Annual Report and Resource Accounts

2007-2008

Contents

Annual Report
For the year ended 21 March 2008

1. Basis of Accounts

This is the Annual Report and Accounts for the Northern Ireland Court Service ("the Department") for the financial year ended 31 March 2008. These Statements have been prepared in accordance with directions given by HM Treasury in pursuance of the Government Resources and Accounts Act 2000.

2. Establishment of the Northern Ireland Court Service

The Northern Ireland Court Service is the Lord Chancellor’s department in Northern Ireland. The Department was established by the Judicature (Northern Ireland) Act 1978 as a "unified and distinct Civil Service of the Crown". Its role is to provide administrative support for the Northern Ireland courts, enforce civil court judgements through the Enforcement of Judgments Office and support the Lord Chancellor in discharging his ministerial responsibilities in Northern Ireland including responsibility for judicial appointments and legal aid.

Further information about the Court Service can be found at www.courtsni.gov.uk.

3. Departmental Boundary

The departmental boundary incorporates only the core department of the Northern Ireland Court Service.

During the year the Department held responsibility for the granting of funds to the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). As executive NDPB’s the NILSC and the NIJAC are outside the departmental boundary for the purposes of these resource accounts.

The funds invested by the Court Funds Office are specifically excluded from the departmental boundary, in accordance with HM Treasury guidance. Third party monies are similarly excluded. The Northern Ireland Legal Services Commission, the Northern Ireland Judicial Appointments Commission and Court Funds Office each publish their own audited financial statements.

4. Departmental Reporting Cycle

The Department is required to prepare an Estimate for HM Treasury in January each year, which details the proposed spending of the Department for the coming financial year. Supplementary estimates are prepared in spring and winter, if required, to take account of any changes during the year.

The main estimate and any supplementary estimates are published each year on the HM Treasury website at www.hm-treasury.gov.uk.

An Annual Report is published by the Court Service each year on www.courtsni.gov.uk/publications

5. Ministers and the Management Board

5.1 Ministers

The Northern Ireland Court Service is the Lord Chancellor’s department in Northern Ireland. The Lord Chancellor and Secretary of State for Justice has overall responsibility for the UK Ministry of Justice which was established on 9th May 2007 as a completely new department. The new Ministry of Justice brought together the agencies responsible for the criminal, civil and family courts, tribunals, sentencing policy, prisons and the management and rehabilitation of offenders.

This included all the organisations that made up the Department of Constitutional Affairs. The following were in Ministerial office up to 9 May 2007: The Lord Chancellor, The Right Honourable The Lord Falconer of Thoroton.

The Right Honourable Harriet Harman QC MP: Minister of State at the Department of Constitutional Affairs.

Baroness Ashton of Upholland: Parliamentary Under-Secretary of State at the Department of Constitutional Affairs.

Bridget Prentice MP: Parliamentary Under-Secretary of State at the Department of Constitutional Affairs.

Vera Baird QC MP: Parliamentary Under-Secretary of State at the Department of Constitutional Affairs.

The following held ministerial office for the remainder of the year, subsequent to the formation of the Ministry of Justice:

The Right Honourable Jack Straw MP: Minister of Justice (appointed 28 June 2007).

Lord Hunt of Kings Heath OBE Philip Hunt: Parliamentary Under Secretary of State for Justice (appointed 29 June 2007).

The Right Honourable David Hanson MP: Minister of State (appointed 9 May 2007). Marie Eagle MP: Parliamentary Under Secretary of State (appointed 29 June 2007). Michael Wills MP: Minister of State for Ministry of Justice (appointed 29 June 2007). Bridget Prentice MP: Parliamentary Under Secretary of State (appointed 9 May 2007).

5.2 Departmental Management Board

The Departmental Management Board meets monthly and supports the Director as Head of the Department. It is responsible for reviewing, challenging and providing advice and guidance on the departmental delivery strategies, achievement of departmental objectives and targets, plans and programmes, performance management and governance arrangements.

The composition of the Departmental Management Board during the year was as follows:

D A Lavery Director NI Court Service
D P Andrews Head of Publicly Funded Legal Services
J Durkin Head of Operations
G Fee Head of Criminal Policy and Legislation (from 31 March 2008)
L McAlpine Head of Civil Policy and Legislation
S Broderick Head of Tribunals Operations (from 30 April 2007)
D Thompson Finance Director
K King Non-executive Director
Executive members of the Management Board are appointed in accordance with the Civil Service Management Code.
David Thompson is an appointee, recruited via Interchange from PricewaterhouseCoopers.
Kevin King is an independent member of the Management Board

5.3 Other Committees

The work of the Management Board is supported by two further committees. These are the Finance Committee and the Audit and Risk Management Committee. These committees meet on a quarterly basis with additional meetings being held if required. The Finance Committee is chaired by David Lavery. The Audit and Risk Management Committee is chaired by Kevin King.

6. Management Commentary

6.1 Principal Aim and Objectives

The Department's vision is:
serving the community through the administration of justice.

The Department's purpose is:

The Court Service has published a Corporate Plan for 2008-2011 which identifies four key strategic aims as follows: The Corporate Plan 2008-2011 can be found on the Court Service website at www.courtsni.gov.uk/publications.

6.2 Performance in 2007-08

During the year the Court Service continued to deliver its programme of planned activities in support of the delivery of the strategic aims of its Corporate Plan.

Modernising court business

The Court Service continues to modernise the way in which court business is transacted to meet the expectations of all court users. Within our Business Modernisation Strategy there are 3 major Programmes: In respect of the ICOS Programme year the ICOS Electronic Interfaces Project was successfully extended to enable the secure electronic exchange of information between the Court Service and other public sector organisations. The Court Service also provided secure remote access to ICOS to appropriate criminal justice organisations and established a new single ICOS enabled Jury Management Centre for the province.

The Court Service is a partner in the Causeway Programme which will underpin electronic communication and information sharing between the criminal justice agencies in Northern Ireland when fully implemented. The technical solution is currently undergoing rigorous user acceptance test trials and is planned to enter live service later in 2008.

As part of the Electronic Service Delivery programme new Copy Orders and Media Court List On-line Services were also launched during the reporting period.

The Courtroom Technology Programme was further progressed during the year with the implementation of new Video Conferencing and evidence display facilities across the province.

Improving access to justice

The improvement of access to justice and making the justice system more accessible to everyone remains a core objective.

The 2005 three year Customer Service Strategy committed the Court Service to provide “an efficient, accessible, and quality service for all customers by listening and responding to their needs.” During 2007-08 we made significant achievements in offering choice to our customers, improving the way in which we process our business and changing our listing arrangements to better meet their needs.

The department continued to work closely with its sponsored body, the Northern Ireland Legal Services Commission, in supporting its programme of legal aid reform to deliver publicly funded legal services where it is needed most. Officials worked hard to secure a sustainable funding position for the Commission for 2007 – 2008 and to improve the financial management regime.

