Crown Prosecution Service Annual Report and Resource Accounts 2008 - 2009

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).

Comprehensive Spending Review 2007

The Comprehensive Spending Review (CSR) 2007 settlement announced in October 2007 reflects the challenging fiscal environment and provides the CPS with an average annual real reduction in provision of 3.5% against the baseline budget for 2007-08.

The CSR 2007 settlement identified a series of ambitious value for money reforms to be taken forward by the CPS and the other Law Officers' Departments. The CPS is required to deliver:

• at least three per cent net value for money gains per annum;
• five per cent annual real reductions in the core administration budget.

The Autumn Performance Report 2009 will be published in December 2009 and provides supplementary performance information on PSA targets, DSO 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 2008-11 and Business Plan 2008-09

The CPS Business Strategy for 2008-11 and the Business Plan for 2008-09 (published as one document) sets out how the CPS will deliver the DSO and the PSA targets that were set as part of CSR 2007. PSAs 23 and 24 represent the Government's key objectives in criminal justice.

These two PSAs are most directly relevant to the work of the CPS and the wider CJS and are jointly owned by the Home Office, the Ministry of Justice and the Law Officers' Departments. PSA 24 has the objective of delivering a more effective, transparent and responsive criminal justice system for victims and the public; bringing more offences to justice and improving public confidence in the CJS. PSA 23 'Make communities safer' focuses on putting local needs at the heart of the CJS and reducing crime and re-offending.

The CPS DSO is:
To bring offenders to justice, improve services to victims and witnesses and promote confidence, by applying the Code for Crown Prosecutors, 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 order to achieve this, the CPS has a vision that:
The CPS is a prosecution service that is confident and independent, efficient and effective - becoming truly world class. Everything that we do aims to deliver justice for all and to make our communities safer.

This vision and the business strategy that supports it, builds on the significant progress that the CPS has achieved in the last few years, but goes beyond that to extend the types of advocacy that we undertake and the quality of that advocacy; to combine the robustness of our charging decisions with improvements that ensure we are efficient and support our police partners; and to focus our efforts for victims and witnesses to maximise the quality of the service they receive.

The Business Strategy sets out a challenging agenda based around six key priorities for 2008-09: improving our delivery in the magistrates' courts; completing and embedding our advocacy strategy; improving our services to victims and witnesses; playing our part in achieving the agreed PSA targets for 2008-11; restructuring our delivery model to improve performance, particularly on serious cases, and improving value for money; ensuring that we lead and manage well to get the best from all CPS people, and that we engage with them, partners and communities to improve our service.

(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 2,937 prosecutors, 1,074 are Higher Court Advocates able to present cases in the Crown Court and in the Higher Courts. The Department also employs 453 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 is an influential voice in the Criminal Justice System, through the National Criminal Justice Board (NCJB) and the Local Criminal Justice Board (LCJB).

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 agreement between the CPS and Logica.

The 2009-10 Main Estimate for the CPS has been approved.

(iii) Future Factors

Corporate Services

A review of HQ led to the recommendation that a new Directorate be introduced. As a result, in 2009-10, a new Corporate Services Directorate will be formed which is an amalgamation of the Business Information Systems and Finance Directorates. In addition Internal Audit and Area Resources Branch, formerly of the Business Development Directorate, will also be a part of Corporate Services.

RCPO

A merger between the CPS and the Revenue and Customs Prosecutions Office (RCPO) will take place during 2009-10, with further consolidation in 2010-11.

These organisations are merging to provide an enhanced prosecution service, to safeguard and improve the already high quality work done in both services on serious and complex cases, and to deliver increased value for money.

Along with the rest of the public service the Law Officers' Departments have to deliver increased value for money, whilst maintaining and improving the quality of the service overall. Increased collaboration and economies of scale will help deliver an improved quality of prosecution services and value for money. This merger is forecast to produce savings of approximately 1.5% of the combined CPS-RCPO budget for 2010-11. The savings will come from adopting best practice from both organisations, economies of scale, sharing accommodation and IT infrastructure and from collaborative procurement.

International Financial Reporting Standards (IFRS)

2008-09 is the last year that the CPS resource accounts will be produced under UK GAAP principles. As from 2009-10 the accounts will be prepared under IFRS.

(iv) Summary of Performance

The CPS continued to make progress in 2008-09 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 2008-11 together with the CPS Business Plan for 2008-09 focus on how the PSA targets and DSO will be delivered and are available on the CPS website: www.cps.gov.uk.

(v) Sustainability

Environmental Matters

The CPS continues to work towards embedding sustainable development. The Service was one of twenty pathfinders to become accredited with the Carbon Trust Standard. This award is for continually reducing carbon emissions over a three-year period.

Following a presentation to Senior Area Business Managers, further "Green Groups" have been developed in some Areas. Additional training has taken place and the CPS continues to work towards implementing Environmental Management Systems to the ISO 1400 Standard in some Areas. (Note: National rollout will be complete by the end of the CSR period.)

During the last year, the CPS, along with other members of the Law Officers' Departments, has continued to improve its position within the Sustainable Development in Government Report.

b) Financial Review

The CPS net Request for Resources (RfR), as voted by Parliament, for the period to 31 March 2009 was £648 million. The outturn on expenditure as shown in the 2008-09 Accounts, Statement of Parliamentary Supply, was £632 million.

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.

To meet the transitional and up-front costs of modernising and transforming the business of the Law Officers' Departments, the CPS had access to a ring fenced modernisation fund of £19 million. Access to the fund is only provided for costs directly related to efficiency, structural change and modernisation.

During 2008-09, the CPS managed to secure agreement to access funds of £8.556 million, £7 million of which was deferred for use in 2009-10 and 2010-11. These funds are to be used for the following:

• Assessing progress and performance of the CPS Crown Advocates and external advocates in the Crown Court as part of the advocacy quality management strategy;
• Modernising and reforming the CPS workforce;
• Management and implementation of the Optimum Business Model (OBM); and
• Leadership development training.

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 the CPS Headquarters. Overall the CPS administration outturn was £52 million compared to net provision of £56 million. The underspend of £4 million reflects continuing efficiency savings resulting from the HQ Review, which has enabled a reduction in administration expenditure and reserves held as a contingency against unforeseen pressures were not therefore required.

Crown prosecutions and legal services cover the direct and indirect costs of taking cases to court. After 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, paying allowances and expenses to prosecution witnesses who attend court, the cost of expert testimony 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 £592 million representing an underspend of £11 million. The under spend represents economies made in the year in preparation for the further reduction in available resources in 2009-10 and future years. Over £49 million of the 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.

The CPS uses two fees schemes for the payment of self-employed advocates' fees. The majority of cases in the Crown Court handled by external advocates are paid under the graduated fee scheme (GFS). GFS is a formulaic scheme using a range of measures to determine the fee, and measures include offence category, pages of evidence, numbers of witnesses, outcome type etc. The growth in the size of evidence bundles and a Government focus on bringing more serious crimes to justice creates upward pressure on the fees that the CPS pays.

There is further pressure from practitioner advocates for the CPS to increase prosecution GFS rates to achieve parity with rates being paid to defence advocates.

Over the last three years the number of Crown Court finalisations of defendants charged with indictable-only offences - the most serious cases of all - has risen from 35,654 in 2006-07 to 40,498 in 2008-09. Furthermore, the total number of defendant finalisations in the Crown Court has risen by about 13% over the last three years from 123,476 in 2006-07 to 139,349 in 2008-09.

Crown Court finalisations have cost the CPS around an additional £20 million in prosecution costs expenditure, although the use of the CPS Crown Advocates (CAs) and better control of costs have helped to offset this pressure.

In general, 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.

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

The Department spent a total of £4 million on the purchase of fixed assets. This was £1 million less than the budget. The underspend was caused substantially by slippage in accommodation projects for improvements to leasehold properties and the replacement of office equipment.

The Department's net cash requirement outturn was £618 million against an estimate of £647 million.

During 2008-09 debtors due within one year decreased by £9 million from £58 million to £49 million. This is due mainly to the rates bills being paid monthly through DTZ rather than being prepaid as in previous years and also the increase in the bad debt reserve for cost awards. Debtor days decreased from 187 to 172 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 decreased from £76 million to £59 million and creditor days reduced from 53 days to 46 days. The decrease in creditors is principally due to the 'amounts issued from the Consolidated Fund for supply but not spent at year end' figure falling from £22 million last year to £7 million this year.

TABLE Reconciliation of resource expenditure between Estimates, Accounts and Budgets

Reconciliation of resource expenditure between Estimates, Accounts and Budgets	2008-09 £000	2007-08 £000
Net Resource Outturn (Estimate)	648,032	648,432
Resource Budget (Estimate)	648,032	648,432
Adjustments to additionally include: Consolidated Fund Extra Receipts in the OCS	(165)	(164)
Adjustments to additionally include: Unallocated Resource	(15,638)	(15,554)
Net Operating Cost (Accounts)	632,229	632,714

Management

Sir Ken Macdonald QC was appointed the Director of Public Prosecutions in November 2003 and left the CPS on 31 October 2008. Keir Starmer QC was appointed as the new Director of Public Prosecutions on 1 November 2008. 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, 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 its contribution to the Criminal Justice System PSAs.

