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Driver & Vehicle
Licensing Agency
Annual Report & Accounts 2012 - 13
HC206
4
DVLA Annual Report & Accounts 2012-13
Driver and Vehicle Licensing Agency
Annual Report and Accounts 2012-13
Presented to the House of Commons pursuant to section 7 of the Government
Resources and Accounts Act 2000
Ordered by the House of Commons to be printed 27 June 2013
HC206 London: The Stationery Office £30.00
Go to Contents page
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DVLA Annual Report & Accounts 2012-13
© Crown copyright 2013
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
www.nationalarchives.gov.uk/doc/open-government-licence/ or email: psi@nationalarchives.gsi.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from
the copyright holders concerned.
Any enquiries regarding this publication should be sent to us at www.gov.uk/contact-the-dvla
You can download this publication from www.dft.gov.uk/dvla/
ISBN: 9780102981629
Printed in the UK for The Stationery Office Limited
on behalf of the Controller of Her Majesty‟s Stationery Office
ID 2561056 06/13
Printed on paper containing 75% recycled fibre content minimum.
Go to Contents page
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Contents
DVLA Annual Report & Accounts 2012-13
Highlights for the year
5
Chief Executive’s message
7
Annual Report
1. Directors’ Report
1.1 Who we are and what we do
8
1.2 Transformation and change agenda
9
1.3 Service delivery
11
1.4 Policy development
14
1.5 DVLA people
15
1.6 Looking to the future
16
1.7 Performance summary 2012-13
17
2. Management Commentary
2.1 Financial performance review
20
2.2 Efficiency
21
2.3 VED Collection
23
2.4 VED Enforcement
23
2.5 Sustainability
24
2.6 Disclosure of information to auditors
26
3. Remuneration Report
27
Accounts
4. Accounts for 2012-13
4.1 Statement of the Agency and Accounting Officer‟s responsibilities
34
4.2 Governance statement
35
4.3 Certificate and Report of the Comptroller and Auditor General - Business
Accounts
50
4.4 Summary of accounts 2012-13
52
4.5 Business Accounts
53
4.6 Audit Report of the Comptroller and Auditor General - Trust Statement
94
4.7 Trust Statement
96
Appendix
A. Comptroller and Auditor General Section 2 Report
109
B. Accounts Directions
112
C. Sustainable performance
118
Glossary of terms
122
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Highlights for the year
DVLA Annual Report & Accounts 2012-13 5
Operational results
We exceeded or met 18 of 20 performance
measures.
Customer service measures
We exceeded or met 19 out of 20 of our
customer service measures.
Customer Service Excellence
DVLA has retained its accreditation to the
Customer Service Excellence standard for a
further year, achieving its best result ever,
including awards in twenty areas of „best
practice‟.
Digital services
In October 2012 the Government launched
GOV.UK bringing all government websites
under a single, centrally-run domain. DVLA
customer services were successfully transferred
to the new site. For more information visit
GOV.UK.
In 2012-13, DVLA‟s electronic vehicle licensing
(EVL) service achieved its highest ever digital
take up. By March 2013 this take up percentage
had risen to 55.7% of licensing transactions.
Best event in government 2012
Digital Unite, organisers of the spring online
events across the UK, awarded DVLA a special
„Best Event in Government 2012‟
commendation for its Silver Surfer event held in
April 2012.
The Silver Surfer event proved a great
opportunity for DVLA to make a positive
contribution to the local community and in doing
so, create an awareness of DVLA online
services.
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DVLA Annual Report & Accounts 2012-13 6
DVLA personalised registrations
In 2012, to celebrate the London 2012
Olympics, DVLA released Olympic themed
registration. The Agency was granted official
licensee status for the 2012 Olympic Games
and a three day auction, which included 1,750
registrations, was held at City Hall, London,
raising a total of £4.7 million.
Contact Centre Association
In 2012, DVLA‟s contact centre was crowned
„Best Overall Contact Centre of the Year‟ by the
Customer Contact Association (CCA).
Our contact centre also won the award for the
„Most Effective Training Programme‟ category.
CCA is the leading independent authority on
customer contact strategies and operations,
particularly for the contact centre industry. The
CCA Global Standard© and the CCA
Excellence Awards programme brings together
all of the elements needed for quality contact
centre operation.
Financial result
DVLA raised £401 million through fees and
charges income, an increase of £13 million
against the Business Plan 2012-13 forecast of
£388 million. A fees surplus of £10.9 million was
achieved against a forecast breakeven outturn
in our Business Plan 2012-13.
The Agency has delivered a sustainable
efficiency gain of £40.6 million exceeding our
target of £33.25 million.
Two ticks
DVLA has been re-accredited with the Two
Ticks „Positive about Disabled People‟ symbol
in recognition of its actions to support disabled
people in the Agency.
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Chief Executive's message
DVLA Annual Report & Accounts 2012-13 7
This last year has
been a
challenging one
for DVLA and its
people. Good
progress has
been made on the
modernisation of
our network
services and we
remain on track to meet our efficiency goal of saving
£100 million in annual running costs by 2014-15.
We have begun work with the Government Digital
Service on developing our new digital exemplar
services, whilst at the same time achieving our
highest ever level of digital take-up for our
established Electronic Vehicle Licensing (EVL)
service and a gradual increase in our Driver
Licensing online service The EVL service is
complemented by our new contract with the Post
Office® for front office counter services which will
ensure a reduced cost for transactions through this
channel and mean that, overall, 97% of vehicle
licences are received electronically, either directly or
through the Post Office®.
In my short time with the Agency, I have been
impressed by the clear commitment of people at all
levels in the organisation to provide a high quality
service to the public and to our business customers.
This is reflected in our operational performance,
which continues to be of a very high standard. We
have achieved or exceeded 18 out of 20 performance
measures and 19 out of 20 customer service
measures. We have also retained our accreditation to
the Customer Service Excellence standard, achieving
our best result ever, whilst our contact centre was
chosen as the best overall contact centre of the year
by the Customer Contact Association.
Nevertheless, there have been difficulties. We did not
make the progress we needed to in preparing for the
procurement of a new supply chain for our IT
systems support and development. This is a critical
enabler for the changes we need to make to our IT
architecture and to digitise and transform the
remainder of our high volume services. However,
good work is under way to get the programme back
on track and to ensure we are able to deliver a
successful outcome. Equally, whilst there was record
take-up of EVL, overall take-up of our digital services
did not rise as expected due to the complex nature of
the transactions. This reinforces the need for us to
rapidly develop new digital services that are designed
around the needs of the customer and to look for
opportunities to enhance existing digital services to
make them more attractive for users.
There are a number of policy developments under
way which could, in time, have a significant impact on
the Agency and the services we provide. Many of
these developments will deliver real benefits for our
customers and make it easier for them to do business
with us However, the challenge is to ensure that the
wide range of current and potential future changes in
the pipeline are managed coherently and effectively
and deliver good value for money. The work
completed in the final part of the year on agreeing a
new vision and business strategy for DVLA is an
important step towards providing a framework within
which to manage this change. More work is needed
in the next few months to turn this high level strategy
into a meaningful plan that will support the successful
transformation of DVLA into a digital business. But I
am confident that, with the commitment of our
people, a clear focus on our customers and the
engagement of stakeholders, we can make good
progress over the coming year towards realising our
vision, whilst ensuring we meet our immediate
business objectives.
Malcolm Dawson OBE
Accounting Officer and Interim Chief Executive DVLA
20 June 2013
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1. Directors' Report
DVLA Annual Report & Accounts 2012-13 8
1.1 Who we are and what we do
DVLA is an Executive Agency of the
Department for Transport (DfT), responsible for
maintaining over 44 million driver records and
almost 37 million vehicle records.
Our purpose
Our purpose is to ensure that complete and
accurate registers of drivers and vehicles are
held and we make them as accessible and as
flexible as possible, to those who have the right
to use them.
These registers underpin action by DVLA, the
police and others to maintain the high levels of
road safety experienced in the UK and the
effective collection of Vehicle Excise Duty
(VED). DVLA registers are used to deliver other
departmental and government initiatives such
as traffic management and reducing carbon
emissions.
Digital services
Since 2002, DVLA has consistently developed
new digital services making it easier for
customers to transact with us. In 2013 DVLA
EVL service reached its highest ever digital
Compliance and enforcement
The Agency collects around £6 billion a year in
VED and is responsible for limiting tax evasion
to no more than 1% per year.
We operate continuous insurance enforcement,
a joint government and insurance industry
initiative to combat uninsured driving.
DVLA also supports the police and intelligence
authorities in dealing with vehicle related crime.
DVLA personalised registrations
DVLA personalised registrations offer a range
of unissued registration numbers for customers
to buy online or at auction. Since its launch in
1989, the Agency has collected over
£1.68 billion on behalf of the Treasury.
Managing our organisation
The Agency's Chief Executive and Accounting
Officer chairs an Executive Board (EB) of six
executive and two non-executive directors.
For more information about how we manage
our organisation see our Governance
Statement (section 4.2) or visit our website.
The purpose of this document
The Annual Report and Accounts should be
read in conjunction with the DVLA Business
Plan 2012-13 and sets out our performance and
achievements for the year.
For more information about DVLA, visit our
website.
take up.
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DVLA Annual Report & Accounts 2012-13 9
1.2 Transformation and change agenda
Modernisation of DVLA services
The centralisation of transactions traditionally processed in the local services network is well underway.
The enforcement centres were closed on 31 March 2013 and enforcement work centralised to Swansea.
Work is on schedule for the centralisation of all other transactions that will support the Agency in closing
the local offices by December 2013.
Digital exemplars
Some of the transactions that will be centralised are progressing as part of the work that we are doing
with Government Digital Services (GDS) to provide these services digitally. These include:
personalised registrations
change of keeper and vehicle details.
Work is being taken forward on the above to ensure developments align to the Government‟s ICT
Strategy. These initiatives will be reviewed as part of a GDS „Discovery‟ workshop at the start of 2013-
2014 to inform the delivery plan for these services.
DVLA ICT systems
During 2012-13, we continued discussions about our future data structures, application and technology
architectures with GDS and stakeholders. Our direction and the first building blocks for the new
approach are now being laid. High level plans are being developed, which will allow us to continue the
journey on increasing the agility and flexibility of our ICT estate.
We have started the move away from a reliance on proprietary, closed platform, closed standard
products and have started to make increased use of open source or open standard products wherever
possible, as guided by the Government ICT Strategy.
The Contract Let Procurement Programme is driving this work forward by developing an IT
transformation plan to inform the move away from our current architecture.
IT Contract let
The programme did not progress at the rate envisaged in 2012-13 due to a number of factors and in
February 2013 DVLA received approval to enter in to a 6 month contract with an Engagement Partner.
The Engagement Partner was appointed on 19 March 2013 following a competitive procurement
process. The programme is now working to deliver an outline business case for approval in September
2013.
EU Third Directive
The national legislation for the European Third Directive legislation for driver licences was laid in March
2012. DVLA systems and process were implemented by the legislative date of 19 January 2013.
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DVLA Annual Report & Accounts 2012-13 10
Development of motor insurance industry enquiry facilities– digital exemplar
We have continued work on our project to provide access for the motor insurance industry to check
driver records at the point of quotation. Working closely with GDS we have introduced an agile
approach to the development and using the new Government Sprint II Framework, the project appointed
Kainos to work with IBM to integrate the new build with current systems. Cabinet Office has labelled this
work as a „digital exemplar‟ as part of the wider government digital services agenda.
The inception phase and the first four sprints were completed during the year with a planned
implementation date of the first quarter of 2014.
Migration of Northern Ireland Vehicle Systems to Vehicles System Software
We are continuing our work towards the introduction of e-services in Northern Ireland and to bring these
services up to the standard of the rest of the UK.
Future card production
In April 2012 DVLA awarded the contract for the provision of card products (including driving licence) to
Gemalto (UK), following the completion of competitive dialogue procurement. The new contract will run
for a term of six years with the possibility of a further extension of two years. Tachograph cards will be
the first products to be issued in June 2013 with the introduction of the driving licence planned for
January 2014. The new card contract will provide the UK taxpayer savings of more than £35 million over
the next six to eight years.
Front office counter services
In December 2012, after a successful procurement process, our front office counter services contract
was awarded to the Post Office®. The new contract started from April 2013 and runs for a period of
seven years. The contract is a cross government framework that will allow other departments to call off
face to face services without going through an extensive procurement exercise.
We have managed to secure significant cost reduction through the new contract with forecast saving of
around £19 million per year while gaining improvements to the services offered.
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DVLA Annual Report & Accounts 2012-13 11
1.3 Service Delivery
Transaction volumes
2012-13
2011-12
Business
Plan
Actual
Business
Plan
Actual
Vehicle volumes
103,672,000
97,424,000
101,193,790
100,982,000
Driver volumes
16,891,000
15,197,000
17,174,984
15,610,000
Electronic take-up
target
54%
-
53%
-
Electronic take-up
(actual)
-
50.3%
-
53.7%
Actual and business plan volumes in the table above show driver and vehicle transactions only. It
excludes items that are not driver or vehicle specific e.g. volume of sale of marks. It also excludes
telephone enquiries.
Driver transactions
First applications for a driving licence are at around one million transactions a year; there has been a
decline in 2012-13 from 2011-12 of around 5%, which reflects the continued economic downturn. The
total driver transactions have reduced by 2% against 2011-12.
Vehicle transactions
Vehicle volumes have decreased in 2012-13 against 2011-12 by 3% overall. Vehicle first registrations
have increased by around 100,000 compared to 2011-12 reflecting predictions made by the motor
industry during 2012-13. Volume reductions have been experienced across a wide range of vehicle
transactions most noticeably relating to vehicle licensing and changes to vehicle registration documents.
DVLA digital services
In the ten years since DVLA‟s first electronic transaction was introduced, the demand from our
customers for digital services continues to grow. In 2012-13 we processed 23.5 million EVL transactions
and 2.3 million driver licence transactions.
Electronic Vehicle Licensing
By March of 2013 EVL take up rate had risen to 55.7%. DVLA continues to examine improvements to its
online licensing service and is working with the Government Digital Service on a redesign of EVL that
will further improve the customer experience, encouraging further growth in digital take up. DVLA‟s
target for 2013-14 is to achieve take up of 58.0% by March 2014.
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DVLA Annual Report & Accounts 2012-13 12
Electronic take up for drivers and vehicles
During 2011-12, 53.7% of all transactions processed by DVLA were handled digitally. It was our
intention to continue to grow the digital channel and we projected a modest increase by March 2013 to
54%.
Vehicles - In 2012-13, DVLA‟s online vehicle enquiries were 2.3 million lower than the original forecast.
These transactions are very difficult to forecast, as there is no discernable pattern to the volumes, the
monthly figures vary from just under 1 million to over 3.5 million with no explanation or seasonal pattern.
Drivers - In 2012-13 there was a decrease in driver online enquiries with them totalling around1.5 million
(or a further 1% reduction in what are 100% digital transactions against our plan).
Drivers electronic fixed penalty updates decreased by 500,000. This in itself is positive, as we are
receiving less fixed penalty updates, showing a reduction in offences by drivers.
DVLA‟s driver verification service volumes reduced by almost 350,000 compared to 2011-12. There are
a few potential reasons for this reduction. The customer auditing and monitoring procedures have been
tightened and the organisation no longer actively promotes the service to potential new customers. In
summary the reduction accounted for a 0.2% reduction.
As a result of the above volume reductions the target for 2012-13 was not achieved.
In 2012-13 we held a successful „Silver Surfer‟ event to help our customers use the internet. We also
started to promote our online services through the social media channel „Twitter‟.
Working with Government Digital Services
During the year DVLA worked closely with Government Digital Services (GDS) on a number of initiatives
specifically the re-design of our EVL online service to improve take up and reduce the calls to our
contact centre. This work is ongoing.
Work continues with GDS to understand DVLA requirements in line with the Identity Assurance agenda.
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DVLA Annual Report & Accounts 2012-13 13
Drivers medical
In 2012-13 the Agency introduced an automated email response solution for customers needing to make
medical related enquiries. This has resulted in over 44% automated responses being produced since
September 2012.
Routine assurance of the drivers medical Customer Service Measures identified errors in the automated
management information (MI) systems and the 2012-13 reported figures have been corrected for this.
The corrected figure for 2012-13 showed 78.5% of simple cases were concluded within 15 working days.
The figure prior to correction was 87.4% against a target of 90%. The target was missed due to an
unexpected fluctuation in volumes. Action was taken in the latter part of the year which has improved
the position.
In addition the investigation highlighted that the approach, which defined cases as simple or complex,
was no longer providing a meaningful measure for customers. This has resulted in the Customer Service
Measure for medical customers being altered for 2013-14.
Diversity and the customer
DVLA continues to promote and support diversity and equality principles for both staff and customers in
line with the Government's Digital Agenda. During the year, the Agency held a successful „Going digital
and the customer‟ conference, which included a presentation by the Permanent Secretary Philip Rutnam
and was attended by Sir Paul Jenkins (Civil Service Diversity Champion) as a keynote speaker.
Customer interaction continues with diverse groups participating and providing feedback on DVLA digital
services, forms and leaflets. For more information about DVLA and diversity visit our website.
Automated First Registration and Licensing
In 2012-13 DVLA continued to promote take-up of Automated First Registration and Licensing (AFRL)
with vehicle manufacturers not currently using the system. During the year 300 new dealers joined the
system. There are approximately two million AFRL transactions each year with 90% of dealers now
using the system.
DVLA Personalised Registrations
DVLA‟s Personalised Registrations online service allows customers to purchase registration numbers
outside of auction events. The service also offers follow up transactions, which allow customers to
amend details of registrations held.
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DVLA Annual Report & Accounts 2012-13 14
1.4 Policy development
Driving licence counterpart
As part of the Red Tape Challenge, we have announced our intention to abolish the paper counterpart to
the driving licence. The Motoring Services Strategy Consultation recently launched by DfT reinforced
this commitment. Subject to a commencement order, legislative powers already exist to abolish the
counterpart. This measure is expected to reduce burdens and deliver efficiency savings for customers
and DVLA. A final decision will be taken during 2013-14.
Road safety
DVLA has introduced a fast track process for revocation of driving entitlement to drivers failing police
roadside eyesight checks. This means that licences are revoked in a matter of hours rather than days.
Data sharing
Work is continuing to introduce an automated checking service with DVLA and the UK Border Agency.
This service will enable DVLA to quickly verify the residency status of foreign driving licence applicants.
Statutory off Road Notification
DVLA has secured a legislative slot through the Finance Bill 2013 to amend primary legislation to deliver
indefinite Statutory off Road Notification (SORN), the requirement to SORN only once. Work is
progressing to plan, with an impact assessment undergoing peer review within DfT and will be published
alongside the new legislation.
Road user charging
The Government has introduced a system of HGV road user charging. This will ensure a fairer
arrangement for UK hauliers.
The charge applies to vehicles in the HGV tax class weighing 12 tonnes or more. From April 2014,
drivers taking out HGV VED will pay the new combined vehicle tax and road user charge.
The initiative will see a fairer arrangement for UK hauliers in line with current practices across EU
Member States.
Fleet operators
Work continues with DfT to make the legal changes to allow fleet companies to request the suppression
of vehicle registration certificates. A high level impact assessment has been reviewed by DfT. This will
reduce the burden on fleet companies in having to manage and store large amounts of certificates.
Removal of insurance check
A public consultation began in October 2012 for the removal of insurance checks when taxing a vehicle.
The Impact Assessment is currently undergoing review at DfT and once agreed it will be published with
the amended legislation. This proposal remains on target to be delivered towards the end of 2013. The
proposal will result in time savings of around 10 to 25 minutes for the public and businesses and
£1.1 million for the government due mainly to fewer transactions failing when taxing online.
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DVLA Annual Report & Accounts 2012-13 15
1.5 DVLA people
During 2012-13 DVLA has been preparing for the closure of the local services network and the
centralisation of its activity in Swansea. This will result in a temporary increase in Full Time Equivalents
from 5,469 at the end of March 2012 to 5,644 at the end of March 2013. This increase is as a result of
the recruitment of staff into Swansea in advance of the network closure. This increase will be more than
offset when the local offices close later this year. The figures excluding DfT HR staff employed on the
Next Generation HR Group model at 31 March 2013 were 5,612.
DVLA operates under the DfT Group HR model and has adopted common DfT and Civil Service
Employee Policy such as attendance management. The setting up of centralised DfT HR Advice and
casework teams has ensured the provision of consistent, expert advice and guidance for managers.
The Agency sick absence rates in 2012-13 reduced from an average of 7.6 days per person to 6.7 days.
During this period, we delivered a programme of work entitled „Changing Minds‟ to address mental
health issues, which is the top reason for absence. This work included:
Delivery of master-classes to managers
e-learning for all staff
an intranet site outlining advice and sources of support
a corporate challenge to build mental resilience
As a result of the Civil Service People Survey 2012, work was carried out around the areas identified in
need of improvement. Leadership and managing change were identified as the key driver of
engagement in the Agency and during the year, managers have been engaging with staff to make
improvements, work continues.
DVLA are working with DfT to promote the good people management model, which is designed to
underline the importance of a good working relationship between the line manager and their staff.
In 2012-13 we successfully launched the use of Civil Service Learning with every member of staff
registering and participating in both e-learning and classroom activity.
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DVLA Annual Report & Accounts 2012-13 16
1.6 Looking to the future
Towards the end of the financial year and to reflect the increasing emphasis on the customer‟s needs
and the digital by default agenda, the Agency recast its vision.
Our vision:
Customers are at the heart of our business and drive everything we do. Our
digital services and our people exceed our customers’ expectations.
To achieve this, the Agency needs to be an organisation that is digital by default, with services so good
that people want to use the digital one first. We will ensure that DVLA keeps in-step with the wider
Civil Service Reform Plan, the Government Digital Strategy and The Red Tape Challenge as we:
ensure we meet our customer service targets for accuracy and timeliness
ensure personal data is held safely, increasing accuracy and continuing to achieve high levels
of motoring tax compliance
redesign our business and processes around customer needs to cater for the digital world that
we all now live in and keep up with future technology changes
develop our staff and managers so that we have the skills to deliver, know what we are working
to achieve and can all apply this strategy in our day to day work
change our culture to become a responsive, agile and empowered organisation.
The revised strategy will be used to prioritise the work going forward and to develop route maps in order
to achieve our goals over the next 3-5 years.
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DVLA Annual Report & Accounts 2012-13 17
1.7 Performance Summary 2012-13
Measure 2012-13
Met
Result
Change
1
Continuous Insurance Enforcement
Reduce the number of uninsured vehicles on the road to 2.65% (860,000
vehicles) by March 2013
2.20%
(709,906 vehicles)
2
EU 3
rd
Directive
DVLA and Third Party Systems updated and testing by March 2013
Systems and process
were implemented by
the legislative date of
19 January 2013
3
ICT Contract Let
Appoint technical delivery partner(s), agree contract requirements and
procurement strategy, define and agree technical solutions by March
2013
x
The contract let
programme did not
progress at the rate
envisaged. An outline
business case will be
delivered in September
2013
4
Digital services
Improve take-up of EVL by March 2013 to 55%
55.7%
5
Digital services
Improve overall electronic take- up (drivers and vehicles) by March 2013
to 54%
x
50.3 %
6
Sustainability
Cut 25% carbon emissions from Agency buildings and business use of
vehicles by 2014-15 against a 2009-10 baseline cap increase at 10%
2% reduction in carbon
emissions
Service delivery
7
Collect vehicle tax for the government
Collect a high proportion of the £6 billion tax forecast (over 99%).
£6 billion
8
Accuracy
Vehicles – maintain accuracy so the registered vehicle keeper can be
traced from details held on our record in 95% of cases.
98.9%
9
Accuracy
Drivers - provide the Department with a plan by March 2013 to deliver
improvements in the accuracy of driver record
A report has been
provided to DfT
outlining a plan of
activity for 2013-14
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DVLA Annual Report & Accounts 2012-13 18
* DfT approval to revise DVLA's workforce target from 5,307 to 5,635 as a result of the transformation and modernisation of DVLA
network services.
