to any case where:
- Offences under S121 of the Anti-Social Behaviour, Crime and Policing Act 2014 are considered at pre-charge decision or are charged; and
- A breach of a Forced Marriage Protection Order under S120 of the Anti-Social Behaviour, Crime and Policing Act 2014 (S63CA Family Law Act 1996).
The flag should be applied from the onset of the case, and will remain in place even if those charges are subsequently amended or dropped. If a case commences under a different offence but then changed to a forced marriage charge, the case should be flagged at that stage.
In addition, the flag should also be applied where any offence of threatening behaviour, violence or abuse (psychological, physical, sexual, financial or emotional) that has been carried out in the context of a forced marriage, either:
- to coerce a party/parties into marrying without their consent, which would be prosecuted under the specific offence committed, e.g. harassment, kidnap, threats to kill; or • after a forced marriage without the consent of one or both parties and where duress is a factor, which would be prosecuted under the specific offence e.g. rape, sexual assault
So-called ‘Honour-based’ violence: The definition of so-called ‘honour-based’ violence to be used is the definition adopted by the Forced Marriage Unit at the Home Office: “So-called ‘honour-based’ violence is a crime or incident, which has or may have been committed to protect or defend the honour of the family and/or community”.
Any criminal offence of threatening behaviour, violence or abuse (psychological, physical, sexual, financial or emotional) committed as so-called ‘honour crime’ will be flagged as so-called ‘honour-based’ violence. Cases would be prosecuted for the specific offence committed, e.g. common assault, GBH, harassment, kidnap, rape, threats to kill, murder.
Harmful practices: Harmful practices are forms of violence which have been committed primarily against women and girls, in certain communities and societies, without their ‘consent’, with a view to keeping women in submission, according to the norms of their communities. As with all forms of violence against women and girls, harmful traditional practices constitute a violation of human rights.
Human trafficking: The flag for human trafficking is applied to:
• Offences flagged are Sexual Offences Act 2003 (ss.57, 58, 59 and 59A), • Asylum and Immigration [Treatment of Claimants] Act 2004 ss. 4(1), (2) and (3); and • Coroners and Justice Act 2009 s.71 • Modern Slavery Act 2015 s.1 and s.2
The flag is applied at the outset of the case and will remain in place even if those charges are subsequently amended or dropped. If a case commences under a different offence but is then changed to a trafficking charge, the case should be flagged at that stage.
From April 2013: ss.57, 58 and 59 of the Sexual Offences Act 2003 were replaced by s.59A SOA ; and ss.4(1), (2) and (3) of the Asylum and Immigration [Treatment of Claimants] Act 2004; were repealed and replaced by s.4(1A) (1B) (1C) A&IA.
Rape: Any defendant charged with one or more of the following offences: • s.1 Sexual Offences Act 1956 • s.5 Sexual Offences Act 1956 o An attempt to commit one of the above offences under the Criminal Attempts Act 1981 • s.1 Sexual Offences Act 2003 • s.5 Sexual Offences Act 2003 • s.30(3) Sexual Offences act 2003 o An attempt to commit one of the above offences under the Criminal Attempts Act 1981
Incitement or conspiracy to commit any of the above offences
Sexual offences exc. rape: Any defendant whose principal offence category, at finalisation, is a sexual offence excluding rape.
Performance management terms
Monitoring flags: Sensitive case types are identified using a number of monitoring flags, applied to relevant cases at the pre-charge stage. The flags allow managers to monitor proceedings during the life of the prosecution, and enable reporting of outcomes following the conclusion of the case. The data is accurate only to the extent that the flag has been correctly applied; there may be a small number of cases where the use of the flag has been omitted.
Principal offences: Principal offence category: charged offences are allocated one of twelve offence categories to indicate the type and seriousness of the charges brought against the defendant. The Principal Offence Category indicates the most serious offence with which the defendant is charged at the time of finalisation. Where the nature of the charges alters during the life of a case, the Principal Offence at the time of finalisation may be different than would have seemed appropriate at an earlier stage of proceedings. In all such cases the Principal Offence category to be recorded is that which applies at finalisation, regardless of whether this is more serious, or less serious, than would have applied earlier in the life of the case.
Where a defendant faces a mix of charges of which fall into different Principal Offence Categories, chose the most serious according to the following order of priority:
Homicide: 'Homicide' comprises a range of offences including - murder & attempted murder, manslaughter, infanticide, child destruction, conspiring or soliciting to commit murder and causing death by dangerous driving.
Offences against the person: 'Offences against the person' comprises a range of offences including - grievous bodily harm, assault occasioning actual bodily harm, common assault, possession of a firearm with intent to cause fear of violence and child abduction.
Sexual offences: 'Sexual Offences' comprises a range of offences including rape, buggery, sexual assault, bigamy, procuration and gross indecency with a child.
Criminal damage: ‘Criminal damage’ includes offences of arson, criminal or malicious damage and arson or criminal damage endangering life.
Public order offences: 'Public Order Offences' includes offences of rioting, violent disorder and causing an affray.
Case outcomes
Pre-charge decisions: The Director’s Guidance on charging (5th Edition) provides that the police may charge any Summary only offence (one that can only be dealt with in the Magistrates’ Court) irrespective of plea and any either way offence (can be tried in either the Magistrates’ Court or Crown Court) where a guilty plea is anticipated and it is suitable for sentence in the Magistrates’ Court subject to certain exceptions such as DA, hate crime and a case involving a death. CPS prosecutors must make the charging decisions in all indictable only cases (those cases which can only be tried in the Crown Court), either way offences not suitable for Magistrates’ Court and where a not guilty plea is anticipated.
Charged: Cases where the CPS’ decision is to charge.
The CPS is continually striving to improve the quality of data used in both internal and external reports. During the course of 2013–14, a revised method of reporting the outcomes of charging decisions was developed. The revised method has been used in this report which provides a more accurate figure for the percentage of defendant cases which proceeded to prosecution. For this reason, the data will differ from that reported prior to 2013–14.
No prosecution: Whose cases where the CPS’ decision is not to prosecute, for evidential or public interest reasons.
Out of court disposal: Where a caution, conditional caution, reprimand or final warning has been given or where the offence has been taken into consideration in relation to other charges.
Administrative Finalisation: The suspect has failed to answer to bail and a warrant is outstanding or the case has been finalised administratively for various reasons.
Other: The outcome of the charging decision has not been recorded or is undefined.
Prosecutions: All defendants charged or summoned whose case was completed in Magistrates’ or in the Crown Court during the period, including those proceeding to a trial or guilty plea, those discontinued and those which could not proceed.
Contests inclusive of mixed pleas Mixed Guilty/Not Guilty and Contest: (a) The Defendant enters at least one guilty plea to a set of charges, and (b) a plea of not guilty to one or more charges, and (c) these pleas are not acceptable to the CPS, and (d) the matter proceeds to trial
Contests exclusive of mixed pleas Not Guilty and Contest: (a) The Defendant enters only not guilty pleas, AND (b) a trial takes place
Unsuccessful outcomes: All completed prosecutions where the defendant is not convicted, comprising the following:
Administrative finalisation: Ehen a prosecution cannot proceed because a defendant has failed to appear at court and a Bench Warrant has been issued for his or her arrest; or the defendant has died, or is found unfit to plead: or where proceedings are adjourned indefinitely. If a Bench Warrant is executed the case may be reopened.
Discharged committals: committal proceedings in which the defendant is discharged. Following a discharge a case can be reinstituted.
Discontinued and withdrawn: Consideration of the evidence and of the public interest may lead the CPS to discontinue proceedings at any time before the start of the trial. Included here are cases formally discontinued in advance of the hearing, those in which no evidence was offered, and those withdrawn at court. Also included are cases in which the defendant was bound over to keep the peace.
Dismissed after full trial: cases in which the defendant pleads not guilty and proceedings are dismissed by the magistrates after hearing the defence case.
Judge directed acquittal: Cases where at the close of the prosecution case against the defendant, a successful submission of ‘no case’ or ‘unsafe’ is made on behalf of the defendant, and the judge directs an acquittal rather than allow the case to be determined by the jury.
Jury acquittal: When the defendant pleads not guilty and, following a trial, is acquitted by the jury. No case to answer: Cases in which the defendant pleads not guilty and prosecution evidence is heard, but proceedings are dismissed by the magistrates without hearing the defence case.
All other unsuccessful outcomes: Comprising administrative finalisations, discharged committals and no case to answer.
Convictions: Cases where the defendant is convicted following a prosecution, comprising:
Conviction after trial: Cases in which the defendant pleads not guilty, but is convicted after the evidence is heard.
Guilty plea: Where the defendant pleads guilty.
Proof in absence: these are lesser offences which are heard by the court in the absence of the defendant.
Reasons for unsuccessful outcomes
Acquittals after trial: The defendant is found not guilty by the magistrates or jury after a contested hearing in which the defence is called on to present its case. (Cases dismissed, no case to answer or judge directed acquittals are not included).
Victim evidence does not support case: The evidence of the victim of an offence does not support the prosecution of the defendant, leading to an unsuccessful outcome, but the victim however, has not retracted. (the ‘reason title’ was amended in April 2013 to: The evidence of the victim does not come up to proof, but there is no retraction).
Victim non-attendance: The victim is called as a witness in a trial, but fails to attend court.
Victim retraction: Where the evidence of the victim supports the prosecution case, the victim refuses to be called as a witness, or retracts, or withdraws a complaint.
Conflict of evidence: Conflict of prosecution evidence (from April 2013 the guidance was amended to clarify that this reason is not to be used when the victim retracts, does not attend or their evidence does not come up to proof).
Essential Legal Element Missing: Essential legal element missing (the ‘reason title’ was amended in April 2013 to ‘Incorrect charging decision – legal element missing’; the updated guidance made it clear that this reason is not to be used when the victim retracts, does not attend or their evidence does not come up to proof). Unreliable witness: Unreliable witness or witnesses (The ‘reason title’ was Amended in April 2013 to: ‘Key witness (non-victim) refuses to give evidence/retracts/not up to proof’ to provide clarity).
Legal terminology
Hearsay: Section 116(1) Criminal Justice Act 2003. In criminal proceedings a statement not made in oral evidence in the proceedings is admissible as evidence of any matter stated if:
(a) oral evidence given in the proceedings by the person who made the statement would be admissible as evidence of that matter, (b) the person who made the statement (the relevant person) is identified to the court's satisfaction, and (c) any of the five conditions mentioned in subsection (2) is satisfied.