During 2008-09 the Board structure remained unchanged with the membership comprising the Director, Chief Executive, Chief Operating Officer, Finance Director, the Chief Executive of OCJR, and three Non-executive Directors. The membership of the Chief Executive of OCJR was under formal review during the period, and as such they did not attend meetings of the Board. Having served a maximum six year term one of the Non-executive Directors left the Board in December 2008.

The effectiveness of the governance arrangements and membership was reviewed during 2008-09 and considered to be working successfully.

The membership of the CPS Board and their attendance during 2008-09 are as follows:

Board Member	Title	Attendance (out of 7 meetings)	Notes
Sir Ken Macdonald QC	DPP	3 (out of 4)	Left CPS 31 October 2008
Keir Starmer QC	DPP	3 (out of 3)	Joined CPS 1 November 2008
Peter Lewis	Chief Executive	7
John Graham	Finance Director	6
Mike Kennedy	Chief Operating Officer	7
Gerard Lemos	Non-executive Director	5
Philip Oliver	Non-executive Director	4 (out of 5)	Left CPS 31 December 2008
Rob Sykes	Non-executive Director	6
Vacant	Acting Chief Executive, OCJR	0	Membership under review during 2008-09

The Board, Corporate Delivery and Management Group (CDMG), Group Chairs Group (GCG) and the Senior Area Business Managers meet twice yearly to debate strategic issues and key operational challenges.

The appointment and termination of staff who are members of the CPS Board, excluding the Non-executive Directors (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 2008-09.

The role of the Board is to:

• ensure the 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 the 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:

• Headquarters Review;
• strengthening of the Finance function; and
• sickness absence.

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.

Examples of business covered by the CDMG include:

• Change Portfolio;
• Stakeholder Management Strategy; and
• Staff Survey.

The membership of the CDMG and their attendance during 2008-09 are as follows:

CDMG Member	Position/Role	Attendance (out of 10 meetings)	Notes
Peter Lewis	Chief Executive	9
John Graham	Finance Director	8
Mike Kennedy	Chief Operating Officer	9
David Jones	Business Information Systems Director	10
Roger Daw	Policy Director	8
Ros McCool	Human Resources Director	9
Séamus Taylor	Equality and Diversity Director	7 (out of 9)	Left CDMG after February meeting
Philip Oliver	Non-executive Director	5 (out of 7)	Left CDMG after December meeting
Karen Sawitzki	Senior Business Manager	9
Dru Sharpling	CCP London	10
Pam Teare	Head of Communication	9

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.

Examples of business covered by the GCG include:

• Optimum Business Model;
• Advocacy Quality Assurance; and
• Modernising Charging.

The membership of the GCG and their attendance during 2008-09 are as follows:

GCG Member	Position/Role	Attendance (out of 10 meetings)	Notes
Peter Lewis	Chief Executive	9
Mike Kennedy	Chief Operating Officer	10
Paul Whittaker	Group Chair Merseyside & Cheshire	10
Neil Franklin	Group Chair West / North Yorkshire	8
Martin Goldman	CCP CPS Direct	8
Dru Sharpling	CCP London	10
John Holt	Group Chair Manchester	8
David Blundell	Group Chair West Midlands	7
Nicola Reasbeck	Group Chair North East	7 (out of 8)	Left GCG after January meeting
Wendy Williams	Group Chair North East	4 (out of 4)	Joined GCG at December meeting
Nigel Cowgill	Group Chair South Yorkshire & Humberside	5 (out of 6)	Left GCG after October meeting
Barbara Petchey	Group Chair South Yorkshire & Humberside	4 (out of 4)	Joined GCG at December meeting
Bob Marshall	Group Chair North West	8
Chris Woolley	Group Chair Wales/Cymru	9
Barry Hughes	Group Chair South West	9
Nick Hawkins	Group Chair Wessex	9
Roger Coe-Salazar	Group Chair South East	8
Baljit Ubhey	Group Chair Thames & Chiltern	8
Ken Caley	Group Chair Anglia	8
Judith Walker	East Midlands	10
Alison Saunders	Casework Divisions	6

Audit Committee

The Audit Committee (AC) supports the Accounting Officers in their responsibilities for issues of internal control, risk and governance by reviewing the comprehensiveness and integrity of assurances in meeting the CPS Board and Accounting Officers' assurance needs. The AC's role and responsibilities remained unchanged throughout the year.

Examples of business covered by the AC include:

• Reviewed assurances received in respect of the systems and processes of internal control, risk and governance, which included those provided by Internal Audit, management, the NAO and HMCPSI;
• reviewed the Statement on Internal Control and Resource Accounts for 2008-09, including the observations by the NAO in their capacity as external auditors, and recommended acceptance by the Board; and
• approved and monitored the Internal Audit programme for 2008-09 and the external auditors' strategy and plan for the 2008-09 Resource Accounts.

AC Member	Position/Role	Attendance (out of 5 meetings)	Notes
Rob Sykes	Non-executive Director (Chair)	5
David Judd	Non-executive member	5
Paula Abrahams	CCP Essex	5
Gail Pessol	ABM Lincolnshire	1 (out of 2)	Joined AC at the October meeting. Left AC after the January meeting
Claire Lindley	CCP Cumbria	3 (out of 3)	Joined AC at the October meeting

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 policy of equal opportunities and aims to create and sustain a working environment that is fair to all. Through commitment, action and review, the aim is to ensure that employment, training and development opportunities are appropriate to the abilities of the individual regardless of their sex, race, colour, nationality, ethnic or national origins, disability, religion, age, marital status, working pattern, sexual orientation or gender reassignment.

This policy has been jointly agreed and endorsed by the management and trade union sides of the Departmental Whitley Council. Both parties have affirmed their full support for the principle of equality of opportunity, and are determined to ensure that this policy is effectively implemented at all levels of the Service.

The Department's policy is based on the legislation governing equal opportunities and aims to promote equality of opportunity by following both the spirit and the letter of that legislation. The legislation is: the Sex Discrimination Act 1975, the Sex Discrimination (Gender Reassignment) Regulations 1999, the Race Relations Act 1976 and the Disability Discrimination Act 1995.

An Equal and Diverse Prosecution Service

The CPS continually strives to improve its reputation on equality and diversity issues and its work has been positively recognised through the Cabinet Office Capability Review of the CPS in June 2007. The Service is moving on to a third phase in its work to further equality and diversity. It began with an agenda setting and awareness raising period, and then in 2005 the Service moved to an outcome and performance based approach. It will now build on this work and focus on bringing about cultural change to help to secure lasting transformational change on equality and diversity.

The CPS is committed to further progress on equality and diversity in employment and is implementing a Diversity Delivery Plan which sets out what we will do to achieve 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 INCIDENTS FORMALLY REPORTED TO THE INFORMATION COMMISSIONER'S OFFICE IN 2008 - 09

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

TABLE 2: SUMMARY OF OTHER PROTECTED DATA RELATED INCIDENTS IN 2008 - 09

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.

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	1
III	Insecure disposal of inadequately protected electronic equipment, devices or paper documents	0
IV	Unauthorised disclosure	2
V	Other	11

Explanatory Notes:

• the losses relate to a very limited amount of personal data and in most instances related to a single case. To put the losses into context, the CPS handles approximately 1.3 million defendant cases in a year. Most of these files make at least one journey to court. In addition CPS sends evidence to both the court and defendants / solicitors / barristers.
• Included
  • Category I - 1 incident related to a loss from within a CPS building.
  • Category II - 1 incident related to a theft of information from CPS at a court.
  • Category IV - 1 incident relates to a fax being sent to the incorrect number and 1 incident relates to victim details being served on defence in error.
  • Category V - 11 personal data loss incidents relate to information in transit.
• Minor incidents have been excluded for the purposes of this report.
• Lost/Stolen Laptops/Blackberries: The figures in Table 2 do not include lost or stolen Laptops and Blackberries. No data losses have resulted from these incidents as the equipment is encrypted to Government standard and the data is therefore fully protected against compromise.

Totals:

Lost/Stolen Blackberries	6
Lost/Stolen Laptops	3

Staff Engagement

Employee engagement is described as employees' willingness and ability to invest their personal effort in the success of the CPS. The CPS recognises that this is critical to retaining key talent and securing high levels of individual, team and organisational performance.

The CPS carries out staff surveys to assess employees' experiences and measure their level of engagement. Key actions have been identified for improvement and incorporated into CPS projects and programmes. To reinforce its importance, local staff engagement has been measured through robust 'People Measures' activities across the Service.

The CPS trades unions play an important part in staff engagement through their wider role in representing employees. During the year, the CPS and the trades unions have developed and implemented an Employee Relations Framework Agreement. This sets out new arrangements to promote effective negotiation, consultation and information sharing. It forms part of a wider, ongoing strategy and programme to build constructive, forward-looking employee relations within the CPS.

In 2008, the CPS agreed a reward and recognition strategy that described how the CPS would modernise its pay structures over the three years to April 2011. These changes form part of the three-year pay award, which was implemented in November 2008.

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.

Sickness Absence

A renewed focus by the CPS Board in 2008-09, coupled with the launch of our Attendance Management and Wellbeing Strategy, which promoted the proactive and sensitive management of absence, led to an improvement in sickness absence performance. There was a reduction in average working days lost to sickness - down from 9.4 days per employee in the year to March 2008, to 8.5 days in the year to March 2009.