In 2007-08 the Court Service brought forward legislation renaming the office of Resident Magistrate as District Judge (Magistrates’ Courts) in Northern Ireland. The restyling of the office, which was recommended by the Northern Ireland Criminal Justice Review, is intended to reflect, for the benefit of court users, that the magistracy is an integral part of the judiciary, and to reflect that the term resident, which has its origins in the nineteenth century has less relevance in the modern context where magistrates no longer need to live in the district in which they hold office.

Following the 2006-07 review of civil court fees, the new statutory framework was implemented in 2007-08. The new fees, along with a robust exemptions and remissions policy, achieve a balance between the need to recover the full cost of civil court business and the need to ensure continued access to justice. During the year a Court Funds Office (CFO) modernisation project was commenced, to review all aspects of CFO business policy, practices and operations to ensure a modern, professional, transparent, flexible and cost effective service which meets the specific needs of clients and stakeholders. This includes a review of governance arrangements, legislative provisions, accounting arrangements and operational systems and procedures.

The Enforcement of Judgments Office (EJO), responsible for the recovery of money, property and goods from civil court judgments, continues on its quality improvement programme under the Modernising Government Agenda. This year EJO was awarded a “Mark of Excellence” under the Business Excellence Model promoted by the European Foundation for Quality Management Scheme. The award was achieved through significant results including better value for money, considerable improvement in processing times, overall improvements in staff and customers’ satisfaction and modernising business through innovative technology such as on-line Case Tracking and Judgment Searching. To further support business improvement and people development, EJO introduced and implemented an extensive Quality Management System which was accredited under ISO 9001:2000. This highly detailed approach ensures that best practice is consistently applied in order to bring benefits for both staff and customers.

The modernised Coroners Service for Northern Ireland was inspected by Her Majesty’s Inspectorate of Court Adminstration (HMICA) during 2007. HMICA issued a report in October 2007 on the progress made by the Coroners Service since its establishment in April 2006 and recommending 7 areas where continued development could be made. The Coroners Service drew up and implemented an action plan to take forward the recommendations and at the same time issued a Business Review covering the disposal of business between the period of April 2006 to March 2007. These reports may be viewed on the Court Service website at www.courtsni.gov.uk.

In March 2006, the Secretary of State in direct rule announced a programme for tribunal reform including the transfer of administrative responsibility for NI tribunals from NI Departments and NIO to the Court Service on a cost neutral basis. It was also announced that any newly established tribunals would become the responsibility of the Court Service from the outset.

Since the Secretary of State’s announcement the Court Service has assumed responsibility for two new tribunals - the NI Valuation Tribunal (established in April 2007) and the Traffic Penalty Tribunal (which became operational in November 2006). During its first year in operation the NI Valuation Tribunal received 9 appeals (the first of which was received October 2007). Five appeals were heard within the financial year (4 disposed of; 1 adjourned). During the same period the Traffic Penalty Tribunal received 224 appeals (including Statutory Declaration appeals). Of these, 29 were either withdrawn by the appellant or not contested by Roads Service. Of those that proceeded to hearing 31 were successful; 125 were refused (a success rate for applicants of 20%). At the end of the year 39 cases await listing.

The Charities Tribunal when established will also be administered by the Court Service.

The administration of Criminal Injuries Compensation Appeal Panel for Northern Ireland (CICAPNI), previously sponsored by the Secretary of State, transferred to the Court Service on 1 December 2007. The transfer of the administration of the remaining NIO tribunal, the Police Medical Pensions Appeal Tribunal, will take place later in 2008.

Although a considerable amount of work was undertaken by the Court Service and by officials in the NI departments to give effect to the Secretary of State’s March 2006 announcement, the transfer of the administration of the NI departmental tribunals had not been completed when the NI Assembly was restored in May 2007. It therefore became necessary to seek the views of the Northern Ireland Executive on the future of the reform. The Executive endorsed a continuation of the reform programme on the 24th April 2008.

Other achievements made in Customer Service are as follows:

Promoting Confidence in the Justice System

During the year the Court Service worked with colleagues in the Northern Ireland Office to facilitate the enactment of the Justice and Security (Northern Ireland) Act 2007 which delivered the Government’s commitment to abolish non-jury “Diplock courts”. With a view to making juries in Northern Ireland more representative of society as a whole, we have also progressed plans to widen the jury pool by conducting a review of persons ineligible to perform jury service and those excusable as of right.

The Court Service worked closely with the NIO on reforming sentencing reflected in the draft Criminal Justice (NI) Order currently laid before Parliament. The draft Order introduces extended sentences for public protection for serious cases and a system of release on licence for all prisoners which will replace the system of fifty percent remission. The Order also contains provisions designed to update and enhance road traffic law and contains a number of other miscellaneous provisions.

The Service has also been involved in preparation for the possible future devolution of justice functions in Northern Ireland. This has included the identification of those legislative steps necessary to devolve functions from the Lord Chancellor and the Court Service to the Northern Ireland Assembly and the development of policy in relation to devolution of those functions. Developmental work has also been undertaken to establish a framework for the future status of the Northern Ireland Court Service on devolution and on a draft concordat on judicial independence.

The Court Service Outreach Programme coordinates and underpins a commitment to promote and enhance knowledge and understanding about the courts and the wider justice system.

During 2007/08 the Court Service organised a wide range of educational and community based activities throughout Northern Ireland including a range of court visits tailored to meet the needs of schools, colleges, community groups and the general public.

The National Magistrates’ Court Mock Trial Competition is a highlight of the Court Service’s Outreach programme. Each year it involves 4,500 young people throughout England, Wales and Northern Ireland, and 800 magistrates and other legal professionals. The Northern Ireland heats of this Competition (2007/08) were hosted by the Court Service in Laganside Courts. This event provides young people with an excellent opportunity to gain a better knowledge and understanding of the justice system in an exciting and innovative way.

The Court Service supported Criminal Justice Week (18 – 22 February 2008) by inviting local schools and community groups to attend a range of open days at 7 court venues. The events offered local communities the opportunity to learn more about the Criminal Justice System and to engage with frontline court staff and representatives from other criminal justice agencies and the voluntary sector. Each of the open days focused on a particular theme – including crime prevention, safety, victims and witnesses, working with the community and the role of the judiciary/ legal profession.

6.3 Financial Position and Results for the Year

Financial Position (Balance Sheet)

The Department’s activities are financed mainly by Supply voted by Parliament and financing from the Consolidated Fund.

The Department’s Balance Sheet consists primarily of tangible fixed assets totalling £211m. Of this, £207m represents land and buildings; the remainder being Information Technology assets, furniture and fittings, plant and machinery.

During the year the department expended £0.5m in capital refurbishment and improvement of its property. IT additions amounted to £1.07m primarily as a result of the department’s ongoing programme of business modernisation.

Results for the Year (Operating Cost Statement)

The Operating Cost Statement represents the net total administration and programme resources consumed during the year by Request for Resources. The results for the year are set out in the Operating Cost Statement and are as follows:

The Department employed an average of 750 (Full Time Equivalent) staff during 2007-08, a decrease of 15 from 2006-07. Accommodation rentals, PFI service charges, and non-cash asset related charges accounted for the majority of other administration costs.

