Radiocommunications Agency Annual Report and Accounts 95/96

Accounts for the year 1995/1996

Notes to the Accounts

2. Gross Income
For the purposes of company law and accounting standards, the Agency has only one class of business and all income arises in the United Kingdom.

The following information is given to satisfy the additional disclosure requirements of the HM Treasury Fees and Charges Guide, in accordance with paragraph 3(d) of the Agency's Accounts Direction.

Paragraph 1.5 of the Fees and Charges Guide specifies main categories of service.

Miscellaneous income includes costs awarded to the Agency in successful Court prosecutions and other items for which the full cost cannot easily be determined. Accordingly, no costs have been set against this category of income.

The above summary excludes all uninsured losses fully recoverable from the DTI. See also notes 1(k) and 18.

Paragraph 3.8 of the Fees and Charges Guide requires the disclosure of the financial objective, full cost, income, surplus or deficit, and performance against the financial objective for each form of a statutory service which has a full cost of more than £I million. By agreement with the Treasury, statutory service is taken to be the same as the Agency's business reporting sector rather than the individual licence classes and sub-classes within such sectors. The business reporting sectors reflect the broad types of radio use recognised in the radio industry.

The financial objective in each case is to recover the full cost from customers. Full cost for each sector is calculated by the Agency's costing system and involves a significant apportionment of overhead costs which cannot be directly allocated at this level of detail. The Agency has agreed a three-year plan to minimise surpluses/deficits on all business reporting sectors and to eliminate its overall surplus.

3. Performance against key financial targets

The Agency's key financial target is to recover its full costs from its customers. This target was achieved for the year ended 31 March 1996 (as it been each year since the inception of the Agency). For the year to 31 March 1996, the Income and Expenditure Account shows that income exceeded expenditure by £2,981,000.

4. Staff costs

The number of senior employees (Civil Service Grades 5 and above) in post at the end of the year, excluding the Chief Executive, was:

The Chief Executive receives a basic annual bonus on the same terms as all staff, based on the Agency's performance against key performance targets. In addition, he receives a Chief Executive's bonus limited to a maximum of 10% of salary. This is based on his assessed performance in the previous financial year. The amount of this bonus is recommended by the Steering Board and approved by the DTI.

Pensions
The employees of the Agency are civil servants to whom the conditions of the Superannuation Acts 1965 and 1972 and subsequent amendments apply. For the year ended 31 March 1996, contributions were paid to the Paymaster General at rates of 11.0 to 19.5% (according to grade) (1995: 13.5% for all grades) of wages and salaries as determined by the Government Actuary and advised by the Treasury.

Early retirement
In 1995-96, 16 staff (1994-95: 3 staff) retired early from the Agency. The cost for the year of early retirement benefits paid in respect of Agency staff retiring early in all years up to and including 1995-96 amounted to £368,371 (1994-95: £160,429). Since the DTI accepts full liability for these costs (see Note I (i)), they have not been charged to the Agency's Income and Expenditure Account. At 31 March 1996, the estimated cost of future pension payments under the scheme for Agency staff who had retired early amounted to £789,000 (31 March 1995: £306,000).

Steering Board
The Agency Steering Board comprises seven members, three of whom are civil servants (details are given in the Foreword to the Accounts). The Chief Executive is one of these members and his remuneration is borne by the Agency and disclosed above. The costs of the other civil servant members are borne by the DTI. These members do not receive any remuneration for Board duties in addition to their normal salaries. The external members of the Steering Board are remunerated directly by the DTI and their total remuneration for the year ended 31 March 1996 was £12,570 (1995: £12,874).

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