Res gestae: Any rule of law under which in criminal proceedings a statement is admissible as evidence of any matter stated if:
(a) the statement was made by a person so emotionally overpowered by an event that the possibility of concoction or distortion can be disregarded, (b) the statement accompanied an act which can be properly evaluated as evidence only if considered in conjunction with the statement, or (c) the statement relates to a physical sensation or a mental state (such as intention or emotion). | Acronym | Description | |---------|-------------| | BME | Black and Minority Ethnic | | CAMHS | Child and Adolescent Mental Health Services | | CJA | Criminal Justice Act | | CJS | Criminal Justice System | | COE | Centre of Expertise | | CMS | Case Management System | | CPS | Crown Prosecution Service | | CPBSD | Crown Prosecution Service Direct | | CSA | Child Sexual Abuse | | CSE | Child Sexual Exploitation | | DPP | Director of Public Prosecutions | | DA | Domestic Abuse | | ECG | External Consultation Group | | FM | Forced Marriage | | FGM | Female Genital Mutilation | | HBV | so-called ‘Honour-Based’ Violence | | HMCPSI | Her Majesty’s Crown Prosecution Service Inspectorate | | HMIC | Her Majesty’s Inspectorate of Constabulary | | HO | Home Office | | ICEM | Inclusion and Community Engagement managers | | IDVA | Independent Domestic Abuse Adviser | | IQA | Individual Quality Assessment | | ISVA | Independent Sexual Violence Adviser | | MIS | Management Information System | | MoJ | Ministry of Justice | | NCA | National Crime Agency | | NMO | Non-Molestation Order | | NPCC | National Police Chiefs’ Council | | NRM | National Referral Mechanism | | PHA | Protection of Harassment Act | | PPT (ppt)| Percentage point | | RAR | Rehabilitation Activity Requirement | | RASSO | Rape and Serious Sexual Offences | | SDVC | Specialist Domestic Abuse Court | | SHPO | Sexual Harm Prevention Order | | SOA | Sexual Offences Act | | SO | Sexual Offences | | TSJ | Transforming Summary Justice | | LSIP | Local Scrutiny and Involvement Panels | | WCU | Witness Care Unit | | WMS | Witness Management System | | VAWG | Violence against Women and Girls |
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5b5f303bec9a7adeff5e0fec2f516a8941538149 | CPS 2020 AND 2016/17 PLAN Our duty is to prosecute the right people for the right offences. The CPS works with our partners at the heart of the criminal justice system to protect the public and create a safe society.
We will be independent and fair and will deliver justice in every case, acting professionally and striving for excellence. We will treat people with respect and will be honest and open about our work. THE STORY SO FAR
SAVINGS AND EFFICIENCIES DELIVERED AFTER SIGNIFICANT CUTS
REDUCED EXPENDITURE £101 MILLION reduction in net annual expenditure since 2011/12
STEADY CONVICTIONS Conviction rate remains steady around 83%
DELIVERING JOINED UP JUSTICE ACROSS AREA BOUNDARIES
LOWER HEADCOUNT 27% fewer staff than in 2011/12
GUilty PLEAS 76% guilty pleas up from 69% in 2011/12
EFFICIENT OPERATING through digitisation, Better Case Management and Transforming Summary Justice
CROWN COURT CASES Caseload in Crown Court remains steady at 96,000 - 101,000 cases per annum
PROCEEDS OF CRIME £84 MILLION put back into public funds in 2015/16
MAGISTRATES CASES 36% reduction in magistrates court caseload
AN EVER CHANGING CASELOAD AS WE ADAPT TO AN EVOLVING CRIME ENVIRONMENT
SHIFTING CASELOAD 28% 5 year increase in sexual offence cases
STEADY CONVICTION RATE, RISING GUILTY PLEAS AND STREAMLINED CASELOADS BY BRINGING THE RIGHT CASES AND WORKING BETTER WITH OUR PARTNERS
SERIOUS AND COMPLEX 23% 5 year increase in fraud and forgery cases
AN EVER CHANGING CASELOAD AS WE ADAPT TO AN EVOLVING CRIME ENVIRONMENT
5 year increase in sexual offence cases
5 year increase in fraud and forgery cases DELIVERING JUSTICE
Our new strategic priorities reflect our commitment to being a flexible, trusted prosecution service. That commitment is underpinned by our existing values:
- Treat everyone with respect
- Be independent and fair
- Be honest and open
- Behave professionally and strive for excellence
OUR VALUES
SUCCESS OF OUR PEOPLE
We will attract the best people and be recognised for our investment in staff, training and skills
HIGH QUALITY CASEWORK
We will deliver justice through excellent, timely legal decision-making, casework preparation and presentation
PUBLIC CONFIDENCE
Our decisions will be open and transparent and the public will trust that we are fair and deliver justice
CONTINUOUSLY IMPROVING
We will continue to digitise and modernise the way we work and support a flexible workforce. We will deliver swifter justice, fewer hearings and more effective trials Our decisions will be open and transparent, and the public will trust that we are fair and deliver justice. We will:
- Positively influence the criminal justice landscape and deliver justice with our partners.
- Provide a professional service to everyone we work with.
- Treat victims and witnesses with respect and care, and respond to their individual needs.
- Be open, listen, explain our decisions and learn from our successes and our mistakes.
- Anticipate and adapt to new and emerging criminal trends.
- Work with and learn from communities to build confidence in the criminal justice system.
- Create engaging campaigns that explain our work.
- Develop effective policies and guidance that reflect changes in society.
- Deal promptly and thoroughly with enquiries and complaints. We will attract the best people and be recognised for our investment in staff, training and skills. We will:
- Behave according to our values, creating a culture of respect where it’s safe to speak up.
- Nurture and grow our talent, offering everyone a clear path for career development.
- Empower leaders to foster a culture of learning where everyone takes responsibility for their own development, and progression is based on merit.
- Broaden our expertise by supporting career moves in and out of the CPS, and between teams.
- Equip our people with the skills to excel in a changing environment.
- Support social mobility, and invest in apprenticeships, scholarships, legal and professional training.
- Set high expectations for individual performance, and be clear how this is managed.
- Develop a diverse workforce that reflects the society we serve. We will deliver justice through excellent, timely legal decision-making, casework preparation and presentation. We will:
- Give early advice to investigators so that the right cases progress, or are quickly stopped.
- Take the right decisions, treating every case fairly and equally, and bringing the correct charges according to the evidence and the Code for Crown Prosecutors.
- Deliver swifter justice through timely case preparation, encouraging appropriate early guilty pleas.
- Build and progress strong cases.
- Provide first class advocacy in every case.
- Build effective partnerships, nationally and internationally, to ensure excellence across the criminal justice system and to prevent harm to the UK. We will continue to digitise and modernise the way we work, supporting a flexible workforce and delivering swifter justice, fewer hearings and more effective trials. We will:
- Look forward, identifying opportunities to reform and improve.
- Work flexibly across geographic boundaries to drive up quality across the CPS.
- Rapidly redeploy resources to respond to changing crime patterns.
- Co-create a shared, digital system that works for all partners in the criminal justice system.
- Design new ways of working informed by the expertise of our frontline staff.
- Invest in our IT, giving people the tools they need to do their best, wherever they work.
- Adapt business processes that support efficiency and cut bureaucracy. THE PUBLIC HAS CONFIDENCE THAT THE CPS IS FAIR, EFFECTIVE AND INDEPENDENT
WE WILL:
• Treat victims and witnesses with respect and care and respond to their individual needs.
• Enhance our complaints performance management systems to ensure they are dealt with promptly and thoroughly.
• Identify and share best practice in domestic abuse prosecutions, including the new offence of controlling or coercive behaviour.
• Develop capability of Witness Care Units to meet the planned Victim’s Law and related reforms.
• Improve the instance, quality and timeliness of letters issued to victims explaining our decision to stop a case or substantially alter charges.
• Develop effective policies and guidance that reflect changes in society, such as delivering against the cross-government hate crime strategy.
• Ensure that all RASSO cases are reviewed and presented in court by a specialist trained sexual offences prosecutor.
• Create an engagement plan and resource hub of materials for schools, colleges and universities.
• Develop more proactive campaigns like #ConsentIs.
• Conduct stakeholder mapping to identify how best to measure confidence.
MEASURED BY:
- LESS THAN 25% unsuccessful outcomes due to witness issues
- MORE THAN 55% of hate crime sentence uplifts recorded in finalised convictions
- LESS THAN 16% of complaints escalated to stages 2 & 3 before resolution
- FEWER THAN 250 RASSO\* cases waiting more than 28 days for pre-charge advice or decision
\*Rape and serious sexual offences WE SUPPORT THE SUCCESS OF OUR PEOPLE
WE WILL:
• Nurture and grow our talent, offering everyone a clear path for career development.
• Broaden our expertise by supporting career moves in and out of the organisation.
• Support social mobility by investing in apprenticeships, scholarships, legal and professional training.
• Increase workforce flexibility and resilience by moving more work to where our people are located.
• Improve the experience of working at the CPS through a continued focus on employee engagement and wellbeing.
• Invest in the skills of our workforce and ensure effective evaluation of learning and development.
• Set high expectations for individual performance and be clear how this is managed.
MEASURED BY:
MORE THAN 55% employee engagement index from People Survey
MORE THAN 2.3% apprenticeships to meet Civil Service ambition for social mobility
MORE THAN 250 internal and external secondments supporting workforce mobility
WITHIN 4% vacancies against the resource plan
MORE THAN 33% increase in full-time equivalent people managing out-of-Area cases supporting resource flexibility EVERYONE IN THE CPS CONTRIBUTES TO HIGH QUALITY CASEWORK
WE WILL:
• Give early advice to investigators so that the right cases progress and others are quickly stopped.
• Take the right decisions, treating every case fairly and equally, and bringing the correct charges according to the evidence and the Code for Crown Prosecutors.
• Deliver swifter justice through timely case preparation that builds and progresses strong cases and encouraging appropriate early guilty pleas.
• Build effective partnerships, nationally and internationally, to ensure excellence across the Criminal Justice System (CJS) and maximise the recovery of proceeds of crime.
• Develop a new advocacy strategy to ensure our advocates are able to meet changing demands and that we provide first class advocacy in every case.
• Embed ‘Better Case Management’ to ensure fewer hearings in Crown Court cases and improved engagement from all parties.
• Utilise the trends from Individual Quality Assessments to help better identify themes and inform how we can improve.
MEASURED BY:
- Compliance with judicial orders in the Crown Court
- Cracked or ineffective trial rate due to prosecution reasons in Crown Court
- Recovered from proceeds of crime
- Cracked or ineffective trial rate due to prosecution reasons in magistrates’ courts
- Hearings on average per guilty plea case in magistrates’ courts WE WILL CONTINUOUSLY IMPROVE THE WAY WE WORK
WE WILL:
• Develop capability to respond to and meet challenges of HMCTS Court Reform programme.
• Invest in technology, giving people the tools they need to do their best, wherever they work.
• Explore alternative ways to deliver a better integrated charging service to police and other investigators.
• The CJS Common Platform will have deployed its first applications to test cross-agency digital justice.
• Develop an IT strategy to complement and support multi-agency initiatives.
• Co-create a shared, digital system that works for all partners in the CJS.
• Design new ways of working informed by the expertise of our own people and develop new ways to support this, such as People Impact Assessments and satisfaction surveys.
• Employ tight financial management that ensures we make full and best use of available funding.
MEASURED BY:
MORE THAN 95.5% availability of core business infrastructure through resilient IT
MORE THAN 4500 remote access service users supported by smarter working
MORE THAN 5% OF £3.3M reduced cost of paper purchased and couriers used through digital working
WITHIN 1% of agreed operating funding limits About the Crown Prosecution Service
The CPS is responsible for prosecuting most cases heard in the criminal courts in England and Wales. It is led by the Director of Public Prosecutions and acts independently on criminal cases investigated by the police and other agencies. The CPS is responsible for deciding the appropriate charge in more serious or complex cases and provides information, assistance and support to victims and witnesses.