Measure 2012-13
Met
Result
Service delivery
10
Customer service
Achieve 18 out of 20 customer service measures (see page 19)
19 out of 20
1
Customer satisfaction
Maintain or improve the satisfaction of our customers for our services
(85%)
91.3%
12
Freedom of Information
Provide a 93% response within 20 working days
100%
13
Parliamentary Questions
Provide a 85% response within due date
100%
14
Member of Parliament correspondence
Provide a 85% response within 7 working days
99.5%
15
Official correspondence
Provide a 80% response within 20 working days
100%
16
Prompt payment
Pay 80% supplier invoices within 5 working days
96.0%
Financial performance
17
Finance
Annually make progress towards the ultimate goal of a sustainable
£100 million a year reduction in operating costs by the end of 2014-
15. Deliver an in-year addition of £5.75 million of sustainable savings
(substantiated by Audit) compared on a consistent basis with the
2010 baseline - £33.25 million (accumulated run rate reduction)
£40.6 million
18
Efficiency
Deliver financial performance in line with formal DfT breakeven
expectation
£10.9 million fees
surplus
19
Workforce
By March 31 agency workforce will number 5,635 full time equivalents
(excluding DfT HR staff employed on the Next Generation HR Group
model )*
5,612 full time
equivalents
20
Sickness Absence
Ensure the average number of working days lost due to sickness is
no more than 6.9 days (per full time equivalent)
6.7 days
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DVLA Annual Report & Accounts 2012-13 19
** see Drivers medical in section 1.3 Service Delivery
Customer Service Measures
Met
Measure
2012-13
Result
Customer Service Excellence Standard
Retain accreditation of the CSE Standard
Customer Contact Association Standard
Retain accreditation of the CCA Standard
Driving Licences
To deliver a first driving licence within 8 working days
98%
98.2%
To deliver a vocational licence within 8 working days
98%
99.5%
To deliver an ordinary driving licence within 10 working days
98%
98.8%
To deliver a digital tachograph renewal in 8 working days
98%
99.1%
Medical investigations
To conclude a simple case within 15 working days
x
90%
**78.5%
To conclude a complex case (one that requires further medical investigating) within 90 working days
88%
88%
Vehicle registration document
To deliver a first registration document, excluding cherished transfers, within 14 working days
95%
99.7%
To deliver a change on a registration certificate within 14 working days
95%
98%
To deliver a registration document from an application (notifying changes to the registration
certificate) within 30 working days
95%
98.7%
VED refunds
To deliver a refund due within 30 working days
95%
99.5%
Customer service
To answer calls queued to advisor
95%
98.9%
To deliver a recognised quality of service standard in the Contact Centre
85%
86.8%
To answer an email within 3 working days
95%
100%
Keep average local office queuing time to no more than 15 minutes
15:00
11:06
To deliver a cherished transfer within 7 working days
95%
98.3%
Customer complaints
To acknowledge a complaint within 1 working day
100%
100%
To maintain or improve on last year‟s performance sending a substantive response within 10
working days
98%
99.6%
MP correspondence
To acknowledge correspondence within 1 working day
100%
100%
Overall
18 of 20
19 of 20
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2. Management Commentary
DVLA Annual Report & Accounts 2012-13 20
2.1 Financial performance review
The Agency Accounts are made up of the Business Accounts and the Trust Statement.
Trust statement
The Trust Statement brings to account the taxation and fine revenue collected by the Agency that is due
to the Consolidated Fund. It incorporates the licence fees and taxes from VED and fines and penalties
from enforcement. Net revenue for the consolidated fund amounted to over £6 billion in 2012-13 (see
Trust Statement- Note 2).
Business accounts
DVLA‟s business is segmented (see Business Accounts - Note 2) between:
maintenance of our driver and vehicle databases and services, which include the release of
information from DVLA‟s registers under the reasonable cause provision and services to other
public bodies (more widely across government)
collection and enforcement of VED
sale of personalised registrations, which represents commercial income directly from the public.
We retain only sufficient funds to cover our costs with all excess income being paid over directly
to HM Treasury as Consolidated Fund Extra Receipts (CFER's).
The Agency is funded by a combination of fees, cost recovery charges and supply funding from DfT. The
Agency‟s target is to break even year on year on its fees and cost recovery activities. Small percentages
of change in either fee income, which is demand led, or in costs can give rise to a surplus or deficit that
may be significant, due to the scale of its income and expenditure.
Financial results
The financial results for 2012-13 show a net fees surplus of £10.9 million against a target to break even.
This surplus has been generated through a combination of additional fee income mainly from vehicle first
registration and a reduction in operational expenditure against plan.
There are no plans to further adjust the fee structures in 2013-14, although it is the Agency‟s intention to
carry out a full review of the suitability of the existing fee structure during the coming financial year in
conjunction with the changing strategy of the Agency towards digital service.
Our aim to achieve £100 million savings in operating costs by 2014-15 is on track. Efficiency delivered
by the end of 2012-13 is £40.6 million compared to a target of £33.25 million.
In 2012-13 we spent £538 million of which £349 million related to fees and charges activities, £10.7
million to DVLA personalised registrations with the remainder relating to VED collection and enforcement
(see Business Accounts - Note 2). During 2012-13, £158 million was spent on staff costs and £380
million on other costs, including the purchase of goods and services, resulting in a net operating cost of
£65.1 million.
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DVLA Annual Report & Accounts 2012-13 21
Fees and charges income
We raised £401 million through fees and charges income, an increase of £13 million against the
Business Plan forecast of £388 million. This net increase includes:
an increase in vehicle first registration income of £10 million. Despite ongoing economic
concerns, the UK car market consistently outperformed expectations
an increase in 'other income‟ of £6 million, mainly accounted for by a demand led increase in
cherished transfer volumes over initially estimated amounts
a decrease in drivers related income of £3 million, the majority of which was due to lower
volumes in first applications.
Expenditure
The total direct expenditure for the year is £538 million against the Business Plan forecast of
£555million. The decrease is mainly due to a slowdown in the rate of project expenditure as the Agency
reviewed its strategy and our continued drive towards reducing costs.
Key points to note on spending during the year were:
as part of the government‟s transparency agenda, all individual cost items over £500 are
itemised on Data.Gov.UK
performance against our prompt payment target for payment of suppliers within five days was
96% exceeding the target of 80%.
2.2 Efficiency
The Agency‟s current efficiency aim is to achieve £100 million per annum in operating cost savings by
the end of 2014-15 (as measured against the Business Plan 2010-11 baseline). This performance
measure builds on efficiency objectives exceeded in previous years. Achievement of the latest target will
continue to promote the Agency‟s reputation for delivering value for money, as it has delivered on every
efficiency target it has been set since 2001.
The efficiency measure in the Business Plan for 2012-13 was £33.25 million. The reported efficiency
delivered as at the end of March 2013 is £40.6 million. This represents a sustainable annual saving
against operational expenditure and significant progress in moving towards our strategic efficiency plans.
The achievement of its service targets and in many cases improvement against previous year
performance (see section 1.7), suggests the Agency has achieved these savings without impacting on
its quality of service.
The efficiencies delivered are focussed on productivity. As time progresses, the proportion of major
transformational change related efficiencies will increase. The Agency strategy will enable further
savings to be made, particularly in respect of the Agency‟s vision to move to a digital by default
environment supported by a robust, rationalised IS/ICT infrastructure.
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DVLA Annual Report & Accounts 2012-13 22
Total cumulative efficiencies achieved by the end of 2012-13 were made by reducing the Agency‟s
operational expenditure by:
reviewing internal business as usual processes, including applying stricter rules on travel and
subsistence, movement to second class postage and using no/low cost marketing, has resulted
in sustainable savings of £21.3 million
procurement based activities have resulted in savings in excess of £15 million
channel shift from expensive, resource intensive manual routes to less expensive electronic
methods has resulted in £4.3 million savings.
Plans for 2013-14 include:
driving efficiencies through re-negotiation and re-tendering our contracts, for example we have
negotiated significant savings in our front office counters services contract forecast to deliver
around £19 million per year from April 2013
centralising or using intermediaries and electronic channels to deliver services currently
provided by the local office and enforcement centre network. This is part of the transformation
and modernisation of network services and will deliver annual savings of £24 million.
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DVLA Annual Report & Accounts 2012-13 23
2.3 VED collection
Gross VED receipts in 2012-13 amounted to over £6 billion with refunds amounting to £194 million.
During 2012-13 the Agency has moved from using the volume of reminders issued as a baseline for
measuring take up to using total number of VED transactions (including SORN).
The cost of VED collection was £118 million revenue expenditure, along with £5.1 million in capital
expenditure in respect of VED ICT system changes. This total spend of £123.1 million was £4 million
lower than budgeted for in the Business Plan (£127.1 million) and this partly reflects a reduction in
vehicle volumes and the effects of the efficiencies generated within DVLA. The funding requirement for
VED collection in 2013-14 and estimates for future years reflects the continuing drive to reduce overall
Agency operating expenditure.
2.4 VED enforcement
The overall cost of enforcement activity in 2012-13 was £59.8 million. The net position for the year, after
retention of court cost income of £4.1m, was £55.7 million against the business plan 2012-13 of £56.9
million. This decrease in funding requirement is a reflection of the efficiency savings generated by the
Agency.
The last roadside survey was carried out by the DfT in 2011 with the next survey due in 2013. The 2011
survey reported a VED compliance rate of 99.3% for 2011-12. Using this compliance rate would suggest
a total of around £40 million VED revenue lost through evasion. As with prior periods a proportion of this
initially uncollected revenue was subsequently recovered through DVLA enforcement activity.
Automatic number plate readers
The Agency‟s static automatic number plate reader cameras encourage compliance and relicensing by
issuing keepers of unlicensed vehicles with a warning that their vehicle has been seen unlicensed on the
road. In 2012-13, almost 46,000 letters have been issued to keepers identified as untaxed and of those,
50% have relicensed their vehicles. Work is progressing to gain Home Office type approval to enable
prosecution activity to be undertaken.
Wheelclamping
In 2012-13 there were 57,287 vehicles wheel-clamped as a result of non payment of VED by the
registered keeper. In addition 7,936 enforcement notices were placed on unlicensed vehicles, a
reduction of 8,837 from the previous year. Vehicles are now clamped after two months of being
unlicensed, as opposed to the previous position of one month.
Debt Collection
DVLA‟s debt collection agents have received almost 500,000 unpaid continuous registration cases for
2012-13, collecting £11.2 million gross in unpaid continuous registration penalties. Over 2 million unpaid
continuous registration cases have been passed to debt collectors since the contract started in 2008,
raising £41 million.
Continuous insurance enforcement
In 2012-13, over 550,000 insurance advisory letters were issued by the Motor Insurers‟ Bureau (MIB) to
the registered keepers of vehicles who were identified as potentially not insured. On receipt, 65%
reacted to make sure that their vehicles complied with the requirements of CIE. For those that did not,
DVLA issued 179,000 fixed penalty notices, which collected over £3 million in penalty and fine revenue.
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DVLA Annual Report & Accounts 2012-13 24
2.5 Sustainability
As an executive agency of DfT, DVLA must demonstrate leadership on sustainability to the public and
private sector, our customers, stakeholders and the wider public. The Agency‟s overall strategy is
aligned with the principles of sustainable development with a close relationship between increased
efficiency resulting in reduced costs.
This report details our contribution to government-wide sustainability targets, the Greening Government
Commitments. Our targets include achieving a significant reduction in our impact on the environment
through:
Green house gas emissions
In 2012-13 we recorded a 2% reduction in carbon emissions from agency buildings and business travel.
This reduction from last year was achieved in spite of a forecasted increase in energy consumption and
business travel associated with the preparation of the closure of DVLAs local service network.
We have implemented a number of energy saving measures which has helped us to offset these
increases and maintain 2011-12 levels, including:
installation of LED lighting in areas to increase efficiency of energy use
removal of various excess or seldom used lights to reduce wastage
replacement of standard water pumps with variable speed drive pumps to reduce energy
consumption
substitution of steam humidifiers with low energy equivalents
increased stringency of control of air conditioning units
plans and proposals for the coming year and beyond which will assist in the successful
achievement of the 2014-15 25% reduction target include:
o further installation of LED lighting throughout the sites
o transformation and change agenda see page 9.
By the end of 2013 this centralisation initiative will reduce the number of agency sites to three, resulting
in a reduction in greenhouse gas emissions from energy use in business operations and travel.
Waste minimisation and management
We are on course to exceed our waste minimisation targets by 2014-15 with a 15% reduction in total
waste achieved to date from the 2009-10 baseline. In October 2012, the Agency entered into a cross
government contract for closed-loop paper supply. This move ensures our waste paper is recycled and
returned for re-use. The process can be repeated time and time again, negating the need for new raw
material to be sourced. Plastic recycling has also been introduced this year on site, in the form of plastic
drinks bottles.
Finite resource consumption-water use
Through the Greening Government Commitments, the Agency has pledged to reduce its water
consumption. Often energy saving measures can result in an increase in water consumption e.g. the
replacement of humidifiers for low energy equivalents in our data centres use more water, however good
practice guidelines are still currently being met (between 4-6m³ per FTE).
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DVLA Annual Report & Accounts 2012-13 25
Finite resource consumption-administrative paper
A one-off target was set across government to reduce administrative paper consumption in 2010-11 by
10% from 2009-10 levels. The Agency achieved a 47% reduction in 2011-12. Our consumption in this
area has continued to fall with a 54% reduction estimated this 2013-14.
Changes to operational practices including reducing the size of customer acknowledgement slips and
using plain rather than coloured paper have produced efficiency savings of approximately 80,000kg of
paper. The Greening Government Commitments also include demonstrating transparency in related
matters.
Sustainable procurement
The Government‟s sustainability agenda principles are included as a provision in all standard tendering
documents issued by DVLA. The Agency‟s sustainability manager currently views each contract before it
is finalised to ensure compliance with government buying standards. There will be a review on the
present system and an education programme introduced to increase procurement officers responsibility
for ensuring sustainable tendering.
Climate change adaptation
A previously completed climate change risk assessment identified the main and only notable concern to
be a possible flood risk at our Swansea Vale site. In response to this, a continuity action plan is in place
to ensure our resilience against this possible impact.
Bio-diversity and natural environment
During the financial year the Agency‟s first bio-diversity action plan was drafted and is due to be
published in April 2013.
As an Agency we have a legal and government requirement under the Greening Government
Commitments to report on and have regard to biodiversity.
Encouraging and enhancing biodiversity not only has a positive impact on the natural environment, but
also on DVLA employees and our surrounding neighbours‟ quality of life through aspects including
health and well-being.
Food and catering services
DVLA‟s Private Finance Initiative (PFI) contract with Telereal Trillium for food and catering services is
sub contracted to Elior UK. Elior UK has strict quality (Red Tractor Assurance) and sustainability
standards that ensure that they and their suppliers meet through regular audits. Negative environmental
impacts seek to be limited through e.g., sourcing food locally wherever possible and the delivery and
distribution of their products.
They promote healthy eating within the Agency with their „balance programme‟ developed in line with
Food Standards Agency guidelines, with the aim of reducing sugar, saturated fat and salt in the food
supplied.
Sustainable construction
We have not engaged in any significant construction work during the last financial year. All minor
projects have required waste to be recycled wherever possible and ensured the use of legal and
sustainable timber through a certified scheme.
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DVLA Annual Report & Accounts 2012-13 26
People
At DVLA we understand that we have a responsibility to support the people that work with us and the
communities in which we work. We are committed to being a socially responsible employer. For more
information see page 15.
2.6 Disclosure of information to auditors
The Accounting Officer (AO) is not aware of any relevant information of which the auditors are unaware.
The AO has taken all steps that he ought to have taken to make himself aware of any relevant audit
information and to establish that the Agency auditors are aware of this information.
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3. Remuneration Report
DVLA Annual Report & Accounts 2012-13 27
3. Remuneration policy
The remuneration of senior civil servants is set
by the Prime Minister following independent
advice from the Review Body on Senior
Salaries.
In reaching its recommendations, the Review
Body has regard to the following considerations:
the need to recruit, retain and motivate
suitably able and qualified people to
exercise their different responsibilities
regional/local variations in labour markets
and their effects on the recruitment and
retention of staff
government policies for improving the public
services including the requirement on
departments to meet the output targets for
the delivery of departmental services
the funds available to departments as set
out in the Government's departmental
expenditure limits
the Government's inflation target.
The review body takes account of the evidence
it receives about wider economic considerations
and the affordability of its recommendations.
Further information about the work of the
Review Body can be found at
Office of Manpower Economics
Service contracts
Civil service appointments are made in
accordance with the Civil Service
Commissioners' Recruitment Code, which
requires appointments to be based on fair and
open competition but also includes the
circumstances when appointments may
otherwise be made. Unless otherwise stated
below, the officials covered by this report hold
appointments, which are open-ended until they
reach the normal retiring age of 60. Early
termination, other than for misconduct, would
result in the individual receiving compensation
as set out in the Civil Service Compensation
Scheme. The standard period of notice to be
given by directors is three months.
Salary and pension entitlements
The remuneration and pension interests of the
Chief Executive and Directors are set out on
pages 30 to 33.
The senior civil servant annual pay award is
determined by performance, with no award
made to unsatisfactory performers. Bonuses are
awarded to no more than 25% of senior civil
servants. They are made to reward in-year
performance in relation to agreed objectives, or
short-term personal contributions to wider
organisational objectives.
Salary
Salary includes gross salary; overtime; reserved
rights to London weighting or London
allowances; recruitment and retention
allowances and any other allowance to the
extent that it is subject to UK taxation. This
report is based on payments made by the
Agency and recorded in these accounts.
Performance bonus
Performance is assessed annually for Directors
through the appraisal processes stipulated by
DfT and entitlement to performance
enhancements or bonuses established in
comparison across the DfT family through the
departmental evaluation committee, chaired by
the Permanent Secretary. The Directors did not
receive any non-cash benefits during the
current or prior year.
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DVLA Annual Report & Accounts 2012-13 28
Civil Service pensions
Pension benefits are provided through the civil
service pension arrangements. From 30 July
2007, civil servants may be in one of four
defined benefit schemes; either a final salary
scheme (classic, premium and classic plus) or a
whole career scheme (nuvos). The schemes
are unfunded with the cost of benefits met by
monies voted by Parliament each year.
Pensions payable under classic, premium,
classic plus and nuvos are increased annually
in line with changes in Pension Increase Act
1971. Members joining from October 2002 may
opt for either the appropriate defined benefit
arrangement or a „money purchase‟ stakeholder
pension with an employer contribution
(partnership pension account). Employee
contributions are salary related and range
between 1.5% and 3.9% of pensionable
earnings for classic and 3.5% and 5.9% for
premium, classic plus and nuvos. Increases to
employee contributions will apply from 1 April
2013. Benefits in classic accrue at the rate of
1/80th of final pensionable earnings for each
year of service. In addition, a lump sum
equivalent to three years' initial pension is
payable on retirement. For premium, benefits
accrue at the rate of 1/60th of final pensionable
earnings for each year of service. Unlike
classic, there is no automatic lump sum.
Classic plus is essentially a hybrid with benefits
for service before 1 October 2002 calculated
broadly as per classic and benefits for service
from October 2002 worked out as in premium.
In nuvos a member builds up a pension based
on his pensionable earnings during their period
of scheme membership. At the end of the
scheme year (31 March) the member‟s earned
pension account is credited with 2.3% of their
pensionable earnings in that scheme year and
the accrued pension is uprated in line with
Pensions Increase Act 1971. In all cases
members may opt to give up (commute)
pension for a lump sum up to the limits set by
the Finance Act 2004.
The partnership pension account is a
stakeholder pension arrangement. The
employer makes a basic contribution of
between 3% and 12.5% (depending on the age
of the member) into a stakeholder pension
product chosen by the employee from a panel
of three providers.
The employee does not have to contribute but
where they do make contributions, the employer
will match these up to a limit of 3% of
pensionable salary (in addition to the employer's
basic contribution). Employers also contribute a
further 0.8% of pensionable salary to cover the
cost of centrally provided risk benefit cover
(death in service and ill health retirement).
The accrued pension quoted is the pension the
member is entitled to receive when they reach
pension age, or immediately on ceasing to be
an active member of the scheme if they are
already at or over pension age. Pension age is
60 for members of classic, premium and classic
plus and 65 for members of nuvos.
Further details about the civil service pension
arrangements can be found at the civil service
web site.
Cash equivalent transfer values
A Cash Equivalent Transfer Value (CETV) is the
actuarially assessed capitalised value of the
pension scheme benefits accrued by a member
at a particular point in time. The benefits valued
are the member's accrued benefits and any
contingent spouse's pension payable from the
scheme. A CETV is a payment made by a
pension scheme or arrangement to secure
pension benefits in another pension scheme or
arrangement when the member leaves a
scheme and chooses to transfer the benefits
accrued in their former scheme. The pension
figures shown relate to the benefits that the
individual has accrued as a consequence of
their total membership of the pension scheme,
not just their service in a senior capacity to
which disclosure applies.
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DVLA Annual Report & Accounts 2012-13 29
The figures include the value of any pension
benefit in another scheme or arrangement
which the member has transferred to the civil
service pension arrangements. They also
include any additional pension benefit accrued
to the member as a result of their buying
additional pension benefits at their own cost.
CETVs are worked out in accordance with The
Occupational Pension Schemes (Transfer
Values) (Amendment) Regulations 2008 and do
not take account of any actual or potential
reduction to benefits resulting from Lifetime
Allowance Tax which may be due when pension
benefits are taken.
Real increase in CETV
This reflects the increase in CETV that is
funded by the employer. It does not include the
increase in accrued pension due to inflation,
contributions paid by the employee (including
the value of any benefits transferred from
another pension scheme or arrangement) and
uses common market valuation factors for the
start and end of the period.
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DVLA Annual Report & Accounts 2012-13 30
Remuneration of the Executive Board Members - audited
Ieuan Griffiths (Finance and Strategy Director) left under voluntary exit terms on 31 December 2012.
DVLA made a payment of £128,137 under the terms of the Civil Service Compensation Scheme
(disclosed in note 3.2). *The above salary also includes an ex gratia payment of £15,297, and
compensation in lieu of notice of £27,970.
Bonuses relate to those paid in 2012-13. The bonus to be paid in 2013-14 is yet to be determined. There
were no benefits in kind.
2012-13
2011-12
Salary
£000
Performance
Bonus
£000
Salary
£000
Performance
Bonus
£000
Chief Executive
Simon Tse
( to 31 March 2013)
95-100
-
95-100
-
Executive Board Members
David L Evans –
Transformation Director
80-85
-
80-85
-
Hugh Evans –
Corporate Affairs Director
(from December 2011)
65-70
0-5
15-20
(65-70 full year
equivalent)
0-5
Paul Evans –
Chief Information Officer
95-100
15-20
90-95
15-20
Ieuan Griffiths –
Finance and Strategy Director
( to December 2012)
110-115*
-
90-95
5-10
Rachael Cunningham –
Acting Finance and
Commercial Director
(from January 2013)
15-20
(65-70 full year
equivalent)
0-5
-
-
Judith Whitaker –
Chief Operating Officer
80-85
-
80-85
-
Eddie March –
HR and Estates Director (from
May 2010 to January 2012)
-
-
45-50
(60-65 full year
equivalent)
0-5
Phil Bushby –
HR and Estates Director (from
January 2012)
65-70
0-5
15-20
(60-65 full year
equivalent)
-
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DVLA Annual Report & Accounts 2012-13 31
Remuneration of Chief Executive – audited
Judith Whitaker was appointed as Interim Chief Executive and Accounting office for the period 1 April
2013 to 2 June 2013, replacing Simon Tse. Effective from 3 June 2013 Malcolm Dawson OBE has been
appointed as Interim Chief Executive and Accounting Officer.
2012-13
2011-12
Salary
£000
Performance
Bonus
£000
Salary
£000
Performance
Bonus
£000
Simon Tse
Salary
100
-
100
-
Pension
Contributions
36
-
36
-
136
-
136
-
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DVLA Annual Report & Accounts 2012-13 32
Remuneration of the Non-Executive Board Members - audited
(i) Includes in 2012-13 remuneration in respect of DfT activities.
Median staff pay multiples
Total remuneration includes salary, non-consolidated performance related pay and benefits-in-kind. It
does not include employer pension contributions and the cash equivalent transfer value of pensions.
The ratios above are a reflection of the composition, by grade, of individuals employed at the Agency.
Due to the nature of the work undertaken we have a higher proportion of staff at lower grades and as a
result the median falls within the lower salary range. The increase in the ratio from 5.37 in 2011-12 to
5.96 in 2012-13 is a reflection of the change in composition of grades within the Agency, with there being
an increase in lower grade staff. This increase is as a result of the recruitment of staff into Swansea in
advance of the network closure.
The employees receiving remuneration in excess of the highest paid director during both financial years
have been senior drivers medical staff.
2012-13
2011-12
£000
£000
Michael Brooks (i)
30-35
20-25
Jim Knox
15-20
15-20
2012-13
2011-12
Band of highest paid director's total Remuneration (£000)
115-120
105-110
Median total remuneration (£)
19,713
20,030
Ratios
5.96
5.37
Number of employees receiving remuneration in excess of highest
paid Director
3
2
Remuneration range for highest paid employee (£000)
115-125
120-135
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DVLA Annual Report & Accounts 2012-13 33
Pension Benefits of the Executive Board Members - audited
Real
increase in
pension and
related lump
sum at age
60 during
year
Total
accrued
pension at
age 60 and
lump sum
(LS)
Cash Equivalent
Transfer Values
(CETV)
Employee
contributions
and transfers
in during year
Real
increase
in CETV
as funded
by
employer
in year
2012-13
£000
2012-13
£000
2012-13
£000
*2011-12
£000
2012-13
£000
2012-13
£000
Simon Tse
0-2.5
25-30
325
282
6
(40)
David L Evans
0-2.5
lump sum
0-2.5
20-25
lump sum
70-75
410
382
4
4
Hugh Evans
0-2.5
lump sum
5.0-7.5
30-35
lump sum
100-105
628
560
6
32
Paul Evans
0-2.5
5-10
128
92
6
23
Ieuan Griffiths
0-2.5
lump sum
(0-2.5)
45-50
lump sum
60-65
925
865
12
7
Rachael
Cunningham
0-2.5
5-10
110
106
3
5
Judith Whitaker
0-2.5
40-45
464
415
5
11
Eddie March
-
-
-
70
-
-
Phil Bushby
5.0-7.5
5-10
92
68
4
87
The new factors have been used in the calculator for the CETV values at the start and end of period.
This means that the CETV value shown for the start of the period will not match the CETV value for the
end of the period in last year‟s disclosure exercise.