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 2008-09 the CPS settled 88.10% of undisputed invoices within 30 days of receipt and 91.53% of witness claims within 5 days. The CPS paid £797 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 £103,000, and comprised £92,000 for the audit of the CPS 2008-09 Resource Accounts and £11,000 for the audit of IFRS Trigger Point 2. Auditors' remuneration is a notional cost (see Note 8).

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.

Keir Starmer QC
Accounting Officer
25 June 2009

Statement of Accounting Officer's 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 the 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. The CPS Board is supported by the Corporate Delivery and Management Group, the Group Chairs Group and the Audit Committee. The CPS is organised into geographical Areas each headed by a Chief Crown Prosecutor and organised into Groups under the oversight of a Group Chair. In 2008-09 line management responsibility for Chief Crown Prosecutors was assigned to Group Chairs. Group Chairs are accountable to me for legal decisions and casework and, in the first instance to the Chief Executive for the delivery of the CPS objectives and PSA targets, and for managing local risks.

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 the CPS for the year ended 31 March 2009 and up to the date of approval of the annual report and accounts, and accords with HM 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 assists the Board by providing regular and detailed oversight of our risk management capability and the management of key corporate risks (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 2008-09 and provided update reports to the Board, the Corporate Delivery and Management Group 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.

Group Chairs and Chief Crown Prosecutors are personally responsible for maintaining effective risk management arrangements and ensuring an effective system of internal control is operated in their Groups and Areas. With the Chief Executive, I personally take part in a quarterly round of performance review meetings with Areas, including any key challenges or risks across key performance indicators and business change projects. For 2008-09, the performance framework was revised to provide a broader range of indicators and a clearer alignment between Area performance measures and the Department's strategic priorities.

In addition, in the latter part of 2008-09 the Chief Executive and I started an extensive round of Area visits to engage with Area managers and staff at all levels. Throughout the year Board meetings were arranged at Area offices to allow the Board to meet with staff. Also, Area and Casework Divisions procedures for identifying and managing their business risks are assessed on a two year cycle: 22 Areas were reviewed in 2008-09. A yearly performance and delivery risk review 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 were reviewed, updated and re-issued in 2008-09.

Risk management guidance is provided at the start of each business planning round. Risk training is provided on demand but take up in the year was limited. In response, a range of learning opportunities were promoted in the final quarter and at the end of the year, work was done to integrate risk into core management training provided across the Service. 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 and the Centre of Excellence, 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. Formal Risk Management is applied to strategic corporate risks, Group and Area operational and business risks and key business change programmes. For 2008-09 the focus for corporate and Area risks was the delivery of the PSA targets and the other priority business delivery improvement programmes. 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;
• our capacity and capability to sustain delivery of the PSA targets and business change commitments;
• effective management of stakeholder relations that impact on delivery of core business, the PSA targets and business change commitments;
• the impact on reputation from adverse publicity;
• efficiency delivery and funding constraint effects on service delivery and public confidence;
• the impacts on effective delivery of core business and CPS reputation arising from a potential change to the responsibility for charging decisions (added October 2008); and
• information handling and security risks (added October 2008).

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 agrees and reviews the corporate risk register twice in the year and receives quarterly performance and risk highlight reports, and separate reports of any escalated risks. No corporate risks were escalated to the Board in 2008-09.

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. A fundamental review of the CPS change programme in 2008-09 streamlined and re-prioritised the portfolio. Linked to this, further work to improve the management and governance will be carried into 2009-10. Key business change programmes undergo Office of Government Commerce style 'Gateway' or 'Health Check' reviews.

For information handling and security 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. Our approach to information risk management is to integrate it into our existing business and change risk arrangements. Work to meet all of the Hannigan and Cabinet Office Security Framework requirements, including final development of information risk policy and our plans to further develop the appropriate culture and awareness, will not be completed until 2009-10. Whilst we recognize that we can improve the level of compliance with our information handling and security standards, I am confident that there is an adequate framework of processes and procedures against which we can adequately deliver and monitor our performance.

The Board fully met their programmed corporate risk identification and review commitments and their governance role, including the progress of managing the associated key risks and issues in 2008-09. The Corporate Delivery and Management Group reviewed corporate risks on two of the four planned occasions but tracked progress using the performance and risk summary report. I am satisfied 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 Groups, 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.

Group and Area risk registers were reviewed at the start of the year to identify trends and common themes. No issues were escalated to the corporate risk register.

In addition, we have undertaken specific review of risks around:

• efficiency programme delivery;
• fraud; and
• key supplier and contractor resilience.

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 formal 5 year risk development programme came to an end on 31 March 2009; however, we are committed to continuing development around:

• further embedding risk - we are addressing this by continuing review and development of awareness, maintaining and updating the level of support and guidance provided, promoting a programme of risk training integrated into our core management training wherever practical, and continuing with our quality assurance arrangements;
• demonstrating improved risk handling and better delivery of planned outcomes - we are addressing this with our work to develop our change management and delivery monitoring arrangements, and by maintaining our regular performance and risk management review programme; and
• managing risks with partners - we are continuing to address this by working with Office of the Criminal Justice Reform on risks to the delivery of criminal justice PSA targets, a joint and formal approach for joint developments, e.g. the Criminal Justice Speedy Simple Summary system, in the wider context by consulting risk representatives across Government in the HM Treasury sponsored Risk Improvement Group.

I am satisfied that, although we could further improve the application of our risk management framework, we have reached a reasonable level of integration and 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 a plan to address weaknesses and ensure continuous improvement of the system is in place.

In line with the Corporate Governance Code of Practice and to reflect changes in the Area line management arrangements we again reviewed our governance arrangements in 2008-09. Although we have reaffirmed the reliability of the basic Board and sub-group/committee structure, the Board is considering refinements to address changes, due to attrition, to the balance of executive and non-executive members; increasing the Board's profile across the Service; and developing a more clearly delineated and complementary work programme for each of the Group Chairs Group and Corporate Delivery and Management Group that minimises duplication of business.

The responsibilities of the Board and sub-groups are clearly defined. During 2008-09, 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 and risk management issues; 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.

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

The Department has an internal audit function that operates to the 'Government Internal Audit Standards' guidance. They submit reports against progress; key findings and the level of assurance that can be provided at each Audit Committee meeting. The Audit Committee reviews and approves the annual report to me by 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 2008-09, to support our commitment to the Code of Good Practice on Corporate Governance and the guidance contained in HM Treasury's Audit Committee Handbook, the Audit Committee undertook a self assessment, facilitated by the National Audit Office. The key improvements to be implemented in 2009-10 are to rebalance the proportion of executive and non-executive members to take a systematic approach to ensuring the committee has the necessary skill set.

At the end of the calendar year each Chief Crown Prosecutor and HQ Director completes a certificate of assurance. The scope and focus for the certificates were updated for 2008. 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 CPS policies, aims and objectives. All certificates are supported by a portfolio of evidence and are validated by Internal Audit against HM Crown Prosecution Service Inspectorate reports and other performance information. For 2008-09, 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 2009-10: providing the desired level of service to Victims and Witnesses; ensuring continuing base levels of security are maintained; and levering best use from the staff performance and development reporting system.

Our quarterly performance review programme with Group Chairs and 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 2008-09 they undertook a programme of inspection that included Area, the CPS London's Fraud Prosecution Service, CPS Direct and HQ casework divisions. A joint regional inspection of Lancashire; and thematic reviews of safeguarding children, charging, decision making and conduct cases arising from road traffic offences involving fatalities, and the Plea and Sentence Documentation Scheme were also carried out.

Significant internal control issues

I have two significant internal control issues to report for 2008-09; all previously reported issues have been cleared.

Employment Tribunal Judgement that attracted significant media interest: in 2008-09 an Employment Tribunal made a remedies judgement against the CPS that attracted significant media interest. (The monetary award is reflected in the Losses Statement). The judgement indicated that the CPS had acted unfairly by not treating the suspension of an officer as disciplinary action as there was a difference between the written disciplinary policy and that applied in practice. Although some aspects of the judgement are being contested and are subject to appeal, there are key lessons to be addressed.

Since the original issue arose in 2001 we have improved the internal control in this area by clarifying our disciplinary policy; providing focussed training and coaching; and implementing a monitoring framework for all disciplinary actions. In addition, we have refreshed our equality and diversity training programme several times over this period.

Digital media receipt and logging: in 2007-08, we discovered a data disk containing DNA crime scene profiles from a European police service had not been properly logged, reviewed or actioned. There is no suspicion that the data was compromised in any way, but it was not securely stored at times whilst in possession of the CPS.

There was a long delay in accessing the data, however, ultimately, none of the information thereon has been added to UK databases, and the information on the disk alone did not provide a basis for any criminal proceedings in the UK.

Nonetheless, this was an unacceptable standard for handling sensitive data and in 2008-09 we introduced a single point of receipt for materials and information received into the relevant Directorate, with new logging and management check procedures, including materials received as attachments to e-mails. Also, we agreed with the National Police Improvement Agency that future exchange of data will include identification of senior contacts in each jurisdiction for the secure transmission handling and effective use of DNA information.