As in previous years, a large portion of the Department’s expenditure was allocated to publicly funded legal services, or Legal Aid. The funding of Legal Aid continues to be a pressure on departmental resources. However, the ongoing programme of reform has been designed to address this. The administration of publicly funded legal services is carried out by the Northern Ireland Legal Services Commission (NILSC). The NILSC is an executive Non-Departmental Public Body (NDPB), and subject to the relevant government and accounting guidelines. Details of operational and financial performance of the NILSC can be found on their website at www.nilsc.org.uk. The total grants paid to NILSC in 2007-08 amounted to £80m, over 50% of the gross expenditure of the Department.

The Department is also responsible for providing grant in aid funding to the Northern Ireland Judicial Appointments Commission (NIJAC). NIJAC is another executive NDPB and so is also subject to the relevant government and accounting guidelines. Further details about the activities of NIJAC can be found on their website at www.nijac.org. The grant in aid paid to NIJAC during 2007-08 totalled £1.4m. The Department had operating income of £20.5m which was used to support the administration of justice.

Fees from civil court work are included in these financial statements as appropriations in aid (AinA).

It is government policy that the provision of services for civil court proceedings must be self-financing, so the fees earned from this type of work must cover the cost of that provision. Note 10 shows the level of civil court costs, and the associated income generated. In 2007-08 the recovery level was 68%. It is expected that the revised civil fee structure was implemented in October 2007 after an Equality Impact Assessment and Regulatory Impact Assessment were undertaken, will result in an increase percentage cost recovery in 2008-09.

Comparison of Outturn against Estimate (Statement of Parliamentary Supply)

Supply Estimates are a request by the Department to Parliament for funds to meet expenditure. When approved by the House of Commons, they form the basis of the statutory authority for the appropriation of funds and for the Treasury to make issues from the Consolidated Fund. Statutory authority is provided annually by means of Consolidated Fund Acts and by an Appropriation Act. These arrangements are known as the “Supply Procedure” of the House of Commons.

As a government department the Court Service is accountable to Parliament for its expenditure. Parliamentary approval for its spending plans is sought through Supply Estimates presented to the House of Commons.

The Statement of Parliamentary Supply provides information on how the department has performed against the Parliamentary and Treasury control totals against which it is monitored. This information is supplemented by Note 2 which represents Resource Outturn in the same format as the Supply Estimate.

In 2007-08 the Court Service met all of its control totals. At £130.9m the net resource outturn was £9.9m less than the 2007-08 Estimate of £140.9m. The main reasons for this variance were:

However, the department was required to fund additional judicial costs which are outside of the Parliamentary Vote. As set out in Note 3(a) these amounted to £2.2m thereby reducing the overall net operating cost to £7.7m less than the Estimate.

A reconciliation of resource expenditure between Estimates, Accounts and Budgets can be found below.

2007-08
£000
2006-07
£000
Net Resource Outturn (Estimates130,942 128,946
Adjustments to additionally include:  
Non-voted expenditure in the OCS7,4247,181
Net Operating Cost (Accounts)138,366 136,127
Adjustments to additionally include:  
Resource consumption of non departmental public bodies2,004 13,189
Resource Budget Outturn (Budget)140,370 149,316
of which  
Departmental Expenditure Limits (DEL)140,370149,316
Annually Managed Expenditure (AME)--

It should be noted that the resource consumption of NDPB’s included above is an unaudited figure. The Resource Budget (Budget) in the Estimate for 2007-08 is £149,180k (2006-07: £158,893k).

These accounts have been prepared on a going concern basis.

Cash Flow Statement

The Cash Flow Statement provides information on how the Court Service finances its ongoing activities. The main sources of funds are from the Consolidated Fund.

The Cash Flow Statement shows a net cash outflow from operating activities of £122.5m (2006-07 £119.9m). The change is mainly due to increased support of the departmental NDPBs.

Statement of Operating Costs by Departmental Aim and Objectives

This statement reports expenditure by Departmental objective. The basis of allocation and apportionment of administration and programme expenditure is set out in Note 22.

The Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI)

During the financial year CICAPNI (the Panel) received a total of 859 appeals which shows a decrease of 152 from last years figure of 1011. This number represents an appeal rate of just fewer than 33% of the 2610 reviewed decisions given by the Compensation Agency during the same period. In the year the Panel processed 837 appeals and out of that number 371 applicants won their appeals thus indicating a successful application rate of approximately 44%. The total value of awards made to the successful applicants amounted to £2,050,656.30. The Panel finished the year with 679 appeals in hand and continues to work closely with the Agency's Presenting Officers Section in order to seek ways of reducing that number. The Panel also provided timely and considered advice to the Secretary of State on matters within the Scheme.

The Panel received 3 applications for judicial review in the financial year which represents a judicial review application rate of less than 0.4% of the total decisions made by the Panel in the year thus indicating the high quality of the decision making of the Panel.

The net costs of operating the panel for the 2007-08 financial year were £669,368 (2006-07 £568,995).

The 2006-07 comparatives have been restated to recognise the transfer of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) from the Northern Ireland Office on 1st December 2007 by way of a Machinery of Government transfer. Restatement has resulted in an increase in net operating costs of £568,995 and an increase in net assets of £61,118. Full details are disclosed in notes 1.21 and 34 to the accounts.

6.4 Business Focus for the future

The Corporate Plan 2008-2011 sets out the programme of work for the Court Service over the next three years and explains how we plan to use the resources. The resources agreed in the Comprehensive Spending Review (CSR) for the next three years are as follows:
2008-09
£'m
2009-10
£'m
2010-11
£'m
Resource DEL132.7131.9131.4
Near cash resource DEL215.0114.0113.0
Net administration budget10.710.010.2
Capital DEL7.07..47.4

The Corporate Plan 2008-2011 can be found on the Court Service website at www.courtsni.gov.uk/publications.

As noted earlier the NI Executive has now endorsed a continuation of tribunal reform. This reform programme will transfer administrative responsibility for tribunals from the NI departments to the NI Court Service. On devolution of justice, statutory responsibility for the administration of tribunals can transfer to a Department of Justice.

The Court Service continues to work with the NILSC to secure a stable and sustainable funding settlement throughout the CSR period. This involves seeking additional funds and taking costs out of the legal aid system.

6.5 Principle risks and uncertainties

Devolution of Policing and Justice

The Assembly and Executive Review Committee submitted its report to the Secretary of State for Northern Ireland at the end of March 2008. The Report recommends that the Northern Ireland Court Service should become part of a new Northern Ireland Department of Justice. This would mean that the Court Service would continue as a unified Court Service and would initially become an Agency of the Department of Justice. However the Committee also recommended that further consideration should be given, as a priority, to whether the Court Service should in due course become a non- ministerial department.

The Report also recommends that responsibility for the Northern Ireland Judicial Appointments Commission should be transferred to the Office of the First Minister and the Deputy First Minister and that responsibility for legal aid and the Northern Ireland Legal Services Commission should transfer to the planned Department of Justice. It also recommends that responsibility for the Northern Ireland Judicial Appointments Ombudsman transfer to the Department of Justice.

The Committee was unable to reach agreement on a date by which it will request devolution of justice and this will be for the Assembly and political Parties to decide.