*or at date of appointment as director, if later.
Malcolm Dawson OBE
Accounting Officer and Interim Chief Executive DVLA
20 June 2013
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4. Accounts for 2012-13
DVLA Annual Report & Accounts 2012-13 34
4.1 Statement of the Agency's
and Accounting Officer’s
responsibilities
Business Accounts
Under the Government Resources and
Accounts Act 2000, HM Treasury has directed
the Driver and Vehicle Licensing Agency
(DVLA) to prepare for each financial year a
statement of accounts in the form and on the
basis set out in the Accounts Direction. The
accounts are prepared on an accruals basis
and must give a true and fair view of the
Agency‟s state of affairs at the year-end and of
its Statement of comprehensive net
expenditure, Statement of financial position,
Statement of cash flows and Statement of
changes in taxpayers‟ equity, for the financial
year.
In preparing the Business Accounts, the
Accounting Officer is required to comply with
the requirements of the Government Financial
Reporting Manual (FReM) and in particular to:
observe the Accounts Direction issued by
HM Treasury, including the relevant
accounting and disclosure requirements
and apply suitable accounting policies on
a consistent basis
make judgements and estimates on a
reasonable basis
state whether applicable accounting
standards as set out in the FReM have
been followed and disclose and explain
any material departures in the financial
statements
prepare the financial statements on a
going concern basis.
The Accounting Officer for the Agency is
appointed by the Permanent Secretary of DfT.
The responsibilities of an Accounting Officer,
including responsibility for the propriety and
regularity of the public finances for which the
Accounting Officer is answerable, for keeping
proper records and for safeguarding the DVLA‟s
assets, are set out in Managing Public Money.
Trust Statement
Under the Exchequer and Audit Departments Act
1921, HM Treasury has directed the DVLA to
prepare a Trust Statement for each financial year
detailing the revenue and expenditure in respect
of VED, fines and penalties falling outside of the
boundary of the Agency‟s Business Accounts.
The Trust Statement is prepared on an accruals
basis and must give a true and fair view of the
collection and allocation of VED, fines and
penalties, including a Statement of revenue and
expenditure, a Statement of financial position, and
a Statement of cash flows. Whilst DVLA is
concerned with compliance, the Trust Statement
does not estimate the duty foregone because of
non-compliance with the VED regime.
In preparing the Trust Statement, the Accounting
Officer is required to comply with the
requirements of the FReM and in particular to:
observe the Accounts Direction issued by
HM Treasury, including the relevant
accounting and disclosure requirements, and
apply suitable accounting policies on a
consistent basis
make judgements and estimates on a
reasonable basis
state whether applicable accounting
standards have been followed and disclose
and explain any material departures in the
Trust Statement
prepare the financial statements on a going
concern basis.
The HM Treasury appointed Accounting Officer is
also responsible for the fair and efficient
administration of the VED regime including the
assessment, collection and proper allocation of
VED revenue.
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4.2 Governance Statement
1. Introduction
Managing Public Money requires the Accounting Officer to provide a statement on how they have
discharged their responsibility for stewardship of the resources within the organisation‟s control.
Simon Tse was the Driver and Vehicle Licensing Agency‟s (DVLA) Accounting Officer and Chief
Executive Officer (CEO) throughout the period covered by this Governance Statement. Mr Tse
transferred to the Department of Work and Pensions on 1 April 2013 and Judith Whitaker, DVLA Chief
Operating Officer, was appointed as DVLA Accounting Officer with effect from that date and served in
that capacity until 2 June 2013. With effect from 3 June 2013 Mr Malcolm Dawson OBE was appointed
as DVLA Accounting Officer. Mr Tse and Mrs Whitaker have each provided a Letter of Assurance to
their successor confirming that they have reviewed the effectiveness of the Agency‟s system of internal
control and that the Governance Statement disclosures are in accordance with HM Treasury guidance.
Mr Tse has also given assurance that as CEO, he is not aware of any matter other than those Mrs
Whitaker would have been aware of as Executive Board (EB) Member that would need to be highlighted
in the Governance Statement.
DVLA is sponsored through DfT‟s Motoring Services Directorate which is also sponsor to the Driving
Standards Agency (DSA), Vehicle and Operator Services Agency (VOSA) and Vehicle Certification
Agency (VCA). The Motoring Services Directorate manages performance and co-ordinates the
Agencies‟ collective direction and strategy. The Directorate is supported in terms of advice and
management by the Motoring Services Board upon which DVLA‟s CEO sits together with the three other
Agency Chief Executives and sponsor representatives.
DVLA is responsible for providing driver licensing services in Great Britain and the registration of
vehicles and collection of VED throughout the United Kingdom. Regular meetings are held with Ministers
to discuss the Agency's current issues and general progress. These are attended by DVLA's sponsor
and / or the CEO.
Driver licensing in Northern Ireland is a devolved power and is undertaken by the Driver and Vehicle
Agency (DVA), sponsored by the Department of the Environment in Northern Ireland. However
responsibility for licensing and registering of vehicles and collection of VED in Northern Ireland lies
directly with the DfT Secretary of State functions discharged by DVA, through DVLA managed service
level agreements.
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2. DVLA Governance Framework
The CEO has ensured that the Agency‟s governance framework is designed to comply with the good
practice guidance laid down in HM Treasury Corporate Governance in Central Government
Departments: Code of Good Practice 2011.
Executive Board
The Agency‟s EB meets formally each month to consider:
Strategic direction and plans of the Agency: including oversight of the Agency‟s change agenda
and progress against the Business Plan
Key issues and risks: including the identification of management actions to address the main
risks to successful delivery of Agency plans
Service delivery: including the monitoring of delivery for outputs, finance, headcount and
resources.
The EB is comprised of six Executive Directors and two independent Non-Executive Board Members
and is chaired by the CEO. The Executive Directors have specific areas of functional responsibility and
accountability:
Chief Operating Officer: Judith Whitaker
Human Resources and Estates: Phil Bushby
Chief Information Officer: Paul Evans
Corporate Affairs: Hugh Evans (Acting Director)
Transformation: David L Evans
Finance and Strategy: Ieuan Griffiths - to 31 December 2012
Finance and Commercial: Rachael Cunningham (Acting Director) - from 1 January 2013.
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NB: to more accurately reflect the Directorate‟s core business, Finance and Strategy Directorate was
renamed Finance and Commercial Directorate (FCD) with effect from 1 February 2013.
The EB brings a good mix of knowledge and experience from a wide range of organisations both public
and private sector, equipping them well to work with both sectors as an Executive Agency. The team has
a clear corporate vision and focus and the EB works entirely within the Civil Service definitions of ethics
and values. For EB member biographies visit the Agency‟s website.
Non-Executive Board Members
The two Non-Executive Board Members exert their influence both directly at the monthly EB meetings
and through the Audit Committee. They both have private sector backgrounds: Mike Brooks in Finance
and Jim Knox in ICT and Business Consultancy. Due to a change in circumstances, Jim Knox stepped
down from the EB in August 2012 and used his expertise to support the Agency‟s Contract Let
Procurement Programme until his formal resignation as Non-Executive Director on 31 March 2013.
DVLA and DfT are currently in the process of recruiting two new Non-Executive Directors: one for Jim
Knox‟s vacant position and another to strengthen the Audit Committee. This latter recruitment
discharges a recommendation from a review of the Audit Committee‟s effectiveness and follows
Treasury best practice guidance: Sarah Scullion has been appointed to the Audit Committee with effect
from 3 June 2013. Also Paul Rodgers replaced Kate Mingay on the Audit Committee with effect from 23
October 2012.
Executive Board responsibilities
Day to day accountability for compliance with the Corporate Governance in Central Government
Departments: Code of Good Practice 2011 lies with the Secretary to the EB who also acts as the
Secretary to the Audit Committee and who has direct access to the CEO and to the Chair of Audit
Committee.
The CEO formally agrees specific targets and success criteria with each EB member at the start of each
year, directly from the Agency‟s published Business Plan. In 2012-13 the CEO met individual EB
members monthly to assess progress against objectives. He meets regularly with the Non-Executive
Board Members to review their performance and ensure the Civil Service Code is met and that the
Agency gains greatest value from their external perspectives and experience.
The EB gives assurance to the Secretary of State on the quality with which the Agency is run and the
effectiveness with which it is meeting its objectives. Key items considered this year were issues of
strategic impact to the Agency, the Corporate Risk Register and other reports and issues escalated from
subordinate boards, each chaired by EB members:
Operations Board: Chief Operating Officer
Agency Change Board: Transformation Director
Commercial Board: Finance and Commercial Director
Finance Committee: Finance and Commercial Director.
The EB also meets informally once a month to discuss a wide range of issues, from the Agency‟s future
strategic direction to its own performance as a Board.
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Board and Committee attendance
Figures denote meetings attended (meetings available to attend) between 1 April 2012 and 31 March
2013
Name
Executive Board
Audit Committee
Simon Tse (Chief Executive)
14 (14)
-
Judith Whitaker
13 (14)
-
Phil Bushby
13 (14)
-
Paul Evans
13 (14)
-
Hugh Evans
11 (14)
-
David L Evans
12 (14)
-
Ieuan Griffiths (to 31.12.12)
10 (11)
-
Rachael Cunningham (from 01.01.13)
3 (3)
-
Mike Brooks (Non Executive Member)
14 (14)
4 (4)
Jim Knox (Non Executive Member)
4 (5)
3 (4)
Kate Mingay (to 12.06.12)
-
2 (2)
Paul Rodgers (DfT Non Executive Member)
(from 23 10.12)
-
2 (2)
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DVLA Annual Report & Accounts 2012-13 39
Executive Board key decisions
In July 2012 and following extensive consultation, Justine Greening Secretary of State for
Transport agreed the EB recommendation for the centralisation of enforcement operations into
Swansea and the closure of the local office network.
The work to centralise enforcement has been completed on time and the local office closure
programme is on track to complete by the December 2013 target date.
In October 2012 the EB instigated an end-to-end review of the Agency‟s procurement and
investment approvals process to ensure alignment and compliance with evolving Cabinet Office
and HM Treasury requirements. This was as a result of the new Cabinet Office Guidance V3.1
not having been implemented in a timely manner and therefore resulted in a delay in some
Cabinet Office approvals being sought. That review has completed and where necessary, any
secondary approvals requiring higher authority have been obtained.
In November 2012 and following a complex, competitive procurement exercise, the Agency
awarded a framework contract for the provision of Front Office Counter Services to the Post
Office®. Prior to award the recommendation was endorsed by the DfT Board Investment and
Commercial Sub-Committee (BICC) and the DfT Contracts Award Committee (CAC). Transition
to the new contract arrangements went live on 1 April 2013.
In December 2012 the EB commissioned a review of the Agency‟s current strategic statements,
its alignment with wider Government strategy and the expectations of DVLA held by
stakeholders, including that of becoming a model digital delivery organisation. That review has
concluded and work to translate its recommendations into reality is underway.
Executive Board effectiveness
The EB reviews its effectiveness by drawing upon a range of review indicators including direct
feedback from the Agency‟s Minister, DfT sponsoring directorate and staff – in the latter case
collected through annual staff engagement surveys and formal 180
O
feedback from EB direct
reports.
An assessment of individual director performance as a board member is included in the CEO‟s
normal line management responsibilities and formal performance appraisal reports. The CEO
also seeks views on performance as CEO and Chair of the EB from external and internal
stakeholders, Ministers, the Motoring Services Board and other direct reports. The Chair of the
Audit Committee similarly conducts assessments of the Audit Committee‟s performance: in
2013-14 the assessment will be of individual committee member performance and overall Audit
Committee effectiveness.
At EB meetings each board member gives a synopsis of their individual Directorate‟s
performance which includes monthly and year to date performance. This is measured against
performance indicators that are set out annually in the Agency‟s Business Plan, agreed by the
sponsor Directorate. The EB statement report is used to form the basis of this review and
challenge is welcomed from other EB members as and when measures are not being met.
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The EB statement includes key management information, data and statistics of all the business
and support areas. Its aim is to give a clear, concise and accurate view of monthly performance.
During the year the EB statement has been refined and improved using feedback from board
members, non-executive board members and other senior managers.
In addition to the monthly review of the corporate risk register, in December 2012 the EB
undertook a horizon scanning exercise to log potential risks. In addition the EB has undergone
exercises to assess the impact of some of these risks if they subsequently materialised as
issues.
Remuneration
The Agency‟s remuneration processes and details are set out in the Annual Report and Accounts.
Remuneration and bonuses for the Agency‟s six members of the senior civil service is set by the
appropriate DfT committee. The committee considers submissions made by the CEO showing the link
between their remuneration and their roles and responsibilities within the Agency and the other Agency
Chief Executives alongside the DfT Directors General. General increases are set by DfT with Cabinet
Office / HM Treasury approval.
The Agency‟s wider staffing and grading structures remain relatively standard within the Civil Service
and DfT. The Agency has strict controls in place to prevent grade creep and to ensure robust adherence
to processes that determine the grade of each individual post. The annual overall review of salary scales
is agreed first by EB after recommendation by the HR function, but is then challenged and finally
approved by both DfT and HM Treasury.
Robust workforce plans and overall staff expenditure controls are exercised monthly through the EB
management meetings, supplemented by CEO one-to-ones with individual Directors and monthly
workforce review meetings.
Audit Committee
The DVLA Audit Committee has formally agreed terms of reference, reviewed on an annual basis. The
Committee provides advice and support to the CEO in delivering the Accounting Officer role for the
Agency. The Chair of the Audit Committee is also a member of the DfT Group Audit Committee. This
ensures line of sight for the Permanent Secretary as Principal Accounting Officer to supplement the
formal risk and issues reporting mechanisms in place through the DfT sponsoring directorate.
The Audit Committee comprises of two non-executive board members, together with a representative
appointed by DfT. During the year Kate Mingay the Commercial and Technical Services Director was
replaced by Paul Rodgers, Director Rail Commercial as the DfT representative. The CEO attends along
with the Finance and Commercial Director and Head of Internal Audit as observers, as do
representatives of DfT Finance (who also represents the DfT sponsor Directorate), National Audit Office
and KPMG (as sub-contracted auditors to National Audit Office). Other EB members attend as observers
on a cyclical basis.
The Audit Committee has access to all internal audit reports, major project assurance reports, external
reviews, risk registers, and management reports. The agendas follow a cyclical pattern for external
reporting but consider at each of their four meetings each year:
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progress against assurance plans
adequacy of response to the risk register
management responses and action progress against assurance reviews (internal and
external)
response to fraud and bribery threats
ICT security and any breaches reported.
The Audit Committee considers and approves before submission to DfT, the EB Management
Assurance Statement, the Governance Statement and the Annual Report and Accounts.
Wider governance
The DfT Motoring Services Directorate helps ensure sufficient priority is afforded to operational delivery,
progress towards Business Plan performance measures and the management of risk through monthly
challenge meetings with the CEO and FCD.
There are also monthly meetings with DfT through the Policy Forum, Commercial Board, Finance
Management Team and HR Directors Forum in which current issues are explored and updates provided.
The Agency contributes monthly to DfT transparency reporting on progress towards financial targets and
cash forecasting, expenditure and contracts in respect of our own activities. The DVLA reports, together
with emerging escalated risks and issues, are aggregated with those of other agencies and considered
at the DfT Executive Committee and Group Audit Committee as appropriate.
3. Risk Management
At least once every 12 months EB reviews and updates its risk policy and a review took place in April
2012. Alongside this wider risk policy review, EB reassesses risk appetite and following an initial review
in April 2012, the EB conducted a fuller review of appetite in July 2012 making one revision. The risk
appetite is set out in a published policy, available with guidance to all managers and staff on the
Agency‟s intranet site. The Agency will review the risk appetite and policy in 2013.
Part of the risk management team responsibilities is to establish and promote a framework within which
business managers regularly identify and plan how best to mitigate risks. Both new and existing risks are
reviewed at least monthly through risk registers. Risk registers are managed at different levels in the
Agency with risks escalated between levels when necessary. Each month the EB individually and
collectively reviews risks including the Corporate Risk Register. The EB review includes:
current risks and risk ratings
agreeing and assigning mitigating actions
discussing potential new risks for escalation to the Corporate Register.
The corporate risk register is also shared every month with the DfT sponsoring directorate.
The main risks to the Agency in 2012-13 have been from the change agenda e.g. ICT Contract Let
Procurement Programme (CLPP), Transformation and Modernisation of Network Services and more
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recently, the lack of an agreed Technical Refresh roadmap. The CLPP Strategic Outline Case was not
approved by Cabinet Office during the 2012-13 financial year pending a review of Agency business
strategy. As a result a March 2013 performance measure was not met. An Engagement Partner
(Deloitte) has been procured to support the Agency in the development and subsequent approval of an
Outline Business Case by the end of September 2013 and work has commenced to develop options
including an IT operating model, supply chain design and to-be ICT architecture.
The Agency has a well defined risk management process and has recently invested extra resources in
the Risk Management team. DVLA plays an active role in the development of a common approach to
risk management across the whole of DfT.
The effectiveness of the Agency‟s management of risk has been reviewed during 2012-13 by:
senior managers: on two occasions as part of the Management Assurance Statement
exercise and report to DfT
a VOSA risk manager: through a maturity assessment against a HM Treasury template
internal audit: an assessment through a DfT template.
The review was conducted by Corporate Assurance Services (CAS) as part of a wider DfT Internal Audit
approach to risk management. Risk management was judged to be getting better across the Agency and
CAS could provide reasonable and improving assurance to the Accounting Officer. A series of
management actions were agreed with management to further enhance the current risk management
framework.
4. Change controls
The Agency has a challenging Change portfolio. In particular 2012-13 has delivered the implementation
of EU Third Directives system changes and also has a number of key‟ in flight‟ projects such as the
transformation and modernisation of the local office network, Northern Ireland Electronic Vehicle
Services, Insurance Industry Access to Data and the ICT contract let programme.
In order to deliver this Change portfolio the Agency has four change programmes, each of which has a
Board Member assigned as Senior Responsible Officer. The current allocation within the change
programmes is:
efficiency: Chief Operating Officer
mandatory Policy and Legislative Changes: Corporate Affairs Director
ICT Infrastructure: Chief Information Officer
ICT Contract Let: Brian Etheridge, Managing Director Motoring Services and DfT Digital Leader.
The Transformation Director role ensures that there is genuine synergy and balance between the
programmes. This is achieved through the Agency Change Portfolio Office (ACPO) which reports to the
Transformation Director.
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Agency Change Portfolio Office
ACPO is ultimately responsible for:
Management of the change initiation process
Ensuring all change is aligned to strategy
Implementation and management of change governance standards
Assurance of projects
Progress monitoring (at portfolio level)
Effective resource management
Adherence with Cabinet Office spend controls.
ACPO reports progress monthly to the Agency Change Board at programme and overall portfolio level
through a scorecard approach.
During 2012-13 the main change to governance and controls has been in relation to the Cabinet Office
spend controls (version 3.1). In summer 2012 it emerged that some “in flight” projects did not have
approval in relation to the Cabinet Office spend controls. The Agency worked quickly with DfT and
Cabinet Office to rectify the position: where necessary secondary approval was received and where we
have not been able to obtain approval, a way forward has been agreed. The Agency has subsequently
encountered issues in relation to the fact that there is an apparent lack of context and strategic direction
to some of the investment decisions being made. The Agency in particular has been unable to
demonstrate that it has a cohesive plan to replace its legacy systems and move to Greenfield
architecture (in line with government strategy). In the latter part of the financial year the Agency has
worked closely with DfT to aggregate, collate and refresh the strategy and articulate it more clearly to
stakeholders. This will help in creating the context in which some of these spend decisions are being
made.
All proposed changes are subjected to initial review by ACPO to assess alignment to strategy (Agency,
DfT and Wider Government). ACPO has introduced discussion with DfT and Cabinet Office ensuring
early visibility, engagement and adherence to Cabinet Office/ICT spend approvals and processes.
When a change is approved to proceed, a Preliminary Business Case is drafted and all relevant spend
approvals instigated via ACPO, with DVLA CIO, DfT or Cabinet Office depending on the value of the
project/contract.
Business cases
All business changes proposed are examined through appropriate business case processes. Benefit
realisation plans and monitoring is built in to all such developments with direct periodic reporting to the
EB for corporate projects.
Aligned with this is work being performed to improve the way in which business cases are written to
ensure that the strategic argument is cohesive. Much work has been done to improve skills and
knowledge gaps in relation to business case writing, sharing best practice and improving the way in
which the review process is carried out. This will present further challenges as the Agency moves to an
Agile way of delivering projects. This is currently being considered and reviewed to ensure that
investment decisions can still be made with appropriate rigour but in a more streamlined way.
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Business cases comply with the DfT Investment Appraisal Framework through compliance with the HM
Treasury Green Book and use of the best practice five-case business model advocated by the Cabinet
Office Efficiency Reform Group and HM Treasury. Early stage involvement of the Efficiency Reform
Group through their review cycle is observed in all cases.
Agency Change Board
The monthly agency change board is chaired by the Transformation Director. Members include the CEO,
EB members, non-executive board members, the head of agency change and the head of
communications. The EB has delegated the agency change board with responsibility for approval of
project business cases, review of progress in delivering the Agency‟s transformation agenda and
identifying cross-Agency impacts of changes proposed.
Analytical modelling
The Agency has a strategic modelling function which supports the development of business cases,
procurement activity and cost modelling. Due to the nature and importance of the outputs concerned, the
Agency takes very seriously the assurance of such models. Following recent reviews (Laidlaw and
Macpherson) the Agency has reviewed its approach to this assurance and has refined its quality
assurance methodology to ensure alignment with review recommendations. Each model will have its
own Senior Responsible Officer and the Acting FCD will be the Agency Quality Assurance Champion.
There is still work to be done to ensure that this is implemented across all business and financial models
used in decision making across the Agency.
5. Business and investment
Financial controls
The DVLA Finance Committee has delegated expenditure responsibilities and provides EB with advice
on operational budgets and project affordability. The Finance Committee is chaired by the FCD and is
quorate when attended by a second EB member. Budgetary controls are supported by a robust and
formal full monthly planning and re-forecasting cycle, monitoring volume and change demand. The
results are reported monthly to the EB for action and forward decisions and is supplemented by a
quarterly full and robust Director-led challenge and re-forecasting process, formally reported as the EB
financial review meeting.
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Commercial controls
The Agency‟s Commercial governance framework is shown in the following diagram:
All procurement and contract management activities are controlled by Commercial Services Group
(CSG). They ensure:
activities are managed in line with the Cabinet Office transparency guidelines and approvals
processes
activities are compliant with the Agency‟s obligations under European Public Procurement rules
and United Kingdom Law to ensure full and fair competition amongst prospective suppliers of
goods and services
Government policy on procurement is applied across the organisation.
This control is supported by the Agency‟s Commercial Policy and Procedures which encompass the core
guidance provided by DfT and the Cabinet Office. The Procedures cover the commercial roles and
procedures operating at DVLA and clearly sets out individual responsibilities. To support these roles,
CSG has developed a suite of commercial training which provides role holders with an understanding of
their commercial obligations. Contractual and financial authority is delegated to a limited amount of
named individuals in line with their specific posts/roles.
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As part of the selection process for new contracts, tender evaluation incorporates whole life costing to
ensure that value for money is considered throughout the life of the product/ service contract. Supplier
performance is proactively managed for all key contracts let by the Agency to ensure that quality and
service are maintained for the duration of the contract.
To further enhance commercial controls, CSG has developed a Commercial Assurance Model. The
Model will allow CSG to carry out tier 2 commercial assurance reviews on contract management activity
within the Agency. Outputs from the reviews are fed into the Commercial Board. CSG is also working
closely with DfT to develop an assurance model which will provide specific assurances during the key
phases of the procurement cycle. This will provide positive input into a review of DfT Family governance
and control that has been initiated following recommendations falling out of the Laidlaw report on the
West Coast Rail procurement incident.
While awaiting specific guidance around the Public Services (Social Value) Act the impacts of the Act
are considered as a pre-cursor to any commercial engagement at DVLA.
Vehicle Excise Duty collection and enforcement
The targets and operations relating to these activities are set and monitored through the VED
Governance Committee, a tripartite arrangement comprising DVLA, DfT and HM Treasury. This is
chaired by DfT and meets during the year to agree the budgets and objectives and monitor progress
against these. The full year Service Level Agreement financial position is reported as part of the routine
monthly and quarterly DfT Motoring Services Directorate reporting and challenge cycle.
6. Shared Services
The Agency is party to a group arrangement with the DfT Shared Service Centre (SSC) for the provision
of finance, HR and associated services governed by a service level agreement and managed through
the single client function within DfT.
The Agency receives a quarterly management assurance report that is based primarily on Shared
Services management risk and control monitoring activities and reporting processes. This assurance
also draws upon Internal Audit reports and other relevant risk/control reports and sources of assurance.
Through this, Shared Services has reported to the Agency that its system of internal control met the
criteria for effective internal control, although a small number of exceptions remain in relation to controls
that do not directly impact the financial statements.
DfT has signed a contract to divest itself of the SSC with final handover having taken place in June
2013. The Agency has supported DfT in designing the post-divestment services and has received
regular assurance updates from DfT as the divestment has progressed.
Throughout the year the Agency has continued to take responsibility for ensuring that controls and
processes are operating effectively. These factors, combined with the quarterly reports from Shared
Services, ensure that the combination of controls is appropriate and adequate in terms of our overall
internal and assurance requirements.
