The Crown Prosecution Service Annual Report 2007

Resource Accounts

Management Commentary

Introduction

The Accounts report the resources that have been consumed working to deliver the Department’s aim and objective. This report has been prepared in accordance with the guidance set out in the Government’s Financial Reporting Manual (FReM).

Spending Review 2004

The Government spending plans for the CPS for the three years from 2005-06 to 2007-08, which were announced in July 2004 as part of the 2004 Spending Review represent an average increase in real terms of 3 per cent a year.

The new spending plans required the CPS to:

Deliver more challenging Public Service Agreement (PSA) targets. Further details on performance against current PSA targets can be found within the body of the Annual Report under the heading: Criminal Justice System Performance.
Complete the rollout of full statutory charging across England and Wales by March 2007;
Improve the handling of victims and witnesses, promote their needs, ensure that victims’ views are represented and enable both victims and witnesses to give evidence effectively; and
Deliver significant efficiency savings that amount to £34 million in 2007-08. Further details can be found within the body of the Annual Report under the heading: Criminal Justice System Performance.

Departmental Report

The CPS Departmental Report is presented to Parliament as part of the Law Officers’ Departments Departmental Report. The report for 2007-08 was published in May 2008 and can be found on the CPS website: www.cps.gov.uk

The coverage of the report includes the following main elements:

Progress on delivering public services, including departmental objectives, PSA targets and modernising government;
Recent developments in the CPS, including reorganisation and other new legislative and working practice initiatives;
An analysis of expenditure over the previous five years and the expenditure plans for the next three years; and
CPS performance and achievements.

The Autumn Performance Report 2008 will be published in December 2008 and provides supplementary performance information on PSA targets and progress on the key initiatives being undertaken by the CPS and other CJS agencies. Autumn Performance Reports are available at www.cps.gov.uk

Operating and Financial Review

a) Operating Review

(i) CPS Business Strategy for 2005-08

The CPS Business Strategy for 2005-08 focuses on how to deliver the PSA targets which represent the Government’s key objectives in criminal justice, and the basis on which funding for the Service is provided.

The CPS Vision to become a world class prosecution authority and the supporting business strategy has been developed with regard to a number of business drivers and changes across the CJS and to wider Civil Service reforms.

The Business Strategy sets out a challenging reform agenda for the CPS over the three years to 2008. The changes set out in the Strategy are part of the wider reform of the CJS and are essential if the CPS is to play its full part in a more efficient and effective CJS and become more accountable to local communities.

The planned changes, which are described in detail in the body of the Annual Report, will mean a more confident, strong and independent CPS that is better equipped to bring more offenders to justice and to prevent offenders profiting from their criminality. It will mean that people will be more secure from anti-social behaviour and crime, communities will be safer places to live and work and the public will have more confidence and trust in the CPS and in the CJS as a whole.

(ii) Key Strengths

The Board believes the key strengths of the CPS include:

The department has clear, strong direction and leadership that has transformed the organisation’s role, performance and reputation in recent years. The vision has enthused and raised the ambitions of many staff and has attracted more high quality recruits. The CPS employs 2,973 prosecutors, 989 are Higher Court Advocates able to present cases in the Crown Court and in the Higher Courts. The department also employs 438 Associate Prosecutors able to present cases in the magistrates’ courts. Both groups are representative of the increasing professionalism of the CPS.

The CPS has made good progress in building positive and effective working relationships with its partners and becoming an influential voice within the Criminal Justice System.

The CPS has a proven track record for successfully planning, resourcing and delivering major change initiatives including assuming the responsibility for determining the appropriate charge in all but the most routine cases, implementation of joint Witness Care Units with the police to provide a single point of contact for witnesses and the successful implementation of national Case Management and Witness Management Systems based on up to date IT infrastructure provided through a PFI between the CPS and Logica.

The 2008-09 Main Estimate for the CPS has been approved and no changes are anticipated.

(iii) Future Factors

CSR2007

In October 2007 the Government concluded the Comprehensive Spending Review 2007 (CSR2007) which determined the spending plans and performance targets for all departments for financial years 2008-09 to 2010-11. CSR2007 has delivered a long term and fundamental review of government expenditure. As part of the settlement the CPS has agreed the following new departmental strategic objective: To bring offenders to justice, improve services to victims and promote confidence by applying the Code for Crown Prosecutors, by adopting a proportionate approach to determine which offenders should be charged and which should be diverted from court, and by firm and fair presentation of cases in court.

In addition the CPS will be working with the other Criminal Justice System agencies to contribute to the delivery of the following PSAs over the CSR period:

Make communities safer;
Deliver a more effective, transparent and responsive Criminal Justice System for victims and the public; and
Reduce the risk to the UK and its interests overseas from international terrorism.

The Government has recognised the increasingly important role the CPS plays in supporting counterterrorism activities and provided an additional £8 million per annum over the CSR2007 period.

In line with many departments the CPS will be expected to deliver efficiency savings of 3.2 per cent per year with a focus on cashable savings to free up resources to meet the challenges ahead. In addition the administration budget for the Department will be reduced by 5 per cent per year in real terms over the CSR2007 period, releasing additional resources for reallocation to frontline service delivery.

In January 2008 the CPS published the Department’s CSR2007 Value For Money Delivery Agreement that explains how the efficiency savings targets will be achieved and which can be found on the CPS website: www.cps.gov.uk. The main themes are focused on delivering the Department’s frontline activities more efficiently through more effective working with other CJS agencies and the adoption of lean service delivery techniques, maximising the efficiency opportunities provided by information technology, improved procurement and other corporate services and through increasing the role of the Department in presenting cases at court.

(iv) Summary of Performance

The CPS has continued to make substantial progress in its reform programme in 2007-08 and in working to achieve the SR2004 PSA targets. Full details of performance and achievements during the year and comparisons with achievements in previous years can be found within the body of the Annual Report under the heading: Criminal Justice System Performance.

The CPS’ Business Strategy for 2005-08 together with the CPS Business Plan for 2008-09 focus on how the PSA targets will be delivered and are available on the CPS website: www.cps.gov.uk

(v) Sustainability

Environmental Matters

The key CPS objectives to incorporate sustainable development and social and community issues are discussed in the body of the Annual Report under the heading Sustainable Development. The CPS, along with the other Law Officers’ Departments, have agreed the Law Officers’ Departments Sustainable Development Action Plan which will be published on the CPS website: www.cps.gov.uk

b) Financial Review

The CPS net Request for Resources (RfR), as voted by Parliament, for the period to 31 March 2008 was £648 million. Our outturn on expenditure as shown in the 2007-08 Accounts, Statement of Parliamentary Supply, was £633 million.

As part of the 2000 Spending Review plans, HM Treasury created a criminal justice reserve which set aside funding to provide for unforeseen pressures and trilaterally agreed new initiatives. The Attorney General, the Home Secretary and the Lord Chancellor agreed to allocate £76 million from the reserve in 2004-05 to the CPS to continue the reform of the Service. The investment has enabled the Service to direct additional resources to the more serious cases, progress the implementation of the charging initiative, bring more offences to justice, provide better support for victims and to implement the recommendations of Speaking up For Justice. The reserve became part of CPS baseline funding from 2005-06.

Note 2 to the Accounts analyses expenditure within the Departmental Expenditure Limit (DEL) by the Department’s two functions, Administration and Crown prosecutions and legal services.

Administration represents the costs of running the Department and includes only those costs not attributed to front line services directly associated with the prosecution of criminal cases. Administration includes staff salaries, other staff related expenditure, accommodation and related costs for administrative staff based in CPS Headquarters. Overall the CPS administration outturn was £52 million compared to net provision of £57 million. The underspend of £5 million reflects, in part, continuing efficiency savings made during the year by HQ Directors to support the decision of the CPS Board to freeze HQ staff numbers and budgets from 2005 - 06 and, in part, some slippage in recruiting staff. The balance comprises the remaining reserves held as a contingency against unforeseen pressures.

Crown prosecutions and legal services cover the direct and indirect costs of taking cases to court. Following the cost of front line staff salaries, most of the expenditure is associated with the costs of the more serious cases, which are heard in the Crown Court and comprise the costs of employing barristers as advocates, reimbursing the costs of prosecution witnesses who attend court, and a number of other less significant costs associated with the prosecution process.

Expenditure on Crown prosecutions and legal services was £581 million compared with provision of £591 million representing an underspend of £10 million. Over £49 million of CPS provision for programme costs is provided by way of costs awarded against defendants and collected by the magistrates’ courts on behalf of the CPS and through the collection of receipts in respect of confiscated criminal assets.

