Annual report and accounts 2016–17

1 Annual reportand accounts2 016 17 CORRECTION SLIP 1 Title: BEIS Annual report and accounts 2016-17 Session: 2017/18 HC 202 Print ISBN: 9781474143059 Web ISBN: 9781474143066 Ordered by the House of Commons to be printed 19 July 2017 Correction: There are two rows missing from the bottom of the table on page 158. The two rows should read: Low carbon price assumption: Favourable changes: nil, Unfavourable changes: 6,480 High carbon price assumption: Favourable changes: 6,340, Unfavourable changes: nil CORRECTION SLIP 2 Title: BEIS Annual report and accounts 2016-17 Session: 2017/18 HC 202 Print ISBN: 9781474143059 Web ISBN: 9781474143066 Ordered by the House of Commons to be printed 19 July 2017 Correction: Page 81 shows ethnicity data for BEIS as follows: 16% BAME 16% Prefer not to say 35% White 33% Unknown The corrections data should state.

2 9% BAME 3% Prefer not to say 51% white 37% unknown 2 016 17 Annual reportand accountsFor the year ended 31 March 2017 accounts presented to the House of Commons pursuant to Section 6(4) of the Government Resources and accounts Act 2000 Annual report presented to the House of Commons by Command of Her MajestyOrdered by the House of Commons to be printed on 19 July 2017HC 202 Crown copyright 2017 This publication is licensed under the terms of the Open Government Licence except where otherwise stated. To view this licence, visit or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: Image: UK from the International Space Station at night ESA/NASA p246 Image: Visit England, p32 Image: VisitBritain/Michael TurtleThis publication is available at Any enquiries regarding this publication should be sent to us at: 1 Victoria Street, London.

3 SW1H 0ET Tel: 020 7215 5000 Email: Print ISBN 9781474143059We b ISBN 97814741430 6 6ID 07041701 07/17 Printed on paper containing 75% recycled fibre content minimumPrinted in the UK by the Williams Lea Group on behalf of the Controller of Her Majesty s Stationery OfficeThis is part of a series of departmental publications which, along with the Main Estimates 2017-18 and the document Public Expenditure: Statistical Analyses 2017, present the Government s outturn for 2016-17 and planned expenditure for report5 ContentsForeword by the Secretary of State 6 report of the Permanent Secretary 7 Performance report 8 Overview 9 Our purpose 9 What we are aiming to achieve 9 How we were formed 10 How we are organised 11 Our highlights this year 12 Where we spent our money in 2016-17 14 Our performance 16 Our aims and achievements 16 Principal risks and uncertainties 26 Looking ahead 30 Accountability report 32 Directors report 33 Financial review 33 Departmental board and leadership team 44

4 Statement of Accounting Officer s responsibilities 49 Governance statement 50 Sustainability report 74 Staff report 78 Remuneration report 86 Parliamentary accountability and audit report 98 Financial statements 118 Trust statement 218 Annexes 240 Annex A: Our major projects and programmes 241 Annex B: Other Information 243 Annex C: Expenditure Tables 244 Annex D: Glossary 253 Annual report and accounts 2016 176 Foreword by the Secretary of StateIt s a great pleasure to introduce the first Annual report of the Department for Business, Energy and Industrial the first Secretary of State for this new department, I m immensely grateful for the hard work and dedication of its staff.

5 Over the last 12 months they ve joined together as one team to deliver a truly ambitious core purpose of BEIS is to put industrial strategy at the heart of economic policy. It s a mission that encompasses the whole department. Indeed, the scope of the strategy extends across Whitehall and beyond, with BEIS as the focal industrial strategy green paper was published by the Department in January. I ve been hugely encouraged by the scale and breadth of the response to the consultation. From the beginning, we promised to engage with every part of the country and every sector of the economy and we have. We are thereforewell placed to build the industrial strategy with, and not just for, British industry.

6 One of our early breakthroughs was securing more money for British science and innovation. At the last Autumn Statement, the Chancellor announced the biggest increase in public R&D investment since 1979. As a country we cannot afford to lag behind in the race for the future. That is why, looking further ahead, our target is now to match and then exceed the current level of R&D investment among advanced industrial nations. Getting the best value from these resources is even more important. This is the purpose of the Higher Education and Research Act, which became law in April. It brings together the 7 Research Councils and other funding bodies into a single, strategic agency called UK Research and Innovation.

7 UKRI will encourage collaborative research across the sciences, and closer cooperation between researchers, innovators and and technology is the basis for economic progress and also for the action we need to take on climate change. Over the past year, the UK has ratified the Paris Agreement and passed the fifth carbon budget. BEIS itself was created to align economic and environmental objectives. By working with industry partners, on projects from Hinkley Point C in Somerset to the Siemens wind turbine factory in Hull we are showing that investment in clean energy is also investment in jobs, skills and local growth. This department s second year will be just as important as its first.

8 In particular, we will work to secure a business-friendly Brexit, endeavouring to represent British enterprise and British workers on this and every other Rt Hon Greg Clark MP Secretary of State for Business, Energy and Industrial StrategyPerformance report7 Following the creation of the Department in July 2016, we have made good progress against our four headline objectives: to deliver an ambitious industrial strategy; to maximise investment opportunities and bolster UK interests; to promote competitive markets and responsible business practices; and to ensure the UK has a reliable, low-cost and clean energy system. We have also built a strong new department, well equipped to deliver on our ambitious agenda.

9 This report highlights the key achievements during 2016-17 towards these four objectives. In January, we launched an industrial strategy green paper to consult on proposals for a modern industrial strategy. As well as receiving nearly 1,900 responses, Ministers and officials engaged extensively with stakeholders through workshops, roundtables and other events, gathering insights which will shape our industrial strategy going forward. We also announced additional investment in sectors including advanced materials and life sciences, and we increased our support for science, research and innovation, with an additional billion to be invested over the next 4 years.

10 We have continued our support for businesses and employees, making 250 million of Start Up loans available since 2012 and announcing 400 million for the British Business Bank to invest in innovative firms planning to scale up. We have seen a further increase to the National Living Wage, rising to in April 2017, and a doubling of female representation in boardrooms, up 26% compared to 2011. report of the Permanent SecretaryTo boost our economy and increase the security of our energy supply, we gave the go ahead to build the first new nuclear power station in a generation at Hinkley Point C. We are continuing to take action to reduce energy bills for consumers, and, as of March 2017, there were nearly 7 million meters operating under our Smart Meter Programme.