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79b02affbd09e98f515642deca3bd10b7b0a2afd | # CPS Asset Recovery Strategy
## Contents
| Section | Page | |------------------------------------------------------------------------|------| | Introduction | 1 | | The CPS Strategy | 2 | | CPS Priorities | 2 | | CJS Engagement | 3 | | Confiscation | 4 | | Enforcement | 6 | | International | 8 | | Money Laundering | 10 | | Civil Recovery | 11 | | Create a new national CPS Proceeds of Crime Service | 12 | | Using Recovered Assets | 14 | Introduction
The CPS Asset Recovery strategy is to:
- Prioritise the recovery of assets from serious and organised crime and serious economic crime.
- Pursue the assets of all who profit from crime, when it is proper to do so.
- Assist our international colleagues to enforce assets on our behalf and where necessary to do this assist them in developing their asset recovery capacity and capability.
- Improve the enforcement of confiscation orders.
The Proceeds of Crime Act 2002 (POCA) has transformed the CJS response to the proceeds of crime. Before the Act, criminal justice agencies collectively recovered about £25 million a year in criminal assets(^1). Now they regularly recover over £150 million a year. POCA allows the use of tools such as confiscation, cash forfeiture, civil recovery, and criminal taxation in order to(^2):
- Deprive offenders of the proceeds of their criminal conduct;
- Deter the commission of further offences; and
- Reduce the profits available to fund further criminal enterprises.
The CPS asset recovery strategy assesses which assets we should target and how. It describes how we will re-organise our structures to improve the performance of both routine and specialist asset recovery work. It puts in place a plan to recover assets that are hidden around the world. And it explains what we intend to do with the assets we recover.
The strategy will be delivered by the new **CPS Proceeds of Crime service**, comprising of three Central Units based in CPS Headquarters and nine Regional Teams. The new service will focus on six priority areas of work, and its success will be measured against new performance metrics, designed to ensure robust governance.
The CPS strategy supports the Government’s Serious and Organised Crime Strategy, published by the Home Office, which aims “to substantially reduce the level of organised crime in this country and the level of serious crime that requires a national response (notably fraud and child sexual exploitation)(^3). In particular, its strategy on asset recovery aims to: amend asset recovery powers; ensure enforcement of court orders; achieve better recovery of assets hidden overseas; and implement new money laundering regulations(^4).
In all cases where prosecutors are considering instigating confiscation proceedings, they will apply the principles set out in the DPP’s “Guidance for Prosecutors on the Discretion to Instigate Confiscation Proceedings”(^5).
______________________________________________________________________
(^1)Criminal Justice Joint Inspection Joint Thematic Review of Asset Recovery, 2010 (Joint Thematic Review), paragraph 4.2: in 2001-02 £25 was recovered.
(^2)See *R v Rezvi [2002] UKHL 1* and *R v Waya [2012] UKSC 51*.
(^3)The government’s Serious and Organised Crime Strategy October 2013, paragraph 3.1.
(^4)The government’s Serious and Organised Crime Strategy October 2013, paragraphs 4.45-4.57.
(^5)Guidance for prosecutors on the discretion to instigate confiscation proceedings The CPS strategy
The aim of this strategy is for the CPS to recover more criminal assets, located both in the UK and overseas. The CPS will prioritise the recovery of assets from serious organised crime and serious economic crime, whilst pursuing the assets of all who profit from crime. Criminal profits are the life-blood of organised crime and professional fraudsters as these profits are often reinvested in further criminal activities. By taking away the profits that fund crime, we can help to disrupt the cycle that sustains these organisations and fraudsters. By prioritising the assets of organised and economic crime, the strategy aims to improve further on our asset recovery performance, and to disrupt, deter and reduce organised crime and economic crime. This will help to protect the public from the harm it causes.
To implement the strategy, the CPS is creating a new national CPS Proceeds of Crime service, which will focus on eight priority work areas. We will also introduce a more robust performance, assurance and governance regime.
One of the CPS’s priorities is the service we provide to victims. Serious and organised crime and serious economic crime often do not have an identifiable victim. However, these are not victimless crimes. Sometimes the victim is the public purse, or the public itself: for instance, there is better recognition now that money stolen in tax and excise fraud cannot be spent on schools, hospitals, fire-fighters, police and other public services.
In some cases, there are identifiable victims, such as the person trafficked, or persons duped by an investment scam, who can ill-afford to lose their hard-earned savings. When appropriate, we shall seek compensation for identified victims.
We recognise that the success of this strategy will, in part, depend upon our close working relationships with law enforcement, CJS and international partners. We shall engage with them to ensure that our strategy is aligned with theirs, in pursuit of our common asset recovery objectives.
Our strategy recognises the need to assist other jurisdictions in their asset recovery work, rather than simply requesting assistance from them. To this end, we shall extend our international footprint by expanding the deployment of specialist asset recovery lawyers overseas.
CPS priorities
There are eight areas of work central to the implementation of our strategy:
- CJS Engagement
- Confiscation
- Enforcement
- International
- Money Laundering
- Civil Recovery
- Create a New National Organisation
- Using Recovered Assets Engage with CJS and law enforcement partners to promote asset recovery
The CPS recognises the need for CJS agencies to work together, and towards common goals, if we are to make significant improvements in asset recovery. We shall engage with our CJS and law enforcement partners to promote the CPS asset recovery strategy, which is aligned with the work of other agencies. In doing so, we aim to contribute to the development of a wider CJS overarching strategy on the proceeds of crime.
The Criminal Finances Board, chaired by a Home Office minister, oversees a programme of cross-departmental work on asset recovery. The CPS is represented on the Board. We are committed to assisting in the implementation of the Board’s Criminal Finances Improvement Programme, which is aimed at improving CJS asset recovery performance, in accordance with the government’s serious and organised crime strategy. We will work with the Home Office, which is responsible for the domestic proceeds of crime legislation, and other agencies represented on the board to identify ways in which asset recovery legislation can be improved and to make the case for legislative change where we think it is necessary.
The CPS enjoys close working relationships with law enforcement agencies, such as the police, HMRC and the National Crime Agency (NCA). We wish to strengthen these relationships, and to explore new approaches to asset recovery.
When deciding whether to carry out a financial investigation or to bring confiscation proceedings, an important factor to consider is whether confiscation is a proportionate response with regard to the circumstances of the case and the cost and resources involved. The CPS will work with the College of Policing, ACPO, the NCA, HMRC, DWP, the Department of Health and DEFRA to develop confiscation case typologies. These will inform our assessment of whether to seek a confiscation order on individual cases. This will ensure that our resources are targeted efficiently and in line with our strategy. We shall encourage our law enforcement partners to adopt a similar approach.
We shall provide advice on early financial investigations, including full financial profiles of individual suspects. A restraint application may be made at any time following the commencement of the criminal investigation and at any stage of the criminal proceedings. Standard Operating Practices will ensure that we monitor the need for restraint throughout the investigation and criminal proceedings and if there is a risk of dissipation of the defendant’s assets, trained specialists within CPS Proceeds of Crime will work with law enforcement to make timely restraint applications in accordance with updated Service Level Agreements with our law enforcement partners. This will include joint working with international colleagues, when assets are located abroad or evidence is required from another jurisdiction. We shall also advise on alternatives to prosecution, such as civil recovery, where prosecution is not the most appropriate solution to ensure that criminals do not retain high value criminal assets.
______________________________________________________________________
6 The National Audit Office report “Confiscation Orders”, 17 December 2013 (NAO report), recommends strategic coherence across government: recommendation (a).
7 Joint Thematic Review p11, issue to address number 9; the NAO report states that action is not being taken early enough to prevent offenders hiding or disposing of assets: paragraph 3.6. Mainstream confiscation and improve the quality of this work
Confiscation orders represent perhaps the best opportunity to deprive criminals of assets as, subject to certain qualifying criteria being satisfied, an order can extend to assets other than those relating to the offence for which the person is convicted. Confiscation orders currently account for 69 per cent of all criminal assets recovered under POCA powers.
CPS prosecutors participate in every stage of the confiscation process, in that they:
- Advise on the obtaining of a restraint order and conduct restraint applications.
- Advise on the confiscation investigation.
- Conduct confiscation proceedings in court.
- Obtain receivership orders.
- Recover assets to satisfy a confiscation order by way of enforcement action in the UK and overseas.
The total amount of assets recovered across the CJS in 2012-13 was £152.2 million. This figure combines money recovered from confiscation, cash forfeiture, civil recovery, criminal taxation, and international asset sharing. The money recovered under confiscation orders alone was £105.4 million.
A large proportion of these recovered assets relate to confiscation orders in CPS cases. The CPS recovered £90 million from confiscation orders in 2012-13. This means that currently the CPS is responsible for almost 90% of CJS recovery on confiscation orders, and for almost two thirds of all CJS asset recovery. In future cases we will also seek to avoid unrealistic confiscation orders by working closely with investigators to make the most precise calculation of the benefit and recoverable amount that a court will find. This will include the early identification of assets and a reliable assessment of their value, taking into account any third party claims to ownership.
Given the importance of confiscation work to both the CJS and the CPS, most CPS confiscation work will continue to be mainstreamed across the Service. Although high value and complex confiscation work will be delivered by specialist asset recovery prosecutors in the Central CPS Unit, other confiscation work will be integral to the work of Regional and Area prosecutors.
______________________________________________________________________
8 Based on the Joint Asset Recovery Database (JARD) figures, November 2013. 9 Joint Asset Recovery Database (JARD). The figure is net, after deducting enforcement costs and compensation payments to victims. 10 JARD.Net figure. 11 JARD.Net figure. 12 R v Waya[2012] UKSC 51 confirms that Part 2 POCA must be given effect in a manner that is compliant with Article 1 of the First Protocol to the ECHR (peaceful enjoyment of possessions). Accordingly, if the application of the provisions of POCA would lead to the making of a confiscation order in a sum that would be disproportionate, then a judge may make an order in a sum that is proportionate. We intend to improve the quality of this work, including the decision making of prosecutors throughout the life of a case\\textsuperscript{13}. We shall do this by incorporating confiscation into two of the CPS priority objectives, which are to provide all staff with the right “tools and skills” for the job they do, and to achieve a consistent high standard in the “quality of our casework”. We will also make CPS Proceeds of Crime Teams and Areas more accountable for confiscation performance.
**Develop Standard Operating Practices for confiscation**
Standard operating practices (SOPs) are an important new tool for the CPS. These lay down a consistent way of working across the country, in areas such as case management and progression. All aspects of confiscation work - restraint, confiscation and enforcement - will feature in our SOPs and they will also address other aspects of asset recovery, such as compensation for victims and forfeiture orders. This will ensure that prosecutors and caseworkers are reminded at every relevant stage of a case - advice, charge, court hearings and acceptance of pleas or basis of plea - what needs to be done, what the issues are and what questions they need to consider on asset recovery\\textsuperscript{14}. A compliance and assurance regime using targeted management checks will help to achieve a consistent way of working.
The CPS is developing a casework hub, an online single repository of all information required to handle a case. A bespoke proceeds of crime section is to be added to the hub, which will give CPS lawyers practical casework assistance and the ability to deal with the issues they face. For instance, prosecutors will have access to template precedents and information on what a section 16 statement should contain, to ensure prosecutors review these statements correctly\\textsuperscript{15}. The casework hub will also include links to the SOPs and the most up to date legal guidance relevant to asset recovery work.
The casework quality initiative will include a focus on asset recovery work. It will set the required standard from initial advice, through charging and the review of a case. We will review performance against these standards, which will be incorporated in an updated version of our Core Quality Standards: see also section on “CPS measures of success”.