6.6 Personal Data Related Incidents

The Court Service have given consideration to Cabinet Office guidance on Reporting of Personal Data Related Incidents issued in April 2008. The guidance requires that for 2007-08, and prior years, a summary of incidents reported to the Information Commissioner's Office and the numbers of incidents recorded by the Department but not required to be reported to be disclosed in the Annual Report and Resource Accounts of the Department. The Court Service are content that there are no such incidents. The Court Service report any incidents which they feel fall under this guidance to the Cabinet Office and Information Commissioner’s Office immediately.

Sustainability report

Community Programmes

Serving the Community through the administration of justice The Criminal Justice Review report set a clear agenda for those involved in the administration of justice in relation to improved information about the criminal justice system and community outreach. The Review report stated:

Securing a clear understanding on the part of the community about the way in which criminal justice operates and is structured is an essential component of a strategy of enhancing public confidence in the system and is an important contribution to transparency and accountability.’ Our Community Programmes take place under a number of different themes. Below are major themes which the Court Service has developed programmes within which members of the community may be able to get involved.

Further information on the above can be found on www.courtsni.gov.uk

Improving Access of Justice

The Court service is committed to improving access to justice to make the justice system more accessible to everyone, and to develop better and more efficient ways to resolve disputes. The Court Service is working with the Northern Ireland Legal Services Commission on their programme of legal aid reform to improve the delivery of publicly funded legal services.

Improving access to justice is also about improving the ways through which justice can be secured involving resolving disputes by access to an independent tribunal. Tribunals serve a specific purpose – allowing the public to resolve disputes on a range of issues without resorting to the more formal process of a court hearing. The Court Service is responsible for a number of tribunals including the Office of the Social Security Commissioners and the Pensions Appeals Tribunal, and will build upon its programme of tribunal reform by transferring other tribunals to the Court Service to create a unified Courts and Tribunals Service for Northern Ireland.

The Court Service is also committed to reforming the civil justice system and are working closely with the Lord Chief Justice of Northern Ireland, Sir Brian Kerr, who has established a Civil Justice Committee. The Civil Justice Committee will consider how to make the civil justice system as accessible, economical and efficient as possible.

Environmental Issues

The Court Service is currently developing an environmental strategy which will be issued in 2008/09

6.8 Public Interest and Other matters

Pensions and Early Departure Costs

Details about the Department's pensions and early departure costs policies are included in the notes to these accounts. Details of pension benefits and schemes for Board members are included in the remuneration report.

Employment of Disabled Persons

The Department follows the Civil Service Code of Practice on the Employment of Disabled People that aims to ensure that there is no discrimination on the grounds of disability and that access to employment and career advancement in the Department is based solely on ability, qualifications and suitability for the post.

The Department has in place a Code of Practice on the Employment of People With Disabilities and a Good Practice Guide for Managers. A Disability Liaison Officer has been designated to support people with disabilities in their employment. The Department aims to ensure that people with disabilities have equality of opportunity and fair participation in all aspects of their employment, and that discrimination does not take place.

Following the introduction of two new disability duties for public authorities in June 2007 the Court Service issued a Disability Action Plan for the period 2007-09. The Plan details the actions we have already taken and future plans to: I Promote positive attitudes towards disabled people; and II Encourage the participation of disabled people in public life.

Equal Opportunities and Diversity

The Department is an equal opportunities employer. Policies are in place to guard against discrimination, ensure compliance with legal requirements and aim to ensure that there are no unfair or illegal discriminatory barriers to employment and advancement in the Department. The Department employs a designated Diversity Officer who has responsibility for promoting awareness of diversity and equality policies, monitoring the uptake of policies and conducting regular reviews of workforce composition. The role includes acting as an inter-departmental liaison officer with the Cabinet Office and the Northern Ireland Home Civil Service Network.

The Department has in place an Equal Opportunities Policy which guards against discrimination in employment, a Diversity Strategy, which values difference and an Equality Scheme which ensures that all 9 groups contained in Section 75 of the Northern Ireland Act 1998 are protected. An Employment Equality Plan has been put in place to draw together all the proposed activity, which will take place in relation to these policies within the life of the corporate plan. The Equal Opportunities policy states that there shall be no discrimination against staff on grounds of gender, marital status, race, colour, nationality, ethnic origin, religion, disability, age or background. Employment and promotion are based solely on merit. Staff who work reduced hours are assessed on exactly the same basis as those working full time. A Dignity and Harmony at Work policy is in place and provides systems and procedures to enable and support staff to challenge harassment and bullying.

Employee Involvement

The Department attaches considerable importance to ensuring the involvement of employees in delivering its aims and objectives. The Whitley Council within the Court Service provides the means for communication and negotiation with Trade Union Side. The Whitley Executive Committee meets quarterly and is chaired by the Head of Operations. The vice-chairperson is appointed by Trade Union Side.

In addition to using the Whitley forum for communication with staff, a central focus of the development and review of policy within the department includes staff consultation. This is achieved through policy review focus groups to which staff may nominate themselves.

A Workplace Health Committee meets throughout the year to discuss health and safety matters of concern to staff and management.
The Court Service has a well established internal communications system, which meets the requirements of the Information and Consultation of Employees Regulations (NI) 2005, which includes for example team briefing sessions, focus groups, the staff handbook, staff notice board, intranet site, staff notices and staff attitude surveys. The departmental magazine of the Court Service, “Open Court” is circulated quarterly to all members of staff.

Payment of Suppliers

The Department is committed to the prompt payment of suppliers and has signed up to the Government's Prompt Payment Charter which promotes the payment of suppliers within 30 days. In 2007-08 98.02% (2006-07: 95%) of invoices were paid within 30 days.

Auditors

The financial statements are audited by the Comptroller and Auditor General (C&AG) in accordance with the Government Resources and Accounts Act 2000. He is head of the National Audit Office. He and his staff are wholly independent of the Northern Ireland Court Service, and he reports his findings to Parliament.

The audit of the financial statements for 2007-08 resulted in an audit fee of £45,850 (2006-07: £50,000). This fee is included in non staff administration costs, as disclosed in Note 8 to these accounts. The C&AG did not provide any non-audit services during the year. Directorships and other significant interests A register is maintained by the Court Service that includes details of company directorships and other significant interests held by Board members which may conflict with their management responsibilities. This register is available for public inspection upon request.

Other

The continuing development of the Department’s Integrated Court Operations System (ICOS) has again been to the forefront of the activities of the finance department over the year. Finance staff have been involved in helping to ensure that appropriate financial controls and interfaces were incorporated into the new system. This collaborative approach to system development was a priority to ensure the accuracy of the financial outputs. As well as improving the efficiency of case management, ICOS facilitates the payment of fees and fines at any court location throughout Northern Ireland

Through the Court Funds Office, the Department administers a banking and investment service for funds deposited in court. Examples of the types of funds include monies held for minors, certain assets of some mental health patients, and payments in court in satisfaction of a claim. A formal review of administrative and investment processes has commenced with the objective of improving the efficiency and effectiveness of this service. The performance of these funds is outside the departmental boundary and further details may be found in the published white paper accounts for Funds in Court in Northern Ireland.