Keir Starmer QC
Accounting Officer
25 June 2009

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 2009 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 Strategic Objective 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 which comprises the Management Commentary, the Operating Financial Review and the community engagement agenda 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. This other information comprises the unaudited part of the Remuneration Report, the Director's Letter to the Attorney General, Introduction, Summary of Performance and Achievements, CSR 2007 progress on delivery, Improving performance in the magistrates' courts, Completing and embedding the Advocacy Strategy, Focusing support to victims and witnesses and Playing its part in achieving the agreed PSA targets for 2008-11, Restructuring the delivery model and Ensuring that the CPS leads and manages well. 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 2009 and the net cash requirement, net resource outturn, net operating cost, operating costs applied to departmental strategic 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 which comprises the Management Commentary, Operating and Financial Review, and Community Engagement Agenda 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.

Amyas C E Morse
Comptroller and Auditor General

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

30 June 2009

The maintenance and integrity of the CPS'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 web site.

Statement of Parliamentary Supply
Summary of Resource Outturn 2008-09

Description	Note	2008-09 £000 Estimate Gross expenditure	2008-09 £000 Estimate A in A	2008-09 £000 Estimate Net Total	2008-09 £000 Outturn Gross expenditure	2008-09 £000 Outturn A in A	2008-09 £000 Outturn Net Total	2008-09 £000 Net total outturn compared with Estimate: saving/(excess)	2007-08 £000 Outturn Net Total
Request for resources 1: Increasing public confidence in the criminal justice system through fair, firm and effective prosecutions	2	709,815	61,783	648,032	689,227	56,833	632,394	15,638	632,878
Total resources	3	709,815	61,783	648,032	689,227	56,833	632,394	15,638	632,878
Non-operating cost A in A	5	-	-	-	-	-	-	-	-

The notes below form part of these accounts

Net cash requirement 2008-09

Description	Note	2008-09 £000 Estimate	2008-09 £000 Outturn	2008-09 £000 Net total outturn compared with Estimate: saving/(excess)	2007-08 £000 Outturn
Net cash requirement	4	646,529	618,048	28,481	627,039

The notes below form part of these accounts

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

Description	Note	2008-09 Forecast £000 Income	2008-09 Forecast £000 Receipts	2008-09 Outturn £000 Income	2008-09 Outturn £000 Receipts
Total	5	-	-	165	153

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

The notes below form part of these accounts

Operating Cost Statement
for the year ended 31 March 2009

Description	Note	2008-09 £000 Staff Costs	2008-09 £000 Other Costs	2008-09 £000 Income	2008-09 £000	2007-08 £000
Administration Costs on HQ and Central Services
Staff costs	7	27,357				27,312
Other administration costs	8		26,181			26,697
Operating income	10			(1,821)		(1,650)
Crown Prosecutions and Legal Services
Staff costs	7	338,583				333,576
Other programme costs	9		297,106			302,973
Less: income	10			(55,177)		(56,194)
Totals		365,940	323,287	(56,998)		632,714
Net operating cost	3				632,229	632,714
Net resource outturn	4				632,394	632,878

The notes below form part of these accounts

Statement of Recognised Gains and Losses
for the year ended 31 March 2009

Description	Note	2008-09 £000	2007-08 £000
Net (loss) / gain on revaluation of tangible fixed assets	18	(944)	2,299
Net gain on revaluation of intangible fixed assets	18	-	7
Recognised (loss) / gain for the financial year		(944)	2,306

During 2008-09 there was significant downward revaluation of Land and Buildings tangible fixed assets. To reflect this, part of the movement in valuation has been reflected via a restatement of reserves rather than via a charge in the Operating Cost Statement.

The notes below form part of these accounts

Balance Sheet
as at 31 March 2009

Description	Note	2,009 £000 Breakdown	2,009 £000	2,008 £000 Breakdown	2,008 £000
Fixed assets:
Tangible assets	11		26,885		28,114
Intangible assets	12		371		627
Debtors falling due after more than one year	13		1,563		2,400
Current assets:
Debtors	13	48,820		57,680
Cash at bank and in hand	14	6,663		23,029
Total current assets		55,483		80,709
Creditors (amounts falling due within one year)	15	(59,073)		(75,670)
Net current assets			(3,590)		5,039
Total assets less current liabilities			25,229		36,180
Provisions for liabilities and charges	16		(16,383)		(12,715)
Total less provisions			8,846		23,465
Taxpayers' equity:
General fund	17		3,223		16,293
Revaluation reserve	18		5,623		7,172
Total equity			8,846		23,465

The notes below form part of these accounts

Keir Starmer QC
Accounting Officer
25 June 2009

Cash Flow Statement
for the year ended 31 March 2009

Description	Note	2008-09 £000	2007-08 £000
Net cash outflow from operating activities	19(a)	(614,001)	(623,543)
Capital expenditure and financial investment	19(b)	(3,894)	(2,188)
Payments of amounts due to the Consolidated Fund		(1,222)	(2,293)
Financing	19(d)	602,751	646,973
(Decrease)/increase in cash in the period	19(e)	(16,366)	(18,949)

The notes below form part of these accounts

Statement of Operating Costs by Departmental Strategic Objective
for the year ended 31 March 2009

Departmental Strategic Objective

To bring offenders to justice, improve services to victims and witnesses and promote confidence, by applying the Code for Crown Prosecutors, 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.

	2008-09 £000 Gross	2008-09 £000 Income	2008-09 £000 Net	2007-08 £000 Gross	2007-08 £000 Income	2007-08 £000 Net
Objective	689,227	(56,998)	632,229	690,558	(57,844)	632,714
Net operating costs	689,227	(56,998)	632,229	690,558	(57,844)	632,714

See Note 20

The notes below 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 2008-09 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 Strategic 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 in existing use 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:

a) property on the departmental estate, title to which is held by the CPS; and

b) 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.

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

All intangible fixed assets are restated to current value in existing use each year by indexation up to the year-end using Price Index Numbers for Current Cost Accounting, published by the Office for National Statistics.

1.4 Depreciation and Amortisation

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:

a) the remaining life of the property lease;

b) 10 years; or

c) 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 amortised 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 due to the Consolidated Fund, which in accordance with the 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 objective in the Statement of Operating Costs by Departmental Strategic Objective.

Programme income 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 asset 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 remains a very 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 2009.

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:

(a) cash balances with the Office of the Paymaster General and donated assets where the charge is nil; and

(b) 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, 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 FRS12 are stated at discounted amounts and the amount reported to Parliament separately noted. Contingent liabilities that are not required to be disclosed by FRS12 are stated at the amounts reported to Parliament. 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

Description	2008-09 £000 Admin	2008-09 £000 Other current	2008-09 £000 Gross resource expenditure	2008-09 £000 A in A	2008-09 £000 Outturn Net Total	2008-09 £000 Estimate Net Total	2008-09 £000 Net Total outturn compared with Estimate	2007-08 £000 Prior year outturn
Request for Resources 1: Increasing public confidence in the criminal justice system through fair, firm and effective prosecutions
Administration costs on HQ and Central Services	53,538	-	53,538	(1,803)	51,735	56,352	4,617	52,362
Crown Prosecutions and Legal services	-	635,689	635,689	(55,030)	580,659	591,680	11,021	580,516
Total	53,538	635,689	689,227	(56,833)	632,394	648,032	15,638	632,878
Resource Outturn	53,538	635,689	689,227	(56,833)	632,394	648,032	15,638	632,878

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

1. Net total outturn was £15.638 million less than the Estimate, representing 2.4% of net provision. The underspend represents continued efficiency savings made during the year to meet stricter budgetary allocations. In particular, expenditure on Crown prosecutions and legal services was £11 million lower than the Estimate.

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

Description	Note	2008-09 £000 Outturn	2008-09 £000 Supply Estimate	2008-09 £000 Outturn compared with Estimate	2007-08 £000 Outturn
Net Resource Outturn	2	632,394	648,032	15,638	632,878
Non-supply income (CFERs)	5	(165)	-	165	(164)
Net operating cost		632,229	648,032	15,803	632,714

3(b) Outturn against final Administration Budget

Description	2008-09 £000 Budget	2008-09 £000 Outturn	2007-08 £000 Outturn
Gross Administration Budget	58,252	53,624	54,006
Less: Income allowable against the Administration Budget	(1,900)	(1,803)	(1,647)
Net outturn against final Administration Budget	56,352	51,821	52,359

4. Reconciliation of resources to cash requirement

Reconciliation of resources to cash requirement	Note	Estimate £000	Outturn £000	Net total outturn compared with Estimate: saving/ (excess)
Resource Outturn	2	648,032	632,394	15,638
Capital: Acquisition of fixed assets	11, 12 and 19	5,300	3,894	1,406
Capital: Investments		-	-	-
Non-operating A in A: Proceeds of fixed asset disposals		-	-	-
Accruals adjustments: Non-cash items	8 and 9	(8,476)	(18,941)	10,465
Accruals adjustments: Changes in working capital other than cash		-	(3,502)	3,502
Accruals adjustments: Use of provisions	16	1,673	4,203	(2,530)
Net cash requirement		646,529	618,048	28,481

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

(i) Net total outturn was £15.638 million less than the Estimate, representing 2.4% of net provision. The underspend represents continued efficiency savings made during the year to meet stricter budgetary allocations. In particular, expenditure on Crown prosecutions and legal services was £11 million lower than the Estimate.