**Closely monitor confiscation performance**
Asset recovery performance across the CPS will be more closely monitored as part of the Area Performance Review Framework, with those responsible for performance required to account to the Chief Operating Officer on a quarterly basis. This will allow us to monitor more closely the quality and extent of our confiscation work.
\\textsuperscript{13} See the NAO Report, Finding at paragraph 9: insufficient awareness of proceeds of crime within law enforcement and prosecution agencies.
\\textsuperscript{14} Joint Thematic Review, p11, issue to address number 12.
\\textsuperscript{15} Joint Thematic Review p11, issue to address number 11. **Improve the enforcement of confiscation orders**
Since 2009-10 the value of criminal assets that are enforced in respect of CPS obtained confiscation orders has increased from £63 million to £90 million(^\\text{16}). But there remains a large gap between confiscation orders made and those collected. The ability to effectively enforce confiscation orders depends on the Financial Investigator or receiver’s success in locating a defendant’s assets.
HMCTS is ultimately responsible for collecting the debt owed by a defendant on a confiscation order. However, the CPS assumes responsibility for cases that require prosecution input in order to enforce effectively. The criteria for determining the lead enforcement agency is set out in the SLA between the CPS and HMCTS. When there is nothing more we can do to enforce the debt, we shall remit the case back to HMCTS.
It is important to stress that the value of a confiscation is not always a true measure of the amount that is actually recoverable. There are many reasons for this. Confiscation orders require defendants to pay a sum of money representing the value of their benefit from criminal conduct. The onus is on the defendant to show that assets are no longer available to pay towards the confiscation order. Defendants are often unable or unwilling to explain what they have done with their proceeds and, as a result, confiscation orders are made in circumstances when there may be few or no identified assets against which enforcement action may be taken. Such orders are known as hidden assets orders, and organised criminals will often have hidden their assets overseas. The available assets may be further reduced by the legitimate claims of third parties.
There are risks in not knowing the true level of enforceable debt: it raises false expectations about the range and value of assets that are actually recoverable; and it obscures the real amounts that we should be pursuing.
We have analysed our debt in detail, to understand it better. We have taken steps to:
- Establish how much existing debt on CPS cases is genuinely recoverable.
- Collect all debt that we assess as recoverable.
- Target high priority cases.
- Identify priority countries for enforcement.
We have further broken down the value of realisable assets into categories: third party assets; hidden assets; and foreign assets. This has given us a clear picture of the size and types of assets that we are dealing with. The information on foreign assets is broken down further to include: the countries in which the assets are held; any current partnership working with those countries; and whether there are specific asset recovery difficulties in these countries. This information informs our strategy for international enforcement: see “International” section. The data has been used to formulate appropriate enforcement plans for all cases.
(^{16}) JARD database, net figures. The 2009-10 figure does not include RCPO pre 1 January 2010, or DEFRA or DWP orders. We undertake a regular enforcement data assurance exercise to update this information.
**Work across the CJS to enforce high priority cases**
Our “high priority” cases are cases where:
- The debt is collectable; and
- The collectable debt exceeds £500,000; or
- Enforcement will maximise assets removed from serious and organised criminals, in line with the CPS strategy and the Government’s strategy; or
- Where failure to enforce might have an adverse impact on public confidence.
We have agreed a cross-agency approach with HMCTS, the NCA and HMRC. Each lead enforcement agency has identified an enforcement priority case list based on similar criteria. The cross-agency work includes an agreed approach to international enforcement.
All future cases will have enforcement strategies based on this model, and they will be subject to regular reviews and an assurance regime.
We shall develop success measures that are based on this case selection criteria, to link performance to our strategic goals.
The CPS has a National Service Level Agreement (SLA) with HMCTS(^\\text{17}), which sets out the division of responsibility for enforcement. We will work with HMCTS to review and update the SLA in line with our strategy.
**Publish a strategy on the use of receivers**
The strategy will set out clear criteria for when to appoint a management receiver and an enforcement receiver. We shall make use of management receivers where they are required to safeguard and manage assets that may be needed to satisfy a confiscation order. And we shall appoint enforcement receivers post confiscation order, when a defendant will not voluntarily realise his assets. Our use of receivers will be governed by the national procurement framework, to ensure that the expertise of receivers are matched to the requirements of the particular case, and that we obtain value for money from those we appoint.
This approach should ensure that we recover a greater proportion of confiscation debts in future. Our renewed focus on enforcement is aligned with the Government’s aim to tackle the confiscation debt(^\\text{18}), and complies with the National Audit Office’s recommendations(^\\text{19}).
______________________________________________________________________
(^{17}) Service Level Agreement between the CPS and HM Courts & Tribunals Service for the Enforcement of Confiscation Orders. Version 3, 2012.
(^{18}) The government’s Serious and Organise Crime Strategy October 2013, paragraphs 4.51-4.52.
(^{19}) The NAO Report, recommendations (a) and (c). Recover more hidden assets overseas
The CPS is well placed to develop closer collaboration on asset recovery with other jurisdictions based on the success of our Liaison Magistrates and Criminal Justice Advisors, who are stationed in a number of countries in the EU and worldwide. We aim to utilise our Liaison Magistrates and Criminal Justice Advisors to take a more targeted and dynamic approach to the particular challenges of international asset recovery. When we send out a request for Mutual Legal Assistance (MLA), to freeze and realise assets, we will not simply wait for a response but will be proactive in assisting recipient countries to trace assets. When practical or systemic blockages to such joint work occur, we will work with others to remove or reduce them.
This will increase the amount of assets we can recover and other jurisdictions stand to benefit from this approach by way of a share of the assets recovered, whether because of EU Framework Decisions or asset sharing agreements with countries outside the EU.
We intend to increase our capacity to recover assets hidden overseas by:
- Working with UK and international partners to improve our performance on international asset recovery and to improve and develop the international operating environment for the recovery of illicit assets in priority jurisdictions.
- Working with UK and international law enforcement, and with criminal justice partners, financial practitioners and policy makers to:
- Improve operational performance on international asset recovery at home and abroad, so that assets can be seized and recovered more effectively and swiftly.
- Improve the operational environment in key priority countries to increase the total of assets recoverable and recovered.
In pursuit of this international strategy, our objectives are:-
- To recover more from current outstanding orders.
- To improve our performance and that of our key partners (at home and abroad) within the legal regime and systems which currently exist (at home and abroad) so that we work as efficiently and as effectively as possible.
- To develop the operational environment at home and in countries of importance to UK international asset recovery so that more assets can be recovered than current conditions permit. Recover more UK-based assets on behalf of other countries
Other countries may ask the CPS to restrain assets and to enforce confiscation orders on their behalf under a Mutual Legal Assistance (MLA) request. If we assist, the UK may be entitled to keep the recovered assets, or a proportion of them, if there is a bilateral asset sharing agreement, or international convention or treaty(^\\text{20}).
Since London is a global centre for finance, there are a large number of criminal proceeds deposited in its financial institutions. Despite this, historically the CPS has not received a high volume of incoming MLA requests for the restraint and recovery of assets. We propose to address this shortfall, and to substantially increase asset recovery for other countries.
For instance, we set up a project whereby the CPS Liaison Magistrate to Italy has worked closely with the Italian authorities and specialist asset recovery prosecutors in London to restrain substantial amounts of assets in the UK on behalf of those authorities. We expect to recover these assets in due course. We aim to build upon this initial success through use of our Liaison Magistrates, Criminal Justice Advisors and Asset Recovery Advisors located overseas. They will ensure that authorities in other jurisdictions are aware of our ability to carry out this work on their behalf, and encourage them to make appropriate MLA requests. If required, they will also provide capacity building and casework assistance.
We shall also work with our key domestic law enforcement and policy partners to ensure a coordinated approach in the UK to the execution of incoming MLA requests.
(^{20}) If the criminal offences fall under the UN Convention Against Corruption (UNCAC), the proceeds of corruption will be returned to the victim state according to the terms of UNCAC. Build capability and train prosecutors to undertake money laundering prosecutions
The prosecution of money laundering offences, and the subsequent confiscation of assets, removes the profits of organised crime and professional fraudsters, thereby disrupting their criminal activities. The CPS prosecutes money laundering offences when there is sufficient evidence and it is in the public interest to do so.
We shall also advise on money laundering investigations and consider money laundering charges when third parties claim ownership of identified assets in enforcement proceedings, and there is a suspicion that the third parties are themselves involved in criminal behaviour.
Money laundering prosecutions may include seized assets that are also subject to civil cash forfeiture proceedings. When this happens, there are a number of risks: if cash forfeiture is prioritised over confiscation, the potential for greater returns from confiscation may be lost, and criminals may retain more of their assets; a cash forfeiture hearing may prejudice a criminal trial; and the existence of two separate court processes may be an inefficient use of resources. To reduce risks in such linked cases, the CPS prosecutor will initiate early discussions with the investigator, to agree an appropriate case specific strategic approach. If the seized assets are to be preserved for potential confiscation proceedings, the civil proceedings should be adjourned.
Following some cash seizures, law enforcement will simply bring civil cash forfeiture proceedings without any criminal investigation. Although criminals will lose their cash, they will not be prosecuted and subject to a criminal sentence, and they will not face the risk of losing criminal assets derived from their criminal lifestyle. We intend to review with law enforcement colleagues the benefits to be derived from pursing a greater proportion of criminal investigations and prosecutions following cash seizures.
Building Capability
CPS Proceeds of Crime will work in partnership with the Complex Casework Units and the Central Casework Divisions to provide advice on money laundering prosecutions. The creation of nine new teams linked to Police Regional Asset Recovery Teams will ensure we have capability to support this work across England and Wales.
Training Prosecutors
We will introduce newly developed core learning packages for all prosecutors on proceeds of crime legislation including money laundering.
We will provide focused training for prosecutors in CPS Proceeds of Crime to enhance their existing knowledge and expertise.
21 See Joint Thematic Review p12, issue to address number 21: the prosecution team should consider the possible divisive effects of policies on cash seizures. Bring more civil recovery cases
Those committing organised crime and economic crime are careful not only to hide their assets but also their involvement in offences. If a criminal prosecution is not feasible, civil recovery may present an opportunity to deprive criminals of their profits. Civil recovery can also be used when a conviction is obtained but a confiscation order is not made, or when the public interest is better served by using a civil rather than a criminal disposal. It is therefore potentially a powerful tool to be used against organised and economic crime.
For instance, we can use civil recovery when:
- The criminality took place overseas and we cannot prosecute the case in our courts.
- We have identified criminal assets but we cannot link them to any individual.
- There is simply insufficient evidence to bring criminal proceedings.
To date the CPS has obtained two civil recovery orders, and is currently conducting a number of on-going civil recovery investigations. We also have a project with law enforcement to explore ways to bring far more civil recovery cases. We shall review the success of this project at its conclusion and consider whether to embed the use of civil recovery powers into our long-term asset recovery strategy.
To ensure that we only use civil recovery where it is proper to do so, our prosecutors will, in all cases, apply the Attorney General’s Guidance on Asset Recovery Powers for Prosecutors when considering the public interest in using non-conviction based powers.