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7. Data Controls
DVLA handles a large quantity of personal data and has to comply with the appropriate legislative
frameworks and government policy on protecting and releasing this information.
Responsibility for the security of personal information is with the Chief Information Officer as Senior
Information Risk Owner and the Head of Information Security who heads up the Information Assurance
Group (IAG). The Head of IAG reports to the Chief Information Officer but also has direct access to the
CEO as required.
The Agency has DfT delegated authority to accredit its systems on a rolling annual programme. All
systems are reviewed internally but supported by external health checks to ensure measures comply
with government security standards. New systems are not permitted to go live unless they have been
signed off by the Head of Information Security who is also the DVLA Accreditor.
The Agency has a network of Information asset owners who are accountable for specific information.
These are supported and trained by the IAG. They are responsible for the release and use of the data
sets allocated to them.
2012-13 Main Activities
Following EB approval a data governance framework was implemented in May 2011. A board formally
reviews and agrees data release standards to ensure a consistent approach and a data release panel
will look at new requests/proposals to access DVLA data. These controls will give data management a
focal point for escalation. Third party data sharing activities have been centralised and re-organised into
one team. Those who abuse their access to data have their access suspended. All companies in the
supply chain were re-registered and checked this year and this will continue on an annual basis. In
addition to planned audit visits, targeted audit visits have been carried out where information or
complaints have raised awareness of possible issues. Specific guidance is now produced for different
vehicle customer types, for example public sector, National Anti Fraud Network, Motor Insurance Bureau
and new guidance for driver enquiry customers. A new standard keeper enquiry contract has been
issued that captures the changes and new assurance requirements.
Tier 2 assurance checks on all drivers‟ customers have been completed. In January 2013 a programme
of tier 2 assurance checks on vehicle keeper enquiry customers commenced.
The mandatory annual information security training programme was conducted. All staff are required to
pass this assessment with a minimum pass mark of 80% and it is seen as a key education exercise to
keep personal information supplied to DVLA secure.
A test on the Agency‟s physical security was carried out. External specialists were commissioned to try
and access HQ buildings. This was an unannounced exercise and the Agency‟s defences held up with
staff taking appropriate action when approached. A lessons learned report has been prepared and the
Agency is taking forward recommendations.
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Data controls: key issues and risks
Requests to access the Agency‟s data and services are increasing, as is the way people want to use this
data. This is putting increasing pressure on to Information Assurance Group in terms of meeting its
longer term strategy. There has been an increase in low level data breaches, from 12 in 2011-12 to 30 in
2012-13. The majority of these involved individual cases and would be classed as low impact, the
primary cause being human error. Senior management is looking at ways of increasing IAG‟s capability
and capacity to reverse this trend.
There has been a significant organisational change which resulted in the loss of several information
asset owners to other roles within the Agency. This has weakened the information asset owner
framework and there is a need to find new information asset owners and train them appropriately. In the
meantime, the gaps in the framework to manage and protect the assets and conduct risk assessments
when required have been dealt with by IAG.
Two systems have failed accreditation. Whilst these failures have to be addressed they are both held on
an accredited network offering sufficient security for an interim period. This risk is under active
management.
8. CEO assurance
As Accounting Officer for DVLA, the CEO has responsibility for reviewing the effectiveness of the
systems of internal control. The review is primarily informed by the Agency‟s Internal Audit and the work
and management assurance reporting of the executive managers within the Agency who are responsible
for the development and maintenance of the internal control framework. The Agency has adopted a
three tier integrated assurance framework for internal controls which the CEO draws on to assist in
balancing the evidence, positive and negative, provided by a wide range of specific reviews and
governance activity.
Twice a year, a Management Assurance Statement review is undertaken to gather together and review
all facets of management assurance, policy and practice applying a framework and reporting standards
set by DfT. The end of 2012-13 Management Assurance Statement review asked Agency senior
managers to provide performance commentary and evidence on the application of 60 aspects of
assurance. Responses were reviewed by subject matter experts, Internal Audit, Audit Committee, EB
and DfT.
This exercise reinforces the importance of assurance processes otherwise promoted individually.
Audit Committee
The EB and Audit Committee assist in developing and overseeing governance assurance processes and
the plans to address weaknesses, ensuring continual improvement of the systems remains a priority.
These processes apply to all Agency activities and transactions in the DVLA business and VED
accounts. The Chair of the Audit Committee reports regularly to the EB on the Audit Committee‟s views
on the effectiveness of internal control.
Internal Assurance
A single integrated structure has been established as Corporate Assurance Services to carry out the
core internal reviews. This works very closely with a range of other assurance providers including the
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DVLA Annual Report & Accounts 2012-13 49
Agency‟s Fraud Unit, CSG, Financial Services Group and ACPO. DVLA Internal Audit operates to
prescribed Government Internal Audit Standards and provides the CEO with an independent opinion on
the adequacy and effectiveness of the Agency‟s system of internal control, together with
recommendations for improvement. The Head of Internal Audit has free access to the Chair of the Audit
Committee and to the CEO as Accounting Officer, but also works closely with the DfT Head of Internal
Audit as part of the group operating model. Its audit plan for the year is informed by the main risks to the
Agency‟s business and encompasses a broad range of internal controls. This includes assurance over
the security and use of DVLA data, as well as contractual commitments and data protocols for those
organisations that interact with us.
Monitoring of Specific Control Issues
Remedial action is always taken when a control issue is identified and progress is closely monitored to
full resolution. In the 2011-12 Annual Report and Accounts the Agency reported the following issue for
which resolution was ongoing in 2012-13:
DVA Control Assurance and Vehicles Responsibilities
DVA is subject to internal audit review by the Department for Regional Development in Northern Ireland.
The CEO draws assurance from the opinion the Department for Regional Development Head of Internal
Audit provides to the DVA Agency Accounting Officer. This is overseen by the DVA Audit Committee
which is chaired by Mike Brooks the Chair of the DVLA Audit Committee. With the Northern Ireland
vehicles systems now physically relocated to Swansea and operating from DVLA data centres, the
systems operations projects are now largely working directly within the DVLA processes and controls.
Head of Internal Audit Opinion
The overall opinion the CEO received from the Head of Internal Audit for 2012-13 is that reasonable
assurance can be provided that the DVLA governance, risk management and control arrangements are
appropriately defined and found to be working effectively.
The cases where Internal Audit identified the need for control enhancements were not deemed
significant in the context of the overall control environment. Where enhancements were proposed,
corrective action has been agreed and subsequent delivery is monitored closely both within DVLA by
individual Directors, monthly reporting on outstanding issues at EB meetings and the DVLA Audit
Committee, but also reported directly to DfT Executive Committee.
Actions against weaknesses identified have contributed to the overall assurance reported within this
Governance Statement.
Malcolm Dawson OBE
Accounting Officer and Interim Chief Executive DVLA
20 June 2013
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DVLA Annual Report & Accounts 2012-13 50
4.3 The Certificate and Report of the Comptroller and Auditor General to
the House of Commons
I certify that I have audited the financial statements of Driver and Vehicle Licensing Agency for the year
ended 31 March 2013 under the Government Resources and Accounts Act 2000. The financial
statements comprise: the Statements of Comprehensive Net Expenditure, Financial Position, Cash
Flows, Changes in Taxpayers‟ Equity; and the related notes. These financial statements have been
prepared under the accounting policies set out within them. I have also audited the information in the
Remuneration Report that is described in that report as having been audited.
Respective responsibilities of the Accounting Officer and auditor
As explained more fully in the Statement of the Agency‟s and Accounting Officer‟s Responsibilities, the
Chief Executive as Accounting Officer is responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view. My responsibility is to audit, certify and report on
the financial statements in accordance with the Government Resources and Accounts Act 2000. I
conducted my audit in accordance with International Standards on Auditing (UK and Ireland). Those
standards require me and my staff to comply with the Auditing Practices Board‟s Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the Driver and Vehicle Licensing Agency‟s circumstances and
have been consistently applied and adequately disclosed; the reasonableness of significant accounting
estimates made by the Accounting Officer; and the overall presentation of the financial statements. In
addition I read all the financial and non-financial information in the Annual Report to identify material
inconsistencies with the audited financial statements. If I become aware of any apparent material
misstatements or inconsistencies I consider the implications for my certificate.
I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and
income recorded in the financial statements have been applied to the purposes intended by Parliament
and the financial transactions recorded in the financial statements conform to the authorities which
govern them.
Opinion on regularity
In my opinion, in all material respects the expenditure and income recorded in the financial statements
have been applied to the purposes intended by Parliament and the financial transactions recorded in the
financial statements conform to the authorities which govern them.
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DVLA Annual Report & Accounts 2012-13 51
Opinion on financial statements
In my opinion:
the financial statements give a true and fair view of the state of Driver and Vehicle Licensing
Agency‟s affairs as at 31 March 2013 and of the net operating cost for the year then ended; and
the financial statements have been properly prepared in accordance with the Government
Resources and Accounts Act 2000 and HM Treasury directions issued thereunder.
Opinion on other matters
In my opinion:
the part of the Remuneration Report to be audited has been properly prepared in accordance
with HM Treasury directions made under the Government Resources and Accounts Act 2000;
and
the information given in the Annual Report and the Management Commentary included within
the Annual Report for the financial year for which the financial statements are prepared is
consistent with the financial statements.
Matters on which I report by exception
I have nothing to report in respect of the following matters which I report to you if, in my opinion:
adequate accounting records have not been kept or returns adequate for my audit have not
been received from branches not visited by my staff; or
the financial statements and the part of the Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
I have not received all of the information and explanations I require for my audit; or
the Governance Statement does not reflect compliance with HM Treasury‟s guidance.
Report
I have no observations to make on these financial statements.
Amyas C E Morse
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP
24 June 2013
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DVLA Annual Report & Accounts 2012-13 52
4.4 Summary of accounts
The Agency accounts for 2012-13 are made up of the Business Accounts and the Trust Statement.
The net operating costs in the Agency Business Accounts were £65.1 million (2011-12: £117.7 million)
within which the fee surplus for the year was £10.9 million (2011-12: £0.2 million) Total cost of VED
collection and enforcement was £178.3 million (2011-12: £191.0 million) and £100.2 million (2011-12:
£84.6 million) was payable directly to HM Treasury (CFERs) representing the excess income following
retention of funds to cover costs on the sale of personalised registrations and cherished transfers. In Note
2 the Business segments are disclosed to enable disclosure of net operating costs on fees and charges,
DVLA personalised registrations and VED collection and enforcement. The element of CFER's due to the
Consolidated Fund in respect of Cherished Transfers is separately identified, to enable the reporting of the
fees surplus position to the EB.
In 2012-13 HM Treasury directed that excess cash reserves acquired whilst a Trading Fund prior to April
2011, and also during its first year as an Executive Agency in 2011-12, should be surrendered to the
Consolidated Fund. A total of £61.8 million was paid to HM Treasury in 2012-13.
In 2012-13 some elements of the provision recognised in 2011-12 relating to the transformation and
modernisation of DVLA's network services have been reclassified as an accrual due to the value and time
of payments being more certain.
The movement from Business Plan forecast to outturn fees surplus of £10.9 million as reported in the
Business Accounts Note 2 has been discussed in the Management Commentary.
The net revenue for the Consolidated Fund from VED and fines and penalties brought to account in the
Trust Statement is £6 billion (2011-12 £5.9 billion).
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DVLA Annual Report & Accounts 2012-13 53
4.5 DVLA Business Account for 2012-13
Statement of comprehensive net expenditure for the year ended 31 March
2013
Note
2012-13
2012-13
2011-12
2011-12
£000
£000
£000
£000
Income
Re-stated
Re-stated
External revenue
472,502
468,526
Finance income
5
-
14
Total income
2
472,502
468,540
Expenditure
Operating costs
4
(346,115)
(397,583)
Staff costs
3
(157,990)
(155,533)
Depreciation, amortisation and
impairment
6
(31,411)
(30,344)
Finance costs
5
(2,067)
(2,789)
Total expenditure
2
(537,583)
(586,249)
Net operating cost
2
(65,081)
(117,709)
Other comprehensive income
Net gain on revaluation of property,
plant and equipment
6
2,479
1,878
Net gain on revaluation of intangible
assets
7
1,569
2,340
Other comprehensive income for the
year
4,048
4,218
Total comprehensive expenditure for
the year
(61,033)
(113,491)
Re-statement: The Operating costs and Staff costs categories for 2011-12 have been re-stated - see
Notes 3 and 4
All income and expenditure are derived from continuing operations. Notes forming part of these accounts
appear on pages 58 to 93.
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DVLA Annual Report & Accounts 2012-13 54
Statement of financial position as at 31 March 2013
Note
31 March
2013
31 March
2012
Non-current assets
£000
£000
Property, plant and equipment
6
83,915
88,399
Intangible assets
7
92,197
91,962
Trade and other receivables due after more than one year
8
1,686
2,604
Total non-current assets
177,798
182,965
Current assets
Trade and other receivables
8
43,271
58,862
Cash and cash equivalents
9
62,293
103,373
Total current assets
105,564
162,235
Total assets
283,362
345,200
Current liabilities
Trade and other payables due within one year
10
(84,419)
(48,032)
Provisions for liabilities and charges
12
(28,458)
(3,739)
Total current liabilities
(112,877)
(51,771)
Total assets less current liabilities
170,485
293,429
Non-current liabilities
Trade and other payables due after more than one year
10
(29,535)
(46,326)
Provisions for liabilities and charges
12
(27,871)
(53,636)
Total non-current liabilities
(57,406)
(99,962)
Assets less liabilities
113,079
193,467
Taxpayers’ equity
General fund
64,583
149,019
Revaluation reserve
48,496
44,448
Total taxpayers’ equity
113,079
193,467
Notes forming part of the accounts appear on pages 58 to 93.
Malcolm Dawson OBE
Accounting Officer and Interim Chief Executive DVLA
20 June 2013
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DVLA Annual Report & Accounts 2012-13 55
Statement of cash flows for the year ended 31 March 2013
Note
2012-13
2011-12
Cash flows from operating activities
£000
£000
Net operating cost
(65,081)
(117,709)
Adjustments for non cash items:
Loss on disposal, depreciation, amortisation and impairment
6
31,411
30,344
Net financing costs
5
2,067
2,775
Decrease in trade and other receivables
8
16,509
7,138
Increase/(Decrease) in trade payables
10
810
(6,854)
Auditors remuneration – notional charges
122
120
(Decrease)/Increase in provisions
12
(1,388)
45,134
Net cash outflow from operating activities
(15,550)
(39,052)
Cash flows from investing activities
Purchase of property, plant and equipment
6
(1,465)
(7,098)
Purchase of intangible assets
7
(21,760)
(17,236)
Finance income
5
-
14
Proceeds from sale of property, plant and equipment
79
8
Net cash outflow from investing activities
(23,146)
(24,312)
Cash flows from financing activities
Finance costs
5
(1,725)
(2,491)
Capital element of payments in respect of finance leases and
on-balance sheet PFI contracts
(1,937)
(1,734)
DfT Supply funding received in year
158,997
190,900
Net cash used in financing activities
155,335
186,675
Payments of amounts due to the Consolidated Fund
(95,922)
(85,614)
Payment of excess cash reserves to HM Treasury
(61,797)
-
Net (decrease) / increase in cash and cash equivalents in
the period
(41,080)
37,697
Cash and cash equivalents at the beginning of the period
9
103,373
65,676
Cash and cash equivalents at the end of the period
9
62,293
103,373
Notes forming part of these accounts appear on pages 58 to 93.
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DVLA Annual Report & Accounts 2012-13 56
Statement of changes in taxpayers’ equity for the year ended 31 March
2013
General
Fund
Revaluation
Reserve (i)
Total Reserves
£000
£000
£000
Balance at 31 March 2012
149,019
44,448
193,467
Net comprehensive expenditure for the year to
31 March 2013
(65,081)
-
(65,081)
Non cash charge – auditor‟s remuneration
122
-
122
DfT Supply funding
142,567
-
142,567
Payment of excess cash reserves to
HM Treasury (ii)
(61,797)
-
(61,797)
CFERs payable to the Consolidated Fund:
Cherished Transfers
(43,163)
-
(43,163)
Personalised Registrations
(57,084)
-
(57,084)
Other Comprehensive Income
Net gain on revaluation of property, plant and
equipment
-
2,479
2,479
Net gain on revaluation of intangible assets
-
1,569
1,569
Balance at 31 March 2013
64,583
48,496
113,079
(i) The Revaluation Reserve reflects the accumulated revaluation gains relating to non-current assets.
The amount of the revaluation reserve that relates to intangible assets at 31 March 2013 is £14.7
million (31 March 2012: £13.2 million).
(ii) Following revocation of Trading Fund status on 1 April 2011 the Agency became a supply funded
Agency. This has resulted in HM Treasury directing in 2012-13 that excess cash acquired whilst a
Trading Fund and in 2011-12 should be surrendered to the Consolidated Fund. A total of £61.8
million was paid to HM Treasury in 2012-13.
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DVLA Annual Report & Accounts 2012-13 57
Statement of changes in taxpayers’ equity for the year ended 31 March
2012
General
Fund
Revaluation
Reserve (i)
Total Reserves
£000
£000
£000
Balance at 31 March 2011
161,364
40,230
201,594
Net comprehensive expenditure for the year to
31 March 2012
(117,709)
-
(117,709)
Non cash charge – auditor‟s remuneration
120
-
120
DfT Supply funding
189,894
-
189,894
CFERs payable to the Consolidated Fund:
Cherished Transfers
(26,441)
-
(26,441)
Personalised Registrations
(58,209)
-
(58,209)
Other Comprehensive Income
Net gain on revaluation of property, plant and
equipment
-
1,878
1,878
Net gain on revaluation of intangible assets
-
2,340
2,340
Balance at 31 March 2012
149,019
44,448
193,467
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DVLA Annual Report & Accounts 2012-13 58
Notes to the accounts
Note 1. Statement of accounting
policies
The financial statements have been prepared in
accordance with the 2012-13 Government
Financial Reporting Manual (FReM) issued by HM
Treasury. The accounting policies contained in the
FReM apply International Financial Reporting
Standards (IFRS) as adapted or interpreted for the
public sector context. Where the FReM permits a
choice of accounting policy, the accounting policy
which has been judged to be the most appropriate
to the particular circumstances of the Agency‟s
Business Accounts for the purpose of giving a true
and fair view has been selected. The particular
policies adopted by the Agency are described
below. They have been applied consistently in
dealing with items that are considered material to
the accounts.
New standards and interpretations
adopted early
None
New standards and interpretations not
yet adopted
A number of new standards, amendments to
standards and interpretations are not yet
effective for the year ended 31 March 2013 and
have not been applied in preparing these
financial statements. The following are those
standards, amendments and interpretations that
may be adopted in subsequent periods:
IAS 1 – Presentation of financial statements
(Other Comprehensive Income) - This
amendment , effective in 2013-14, requires
items of Other Comprehensive Income to be
grouped on the basis of whether they might at
some point be reclassified („recycled‟) from
Other Comprehensive Income to profit (e.g.
cash flow hedges) or where they will not (e.g.
gains on property revaluation). This will have a
presentational impact only on the Statement of
Comprehensive Net Expenditure.
Phases 1 and 2 of IFRS 9 Financial
Instruments, which will replace parts of IAS 39,
deal with the classification and measurement of
financial assets and financial liabilities. IFRS 9
is intended to improve and simplify the reporting
of financial instruments. The completed phases
require financial assets and liabilities to be
measured according to their classification, and
simplify the classification structure. According to
the IASB, application of this standard is required
for reporting periods beginning on or after 1
January 2015, though earlier application is
permitted. However, it is yet to receive EU
endorsement so it is difficult to predict the actual
application date. The impact of initial application
of IFRS 9 is not expected to be significant; the
classification of financial assets and liabilities
will change, but it seems that existing
measurement approaches will continue to be
appropriate.
IFRS 13 - provides guidance on establishing fair
values of assets and liabilities and sets out
disclosure requirements, where other standards
require the fair value to be used or disclosed.
HM Treasury have issued an exposure draft of
proposed changes to the FReM, to take effect
from 1 April 2013. The exposure draft interprets
the IFRS to permit the use of alternative
valuation methods for some public service
assets, but retains the disclosure requirements
of the IFRS. As the agency's most material
category of arrangements held at fair value is
financial instruments, and as the guidance on
fair value measurement for such arrangements
is already clearly defined, it is considered
unlikely that IFRS 13 will have a material impact
for DVLA.
IFRS 7 - An amendment will come into effect in
2013–14 dealing with disclosures concerning
netting arrangements. The Agency considers
that these amendments to IFRS 7 will have no
impact, as it has no netting arrangements.
The FReM has been amended to reflect
guidance on grantor accounting for service
concessions contained in the International
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DVLA Annual Report & Accounts 2012-13 59
Public Sector Accounting Standards Board
(IPSASB) statement IPSAS 32. It clarifies that
service concession assets should be
recognised under the normal criteria for asset
recognition (the asset provides future economic
benefits controllable by the entity, and its cost or
fair value can be measured reliably), which may
occur before the asset is complete. It also
clarifies the treatment of service concessions
where the operator has the right to charge the
public. This change is likely to impact on the
timing of recognition of any future assets
constructed under the PFI scheme.
IAS 32 – an amendment will come into effect for
periods starting on or after 1 January 2014,
which provides additional guidance on the
criteria for offsetting financial assets and
financial liabilities. As the Agency currently does
not offset any financial assets and liabilities, it is
considered that this will have no impact.
The International Accounting Standards Board
(IASB) is currently developing a replacement to
the existing leasing standard, which is expected
to eliminate off-balance sheet leasing
arrangements, and require recognition of a
single right-of-use asset, measured at the
present value of lease payments. This is likely
to have an effect on the statement of financial
position following the Agency transformation
and modernisation of its network services.
The IASB is currently developing a replacement
to the existing standards on revenue recognition
and construction contracts, so that revenue can
be recognised only when the associated
performance obligations are met. This is not
expected to have a material effect on the
Agency accounts.
Other changes due to come into effect after
2012–13 are considered to have no impact on
the Agency.
Accounting convention
These financial statements have been prepared
under the historical cost convention, modified to
account for the revaluation of property, plant
and equipment and intangible assets. The
financial statements have been prepared in
accordance with the revised accounting
direction issued by HM Treasury on 17
December 2012. They meet the relevant
requirements of the Companies Act, and of the
International Financial Reporting Standards
issued and approved by the International
Accounting Standards Board. We are not aware
of any disclosures or circumstances where
these are inappropriate. The financial
statements have been prepared on the going
concern basis.
Income
Income from the sale of registration marks is
recognised on receipt of payment for fixed price
sales and on the fall of the auctioneer's hammer
for sales at auction. Uncompleted sales are
provided for after 90 days and are written out of
sales after twelve months, with the related
marks becoming available for resale. Fee
income from the assignment, transfer and
retention of cherished registration marks is
recognised on receipt, when the transaction is
processed, as is that from fee-bearing statutory
services. All other income is recognised when
the services and goods are issued.
Finance income and finance costs
As an Executive Agency DVLA does not earn
interest on funds invested.
Finance costs comprise interest expense on
borrowings and unwinding of the discount on
provisions. Borrowing costs are recognised in
profit or loss using the effective interest method.
Taxation
The Agency is not liable to pay Corporation Tax.
Expenditure is shown net of recoverable VAT.
Irrecoverable VAT is charged to the appropriate
expenditure heading, or capitalised if it relates
to an asset.
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DVLA Annual Report & Accounts 2012-13 60
Cash and cash equivalents
Cash and cash equivalents comprise cash
balances in non-interest bearing accounts. The
Agency does not have any bank overdrafts.
Following revocation of Trading Fund status on
1 April 2011 the Agency became a supply
funded Agency. This has resulted in HM
Treasury directing in 2012-13 that excess cash
acquired whilst a Trading Fund and in 2011-12
should be surrendered to the Consolidated
Fund. A total of £61.8 million was paid to HM
Treasury in 2012-13.Non-current assets:
property, plant and equipment
Non-current assets: property, plant and
equipment
The Agency revalues its non-current asset
portfolio annually at 31 March each financial
year in accordance with the requirements of the
FReM, with a full valuation every 5 years
supplemented by annual indexation. A full
valuation of the Agency‟s estate was
undertaken on 31 March 2009 on an existing
use valuation by Joseph M L Funtek BSc
(Hons) MRICS of Gerald Eve LLP.
Office property (including PFI office property)
was revalued at 31 March 2013 using an index-
linked revaluation. The Department of Business
Innovation and Skills (BIS) Output Price Index,
which measures changes in construction prices
for completed works, was used to revalue the
PFI assets and also specific fixture and fittings
assets, which relate to the specialised fit-out of
the Richard Ley Development Centre and the
contact centre. Freehold land was not revalued
at 31 March 2013 as the impact is considered
immaterial.
Plant and machinery, fixtures and fittings,
computer equipment, motor vehicles and office
equipment are revalued in accordance with
price indices published by the Office of National
Statistics (MM22 Producer Price Indices). The
exception to this is the revaluation of the
specialised fit-out of buildings; this has been
revalued for 2012-13 using BIS Output Price
Index which measure changes in construction
prices for completed works. Surpluses and
deficits arising on revaluation are taken to the
Revaluation Reserve. Where it is not possible
for any such deficit to be offset by previous
surpluses in the Revaluation Reserve it is
charged to revenue as are permanent
diminutions in the value of fixed assets.