(ii) Expenditure on acquisition of fixed assets was £1.406 million less than the Estimate. This was due to slippage in accommodation projects and replacement of office equipment.

(iii) Non-cash items were £10.465 million higher than the Estimate due principally to:

(a) an increase in the doubtful debt provision resulting from a further refinement of the basis of estimation (£5.2 million), and

(b) an increase in the early retirement provision resulting from additional leavers (£1.6 million).

(iv) Changes in working capital other than cash were £3.502 million lower than the Estimate due principally to working capital management.

(v) Use of provisions was £2.53 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

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

Analysis of income payable to the Consolidated Fund	Note	2008-09 Forecast Income £000	2008-09 Forecast Receipts £000	2008-09 Outturn Income £000	2008-09 Outturn Receipts £000
Operating income and receipts - excess A in A	6	-	-	-	-
Non-operating income and receipts - excess A in A		-	-	-	-
Subtotal		-	-	-	-
Other operating income and receipts not classified as A in A	6	-	-	165	153
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		-	-	165	153

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

Income	Note	2008-09 £000	2007-08 £000
Operating income
Administration		1,821	1,650
Programme		56,192	57,288
Netted-off gross expenditure in sub-head		(1,015)	(1,094)
Total Operating income	10	56,998	57,844
Income authorised to be appropriated-in-aid
Administration		1,804	1,647
Programme		55,029	56,033
Total Income authorised to be appropriated-in-aid		56,833	57,680
Operating income payable to the Consolidated Fund
Administration		17	3
Programme		148	161
Total Operating income payable to the Consolidated Fund	5	165	164

7. Staff numbers and related costs

Staff costs comprise:	2008-09 £000 Total	2008-09 £000 Permanently employed staff	2008-09 £000 Others	2007-08 £000 Total
Wages and salaries	287,708	278,712	8,996	284,202
Social security costs	22,266	22,266	-	22,038
Other pension costs	55,966	55,966	-	54,648
Sub Total	365,940	356,944	8,996	360,888
Less recoveries in respect of outward secondments	(1,497)	(1,497)	-	(1,381)
Total net costs	364,443	355,447	8,996	359,507

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 2008-09, employers' contributions of £55,790,416 were payable to the PCSPS (2007-08: £54,521,376) 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 usually every four years following a full scheme valuation. From 2009-10, the rates will be in the range 16.7 to 24.3 percent. The contribution rates are set to meet the cost of the benefits accruing during 2008-09 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, a stakeholder pension with an employer contribution. Employers' contributions of £161,931 (2007-08: £116,719) were paid to one or more of the panel of three appointed stakeholder pension providers. Employer contributions are age-related and range from 3 to 12.5 per cent (2007-08: 3 to 12.5 per cent) of pensionable pay.

Employers also match employee contributions up to 3 per cent of pensionable pay. In addition, employer contributions of £13,949, 0.8 per cent (2007-08: £9,883, 0.8 per cent) 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 balance sheet date were £15,956. Contributions prepaid at that date were £Nil.

12 individuals (2007-08: 12 individuals) retired early on ill-health grounds; the total additional pension granted to them amounted to £40,077 (2007-08: £25,159).

Average number of persons employed

The average number of whole-time equivalent persons employed during the year was as follows.

Objective	2008-09 Number Total	2008-09 Number Permanent staff	2008-09 Number Others	2007-08 Number Total
To ensure the effective delivery of justice.	8,396	8,216	180	8,520
Total	8,396	8,216	180	8,520

8. Other Administration Costs

Other Administration Costs	Note	2008-09 £000	2008-09 £000	2007-08 £000	2007-08 £000
Rentals under operating leases:
Hire of office equipment		94		354
Other operating leases		5,386		6,487
Total Rentals under operating leases			5,480		6,841
PFI service charges:
Off-balance sheet contracts	23		645		597
Non cash items
Cost of capital charge		(46)		(44)
Auditors' remuneration (Note a and b)		103		-
Total Non cash items			57		(44)
Other expenditure
Consultancy		3,642		3,404
Accommodation and associated costs		3,627		3,866
Travel and subsistence		2,213		2,224
Training		1,614		1,963
Facilities management		1,342		993
Printing and stationery		1,262		782
Non PFI contract IT costs		1,262		1,085
Recruitment costs		783		773
Postage and carriage		394		391
Communications		177		189
Other expenditure		3,683		3,632
Total Other expenditure			19,999		19,303
Total Other Administration Costs			26,181		26,697

Note a - The audit fee comprises £92,000 for the audit of the CPS 2008-09 Resource Accounts and £11,000 for the audit of IFRS Trigger Point 2. There has been no auditors' remuneration for non-audit work.

Note b - In 2008-09 Auditors' remuneration was reclassified from other programme costs to other administration costs.

9. Programme Costs

Programme Costs	Note	2008-09 £000	2008-09 £000	2007-08 £000	2007-08 £000
Rentals under operating leases:
Hire of office equipment		906		1,640
Other operating leases		21,382		21,066
Total rentals under operating leases			22,288		22,706
PFI service charges:
Off-balance sheet contracts	23		47,668		49,694
Non cash items
Depreciation		4,656		4,783
Amortisation		254		181
Impairment		-		149
Loss on disposal of fixed assets		4		-
Loss on revaluation	11	17		88
Cost of capital charge:
Civil Estate		179		210
Other items		435		722
Change in bad debt provision	13	5,468		4,494
Auditors' remuneration (Note a)		-		92
Provisions:
Provided in year	16	7,930		5,562
Unrequired provision written back	16	(188)		-
Unwinding of discount on provisions	16	129		154
Total non cash items			18,884		16,435
Other expenditure
Advocate fees		127,133		139,672
Accommodation and associated costs		20,550		18,514
Expert witness fees		7,470		6,296
Communications		6,725		6,568
Non-expert witness expenses		6,412		6,349
Travel and subsistence		5,415		5,068
Printing and stationery		5,335		5,318
Postage and carriage		5,246		4,752
Prosecution transcripts and translations		3,611		2,698
Prosecution presentational equipment		3,159		2,719
Costs awarded to CPS written off	28	3,100		2,867
Training		1,555		1,385
Interpreters and translators		1,510		1,464
Publications		1,194		1,129
Consultancy		778		1,450
Other expenditure		9,073		7,889
Total other expenditure			208,266		214,138
Total programme costs			297,106		302,973
Less: programme income	6		(55,177)		(56,194)
Net programme costs			241,929		246,779

Note a - In 2008-09 Auditors' remuneration was reclassified from other programme costs to other administration costs.

10. Income

Type of income	2008-09 £000	2007-08 £000
Administration income:
Rental receivable from external tenants	1,164	1,142
Consolidated Fund extra receipts	17	3
Other	640	505
Programme income:
Costs awarded to the CPS	38,176	39,747
Recovered Assets Incentivisation Fund	10,900	10,068
Rental receivable from other departments	1,015	1,095
Netted-off gross expenditure in sub-head	(1,015)	(1,095)
Rental receivable from external tenants	848	1,119
Income in respect of letting, disposal, vacation or occupation of property or accommodation	295	-
Consolidated Fund extra receipts	148	161
Other	4,810	5,099
Total income	56,998	57,844

11. Tangible fixed assets

Tangible fixed assets	Freehold Land and Buildings £000	Leasehold Improvements £000	Furniture and Fittings £000	Information Technology £000	Total £000
Cost or valuation at 1 April 2008	6,642	5,977	35,647	2,031	50,297
Additions	28	506	2,560	1,297	4,391
Disposals	-	-	-	(4)	(4)
Revaluation	(1,908)	(23)	845	(66)	(1,152)
Cost or valuation at 31 March 2009	4,762	6,460	39,052	3,258	53,532
Depreciation at 1 April 2008	746	1,817	17,982	1,638	22,183
Charged in year	266	708	3,334	305	4,613
Disposals	-	-	-	-	-
Revaluation	(557)	(14)	479	(57)	(149)
Depreciation at 31 March 2009	455	2,511	21,795	1,886	26,647
Net book value at 31 March 2009	4,307	3,949	17,257	1,372	26,885
Net book value at 31 March 2008	5,896	4,160	17,665	393	28,114

Freehold land and buildings were valued at 31 March 2005 at £5,775,000 on the basis of existing use value by an external firm of Chartered Surveyors, Donaldsons. The valuations were undertaken in accordance with the UK Practice Statement 1.3 of the Royal Institution of Chartered Surveyors (RICS) Appraisal and Valuation Standards published 1 May 2003.

The Accounting Officer is not aware of any material changes in the carrying value of freehold land and buildings and therefore there have been no interim valuations, other than indexation, since 31 March 2005.

Other tangible assets are revalued on the basis of latest available indices.

The majority of IT assets in use in the business are held under a PFI contract as detailed in Notes 1.10 and 23.

12. Intangible fixed assets

Intangible fixed assets comprise software licences.