To mitigate the risk of substantial costs being awarded against the CPS in the event of an unsuccessful application, the DPP will personally approve the commencement of all civil recovery actions and proceedings will only be conducted by prosecutors in the CPS Proceeds of Crime Civil Recovery Unit. We shall also seek agreement with law enforcement agencies on funding CPS civil recovery work so as to share the risks involved in litigation.
______________________________________________________________________
22 Attorney General’s Guidance on Asset Recovery Powers for Prosecutors. Create a national approach to asset recovery with a strong centre and enhanced regional focus
To support our asset recovery strategy we are reorganising the way we work. We shall create a national CPS Proceeds of Crime service. Our area work will be delivered through three Central Units based in CPS Headquarters and nine Regional teams, co-located with the RARTs wherever possible. These proceeds of crime teams will be staffed by lawyers and case workers with experience and expertise in asset recovery.
The Central Units will carry out restraint, confiscation, and enforcement work on cases that meet defined criteria - broadly, high value and complex cases. The work will be split between two teams: Pre-enforcement and Enforcement.
The Regional teams will specialise in restraint and enforcement work. This will ensure that every CPS case that requires in-house restraint or enforcement work will be handled by a dedicated proceeds of crime team. The teams will also carry out some confiscation work when there is a restraint order in place.
Mainstream confiscation work will remain within prosecuting teams in the Areas, as confiscation is an integral part of the prosecution process, and Area prosecutors will have the requisite skills and knowledge to carry out this work.
Establish clear lines of responsibility for asset recovery work together with effective assurance and governance regimes
CPS Proceeds of Crime will be led by the Head of Proceeds of Crime, who will be a Chief Crown Prosecutor. This newly created role will be high profile and the post-holder will be expected to lead the agenda on asset recovery issues in the CJS, and to promote the CPS asset recovery strategy both nationally and internationally. The Head of Proceeds of Crime will report directly to the Chief Operating Officer. Each Regional team will be accountable to the Head of Proceeds of Crime. We will establish a ring-fenced resourcing model for CPS Proceeds of Crime, to ensure sufficient resources for asset recovery work nationwide.
We shall also create national information management systems that will provide us with prompt and accurate management data. This data will then be used to identify and address any operational or performance issues quickly. We will carry out local and national quality assurance checks of systems, processes, casework and management data. A quarterly performance review process will provide continuous assessment of the work of CPS Proceeds of Crime and Areas. The assessment will capture all aspects of proceeds of crime activity.
Improve and standardise our systems, processes and practices in respect of restraint, confiscation and enforcement
We are creating standard operating procedures for restraint, confiscation and enforcement activity to ensure that the work is performed, managed and controlled effectively. Guidance, training and support will be given to all staff handling proceeds of crime cases. This will include
23 Although confiscation cases in which there are complex restraint proceedings may be dealt with by the Hubs. training on the use of JARD. A communication strategy will be put in place to ensure that we share lessons learnt and continually develop best practice.
We shall establish a “link lawyer system” between CPS Proceeds of Crime and Areas.
**Work more productively with law enforcement agencies and HMCTS**
Our prosecutors will build closer relationships with the Financial Investigation Units (FIUs) of local police forces across the country.
CPS lawyers are co-located in each of the nine multi-agency RARTs, made up of police and CPS members. RARTs provide specialist financial investigation skills to conduct complex confiscation and money laundering investigations. Their aim is to disrupt serious and organised crime, and their work is targeted at criminals who pose the greatest threat. The work of RARTs furthers the objectives of the CPS asset recovery strategy, and we shall continue to provide RARTs with experienced, dedicated staff. We shall also ensure that the Regional teams and local CPS Areas have a clearly defined relationship with the RARTs. To achieve this, we will agree a Memorandum of Understanding with each of the RARTs.
**Measure and report on our performance**
The CPS delivers a public service in accordance with a set of publically facing Core Quality Standards (CQS)(^{24}). These lay down the quality of service that the public is entitled to expect from those who prosecute on its behalf and include a standard on asset recovery work. The CQS are currently being reviewed.
The CQS are supported by published service delivery measures that set the performance expected in respect of each standard. Currently, the asset recovery measures provide quarterly data on the volume of restraint orders, the volume and value of confiscation orders, and the value of assets recovered. We intend to publish this data on the CPS website and report on our performance in the CPS Annual Report.
We recognise that to make further improvements in asset recovery, we shall need to develop a more comprehensive and refined set of measures(^{25}). We will develop new measures during 2014/15.
**Ensure our prosecutors have the skills for the job**
The CPS is going to introduce a Legal Development Programme (LDP) for all prosecutors and caseworkers. Specific to the design of the Programme will be training for asset recovery.
______________________________________________________________________
(^{24})CPS Core Quality Standards
(^{25})The NAO report recommends that agencies define clear objectives and success measures, and develop more sophisticated performance data: recommendations a and c. Reinvest all monies recovered under ARIS in further recovery work
The CPS participates in the Asset Recovery Incentivisation Scheme (ARIS), whereby we and other agencies receive a proportion of the assets we recover to help fund our work. Under the ARIS arrangements, the Home Office receives 50% of confiscated assets, the relevant law enforcement authority and the prosecutor will each receive 18.75%, and HMCTS receives 12.5%. In cash forfeiture, civil recovery and criminal taxation cases, the Home Office and the applicant agency each receive 50% of the sum recovered.
If we are to build upon the successes of our asset recovery work to date, it is essential that we maintain this funding stream.
To maintain public confidence and to make further improvements in our asset recovery performance, we shall reinvest all monies received under ARIS in further asset recovery work. The aim of this reinvestment is not to benefit the CPS or its prosecutors but to deprive more criminals of their profits. This in turn will disrupt more criminal organisations, and deter and reduce crime, in line with our broader strategy on asset recovery. The DPP will publish detailed guidance on the use that can be made of ARIS funding.
Take a principle-based approach to asset recovery
The CPS is mindful that the ARIS scheme could be seen as an incentive for the CPS to pursue criminal’s assets inappropriately, due to the potential benefits that accrue to the Service. Our strategy seeks to ensure that this will not occur by only bringing confiscation proceedings when it is a proper and proportionate response. We recognise that we must take a principled based approach to confiscation, in line with the purpose of proceeds of crime legislation, which is to:
- Deprive offenders of the proceeds of their criminal conduct;
- Deter the commission of further offences; and
- Reduce the profits available to fund further criminal enterprises.
Accordingly, in all cases where we are considering whether to bring confiscation proceedings we shall apply the principles set out in the DPP’s “Guidance for Prosecutors on the Discretion to Instigate Confiscation Proceedings”. The guidance provides examples of when it may be inappropriate for prosecutors to decide to instigate confiscation proceedings.
______________________________________________________________________
26 Joint Thematic Review p12, issue to address number 22: the CPS and others should consider ring-fencing ARIS funds, so that they are ploughed back into the same work.
27 Guidance for prosecutors on the discretion to instigate confiscation proceedings.
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acc899e599549e85a3bc83b0b7472da072c1b9cb | Employee engagement is shaped by experience at work, as measured by nine themes in the survey shown below.
**Engagement Index**
- **My work**: 68%
- Difference from previous survey: +1
- Difference from CS2015: -5
- Difference from CS High Performers: -9
- **Organisational objectives and purpose**: 83%
- Difference from previous survey: 0
- Difference from CS2015: 0
- Difference from CS High Performers: -4
- **My manager**: 60%
- Difference from previous survey: +1
- Difference from CS2015: -8
- Difference from CS High Performers: -11
- **My team**: 71%
- Difference from previous survey: +1
- Difference from CS2015: -9
- Difference from CS High Performers: -12
- **Learning and development**: 43%
- Difference from previous survey: +4
- Difference from CS2015: -6
- Difference from CS High Performers: -13
- **Inclusion and fair treatment**: 67%
- Difference from previous survey: +2
- Difference from CS2015: -7
- Difference from CS High Performers: -11
- **Resources and workload**: 64%
- Difference from previous survey: +2
- Difference from CS2015: -9
- Difference from CS High Performers: -13
- **Pay and benefits**: 36%
- Difference from previous survey: +2
- Difference from CS2015: +6
- Difference from CS High Performers: -1
- **Leadership and managing change**: 33%
- Difference from previous survey: +1
- Difference from CS2015: -10
- Difference from CS High Performers: -18
**Crown Prosecution Service**
Returns: 3,588\
Response rate: 61%\
Civil Service People Survey 2015
Strength of association with engagement\
Statistically significant difference from comparison The table below shows how you performed on each of the nine themes ranked by the strength of association with engagement. The themes which have the strongest association with engagement should be the focus for action. See the appendix for further details.