Ownership of the Agency's assets is vested in
the Secretary of State.
The Agency's assets are grouped together for
the purposes of capitalisation when there is an
interdependency of the assets. The minimum
level for capitalisation as an individual non-
grouped asset is £5,000.
Non-current assets: intangible assets
The value of licences to operate the Driver and
Vehicle systems is capitalised. Software
development costs are capitalised, excluding
any costs incurred in the planning and design
stages of the project, which are clearly defined
and separate from the build phase of a project.
New expenditure on IT systems development is
written off in the period in which it is incurred,
unless a beneficial relationship to a future
period can be established with reasonable
certainty, in which case the charge is
capitalised. The Agency reviews its projects and
operational software for impairment and
revalue's its intangible assets annually based on
Depreciated Replacement Cost.
The value of the driver and vehicle databases,
cannot be estimated. The DVLA personalised
registrations database, including unallocated
vehicle registration marks, is a very large store
of possible combinations of alpha-numeric digits
and is affected by changes in opinion, taste and
judgement. As a result, the potential future
sales value is not recognised in the Agency's
Statement of financial position, as it cannot be
reasonably estimated.
Depreciation and amortisation
Depreciation is provided on intangible and
tangible non-current assets from the date they
are commissioned into operational service,
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DVLA Annual Report & Accounts 2012-13 61
except for computer equipment, which is
provided for at the date of purchase. When
assets are revalued the depreciation continues
on the revised value over the remaining useful
life of the relevant asset. The estimated useful
lives from new of the main categories of non-
current assets are:
Years
Plant and machinery
3-10
IT equipment
3-5
Purchased software
up to 10
Office equipment
5 -10
Software licences
3 -15
Fixtures and fittings
5 -10
Motor Vehicles
5 -10
The estimated remaining useful lives of
buildings on 31 March 2013 are
36 years Morriston site (excluding J and E
blocks)
32 years Richard Ley Development Centre at
Swansea Vale
21 years J and E blocks (Morriston site)
The estimated useful lives of assets are
reviewed regularly and, when necessary,
revised. Land (freehold and leasehold) is not
depreciated.
Leases
The Agency incurs operating lease rentals
which are charged to the Statement of
comprehensive net expenditure on a straight-
line basis over the lease term.
Leases in terms of which the Agency assumes
substantially all the risks and rewards of
ownership are classified as finance leases.
Upon initial recognition the leased asset is
measured at an amount equal to the lower of its
fair value and the present value of the minimum
lease payments. Subsequent to initial
recognition, the asset is accounted for in
accordance with the accounting policy
applicable to that asset. Minimum lease
payments made under finance leases are
apportioned between the finance expense and
the reduction of the outstanding liability. The
finance expense is allocated to each period
during the lease term so as to produce a
constant periodic rate of interest on the
remaining balance of the liability.
Early departure costs
The Agency provides for future annual
compensation payments to certain former
employees who have taken early retirement.
Compensation is payable from the date of
retirement until age 60.
The Agency is responsible for 20% of the
liability to former employees that took early
retirement between 1 October 1994 and 31
March 1996 and met certain criteria. This
liability is provided for within the early departure
provision. The remaining liability is met centrally
by the Civil Superannuation Vote. For
departures between April 1996 and March
1997, HM Treasury introduced capping
arrangements that limit the central contribution
for these departures to a maximum of £99,000
per annum.
The Agency announced a Voluntary Early
Retirement (VER) scheme in 2005-06 and a
Flexible Early Retirement (FER) scheme in
2009-10. The Agency is responsible in full for
the liability to former employees who take early
retirement under the VER and FER schemes
and provides for the liability within the Early
Departure Costs provision.
Future payments to be made under the Early
Departure and Voluntary Retirement schemes
are discounted at the HM Treasury advised rate
of 2.35% (2011-12: 2.8%).
Tax officers’ pensions and
compensation payments
The Agency makes payments in relation to
costs of former taxation officers employed by
local authorities prior to the creation of the
Driver and Vehicle Licensing Centre in 1972.
Certain individuals remained within the Local
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Government Pension Scheme. The Agency
contributes to the local authorities concerned
towards the annual cost of these pensions. The
Agency also makes compensation payments to
a number other individuals in respect of loss of
emoluments when the Local Taxation Offices
closed. A provision has been made for future
costs. An actuarial valuation is carried out every
three years to determine future liabilities, with
the latest valuation being carried out 31 March
2013.
Pensions
Present and past employees are covered by the
provisions of the Principal Civil Service Pension
Scheme (PCSPS). The defined benefit
schemes are unfunded and are non-contributory
except in respect of dependants‟ benefits. The
Agency recognises the expected cost of
providing pensions on a systematic and rational
basis over the period during which it benefits
from employees' services by payment to the
PCSPS of amounts calculated on an accruing
basis. Liability for payment of future benefits is a
charge on the PCSPS. In respect of the defined
contribution schemes, the Agency recognises
the contributions payable for the year.
Accounting for strategic IT outsourced
costs
The strategic IT contractor (IBM) supplies an
end-to-end outsourced IT service to DVLA,
including the provision of the physical IT
equipment. The risks and rewards of ownership
of that equipment remain with the contractor
and are therefore not capitalised on the DVLA's
Statement of financial position. Strategic
outsourced costs relating to the equipment are
charged to the Statement of comprehensive net
expenditure in line with the delivery of the
service. The financing arrangements mean that
a prepayment is set up and discounted over
time by 3.5%.
Research and development
We consider our expenditure each year to
determine if any is considered as Research and
Development. Expenditure on research is not
capitalised, we concluded that no intangible
assets have arisen as a result of development
undertaken by the Agency in the period of this
report or the prior year. Should the Agency incur
such costs our accounting policy would be as
described.
Expenditure incurred on pure and applied
research is treated as an operating charge in
the year in which it is incurred. Development
expenditure is for the development of specific
business systems. Expenditure which does not
meet the criteria for capitalisation is treated as
an operating cost in the year in which it is
incurred. Development costs meeting the
criteria for capitalisation are treated as
intangible fixed assets and amortised as
explained in the intangible non-current asset
note. Non-current assets acquired for use in
development are depreciated over the expected
useful life of the underlying system.
Private Finance Initiative (PFI) contract
for estates
On the 4 April 2005, DVLA entered into a 20-
year service concession agreement with
Telereal Trillium (formerly Land Securities
Trillium). This agreement falls within the scope
of IFRIC 12 Service Concession Arrangements
and has been set up to provide the following
property outsourcing solutions:
building maintenance
office moves
cleaning
catering and vending
furniture repair
furniture replacement
grounds maintenance
waste management and pest control.
DVLA are invoiced on a monthly basis and this
revenue expenditure is recorded as a service
charge in the Statement of comprehensive net
expenditure.
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As part of the contract, Telereal Trillium has
undertaken a refurbishment of the Swansea HQ
site. Where the work is capital in nature (air
conditioning, double-glazing, lifts and specialist
cabling), the costs have been capitalised on
Independent Assessors' sign off for each floor
as complete and ready for use. The air
conditioning, double-glazing and lifts are
depreciated over the length of the PFI contract.
The cabling is depreciated over its expected
useful life of ten years.
A PFI liability has been created to reflect the
liabilities relating to property, plant and
equipment paid for under the PFI unitary
charge. This creditor is reduced over the life of
the contract as payments are made. In
accordance with Government Financial
Reporting Manual requirements, the interest
element of the unitary charge relating to the
assets capitalised has been calculated using
the actuarial method.
Financial instruments
Financial instruments are contractual
arrangements that give rise to a financial asset
of one entity and a financial liability or equity
instrument of another entity. Financial assets
are typically cash or rights to receive cash or
equity instruments in another entity. Financial
liabilities are typically obligations to transfer
cash. A contractual right to exchange financial
assets or financial liabilities with other entities
will also be a financial asset or liability,
depending on whether the conditions are
potentially favourable or adverse to the
reporting entity.
Non-derivative financial assets comprise trade
and other receivables and cash and cash
equivalents. These are classified as loans and
receivables. The Agency initially recognises
these assets on the date that they are
originated, and derecognises them when the
contractual rights to the cash flows from the
asset expire.
Trade and other receivables are recognised
initially at fair value on the date that they
originated. Fair value is usually at the original
invoiced amount. Subsequent to initial
recognition they are measured at amortised
cost using the effective interest method, less
any impairment losses.
Non-derivative financial liabilities comprise trade
and other payables, obligations under finance
leases, obligations under on-balance sheet PFI
contracts and a loan from DfT. The Agency
recognises these liabilities initially on the trade
date at which the Agency becomes a party to
the contractual provisions of the instrument, and
derecognises when its contractual obligations
are discharged or cancelled or expired. Trade
and other payables are recognised initially at
fair value. Fair value is usually at the original
invoiced amount. Subsequent to initial
recognition they are measured at amortised
cost.
Impairment of financial assets
The Agency assesses at each balance sheet
date whether there is objective evidence that
financial assets are impaired as a result of one
or more loss events that occurred after the initial
recognition of the asset and prior to the balance
sheet date, and the loss event or events has
had an impact on the estimated future cash
flows of the financial asset or the portfolio that
can be reliably estimated.
The amount of the impairment loss is measured
as the difference between the assets' carrying
amount and the present value of estimated
future cash flows. The methodology and
assumptions used for estimating future cash
flows are reviewed regularly to reduce any
differences between loss estimates and actual
loss experience.
The Agency does not hold any derivative
financial instruments.
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DVLA Annual Report & Accounts 2012-13 64
Contingent liabilities
In addition to contingent liabilities disclosed in
accordance with IAS 37, the Agency discloses
for Parliamentary reporting and accountability
purposes certain statutory and non-statutory
contingent liabilities where the likelihood of a
transfer of economic benefit is remote, but
which have been reported to Parliament in
accordance with the requirements of Managing
Public Money.
Where the time value of money is material,
contingent liabilities which are required to be
disclosed under IAS 37 are stated at discounted
amounts and the amount reported to Parliament
separately noted. Contingent liabilities that are
not required to be disclosed by IAS 37 are
stated at the amounts reported to Parliament.
Use of estimates and judgements
The preparation of the financial statements in
conformity with International Financial Reporting
Standards requires management to make
judgements, estimates and assumptions that
affect the application of accounting policies and
the reported amounts of assets, liabilities,
income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimates are revised and in
any future periods affected.
Information about critical judgements in
applying accounting policies that have the most
significant effect on the amounts recognised in
the financial statements is included in the
following notes:
Note 12 - Provisions for liabilities and charges
Note 13 – Commitments under leases
The critical assumptions and estimation
uncertainties that have a significant risk of
resulting in a material adjustment within the next
financial year relate to the estimated useful
economic life of intangible assets. These are
based on management‟s judgement of assets of
a similar nature and historical trends and are
revised where appropriate.
Shared Service Centre
The DfT SSC is based in one of DVLA‟s leased
buildings at Swansea Vale. The centre provides
a mix of human resources, finance,
procurement and payroll services to a number
of Business Units within DfT and became
operational in April 2007.
DVLA recharges DfT for the costs incurred on
its behalf in terms of staff, IT services and
accommodation, netting these costs in the
DVLA accounts to only show the DVLA
operational expenditure and separately
disclosing the full recharge from the SSC for the
services DVLA receives as a customer within
operating costs. Staff working at the SSC
remain on DVLA contracts of employment but
governance arrangements and line
management comes under DfT (Central).
Consolidated Fund Extra Receipts
Payments due to the Consolidated Fund from
the Business Accounts represent amounts in
excess of costs for DVLA personalised
registration/Cherished Transfer transactions.
The income from these transactions is only
deemed as due to the Consolidated Fund after
the recovery of these costs. The surplus
Consolidated Fund Extra Receipts are
recognised in the Statement of Taxpayers
Equity in compliance with the 2012-13 FReM.
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Note 2.Segmental reporting
(i) The element of CFERs due to the Consolidated Fund in respect of Cherished Transfers is
separately identified, to enable the reporting of the fees surplus position to the EB.
(ii) The increase in the provision for the transformation and modernisation of network costs in 2012-13
pertaining to Cherished Transfers is included in operating expenditure. In order to disclose the fees
surplus, as reported to the EB, this item has been deducted in this note as no income has been
retained this year. Income will be retained in relation to this provision increase in future years as the
provision is utilised.
DVLA complies with the cost allocation and charging requirements set out in the HM Treasury Fees and
Charges guide. The Agency's financial objective is to recover the full cost of keeping the vehicle and
driver registers, and fees (where applicable) are set to cover these costs. For fee setting purposes we
have a Section 102 order that allows us to pool these fees and costs; the total fees and costs are
disclosed in the Fees and Charges segment above.
The segments used reflect how management information is provided to the EB. An analysis of assets
and liabilities by segment is not regularly provided to the Chief Executive or EB.
2012-13
Operating
Segments
Fees and
charges
DVLA
personalised
registrations
VED Collection
VED
Enforcement
Total
£000
£000
£000
£000
£000
External revenue
400,622
67,760
-
4,120
472,502
Operational
Expenditure
(348,628)
(10,676)
(118,447)
(59,832)
(537,583)
Net operating cost
51,994
57,084
(118,447)
(55,712)
(65,081)
Memorandum items to monitor break even in fees and charges
Cherished Transfer
CFERs due to the
Consolidated Fund (i)
(43,163)
Increase in provision
(ii)
2,104
Fees surplus reported
to EB
10,935
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DVLA Annual Report & Accounts 2012-13 66
Restatement: DVLA now retains court costs awarded relating to enforcement cases. Previously this
income was paid over to HM Treasury, the new treatment allows closer alignment between costs and
income.
2011-12
Operating
Segments
(Re-stated)
Fees and
charges
DVLA
personalised
registrations
VED Collection
(Re-stated)
VED
Enforcement
Total
£000
£000
£000
£000
£000
External Revenue
396,066
68,648
-
3,826
468,540
Operational
Expenditure
(338,483)
(10,439)
(127,222)
(63,798)
(539,942)
Exceptional Costs for
Organisational
Restructuring (note 20)
(30,949)
-
(5,895)
(9,463)
(46,307)
Net operating cost
26,634
58,209
(133,117)
(69,435)
(117,709)
Memorandum items to monitor break even in fees and charges
Cherished Transfer
CFERs due to the
Consolidated Fund
(26,441)
Fees surplus reported
to EB
193
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DVLA Annual Report & Accounts 2012-13 67
Note 3. Staff numbers and related costs
Staff costs, excluding staff managed by DfT, comprise:
2012-13
Permanently
employed
staff
Short-term
employment
contract and
agency staff
Total
£000
£000
£000
Wages and salaries
125,681
2,370
128,051
Social security costs
8,203
83
8,286
Other pension costs
21,524
129
21,653
Total
155,408
2,582
157,990
2011-12
Permanently
employed
staff
Short-term
employment
contract and
agency staff
Total
Re-stated
Re-stated
£000
£000
£000
Wages and salaries
123,220
2,641
125,861
Social security costs
8,067
140
8,207
Other pension costs
21,115
350
21,465
Total
152,402
3,131
155,533
Re-statement: costs in relation to transformation and modernisation of network services of £24.5 million
(2011-12 : £27.7 million) and Voluntary Early Retirement of £0.8 million (2011-12 : £0.5 million)
previously classified as staff costs in Note 3 are now classified as Operating Costs and recognised in
Note 4 within net (decrease) / increase in provision required in year, and also in Note 12. This is to
ensure consistency on consolidation with DfT's accounts.
The staff costs of the permanently employed staff include the non-consolidated pay award, which in
2012-13 amounted to £6,130,642 (2011-12: £6,380,000). The non-consolidated pay is an integral part of
the Agency‟s reward structure. It is used to drive performance - it is not paid to staff who do not achieve
satisfactory levels of performance and has to be re-earned each year. The non-consolidated
performance pay quantum in total has been built up over a number of years by withholding an element of
the pay award agreed with HM Treasury to support the Agency‟s move to non-consolidated performance
payments to individuals. These payments are contractual and pensionable.
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DVLA Annual Report & Accounts 2012-13 68
DVLA staff working at the SSC but managed by
DfT are not included in the above costs for
either year as the recharges to DfT for their
salaries are excluded from the DVLA Statement
of comprehensive net expenditure and their
costs included directly in the DfT accounts.
The annual leave accrual at 31 March 2013 is
£3,787,000 (31 March 2012: £3,377,000).
The Principal Civil Service Pension Scheme
(PCSPS) is an unfunded multi-employer defined
benefit scheme but DVLA is unable to identify
its share of the underlying assets and liabilities.
The scheme actuary valued the scheme as at
31 March 2007. Consequently, a formal
actuarial valuation would have been due by 31
March 2011. However, formal actuarial
valuations for unfunded public service pension
schemes have been suspended by HM
Treasury on value for money grounds while
consideration is given to recent changes to
public service pensions and while future
scheme terms are developed as part of the
reforms to public service pension provision. The
primary purpose of the formal actuarial
valuations is to set employer and employee
contribution rates, and these are currently being
determined under the new scheme design.
Details can be found in the resource accounts
of the Cabinet Office: Civil Superannuation
For 2012-13, employers‟ contributions of £22.2
million were payable to the PCSPS (2011-12:
£22.3 million) at one of four rates in the range
16.7% to 24.3% (2011-12: 16.7% to 24.3%) of
pensionable pay, based on salary bands. The
scheme‟s Actuary reviews employer
contributions usually every four years following
a full scheme valuation. The contribution rates
are set to meet the cost of the benefits accruing
during 2012-13 to be paid when the member
retires and not the benefits paid during this
period to existing pensioners.
Employees can opt to open a partnership
pension account, which is a stakeholder
pension with an employer contribution.
Employers‟ contributions of £207,200 (2011-12:
£212,180) were paid to one or more of a panel
of three appointed stakeholder pension
providers. Employer contributions are age-
related and range from 3.0% to 12.5% (2011-
12: 3.0% to 12.5%) of pensionable pay.
Employers also match employee contributions
up to 3.0 % of pensionable pay. In addition,
employer contributions of £14,025, 0.8% (2011-
12: £14,941, 0.8%) of pensionable pay, were
payable to the PCSPS to cover the cost of the
future provision of lump sum benefits on death
in service and ill health retirement of these
employees. Contributions due to the partnership
pension providers at the reporting period date
were £Nil. Contributions prepaid at that date
were £Nil.
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DVLA Annual Report & Accounts 2012-13 69
3.1 Average number of persons employed
2012-13
Permanent
Staff
(FTEs)
Short-term
employment
contract and
agency staff
(FTEs)
Total
(FTEs)
Directly employed
5,425
99
5,524
Staff managed by DfT (SSC)
211
18
229
Total
5,636
117
5,753
2011-12
Permanent
Staff
(FTEs)
Short-term
employment
contract and
agency staff
(FTEs)
Total
(FTEs)
Directly employed
5,386
142
5,528
Staff managed by DfT (SSC)
231
7
238
Total
5,617
149
5,766
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DVLA Annual Report & Accounts 2012-13 70
3.2 Civil Service and other compensation schemes – exit packages
2012-13
Exit package cost band (£)
Number of
compulsory
redundancies
agreed
Number of other
departures agreed
Total number
of exit
packages by
cost band
(Total cost)
<10,000
17
5
22
10,000 – 25,000
112
15
127
25,000 – 50,000
2
46
48
50,000 – 100,000
-
6
6
100,000 – 150,000
-
2
2
Total number of exit packages by type
131
74
205
Total resource cost (£)
1,951,362
2,593,352
4,544,714
Redundancy and other departure costs have been agreed in accordance with the provisions of the Civil
Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit
costs are accounted for in full in the year of departure. Where the department has agreed early
retirements, the additional costs are met by the department and not by the Civil Service pension
scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table.
During the financial year 2012-13, three payments were made which were not covered by the Civil
Service Compensation Scheme. These ex-gratia payments were approved by HM Treasury, two less
than £10,000 and one between £10,000 to £25,000.
2011-12
Exit package cost band (£)
Number of
compulsory
redundancies
agreed
Number of other
departures agreed
Total number
of exit
packages by
cost band
(Total cost)
<10,000
-
8
8
10,000 – 25,000
-
4
4
25,000 – 50,000
-
1
1
Total number of exit packages by type
-
13
13
Total resource cost (£)
-
124,753
124,753
During the financial year 2011-12, 5 payments were made which were not covered by the Civil Service
Compensation Scheme. These ex-gratia payments, 4 between £10,000 and £25,000 and one between
£50,000 and £100,000 all for termination of employment, were agreed with HM Treasury.
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DVLA Annual Report & Accounts 2012-13 71
Note 4. Operating costs
2012-13
2012-13
2011-12
2011-12
£000
£000
£000
£000
Outsourced services
Re-stated
Re-stated
ICT Services
116,934
131,807
Post Office®
45,943
46,772
Wheelclamping
7,735
12,990
PFI Estates unitary charge
19,814
18,661
DVA (i)
11,810
11,560
Medical practitioners
13,504
10,651
Shared Services (ii)
6,752
6,117
222,492
238,558
Service delivery
Postal related expenses
33,292
31,232
Publicity and marketing
553
128
Non outsourced ICT
17,160
14,073
Stationery and printing
11,451
11,604
Blank cards
13,318
15,576
Credit Card Charges
12,759
12,446
Maintenance of machinery and vehicles
4,555
4,360
Consultancy
652
475
Professional Services
1,288
2,154
95,028
92,048
Accommodation
14,454
13,387
Staff related
4,376
3,561
Auditors remuneration
122
120
Other (iii)
1,844
1,734
Net increase in provisions (iv)
7,799
48,175
Total Operating costs
346,115
397,583
(i) These costs are provided in full detail in the DVA accounts, which can be obtained from DVA
Finance, County Hall, Castlerock Road, Coleraine BT51 3HS. The agreement is for DVLA to cover
the cost of the provision of services in Northern Ireland for the licensing and registration of vehicles
and collection of VED. This includes the enforcement of non-payment of VED, registration of new
and used vehicles, provision of a vehicles enquiry line and sale and transfer of personalised
registration marks.
(ii) DfT accounts for all SSC income and costs. Accommodation and IT services remain delivered
through DVLA contracts, and DVLA staff working at the SSC, managed by DfT remain on DVLA
contracts of employment (see Note 3). DVLA nets off the recharges to DfT prior to disclosure in its
accounts so that it presents only its own operating expenditure, showing then the full cost of the
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DVLA Annual Report & Accounts 2012-13 72
invoiced service it receives from the DfT SSC as part of its functional expenditure. DfT has signed a
contract to divest itself of the SSC with final handover scheduled for June 2013. From that date the
SSC will be managed by Arvato and the accounting treatment will change with the only element
impacting on DVLA being the charges from Arvato.
(iii) As an Executive Agency the auditor‟s remuneration is a notional fee for the DVLA Business
Accounts of £90,550 (2011-12: £89,200) along with a notional fee for the statutory audit of the Trust
Statement of £31,060 (2011-12: £30,600).
(iv) Includes amounts provided for the potential costs relating to the transformation and modernisation
of DVLA network services as detailed in Note 12 and Note 20. These were not previously
separately identified within this note but now are to ensure consistency on consolidation with DfT's
accounts. For comparability the figures for 2011-12 have been restated.
Note 5. Finance income/(costs)
2012-13
2011-12
£000
£000
Finance Income
Bank interest prior to revocation of Trading Fund status.
(related to 2010-11 brought to account in 2011-12)
-
14
Total finance income
-
14
Finance Costs
Interest on imputed finance lease element of on balance sheet
PFI contracts
(1,703)
(1,795)
Interest on finance lease liabilities
(22)
(11)
Interest on loan from DfT
-
(685)
Unwinding of discount and impact of changes in discount rate
on provisions
(342)
(298)
Total finance costs
(2,067)
(2,789)
Net finance costs
(2,067)
(2,775)
Following discussions with DfT and HM Treasury on the repayment of excess cash reserves, DfT waived
the interest payment of £0.6 million and agreed to the early settlement of the loan in 2013-14.
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DVLA Annual Report & Accounts 2012-13 73
Note 6. Property, plant and equipment
*AUC relates to Assets Under Construction
**IT relates to Information Technology
2012-13
Land
Buildings
(excl PFI
fit out)
**IT
Plant and
Machinery
Furniture
and
Fittings
(incl PFI fit
out)
Motor
Vehicles
*AUC
Total
£000
£000
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 April 2012
4,623
63,772
4,649
11,751
38,401
1,025
148
124,369
Additions
-
85
32
610
645
48
13
1,433
Disposals
-
-
-
(10)
(2,352)
-
-
(2,362)
Transfer
-
90
-
58
-
-
(148)
-
Revaluations
-
1,423
637
595
491
22
-
3,168
At 31 March 2013
4,623
65,370
5,318
13,004
37,185
1,095
13
126,608
Depreciation
At 1 April 2012
-
7,516
2,620
3,508
22,201
125
-
35,970
Charged in year
-
1,736
443
2,060
3,931
226
-
8,396
Disposals
-
-
-
(10)
(2,352)
-
-
(2,362)
Revaluations
-
-
359
147
180
3
-
689
At 31 March 2013
-
9,252
3,422
5,705
23,960
354
-
42,693
Net book value at
31 March 2012
4,623
56,256
2,029
8,243
16,200
900
148
88,399
Net book value at
31 March 2013
4,623
56,118
1,896
7,299
13,225
741
13
83,915
Asset financing
Owned
4,192
31,395
1,896
7,299
6,334
40
13
51,169
Finance Lease
-
-
-
-
-
701
-
701
On-balance sheet
PFI contracts
431
24,723
-
-
6,891
-
-
32,045
Net book value at
31 March 2013
4,623
56,118
1,896
7,299
13,225
741
13
83,915
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DVLA Annual Report & Accounts 2012-13 74
Contractual commitments for property, plant, and equipment are covered by the PFI contract and are
included in Note 14. The commitments for 2012-13 are £Nil (2011-12: £268,000).