Software licences	Total £000
Cost or valuation at 1 April 2008	1,005
Additions	-
Disposals	-
Revaluation	(32)
Cost or valuation at 31 March 2009	973
Amortisation at 1 April 2008	378
Charged in year	242
Disposals	-
Revaluation	(18)
Amortisation at 31 March 2009	602
Net book value at 31 March 2009	371
Net book value at 31 March 2008	627

13. Debtors

13 (a) Analysis by type

Description	2008-09 £000	2007-08 £000
Amounts falling due within one year:
Trade debtors (Note a)	43,611	40,284
Doubtful debt provision for costs awarded to the CPS	(16,180)	(10,712)
Deposits and advances	380	373
Other debtors (Note b)	652	1,341
Prepayments: PFI	751	751
Prepayments: Other	7,641	13,335
Accrued income	11,965	12,308
Amounts due from the Consolidated Fund in respect of supply	-	-
Total falling due within one year	48,820	57,680
Amounts falling due after more than one year:
Prepayments: PFI	1,502	2,253
Prepayments: Other	61	147
Total Debtors	50,383	60,080

Note a - It is not possible to analyse cost award debtors by amounts falling due within one year and amounts falling due after one year.

Note b - Included within other debtors is £12k (2007-08: £Nil) representing unexpected receipts due to the Consolidated Fund once the debts are collected.

13(b) Intra-Government Balances

Intra-Government Balances	Amounts falling due within one year £000 2008-09	Amounts falling due within one year £000 2007-08	Amounts falling due after more than one year £000 2008-09	Amounts falling due after more than one year £000 2007-08
Balances with other central government bodies	3,606	2,835	-	-
Balances with local authorities	242	5,361	48	131
Balances with NHS Trusts	-	1	-	-
Balances with public corporations and trading funds	1	-	-	-
Total intra-government balances	3,849	8,197	48	131
Balances with bodies external to government (Note a)	44,971	49,483	1,515	2,269
Total debtors at 31 March	48,820	57,680	1,563	2,400

Note a - It is not possible to analyse cost award debtors by amounts falling due within one year and amounts falling due after one year.

14. Cash at bank and in hand

Cash at bank and in hand	2008-09 £000	2007-08 £000
Balance at 1 April	23,029	4,080
Net change in cash balances	(16,366)	18,949
Balance at 31 March	6,663	23,029
Balance held at Office of HM Paymaster General	6,640	23,003
Balance held at commercial banks and as cash in hand	23	26
Balance at 31 March	6,663	23,029

15. Creditors

15(a) Analysis by type

Creditors Analysis by type	Note	2008-09 £000	2007-08 £000
Amounts falling due within one year:
VAT		47	78
Other taxation and social security		7,617	7,441
Trade creditors		9,481	7,748
Other creditors		5,368	5,148
Accruals and deferred income		29,886	32,226
Total falling due within one year:		52,399	52,641
Amounts issued from the Consolidated Fund for supply but not spent at year end		6,632	21,929
Received Consolidated Fund extra receipts due to be paid to the Consolidated Fund	19(e)	30	1,100
Receivable Consolidated Fund extra receipts due to be paid to the Consolidated Fund	13(a)	12	-
Total Creditors		59,073	75,670

15(b) Intra-Government Balances

Intra-Government Creditor Balances	Amounts falling due within one year £000 2008-09	Amounts falling due within one year £000 2007-08	Amounts falling due after more than one year £000 2008-09	Amounts falling due after more than one year £000 2007-08
Balances with other central government bodies	20,534	37,003	-	-
Balances with local authorities	458	824	-	-
Balances with NHS Trusts	14	-	-	-
Balances with public corporations and trading funds	5	2	-	-
Total intra-government balances	21,011	37,829	-	-
Balances with bodies external to government	38,062	37,841	-	-
Total creditors at 31 March	59,073	75,670	-	-

16. Provisions for liabilities and charges

Description	Early departure costs £000	Other £000
Balance at 1 April 2008	11,953	762
Provided in the year	4,781	3,149
Provisions not required written back	-	(188)
Provisions utilised in the year	(3,282)	(921)
Unwinding of discount	129	-
Balance at 31 March 2009	13,581	2,802

Early departure costs

The CPS meets the additional costs of benefits beyond the normal PCSPS benefits in respect of employees who retire early by paying the required amounts annually to the PCSPS over the period between early departure and normal retirement date. The CPS provides for this in full when the early retirement programme becomes binding on the CPS by establishing a provision for the estimated payments discounted by the HM Treasury discount rate of 2.2 per cent in real terms.

Other provisions

Other provisions comprise outstanding compensation claims for personal injury, employment tribunal legal claims and dilapidation claims served by landlords at the expiry of the lease on a property occupied by the CPS. In respect to compensation claims, provision has been made for the litigation against the Department. The provision reflects all known legal claims where legal advice indicates that it is more than 50 per cent probable that the claim will be successful and the amount of the claim can be reliably estimated. Expenditure is likely to be incurred within one year. Legal claims which may succeed but are less likely to do so or cannot be estimated are disclosed as contingent liabilities in Note 26. All dilapidation claims received or anticipated from landlords are provided for. Where a claim has yet to be submitted, an estimate of the cost of the claim is provided by the CPS managing agents.

17. General Fund

The General Fund represents the total assets less liabilities of the entity, to the extent that the total is not represented by other reserves and financing items.

General Fund	Note	2008-09 £000	2008-09 £000	2007-08 £000	2007-08 £000
Balance at 1 April			16,293		21,005
Net Parliamentary funding: Drawn Down	19	602,751		646,973
Net Parliamentary funding: Deemed		21,929		1,995
Total Net Parliamentary funding			624,680		648,968
Year end adjustment: Supply Creditor - current year	15(a)		(6,632)		(21,929)
Net Transfer from Operating Activities: Net operating cost		(632,229)		(632,714)
Net Transfer from Operating Activities: CFERs repayable to Consolidated Fund	6	(165)		(164)
Total year end adjustments and transfers			(632,394)		(632,878)
Non Cash Charges: Cost of capital charge	8 and 9	568		888
Non Cash Charges: Auditors' remuneration	8	103		92
Total Non Cash Charges			671		980
Transfer from revaluation reserve	18		605		147
Balance at 31 March			3,223		16,293

18. Reserves

The revaluation reserve reflects the unrealised element of the cumulative balance of indexation and revaluation adjustments (excluding donated assets).

Description	2008-09 £000	2007-08 £000
Balance at 1 April	7,172	5,013
Arising on revaluation during the year (net)
Tangible fixed assets	(944)	2,299
Intangible fixed assets	-	7
Transferred to general fund in respect of realised element of revaluation reserve
Tangible fixed assets	(605)	(149)
Intangible fixed assets	-	2
Balance at 31 March	5,623	7,172

19. Notes to the Cash Flow Statement

19(a) Reconciliation of operating cost to operating cash flows

Reconciliation of operating cost to operating cash flows	Note	2008-09 £000	2007-08 £000
Net operating cost		(632,229)	(632,714)
Adjustments for non-cash transactions	8 and 9	18,941	16,391
Decrease / (increase)	13(a)	4,229	(2,587)
(Decrease) in creditors		(739)	(2,213)
Use of provisions	16	(4,203)	(2,420)
Net cash outflow from operating activities		(614,001)	(623,543)

19(b) Analysis of capital expenditure and financial investment

Capital expenditure and financial investment	Note	2008-09 £000	2007-08 £000
Tangible fixed asset additions	11	(3,894)	(2,188)
Net cash outflow from investing activities		(3,894)	(2,188)

Net cash outflow from investing activities(3,894)(2,188)

19(c) Analysis of capital expenditure and financial investment by Request for Resources

Capital expenditure and financial investment by Request for Resources	Capital expenditure	Loans, etc.	A in A	Net Total
Request for resources 1	(4,391)	-	-	(4,391)
Net movement in creditors	(339)	-	-	(339)
Total 2008-09	(4,730)	-	-	(4,730)
Total 2007-08	(3,024)	-	-	(3,024)

19(d) Analysis of financing

Financing	Note	2008-09 £000	2007-08 £000
From the Consolidated Fund (Supply) - current year	17	(602,751)	(646,973)
Net financing		(602,751)	(646,973)

19(e) Reconciliation of Net Cash Requirement to (increase)/decrease in cash

Reconciliation of Net Cash Requirement to (increase)/decrease in cash	Note	2008-09 £000	2007-08 £000
Net cash requirement		618,048	627,039
Receipts from the Consolidated Fund (Supply) - current year	17	(602,751)	(646,973)
Amounts due to the Consolidated Fund - received in a prior year and paid over		1,099	2,085
Amounts due to the Consolidated Fund - received and not paid over	15	(30)	(1,100)
Decrease / (increase) in cash		16,366	(18,949)

20. Notes to the Statement of Operating Costs
by Departmental Strategic Objective

Departmental Strategic Objective

To bring offenders to justice, improve services to victims and witnesses and promote confidence, by applying the Code for Crown Prosecutors, 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.

Other current expenditures were as follows:

Description	2008-09 £000	2007-08 £000
Other current expenditures	241,929	246,779
Total Other current expenditures	241,929	246,779

This expenditure represents programme costs which form part of the net operating costs disclosed in the Statement of Operating Costs by Departmental Strategic Objective.

Capital Employed by Departmental Strategic Objective at 31 March 2009

The CPS's capital is employed exclusively for programme purposes.