| Drivers of Engagement | Strength of association with engagement | Theme score % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-----------------------|----------------------------------------|------------------------|-------------------------------|-----------------------|----------------------------------| | Leadership and managing change | 33% | +1 | -10 | -18 | | My work | 68% | +1 | -6 | -10 | | My manager | 60% | +1 | -8 | -11 | | Resources and workload | 64% | +2 | -9 | -13 | | Pay and benefits | 36% | +2 | +6 | -1 | | Learning and development | 43% | +4 | -6 | -13 | | Organisational objectives and purpose | 83% | 0 | 0 | -4 | | Inclusion and fair treatment | 67% | +2 | -7 | -11 | | My team | 71% | +1 | -9 | -12 |
Wellbeing
- Overall, how satisfied are you with your life nowadays? 57%
- Overall, to what extent do you feel that the things you do in your life are worthwhile? 67%
- Overall, how happy did you feel yesterday? 56%
- Overall, how anxious did you feel yesterday? 42%
Discrimination, bullying and harassment
- During the past 12 months have you personally experienced discrimination at work? 13%
- During the past 12 months have you personally experienced bullying or harassment at work? 12%
Your plans for the future
- I want to leave the CPS as soon as possible: 12%
- I want to leave the CPS within the next 12 months: 13%
- I want to stay working for the CPS for at least the next year: 24%
- I want to stay working for the CPS for at least the next three years: 51%
### All questions by theme
#### My work
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B01 I am interested in my work | 89% | 0 | 0 | -2 ▼ | | B02 I am sufficiently challenged by my work | 79% | +1 | 0 | -4 ▼ | | B03 My work gives me a sense of personal accomplishment | 75% | +2 | 0 | -3 ▼ | | B04 I feel involved in the decisions that affect my work | 45% | +2 | -11 | -19 ▼ | | B05 I have a choice in deciding how I do my work | 54% | +2 | -20 | -25 ▼ |
#### Organisational objectives and purpose
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B06 I have a clear understanding of the CPS purpose | 85% | 0 | 0 | -4 ▼ | | B07 I have a clear understanding of the CPS objectives | 81% | 0 | +2 | -3 ▼ | | B08 I understand how my work contributes to the CPS objectives | 82% | -1 | -1 | -5 ▼ |
### My manager
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B09 My manager motivates me to be more effective in my job | 60% | +1 | -8 | -12 | | B10 My manager is considerate of my life outside work | 72% | +1 | -10 | -13 | | B11 My manager is open to my ideas | 68% | -1 | -12 | -16 | | B12 My manager helps me to understand how I contribute to the CPS objectives | 59% | +1 | -4 | -9 | | B13 Overall, I have confidence in the decisions made by my manager | 64% | +1 | -8 | -13 | | B14 My manager recognises when I have done my job well | 71% | 0 | -8 | -10 | | B15 I receive regular feedback on my performance | 59% | +1 | -7 | -11 | | B16 The feedback I receive helps me to improve my performance | 55% | +1 | -7 | -10 | | B17 I think that my performance is evaluated fairly | 59% | +3 | -3 | -9 | | B18 Poor performance is dealt with effectively in my team | 34% | +1 | -5 | -10 |
### My team
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B19 The people in my team can be relied upon to help when things get difficult in my job | 80% | +2 | -4 | -7 | | B20 The people in my team work together to find ways to improve the service we provide | 75% | +2 | -5 | -9 | | B21 The people in my team are encouraged to come up with new and better ways of doing things | 58% | -1 | -16 | -20 |
### Learning and development
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B22 I am able to access the right learning and development opportunities when I need to | 58% | +6 | -5 | -9 | | B23 Learning and development activities I have completed in the past 12 months have helped to improve my performance | 48% | +5 | -4 | -10 | | B24 There are opportunities for me to develop my career in the CPS | 30% | +1 | -11 | -19 | | B25 Learning and development activities I have completed while working for the CPS are helping me to develop my career | 36% | +3 | -8 | -14 |
### Inclusion and fair treatment
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B26 I am treated fairly at work | 70% | +3 | -8 | -11 | | B27 I am treated with respect by the people I work with | 80% | +2 | -4 | -7 | | B28 I feel valued for the work I do | 54% | +2 | -10 | -15 | | B29 I think that the CPS respects individual differences (e.g. cultures, working styles, backgrounds, ideas, etc) | 65% | +2 | -7 | -13 |
### Resources and workload
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B30 In my job, I am clear what is expected of me | 82% | 0 | -1 | -4 | | B31 I get the information I need to do my job well | 57% | +2 | -12 | -16 | | B32 I have clear work objectives | 74% | +2 | -1 | -6 | | B33 I have the skills I need to do my job effectively | 85% | 0 | -3 | -5 | | B34 I have the tools I need to do my job effectively | 54% | +3 | -15 | -20 | | B35 I have an acceptable workload | 44% | +3 | -15 | -20 | | B36 I achieve a good balance between my work life and my private life | 51% | +2 | -16 | -21 |
### Pay and benefits
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B37 I feel that my pay adequately reflects my performance | 33% | +2 | +2 | -4 | | B38 I am satisfied with the total benefits package | 39% | +2 | +6 | 0 | | B39 Compared to people doing a similar job in other organisations I feel my pay is reasonable | 34% | +1 | +9 | +2 |
### Leadership and managing change
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B40 I feel that the CPS as a whole is managed well | 32% | 0 | -13 | -24 | | B41 Senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) in the CPS are sufficiently visible | 44% | +1 | -9 | -22 | | B42 I believe the actions of senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) are consistent with the CPS values | 41% | 0 | -4 | -15 | | B43 I believe that the CPS Board has a clear vision for the future of the CPS | 31% | -2 | -11 | -23 | | B44 Overall, I have confidence in the decisions made by the CPS senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) | 31% | 0 | -10 | -20 | | B45 I feel that change is managed well in the CPS | 23% | -1 | -7 | -16 | | B46 When changes are made in the CPS they are usually for the better | 21% | +1 | -6 | -14 | | B47 The CPS keeps me informed about matters that affect me | 44% | +2 | -12 | -20 | | B48 I have the opportunity to contribute my views before decisions are made that affect me | 33% | +5 | -3 | -11 | | B49 I think it is safe to challenge the way things are done in the CPS | 32% | 0 | -9 | -18 |
## Engagement
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------|------------------------|-----------------------------------| | B50 I am proud when I tell others I am part of the CPS | 15 | 33 | 29 | 16 | 7 | 48% | 0 | -9 | -18 | | B51 I would recommend the CPS as a great place to work | 10 | 22 | 30 | 24 | 14 | 31% | 0 | -16 | -27 | | B52 I feel a strong personal attachment to the CPS | 18 | 35 | 25 | 15 | 8 | 53% | +2 | +6 | -1 | | B53 The CPS inspires me to do the best in my job | 12 | 26 | 31 | 20 | 11 | 38% | +1 | -6 | -13 | | B54 The CPS motivates me to help it achieve its objectives | 12 | 24 | 31 | 21 | 12 | 36% | +1 | -6 | -13 |
## Taking action
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |-------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------|------------------------|-----------------------------------| | B55 I believe that senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) in the CPS will take action on the results from this survey | 9 | 28 | 23 | 21 | 19 | 37% | +2 | -6 | -18 | | B56 I believe that managers where I work will take action on the results from this survey | 14 | 31 | 21 | 17 | 17 | 45% | +2 | -10 | -17 | | B57 Where I work, I think effective action has been taken on the results of the last survey | 11 | 22 | 30 | 19 | 18 | 32% | +3 | -1 | -10 |
### Organisational culture
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------|-----------------------|-----------------------------------| | B58 I am trusted to carry out my job effectively | 29 | 53 | 8 | 7 | | 83% | +2 | -5 | -7 | | B59 I believe I would be supported if I try a new idea, even if it may not work | 17 | 35 | 23 | 17 | 8 | 52% | +2 | -16 | -20 | | B60 My performance is evaluated based on whether I get things done, rather than solely follow processes | 14 | 35 | 24 | 17 | 11 | 49% | +1 | -16 | -21 | | B61 When I talk about the CPS I say "we" rather than "they" | 21 | 44 | 20 | 10 | 5 | 64% | +2 | -6 | -14 | | B62 I have some really good friendships at work | 36 | 45 | 12 | | | 81% | +1 | +6 | +2 |
### Leadership statement
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------|-----------------------|-----------------------------------| | B63 My manager inspires my team to do our best | 21 | 38 | 20 | 12 | 8 | 60% | -- | -7 | -11 | | B64 Senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) inspire people across the CPS to do their best | 8 | 25 | 31 | 22 | 14 | 33% | -- | -4 | -13 | | B65 My manager leads our team with confidence | 22 | 39 | 19 | 11 | 9 | 61% | -- | -9 | -15 | | B66 Senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) lead the CPS with confidence | 10 | 29 | 33 | 16 | 12 | 39% | -- | -8 | -18 | | B67 My manager empowers me to do my job effectively | 20 | 36 | 23 | 11 | 9 | 57% | -- | -15 | -19 | | B68 The CPS senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) empower teams to deliver | 8 | 23 | 35 | 20 | 14 | 31% | -- | -9 | -17 | | B69 Senior managers (DPP, Chief Executive, HQ Directors/Deputies, CCPs, DCCPs, ABMs, BCDMs) in the CPS actively role model the behaviours set out in the Civil Service Leadership Statement | 8 | 23 | 43 | 13 | 12 | 32% | -- | -4 | -12 | | B70 My manager actively role models the behaviours set out in the Civil Service Leadership Statement | 17 | 33 | 34 | 8 | 8 | 50% | -- | -7 | -12 |
### Wellbeing
Unlike the questions B01-B70 which ask people to rate their agreement from strongly agree to strongly disagree, the four wellbeing questions use a 11-point scale. The scale ranges from 0 to 10 for each question, where 0 is equivalent to 'not at all' (e.g. 'not at all satisfied' or 'not at all worthwhile') and where 10 is equivalent to 'completely' (e.g. 'completely satisfied' or 'completely anxious').
For questions W01, W02 and W03 the percent positive is the proportion answering 7, 8, 9 or 10 to each question.
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | W01 Overall, how satisfied are you with your life nowadays? | 57% | +1 | -8 | -11 | | W02 Overall, to what extent do you feel that the things you do in your life are worthwhile? | 67% | +1 | -4 | -7 | | W03 Overall, how happy did you feel yesterday? | 56% | +2 | -6 | -9 |
For question W04 the percent positive is the proportion answering 0, 1, 2 or 3 to the question.
| Question | % Positive | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | W04 Overall, how anxious did you feel yesterday? | 42% | 0 | -8 | -10 |
### Your plans for the future
C01. Which of the following statements most reflects your current thoughts about working for the CPS?
| Statement | % Yes | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |------------------------------------------------|-------|---------------------------------|------------------------|-----------------------------------| | I want to leave the CPS as soon as possible | 12% | -1 | +3 | 0 | | I want to leave the CPS within the next 12 months | 13% | +3 | -2 | -6 | | I want to stay working for the CPS for at least the next year | 24% | 0 | -8 | -14 | | I want to stay working for the CPS for at least the next three years | 51% | -2 | +8 | 0 |
### The Civil Service Code
Differences are based on '% Yes' score
| Question | % Yes | % No | Difference from previous survey | Difference from CS2015 | Difference from CS High Performers | |--------------------------------------------------------------------------|-------|------|---------------------------------|------------------------|-----------------------------------| | D01. Are you aware of the Civil Service Code? | 90% | 10% | +2 | -1 | -5 | | D02. Are you aware of how to raise a concern under the Civil Service Code? | 64% | 36% | +4 | -2 | -8 | | D03. Are you confident that if you raised a concern under the Civil Service Code in the CPS it would be investigated properly? | 58% | 42% | +2 | -10 | -15 | All questions by theme
Discrimination, harassment and bullying
E01. During the past 12 months, have you personally experienced discrimination at work?
| Year | Yes | No | Prefer not to say | |------|-----|----|------------------| | 2015 | 13 | 76 | 11 | | 2014 | 14 | 74 | 12 | | CS2015 | 11 | 80 | 8 |
For respondents who selected 'Yes' to question E01.
E02. On which of the following grounds have you personally experienced discrimination at work in the past 12 months? (multiple selection)
| Ground | Count | |---------------------------------------------|-------| | Age | 67 | | Caring responsibilities | 75 | | Disability | 75 | | Ethnic background | 35 | | Gender | 59 | | Gender reassignment or perceived gender | -- | | Grade, pay band or responsibility level | 112 | | Main spoken/written language or language ability | -- | | Religion or belief | 16 | | Sexual orientation | 10 | | Social or educational background | 24 | | Working location | 86 | | Working pattern | 146 | | Any other grounds | 84 | | Prefer not to say | 45 |
Please note: Counts of fewer than ten responses are suppressed and replaced with '--'.
E03. During the past 12 months, have you personally experienced bullying or harassment at work?
| Year | Yes | No | Prefer not to say | |------|-----|----|------------------| | 2015 | 12 | 78 | 9 | | 2014 | 13 | 78 | 9 | | CS2015 | 10 | 82 | 7 |
For respondents who selected 'Yes' to question E03.