Within the overall expenditure position, expenditure on fees paid to counsel was £3 million higher than originally planned for the year as explained above. The additional expenditure was offset by a reduction in expenditure on other areas of the service.

The CPS and Ministry of Justice use versions of a graduated fee scheme to calculate counsel fees in the majority of Crown Court cases. The concept of broad parity continues to create some upward pressure on the fees the CPS pays for the longer, more complex, cases that have been historically outside the graduated fee scheme. About 40% of Crown Court cases involved indictable-only offences - the most serious cases of all - compared with 33% in 2000-01 and only 18.2% in 1991-92. There are further reasons for the increase in costs. The extension of recovery of criminal assets, the increasing requirements of disclosure, the conclusion of some extremely large cases, terrorism related prosecutions falling out of intensive activity by secret services and the police, and the increased use of information technology have all meant longer and more complex cases.

CPS costs have faced further upward pressure as Crown Court finalisations increased from 122,522 defendant finalisations in 2004-05 to 131,478 in 2007-08, an increase of 7.3% over three years.

Defendant finalisations increased by about 8,000 in the last year alone. These extra Crown Court finalisations have cost the Service around an additional £10 million in prosecution costs expenditure although the use of CPS Higher Court Advocates (HCAs) has helped to offset this pressure.

From October 2005 the graduated fee scheme was extended to include Crown Court cases that had cracked on the day of trial, cases where the defendant gave a guilty plea and cases that were expected to last between 25 and 40 days in court .Further measures are to be taken, in particular the further extension of the deployment of HCAs to help manage these cost pressures.

Capital expenditure in the CPS is focused on improving the Department’s estate and office environment and investment in IT through the PFI arrangement with LogicaCMG.

Reconciliation of resource expenditure between Estimates, Accounts and Budgets (£thousands)

Description	2007-08	2006-07
.	£000	£000
Net Resource Outturn (Estimate)	648,432	621,342
Resource Budget (Estimate)	648,432	621,342
Adjustments to additionally include:
Consolidated Fund Extra Receipts in the OCS	(164)	(2,059)
Unallocated Resource	(15,554)	(5,065)
Net Operating Cost (Accounts)	632,714	614,218

The Department spent a total of £3 million on the purchase of fixed assets. This was £4 million less than the budget. The underspend was caused substantially by slippage in planned projects for improvements to leasehold properties and the replacement of office equipment. The Department’s net cash requirement outturn was £627 million against an estimate of £649 million.

During 2007-08 debtors due within one year decreased by £1 million from £59 million to £58 million and debtor days decreased from 234 to 187 days. Debtors effectively represent the outstanding value of cost awards due to the CPS that are collected by the magistrates’ courts on our behalf. Repayment arrangements agreed with defendants by the courts mean that collection can occur over an extended period of time. The introduction of income in respect of recovered criminal assets under the Proceeds of Crime Act incentivisation scheme has increased the total income for the Department and reduced the proportion accounted for by cost awards.

In the same period creditors increased from £59 million to £76 million and creditor days reduced slightly from 53 days to 51 days. The increase in creditors is due to the ‘amounts issued from the Consolidated Fund for supply but not spent at year end’ figure rising from £2 million last year to £22 million this year.

Management

Sir Ken Macdonald QC was appointed the Director of Public Prosecutions in November 2003. The Chief Executive supports the Director. The Chief Executive has responsibility for finance, human resources, performance management, IT and business and administrative processes, allowing the Director to concentrate on prosecution and legal processes. Peter Lewis was appointed as the Chief Executive on 15 January 2007. The Remuneration Report provides detail of service contracts and salary and pension entitlements for senior officials of the Department.

CPS Board

The CPS Board supports the Director and Chief Executive. It is collectively responsible for the delivery of the CPS public service outcomes, targets and our contribution to the Criminal Justice System Public Service Agreements.

Following the publication of the Capability Review report the CPS undertook a review of corporate governance in Summer 2007. This resulted in revised committee arrangements that came into effect from September 2007, with a subsequent change in January 2008.

Revised membership of the Board from September comprised the Director, Chief Executive, Finance Director, Chief Operating Officer, three Non-executive Directors (NED) and the Acting Chief Executive of the Office for Criminal Justice Reform (OCJR). The Board meets bi-monthly. In addition to changes in the Board, the supporting committee structure was also changed. The Delivery and Change Committee (DCC), Strategy Policy and Diversity Committee (SPDC) and People Equality and Resources Committee (PERC), were disbanded, and Corporate Delivery and Management Group and Group Chairs Group were established in their place. The Audit Committee remained unchanged. The total number of supporting Committees was reduced from four to three. A single secretariat function provides streamlined and co-ordinated support and ensures that links between committee workstrands are identified and managed effectively. The effectiveness of the new governance arrangements and membership of the Board and Committees will be reviewed in 2008-09.

The membership of the CPS Board and attendance during 2007-08 are as follows:

Board Member	Title	Attendance (out of 8 meetings)	Notes
Sir Ken Macdonald QC	DPP	7
Peter Lewis	Chief Executive	8
John Graham	Director, Finance	7
Roger Daw	Director, Policy	4 (out of 4)
Steve Przybylski	Acting, Business Development Director	4 (out of 5)
Mike Kennedy	Business Development Director	2 (out of 2)	Appointed Chief Operating Officer in November 2007
Claire Hamon	Business Information Systems Director	3 (out of 4)	Left the Board after the July 2007 meeting
Ros McCool	Human Resources Director	4 (out of 4)	Left the Board after the July 2007 meeting
Séamus Taylor	Equality and Diversity Director	3 (out of 4)	Left the Board after the July 2007 meeting
Dru Sharpling	CCP, London	3 (out of 4)	Left the Board after the July 2007 meeting
Judith Walker	CCP, South Yorkshire	4 (out of 4)	Left the Board after the July 2007 meeting
Neil Franklin	CCP,West Yorkshire	4 (out of 4)	Left the Board after the July 2007 meeting
Portia Ragnauth	CCP, Durham	2 (out of 4)	Left the Board after the July 2007 meeting
Adele Clarke	ABM, Northumbria	3 (out of 4)	Left the Board after the July 2007 meeting
Gerard Lemos	Non-Executive Director	6
Philip Oliver	Non-Executive Director	6
Rob Sykes	Non-Executive Director	7
Ursula Brennan	Chief Executive, OCJR	0 (out of 1)	Left the Board after the May 2007 meeting
Jonathan Sedgwick	Acting Chief Executive, OCJR	6 (out of 6)	Joined the Board at the May 2007 meeting

In April and October each year CCPs, ABMs and key managers in Headquarters meet together at conference to debate strategic issues and key operational problems.

The appointment and termination of staff who are members of the CPS Board, excluding the NEDs who are not employed by the CPS, is undertaken in accordance with the Civil Service Management Code. Where appropriate their remuneration, details of which can be found in the Remuneration Report, is determined by reference to the Senior Salaries Review Body. In the rare event of members holding company directorships or having any significant interests that conflict with their management responsibilities, these are declared and a record kept by the single secretariat. No specific action was required at Board level due to a declaration of interest in 2007-08.

The role of the Board is to:

Ensure CPS continues to become world class and provides a fair and effective prosecution service;
Demonstrate visible and effective leadership across the organisation to inspire confidence in staff, CJS and other stakeholders and the public;
Determine the vision, role, direction and priorities of the CPS;
Ensure effective allocation and management of CPS staff and financial resources;
Monitor and improve the CPS performance; and
Protect and enhance the CPS reputation as an organisation that is becoming a world class prosecution service.

Examples of business covered by the Board include:

New CPS Vision;
Strategic and Business Plan 2008-11;
People Strategy; and
Management Review.

Corporate Delivery and Management Group

CDMG contributes to the development and delivery of the CPS Vision and Strategy, cross-CJS PSAs, CPS public service outcomes and other priorities.

Work undertaken

HQ Review (ongoing);
Approved 2008-09 resource allocations; and
Performance Management Framework.

Members of the Corporate Delivery and Management Group:

CDMG Member	Title	Attendance (out of 6 meetings)	Notes
Peter Lewis	Chief Executive (Chair)	6
John Graham	Finance Director	4
Mike Kennedy	Business Development Director	4	Appointed Chief Operating Officer in November 2007
Gail Lamb	Acting Business Information Systems Director	5 (out of 5)
David Jones	Business Information Systems Director	1 (out of 1)	Appointed Business Information Systems Director in February 2008
Ros McCool	Human Resources Director	5
Séamus Taylor	Equality and Diversity Director	6
Philip Oliver	Non-executive Director	5
Karen Sawitzki	Senior Business Manager	2 (out of 2)	Joined CDMG at January 2008 meeting
Dru Sharpling	CCP London	1 (out of 2)	Joined CDMG at January 2008 meeting

Group Chairs Group

GCG contributes to the development and delivery of the CPS Vision and Strategy, cross-CJS PSAs, CPS public service outcomes and other priorities.