Description	2008-09 Capital employed £000	2007-08 Capital employed £000
Capital employed for programme purposes	8,846	23,465
Total capital employed	8,846	23,465

21. Capital commitments

Description	2008-09 £000	2007-08 £000
Contracted capital commitments at 31 March 2009 for which no provision has been made in these accounts.	102	117

22. Commitments under leases

Operating Leases

Commitments under operating leases to pay rentals during the year following the year of these accounts are given in the table below, analysed according to the period in which the lease expires.

Obligations under operating leases comprise:	2008-09 Land and buildings £000	2008-09 Other £000	2007-08 Land and buildings £000	2007-08 Other £000
Expiry within 1 year	1,839	84	1,626	89
Expiry after 1 year but not more than 5 years	12,399	4,117	12,067	3,287
Expiry thereafter	11,952	-	13,080	-
Total obligations under operating leases	26,190	4,201	26,773	3,376

23. Commitments under PFI contracts

The Department has entered into the following PFI contract.

Off balance sheet

Information, Communications and Technology (ICT) managed service

The Department's ICT service is provided through a managed service contract with a term of 10 years from 1 April 2002 to 31 March 2012. The contract is extendable for a further five years. The estimated capital value of the contract is £18.2 million (2007-08: £19.8 million). Under the terms of the contract CPS ICT assets were transferred to the contractor with effect from 1 April 2002. A prepayment was established for the fair value of the ICT assets transferred (£7,510,233.28) and the assets were impaired to a nil value as at 31 March 2002.

Charge to the Operating Cost Statement and future commitments

The total amount charged in the Operating Cost Statement in respect of off-balance sheet PFI transactions was £48,313,138 (2007-08: £50,290,921); and the payments to which the Department is committed during the year following the year of these accounts, analysed by the period during which the commitment expires, are as follows.

PFI payment commitments for next year	2008-09 £000	2007-08 £000
Expiry within 1 year	-	-
Expiry within 2 to 5 years	44,538	51,106
Expiry within 6 to 10 years	-	-
Total PFI payment commitments for next year	44,538	51,106

The contract covering the managed service allows for a number of improvements and enhancements to systems over the lifetime of the project. As such changes are successfully introduced there will necessarily be increases in the charges levied by the Service Provider. These increases will only be recognised in the accounts once the relevant changes have been properly tested and fully accepted as fit for purpose by the CPS.

24. Other financial commitments

The Department has entered into contracts, only cancellable at a significant cost, for the delivery and support of the Department's finance system and implementation of an integrated HR and payroll system. Additionally, the Department has entered into a contract for the implementation of a purchasing system. The payments to which the Department is committed during the year following the year of these accounts, analysed by the period during which the commitment expires are as follows.

Other payment commitments for next year	2008-09 £000	2007-08 £000
Expiry within 1 year	-	-
Expiry within 2 to 5 years	1,019	1,559
Expiry thereafter	-	-
Total other payment commitments for next year	1,019	1,559

25. Financial Instruments

FRS 25, 26 and 29 enhance the requirements (previously covered by FRS 13, Derivatives and Other Financial Instruments) to disclose the role which financial instruments have had during the period in creating or changing the risks an entity faces in undertaking its activities. Because of the largely non-trading nature of its activities and the way in which government departments are financed, the CPS is not exposed to the degree of financial risk faced by business entities. Moreover, financial instruments play a much more limited role in creating or changing risk than would be typical of a trading entity. The Department has no power to borrow or invest surplus funds and financial assets and liabilities are generated by day-to-day operational activities and are not held to change the risks facing the Department in undertaking its activities. The Department holds no assets that are available for sale, nor does it hold or trade in investments.

Liquidity risk

The Department's net revenue resource and capital requirements are financed by resources voted annually by Parliament. The CPS is not therefore exposed to liquidity risks.

Interest-rate and Foreign currency risk

The Department has no material transactions in foreign currency; all material assets and liabilities are denominated in sterling, so it is not exposed to interest rate or currency risk.

Credit risk

The Department does not consider that any credit risk arises from trading with other government departments. In trading with commercial concerns, the Department undertakes regular investigation of credit worthiness and employs robust systems to ensure that monies due are collected on time.

As stated in Note 1.5, the CPS receives awards of costs made against convicted defendants at the discretion of the judge or magistrates. Magistrates' courts are responsible for the recording, enforcing and collecting these costs and forwarding collected monies to the CPS. As a result, the Department is not in a position to perform any checks on credit worthiness in advance, and has to rely on systems employed at magistrates' courts to ensure overdue balances are minimised and collected. There remains a significant risk that balances will not be collected in full and on time, and therefore bad debts are provided for on the basis of the historical relationship between costs awarded and cash collected. As a result the Department considers that credit risk in respect of cost award debtors is adequately provided against.

Fair values

The following statement is a comparison by category of original cost and fair values of the Department's financial assets and liabilities at 31 March 2009.

As detailed in Note 23, the Department's ICT service is provided through a managed service contract which under UK GAAP is treated as off balance sheet. Any current charges levied under the contract are included in Creditors in the following statement.

Financial assets and liabilities	2008-09 Original Cost £000	2008-09 Fair Value £000	2007-08 Original Cost £000	2007-08 Fair Value £000	Basis of fair valuation
Financial assets: Debtors falling due after more than 1 year	1,563	1,563	2,400	2,400
Financial assets: Debtors	68,005	48,820	68,392	57,680	Note a
Financial assets: Cash at bank and in hand	6,663	6,663	23,029	23,029
Total Financial assets	76,231	57,046	93,821	83,109
Financial liabilities: Creditors	(59,073)	(59,073)	(75,670)	(75,670)	Note b
Financial liabilities: Provisions	(16,383)	(16,383)	(12,715)	(12,715)
Total Financial liabilities	(75,456)	(75,456)	(88,385)	(88,385)

Note a -

With the exception of cost awards, all debtors are stated at original cost. As stated in Note 1.5, the CPS receives awards of costs made against convicted defendants at the discretion of the judge or magistrates. Magistrates' courts are responsible for the recording, enforcing and collecting these costs and forwarding collected monies to the CPS. Magistrates' courts record and account for individual cost award debtors, but report transactions to the CPS only on an aggregated basis. While the CPS can therefore account fully for aggregate costs awarded, the Department does not hold records of individual debtor balances and transactions so it is not possible to analyse cost award debtors by anticipated future periods of receipt and the resultant cash flows cannot be estimated, nor can the CPS review individual balances for collectibility. As a result, bad debts are provided for on the basis of the historical relationship between costs awarded and cash collected. The CPS consider that providing in this way against the aggregate balance of cost award debtors represents a fair value.

The future timing of cash flows from cost award debtors remain uncertain, since detailed records of individual debtors' payment arrangements rest with the magistrates courts. Since bad debts have effectively been excluded from the stated balance of cost award debtors the Department considers that remaining balances will be paid on a timely basis, and that discounting future cash flows would not provide a significantly different overall net position.

Note b -

Fair value is not significantly different to original cost since, in the calculation of book value, the expected cash flows have been discounted by the real rate set by HM Treasury (currently 2.2 per cent).

26. Contingent Liabilities disclosed under FRS 12

As at 31 March 2009 the CPS was involved in 13 Employment Tribunal cases and 13 personal injury claims.

One employment tribunal case has subsequently settled at a cost of £5,000. It is not possible to estimate the financial effect of the remaining claims.

27. Contingent Liabilities not required to be disclosed under FRS 12 but included for parliamentary reporting and accountability

There were no contingent liabilities of this nature at the year-end.

28. Losses and Special Payments

Included within the Operating Cost Statement are losses and special payments as follows:

Losses and Special Payments	2008-09 Number of cases	2008-09 £000	2007-08 Number of cases	2007-08 £000
28a. Losses Statement: Cash Losses	16	36	-	-
28a. Losses Statement: Administrative write-offs	62,378	3,100	63,637	2,820
28b. Special Payments: Ex gratia	38	930	27	213
Total of losses	62,432	4,066	63,664	3,033

Cash losses are pay and allowances paid to CPS staff in error which have not been recovered.

Administrative write-offs are 62,378 cases relating to costs awarded to the CPS totalling £3,100k of which the Magistrates' Courts, who are responsible for collecting costs awarded to the CPS, wrote off 60,307 cases with a value of £2,545k under their delegated powers, and the CPS authorised a further write off of £555k comprising 2,071 cases.

Ex gratia payments reported are payments made in settlement of Employment Tribunal and personal injury claims made against the Department.

Details of cases over £250,000

During 2007-08 a provision of £500,000 was made for an Employment Tribunal case. A further £87,835 was provided for in this case during 2008-09. These payments are in respect of an Employment Tribunal remedies judgement against the CPS. The total payments made by the CPS to date are £480,569. The remaining provision of £107,266 is for estimated costs.

A payment of £375,000 was made for a civil litigation claim. A provision of £150,000 has been created for the outstanding costs in this case.

29. Related-party transactions

The CPS has close working relationships with all agencies within the criminal justice system and particularly the Courts, their ultimate controlling party being the Ministry of Justice (see Note 1.5). The Courts are regarded as related parties with which the Department has had material transactions, being mainly costs awarded by the Courts to the CPS (see Note 10) less amounts written off (see Note 9).