At the year-end there were no potential environmental liabilities. The Court Service had no contracted capital commitments as detailed in Note 23 to these accounts.

So far as I am aware, there is no relevant audit information of which the Department’s auditors are unaware. I confirm that I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the Department’s auditors are aware of that information.

D A Lavery
Accounting Officer
26 June 2008

Remuneration Report

Remuneration Policy

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 has regard to the following considerations:

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.

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.

Unless otherwise stated below, the officials covered by this report hold appointments, which are open-ended until they reach the normal retiring age of 60. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme.

Staff are appraised annually against a set of competencies and individually targeted objectives. Bonuses, which form only a small percentage of total salaries, are the only form of remuneration subject to performance conditions.

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

Salary and pension entitlements

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

Remuneration(audited)

The Department is not responsible for the remuneration of any ministers. Ministerial salaries are accounted for in the financial statements of the Department for Constitutional Affairs.
2007-082006-07
Name and Title Salary
£000
Benefits in Kind
(nearest £100)
Salary
£000
Benefits in Kind
(nearest £100)
Mr DA Lavery
(Director)
115-120- 115-120-
D P Andrews
Head of Division
65-70-35-40
(65-70 full year equivalent
-
Ms J Durkin
Head of Division
70-75-65-70 -
Ms G Fee
Head of Divison
5-10
(65-70 full year equivalent)
-50-55
65-70 full year equivalent)
-
Ms HL McAlpine
Head of Division
60-65-65-70 -
Ms S Broderick
Head of Division
(from 30th April 2007)
50-55
(60-65 full year equivalent)
---
Mr HA Hunter
(Seconded to NIJAC)
(until 30th September 2007)
35-40
(65-70 full year equivalent)
-65-70-
Mr K King
Non Executive Director
10-15- 10-15 
The salary for Ms G Fee in 2007-08 was paid in respect of the period 15th July 2007 to 5th August 2007 and for 31st March 2008.

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. Kevin King, non-executive director, supplies his services under the terms of a contract, which commenced on 7 October 2004. He is remunerated by way of a daily attendance fee. As non-executive director, there are no entitlements to pension or other contributions from the Court Service.

David Thompson, Finance Director is an appointee, recruited via Interchange. PricewaterhouseCoopers (PWC) supply his services under the terms of a contract, which commenced 5 March 2007. PWC are remunerated by way of a daily attendance fee. There are no entitlements to pension or other contributions from the Court Service. The total amount paid to PWC in 2007-08 for the services of David Thompson was £235,471.37.

Benefits in kind

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

Pension Benefits (audited)

Name and titleReal increase/
(decrease) in
pension and
related lump sum
at age 60 £000
Accrued
Pension at age
60 at 31 march
2008 and related
lump sum
£000
CETV at
31March
2008
£000
CETV at
31March
2007
£000
Real
increase/
(decrease)
in CETV
£000
Employer
contribution to
partnership
pension
account
Nearest £100
Mr DA Lavery
(Director)
0-2.5 plus 2.5-5.0
lump sum
35-40 plus 105-110
lump sum
59770419-
D P Andrews
Head of Division
0-2.5 plus 2.5-5.0
lump sum
20-25 plus 60-65
lump sum
27134324-
Ms J Durkin
Head of Division
0-2.5 plus 2.5-5.0
lump sum
15-20 plus 55-60
lump sum
23029017-
Ms G Fee
Head of Division
0-2.5 plus 2.5-5.0
lump sum
10-15 plus 30-35
lump sum
151172(6)-
Mr G Keatley
Head of Division
0-2.5 plus 2.5-5.0
lump sum
25-30 plus 85-90
lump sum
599680(2)-
Ms HL Division
Head of Division
0-2.5 plus 2.5-5.0
lump sum
20-25 plus 60-65
lump sum
27034123-
Ms S Broderick
Head of Division
0-2.5 plus 2.5-5.0
lump sum
5-10 plus 25-30
lump sum
9212515-
Mr HA Hunter
(Seconded to NIJAC)
0-2.5 plus 2.5-5.0
lump sum
15-20 plus 45-50
lump sum
21923210-

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 joining from October 2002 may 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 in respect of service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 calculated as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with 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.

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 purchasing additional pension benefits at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries 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 drawn.

Due to certain factors being incorrect in last years CETV calculator there might be a slight difference between the final period CETV for 2006/07 and the start of period CETV for 2007/08.

Real increase in CETV

This reflects the increase in CETV effectively 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.

D A Lavery
Accounting Officer
26 June 2008

Statement of Accounting Officer's Responsibilities

Under the Government Resources and Accounts Act 2000, HM Treasury has directed the Northern Ireland Court Service ('the Department') 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 Department 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 Managing Public Money and in particular to:

HM Treasury has appointed the Director of the Northern Ireland Court Service, being the Permanent Head of Department, as Accounting Officer of the Department. 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 the Accounting Officers' Memorandum issued by HM Treasury and published in Managing Public Money.

Statement on 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 Northern Ireland Court Service's 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. As Accounting Officer for the sponsoring department of the NI Legal Services Commission (NILSC) and the NI Judicial Appointments Commission (NIJAC), I have designated their Chief Executives as Accounting Officers. The relationships between the Court Service and the NILSC and NIJAC have been formalised in agreed management statements and financial memorandums.

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 Northern Ireland Court Service for the year ended 31 March 2008 and up to the date of approval of the annual report and accounts, and accords with Treasury guidance.

Capacity to handle risk

Risk management constitutes a standing item on Branch and Divisional meeting agenda and senior managers are required to formally sign off Stewardship Statements for Heads of Division, with Heads of Division completing stewardship statements for submission to me on a twice-yearly basis. Risk Management is also considered formally at Management Board meetings through the review of the Corporate Risk Register and Corporate Plan monitoring reports. These reports include a section on attendant risks thus ensuring that risk management has been incorporated fully into the corporate planning and decision-making processes of the Department.

The risk and control framework

Risks are considered in tandem with objectives at all levels in the organisation and formally reported on in Branch, Divisional and Corporate risk registers. Risks are assessed in terms of their probability of occurrence and impact on the achievement of objectives, and scored and reported on accordingly. Responsibility for the management of each risk is assigned and recorded, along with controls in place to mitigate the risk, monitoring arrangements in place, and any action taken or planned in order to enhance the level of control. Risk registers are formally reviewed on a quarterly basis and documentation updated. The updated risk registers record any movement in terms of impact and probability of occurrence.

The Audit & Risk Management Committee is responsible for the maintenance and development of the risk management and review processes through, for example, ensuring compliance with the structured quarterly review points and twice yearly formal stewardship reporting in order to ensure continued alignment with planning and monitoring at corporate, divisional and branch level. In challenging risks identified by executive management the Committee ensures that there is ongoing consideration of the impact of both external and internal initiatives on the planned work of the Department. Risk management documentation and procedures have recently been reviewed and revisions to the system will be implemented during 2008/09; the newly established Planning and Performance Management team within Finance Branch will assume responsibility for risk management as part of their overall responsibility for corporate plan monitoring and reporting.