Work undertaken

HCA Progression Framework; and
Approved 2008-09 resource allocations.

Members of the Group Chairs Group:

GCG Member	Title	Attendance (out of 6 meetings)	Notes
Peter Lewis	Chief Executive (Chair)	5
Mike Kennedy	Business Development Director	3	Appointed Chief Operating Officer in November 2007
Paul Whittaker	Group Chair Merseyside and Cheshire	4
Neil Franklin	Group Chair West and North Yorkshire	5
Martin Goldman	CCP CPS Direct	5
Dru Sharpling	CCP London	4
John Holt	Group Chair Manchester	5
David Blundell	Group Chair West Midlands	6
Nicola Reasbeck	Group Chair North East	4
Nigel Cowgill	Group Chair South Yorkshire and Humberside	6
Bob Marshall	Group Chair North West	5
Chris Woolley	Group Chair Wales/Cymru	4
David Archer	Deputy Group Chair Wales/Cymru	1
Barry Hughes	Group Chair South West	2
Nick Hawkins	Group Chair Wessex	5
Roger Coe-Salazar	Group Chair South East	4
Baljit Ubhey	Group Chair Thames and Chiltern	6
Ken Caley	Group Chair Anglia	5
Judith Walker	East Midlands	6
Alison Saunders	Casework Divisions	5

Audit Committee (AC)

The AC supports the Accounting Officers in their responsibilities for issues of risk control and governance by reviewing the comprehensiveness of assurances in meeting the CPS Board and Accounting Officers’ assurance needs and reviewing the reliability and integrity of these assurances. The AC’s role and responsibilities remained unchanged throughout the year.

Work undertaken

Reviewed the systems and process of internal control and governance, including reviewing reports by Internal Audit and management on the effectiveness of systems for internal control, governance and risk management;
Reviewed the Statement of Internal Control and Annual Resource Accounts for 2006-07 including the observations by NAO;
Approved and monitored the Internal Audit programme for 2007-08, reviewed the findings from such activity and action taken by management on audit recommendations;
Reviewed and endorsed the Head of Internal Audit’s Annual Report for 2006-07; and
Reviewed the external auditors’ strategy and plan for the 2007-08 Resource Accounts.

Members of the Audit Committee:

AC Member	Title	Attendance (out of 2 meetings)	Notes
Rob Sykes	Non-executive Director (Chair)	2
Linda Fox	ABM, Hertfordshire	2	Left the CPS on 15 February 2008.
David Judd	Non-executive Director	2
Paula Abrahams	CCP, Essex	2

From September DCC, SPDC and PERC were replaced by CDMG and GCG.

Strategy, Policy and Diversity Committee

SPDC determined the Service’s overall vision and strategic direction and developed prosecution policies to deliver that vision whilst integrating all aspects of equality and diversity.

Members of the Strategy, Policy and Diversity Committee:

SPDC Member	Title	Attendance (out of 4 meetings)	Notes
Philip Oliver	Non-executive Director (Chair)	2 (out of 2)
Roger Daw	Director of Policy	4	Left the committee after September 2007 meeting
Elizabeth Howe	CCP Kent	1 (out of 1)	Left the committee after June 2007 meeting
Charles Ingham	CCP Hertfordshire	3
Alison Saunders	Head of Organised Crime Division	4
Séamus Taylor	Director of EDU	2
Chris Woolley	CCP South Wales	3
Denise Bailey	ABM Hampshire and Isle of Wight	0 (out of 1)	Joined the committee at January 2008 meeting
Gerard Lemos	Non-executive Director	0 (out of 1)	Joined the committee at January 2008 meeting

Delivery & Change Committee (DCC)

DCC managed the Service’s change programme to ensure the delivery of PSA and other targets; reviewed and revised the existing change programme in order to integrate new legislative, policy or delivery objectives; and monitored progress so that it became ‘business as usual’.

Members of the Delivery & Change Committee

DCC Members	Position/Role	Attendance (out of 1 meetings)
Gerard Lemos	NED (Chair)	1
Jean Ashton	ABM Greater Manchester	1
John Graham	Director, Finance	1
Claire Hamon	Director, Business Information Systems	1
Nick Hawkins	CCP, Hampshire &Isle of Wight	1
Robert Stevenson	Deputy Director of Business Development	1
Clare Toogood	Sector Business Manager, London South	1
Judith Walker	CCP, South Yorkshire	1

People, Equality & Resources Committee (PERC)

The PERC ensured that the CPS has the capacity and capability to deliver the agreed business strategy, by allocating resources and agreeing supporting strategies for people, equalities, finance and ICT; and ensured that these supporting strategies maximised efficiencies, delivered value for money and enabled the business strategy and PSA targets to be achieved against a background of increasing resource pressure.

Members of the People, Equality & Resources Committee

PERC Members	Position/Role	Attendance (out of 2 meetings)
Peter Lewis	Chief Executive (Chair)	2
Lesley Burton	ABM, London	1
John Graham	Director, Finance	2
Claire Hamon	Director, Business Information Systems	1
Ros McCool	Director	2
Philip Oliver	NED	1
Steve Przybylski	Acting Director ofBusiness Development	2
Baljit Ubhey	CCP, Thames Valley	1

Pensions

The Accounting Policy Note 1.8 describes the CPS policy on how pension liabilities are treated and the accounting treatment is detailed in Note 7 and in the Remuneration Report.

Equal Opportunities

The CPS has a strong commitment and increasingly positive reputation on equal opportunities. The Service reviewed and refreshed its policy commitments on equal opportunities in 2005 and in its refined policy statement states:

‘We are committed to taking account of the diversity of the population we serve and the staff we employ, promoting equality and opportunity for everyone. The Service recognises the challenge of institutional discrimination. We will work to eradicate it. We will work to ensure that prosecution decisions are free from bias or discrimination and that victims, witnesses and defendants are treated fairly, consistently and with respect. We will provide services in a manner that is appropriate to the individual. We are committed to achieving equality and respecting diversity in employment. We will work to build an inclusive workforce, which at all levels, reflects the communities we serve, where all staff are motivated and with no unjustifiable differences in employees’ experiences.’

An Equal and Diverse Prosecution Service

The CPS has moved into a second phase in its work to further equality and diversity - it has moved on from a focus on raising awareness of the issues to a focus on outcomes. From April 2005 onwards the Service introduced equalities outcome measures into its performance review system and reports on achievements on a quarterly basis. The Service continually strives to improve its reputation on equality and diversity issues and in the past year its work has been positively recognised through the Cabinet Office Capability Review of the CPS (June 2007).

The CPS is committed to further progress on equality and diversity in employment and has put a Diversity Delivery Plan in place which sets out what we will do to achieve senior workforce representation targets.

Reporting of Personal Data Related Incidents

Incidents, the disclosure of which would in itself create an unacceptable risk of harm, may be excluded in accordance with the exemptions contained in the Freedom of Information Act 2000 or may be subject to the limitations of the other UK information legislation.

TABLE 1: Summary of protected personal data related to incidents formally reported to the information commissioner’s office in 2007–08.

No incidents have needed to be reported to the Information Commissioner.

Table 2: Summary of other protected data related incidents in 2007–08

Incidents deemed by the Data Controller not to fall within the criteria for report to the Information Commissioner’s Office but recorded centrally within the Department are set out in the table below.

Category Types	Nature of Incident	Total
I	Loss of inadequately protected electronic equipment, devices or paper documents from secured Government premises	1
II	Loss of inadequately protected electronic equipment, devices or paper documents from outside secured Government premises	6
III	Insecure disposal of inadequately protected electronic equipment, devices or paper documents	1
IV	Unauthorised disclosure	2
V	Other	5

Explanatory Notes:

The incidents include minor losses, and those relating to loss of case papers where the protection was adequate but for example a robbery took place on a courier van.
Includes the loss of one laptop which had password protection and encryption on the basic input output system (BIOS). At the time of the loss the protective security on the laptop was compliant with Communications Electronics Security Group (CESG) guidance.
The losses relate to a small number of individual case papers - no bulk losses.

TABLE 3: Year-on-year total numbers of protected data related incidents prior to 2007-08

The CPS will not be providing similar details for the resource accounting period 2004-05, 2005-06, or 2006-07. Detail and the categorisation of the data losses are not totally reliable.