In response to the recommendations of the Glidewell review in a number of locations the CPS and the Police have combined the administration of case files through the co-location of Criminal Justice Units. More recently Integrated Prosecution Teams (IPTs) now merge the Police and CPS teams together to manage an integrated single file and administrative process. By reducing duplication, IPTs will deliver significant efficiencies and improvements in the criminal justice service, including timeliness, quality and readiness of files for court.

The CPS requests that each of its senior managers complete a declaration, stating whether they or their spouse and close family members have been in a position of influence or control in organisations with which the CPS has transactions. The declarations advised no material transactions had taken place.

30. Third-party assets

There are no third-party assets as at the balance sheet date.

31. Post Balance Sheet Events

In accordance with the requirements of Financial Reporting Standard 21, post balance sheet events are considered up to the date on which the accounts are authorised for issue. This is interpreted as the date of the Certificate and Report of the Comptroller and Auditor General.

On 3 April 2009, the Attorney General, Baroness Scotland QC, announced that the Revenue and Customs Prosecutions Office (RCPO) and the CPS are to be combined. The decision was announced after a meeting of the Law Officers' Department Strategic Board. The merger will take place during 2009-10, with further consolidation in 2010-11.

The merger will provide enhanced prosecution services for the public and will safeguard and improve the already high quality work done in both organisations on serious and complex cases, while delivering a community prosecutor approach for the majority of cases across the country.

The Attorney General's Strategic Board will oversee the merger, supported by a new Programme Board, which will include the Director of Public Prosecutions, the Director of RCPO, David Green QC, a representative from the Attorney General's Office and initially Non-executive Directors from both RCPO and the CPS. Since the detail of the merger is still being finalised it is not currently possible to estimate the financial effect.

Departmental Remuneration Report

Remuneration Policy

The Remuneration Committee comprises:

   Keir Starmer QC (DPP)

   Peter Lewis (Chief Executive)

   Ros McCool (Director, Human Resources)

   Mark Summerfield (Deputy Director, Pay and Reward)

   Rob Sykes (Non-executive Director)

There are no independent members of the Committee.

The remuneration of senior civil servants is set by the Prime Minister following independent advice from the Review Body on Senior Salaries.

The Review Body also advises the Prime Minister from time to time on the pay and pensions of Members of Parliament and their allowances; on Peers' allowances; and on the pay, pensions and allowances of Ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975.

In reaching its recommendations, the Review Body is required to have 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; and
• 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 www.ome.uk.com.

In addition, the Remuneration Committee is tasked with considering the relative contributions of the Department's senior employees within each pay band. Paying due regard to completed performance reports, consistency and scope of objectives and the effects of external factors, the Committee will then consider individual awards in line with Cabinet Office guidance. The average increase for 2008-09 was 2.6 per cent. An additional bonus of 8.6 per cent was available for distribution during 2008-09. The top performing 25 per cent received a bonus of around 10 percent, the next 40 per cent receiving between 5 and 10 per cent.

Service Contracts

Civil Service appointments are made in accordance with the Civil Service Commissioners' Recruitment Code, which requires appointment to be on merit on the basis of fair and open competition but also includes the circumstances when appointments may otherwise be made. The DPP, Keir Starmer QC, was appointed by the AGO for a period of three years from 1 November 2008 to 31 October 2011. The previous DPP, Sir Ken Macdonald QC, left after completing a three year contract, subsequently extended to five years, on 31 October 2008.

All other officials covered by this report hold appointments which are open-ended and allow for retirement at the age of 60 or 65.

Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the CSCS.

Further information about the work of the Civil Service Commissioners can be found at www.civilservicecommissioners.gov.uk.

With the exception of the car and chauffeur provided for the official use of the Director of Public Prosecutions, the remuneration of all Directors, non-executive directors and staff employed in the CPS is paid entirely in cash.

Salary and Pension Entitlements

The following sections provide details of the remuneration and pension interests of the most senior officials of the Department.

Remuneration (audited)

Officials	Post held	Date joined or left Board (if applicable)	2008-09 Salary £000	2007-08Salary £000
Keir Starmer QC (a)	Director of Public Prosecutions	(from 1 Nov 08)	80 - 85 (fye 190 - 195)	-
Sir Ken Macdonald QC (a)	Director of Public Prosecutions	(to 31 Oct 08)	115 - 120 (fye 200 - 205)	195 - 200
Peter Lewis	Chief Executive		165 - 170	155 - 160
John Graham	Director Finance		120 - 125	115 - 120
Mike Kennedy	Chief Operating Officer		150 - 155	75 - 80 (fye 140 - 145)
Gerard Lemos (b)	Non-executive Director		-	-
Philip Oliver (b)	Non-executive Director	(to 31 Dec 08)	-	-
Rob Sykes (b) and (c)	Non-executive Director		-	-

fye = full year equivalent salary

a. The Director of Public Prosecutions is provided with a car and chauffeur for official use. This is assessed by HM Revenue and Customs as constituting a benefit in kind. The estimated value of the benefit in kind received by Sir Ken Macdonald QC during the 2008-09 financial year was £6,733. Tax and National Insurance contributions on this sum, amounting to £5,925 are due to be paid on his behalf by the CPS. The estimated value of the benefit in kind received by Keir Starmer QC during the 2008-09 financial year was £5,173. Tax and National Insurance contributions on this sum, amounting to £4,552 are due to be paid on the Director's behalf by the CPS. The remaining Board members did not receive any benefits in kind.

b. Non-executive Directors received a fee of £10,650 as remuneration for sitting on the Board during 2008-09. Expenses are paid.

c. Rob Sykes carried out a challenge function on outputs from the CPS HQ Review and was paid £5,235 for this work.

The membership of the Chief Executive of the Office for Criminal Justice Reform was under formal review during the period and as such did not attend meetings of the Board.

Salary

'Salary' includes gross salary; performance pay or bonuses; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances and any other allowance to the extent that it is subject to UK taxation.

This report is based on payments made by the Department and thus recorded in these accounts.

Benefits in kind

The monetary value of benefits in kind covers any benefits provided by the Department and treated by HM Revenue and Customs as a taxable emolument.

Pension Benefits

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 or classic plus); or a 'whole career' scheme (nuvos). These statutory arrangements 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 the Retail Prices Index (RPI). Members who joined from October 2002 could opt for either the appropriate defined benefit arrangement or a good quality 'money purchase' stakeholder pension with a significant employer contribution (partnership pension account).

Employee contributions are set at the rate of 1.5% of pensionable earnings for classic and 3.5% for premium, classic plus and nuvos. 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' 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, immediately after the scheme year end, the accrued pension is uprated in line with RPI. In all cases members may opt to give up (commute) pension for 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.

Pension benefits (audited)

Officials	Accrued pension at pension age as at 31 March 2009 and related lump sum	Real increase in pension and related lump sum at pension age	CETV at 31 March 2009 (a)	CETV at 31 March 2008 (b)	Real increase in CETV
Keir Starmer QC Director of Public Prosecutions (from 1 Nov 08)	pension 0 - 5 lump sum 0 - 5	pension 0 - 2.5 lump sum 2.5 - 5	23	-	20
Sir Ken Macdonald QC Director of Public Prosecutions (to 31 Oct 08)	pension 25 - 30 lump sum 65 - 70	pension 2.5 - 5 lump sum 7.5 - 10	461	389	46
Peter Lewis Chief Executive	pension 60 - 65 lump sum 180 - 185	pension 2.5 - 5 lump sum 10 - 12.5	1,157	1,019	62
John Graham Director Finance	pension 45 - 50 lump sum 135 - 140	no increase no increase	1,023	962	no increase
Mike Kennedy Chief Operating Officer	pension 45 - 50 lump sum 140 - 145	pension 2.5 - 5 lump sum 10 - 12.5	962	830	69

a. Where an official ceased to act as a Board member during the year, the CETV shown is that at their date of departing the Board.

b. Where an official has joined the Board during the year, the comparative CETV shown is that at their date of joining the Board.

The 'CETV at 31 March 2008' figure may be different from the closing figure in last year's accounts. This is due to the CETV factors being updated to comply with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008.

Further details about the Civil Service pension arrangements can be found at the website www.civilservice-pensions.gov.uk

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.

The figures include the value of any pension benefit in another scheme or arrangement which the individual 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 calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 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.

Compensation for loss of office

There were no compensation payments made to former senior management in 2008-09.

Pension for the Director of Public Prosecutions

Keir Starmer QC

Pension arrangements are currently being established. As with former Directors of Public Prosecutions, these arrangements will provide pension benefits broadly in line with the Judicial Pension Scheme. The value of pension benefits have been disclosed on this basis.

Sir Ken Macdonald QC

Pension benefits were provided through two pension schemes which had the DPP as its only member, and were laid before Parliament on 15 June 2006. The Schemes were unfunded and the cost of benefits were met by monies voted by Parliament each year. The pensions will be increased annually in line with changes in the Retail Prices Index.

The two pension schemes provide benefits which broadly match the benefits provided under the Judicial Pension Scheme. The principal scheme is a registered scheme and provides benefits up to the earnings cap. The supplementary scheme provides on earnings above the cap and is not a registered scheme. The normal retirement age for the scheme is 65.

Employee contributions are set at the rate of 3% of pensionable earnings up to the earnings cap. Benefits accrue at the rate of 1/40th of pensionable salary for each year of service. In addition, a lump sum equivalent to 2.25 years' pension is payable on retirement.