Review of effectiveness

As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control. The Board receives regular reports from the Audit Committee concerning internal control, risk and governance. At the end of the reporting period, Heads of Division reviewed the stewardship statements completed by Business Managers in order to create a series of divisional statements from which I have been able to take assurance in respect of the management of risk and the achievement of objectives.

The Department's Risk and Assurance Branch operates to the Government Internal Audit Standards. It submits regular reports, including an independent opinion by the Head of Risk & Assurance on the adequacy and effectiveness of the Department's system of risk management, control and governance.

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 Northern Ireland Court Service 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. The review processes outlined ensure that there is continuous improvement in the system of internal control.

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 and the Audit & Risk Management Committee and a plan to address any weaknesses and to ensure continuous improvement of the system is in place.

Information risk is currently considered as part of the overall risk assessment process. A number of pieces of work were taken forward during the year to specifically address this area, including reaccreditation to ISO 27001, the information security management standard. A records management review is currently being carried out, the outcome of which should enable further development of our policies and procedures to enhance the management of information risk.

The Civil Court Fees Policy was introduced in September 2007 and although this has increased the value of fees collected, this is still significantly short of the full cost recovery position. We recognise that more work needs to be done and we will take this forward in 2008/09.

Throughout the year I have worked closely with the Northern Ireland Legal Services Commission (NILSC) to improve the financial management regime within the NILSC. The joint Northern Ireland Court Service / NILSC Financial Management Oversight Board continues to co-ordinate a range of activities to assist the NILSC in progressing various initiatives to improve its financial management including the production of Annual Accounts and its forecasting capability.

The Northern Ireland Court Service, through the Financial Management Oversight Board, continues to provide a senior accountant who is the NILSC's Director of Finance. This resource has been supplemented by a range of accountants and technical consultancy support. This work has enabled the NILSC to make progress with the production of accounts and agree a way forward for the treatment of provisions. In particular the Financial Management Oversight Board has made significant progress in establishing the forecast liabilities for the CSR period and this project has informed discussions with HMT aimed at securing a stable and viable funding platform.

The NILSC's internal auditors have undertaken a comprehensive programme of reviews of operational and financial systems, including the systems for the prevention and detection of fraud. The majority of these projects have provided only limited assurance and have highlighted a range of weaknesses, due to either the absence of or non compliance with key controls.

During the year a Landscape Review of the NILSC was undertaken and its results will be published shortly. This review has provided the new Chair of the NILSC with an important overview of the NILSC and key recommendations covering a wide range of the NILSC's activities. The NILSC is finalising an action plan setting out its response to the Landscape Review's findings and recommendations.

The circumstances surrounding the acceptance of hospitality by two Court Service officials in a sailing holiday at the invitation of a prominent contractor continue to be investigated by the PSNI and an independent investigation. Pending the outcome of these investigations the two officers remain on precautionary suspension. Neither of the investigations has reached their conclusion but it is expected that they will conclude in the course of the incoming year. The independent investigation will be concluded when PSNI investigations are finished, at which time a final report will be issued and an action plan will be devised at that stage to implement any recommendations, if applicable.

D A Lavery
Accounting Officer
26 June 2008

The Certificate and Report of the Comptroller and Auditor General to the House of Commons

I certify that I have audited the financial statements of the Northern Ireland Court Service for the year ended 31 March 2008 under the Government Resources and Accounts Act 2000. These comprise the Statement of Parliamentary Supply, the Operating Cost Statement and Statement of Recognised Gains and Losses, the Balance Sheet, the Cashflow Statement and the Statement of Operating Costs by Departmental Aim and Objectives and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.

Respective responsibilities of the Accounting Officer and auditor

The Accounting Officer is responsible for preparing the Annual Report, which includes the Remuneration Report, and the financial statements in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions made there under and Article 8(4) (a) (iii) of the Criminal Injuries Compensation (Northern Ireland) Order 2002 and directions made there under by the Secretary of State for Justice 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 and directions made by the Secretary of State for Justice under Article 8(4) (a) (iii) of the Criminal Injuries Compensation (Northern Ireland) Order 2002. I report to you whether, in my opinion, the Annual Report (including the management commentary but excluding the section titled ‘Comparison of Outturn against Estimate (Statement of Parliamentary Supply)’), 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 and the reconciliation of resource expenditure between Estimates, Accounts and Budgets. I consider the implications for my report 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

Audit Opinion

In my opinion:

Audit Opinion on Regularity

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

Report

I have no observations to make on these financial statements.

T J Burr
Comptroller and Auditor General
National Audit Office
151 Buckingham Palace Road
Victoria
London
SW1W 9SS
14 July 2008

Statement of Parliamentary Supply

Summary of Resource Outturn 2007-08 2007-08
£000
2006-07
£000
Estimate Outturn Net Total outturn
compared with Estimate
saving (excess)
Outturn
Gross Note ExpenditureA-in-A Net Total Gross ExpenditureA in A Net Total Net Total
Request for Resources 1161,884(21000)140,884 151,419(20,477)130,9429,942 
Total Resource161,884 (21000)140,884 151,419(20,477)130,942 9,942128,948
Non- operating cost A in A---- -- (232)


Net Cash requirement 2007-08 2007-08
£000
2006-07
£000
 Note Estimate Outturn Net Total outturn
compared with Estimate
saving (excess)
Outturn
Net Cash requirement 4   132,129 116,78715,342 115,040

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 (cash receipts being shown in italics)
  Forecast 2007-08
£000
Outturn 2007-08
£000
  Note Income Receipts Income Receipts

Excess appropriations-in-aid

  - - - -
Court imposed fines   5,150 5,150 8,552 8,552
Externally imposed fines        2,137  2,137
Other miscellaneous   350 350 (223) (223)
           
 Total 5 5,500 5,500 10,456 10,456

Explanations of variances between Estimate and outturn are given in the Management Commentary. The Department accepts payment for fines imposed in the Magistrates and Crown courts for onward transmission to the Consolidated Fund. Fines imposed in court can be cleared either by payment or by means other than payment, including committal to prison. Fines are deemed to be outside the scope of the Department’s activities until paid. On collection of fines the receipts are accounted for as a creditor to the Consolidated Fund until paid over. For 2007-08, the balance of fines outstanding was:

Court imposed Fines £000
 
Balance at 31 March 2007 7,132
Amounts imposed  11,363
 Fines cleared by payment (8,552)
Fines cleared by means other than payment (2,039)
   
Balance at 31 March 2008 7,904

Operating Cost Statement
for the year ended 21 march 2008

  2007-08
£000
2006-07
restated
£000
  Note Staff
Costs
Other
Costs
Income
Administration Costs          
Staff costs 7 4,883     5,260
Other administration costs 8   6,709   8,020
Operating income 10     (20,477) (17,727)
Programme Costs        
Request for Resources        
Staff costs 7 15,264     14,147
Programme costs 9   131,987   126,996
Income     - -
         
         
Totals   20,147 138,696 (20,477) 136,696
Net Operating Cost 3 & 11   138,366 136,969
 

Statement of Parliamentary Supply

  2007-08
£000
2006-07
£000
Net gain/(loss) on revaluation of tangible fixed assets 14,190 8,893
Net gain/(loss) on revaluation of intangible fixed assets - -
Receipt of donated assets - -
Recognised gains and losses for the financial year 14,190 8,893