Employee Consultation and Providing Information to Employees

The CPS has continued in its strategy of communicating and consulting with staff, both formally and informally. The main hub for the promulgation of business information is from an area on the CPS Intranet called “Infonet Live”. From here staff can access weekly business updates, news and information produced by Areas and HQ Directorates for a more local perspective, as well as the monthly publication CPS News, which is also produced in hard copy and goes to an audience beyond the CPS.

The CPS intranet home page provides a portal to a number of themed areas as well as an online bulletin board, which is used to discuss a variety of business and social subjects. The intranet is becoming an important communication tool for the Department, as it moves to more sustainable working practices, with manuals and standard forms from across the different Directorates also published online, including the CPS HR policy procedures.

Staff are informed about items of change through team meetings and by newsletters circulated by project managers. Informal and formal consultations take place with the Trade Unions and staff networks over changes that will affect staff. Communication and consultation with the Trade Unions takes place as part of regular Whitley Council meetings. The CPS also meets with the Trade Unions to discuss specific policy changes and to conduct pay negotiations.

Payment of Suppliers and Witnesses

The CPS is committed to paying bills in accordance with agreed contractual conditions, or, where no such conditions exist, within 30 days of receipt of goods or services or the presentation of a valid invoice, whichever is the later. The CPS also seeks to pay all expenses to prosecution witnesses within 5 working days of receipt of a correctly completed claim form.

In 2007-08 the CPS settled 91.60% of undisputed invoices within 30 days of receipt and 97.12% of witness claims within 5 days. The CPS paid £Nil with respect to interest due under the Late Payment of Commercial Debts (Interest) Act 1998.

Auditors

This year’s Resource Accounts have been audited by the National Audit Office on behalf of the Comptroller and Auditor General. No further audit services were received aside from that of statutory audit by the NAO.

The cost of audit work was £92,000, which is solely related to audit services and is a notional cost (see Note 9).

As far as the Accounting Officer is aware, there is no relevant audit information of which the National Audit Office are unaware, and the Accounting Officer has taken all the steps that he ought to have taken to make himself aware of any relevant audit information and to establish that the entity’s auditors are aware of that information.

Sir Ken Macdonald QC
Accounting Officer
3 July 2008

Statement of accounting officers responsibilities

Under the Government Resources and Accounts Act 2000, HM Treasury has directed the Crown Prosecution Service to prepare for each financial year resource accounts detailing the resources acquired, held or disposed of during the year and the use of resources by the Department during the year. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Crown Prosecution Service and of its net resource outturn, resources applied to objectives, recognised gains and losses and cash flows for the financial year.

In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual 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 Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts; and
prepare the accounts on a going concern basis.

HM Treasury has appointed the Director of Public Prosecutions as Accounting Officer of the Department, and the Director of Public Prosecutions has appointed the Chief Executive as an Additional Accounting Officer, with responsibility for preparing the Department’s accounts and for transmitting them to the Comptroller and Auditor General. 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 Department’s assets, are set out in Managing Public Money published by HM Treasury. Under the terms of the Accounting Officer’s Memorandum, the relationship between the Department’s principal and additional Accounting Officers, together with their respective responsibilities, is set out in writing.

Statement of internal control

Scope of responsibility

As Accounting Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of CPS policies, aims and objectives, whilst safeguarding the public funds and departmental assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Managing Public Money.

I am supported in managing the CPS and its key risks by a Chief Executive as additional Accounting Officer, the CPS Board and six Headquarters Directors. A governance review in 2007-08 resulted in a streamlined Board structure reducing the number of Chief Crown Prosecutor and HQ Director members and setting up two sub-groups: the Corporate Delivery and Management Group and the Group Chairs Group. During 2007-08, this was supplemented by two Board committees: the Audit Committee and, for part of the year, the Strategy, Policy and Diversity Committee. The CPS is organised into geographical Areas each headed by a Chief Crown Prosecutor with a direct line of accountability to me for legal decisions and casework, and, in the first instance, to the Chief Executive for the delivery of CPS objectives and PSA targets, and for managing local risks. In 2007-08 Areas were organised into Groups under the oversight of a Group Chair

The CPS is an independent part of the criminal justice system under the ministerial superintendence of the Attorney General. I regularly meet the Attorney General to discuss progress, the issues and the risks of key criminal justice policy initiatives.

The purpose of the system of internal control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of departmental policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in CPS for the year ended 31 March 2008 and up to the date of approval of the annual report and accounts, and accords with Treasury guidance.

Capacity to handle risk

The CPS Board is responsible for ensuring that appropriate risk management arrangements exist and for ensuring that corporate risks are properly managed. The Corporate Delivery and Management Group (the change, risk and control oversight functions of which were previously carried out by the Delivery and Change Committee) assists the Board. The role of the Corporate Delivery and Management Group is set out under ‘Review of Effectiveness’

.A Risk Management Champion (who is a Board member) and a Principal Risk Management Advisor, who is responsible for advising on embedding risk management across the Service, supported the Board during 2007-08 and provided update reports to the Board, the Corporate Delivery and Management Group (and previously the Delivery and Change Committee) and the Audit Committee.

The Board approved the CPS corporate risk tolerance - the amount of risk the Department is prepared to carry and all corporate risk owners are Board or Corporate Delivery and Management Group members.

Chief Crown Prosecutors are personally responsible for maintaining effective risk management arrangements and ensuring an effective system of internal control is operated in their Areas. With the Chief Executive, I personally take part in a quarterly round of performance review meetings with Areas. The frequency of review is determined by a risk based assessment. These include consideration of any key challenges or risks across 15 key indicators and business change projects plus a range of occasional thematic topics, which includes local risk management arrangements. In 2007-08 Area procedures for identifying and assessing their business risks were assessed for 21 Areas and Casework Divisions. A similar process is applied to Headquarters Directorates.

The CPS risk management framework is contained in a written policy statement, a practical risk management guide and a written statement of best practice criteria. These are continuously reviewed to ensure they reflect current HM Treasury and Office of Government Commerce standards.

Risk management guidance is provided at the start of each business planning round. In 2007-08, the Service delivered risk training days and/or risk awareness seminars to 5 Areas and 3 HQ Directorates. The CPS Centre of Excellence also delivered training focused on managing business change risks.

Support and best practice guidance is available from the Principal Risk Management Advisor, the Centre of Excellence and a network of 5 Area Business Manager mentors, allowing Areas access to practical help and advice on managing their risks. The full range of risk guidance and support is available to everyone through the Service’s internal ‘Infonet’ and is integrated with other business management and delivery skills that include planning, change, and programme; and project management guidance.

The risk and control framework

All risk management activity is aligned to the corporate aims, objectives, priorities and PSA commitments. Risk Management is applied to strategic corporate risks, Area operational and business risks and key business change programmes. For 2007-08 the focus for corporate and Area risks was the delivery of the PSA targets and the strategic business changes that underpin effective delivery. The priority corporate risk areas were:

change management arrangements and the effective delivery of business benefits and efficiency gains;
maintaining capability to deliver quality core business;
strategic management capacity and capability required to sustain delivery of the PSA targets and business change commitments;
development and anticipation of changes to government criminal justice policy;
the impact on reputation from adverse publicity in high profile cases;
the impact on PSA targets and business change commitments of Area restructuring;
the impacts of structural and responsibility changes within the Criminal Justice System; and
efficiency delivery and funding constraint effects on service delivery and public confidence.

Corporate, Area and HQ Directorate Business Plans are constructed in tandem with the relevant risk registers. Corporate and operational business risk owners are responsible for ensuring proper review and re-assessment of the level of risk. The Corporate Delivery and Management Group is responsible for identifying the risks to be managed corporately and updating the corporate risk register at formal quarterly reviews.

The CPS Board receives quarterly performance and risk highlight reports, and separate reports of any escalated risks. No corporate risks were escalated to the Board in 2007-08.

On behalf of the Board, the Corporate Delivery and Management Group oversees strategic business change projects and considers the level of risk assumed, and the balance of risk and potential benefits of new projects. Key business change programmes undergo Office of Government Commerce style ‘Gateway’ or ‘Health Check’ reviews. In 2007-08, these included reviews of our new human resource management system (HERMES), a direct procurement system (Procure2Pay) and the Area restructuring projects.

Our corporate risk management process has highlighted the need for more structured analysis of risk, cost and benefits. Work to develop this was carried out in 2007-08 and further development is planned for 2008-09.

For data and information handling risks the Board is assisted by a Chief Information Officer, Senior Information Risk Officer (both of whom are Corporate Delivery and Management Group members) and the Departmental Security Officer. During the year the Chief Executive oversaw a review by the Departmental Security Officer of information security risks that, together with an independent review of information systems security by internal audit, led to improvements to the handling and transfer of electronically stored and paper information.

