Annual Financial Information
Summary of the 2011/12 Financial Year
The 2011/12 financial year was the year in which the Authority implemented the most significant changes for Northumberland National Park Authority since the organisation was established in 1997. In response to the need to implement a 33% reduction in core government funding by 2014 the Authority began implementing a financial plan which front-loaded most of the organisational change in 2011/12.
By the March 31, 2012 the majority of the staff reductions, budget cuts and restructuring was completed. The Authority now operates with less staff than over 10 years ago with much reduced management, delivery and internal support capacity
Implementation of the national review of National Park Authority governance was delayed during the year and the outcomes will not be known until 2012/13 at the earliest. Nevertheless, the Authority used the local consultation exercise on governance to review and revise its own governance structures to fit into the reduced internal capacity of the organisation whilst retaining effectiveness in key areas such as Development Management and Review / Scrutiny. The new governance arrangements were agreed in December 2011 for implementation on April 1, 2012.
The Authority remains ambitious and has established a new staff structure and budget plan to address its new priorities with the aim of achieving excellence in four key areas:
- Land Management;
- Rural development;
- The Sill Landscape Centre; and
- Engagement with young people through pathways to work and education.
Key Financial Movements in the Year
In 2011/12 Gross Expenditure was down by £1.11m (32.5%) due to a reduction in income of £390,000 and the results of front-loading the budget cuts and organisational change. (Refer to Note 8). However, the 2010/11 Gross Expenditure did include one-off provision costs of £0.39m for the 2011/12 restructuring exercise. The generation of additional income is proving problematic as in 2011/12 the visitor season was poor and income from the visitor centres and car parking was £20,400 lower than the previous year.
In overall terms the Authority’s General Fund Balances increased by £0.43m due to the budget strategy reducing ongoing staff and other costs early in the budget plan in order to create an ongoing balanced budget. £0.48m was transferred to Earmarked General Fund Reserves to provide financing for future expenditure plans. In addition the Authority managed to deliver budget savings greater than anticipated.
The pension deficit has increased by £0.76m or 21% and at £3.67m it remains a significant liability. The Authority is paying down this liability by:
- reducing the historical fixed liability across the next ten years with annual payments of £128,000pa; and
- reducing the variable debt on future pension liabilities (estimated at £1.63m by the latest Actuarial Valuation, undertaken as at the March 31, 2010) by the Authority contributing 14.2% of staff salary costs or £192,000 pa into the pension fund based on actuarial advice.
As a result of the above financial movements in the year the Authority has modest total reserves of £0.4m – some £0.32m less than the previous year.
Significant reductions to staffing and financial resources, both within the Authority and within many of our partners, has resulted in completed delivery of only two thirds of the planned action in the 2011/12 Corporate Plan. This represents a significant drop in the level of activity the Authority has been achieving over a number of years. The Authority’s capacity to deliver has been significantly reduced, perhaps even more so through the period of change in 2011/12.
Analysis of our overall performance continues to demonstrate a good overall performance, with good performance outweighing poor performance by a ratio of 4:1.
- Successful submission of a funding bid for 'The Sill' Wild Landscape Centre;
- 26% reduction in our carbon footprint in the year and a 39% reduction since the baseline year of 2008/09;
- High overall visitor satisfaction with Northumberland National Park’s services;
- Steady progress in improving the rights of way network by targeting preventative maintenance resulting in usability increasing to 74% from 53% in 2008;
- Volunteering rose 31% driven by successful initiatives with young people and black and minority ethnic communities;
- 72% of farmed land is covered by environmental agreements;
- Assisted by extra volunteer activity, 22 monuments have been removed from 'at risk' reducing the percentage 'at risk' in the National Park from 56% to 50%; and
- Good levels of performance were maintained with the development management service.
Areas where we under-performed
- There was a 26% drop in actual number of visitors to the National Park Centres compared to the 5 year average;
- Improvements to the visitor offer at key villages were not progressed as planned;
- Electronic communication targets were not met in areas including rural broadband, the website and our Facebook site;
- In corporate communication fewer e-zines, position statements and case studies of good practice were produced than planned; and
- Spend through the Sustainable Development Fund was low, with only 33% of the budget available being spent in year despite the budget being almost fully committed to projects.
- The number of grants offered to communities was down to 51 from 93 the previous year.
Areas where we progressed well in unforeseen work:
- Leading a partnership to develop and submit a bid to government for a Nature Improvement Area;
- Working with the Yorkshire Dales National Park Authority, Nidderdale and North Pennines Areas of Outstanding Natural Beauty to scope options for a new Local Nature Partnership; and
- Working with Northumberland County Council and other partners to secure the future of tourism destination management in Northumberland.
Change Management and Human Resources
One in four of the Authority’s staff left the Authority’s employment in 2011/12. Whilst this has resulted in a significant decrease in the proportion of Defra grant used for staff costs, it has resulted in the loss of significant capacity and skills. As a result we are now a very different staff team and are required to work in very different ways. The Authority has a new and much reduced management team, and many staff within the Authority have been asked to perform in newer and wider roles.
Staff morale has clearly suffered as colleagues have left the Authority. However, the way in which staff have, and are continuing to, cope in these difficult circumstances is, in my view, humbling and a significant credit to this Authority.
It is clear we still have much to achieve to become the enabling Authority we envisage. However, I believe we have laid solid foundations with many positive approaches already emerging.
Northumberland National Park Authority manages its finances through a medium term financial plan. The key financial indicators are shown below ...