Valuation of Assets
The net book value of land includes freehold £3.9 million (2011-12: £3.9 million) and leasehold £0.7
million (2011-12: £0.7 million). Leasehold is made up of Richard Ley Development Centre £0.2 million
(125 year lease) and Fforestfach £0.5 million (999 year lease). The net book value of buildings relates to
DVLA property with PFI buildings/refurbishment having a net book value of £25 million (2011-12: £25
million).
2011-12
Land
Buildings
(excl PFI
fit out)
**IT
Plant and
Machinery
Furniture
and
Fittings
(incl PFI fit
out)
Motor
Vehicles
*AUC
Total
£000
£000
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 April 2011
4,623
62,293
4,656
5,958
36,819
64
287
114,700
Additions
-
-
-
5,494
1,278
966
148
7,886
Disposals
-
-
(12)
(9)
(315)
(6)
-
(342)
Transfer
-
-
-
287
-
-
(287)
-
Revaluations
-
1,479
5
21
619
1
-
2,125
At 31 March 2012
4,623
63,772
4,649
11,751
38,401
1,025
148
124,369
Depreciation
At 1 April 2011
-
5,829
2,104
2,095
18,602
16
-
28,646
Charged in year
-
1,687
526
1,389
3,693
112
-
7,407
Disposals
-
-
(12)
(6)
(309)
(3)
-
(330)
Revaluations
-
-
2
30
215
-
-
247
At 31 March 2012
-
7,516
2,620
3,508
22,201
125
-
35,970
Net book value at
31 March 2011
4,623
56,464
2,552
3,863
18,217
48
287
86,054
Net book value at
31 March 2012
4,623
56,256
2,029
8,243
16,200
900
148
88,399
Asset financing
Owned
4,192
31,291
2,029
8,243
8,200
13
148
54,116
Finance Lease
-
-
-
-
-
887
-
887
On-balance sheet
PFI contracts
431
24,965
-
-
8,000
-
-
33,396
Net book value at
31 March 2012
4,623
56,256
2,029
8,243
16,200
900
148
88,399
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DVLA Annual Report & Accounts 2012-13 75
Analysis of depreciation, amortisation and impairment line in Statement of
comprehensive net expenditure
2012-13
£000
2011-12
£000
Depreciation of property, plant and equipment
8,396
7,407
(Profit) /Loss on disposal of property, plant and equipment and
intangibles
(79)
4
Amortisation of intangible assets (note 7)
23,094
22,933
31,411
30,344
Note 7. Intangible assets
The Agency holds a perpetual software licence with Hewlett Packard for the right to use the driver and
vehicle software. Development work undertaken by the Agency that adds value to this is capitalised. In
addition, purchased software licences are capitalised in this category.
2012-13
Software
Licence
Software
Development
Assets under
Construction
Total
£000
£000
£000
£000
Cost or Valuation
At 1 April 2012
11,918
203,291
13,504
228,713
Additions
-
-
21,760
21,760
Transfer
3,937
4,565
(8,502)
-
Disposals
-
-
-
-
Revaluation
12
1,557
-
1,569
At 31 March 2013
15,867
209,413
26,762
252,042
Amortisation
At 1 April 2012
8,273
128,478
-
136,751
Charged in year
3,472
19,622
-
23,094
Disposals
-
-
-
-
At 31 March 2013
11,745
148,100
-
159,845
Net book value at 31 March 2012
3,645
74,813
13,504
91,962
Net book value at 31 March 2013
4,122
61,313
26,762
92,197
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DVLA Annual Report & Accounts 2012-13 76
2011-12
Software
Licence
Software
Development
Assets under
Construction
Total
£000
£000
£000
£000
Cost or Valuation
At 1 April 2011
11,639
181,126
16,372
209,137
Additions
-
-
17,236
17,236
Transfer
127
19,977
(20,104)
-
Disposals
-
-
-
-
Revaluation
152
2,188
-
2,340
At 31 March 2012
11,918
203,291
13,504
228,713
Amortisation
At 1 April 2011
3,982
109,836
-
113,818
Charged in year
4,291
18,642
-
22,933
Disposals
-
-
-
-
At 31 March 2012
8,273
128,478
-
136,751
Net book value at 31 March 2011
7,656
71,291
16,372
95,319
Net book value at 31 March 2012
3,645
74,813
13,504
91,962
The carrying amount that would have been recognised had the revalued class of intangible assets been
measured after recognition using the cost model would have been £83.8 million (2011-12: £83.2 million).
Intangible additions of £21.8 million (2011-12: £17.2 million) have been included in respect of software
under development which is due to be completed and brought into use in future years. Of the net book
value at 31 March 2013 £27.6 million (31 March 2012: £32.6 million) has been financed by finance
lease.
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DVLA Annual Report & Accounts 2012-13 77
Significant intangible assets controlled by the Agency are detailed below:
31 March 2013
31 March 2012
Asset
Remaining
useful
economic
life
Net Book Value
Remaining
useful
economic
life
Net Book Value
(months)
£000
£000
(months)
£000
£000
Electronic Vehicle Re-licensing
10
3,035
22
6,496
DVLA personalised registrations
33
3,005
45
3,986
Vehicle System Software
Re-platforming
23
3,221
35
4,767
Drivers re-engineering
Phase 1
72
20,381
84
23,130
Phase 2
36
2,433
48
3,178
22,814
26,308
Ten Year Renewal
35
4,789
47
6,256
Phase 2
Smart Tachographs
18
354
30
574
Smart Tachographs – Phase 1
33
2,044
45
2,712
2,398
3,286
Common Driver and Vehicle
Operators Interface
10
314
22
673
Drivers casework system (CASP) -
Technical Refresh
AUC
15,433
AUC
7,628
Weblogic
41
3,871
53
4,841
Payment Card Data Security
AUC
2,607
AUC
2,607
Others
-
30,710
-
25,114
Total
92,197
91,962
AUC relates to assets under construction.
There were no contractual commitments for intangibles as at 31 March 2013.
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DVLA Annual Report & Accounts 2012-13 78
Note 8. Trade and other receivables
31 March
2013
31 March
2012
£000
£000
Amounts falling due within one year:
Trade receivables
7,746
3,389
Other receivables
150
147
Public sector debtors
1,024
2,322
VAT reclaimable
5,974
10,223
Post Office® prepayments
-
21,908
IBM prepayment – IT equipment
2,095
5,643
IBM prepayment – service delivery
3,776
3,277
Other prepayments
6,836
4,552
Estates PFI prepayment
1,227
1,300
Accrued income
14,443
6,101
43,271
58,862
Amounts falling due after more than one year
IBM prepayment – IT equipment
1,070
2,519
IBM prepayment – Service delivery
616
85
1,686
2,604
Total
44,957
61,466
Trade receivables 2012-13 of £7.7 million (2011-12: £3.4 million) includes £3.4 million (2011-12: £2.3
million) in relation to DVLA personalised registrations auctions. This amount will, after deduction of
costs, be paid over to HM Treasury during the subsequent financial year.
All prepayments deliver improved terms of contract but are assessed on each individual case to ensure
value for money before they are made.
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DVLA Annual Report & Accounts 2012-13 79
Note 9. Cash and cash equivalents
31 March 2013
31 March 2012
£000
£000
Balance at 1 April
103,373
65,676
Net change in cash and cash equivalent balances
(41,080)
37,697
Balance at 31 March 2013
62,293
103,373
All cash is held in the Government Banking Service.
In 2012-13 HM Treasury directed the Agency to pay to the Consolidated Fund excess cash reserves
acquired whilst a Trading Fund prior to April 2011 (£34.2 million) and during its first year as an Executive
Agency in 2011-12 (£27.6 million). Cash reserves held at 31 March 2013 include £15.2 million due to
repay the DfT loan, £15.8 million due to the Consolidated Fund, £19.3 million supply funding drawn
down during 2012-13 but not utilised at 31 March 2013 (see Note 10) and a working balance agreed with
DfT.
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DVLA Annual Report & Accounts 2012-13 80
Note 10. Trade and other payables
31 March
2013
31 March
2012
Amounts falling due within one year
£000
£000
Trade payables
4,702
7,334
Accruals and deferred income
27,265
22,406
Current part of finance leases
193
190
Current part of imputed finance lease element of on balance
sheet estates PFI contract
1,848
1,749
Cash balance payable to the Consolidated Fund
15,751
11,426
Amounts due to DfT in respect of Supply Funding(i)
19,303
2,874
Other - capital accrual
117
149
Loan from DfT (ii)
15,240
1,904
84,419
48,032
Amounts falling due after more than one year:
Accruals and deferred income
488
-
Finance leases
508
699
Imputed finance lease element of on-balance sheet estates PFI
contract
28,539
30,387
Loan from DfT(ii)
-
15,240
29,535
46,326
Total
113,954
94,358
(i) The £19.3 million represents the amounts due to DfT in respect of Supply Funding for the Agency in
2012-13. In 2011-12 the £2.9 million represents the amounts due to DfT in respect of Supply Funding
for VED collection and enforcement activities only
(ii) In 2010-11 the Agency received a loan from DfT for £19.0 million to replace the Public Dividend
Capital that was repaid in preparation for the revocation of Trading Fund status. The terms of this loan
are 10 years at a fixed interest rate of 3.69% (Public Works Loan Board rate). The loan is repaid in 6
monthly instalments. Early settlement of the loan in 2013-14 has been agreed with DfT.
The movements relating to the finance lease element of the Estates PFI contract are as follows:
2012-13
2011-12
Imputed finance lease element of on-balance sheet Estates
PFI contract
£000
£000
1 April
32,136
33,793
Increase due to assets capitalised
-
-
Amount paid in relation to assets capitalised
(1,749)
(1,657)
31 March 2013
30,387
32,136
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DVLA Annual Report & Accounts 2012-13 81
Note 11. Financial instruments
Fair values
The fair values of the Agency's financial assets and liabilities as at 31 March 2013 are shown below.
With the exception of Finance Lease and PFI liabilities, due to the short-term nature of the financial
instruments held, carrying value is considered to represent the fair values.
The Agency has examined its contracts to identify embedded derivatives and concluded that where
identified these are closely linked to the host contract and therefore need no adjustment.
2012-13
Fair Value
2012-13
Carrying
amount
2011-12
Fair Value
2011-12
Carrying
amount
£000
£000
£000
£000
Financial Assets
Cash and cash equivalents (note 9)
62,293
62,293
103,373
103,373
Loans and receivables (note 8)
-Trade receivables
7,746
7,746
3,389
3,389
-Other receivables
150
150
147
147
-Public sector receivables
(N.B. includes VAT)
6,998
6,998
12,545
12,545
-Accrued income
14,443
14,443
6,101
6,101
Total loans and receivables
29,337
29,337
22,182
22,182
Total financial assets
91,630
91,630
125,555
125,555
Financial liabilities
-Trade and other payables (note 10)
-Trade payables
4,702
4,702
7,334
7,334
-Accruals
27,753
27,753
22,406
22,406
-Imputed finance lease element of on-balance
sheet PFI contracts
29,633
30,387
31,333
32,136
- Finance leases
681
701
862
889
- Cash balance payable to the Consolidated Fund
15,751
15,751
11,426
11,426
- Amounts due to DfT in respect of Supply Funding
19,303
19,303
2,874
2,874
-Capital Accruals
117
117
149
149
-Loan from DfT
15,240
15,240
17,144
17,144
Total financial liabilities
113,180
113,954
93,528
94,358
The fair values above have been calculated using the discount rate implicit in the finance leases and PFI
contract.
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DVLA Annual Report & Accounts 2012-13 82
Financial risk management
The Agency‟s activities expose it to the following financial risks:
Credit risk – the possibility that the other parties might fail to pay amounts due to the Agency
Liquidity risk – the possibility that the Agency might not have funds available to meet its
commitments to make payments
Market risk – the possibility that financial loss might arise for the Agency as a result of changes
in such measures as interest rates movements or foreign exchange rate movements.
Credit risk
Credit risk is the risk of suffering financial loss, should any of the Agency‟s customers or counterparties
fail to fulfil their contractual obligations to the Agency. Some of the Agency‟s customers and
counterparties are other public sector organisations. There is no credit risk from these organisations.
For those customers and counterparties that are not public sector organisations, the Agency has policies
and procedures in place to ensure credit risk is kept to a minimum.
Exposure to credit risk
The carrying amount of financial assets £91.6 million (31 March 2012: £125.6 million) represents the
maximum credit exposure.
The ageing of receivables (gross) at the reporting date was:
31 March
2013
31 March
2012
£000
£000
Not past due
28,959
21,166
Past due 0-30 days
127
1,009
Past due 31-120 days
242
7
More than 120 Days
9
-
Total
29,337
22,182
There is no impairment provision in either year as the Agency believes that no allowance is necessary in
respect of any of its trade receivables.
Liquidity risk
The Agency‟s exposure to liquidity risk is limited; it is fully funded from fee receipts or Treasury funding
drawdown. The Agency is not dependent on the receipt of income from activities or the clearance of
outstanding receivables formed in the ordinary course of business for future liquidity, as any cash
shortfall will be met by an increase in Treasury drawdown, ensuring payment of trade and all other
payable values. The level of capital expenditure payments are managed to be met from available cash
balances. The contractual maturity of financial liabilities, including interest payments is:
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DVLA Annual Report & Accounts 2012-13 83
31 March 2013
Non-
derivative
Financial
liabilities
Measured
at carrying
amount
£000
Future
Contractual
cash flows
£000
6months
or less
£000
6-12
Months
£000
1-2
Years
£000
2-5
Years
£000
5+
Years
£000
Finance
lease
liabilities
701
735
105
105
210
315
-
PFI
Liabilities
30,387
41,426
1,726
1,726
3,452
10,356
24,166
Loan from
DfT
15,240
15,240
15,240
-
-
-
-
Other
67,626
67,626
67,138
-
488
-
-
Total
113,954
125,027
84,209
1,831
4,150
10,671
24,166
Non-
derivative
Financial
liabilities
Measured
at Fair
Value
£000
Fair
Value of
Contractual
Cash flows
£000
6 months
or less
£000
6-12
Months
£000
1-2
Years
£000
2-5
Years
£000
5+
Years
£000
Finance
lease
liabilities
681
681
103
101
196
281
-
PFI
Liabilities
29,633
29,633
1,679
1,634
3,096
8,337
14,887
Loan from
DfT
15,240
15,240
15,240
-
-
-
-
Other
67,626
67,626
67,138
-
488
-
-
Total
113,180
113,180
84,160
1,735
3,780
8,618
14,887
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DVLA Annual Report & Accounts 2012-13 84
31 March 2012
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts.
Non-
derivative
Financial
liabilities
Measured
at carrying
amount
£000
Future
Contractual
cash flows
£000
6 months
or less
£000
6-12
Months
£000
1-2
Years
£000
2-5
Years
£000
5+
Years
£000
Finance
lease
liabilities
889
945
105
105
210
525
-
PFI
Liabilities
32,136
44,878
1,726
1,726
3,452
10,357
27,617
Loan from
DfT
17,144
20,147
1,269
1,251
2,449
6,927
8,251
Other
44,189
44,189
44,189
-
-
-
-
Total
94,358
110,159
47,289
3,082
6,111
17,809
35,868
Non-
derivative
Financial
liabilities
Measured
at Fair
Value
£000
Fair
Value of
Contractual
Cash flows
£000
6 months
or less
£000
6-12
Months
£000
1-2
Years
£000
2-5
Years
£000
5+
Years
£000
Finance
lease
liabilities
862
862
103
102
196
461
-
PFI
Liabilities
31,333
31,333
1,680
1,634
3,095
8,337
16,587
Loan from
DfT
17,144
17,144
1,246
1,207
2,298
6,047
6,346
Other
44,189
44,189
44,189
-
-
-
-
Total
93,528
93,528
47,218
2,943
5,589
14,845
22,933
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DVLA Annual Report & Accounts 2012-13 85
Market risk
Interest rates
The Agency has been exposed to interest rate movements on its cash balances only. In 2010-11 the
Agency received a loan from DfT, the terms of which are 10 years at a fixed interest rate of 3.69%
(Public Works Loan Board rate). Cash balances are all held in non- interest bearing Government
Banking Service bank accounts. At the reporting date the fixed rate interest-bearing financial instruments
are shown below:
Carrying Amount
2013
2012
£000
£000
Fixed Rate instruments
Other finance leases
(701)
(889)
PFI
(30,387)
(32,136)
Financial liabilities
(31,088)
(33,025)
Fair value sensitivity analysis for fixed rate instruments
The Agency does not account for any fixed rate financial assets and liabilities at fair value through profit
and loss, and the Agency does not designate derivatives as hedging instruments under a fair value
hedge accounting model. Therefore a change in interest rates at the reporting date would not affect the
surplus/ (deficit) position.
Cash flow sensitivity analysis for variable rate instruments
The Agency does not earn interest on monies held at the Government Banking Service.
Foreign exchange rates
Financial assets and liabilities are generated by day-to-day operational activities and the Agency has
limited exposure to foreign exchange.
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DVLA Annual Report & Accounts 2012-13 86
Note 12. Provisions for liabilities and charges
2012-13
Transformation
and
modernisation
of network
services
Early
Departure
costs
Tax officers’
Pension
costs
Other
Total
£000
£000
£000
£000
£000
Balance at 1 April 2012
46,307
6,039
3,683
1,346
57,375
Provided in the year
6,338
29
790
1,129
8,286
Digital tachograph cards
Provision not required written
back
-
-
-
(486)
(486)
Reclassified to accruals
(5,547)
-
-
-
(5,547)
Provisions utilised in the year
(150)
(1,947)
(684)
(860)
(3,641)
Unwinding of discount and
impact of changes in
discount rate
-
139
203
-
342
Balance at 31 March 2013
46,948
4,260
3,992
1,129
56,329
Analysis of expected timing of discounted cash flows
2012-13
Transformation
and
modernisation
of network
services
Early
Departure
costs
Tax officers’
Pension
costs
Other
Total
£000
£000
£000
£000
£000
Not later than one year
26,187
1,577
606
88
28,458
Later than one year and not
later than five years
10,289
2,540
1,654
425
14,908
Later than five years
10,472
143
1,732
616
12,963
Balance at 31 March 2013
46,948
4,260
3,992
1,129
56,329
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DVLA Annual Report & Accounts 2012-13 87
2011-12
Transformation
and
modernisation of
network services
Early
Departure
costs
Tax officers‟
Pension
costs
Other
Total
£000
£000
£000
£000
£000
Balance at 1 April 2011
-
7,747
4,196
-
11,943
Provided in the year
46,307
369
153
1,346
48,175
Provisions utilised in the year
-
(2,252)
(789)
-
(3,041)
Unwinding of discount and
impact of changes in
discount rate
-
175
123
-
298
Balance at 31 March 2012
46,307
6,039
3,683
1,346
57,375
Analysis of expected timing of discounted cash flows
2011-12
Transformation
and
modernisation of
network services
Early
Departure
costs
Tax officers‟
Pension
costs
Other
Total
£000
£000
£000
£000
£000
Not later than one year
-
1,828
565
1,346
3,739
Later than one year and not
later than five years
45,876
3,858
1,797
-
51,531
Later than five years
431
353
1,321
-
2,105
Balance at 31 March 2012
46,307
6,039
3,683
1,346
57,375
Transformation and modernisation of network services
See Note 20 for details.
Future payments to be made under the Provision for the transformation and modernisation of network
services are discounted at the HM Treasury advised rate for General Provisions (0 to 5 years -1.80%, 5
to 10 years -1.00%, more than 10 years 2.20%).
Early departure costs
The Agency meets the additional costs of benefits beyond the normal Principal Civil Service Pension
Scheme (PCSPS)/Stakeholder scheme benefits in respect of employees who retire early by paying the
required amounts annually to the PCSPS/Stakeholder schemes over the period between early departure
and normal retirement date of age 60. The Agency provides for this in full when the early retirement
programme becomes binding by establishing a provision for the estimated payments. Future payments
to be made under the Early Departure and Voluntary Retirement schemes are discounted at the HM
Treasury advised rate of 2.35% (2011-12: 2.8%).
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DVLA Annual Report & Accounts 2012-13 88
Tax officer pension costs
Under the Pension Increase Act 1971, the Agency has a liability to contribute to the pensions of ex local
taxation office staff who were employed on driver and vehicle licensing work before the creation of the
Driver and Vehicle Licensing Centre. Under the Vehicle and Driving Licence (Compensation to Officers)
Regulations 1977, the Agency makes compensation payments to local authority staff in respect of loss of
emoluments when the Local Taxation Offices closed. The provision is based on advice from the
Government Actuary's Department, and is re-assessed normally every three years with a full revaluation
being carried out as at 31 March 2013.
Following the estimations of future cash flows provided by the Government Actuary‟s Department future
payments to be made in relation to this provision have been discounted at the HM Treasury advised rate
of 2.35% (2011-12: 2.8%).
Other - Digital Tachograph cards
It was identified during 2011-12 that a number of digital tachograph cards that were issued between 24
March 2007 and 31 August 2008 were malfunctioning. A provision of £1.3 million was recognised in the
2011-12 accounts to incorporate the costs of rectifying this issue. In 2012-13 this has been resolved
with £0.8 million of the provision utilised and the remainder of £0.5 million written back as it was not
required.
Note 13. Commitments under leases
Operating leases
Future payments under operating leases
comprise:
31 March
2013
31 March
2012
£000
£000
Buildings
Not later than one year
4,892
6,041
Later than one year and not later than five years
-
4,679
4,892
10,720
This includes commitments related to local office leases up to the proposed date of closure.
Commitments following these dates are considered onerous and recognised in the Transformation and
modernisation of network services provision (note 12).
Other:
31 March
2013
31 March
2012
£000
£000
Not later than one year
235
288
Later than one year and not later than five years
556
791
791
1,079
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DVLA Annual Report & Accounts 2012-13 89
Finance leases
Future payments under finance leases comprise:
31 March
2013
31 March
2012
£000
£000
Other:
Not later than one year
210
210
Later than one year and not later than five years
525
735
Less interest element
(34)
(56)
701
889
In 2011-12 the Agency brought to account the leases entered into in an agreement by the
wheelclamping contractor ( a combination of operating and finance) for vans and recovery vehicles, all of
which carry the DVLA livery, as the condition for the recognition of a right of use asset has been met by
the Agency.
Expenditure is capitalised and depreciated over the life of the associated asset and the finance lease
creditor is released over the five year life of the agreement. Finance lease interest is expensed at a
constant periodic rate on the outstanding balance of the liability.
Note 14. Commitments under Private Finance Initiative (PFI) on-balance
sheet contracts
On-balance sheet
31 March
2013
31 March
2012
Future payments under on-balance sheet Estates
PFI contract for the following periods comprise:
£000
£000
Not later than one year
3,452
3,452
Later than one year and not later than five years
13,808
13,808
Later than five years
24,166
27,618
41,426
44,878
Less interest element
(11,039)
(12,742)
30,387
32,136
Capital commitments under the Estates PFI contract in 2012-13 were £Nil (2011-12: £268,000).
Charge to the Statement of comprehensive net expenditure and future commitments
The total amount charged to the Statement of comprehensive net expenditure in respect of the service
element of on-balance sheet PFI transactions was £19.8 million (2011-12: £18.7 million) and the
payments to which the Agency is committed during the next year, excluding amounts already provided
for in the Transformation and modernisation of network services provision (note 12), analysed by the
date of payment, is as follows:
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DVLA Annual Report & Accounts 2012-13 90
2012-13
2011-12
£000
£000
Not later than one year
19,672
19,812
Later than one year and not later than five years
85,317
87,681
Later than five years
182,517
222,487
287,506
329,980
DVLA‟s estates development and refurbishment programme is delivered through the Estates PFI
contract with Telereal Trillium. Assets are capitalised in line with the Agency‟s capitalisation policy and a
corresponding PFI liability recognised. The annual unitary charge is separated between capital
repayments, finance interest and a service charge element. PFI finance interest is expensed at a
constant periodic rate on the outstanding balance of the liability.
Note 15. Other financial commitments
The Agency has entered into non-cancellable contracts (which are not leases or PFI contracts), for:
provision of end to end IT service including the provision of IT equipment
front office counter services including vehicle licensing, driver licence application checking,
renewal of photo-licence
wheelclamping services.
The key payments to which the Agency is committed, analysed by the date of payment are as follows:
2012-13
2011-12
£000
£000
Not later than one year
142,631
173,564
Later than one year and not later than five years
328,632
413,563
Later than five years
23,511
-
494,774
587,127
Note 16. Contingent liabilities
There are no Contingent liabilities.