The Board fully met their programmed corporate risk identification and review commitments and their governance role by overseeing work of the programme boards responsible for the key business changes, including the progress of managing the associated key risks and issues in 2007-08. Due to the governance structure changes, the Corporate Delivery and Management Group was only able to review corporate risks on three of the four planned occasions. I am satisfied, however, that the necessary risk management actions were addressed properly at operational and project level.

Managers and staff at all levels have a responsibility to identify, evaluate, manage or report risks. The Director, Chief Executive and the Board encourage innovation and taking opportunities to further the interests of the CPS and the achievement of its objectives. The Board has set the CPS risk tolerance range, and the acceptable parameters for risk taking by managers are outlined in the CPS risk policy and guidance documents.

The Board requires Areas and HQ Directorates to maintain:

a risk register detailing priority by likelihood and impact and showing ownership;
a risk management action plan; and
evidence of regular review and monitoring.

All Area risk registers were reviewed at the start of the year, and almost half reassessed in the year as part of the Area Performance Review process and to identify trends and common themes. No issues were escalated to the corporate risk register.

The CPS capacity to handle risk is under continuing review by the Corporate Delivery and Management Group and Audit Committee and the Principal Risk Management Advisor reports on progress against the CPS risk management development strategy.

The key areas for continuing development are:

further embedding of risk - we are addressing this by continuing review and development of awareness, support and guidance material on the departmental Infonet; Principal Risk Management Advisor quality assurance and promotional visits to operational managers and HQ Directors; the delivery of formal risk training sessions and risk awareness development seminars; providing detailed written feedback reports on request; and maintaining summary best practice guidance;
demonstrating improved risk handling and better delivery of planned outcomes - we are addressing this by integrated review of risk management and performance in quarterly Area performance review, and regular monitoring by CPS Board, Audit Committee and the Corporate Delivery and Management Group; and
managing risks with partners - we are addressing this by working with the Office of Criminal Justice Reform on risks to the delivery of criminal justice PSA targets, and Criminal Justice Information Technology programme on risks to the development of joint information and communications technology; and establishing a criminal justice system risk management forum.

I am satisfied that, although we could further improve the application of our risk management framework, our risk management arrangements meet the necessary governance standards.

Review of effectiveness

As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within the Department who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letter and other reports. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Board, the Audit Committee and the Corporate Delivery and Management Group (and previously the Delivery and Change Committee), and a plan to address weaknesses and ensure continuous improvement of the system is in place.

In the year, we reviewed corporate governance as required by the Corporate Governance Code of Practice. A new streamlined and focused Board and revised governance structure now operates with clearer responsibility and strategic oversight of internal control. There are clearer lines of accountability between the Board, its sub-groups and committees. A new role of Chief Operating Officer was established to provide accountability for delivery of change and performance in front line business and a focus for operational input to the Board.

Non-executive Directors sit on each group and committee with the exception of the Area and Group focused Group Chairs Group.

During 2007-08, the Board sub-groups and committees and their key roles were:

Corporate Delivery and Management Group - to assist the Board in developing CPS and CJS strategy and policy; helping to exploit opportunities for partnership working; overseeing the corporate change agenda and benefits delivery; and overseeing key corporate performance and risk issues and advising the Board on strategic impacts and actions;
Group Chairs Group - to assist the Board in developing CPS and CJS strategy and policy and helping to exploit opportunities for partnership working; advise on the impacts of proposed key operational changes; advise on the operational implications of key corporate performance risk management issues;
Strategy, Policy and Diversity Committee - to consider and inform the Service’s overall vision and strategic direction, development of prosecution policies that integrate all aspects of equality and diversity. (The decision making role has been subsumed by the Board sub-groups and the Board has agreed to discontinue this committee from 2008-09); and
Audit Committee - to provide objective advice, support and assurance to the Accounting Officer and Additional Accounting Officer on corporate governance, risk management, the system of internal control and external audit reports.

The Department has an internal audit function that operates to the ‘Government Internal Audit Standards’ guidance. They submit regular reports to the Audit Committee, including an annual report from the Head of Internal Audit that provides an independent opinion on the adequacy and effectiveness of the Department’s system of internal control and includes recommendations for improvement to the systems of internal control.

In accordance with Code of Good Practice on Corporate Governance, the Audit Committee will prepare an annual report on the work of discharging its responsibilities.

At the end of the calendar year each Chief Crown Prosecutor and HQ Director completes a certificate of assurance. The certificates include a statement on the level of assurance achieved throughout the year by the Area/Directorate against key aspects of their business. They specifically provide an assurance on the effectiveness of local systems to identify and manage the principal risks to the delivery of the Public Service Agreement targets. All certificates are validated against HM Crown Prosecution Service Inspectorate reports and other performance information. For 2007 assurances by managers indicated a continuing improvement in the reliability and effectiveness of key systems and business activities. A small number of ‘assurance hotspots’ were identified for further development work in 2008-09.

Our quarterly performance review programme with Area Chief Crown Prosecutors and Business Managers (detailed in the Capacity to Handle Risk section) is a key part of monitoring effectiveness of the system of internal control. Resulting action plans for performance improvement are agreed with me, the Chief Executive and the Chief Operating Officer.

Independent review of business efficiency and effectiveness in the Areas is carried out by HM Crown Prosecution Service Inspectorate. In 2007-08 they undertook a programme that included Area effectiveness inspections, operational performance assessments and thematic reviews of decision making and management in discontinued and discharged committals and of our ‘Direct Communication with Victims’ arrangements. HM Crown Prosecution Service Inspectorate also carries out joint thematic inspections with other independent Criminal Justice inspectorates.

Significant internal control issues

I have no significant internal control issues to report for 2007-08 and all previously reported issues have been cleared.

Sir Ken Macdonald QC
Accounting Officer
3 July 2008

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 the Crown Prosecution Service for the year ended 31 March 2008 under the Government Resources and Accounts Act 2000. These comprise the Statement of Parliamentary Supply, the Operating Cost Statement and Statement of Recognised Gains and Losses, the Balance Sheet, the Cashflow Statement and the Statement of Operating Costs by Departmental Aim and Objectives 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

The Accounting Officer is responsible for preparing the Annual Report, which includes the Remuneration Report, and the financial statements in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions made thereunder and for ensuring the regularity of financial transactions. These responsibilities are set out in the Statement of Accounting Officer’s Responsibilities.

My responsibility is to audit the financial statements and the part of the Remuneration Report to be audited in accordance with relevant legal and regulatory requirements, and with International Standards on Auditing (UK and Ireland).

I report to you my opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000. I report to you whether, in my opinion, the information included in the Annual Report is consistent with the financial statements. I also report whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In addition, I report to you if the Department has not kept proper accounting records, if I have not received all the information and explanations I require for my audit, or if information specified by HM Treasury regarding remuneration and other transactions is not disclosed.

I review whether the Statement on Internal Control reflects the Department’s compliance with HM Treasury’s guidance, and I report if it does not. I am not required to consider whether this statement covers all risks and controls, or to form an opinion on the effectiveness of the Department’s corporate governance procedures or its risk and control procedures.

I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. I consider the implications for my certificate if I become aware of any apparent misstatements or material inconsistencies with the financial statements. My responsibilities do not extend to any other information.

Basis of audit opinions

I conducted my audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. My audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements and the part of the Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgments made by the Accounting Officer in the preparation of the financial statements, and of whether the accounting policies are most appropriate to the Department’s circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements and the part of the Remuneration Report to be audited are free from material misstatement, whether caused by fraud or error, and that in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Remuneration Report to be audited.

Opinions

In my opinion:

the financial statements give a true and fair view, in accordance with the Government Resources and Accounts Act 2000 and directions made thereunder by HM Treasury, of the state of the Department’s affairs as at 31 March 2008 and the net cash requirement, net resource outturn, net operating cost, operating costs applied to objectives, recognised gains and losses and cashflows for the year then ended;
the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000; and
information included within the Annual Report is consistent with the financial statements.

Opinion on Regularity

In my opinion, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

Report

I have no observations to make on these financial statements.

T J Burr
Comptroller and Auditor General
7 July 2008

National Audit Office
151 Buckingham Palace Road
Victoria, London SW1W 9SS

The maintenance and integrity of the Crown Prosecution Service’s website is the responsibility of the Accounting Officer; the work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Statement of Parliamentary Supply

Summary of Resource Outturn 2007-08 (£Thousands)

The authoritative version of this table can be found in the PDF version of this annual report. There may be information contained in the layout of the data that can not be rendered in this web page.