E04. Who were you bullied or harassed by at work in the past 12 months? (multiple selection)
| Response | Count | |-----------------------------------------------|-------| | A colleague | 131 | | Your manager | 127 | | Another manager in my part of the CPS | 125 | | Someone you manage | 17 | | Someone who works for another part of the CPS | 18 | | A member of the public | 10 | | Someone else | 20 | | Prefer not to say | 63 |
### Crown Prosecution Service questions
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | |--------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------| | F01 I demonstrate the CPS values through my actions | 29 | 57 | 13 | | | 85% | +7 ◊ | | F02 My direct line manager demonstrates the CPS values through their actions | 23 | 48 | 21 | 6 | | 71% | +3 ◊ | | F03 I believe that the CPS is committed to supporting my Health and Wellbeing | 14 | 32 | 24 | 18 | 13 | 45% | -- | | F04 I believe the CPS works constructively with the Departmental Trade Unions | 10 | 25 | 39 | 16 | 9 | 36% | -- | | F05 I am aware of sources of support that are available to me as a CPS employee | Yes: 82% | No: 18% | | | | 82% | -- | | F06 I believe that change is managed well in my Area/Directorate/Division | 9 | 24 | 23 | 26 | 18 | 33% | +2 ◊ | | F07 My local Senior Management Team is sufficiently visible (CCP and ABM/HQ Director/Casework Director/Head of Division) | 17 | 35 | 20 | 16 | 12 | 52% | 0 | | F08 I have arrangements in place to ensure I spend at least five days per year on my personal development this year | Yes: 38% | No: 62% | | | | 38% | +3 ◊ | | F09 I am kept informed of local and national news through the use of Team Talk at regular team briefings/meetings\* | 17 | 43 | 17 | 15 | 8 | 60% | -3 ◊ | | F10 I believe the Digital Business Programme is supporting the CPS to work digitally | 12 | 38 | 28 | 13 | 9 | 50% | -- | | F11 My role contributes to providing a positive experience for Victims and Witnesses | 21 | 45 | 25 | 6 | | 66% | -2 ◊ | | F12 I have discussed my Individual Learning Account (ILA) with my line manager and agreed how that funding will be used to support my personal development\* | Yes: 61% | No: 39% | | | | 61% | +6 ◊ | | F13 I am committed to the CPS purpose of delivering justice | 49 | 44 | 6 | | | 93% | -- |
### Crown Prosecution Service questions
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | |--------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------| | F14 I believe that the CPS is committed to building and maintaining an | 20 | 36 | 22 | 13 | 9 | 56% | -- | | inclusive workforce that treats all its employees fairly | | | | | | | |
- indicates statistically significant difference from comparison
- indicates a variation in question wording from your previous survey Appendix
Glossary of key terms
% positive The proportion who selected either "agree" or "strongly agree" for a question (or all questions within a theme in the case of Theme score % positive).
Previous survey Comparisons to the previous survey relate to the results from the 2014 Civil Service People Survey. Where a question is flagged as changed since the last survey comparisons should be treated with caution as changes to wording may affect how people respond to the question.
CS2015 The CS2015 benchmark is the median percent positive across all organisations that participated in the 2015 Civil Service People Survey.
CS High Performers For each question, this is the upper quartile score across all organisations that have taken part in the 2015 Civil Service People Survey.
Rounding
Results are presented as whole numbers for ease of reading, with rounding performed at the last stage of calculation for maximum accuracy.
Statistical significance:
Statistical testing has been carried out on the comparisons between this year's results and your previous survey, CS2015 results and CS High Performers results to identify differences that are statistically significant. You can therefore be confident that the difference represents a real difference in opinion between the results.
The employee engagement index
The survey includes five questions that make up the engagement index (B50-B54). The index score represents the average level of engagement in that unit and ranges from 0 to 100. An index score of 0 represents all respondents in that unit saying they strongly disagree to all five engagement questions and a score of 100 represents all respondents saying they strongly agree to all five engagement questions.
The drivers of engagement
While the engagement index shows the average level of engagement, it does not show what you can do to improve engagement. Nine themes have been included in the survey to measure employees' experiences at work. A statistical technique, stepwise regression, is used to identify the extent to which each of these themes has an association with engagement. The themes identified as having an association are called the 'Drivers of engagement'. The strength of association with engagement varies by theme and is illustrated by a 4-bar icon, as shown below. Themes with a full 4-bar icon have the strongest association with engagement.
Confidentiality
The survey was carried out as part of the 2015 Civil Service People Survey, which is managed by the Cabinet Office on behalf of all participating organisations. The Cabinet Office commissioned ORC International to carry out the survey. ORC International is a member of the Market Research Society, and is bound by their strict code of conduct and confidentiality rules. These rules do not allow for the breakdown of the results to the extent where the anonymity of individuals may be compromised. Groups of less than 10 respondents will not be reported on, however their responses do contribute to the overall scores for the unit and organisation they belong to and the overall Civil Service results.
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90aa9d8fa237bef0c4e3c9cdc8a00437c2408a93 | Employee engagement is shaped by experience at work, as measured by nine themes in the survey shown below.
| Engagement Index | My work | Organisational objectives and purpose | My manager | My team | |------------------|---------|---------------------------------------|------------|---------| | 59% | 71% | 86% | 64% | 73% | | Difference from previous survey | +5 | +3 | +4 | +2 | | Difference from CS2016 | -1 | -4 | +4 | -7 | | Difference from CS High Performers | -5 | -7 | -1 | -10 |
| Learning and development | Inclusion and fair treatment | Resources and workload | Pay and benefits | Leadership and managing change | |--------------------------|-----------------------------|------------------------|-----------------|-------------------------------| | 46% | 72% | 68% | 35% | 43% | | Difference from previous survey | +3 | +4 | +4 | +10 | | Difference from CS2016 | -4 | -4 | -6 | 0 | | Difference from CS High Performers | -9 | -8 | -9 | -9 |
Strength of association with engagement
Statistically significant difference from comparison The table below shows how you performed on each of the nine themes ranked by the strength of association with engagement. The themes which have the strongest association with engagement should be the focus for action. See the appendix for further details.
| Drivers of Engagement | Strength of association with engagement | Theme score % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-----------------------|----------------------------------------|------------------------|-------------------------------|-----------------------|----------------------------------| | Leadership and managing change | 43% | +10 ▶ | 0 | -9 ▶ | | My work | 71% | +3 ▶ | -4 ▶ | -7 ▶ | | My manager | 64% | +4 ▶ | -4 ▶ | -6 ▶ | | Pay and benefits | 35% | 0 | +4 ▶ | -2 ▶ | | Resources and workload | 68% | +4 ▶ | -6 ▶ | -9 ▶ | | Learning and development | 46% | +3 ▶ | -4 ▶ | -9 ▶ | | Organisational objectives and purpose | 86% | +4 ▶ | +4 ▶ | -1 ▶ | | My team | 73% | +2 ▶ | -7 ▶ | -10 ▶ | | Inclusion and fair treatment | 72% | +4 ▶ | -4 ▶ | -8 ▶ |
Wellbeing
- **W01.** Overall, how satisfied are you with your life nowadays?
- **W02.** Overall, to what extent do you feel that the things you do in your life are worthwhile?
- **W03.** Overall, how happy did you feel yesterday?
- **W04.** Overall, how anxious did you feel yesterday?
Discrimination, bullying and harassment
- **During the past 12 months have you personally experienced discrimination at work?** 12%
- **During the past 12 months have you personally experienced bullying or harassment at work?** 11%
Your plans for the future
- **I want to leave the CPS as soon as possible** 10%
- **I want to leave the CPS within the next 12 months** 11%
- **I want to stay working for the CPS for at least the next year** 23%
- **I want to stay working for the CPS for at least the next three years** 56%
### All questions by theme
#### My work
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B01 I am interested in my work | 91% | +2 | +1 | 0 | | B02 I am sufficiently challenged by my work | 81% | +2 | 0 | -2 | | B03 My work gives me a sense of personal accomplishment | 79% | +4 | +4 | 0 | | B04 I feel involved in the decisions that affect my work | 48% | +4 | -9 | -13 | | B05 I have a choice in deciding how I do my work | 58% | +4 | -16 | -21 |
#### Organisational objectives and purpose
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B06 I have a clear understanding of the CPS purpose | 88% | +3 | +2 | -3 | | B07 I have a clear understanding of the CPS objectives | 85% | +4 | +5 | +1 | | B08 I understand how my work contributes to the CPS objectives | 86% | +4 | +3 | -1 |
### My manager
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B09 My manager motivates me to be more effective in my job | 65% | +5 | -4 | -8 | | B10 My manager is considerate of my life outside work | 77% | +5 | -5 | -8 | | B11 My manager is open to my ideas | 72% | +4 | -8 | -12 | | B12 My manager helps me to understand how I contribute to the CPS objectives | 64% | +4 | -8 | -12 | | B13 Overall, I have confidence in the decisions made by my manager | 70% | +6 | -3 | -8 | | B14 My manager recognises when I have done my job well | 75% | +4 | -3 | -7 | | B15 I receive regular feedback on my performance | 62% | +3 | -4 | -7 | | B16 The feedback I receive helps me to improve my performance | 59% | +4 | -4 | -7 | | B17 I think that my performance is evaluated fairly | 63% | +4 | 0 | -5 | | B18 Poor performance is dealt with effectively in my team | 37% | +3 | -2 | -6 |
### My team
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B19 The people in my team can be relied upon to help when things get difficult in my job | 83% | +3 | -2 | -4 | | B20 The people in my team work together to find ways to improve the service we provide | 76% | +1 | -6 | -9 | | B21 The people in my team are encouraged to come up with new and better ways of doing things | 61% | +2 | -14 | -18 |
### Learning and development
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B22 I am able to access the right learning and development opportunities when I need to | 59% | +1 | -1 | -8 | | B23 Learning and development activities I have completed in the past 12 months have helped to improve my performance | 51% | +3 | +1 | -6 | | B24 There are opportunities for me to develop my career in the CPS | 36% | +6 | -7 | -15 | | B25 Learning and development activities I have completed while working for the CPS are helping me to develop my career | 38% | +3 | -5 | -13 |
### Inclusion and fair treatment
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B26 I am treated fairly at work | 75% | +5 | -4 | -8 | | B27 I am treated with respect by the people I work with | 83% | +3 | -2 | -5 | | B28 I feel valued for the work I do | 59% | +5 | -5 | -11 | | B29 I think that the CPS respects individual differences (e.g. cultures, working styles, backgrounds, ideas, etc) | 70% | +5 | -4 | -8 |
## Resources and workload
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B30 In my job, I am clear what is expected of me | 86% | +4 | | 0 | | B31 I get the information I need to do my job well | 61% | +5 | -7 | -13 | | B32 I have clear work objectives | 76% | +2 | +1 | -4 | | B33 I have the skills I need to do my job effectively | 86% | +1 | -2 | -5 | | B34 I have the tools I need to do my job effectively | 57% | +3 | -13 | -19 | | B35 I have an acceptable workload | 50% | +6 | -8 | -15 | | B36 I achieve a good balance between my work life and my private life | 56% | +5 | -11 | -16 |
## Pay and benefits
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B37 I feel that my pay adequately reflects my performance | 34% | 0 | +2 | -5 | | B38 I am satisfied with the total benefits package | 37% | -2 | +3 | -3 | | B39 Compared to people doing a similar job in other organisations I feel my pay is reasonable | 35% | 0 | +8 | 0 |
### Leadership and managing change
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B40 I feel that the CPS as a whole is managed well | 42% | +10 | -5 | -16 | | B41 My CCP, ABM or Head of Directorate/Division in the CPS are sufficiently visible | 57% | +13 | +2 | -9 | | B42 I believe the actions of my CCP, DCCP, ABM or Head of Directorate/Division are consistent with the CPS values | 58% | +17 | +9 | 0 | | B43 I believe that the CPS Board has a clear vision for the future of the CPS | 46% | +15 | +3 | -9 | | B44 Overall, I have confidence in the decisions made by the DPP, Chief Executive and Directors of Legal, Business and Corporate Services | 45% | +13 | +1 | -10 | | B45 I feel that change is managed well in the CPS | 29% | +6 | -1 | -12 | | B46 When changes are made in the CPS they are usually for the better | 28% | +7 | -2 | -11 | | B47 The CPS keeps me informed about matters that affect me | 50% | +6 | -6 | -15 | | B48 I have the opportunity to contribute my views before decisions are made that affect me | 40% | +6 | +2 | -8 | | B49 I think it is safe to challenge the way things are done in the CPS | 38% | +6 | -5 | -11 |
### Engagement
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B50 I am proud when I tell others I am part of the CPS | 56% | +8 | -3 | -10 | | B51 I would recommend the CPS as a great place to work | 42% | +10 | -9 | -19 | | B52 I feel a strong personal attachment to the CPS | 56% | +4 | +8 | 0 | | B53 The CPS inspires me to do the best in my job | 45% | +6 | -1 | -8 | | B54 The CPS motivates me to help it achieve its objectives | 42% | +6 | -1 | -8 |
### Taking action
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |-------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B55 I believe that my CCP, DCCP, ABM or Head of Directorate/Division in the CPS will take action on the results from this survey\* | 48% | +11 | +2 | -6 | | B56 I believe that managers where I work will take action on the results from this survey | 51% | +5 | -5 | -13 | | B57 Where I work, I think effective action has been taken on the results of the last survey | 39% | +6 | +4 | -3 |
### Organisational culture
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B58 I am trusted to carry out my job effectively | 85% | +2 | -3 | -5 | | B59 I believe I would be supported if I try a new idea, even if it may not work | 54% | +2 | -14 | -19 | | B60 When I talk about the CPS I say "we" rather than "they" | 69% | +5 | -2 | -10 | | B61 I have some really good friendships at work | 82% | +1 | +6 | +2 |
### Leadership statement
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------------|---------------------------------|------------------------|-----------------------------------| | B62 My CCP, ABM or Head of Directorate/Division in the CPS actively role model the behaviours set out in the Civil Service Leadership Statement^ | 48% | +17 | +5 | -1 | | B63 My manager actively role models the behaviours set out in the Civil Service Leadership Statement | 58% | +8 | -4 | -9 | Unlike the questions B01-B63 which ask people to rate their agreement from strongly agree to strongly disagree, the four wellbeing questions use a 11-point scale. The scale ranges from 0 to 10 for each question, where 0 is equivalent to 'not at all' (e.g. 'not at all satisfied' or 'not at all worthwhile') and where 10 is equivalent to 'completely' (e.g. 'completely satisfied' or 'completely anxious').