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DVLA Annual Report & Accounts 2012-13 91
Note 17. Losses and special payments
2012-13
Number of
cases
2012-13
Value
2011-12
Number of
cases
2011-12
Value
£
£
Losses written off in year
cash losses due to abandoned claims for
payments from customers
980
64,053
2,072
82,362
Fruitless payments
-
-
1
158
Bookkeeping losses
-
56,214
-
-
Special payments
Ex-gratia payments
1,319
226,428
1,210
202,827
Personal injury compensation
4
28,655
2
33,500
Note 18. Related parties
DVLA is sponsored by the Motoring Services Directorate of DfT that also sponsors two Trading Funds:
DSA and VOSA.
DfT is regarded as a related party and DVLA has a significant number of material transactions with DfT,
most notably in respect of the supply funding and SSC. In addition, the Agency has had a significant
number of material transactions with other government departments and central government bodies.
Most of these transactions have been with Department of Work and Pensions, DSA, UK Border Agency,
Identity and Passport Service, and Post Office®.
None of the EB members or key managerial staff or other related parties has undertaken any material
transactions with the Agency during the year.
Note 19. Intra-government balances
31 March
2013
31 March
2013
31 March
2012
31 March
2012
£000
Receivables
£000
Payables
£000
Receivables
£000
Payables
Central Government bodies
10,319
50,859
11,443
32,067
Trading Funds and Public
Corporations
900
-
23,880
-
Local Authorities
9
-
78
-
Total Intra-government balances
11,228
50,859
35,401
32,067
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DVLA Annual Report & Accounts 2012-13 92
Note 20. Transformation and modernisation of network services
In 2012-13 DVLA will be implementing the transformation and modernisation of its network services after
considerable planning and public consultation. This will mean the phased closure of 39 local offices and
10 enforcement area offices to centralise operations in Swansea by December 2013.
The centralisation and modernisation of DVLA services are in response to changing customer needs. At
the heart is a programme of changes which will make it easier for motorists and our commercial
customers to conduct their business. These changes include increasing the range of transactions that
can be carried out online, directly or through intermediaries and moving to more digitalised services.
DVLA will continue to provide current levels of customer service at its local offices up until their
scheduled closure date. The closure of the local offices will contribute significantly to the £100 million
annual cost savings target by 2015.
The provision relating to the transformation and modernisation of DVLA's network services has been
reviewed in 2012-13 and where there is now certainty of amounts and timings, those costs previously
provided for are recognised as an accrual in 2012-13 as below.
Provision
Carrying Amount
2012-13
2011-12
£000
£000
Staff costs
20,518
27,735
Travel and subsistence
50
50
Professional services
561
561
PFI unitary charge
13,444
8,454
Rentals under operating leases
12,375
9,507
46,948
46,307
Accrual
Carrying Amount
2012-13
2011-12
£000
£000
Staff costs
3,972
-
Rentals under operating leases
1,575
-
5,547
-
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DVLA Annual Report & Accounts 2012-13 93
Note 21. Motor Vehicle Licence Saving Stamps
For a number of years DVLA ran a Motor Vehicle Licence (MVL) Savings Stamps scheme whereby
customers could purchase savings stamps at the Post Office® and use them to redeem against payment
for Vehicle Excise Duty or for cash. This scheme ceased on 31 March 2005 when the Post Office ®
announced the introduction of its own wider savings stamp scheme. On 1 April 2006 the balance of cash
held at the Post Office® was transferred to DVLA and from that date, holders of stamps could only
redeem them or receive a refund directly from DVLA. As the value of redemptions has been low, (in
2012-13 £24,030 was redeemed( 2011-12 : £32,435), in 2012-13 the balance of funds of £4.6 million
was repaid to HM Treasury with the Agency taking the decision to bear any costs of future refunds in the
Business Accounts.
Note 22. Events after the reporting period
A Consultation on Motoring Services Strategy took place between 13 December 2012 and 7 March
2013. It is DfT's response to the Government‟s broader vision for public services as set out in the Civil
Service Reform Plan, the Open Public Services White Paper and the Government Digital Strategy.
A summary of responses and immediate next steps has been published and has no implications for
DVLA's continued operations in their current form.
These financial statements are laid before the House of Commons by the DfT. International Accounting
Standards (IAS) 10 requires the Agency to disclose the date on which the accounts are authorised for
issue. This is the date that the Comptroller and Auditor General signs the certificate.
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DVLA Annual Report & Accounts 2012-13 94
4.6 Audit Report of the Comptroller and Auditor General to the House of
Commons
I have audited the financial statements of the Trust Statement of the Driver and Vehicle Licensing
Agency for the year ended 31 March 2013 under the Exchequer and Audit Departments Act 1921. The
financial statements comprise: the Statements of Revenue and Expenditure, Financial Position, Cash
Flows and the related notes. These financial statements have been prepared under the accounting
policies set out within them.
Respective responsibilities of the Accounting Officer and auditor
As explained more fully in the Statement of the Agency's and Accounting Officer‟s Responsibilities, the
Chief Executive as Accounting Officer is responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view. My responsibility is to audit and report on the
financial statements in accordance with the Exchequer and Audit Departments Act 1921. I conducted my
audit in accordance with International Standards on Auditing (UK and Ireland). Those standards require
me and my staff to comply with the Auditing Practices Board‟s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the circumstances of the Trust Statement of the Driver and
Vehicle Licensing Agency and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the Accounting Officer; and the overall
presentation of the financial statements. In addition I read all the financial and non-financial information
in the Annual Report to identify material inconsistencies with the audited financial statements. If I
become aware of any apparent material misstatements or inconsistencies I consider the implications for
my report.
I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and
income recorded in the financial statements have been applied to the purposes intended by Parliament
and the financial transactions recorded in the financial statements conform to the authorities which
govern them.
Opinion on regularity
In my opinion, in all material respects the expenditure and income recorded in the financial statements
have been applied to the purposes intended by Parliament and the financial transactions recorded in the
financial statements conform to the authorities which govern them.
Opinion on financial statements
In my opinion:
the Trust Statement gives a true and fair view of the state of affairs of the collection and
allocation of taxes, fines and penalties as at 31 March 2013 and of the net revenue for the year
then ended; and
the Trust Statement has been properly prepared in accordance with the Exchequer and Audit
Departments Act 1921 and HM Treasury directions issued thereunder.
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DVLA Annual Report & Accounts 2012-13 95
Opinion on other matters
In my opinion:
the information given in the Annual Report and the Management Commentary included within
the Annual Report for the financial year for which the financial statements are prepared is
consistent with the financial statements.
Matters on which I report by exception
I have nothing to report in respect of the following matters which I report to you if, in my opinion:
adequate accounting records have not been kept or returns adequate for my audit have not
been received from branches not visited by my staff; or
the financial statements are not in agreement with the accounting records and returns; or
I have not received all of the information and explanations I require for my audit; or
the Governance Statement does not reflect compliance with HM Treasury‟s guidance.
Amyas C E Morse
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP
24 June 2013
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DVLA Annual Report & Accounts 2012-13 96
4.7 DVLA Trust Statement for 2012-13
Statement of revenue and expenditure for the year ended 31 March 2013
Note
2012-13
2011-12
£m
£m
Revenue
Licence Fees and Taxes - VED
2
6,013
5,932
Fines and Penalties - Enforcement
3
42
38
Total Revenue
6,055
5,970
Expenditure
Payment to HM Revenue and Customs
4
(5)
(6)
Credit losses – amounts written off
5
(18)
(13)
Total Expenditure
(23)
(19)
Net Revenue for the Consolidated Fund
6,032
5,951
There were no recognised gains or losses accounted for outside the above Statement of revenue and
expenditure.
Notes forming part of these accounts appear on pages 99 to 108.
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DVLA Annual Report & Accounts 2012-13 97
Statement of financial position as at 31 March 2013
Note
31 March
2013
31 March
2012
£m
£m
Current Assets
Trade and other receivables
5
27
109
Cash and cash equivalents
6
203
131
Total Current Assets
230
240
Current Liabilities
Deferred revenue
7
(2,632)
(2,660)
Trade payables
7
(10)
(8)
Total Current Liabilities
(2,642)
(2,668)
Total net Liabilities
(2,412)
(2,428)
Represented by:
Balance on Consolidated Fund
Account as at 31 March 2013
8
(2,412)
(2,428)
Notes forming part of these accounts appear on pages 99 to 108.
Malcolm Dawson OBE
Accounting Officer and Interim Chief Executive DVLA
20 June 2013
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DVLA Annual Report & Accounts 2012-13 98
Statement of cash flows for the year ended 31 March 2013
2012-13
2011-12
£m
£m
Net cash flow from revenue activities
6,088
5,974
Cash paid to Consolidated Fund
(6,016)
(5,997)
Increase / (Decrease) in cash in this period
72
(23)
Notes to the Statement of cash flows
Reconciliation of Net cash flow to movement in net funds
2012-13
2011-12
£m
£m
Net revenue for the Consolidated Fund
6,032
5,951
Decrease / (increase) in trade and other receivables
82
(44)
(Decrease) / Increase in trade and other payables
(26)
67
Net cash flow from revenue activities
6,088
5,974
Analysis of Changes in Net Funds
Notes
2012-13
2011-12
£m
£m
Increase / (Decrease) in cash in this period
6
72
(23)
Net Funds as at 1 April
6
131
154
Net Funds as at 31 March
203
131
Notes forming part of these accounts appear on pages 99 to 108.
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DVLA Annual Report & Accounts 2012-13 99
Notes to the Trust Statement
Note 1. Statement of Accounting Policies
Basis of accounting
The Agency shall prepare a Trust Statement („the Statement‟) for the financial year ended 31 March
2013 for the revenue and other income, as directed by the Treasury, collected by the Agency as an
agent for others, in compliance with the accounting principles and disclosure requirements of the edition
of the Government Financial Reporting Manual by HM Treasury („FReM‟) which is in force for 2012-13.
The Trust Statement is prepared in accordance with the accounts direction issued by HM Treasury
under Section 2 of the Exchequer and Audit Departments Act 1921. The Trust Statement is prepared in
accordance with the accounting policies detailed below. These have been agreed between DVLA, DfT
and HM Treasury and have been developed with reference to International Financial Reporting
Standards and other relevant guidance. The accounting policies have been applied consistently in
dealing with items considered material in relation to the accounts.
The revenue and associated expenditure contained in these statements are those flows of funds which
DVLA handles on behalf of the Consolidated Fund and where it is acting as agent rather than as
principal.
Although showing net liabilities because of the differences between the recognition of revenue and the
payment of cash these accounts are prepared on a going concern basis.
The financial information contained in the statements and in the notes is rounded to the nearest £million.
Accounting convention
These accounts have been prepared on an accruals basis and in accordance with the historical cost
convention.
General Accounting Policies
Revenue
VED and fines and penalties are measured in accordance with IAS 18. They are measured at the fair
value of amounts received or receivable net of repayments. Revenue is recognised when:
A taxable event has occurred, the revenue can be measured reliably and it is probable that the
economic benefits from the taxable event will flow to the Exchequer. A taxable event occurs when a
liability arises to pay a tax or licence fee. Licence fees are deemed to accrue evenly over the period
for which the licence is valid. Repayments are accounted for on a cash basis and recognised in the
year in which payment is made.
A penalty is validly imposed and an obligation to pay arises.
Late Licensing Penalty (LLP) letters are issued to vehicle keepers who fail to relicense or declare
Statutory Off Road Notification (SORN) within two months of licence expiry. Fine payments are collected
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DVLA Annual Report & Accounts 2012-13 100
throughout the Local Services Network (LSN), Continuous Registration Enforcement Centres and DVLA
Contact Centre. DVLA also employs debt collectors to recover fines not recovered directly.
Debt collection agents are issued cases monthly from DVLA to pursue further. Revenue is either
recovered by agents and paid over to DVLA gross or paid directly to DVLA from customers. Commission
earned by agents is invoiced to DVLA separately. The Agency pays LLP income net of commission to
HM Treasury as Consolidated Fund Extra Receipts under a specific arrangement. Fine income used to
cover agents' commission costs is deducted at source to offset the cost to DVLA.
Continuous Insurance Enforcement (CIE) was introduced in 2011-12 when it became an offence to be
the registered keeper of an uninsured vehicle. A registered vehicle must be insured at all times unless it
is being kept off road and a SORN made.
Fixed penalty notices are issued to registered keepers who fail either to insure or are not CIE exempt
through vehicle status or tax class. The £100 penalty notice is reduced to £50 if paid within 21
days. Penalties are collected through the LSN, Enforcement Centres and by post.
Business Accounts
The following transactions are accounted for in the preceding Business Accounts and are covered by its
related accounting policies:
a) Fixed assets
b) Losses
c) Cost of collection and enforcement of VED
Use of estimates and judgements
The preparation of the financial statements in conformity with International Financial Reporting
Standards requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected.
Information about critical judgements in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements is included in the following notes:
Note 5 - Trade and other receivables
Bad and doubtful debts
In order to give a true and fair view, it is necessary to make allowance for VED and enforcement
receivables, which we believe will be unlikely to be received in the future. A provision has been
estimated using analysis of historic trends in debt recovery and write offs and is supported by
management judgement.
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DVLA Annual Report & Accounts 2012-13 101
Evasion
The costs of VED evasion are outside the scope of the Trust Statement. Evasion is discussed more fully
in the Management Commentary.
Related party disclosure
The Agency is part of DfT. It has a large number of VED transactions with both Local and Central
Government bodies; at present these are not separately identifiable by DVLA.
Deferred income
VED is paid in advance. The deferred revenue balance relates to income received in 2012-13 for VED
which relates to 2013-14.
Deferred income in respect of the Post Office®, Automated First Registration and Licensing, EVL and
Fleets is based on the data collected at source using the period of the VED licence purchased.
Deferred income in respect of Local Offices is based on the licensing renewal pattern for the Post
Office®. Management estimate the level of error arising from this approximation to be de minimis. A
proportion of the deferred income balance will be claimed as a refund of duty during 2012-13. The value
of refunds for 2012-13 is set out in Note 2.
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DVLA Annual Report & Accounts 2012-13 102
Note 2. Analysis of gross VED collected by channel
2012-13
2011-12
£m
£m
Face to Face:
Post Office®
2,682
2,807
Local Services Network
341
344
Sub Total
3,023
3,151
Electronic Channels:
EVL
2,879
2,650
Motor Manufacturing
221
244
Fleet Operators
84
90
Sub Total
3,184
2,984
Total Gross VED collected
6,207
6,135
Amounts refunded
(194)
(203)
Total
6,013
5,932
The table below demonstrates the way in which transactions are being processed is changing
significantly, with a shift from face to face to electronic channels (please refer to the Management
Commentary).
2012-13
2011-12
2010-11
2009-10
2008-09
£m
£m
£m
£m
£m
Face to Face
3,023
3,151
3,196
3,416
3,614
Electronic Channels
3,184
2,984
2,787
2,527
2,176
Total Gross VED collected
6,207
6,135
5,983
5,943
5,790
Amounts refunded
(194)
(203)
(201)
(201)
(248)
Total
6,013
5,932
5,782
5,742
5,542
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DVLA Annual Report & Accounts 2012-13 103
Note 3. Analysis of enforcement fines and penalties collected by channel
Vehicle Excise Duty
Continuous
Insurance (CIE)
Totals
Late Licensing
Penalties (LLP)
Traditional
Enforcement
Wheelclamping
2012-13
£m
£m
£m
£m
£m
Offences in:
2011-12
3
1
-
-
4
2012-13
28
5
5
3
41
Commission
paid
(3)
-
-
-
(3)
Total
28
6
5
3
42
Vehicle Excise Duty
Continuous
Insurance (CIE)
Totals
Late Licensing
Penalties (LLP)
Traditional
Enforcement
Wheelclamping
2011-12
£m
£m
£m
£m
£m
Offences in:
2010-11
3
1
-
-
4
2011-12
23
6
5
2
36
Commission
paid
(2)
-
-
-
(2)
Total
24
7
5
2
38
LLP income collected by debt collectors is included in the LLP figures. Amounts collected by debt
collectors was £11.0 million in 2012-13 (2011-12: £7.2 million). DVLA and HM Treasury have agreed
special payment arrangements for debt collectors. Their commission is paid from the fine income that
they collect and the net amount is remitted to DVLA.
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DVLA Annual Report & Accounts 2012-13 104
Note 4. Payments to HM Revenue and Customs – shipbuilders’ relief
Shipbuilders‟ relief is a payment to HM Revenue and Customs (HMRC) under the Finance Act 1966, to
provide assistance to the shipbuilding industry. It aims to relieve shipbuilders of VED, the duty on
hydrocarbon oil and Value Added Tax incurred in the course of constructing a vessel.
On the 12 January 2004, the Economic Secretary to the Treasury confirmed the abolition, in full and with
immediate effect, of the Shipbuilders‟ Relief. This announcement means that Shipbuilders‟ Relief will not
be paid in respect of any contracts for vessels signed after 12 January 2004.
The DVLA has a contingent liability (which cannot be quantified at this time) with respect to contracts
signed on or before that date. The DVLA will honour all claims in respect of:
contracts signed on or before 31 December 2000 in respect of classes of vessel explicitly covered by
EC Regulation 1540/98
contracts signed on or before 12 January 2004 in respect of classes of vessel not explicitly covered by
EC Regulation 1540/98.
2012-13
2011-12
£m
£m
Payments to HMRC
(5)
(6)
Total
(5)
(6)
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DVLA Annual Report & Accounts 2012-13 105
Note 5. Trade and other receivables
Amounts due
31 March
2013
31 March
2012
£m
£m
Licence Fees and Taxes - VED
20
98
Fines and Penalties - Enforcement
15
20
Total before estimated impairments
35
118
Less estimated provision for impairments
(8)
(9)
Total
27
109
Licence Fees and Taxes - VED receivables include:
Motor Trade receivables (Automated First Registration and Licensing ) of £16.5 million collected
by the dealers in Great Britain and Northern Ireland in 2012-13 but paid to DVLA in 2013-14
(2011-12: £5.3 million)
Dishonoured cheque debtors of £1.9 million (31 March 2012: £2.0 million), which are shown net
of a provision for doubtful debts.
VED income of £Nil collected by the Post Office® in Great Britain and Northern Ireland in 2012-
13 but paid to DVLA in 2013-14 (2011-12: £83.0 million).
VED income of £Nil collected through local offices in 2012-13 but paid to DVLA in 2013-14
(2011-12: £6.0 million).
VED income of £1.3 million collected by DVA (Northern Ireland) in 2012-13 but paid to DVLA in
2013-14 (2011-12: £1.2 million).
The Fines and Penalties - Enforcement receivables include:
Continuous Registration Fines and Penalties of £15.3 million (31 March 2012: £19.7 million) due
from those on whom financial penalties have been imposed but not paid at that date.
All debt will be due to the Consolidated Fund when realised.
The reduction in VED receivables in 2012-13 is due to the fact that the yearend has been impacted by
the bank holiday timings which resulted in all transactions being recognised within the financial year.
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DVLA Annual Report & Accounts 2012-13 106
Change to impairments
2012-13
2011-12
£m
£m
Balance as at 1 April
(9)
(10)
Change in estimated value of impairments
1
1
Balance as at 31 March 2013
(8)
(9)
A provision is made for potential bad debts based on the value of open cases as at 31 March 2013 and
historical data on recovery of VED and enforcement debtors. Debtors in the balance sheet are reported
after the deduction of the estimated value of impairments.
A provision of 10% is made for doubtful dishonoured cheque VED cases resulting in a movement of
£0.02 million in 2012-13 (31 March 2012: £0.018 million). There is no provision in respect of VED
enforcement.
Credit losses - amounts written off
2012-13
2011-12
£m
£m
VED
2
2
VED Enforcement
17
12
Change in the value of impairments
(1)
(1)
Total
18
13
Amounts written off in respect of VED include:
£0.415 million for cases where the Agency is unable to trace the offender (31 March 2012:
£0.534 million).
£0.828 million for cases of successful prosecutions in court where the revenues were collected
by the Home Office (31 March 2012: £0.919 million).
£0.614 million where the applicant returned the VED licence disc and this was voided
(cancelled) (31 March 2012: £0.602 million).
Amounts written off in respect of VED Enforcement relate to waived and abandoned fines and penalties
during 2012-13.
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DVLA Annual Report & Accounts 2012-13 107
Note 6. Cash and cash equivalents
31 March
2013
31 March
2012
£m
£m
Government Banking Service
203
131
Total
203
131
Note 7. Trade and other payables
Trade payables
31 March 2013
Deferred Revenue
31 March 2013
Total
31 March 2013
31 March
2012
£m
£m
£m
£m
VED
-
(2,632)
(2,632)
(2,660)
Motor trade creditors
(6)
-
(6)
(6)
Other
(4)
-
(4)
(2)
Total
(10)
(2,632)
(2,642)
(2,668)
Motor trade creditors are where customers hold pre-payment accounts, or payments have been made
but the service has not yet been provided.
Other creditors includes an accrued cost to HMRC for a payment of Shipbuilders' Relief of £3.738 million
(2011-12: £0.168 million).
VED is paid in advance. The deferred revenue balance relates to income received in 2012-13 for VED
which relates to 2013-14.
There are no trade or other payables in respect of VED enforcement.
Note 8. Balance on Consolidated Fund account
2012-13
2011-12
£m
£m
Balance as at 1 April
(2,428)
(2,382)
Net Revenue for the Consolidated Fund
6,032
5,951
Less amount paid to Consolidated Fund
(6,016)
(5,997)
Balance on the Consolidated Fund Account as
at 31 March 2013
(2,412)
(2,428)
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Note 9. Events after the reporting period
There have been no events since the balance sheet date that impact on the understanding of these
financial statements
These financial statements are laid before the Houses of Commons by DfT. International Accounting
Standards (IAS) 10 requires the Agency to disclose the date on which the accounts are authorised for
issue. This is the date that the Comptroller and Auditor General signs the certificate.
.
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Appendix
DVLA Annual Report & Accounts 2012-13 109
Appendix A
The Comptroller and Auditor General Section 2 Report
Background
1. The Driver and Vehicle Licensing Agency (the Agency) is responsible for the collection of Vehicle
Excise Duty on behalf of the Secretary of State for Transport. Vehicle Excise Duty is vehicle road use
tax levied as an excise duty which must be paid for most types of vehicles used (or parked) on „public
roads‟ in the United Kingdom. In 2012-13, the Agency collected £6.0 billion (2011-12: £6.0 billion) of
revenue and paid £6.0 billion to the Exchequer, as reported in the Agency‟s Trust Statement. The
amount collected exceeded the budget forecast of £5.9 billion
1
.
2. The Agency‟s system for the assessment, collection and allocation of Vehicle Excise Duty (VED)
comprises a number of components and sub-processes, as set out in the overview in Figure 1. The
basic system architecture for collecting Vehicle Excise Duty has remained unchanged for many years.
The Agency‟s contract with its existing suppliers of Information, Communication and Technology
Systems (ICT) is due to come to an end in September 2015, from which date the Agency will move
across to new contractual arrangements. With support from the Department and the Cabinet Office, the
Agency is developing its plans for the new ICT landscape which will mean the transition to a new
'greenfield‟ ICT estate in an iterative manner in the years following the letting of the contract. The
Agency has indicated that it expects that the full move away from the existing ICT systems will be
phased over a transition period of at least 3-5 years. The new ICT arrangements will impact on all
aspects of the Agency‟s core responsibilities, from the issue of driving licenses as well as to managing
Vehicle Excise Duty.
Scope of Audit
3. Section 2 of the Exchequer and Audit Departments Act 1921 requires me, as the Comptroller and
Auditor General (C&AG), to examine the Vehicle Excise Duty revenue accounts (reported by the Agency
in the Trust Statement) and to ascertain that the Agency has in place adequate regulations and
procedures to secure an effective check on the assessment, collection and proper allocation of revenue,
and that the Agency is duly carrying out these regulations and procedure. I am also required by that Act
to examine the correctness of the sums brought to account and to report the results to the House of
Commons. My audit opinions on the Agency‟s Trust Statement and this report together satisfy that
requirement.
4. My team has examined the systems and obtained evidence on the adequacy and operation of its
regulations and procedure, including consideration of the Agency‟s compliance and enforcement
activities. My conclusion on the Agency‟s overall management of the Vehicle Excise Duty systems is
based on this examination, as well as taking into account evidence from our audit of the Trust Statement
itself and information from other sources, including, for example, consideration of the Agency‟s
Governance Statement.
1
HM Treasury Budget 2012
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DVLA Annual Report & Accounts 2012-13 110
Conclusion
5. Whilst recognising that no tax collection system can ensure that all those who have a tax liability
comply with their obligations, I have concluded that, in 2012-13, the Agency has framed adequate
regulations and procedures to secure an effective check on the assessment, collection and proper
allocation of revenue, and that they were being duly carried out.
6. Based on their examination, my team found that the systems in place for the collection of Vehicle
Excise Duty, managed by the Agency through a range of channels, including Post Office® branches,
local offices, and Electronic Vehicle Licensing (EVL) and motor dealers are reasonable in their design
and were operated effectively throughout the year. My staff did not identify any major control
weaknesses.
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DVLA Annual Report & Accounts 2012-13 111
Collection Process for Vehicle Excise Duty
Figure 1 – Overview of Vehicle Excise Duty Assessment, Collection and Allocation
Process
Amyas C E Morse
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP
24 June 2013
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DVLA Annual Report & Accounts 2012-13 112
Appendix B
Accounts Direction given by the Treasury in accordance with section 7 (2)
of the Government Resources and accounts Act 2000
1. This direction applies to those executive agencies listed in the appendix below.
2. These executive agencies shall prepare accounts for the year ended 31 March 2013 in
compliance with the accounting principles and disclosure requirements of the edition of the
Government Financial Reporting Manual issued by H M Treasury („the FReM‟) which is in force
for 2012-13.