Description	Note	Gross expenditure	A in A	Estimate Net Total	Gross expenditure	A in A	Outturn Net Total	2007-08 Net total outturn compared with Estimate: saving/ (excess)	2006-07 outturn Net Total
Request for resources 1	2	707,159	58,727	648,432	690,558	57,680	632,878	15,554	616,277
Total resources	3	707,159	58,727	648,432	690,558	57,680	632,878	15,554	616,277
Non-operating cost A in A	5	-	-	-	-	-	-	-	-

Net cash requirement 2007-08 (£Thousands)

Description	Note	Estimate	saving/Outturn	2007-08 Net total outturn compared with Estimate: saving/(excess)	2006-07 Outturn
Net cash requirement	4	648,968	627,039	21,929	619,885

Summary of income payable to the Consolidated Fund

In addition to appropriations in aid, the following income relates to the Department and is payable to the Consolidated Fund (£Thousands)

Description	Note	2007-08 Forecast - Income	2007-08 Receipts	2007-08 Outturn Income	2007-08 Receipts
Total	5	-	-	164	1,308

Explanations of variances between Estimate and outturn are given in Note 2 and in the Management Commentary.

The notes form part of these accounts

Operating Cost Statement for the year ended 31 March 2008 (£Thousands)

The authoritative version of this table can be found in the PDF version of this annual report. There may be information contained in the layout of the data that can not be rendered in this web page.

Description	Note	Staff Costs	Other Costs	Income	2007-08	2006-07
Administration Costs on HQ and Centrral Services:
Staff costs	7	27,312				30,146
Other administration costs	8		26,697			21,474
Operating income	10			(1,650)		(313)

Crown Prosecutions and Legal Services
Staff costs	7	333,576				318,019
Other programme costs	9		302,973			291,965
Less: income	10			(56,194)		(47,073)
Totals		360,888	329,670	(57,844)		614,218

Net operating cost	3				632,714	614,218
Net resource outturn	4				632,878	616,277

In 2007-08 the cost of external consultants was reclassified from staff costs to other administration costs and other programme costs.

Statement of Recognised Gains and Losses for the year ended 31 March 2008 (£Thousands)

Description	Note	2007-08	2006-07
Net gain on revaluation of tangible fixed assets	18	2,299	785
Net gain on revaluation of intangible fixed assets	18	7	3
Recognised gains for the financial year		2,306	788

The gains on tangible and intangible fixed assets are disclosed separately. Gains on intangible assets were not deemed sufficiently material to warrant separate disclosure in previous years

The notes form part of these accounts

Balance Sheet

Balance Sheet as at 31 March 2008 (£Thousands)

The authoritative version of this table can be found in the PDF version of this annual report. There may be information contained in the layout of the data that can not be rendered in this web page.

Description	Note	2008 Column 1	2008 Column 2	2007 Column 1	2007 Column 2
Fixed assets:
Tangible assets	11		28,114		27,753
Intangible assets	12		627		860
Debtors falling due after more than one year	13		2,400		3,194

Current assets:
Debtors	13	57,680		58,789
Cash at bank and in hand	14	23,029		4,080
		80,709		62,869
Creditors (amounts falling due within one year)	15	(75,670)		(59,239)
Net current assets			5,039		3,630
Total assets less current liabilities			36,180		35,437
Provisions for liabilities and charges	16		(12,715)		(9,419)
			23,465		26,018
Taxpayers’ equity:
General fund	17		16,293		21,005
Revaluation reserve	18		7,172		5,013
			23,465		26,018

Sir Ken Macdonald QC
Accounting Officer
3 July 2008 The notes form part of these accounts

Cash Flow Statement

Cash Flow Statement for the year ended 31 March 2008 (£Thousands)

Description	Note	2007-08	2006-07
Net cash outflow from operating activities	19(a)	(623,543)	(612,439)
Capital expenditure and financial investment	19(b)	(2,188)	(4,761)
Payments of amounts due to the Consolidated Fund		(2,293)	(3,290)
Financing	19(d)	646,973	610,027
Increase/(Decrease) in cash in the period	19(e)	18,949	(10,463)

Statement of Operating Costs by Departmental Aim and Objective

Statement of Operating Costs by Departmental Aim and Objective for the year ended 31 March 2008

Aim:

To deliver a high quality prosecution service that brings offenders to justice, helps reduce both crime and the fear of crime and thereby promotes public confidence in the rule of law, through the consistent, fair and independent review of cases and through their fair, thorough and firm presentation at court. (£Thousands)

Description	2007-08 Gross	2007-08 Income	2007-08 Net	2006-07 Gross	2006-07 Income	2006-07 Net
Objective	690,558	(57,844)	632,714	661,604	(47,386)	614,218
Net operating costs	690,558	(57,844)	632,714	661,604	(47,386)	614,218

The Department’s objective was as follows: To ensure the effective delivery of justice. See Note 20

The notes form part of these accounts

Notes to the departmental Resource Accounts

1. Statement of Accounting Policies

The financial statements have been prepared in accordance with the 2007-08 Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM follow UK generally accepted accounting practice for companies (UK GAAP) to the extent that it is meaningful and appropriate to the public sector.

In addition to the primary statements prepared under UK GAAP, the FReM also requires the Department to prepare two additional primary statements. The Statement of Parliamentary Supply and supporting notes show outturn against Estimate in terms of the net resource requirement and the net cash requirement. The Statement of Operating Costs by Departmental Aim and Objective and supporting notes analyse the Department’s income and expenditure by the objectives agreed with Ministers.

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 Department for the purpose of giving a true and fair view has been selected. The Department’s accounting policies have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Accounting Convention

These accounts have been prepared under the historical cost convention modified to account for the revaluation of fixed assets at their value to the business by reference to their current costs.

1.2 Basis of Consolidation

The CPS has no agencies or other bodies that may form part of a CPS departmental group.

1.3 Fixed Assets

Tangible Fixed Assets

Tangible fixed assets are stated at the lower of replacement cost and recoverable amount. All expenditure on tangible fixed assets of £500 or over is capitalised, including leasehold improvements. On initial recognition they are measured at cost including any costs such as installation directly attributable to bringing them into working condition.

All tangible fixed assets are restated to current value each year. Land and buildings are restated to current value using professional valuations in accordance with FRS15 every five years and in the intervening years by the use of published indices appropriate to the type of land or building. The Investment Property Databank supplies the indices used.

Title to the freehold land and buildings shown in the accounts is held as follows:

property on the departmental estate, title to which is held by the CPS; and
property held by the Department of Environment, Food and Rural Affairs in the name of the Secretary of State.

Other tangible fixed assets are restated to current value annually by indexation up to the year-end using Price Index Numbers for Current Cost Accounting, published by the Office for National Statistics.

Costs of bought-in services incurred in preparation for the implementation of IT projects are capitalised. Internal costs incurred on the same projects are not capitalised where the work can only be carried out by in-house staff.

Intangible Fixed Assets

Most software licences used in the business are paid for on an annual basis and their cost is charged to the Operating Cost Statement over the period to which the licences relate. However, the CPS has purchased certain licences for use over an extended period of time. These have been capitalised as intangible fixed assets, following the same conventions and principles as those applied to tangible fixed assets, including restatement to current value annually by indexation up to the year-end using relevant Price Index Numbers for Current Cost Accounting, published by the Office for National Statistics.

1.4 Depreciation

Tangible Fixed Assets

Tangible fixed assets are depreciated at rates calculated to write them down to estimated residual value on a straight-line basis over their estimated useful lives. No depreciation is provided on freehold land since it has an unlimited useful life. Asset lives are normally in the following ranges:

Freehold buildings: 20 to 50 years
Furniture and fittings: 3 to 10 years
Information technology: 4 years

Leasehold improvements are written off over the shorter of:

the remaining life of the property lease;
10 years; or
where it has been established that a break clause in the lease is likely to be exercised by the Department, the period to the first possible date of exercise of the relevant break clause.

Intangible Fixed Assets

Intangible fixed assets are depreciated at rates calculated to write them down to estimated residual value on a straight-line basis over their estimated useful lives, which are considered to be co-terminous with the Department’s ICT managed service contract (see Note 23).

1.5 Operating Income

Operating income is income which relates directly to the operating activities of the Department, and consists of administration and programme income. It includes not only income appropriated in aid of the Estimate but also income to the Consolidated Fund, which in accordance with FReM is treated as operating income. Operating income is stated net of VAT.