For questions W01, W02 and W03 the percent positive is the proportion answering 7, 8, 9 or 10 to each question.
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |----------|------------|---------------------------------|------------------------|-----------------------------------| | W01 Overall, how satisfied are you with your life nowadays? | 61% | +3 | -6 | -9 | | W02 Overall, to what extent do you feel that the things you do in your life are worthwhile? | 69% | +2 | -2 | -4 | | W03 Overall, how happy did you feel yesterday? | 62% | +7 | -1 | -4 |
For question W04 the percent positive is the proportion answering 0, 1, 2 or 3 to the question.
| Question | % Positive | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |----------|------------|---------------------------------|------------------------|-----------------------------------| | W04 Overall, how anxious did you feel yesterday? | 48% | +6 | -2 | -5 |
### Your plans for the future
C01. Which of the following statements most reflects your current thoughts about working for the CPS?
| Statement | % Yes | % No | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |------------------------------------------------|------|-----|---------------------------------|------------------------|-----------------------------------| | I want to leave the CPS as soon as possible | 10% | | -2 ◊ | +1 ◊ | -1 ◊ | | I want to leave the CPS within the next 12 months | 11% | | -3 ◊ | -4 ◊ | -8 ◊ | | I want to stay working for the CPS for at least the next year | 23% | | 0 | -9 ◊ | -16 ◊ | | I want to stay working for the CPS for at least the next three years | 56% | | +5 ◊ | +13 ◊ | +5 ◊ |
### The Civil Service Code
Differences are based on '% Yes' score
| Question | % Yes | % No | Difference from previous survey | Difference from CS2016 | Difference from CS High Performers | |--------------------------------------------------------------------------|------|-----|---------------------------------|------------------------|-----------------------------------| | D01. Are you aware of the Civil Service Code? | 89% | 11% | -1 ◊ | -3 ◊ | -6 ◊ | | D02. Are you aware of how to raise a concern under the Civil Service Code? | 64% | 36% | -1 | -3 ◊ | -11 ◊ | | D03. Are you confident that if you raised a concern under the Civil Service Code in the CPS it would be investigated properly? | 62% | 38% | +4 ◊ | -5 ◊ | -13 ◊ |
### Discrimination, harassment and bullying
**E01.** During the past 12 months, have you personally experienced discrimination at work?
| Year | Yes | No | Prefer not to say | |------|-----|----|------------------| | 2016 | 12 | 77 | 11 | | 2015 | 13 | 76 | 11 | | CS2016 | 12 | 80 | 9 |
**E02.** On which of the following grounds have you personally experienced discrimination at work in the past 12 months? (multiple selection)
| Ground | Response Count | |---------------------------------------------|----------------| | Age | 47 | | Caring responsibilities | 69 | | Disability | 78 | | Ethnic background | 45 | | Gender | 51 | | Gender reassignment or perceived gender | -- | | Grade, pay band or responsibility level | 126 | | Main spoken/written language or language ability | -- | | Religion or belief | 16 | | Sexual orientation | -- | | Social or educational background | 18 | | Working location | 78 | | Working pattern | 145 | | Any other grounds | 95 | | Prefer not to say | 46 |
**E03.** During the past 12 months, have you personally experienced bullying or harassment at work?
| Year | Yes | No | Prefer not to say | |------|-----|----|------------------| | 2016 | 11 | 80 | 9 | | 2015 | 12 | 78 | 9 | | CS2016 | 11 | 82 | 7 |
For respondents who selected 'Yes' to question E03.
**E04.** Who were you bullied or harassed by at work in the past 12 months? (multiple selection)
| Person | Response Count | |---------------------------------------------|----------------| | A colleague | 111 | | Your manager | 118 | | Another manager in my part of the CPS | 130 | | Someone you manage | 21 | | Someone who works for another part of the CPS | 31 | | A member of the public | -- | | Someone else | 19 | | Prefer not to say | 58 |
Please note: Counts of fewer than ten responses are suppressed and replaced with ‘--’
**E05.** Did you report the bullying and harassment you experienced?
| Year | Yes | No | Prefer not to say | |------|-----|----|------------------| | 2016 | 40 | 48 | 12 | | CS2016 | 34 | 50 | 16 |
For respondents who selected 'Yes' to question E03.
**E06.** In your opinion, has this issue been resolved?
| Year | Yes | No | Prefer not to say | |------|-----|----|------------------| | 2016 | 17 | 62 | 21 | | CS2016 | 20 | 60 | 20 |
### Crown Prosecution Service questions
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | |--------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------| | F01 I demonstrate the CPS values through my actions | 30 | 58 | 11 | | | 88% | +2 ♦ | | F02 My direct line manager demonstrates the CPS values through their actions | 25 | 50 | 18 | | | 75% | +4 ♦ | | F03 The CPS is committed to supporting my Health and Wellbeing | 14 | 39 | 24 | 15 | 9 | 52% | +7 ♦ | | F04 The CPS works meaningfully with the Departmental Trade Unions^ | 10 | 27 | 42 | 14 | 7 | 37% | +1 ♦ | | F05 I am aware of sources of support that are available to me as a CPS employee | Yes: 83% | No: 17% | | | | 83% | 0 | | F06 Change is managed well in my Area/Directorate/Division | 9 | 29 | 25 | 23 | 13 | 38% | +5 ♦ | | F07 My local Senior Management Team is sufficiently visible (CCP and ABM or Head of Directorate/Division)^ | 17 | 39 | 19 | 16 | 8 | 56% | +5 ♦ | | F08 I have arrangements in place to ensure I spend at least five days per year on my personal development this year | Yes: 37% | No: 63% | | | | 37% | -1 | | F09 I am kept informed of local and national news through the use of Team Talk at regular team briefings/meetings | 15 | 48 | 17 | 14 | 6 | 63% | +3 ♦ | | F10 I am supported to work digitally^ | 20 | 50 | 15 | 10 | 5 | 70% | +20 ♦ | | F11 My role contributes to providing a positive experience for Victims and Witnesses | 23 | 49 | 22 | | | 72% | +6 ♦ | | F12 I have discussed my Individual Learning Account (ILA) with my line manager and agreed how that funding will be used to support my personal development | Yes: 64% | No: 36% | | | | 64% | +3 ♦ | | F13 I am committed to the CPS purpose of delivering justice | 49 | 45 | 5 | | | 94% | +2 ♦ |
### Crown Prosecution Service questions
| Question | Strongly agree | Agree | Neither | Disagree | Strongly disagree | % Positive | Difference from previous survey | |-------------------------------------------------------------------------|----------------|-------|---------|----------|-------------------|------------|---------------------------------| | F14 The CPS is committed to building and maintaining an inclusive workforce that treats all its employees fairly | 21 | 42 | 22 | 10 | 5 | 63% | +7 ✷ | | F15 The CPS Conversations feedback is taken into account when decisions are made | 14 | 30 | 40 | 10 | 6 | 44% | -- | Appendix
Glossary of key terms
% positive The proportion who selected either "agree" or "strongly agree" for a question (or all questions within a theme in the case of Theme score % positive).
Previous survey Comparisons to the previous survey relate to the results from the 2015 Civil Service People Survey. Where a question is flagged as changed since the last survey comparisons should be treated with caution as changes to wording may affect how people respond to the question.
CS2016 The CS2016 benchmark is the median percent positive across all organisations that participated in the 2016 Civil Service People Survey.
CS High Performers For each question, this is the upper quartile score across all organisations that have taken part in the 2016 Civil Service People Survey.
Rounding
Results are presented as whole numbers for ease of reading, with rounding performed at the last stage of calculation for maximum accuracy.
Statistical significance:
Statistical testing has been carried out on the comparisons between this year's results and your previous survey, CS2016 results and CS High Performers results to identify differences that are statistically significant. You can therefore be confident that the difference represents a real difference in opinion between the results.
The employee engagement index
The survey includes five questions that make up the engagement index (B50-B54). The index score represents the average level of engagement in that unit and ranges from 0 to 100. An index score of 0 represents all respondents in that unit saying they strongly disagree to all five engagement questions and a score of 100 represents all respondents saying they strongly agree to all five engagement questions.
The drivers of engagement
While the engagement index shows the average level of engagement, it does not show what you can do to improve engagement. Nine themes have been included in the survey to measure employees' experiences at work. A statistical technique, stepwise regression, is used to identify the extent to which each of these themes has an association with engagement. The themes identified as having an association are called the 'Drivers of engagement'. The strength of association with engagement varies by theme and is illustrated by a 4-bar icon, as shown below. Themes with a full 4-bar icon have the strongest association with engagement.
Confidentiality
The survey was carried out as part of the 2016 Civil Service People Survey, which is managed by the Cabinet Office on behalf of all participating organisations. The Cabinet Office commissioned ORC International to carry out the survey. ORC International is a member of the Market Research Society, and is bound by their strict code of conduct and confidentiality rules. These rules do not allow for the breakdown of the results to the extent where the anonymity of individuals may be compromised. Groups of fewer than 10 respondents will not be reported on, however their responses do contribute to the overall scores for the unit and organisation they belong to and the overall Civil Service results.
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