3. The accounts shall be prepared so as to:
(a) give a true and fair view of the state of affairs as at 31 March 2013 and of the income and
expenditure (or, as appropriate, net resource outturn), changes in taxpayers‟ equity and cash
flows of the agency for the financial year then ended
(b) provide disclosure of any material expenditure or income that has not been applied to the
purposes intended by Parliament or material transactions that have not conformed to the
authorities which govern them
4. Compliance with the requirements of the FReM will, in all but exceptional circumstances, be
necessary for the accounts to give a true and fair view. If, in these exceptional circumstances,
compliance with the requirements of the FReM is inconsistent with the requirement to give a true
and fair view, the requirements of the FReM should be departed from only to the extent
necessary to give a true and fair view. In such cases, informed and unbiased judgement should
be used to devise an appropriate alternative treatment which should be consistent with both the
economic characteristics of the circumstances concerned and the spirit of the FReM. Any
material departure from the FReM should be discussed in the first instance with HM Treasury.
Karen Sanderson
Deputy Director, Government Financial Reporting
Her Majesty‟s Treasury
17 December 2012
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DVLA Annual Report & Accounts 2012-13 113
Application of Accounts Direction
This accounts direction applies to the following executive agencies:
No
Name
Department
01
Treasury Solicitor‟s Department Agency
Attorney General
02
Insolvency Service
BIS
03
National Measurement Office
BIS
04
UK Space Agency
BIS
05
Planning Inspectorate
DCLG
06
Royal Parks
DCMS
07
Animal Health and Veterinary Laboratories Agency
DEFRA
08
Centre for the Environment, Fisheries and Aquaculture Science
DEFRA
09
Food and Environment Research Agency (Fera)
DEFRA
10
Rural Payments Agency
DEFRA
11
Veterinary Medicines Directorate
DEFRA
12
Education Funding Agency
DFE
13
National College
DFE
14
Teaching Agency
DFE
15
Standards and Testing Agency
DFE
16
Driver and Vehicle Licensing Agency
DfT
17
Government Car and Despatch Agency
DfT
18
Highways Agency
DfT
19
Maritime and Coastguard Agency
DfT
20
Vehicle Certification Agency
DfT
21
Wilton Park
FCO
22
Forest Research
Forestry Comm‟n
23
Valuation Office
HMRC
24
Asset Protection Agency
HMT
25
UK Debt Management Office
HMT
26
Criminal Records Bureau
HO
27
Identity and Passport Service
HO
28
National Fraud Authority
HO
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DVLA Annual Report & Accounts 2012-13 114
In addition a separate direction has been issued to the Meat Hygiene Service (Food Standards Agency)
(11 January 2006) - issued in respect of 2005-06 and subsequent financial years.
29
UK Border Agency
HO
30
Ministry of Defence Police and Guarding Agency
MOD
31
Service Children‟s Education
MOD
32
HM Courts and Tribunals Service
MOJ
33
National Offender Management Service
MOJ
34
Office of the Public Guardian
MOJ
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DVLA Annual Report & Accounts 2012-13 115
Accounts Direction given by HM
Treasury in accordance with
Section 2 of the Exchequer and
Audit Departments Act 1921
1. This direction applies to those executive
agencies listed in the appendix below.
2. The agency shall prepare a Trust
Statement („the Statement) for the
financial year ended 31 March 2013 for
the revenue and other income, as
directed by the Treasury, collected by
the agency as an agent for others, in
compliance with the accounting
principles and disclosure requirements
of the edition of the Government
Financial Reporting Manual by
HM Treasury („FReM‟) which is in force
for 2012-13.
3. The Statement shall be prepared so as
to give a true and fair view of (a) the
state of affairs relating to the collection
and allocation of taxes, licence fees,
fines and penalties and other income by
the agency as agent and of the
expenses incurred in the collection of
those taxes, licence fees, fines and
penalties insofar as they can properly
be met from that revenue and other
income; (b) the revenue and
expenditure; and (c) the cash flows for
the year then ended.
4. The statement shall also be prepared
so as to provide disclosure of any
material expenditure or income that has
not been applied to the purposes
intended by Parliament or material
transactions that have not conformed to
the authorities which govern them.
5. When preparing the Statement, the
agency shall comply with the guidance
given in the FReM (Chapter 13). The
agency shall also agree with HM
Treasury the format of the Principal
Accounting Officer‟s Foreword to the
Statement, and the supporting notes,
and the accounting policies to be
adopted, particularly in relation to
revenue recognition. Regard shall also
be given to all relevant accounting and
disclosure requirements in Managing
Public Money and other guidance
issued by HM Treasury, and to the
principles underlying International
Financial Reporting Standards.
6. Compliance with the requirements of
the FReM will, in all but exceptional
circumstances, be necessary for the
accounts to give a true and fair view. If,
in these exceptional circumstances,
compliance with the requirements of the
FReM is inconsistent with the
requirement to give a true and fair view,
the requirements of the FReM should
be departed from only to the extent
necessary to give a true and fair view.
In such cases, informed and unbiased
judgement should be used to devise an
appropriate alternative treatment which
should be consistent with both the
economic characteristics of the
circumstances concerned and the spirit
of the FReM. Any material departure
from the FReM should be discussed in
the first instance with HM Treasury.
7. The Statement shall be transmitted to
the Comptroller and Auditor General for
the purpose of his examination and
report by a date agreed with the
Comptroller and Auditor General and
HM Treasury to enable compliance with
the administrative deadline for laying
the audited accounts before Parliament
before the Summer Recess.
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DVLA Annual Report & Accounts 2012-13 116
8. The Trust Statement, together with this
direction (but with the exception of the
related appendices) and the Report
produced by the Comptroller and
Auditor General, under Section 2 of the
Exchequer and Audit Departments Act
1921 shall be laid before Parliament at
the same time as the Department‟s
Resource Accounts for the year unless
the Treasury have agreed that the Trust
Statement may be laid at a later date.
Karen Sanderson
Deputy Director, Government Financial
Reporting
HM Treasury
17 December 2012
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DVLA Annual Report & Accounts 2012-13 117
Trust Statement for the year ended 31 March 2013
1. The Trust Statement shall include:
• a Foreword by the Principal Accounting Officer
• a Statement of the Principal Accounting Officer‟s Responsibilities
• a Governance Statement
• a Statement of Revenue, Other Income and Expenditure
• a Statement of Financial Position
• a Cash Flow Statement
• such notes as may be necessary to present a true and fair view.
2. The Notes shall include among other items:
• the accounting policies, including the policy for revenue recognition and estimation techniques
and forecasting techniques together with statements explaining any significant uncertainty
surrounding estimates and forecasts
• a breakdown of material items within the accounts
• any assets, including intangible assets and contingent liabilities
• summaries of losses, write-offs and remissions
• post balance sheet events
• any other notes agreed with HM Treasury and the National Audit Office.
Sponsoring Department
Income Stream
Responsible
Entity
1
Department for Transport
Vehicle Excise Duty (VED) and VED
Enforcement i.e. Fines and
Penalties
DVLA
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DVLA Annual Report & Accounts 2012-13 118
Appendix C
Sustainable Performance
Green House Gas Emissions
2009-10
2010-11
2011-12
2012-13
Target
2012-13
Non-
Financial
Indicators
Energy
Consumpti
on (kWh)
Electricity:
Non- Green
4,263,932
5,927,347
6,236,144
6,710,672
n/a
Electricity:
Green
13,579,245
16,385,913
16,046,086
12,776,521
n/a
Good Quality
CHP
(purchased)
-
421,285
2,493,512
2,647,699
n/a
Gas
29,903,990
27,715,449
19,765,094
25,553,712
n/a
LPG
0
0
0
0
n/a
Oil
3,856,559
120,142.1
120,137.8
120,137.8
n/a
Total CO₂e attributable to
the whole estate
17,538
17,511
16,660
16,285
16,660
Financial
Indicators
(£)
Total Energy Expenditure
£3,985,523
£2,223,140
£3,287,732
£3,270,133
n/a
CRC Gross Expenditure
n/a
n/a
16,415
tCO₂e
16,179
tCO₂e
(est)
n/a
n/a
n/a
£196,980
£194,150
(est)
n/a
Commentary
Table previously reported as „Finite Resource Consumption – Energy‟.
Total tCO
2
e attributable to the whole estate data was not reported on prior to 2011-12.
• 2012-2013 targets have been set as maintaining 2011-2012 actual data.
• CRC figures for 2012-13 are based on actual emissions used during the financial year 2012-13.
Purchase of the CRC allowances is due to take place in July 2013. Actual figures will be recorded in
2013-14 Annual Accounts.
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DVLA Annual Report & Accounts 2012-13 119
Waste
2009-10
2010-11
2011-12
2012-13
Target
2012-13
Non-
Financial
Indicators
(tonnes)
Total Waste
2,195.85
2,136.03
1,894.50
1,591.00
1,976.00
Hazardous
Waste
Total
0.07
0.00
0.00
0.00
n/a
Non-
Hazardous
Waste
Landfill
610.67
517.82
374.76
316.81
n/a
Reused/
Recycled
1,518.18
1,618.21
1,519.71
1,269.02
n/a
Composted
0.00
0.00
6.72
5.63
n/a
Incinerated/
Energy
from Waste
0.00
0.00
0.02
0.00
n/a
Financial
Indicators
(£)
Total Waste Revenue
£38,694
£53,115
£61,685
£28,001
n/a
Commentary
Under the GGC (Greening Government Commitments) we have a target to reduce waste by 25% by
2014-2015. This target has been met with a 59% reduction. It is expected that the waste reduction will
at least be maintained to 2014-2015.
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DVLA Annual Report & Accounts 2012-13 120
Finite Resource Consumption
2009-10
2010-11
2011-12
2012-13
Target
2012-13
Non-
Financial
Indicators
Total
Water
Consumptio
n (m
3
)
Supplied
54,967
56,432
52,719
52,709
-
Harvested
629.41
1,529.63
762.99
583.20
-
Consumpti
on per FTE
(m³)
-
-
4
4.04
6
Administrative Paper
(A4 reams equivalent)
67,065
-
35,464
33,144
34,940
Financial
Indicators
(£)
Water and Sewerage
Costs
£123,438
£138,237
£159,794
£174,043
n/a
Commentary
Administrative paper previously reported as total reams (can include A3, A4, and A5).
GGC target to reduce water consumption to an average of less than 6m³ per person per
year. N.B. includes „office‟ accommodation only.
m³ per FTE (office only) was not reported on prior to 2011-2012
4-6 m³ per FTE is good practice.
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DVLA Annual Report & Accounts 2012-13 121
DVLA Greening Government Commitments
Measure
Target
2009-10
Baseline
2012-13
Interim
Target
Actual
Outturn
2012-13
Interim
target
%
reduction
against
2009-10
baseline
2014-15
Target
Forecast
Outturn
2014-15
%
reduction
against
2009-10
baseline
Greenhouse
Gas
Emissions
(tCO₂e)
Reduce Business carbon
emissions by 25% by 2014-15
relative to 2009-10 levels.
(Scope 1+2)
17,538
16,660
16,285
7.1%
13,153
12,249
29%
Reduce Travel carbon
emissions by 25% by 2014-15
relative to 2009-10 levels
(Scope 1+3)
971
553
589
39%
728
359
63%
Total Business and travel
carbon emissions
(Scope 1,2+3)
18,509
17,213
16,874
8.8%
13,881
12,608
32%
Reduce Domestic Business
Travel Flights by 25% by
2014-15 relative to 2009-10
levels.
(Number of Flights, Scope 3)
1,747
773
751
56%
1,397
309
82%
Waste
Reduce Waste Arising by 25%
by 2014-15 relative to 2009-10
levels. (Tonnes)
2,196
1,866
1,591
15%
1,647
909
59%
Water
Reduce water consumption to
an average of less than 6m3
per person per year. (m
3
/FTE)
N.B. includes "Office"
accommodation only.
4.58
6.00
4.04
n/a
6.00
3.51
23%
Commentary
• Business and Travel carbon emissions have previously been reported as a total as per Greening Government
Commitments.
• 2012-2013 targets have been set as maintaining 2011-2012 actual data.
• Forecast Outturn and % reduction 2014-15 figures as of March 2013.
• 8.8% percentage reduction achieved to date for total GHG emissions. We are on track to achieve the 2014-2015 target
due to further proposed initiatives.
• Scope 1 emissions: Direct GHG emissions (from sources we own or control)
Scope 2 emissions: Indirect energy emissions (e.g. electricity, heat, steam, cooling etc we consume supplied by another
party).
Scope 3 emissions: Official travel emissions. This includes emissions from non-fleet (e.g. flights, Rail and Taxi) and
employees own vehicles used for official travel.
• A five year target was set for the period 2009-2015 the table shows DVLA‟s progress to date against this target.
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DVLA Annual Report & Accounts 2012-13 122
Glossary of terms
Accounting Officer
A person appointed by the Treasury or designated by a department to be
accountable for the operations of an organisation and the preparation of its
accounts.
Accrual
The principle, which may be used as a basis for the preparation of financial
statements, that revenues and costs should be dealt with in the accounts for the
period in which they are earned or incurred.
Assets
Tangible asset (sometimes referred to as fixed assets) are items that are
purchased as capital expenditure and have a physical substance.
Intangible assets are also capital purchases but do not have a physical
substance, for example software licence, project development.
Non-current assets are those that are not expected to be turned into cash within
one year during the normal course of business.
Automated First Registration and
Licensing (AFRL)
The purpose of the electronic AFRL system is to enhance the accuracy, speed
and efficiency of the First Registration and Licensing process for the benefit of
the motor industry, the public and DVLA. Although participation in the scheme is
not mandatory the majority of the major car manufacturers have joined. An
internet version of AFRL for low volume car manufacturers, motorcycle
manufacturers and independent importers has been developed and went live in
April 2002.
Automatic Number Plate Readers
(ANPR)
The Agency‟s static Automatic Number Plate Reader cameras encourage
compliance and relicensing by issuing keepers of unlicensed vehicles a warning
that their vehicle has been seen unlicensed on the road. To date, almost 59,000
letters have been issued to keepers identified as untaxed and of those 55 per
cent have relicensed their vehicles. Work is progressing to gain Home Office
Type Approval to enable prosecution activity to be undertaken.
Business Case
A method of assessing a project or investment decision; includes an explanation
of the reasoning behind the project. The business case addresses the strategic,
financial, economic and commercial arguments for pursuing a particular course
of action.
Carbon Reduction Commitment
(CRC)
CRC is a mandatory scheme aimed at improving energy efficiency and cutting
emissions in large public and private sector organisations.
Change Programme
A set of projects whose purpose is to help an organisation change its processes,
methods of working.
Consolidated Fund (CF)
The government‟s current account, operated by the Treasury, through which
pass most government payments and receipts.
Contingent liabilities
Potential liabilities that are uncertain but recognise that future expenditure may
arise if certain conditions are met or certain events happen.
Continuous Insurance
Enforcement (CIE)
The Continuous Insurance Enforcement (CIE) scheme to tackle uninsured
motorists was launched in June 2011. Under the scheme it is an offence to be
the keeper of an uninsured vehicle unless it is declared off the road with DVLA.
Information is cross checked between the Motor Insurance Database (MID) and
DVLA keeper records.
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DVLA Annual Report & Accounts 2012-13 123
Costs
Direct - A cost that is incurred as a direct result of a particular activity, for
example sending a V11 form to a customer incurs a postage charge.
Indirect - A cost that is not directly attributable to an activity but forms part of the
general costs of running DVLA.
Data Protection Act
Legislation (1998) which governs how organisations can use personal
information which they hold.
Dataset
A dataset is a collection of data, usually presented in tabular form. Each column
represents a particular variable. Each row corresponds to a given member of the
dataset in question. It lists values for each of the variables, such as height and
weight of an object. Each value is known as a datum. The dataset may comprise
data for one or more members, corresponding to the number of rows.
De minimis
The term de minimis is generally used to describe something that is too small or
insignificant to be considered, something unimportant.
Departmental Expenditure Limit
(DEL)
Expenditure limit within which a department has responsibility for resource
allocation though some elements may be demand-led.
Department for Transport (DfT)
The DfT provides leadership across the transport sector, working with regional,
local and private sector partners to deliver its services.
Depreciation
A monthly charge that spreads the purchase cost of a fixed asset over its useful
economic life. This allows an organisation to match a share of a fixed asset‟s
cost to each of the years it receives a benefit from using the asset.
Driver and Vehicle Agency (DVA)
The Driver and Vehicle Agency (DVA or DVANI) is a government agency of the
Northern Ireland Department of the Environment. It was created in early 2007
through the merger of the Driver and Vehicle Licensing Northern Ireland (DVLNI)
and the Driver and Vehicle Testing Agency (DVTA).
The merger brought together roles which are carried out by a number of different
agencies in Great Britain, namely the Driving Standards Agency (DSA), Vehicle
and Operator Services Agency (VOSA) and Driver and Vehicle Licensing
Agency (DVLA).
Driver Licence Checks (DLC)
The service is web-based and allows „real-time‟ access to our drivers‟ database
and is available 24/7. Enquiries must be supported by informed and explicit
consent from the data subject. Currently the service is restricted to central and
local government.
Driving Standards Agency (DSA)
DSA improve road safety in Great Britain by setting standards for driving and
motorcycling, and for the education and training of drivers and riders. They also
carry out theory and practical driving and riding tests.
Engagement Partner
The partner or other person in the organisation who is responsible for the
engagement and its performance, and for the report that is issued on behalf of
the organisation, and who, where required, has the appropriate authority from a
professional, legal or regulatory body.
European Union (EU)
The EU is an economic and political union or confederation of 27 member states,
which are located primarily in Europe.
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Electronic Vehicle Licensing
(EVL)
DVLA introduced Electronic Vehicle Licensing (EVL) in 2004 with customers
now being able to pay vehicle excise duty online and by phone. However,
customers still have the option to tax their vehicles via the Post Office ®.
Freedom of Information (FoI)
Legislation (2000) designed to promote public access to a wide range of public
sector data and information (but not personal data).
Government Financial Reporting
Manual (FReM)
The Financial Reporting Manual (FReM) is the technical accounting guide that
complements guidance on the handling of public funds published separately by
the relevant authorities. The Manual is prepared following consultation with the
Financial Reporting Advisory Board and is issued by the relevant authorities in
England and Wales, Scotland and Northern Ireland.
Full Time Equivalent (FTE)
A FTE is a unit that indicates the workload of an employed person in a way
that makes workloads comparable across various contexts. FTE is often used
to measure a worker's involvement in a project, or to track cost reductions in
an organisation. An FTE of 1.0 means that the person is equivalent to a full-
time worker; while an FTE of 0.5 signals that the worker is half-time.
Government Banking Service
(GBS)
GBS was established in April 2008 and is the banking shared service provider
to government and the wider public sector. It is part of HM Revenue and
Customs (HMRC). GBS‟s main providers of banking transactions are Citigroup
(Citi) and the Royal Bank of Scotland Group (RBSG).
Government Digital Service
(GDS) (Digital by default)
The Government Digital Service (GDS) has been set up to deliver world class
digital products that meet people‟s needs and offer better value for taxpayer‟s
money.
Government Transparency
Agenda
The Government has set out the need for greater transparency across its
operations to enable the public to hold public bodies and politicians to account.
This includes commitments relating to public expenditure, intended to help
reduce the deficit and achieve better value for money.
Greening Government
Commitments
In February 2011, the Government made a commitment to embed
sustainability in all it does, including the way the Government estate is run, as
part of its commitment to be the greenest Government ever. The Greening
Government Commitments set out firm goals for departments to tackle their
carbon emissions, water use, waste, and supply chain impacts.
Information Communication
Technology (ICT)
ICT is an umbrella term that includes any communication device or application,
encompassing computer and network hardware and software, cellular phones,
satellite systems, radio, television and the various services and applications
associated with them.
Insurance Industry Access to
Driver Database (IIADS)
DVLA works alongside manufacturers, dealers, finance houses, insurance
companies and the police at the heart of Britain‟s automotive industry. Through
properly controlled data release from the DVLA vehicle register we help
each stakeholder fulfil its role in keeping motorists moving safely and legally.
In all matters regarding data release we act responsibly and in accordance with
legislation.
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DVLA Annual Report & Accounts 2012-13 125
Late Licence Penalty
A penalty sent to the registered keeper of a vehicle when they fail to re-licence
or make a Statutory Off Road Notification (SORN) declaration for the vehicle.
Median
The middle number in a sorted list of numbers.
Merchant Acquirer
The term given to a company contracted to collect credit/debit card income on
behalf of an organisation.
Motoring Services Directorate
(MSD)
MSD forms part of DfT. The Directorate brings together DfT‟s agencies in order
to manage performance as well as co-ordinating the collective direction and
strategy of the Department. The Managing Director of Motoring Services is
supported in terms of advice and management by the Motoring Services Board
which is made up of five Agency Chief Executives and sponsor
representatives.
MP correspondence/ direct
Letters written direct to the DVLA (usually to the CEO) by Members of
Parliament or members of the devolved administrations.
Official correspondence
Letters written to Ministers, usually by MPs on behalf of their constituents.
Private Finance Initiative (PFI)
The private initiative is a way of creating public, private partnerships by funding
public infrastructure projects with private capital.
Quorate
The smallest number of people that need to be present to conduct a meeting; a
quorum.
RESeau PERmis de conduire
(RESPER)
RESPER is the European Commission‟s proposed electronic system for
exchanging driver data between member states, implementing commonly
defined solutions through the 3rd Drivers Directive for example, moving
towards mutual recognition of driving sanctions and the introduction of
interoperable smartcard driving licences.
Risk Management
Controls designed to detect error, fraud, irregularity or inefficiency.
Senior Information Risk Owner
(SIRO)
The SIRO has overall responsibility for data security ensuring that DVLA
complies with legislative release provisions, the Data Protection Act and
Cabinet Office guidelines.
Senior Responsible Owner (SRO)
The SRO has overall responsibility for the programme from a business
perspective ensuring it meets its objectives and realises the agreed benefits by
providing the necessary support and advice during key decision-making and
aiding risk/issue resolution.
Service Level Agreement (SLA)
Agreement between parties, setting out in detail the level of service to be
performed. Where agreements are between central government bodies, they
are not legally a contract but have a similar function.
Shared Services
Traditionally, this has meant transferring back office activities to a professional
Shared Service Centre (SSC) that undertakes these activities on behalf of
many organisations.
Statutory Off Road Notification
(SORN)
The SORN scheme came into effect on 1 February 1998. From that date the
keeper of a vehicle has to either license the vehicle or declare it as being off
the road.
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DVLA Annual Report & Accounts 2012-13 126
Supply
Supply is the means by which parliamentary authority is secured for most
government expenditure. This authority is required for all expenditure financed
from the Consolidated Fund. Supply is granted on an annual basis, voted in
Estimates and in the Appropriation Acts. This Act authorises departments to
draw down sums of money from the Consolidated Fund for the service of a
specified year.
Vehicle Excise Duty (VED)
VED also commonly known as vehicle tax. This is a vehicle road use tax levied
as an excise duty which must be paid for most types of vehicle which are to be
used (or parked) on the public roads in the UK.
Vehicle and Operator Services
Agency (VOSA)
The Vehicle and Operator Services Agency (VOSA) was formed on 1st April
2003 following the merger of the Vehicle Inspectorate and the Traffic Area
Network division of the Department for Transport. VOSA provides a range of
licensing, testing and enforcement services with the aim of improving the
roadworthiness standards of vehicles ensuring the compliance of operators
and drivers with road traffic legislation, and supporting the independent Traffic
Commissioners.
Vehicle Certification Agency
(VCA)
VCA is an Executive Agency of the United Kingdom Department for Transport
and the United Kingdom's national approval authority for new road vehicles,
agricultural tractors and off-road vehicles. Their status allows close links with
the UK Government and European policy formulation and enforcement of
vehicle safety and environmental standards.
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DVLA Annual Report & Accounts 2012-13 127
Alternatively:
Drivers enquiries: E-mail: www.direct.gov.uk/emaildvla
Telephone: 0300 790 6801 (national rate)
Fax: 0300 123 0784
Address: Drivers Customer Services (DCS)
Correspondence Team DVLA Swansea SA6 7JL
Textphone: for the deaf and hard of hearing
0300 123 1278 (local rate)
Vehicle enquiries E-mail: www.direct.gov.uk/emaildvla
Telephone: 0300 790 6802 (national rate)
Fax: 0300 123 0798
Address: Vehicle Customer Services (VCS)
DVLA Swansea SA99 1AR
Textphone: for the deaf and hard of hearing
01792 766 366 (standard rate)
Premium Rate Services (Calls charged at 51 pence per minute)
Date Vehicle First Registered: 0906 185 8585
Date of Liability: 0906 765 7585
Car Hire Companies: 09061 393837
DVLA Personalised Registrations
To check the availability of DVLA Personalised Registrations, please visit our website at
dvlaregistrations.direct.gov.uk
Press enquiries Tel: 03001230791 or e-mail press.office@dvla.gsi.gov.uk
To call the Agency from abroad + 44 1792 782341
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