Administration Income

Administration income is income associated with support to front-line functions. This relates to the recovery of salaries for staff seconded to other Government Departments or Local Criminal Justice Boards, rental income from the sub-letting of buildings used principally for administrative purposes and reimbursement of expenditure under the Government’s Access to Work scheme. It includes not only income appropriated in aid of the Estimate but also income due to the Consolidated Fund, which in accordance with the FReM is treated as operating income. In the case of salary reimbursements, income is recognised quarterly in arrears; in the case of rental income, invoices are raised quarterly in advance and income is recognised monthly, and in the case of reimbursements under the Access to Work scheme, income is recognised on a case-by-case basis as it is received.

Programme Income

Programme income is direct income associated with delivery of front-line functions. The principal element relates to costs awarded to the CPS. The CPS receives awards of costs made against convicted defendants at the discretion of the judge or magistrates. Magistrates’ courts are responsible for recording, enforcing and collecting these costs, forwarding collected monies to the CPS and, under delegated authority, for writing off awards where the amount outstanding is less than £100.

Bad debts are provided for on the basis of the historical relationship between costs awarded and cash collected.

In order to account for cost awards, the CPS uses returns submitted quarterly by the courts in respect of cash collected, transfers to and from other courts, amounts written off and cost awards outstanding. The CPS recognises income immediately these returns are received. In interim months, when no returns are received, income is accrued on the basis of historical data for each Magistrates’ bench. The costs reflect the nominal full cost of the prosecution but for administrative purposes are recorded against programme costs only.. Cost award income is included in the objectives in the Statement of Resources by Departmental Aim and Objectives.

Programme income also includes rental income from other Government Departments in jointly occupied buildings, commercial sub-tenants and Non Departmental Public Bodies; but it also includes other income such as recovery of salaries for staff seconded to other Government Departments or Local Criminal Justice Boards, the Department’s share of Home Office receipts derived from criminal assets recovered under the Proceeds of Crime Act 2003 and reimbursement of expenditure under the Government’s Access to Work scheme. In the case of rental income, invoices are raised quarterly in advance and income is recognised on a monthly basis. In the case of salary reimbursements invoices are raised and income is recognised quarterly in arrears. In the case of receipts under the Proceeds of Crime Act, the ‘Asset Incentivisation Scheme’, the Department is allowed to retain a proportion of the total value of assets recovered in the year. Income generated from this scheme is recognised in the CPS’ accounts when the Home Office recognises it in their accounts. Income from the Asset Incentivisation Scheme is intended to offset the costs of assets forfeiture activity; within the CPS these costs fall within programme expenditure. In all other cases income is recognised on a case-by-case basis as it is received. Rental income received from other Government Departments is netted off against expenditure in accordance with the FReM.

1.6 Administration and Programme Expenditure

The Operating Cost Statement is analysed between administration and programme income and expenditure. The classification of expenditure and income as administration or as programme follows the definition of administration costs set out in the Consolidated Budgeting guidance issued by HM Treasury. Costs are stated inclusive of VAT.

Administration Costs

Administration costs reflect the costs of running the Department. These include both administrative costs and associated operating income. Income is analysed in the notes between that which, under the administrative cost-control regime, is allowed to be offset against gross administrative costs in determining the outturn against the administration cost limit, and that operating income which is not.

Programme Costs

Programme costs reflect non-administration costs being the direct cost and associated overheads of prosecution including the employment of counsel and compensation paid to witnesses for costs incurred through their attendance at court. Where a prosecution case is expected to last in excess of 40 days (or where three or more trial counsel are instructed) counsel are required to submit invoices covering work done as pre-determined stages in the case are reached; expenditure is recognised upon receipt of such invoices. This treatment of 'very high cost cases', which has been in existence since 2006- 07, replaced a previous system for 'high cost cases' which did not involve counsel issuing periodic, or staged, invoices. As a result there are a small number of cases previously designated as 'high cost cases' for which final counsel invoices have not been received at the year end. Such items have been individually accrued for at 31 March 2008.

Counsel fees in cases which are expected to last for less than 40 days are paid through the CPS ‘Graduated Fee Scheme’ agreed between the Bar Council and the Department with a target of payment within 20 days of receipt of a valid claim. Payment is made on completion of all work on a case and the fee is not dependant on the effort deployed by the barrister in that particular case. The scheme includes a tariff of charges calculated using a range of set cost factors including the number of defendants, the complexity and volume of evidence, preparation, ‘refresher’ and appearance time. The scheme also includes different tariffs to cover ‘guilty’ and ‘not-guilty’ pleas by defendants - though pleas may change at any time before or even during a trial. In addition, barristers are entitled to return a brief at any time between their initial appointment and the start of a trial, so the Department does not incur any liability with a particular barrister until the commencement of a trial. In this context commencement is defined as the day on which a plea is made or the jury is sworn in. Therefore, for practical purposes, since on average most trials are started and completed within the same day (save for the sentence hearing which may occur a short time later) it is considered prudent to recognise expenditure on counsel fees in such cases only as trials are completed. It is not possible to ascertain the full value owed on all such cases at year-end until some considerable time later. Where actual counsel fees can be ascertained they have been accrued for; in all other cases the Department estimates such counsel fees outstanding for inclusion in these accounts.

1.7 Capital Charge

A charge, reflecting the cost of capital utilised by the Department, is included in operating costs. The charge is calculated at the real rate set by HM Treasury (currently 3.5%) on the average carrying amount of all assets less liabilities, except for:

cash balances with the Office of the Paymaster General and donated assets where the charge is nil; and
liabilities for amounts to be surrendered to the Consolidated Fund for which no credit against the charge is allowed.

1.8 Pensions

Past and present employees are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS). This is a defined benefit scheme and is unfunded and non-contributory except in respect of dependants’ benefits. The CPS 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. With effect from 1 October 2002 new employees have the option to join either the PCSPS scheme or a Partnership Pension Account. The latter is a defined contribution scheme where the department recognises the contributions payable for the year.

1.9 Operating Leases

Rentals due under operating leases are charged to the Operating Cost Statement over the lease term on a straight-line basis, or on the basis of actual rentals payable where this fairly reflects the usage. Future payments, disclosed at Note 22, "Commitments under Leases", are not discounted.

1.10 Private Finance Initiative (PFI) Transactions

The CPS signed a contract entering into a PFI transaction on 31 December 2001 for a 10 year period commencing 1 April 2002. This has been accounted for in accordance with Technical Note No.1 (Revised), entitled How to account for PFI Transactions, as required by the FReM. The balance of risks and rewards of ownership of the PFI property are borne by the PFI operator, therefore the PFI payments are recorded as an operating cost. The CPS transferred all IT assets to the PFI operator with effect from 1 April 2002. A prepayment for their fair value is recognised and amortised over the life of the PFI contract.

1.11 Provisions

The Department provides for legal or constructive obligations, which are of uncertain timing or amount, at the balance sheet date on the basis of the best estimate of the expenditure required to settle the obligation. Where the effect of the time value of money is significant, the estimated risk-adjusted cash flows are discounted using the real rate set by HM Treasury (currently 2.2%).

1.12 Contingent Liabilities

In addition to contingent liabilities disclosed in accordance with FRS12, the Department discloses for parliamentary reporting and accountability purposes certain contingent liabilities where the likelihood of a transfer of economic benefit is remote. These comprise:

items over £250,000 (or lower, where required by specific statute) that do not arise in the normal course of business and which are reported to Parliament by departmental Minute prior to the Department entering into the arrangement; and
all items (whether or not they arise in the normal course of business) over £250,000 (or lower, where required by specific statute or where material in the context of resource accounts), which are required by the FReM to be noted in the resource accounts.

1.13 Value Added Tax

Most of the activities of the Department are outside the scope of VAT and, in general output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged, the amounts are stated net of VAT.

2. Analysis of net resource outturn by section (£Thousands)

The authoritative version of this table can be found in the PDF version of this annual report. There may be information contained in the layout of the data that can not be rendered in this web page.

Description	Admin	Other current	Gross resource expenditure	A in A	Outturn Net Total	Estimate Net Total	2007-08 Net Total outturn compared with Estimate	2006-07 Prior-year outturn
Request for Resources 1:
Administration on HQ and Central Services	54,009	-	54,009	(1,647)	52,362	57,303	4,941	51,310
Administration on HQ and Central Services
Crown prosecutions and legal services	-	636,549	636,549	(56,033)	580,516	591,129	10,613	564,967

Total	54,009	636,549	690,558	(57,680)	632,878	648,432	15,544	616,277

Resource Outturn	54,009	636,549	690,558	(57,680)	632,878	648,432	15,544	616,277

Explanation of the variation between Estimate and outturn (net total resources):

(i) Net total outturn was £15.554 million less than the Estimate, representing 2.4% of net provision. The underspend represents continuing efficiency savings made during the year by HQ Directors to support the decision of the CPS Board to freeze HQ staff numbers and budgets from 2005-06 and some slippage in the recruitment of staff.