Balance Sheet

  2007-08 2006-07
(restated)
  Note £000 £000
Fixed Assets:      
Tangible assets 12 210,763 203,162
Intangible assets 13 65 -
Debtors falling due after more than one year   210,828 203,162
       
Current assets:      
Debtors      
Cash at bank and in hand 14(a) 4.527 5,725
  15 8.996 3,191
    13,523 8,916
Creditors(amount falling due within one year) 16(a) (20,555) (12,233)
Net current assets   7,032 (3,317)
Total assets less current liabilities   203,796 199,845
       
Creditors(amount falling due after more than one year) 16(a) (22,816) (25,192)
Provisions for liabilities and charges 17 (3,133) (3,003)
Pension liability 18 (367) (367)
       
Taxpayers' equity;  19 67,387 75,380
General fund 20(a) 110,093 96,903
Revaluation reserve 20(b) - -
Donated asset reserve   177,480 171,283
       
       
The 2006-07 figures have been restated to include expenditure of £568,995.12 and Fixed Assets of £61,117.96 relating to the transfer of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) from the Northern Ireland Office to the Northern Ireland Court Service. The impact of this transfer on the 2007-08 and 2006-07 Operating Costs Statements and Balance Sheet has been disclosed in note 34.

Cash Flow Statement for the year ended 21 March 2008

  2007-08 2006-07
  Note £000 £000
Net cash outflow from operating activities 21(a) (122,452) (119,927)
Capital expenditure and financial investment 21(b) (1,759) (2,294)
Receipts due to the Consolidated Fund which are outside      
the scope of the Department's activities   10,456 9,116
Payments of amounts due to the Consolidated Fund   (10,881) (8,825)
Financing 21(d) 130,441 122,864
Increase/(decrease) in cash in the period 21(e) 5,805 934

Statement of Operating Costs by Departmental Aim and Objectives for the year ended 21 march 2008

      2007-08
£000
    2006-07
(restated)
£000
Aim Gross Income Net Gross Income Net
Objective 1 13591 195 13,396 15,340 - 15,340
Objective 2 3,148 612 2,536 11,098 1,063 10,035
Objective 3 61,074 19,670 41,404 57,495 16,664 40,831
Publicly funded legal services 81,030 - 81,030 70,490 - 70,490
Net operating Costs 158,843 20,477 138,366 154,423 17,727 136,969
             
Objectives 2007-08            
Objective 1 To Modernise court business
Objective 2 To improve access to justice
Objective 3 To promote confidence in the justice system

Notes to the Departmental Resource Accounts

1.0 Statement of Accounting Policies

The financial statements have been prepared in accordance with the 2007–2008 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 Cost by Departmental Aim and Objectives 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 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.

1.2 Basis of Consolidation

These accounts incorporate the core activity of the Department.

The Department sponsors two executive non-departmental public bodies (NDPB’s). These are the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). These have been excluded from the Departmental boundary for the purposes of these resource accounts.

The NILSC was established on 1 November 2003 to operate the legal aid system, a function previously performed by the Legal Aid Department (LAD).

The NIJAC was established on 15 June 2005 to reform the system for the appointment of members of the judiciary and tribunals.

The funds invested by the Court Funds Office (Funds in Court) are specifically excluded from the departmental accounts following HM Treasury guidance. Third party monies are similarly excluded. The funds held on behalf of third parties by the Court Funds Office are included in Note 31.

Financial information about the Northern Ireland Legal Services Commission, the Northern Ireland Judicial Appointments Commission and the Funds in Court may be obtained from their separately published annual accounts.

1.3 Tangible Fixed Assets

The Department holds title to the freehold and leasehold land and buildings shown in the accounts.

Freehold and leasehold land has been included within the balance sheet on the basis of open market value for existing use. Due to the specialised nature of courthouses they are included within the balance sheet at depreciated replacement cost. Other buildings are included within the balance sheet on the basis of existing use value. Land and buildings surplus to requirements are valued on the basis of open market value less any directly attributable selling costs. Antiques are professionally valued every five years. All other assets are included at depreciated replacement cost.

Professional valuations of land and buildings take place at least once every five years in accordance with FRS 15 and appropriate indices are applied to revalue in intervening years. Land and buildings were valued by the Valuation and Lands Agency of the Department of Finance and Personnel at 31 March 2004. Indices used to update land and buildings were provided by the Valuation and Lands Agency.

Other tangible fixed assets have been stated at their value to the business by reference to Office of National Statistics (ONS) indices. The indices for other tangible fixed assets were obtained from ONS MM17 Price Index Numbers for Current Cost Accounting as at December 2007.

Assets costing more than the prescribed capitalisation level of £1,000 are treated as capital assets.

1.4 Intangible Fixed Assets

Purchased computer software licences are capitalised as intangible fixed assets where expenditure of £1,000 or more is incurred. Software licences are amortised over the shorter of the term of the licence and the useful economic life.

1.5 Depreciation

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. Assets in the course of construction are depreciated from the point at which the asset is brought into use. A further adjustment is made for any backlog depreciation arising from the Treasury requirement to value fixed assets by reference to current costs. No depreciation is provided on freehold land since it has unlimited or very long estimated useful life.

Useful lives are normally in the following ranges:

Land -Freehold  Not depreciated
  -Leasehold Not depreciated
Buildings -Freehold  individually assessed
  -Leasehold Period of lease
Furniture and Fittings   10 years
Plant and machinery   5 years
Computer equipment   3-7 years
Intangible  Assets  - Software licences   3 years
Computer Software   3 years
Motor vehicles   3 years
Antiques(non-operational)   Not depreciated
Additions to fixed assets will be depreciated from the month of acquisition where material. Disposals from fixed assets will not be depreciated in the month of disposal.

Antiques (non-operational) are included in the Furniture & Fittings section in the Fixed Asset note.

1.6 Donated Assets

Donated tangible fixed assets are capitalised at their current value on receipt, and this value is credited to the donated asset reserve. Subsequent revaluations are also taken to this reserve. Each year, an amount equal to the depreciation charge on the asset is released from the donated asset reserve to the operating cost statement.

1.7 Stocks

Stocks of consumable stores held by the Department are not considered material and are written off in the operating cost statement as they are purchased.

Assets seized by the Enforcement of Judgments Office are not included in stocks on the basis that they are not owned by the Department, but are held for resale in settlement of third party creditors. Third party assets held by the Enforcement of Judgments Office at the year-end are disclosed in Note 31.

1.8 Operating Income

Operating income is income that relates directly to the operating activities of the Department. Operating income comprises fees and charges for services provided to external customers, rents receivable, and miscellaneous receipts. It includes operating income appropriated-in-aid of the Estimate.

Income is accrued and accounted for in the period in which it is earned in the operating cost statement. Operating income is stated net of VAT.

1.9 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 by HM Treasury.

1.10 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:

1.11 Operating Leases

Rentals under operating leases are charged to the operating cost statement on a straight line basis over the lease term.