Detailed explanations of the variances are given in the Management Commentary.

3. Reconciliation of outturn to net operating cost and against Administration Budget

3(a) Reconciliation of net resource outturn to net operating cost (£Thousands)

Description	Note	Outturn	Supply Estimate	2007-08 Outturn compared with Estimate	2006-07 Outturn
Net Resource Outturn	2	632,878	648,432	15,554	616,277
Non-supply income (CFERs)	5	(164)	-	164	(2,059)
Net operating cost		632,714	648,432	15,718	614,218

3(b) Outturn against final Administration Budget (£Thousands)

Description	Budget	2007-08 Outturn	2006-07 Outturn
Gross Administration Budget	59,003	54,006	51,617
Less: Income allowable against the Administration Budget	(1,700)	(1,647)	(310)
Net outturn against final Administration Budget	57,303	52,359	51,307

4. Reconciliation of resources to cash requirement (£Thousands)

The authoritative version of this table can be found in the PDF version of this annual report. There may be information contained in the layout of the data that can not be rendered in this web page.

Description	Note	Estimate	Outturn	Net total outturn compared with Estimate saving/ (excess)
Resource Outturn	2	648,432	632,878	15,554
Capital:
Acquisition of fixed assets	11,12 and 19	7,400	2,188	5,212
Investments		-	-	-
Non-operating A in A:		-	-	-
Proceeds of fixed asset disposals
Accruals adjustments
Non-cash items	8 and 9	(8,537)	(16,391)	7,854
Changes in working capital other than cash		-	5,944	(5,944)
Changes in creditors falling due after more than one year		-	-	-
Use of provision	16	1,673	2,420	(747)
Net cash requirement		648,968	627,039	21,929

Explanation of the variation between Estimate and outturn (net total resources):

Net total outturn was £15.554 million less than the Estimate, representing 2.4% of net provision. The underspend represents continuing efficiency savings made during the year by HQ Directors to support the decision of the CPS Board to freeze HQ staff numbers and budgets from 2005-06 and some slippage in the recruitment of staff.
Expenditure on acquisition of fixed assets was £5.212 million less than the Estimate. This was due to slippage in planned projects for improvements to leasehold properties and the replacement of office equipment.
Non-cash items were £7.854 million higher than the Estimate due principally to:
(a) an increase in the doubtful debt provision resulting from a refinement of the basis of estimation (£4.494 million), and
(b) an increase in the early retirement provision resulting from departures that were not planned prior to the start of the accounting year (£3.335 million)
Changes in working capital other than cash were £5.944 million higher than the Estimate due principally to:
(a) increased debtors for cost awards as a result of slower collections (£2.728 million), and
(b) reduced creditors because of speedier settlements of trade creditors (£1.540 million)
Use of provisions was £0.747 million higher than the Estimate due to increased payments to new leavers as noted in (iii) (b) above.

Detailed explanations of the variances are given in the Management Commentary.

5. Analysis of income payable to the Consolidated Fund (£Thousands)

Analysis of income payable to the Consolidated Fund.

In addition to appropriations in aid, the following income relates to the Department and is payable to the Consolidated Fund.

Description	Note	Forecast Income	2007-08 Receipts	Outturn Income	2007-08 Receipts
Operating income and receipts - excess A in A	6	-	-		1,098
Non-operating income and receipts - excess A in A		-	-	-	-
Subtotal		-	-	-	1,098
Other operating income and receipts not classified as A in A	6	-	-	164	210
Other non-operating income and receipts not classified as A in A		-	-	-	-
Other amounts collectable on behalf of the Consolidated Fund		-	-	-	-
Total income payable to the Consolidated Fund		-	-	164	1,308

6. Reconciliation of income recorded within the Operating Cost Statement to operating income payable to the Consolidated Fund (£Thousands)

The authoritative version of this table can be found in the PDF version of this annual report. There may be information contained in the layout of the data that can not be rendered in this web page.

Description	2007-08	2006-07
Operating income
Administration	1,650	313
Netted-off gross expenditure in sub-head	-	-
Programme	57,288	48,019
Netted-off gross expenditure in sub-head	(1,094)	(946)
Sub total	57,844	47,386
Income authorised to be appropriated-in-aid: Administration	1,647	310
Income authorised to be appropriated-in-aid: Programme	56,033	45,017
Sub total	57,680	45,327
Operating income payable to the Consolidated Fund Administration	3	3
Operating income payable to the Consolidated Fund Programme	161	2,056
Total	164	2,059

7. Staff numbers and related costs (£Thousands)

Staff costs comprise:	Total	Permanently employed staff	2007-08 Others	2006-07 Total
Wages and salaries	284,202	273,012	11,190	274,742
Social security costs	22,038	22,038	-	21,277
Other pension costs	54,648	54,648	-	52,146
Sub Total	360,888	349,698	11,190	348,165
Less recoveries in respect of outward secondments	(1,381)	(1,381)	-	(1,215)
Total net costs	359,507	348,317	11,190	346,950

The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme but the Crown Prosecution Service is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the scheme as at 31 March 2007. You can find details in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk).

For 2007-08, employers’ contributions of £54,521,376 were payable to the PCSPS (2006-07: £52,057,440) at one of four rates in the range 17.1 to 25.5 per cent of pensionable pay, based on salary bands. The scheme’s Actuary reviews employer contributions every four years following a full scheme valuation. From 2008-09, the salary bands will be revised but the rates will remain the same. (The rates will be changing with effect from April 2009).

The contribution rates are set to meet the cost of the benefits accruing during 2007-08 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 pe

Crown Prosecution Service Annual Report and Resource Accounts 2007 - 2008

Contents

Resource Accounts

Management Commentary

Introduction

Spending Review 2004

Departmental Report

Operating and Financial Review

a) Operating Review

(i) CPS Business Strategy for 2005-08

(ii) Key Strengths

(iii) Future Factors

CSR2007

(iv) Summary of Performance

(v) Sustainability

Environmental Matters

b) Financial Review

Reconciliation of resource expenditure between Estimates, Accounts and Budgets (£thousands)

Management

CPS Board

The membership of the CPS Board and attendance during 2007-08 are as follows:

Corporate Delivery and Management Group

Work undertaken

Members of the Corporate Delivery and Management Group:

Group Chairs Group

Work undertaken

Members of the Group Chairs Group:

Audit Committee (AC)

Work undertaken

Members of the Audit Committee:

Strategy, Policy and Diversity Committee

Members of the Strategy, Policy and Diversity Committee:

Delivery & Change Committee (DCC)

Members of the Delivery & Change Committee

People, Equality & Resources Committee (PERC)

Members of the People, Equality & Resources Committee

Pensions

Equal Opportunities

An Equal and Diverse Prosecution Service

Reporting of Personal Data Related Incidents

TABLE 1: Summary of protected personal data related to incidents formally reported to the information commissioner’s office in 2007–08.

Table 2: Summary of other protected data related incidents in 2007–08

Explanatory Notes:

TABLE 3: Year-on-year total numbers of protected data related incidents prior to 2007-08

Employee Consultation and Providing Information to Employees

Payment of Suppliers and Witnesses

Auditors

Statement of accounting officers responsibilities

Statement of internal control

Scope of responsibility

The purpose of the system of internal control

Capacity to handle risk

The risk and control framework

Review of effectiveness

Significant internal control issues

The certificate and report of the Comptroller and Auditor General to the House of Commons

Respective responsibilities of the Accounting Officer and auditor

Basis of audit opinions

Opinions

Opinion on Regularity

Statement of Parliamentary Supply

Summary of Resource Outturn 2007-08 (£Thousands)

Net cash requirement 2007-08 (£Thousands)

Summary of income payable to the Consolidated Fund

Operating Cost Statement for the year ended 31 March 2008 (£Thousands)

Statement of Recognised Gains and Losses for the year ended 31 March 2008 (£Thousands)

Balance Sheet

Balance Sheet as at 31 March 2008 (£Thousands)

Cash Flow Statement

Cash Flow Statement for the year ended 31 March 2008 (£Thousands)

Statement of Operating Costs by Departmental Aim and Objective

Aim:

Notes to the departmental Resource Accounts

1. Statement of Accounting Policies

1.1 Accounting Convention

1.2 Basis of Consolidation

1.3 Fixed Assets

1.4 Depreciation

Tangible Fixed Assets

1.5 Operating Income