1.12 Pensions

Past and present employees are covered by the provisions of the Principal Civil Service Pension Schemes that are described at Note 7. The defined benefit elements of the schemes are unfunded and are non-contributory, except in respect of dependants’ benefits. The Department recognises the expected cost of these elements on a systematic and rational basis, over the period during which it benefits from employees’ services, by payment to the Principal Civil Service Pension Schemes (PCSPS) of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the PCSPS. In respect of the defined contribution schemes, the Department recognises the contributions payable for the year.

1.13 Early Departure Costs

The Department 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 Department provides for this in full, when the early retirement programme becomes binding on the Department, by establishing a provision for the estimated payments discounted by the Treasury discount rate of 2.2% in real terms.

Pension liabilities may arise in respect of provisions for lump sum early departure costs and the balance of any unpaid ASLC. Such liabilities will normally be disclosed within creditors (falling due within one year).

1.14 Value Added Tax (VAT)

Most of the activities of the Department are outside the scope of VAT; 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 or input VAT is recoverable, the amounts are stated net of VAT.

1.15 Private Finance Initiative (PFI) Transactions.

PFI transactions have been accounted for in accordance with Technical Note No.1 (Revised), entitled “How to account for PFI Transactions”, as required by the FReM. Where the balance of the risks and rewards of ownership of the PFI property are borne by the PFI operator, the PFI payments are recorded as an operating cost. Where the Department has contributed assets, a prepayment for their fair value is recognised and amortised over the life of the PFI contract.

Where the balance of risks and rewards of ownership of the PFI property is borne by the Department, the property is recognised as a fixed asset and the liability to pay for it is accounted for as a finance lease. Contract payments are apportioned between an imputed finance lease charge and a service charge.

Further details of current ongoing agreements are shown in Note 25 to the accounts.

1.16 Grants Payable

Grants payable are recorded as expenditure in the period that the underlying event or activity giving entitlement to the grant occurs. Receipt of a claim for funding acts as the underlying event in normal circumstances.

1.17 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%).

1.18 Contingent Liabilities

In addition to contingent liabilities disclosed in accordance with FRS 12, the Department discloses for parliamentary reporting and accountability purposes, certain statutory and non-statutory contingent liabilities where the likelihood of a transfer of economic benefit is remote, but which have been reported to Parliament in accordance with the requirements of Managing Public Money.

Where the time value of money is material, contingent liabilities, which are required to be disclosed under FRS 12, are stated at discounted amounts and the amount reported to Parliament separately noted. Contingent liabilities that are not required to be disclosed by FRS 12 are stated at the amounts reported to Parliament.

1.19 Third Party Assets

The Department holds as custodian or trustee, certain assets belonging to third parties. These are not recognised in the accounts since neither the Department nor Government has a direct beneficial interest in them.

1.20 Changes to Estimation Techniques

There were no material changes in estimating techniques introduced during the financial year.

1.21 Comparatives

The Court Service accounts for Machinery of Government changes and other transfers of function using merger accounting. The prior year comparatives are restated as appropriate.

Note 34 gives the financial impact of the restatement of comparatives necessary to recognise the transfer of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) from the Northern Ireland Office to the Northern Ireland Court Service on 1st December 2007

Analysis of net resource outturn by section

              2007-08
£000
2006-07
£000
              Estimate  
Admin Other
Current
Grants Gross
Resource
Expenditure
A-in-A Net Total Net Total Net Total
Outturn
Compared
with
Estimate
Prior-
year
outturn

Request for Resources 1:

Supporting the effective & efficient administration of justice in Northern Ireland

Central Government spending
Court and other legal  
services 11,592 58,535 25 (20,477) 49,675 55,122 5,447 53,431
Legal Services                
Commission -   79,861 - 79,861 54,262 4,401 74,082
Judicial Appointments                
Commission -   1,406 - 1,406 1,500 94 1,433
                 
Total 11,592 58,535 (20,477) 130,942 140,884 9,942 128,946
                 
Resource Outturn 11,592 58,535 (20,477) 130,942 140,884 9,942 128,946

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

  2007-08
£000
2006-07
(restated)
£000
Note Outturn Supply
Estimate
Outturn
compared
with Estimate
Outturn
Net Resource Outturn 2 130,942 140,884 9,942 128,946
Non-supply income (CFERs) 5 - - - -
Non-supply expenditure 19 7,424 5,166 (2,258) 7,181
Machinery of Government change   - - - 569
           
Net operating cost 138,336 146,050 7,684 136,696

3(b) Outturn against final Administration Budget

    2007-08
£000
2006-07
(restated)
£000
  Budget Outturn Outturn
Gross Administration Budget 20,311 11,592 12,986
Income allowable against the Administration Budget - - -
       
Net outturn against final Administration Budget 20,311 11,592 12,986

4. Reconciliation of resources to cash requirement

    Estimate Outturn Net total
outturn
compared
with estimate:
saving/ (
excess)
  Note £000 £000 £000
Resource Outturn Capital 2  140,884 - -
Acquisition of fixed assets 12, 13 5,990 (2,258) 7,181
Investments - - 569
Non operating A in A -    
Proceeds of fixed asset disposals   7,684 136,696
Accruals adjustments      
Non-cash items (14,745) (14,878) 133
Changes in working capital other than cash - (3,600) 3,600
Changes in creditors falling due after more than one year 16 - 2,386 (2,376)
Use of provision 17 - 188 (188)
Excess cash receipts surrenderable to the Consolidated Fund 5 - - -
Net cash requirement 132,129 116,787 15,342

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 (cash receipts being shown in italics):

  Forecast 2007-08
£000
Outcome 2006-07
£000
  Note Income Receipts Income Receipts
Operating income and receipts - excess A in A 6 - - - -
Other operating income and receipts not classified as A in A 6 - - - -
Non-operating income and receipts - excess A in A   - - - -
Other non-operating income and receipts not classified as A in A   250 250 - -
Other amounts collectable on behalf of the   - - - -
Consolidated Fund   5,250 5,250 10,456 10,456
Excess cash surrenderable to the Consolidated Fund   - - - -
 
Total income payable to the Consolidated Fund   5,500 5,500 10,456 10,456

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

    2007-08
£000
2006-07
£000
  Note Income Receipts
Operating income 10 20,477 17,272
Adjustments for transactions between RfRs   - -
       
Gross income   20,477 17,727
Income authorised to be appropriated-in-aid   20,477 17,727
 
Total income payable to the Consolidated Fund 5 - -

7. Staff numbers and related costs

Staff costs comprise:         2007-08
£000
2006-07
£000
  Total Permanently
employed
staff
Others Ministers Special
advisors
Total
Wages and salaries 16,645 16,349 296 - - 15,773
Social security costs 1,018 995 23 - - 976
Other pension costs 2,995 2,995 - - - 2,744
             
Sub Total 20,658 20,339 319 - - 19,493
Inward secondments 448 448 - - - 583
             
Total Costs 21,106 20,787 319 - - 20,076
Less recovers in respect of            
outward secondments (957) (957) - - - (669)
             
Total net costs 20,147 19,828 319 - - 19,407

The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme but the Northern Ireland Court Service is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 2007. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk).

For 2007-2008, employers' contributions of 2,990K were payable to the PCSPS (2006-07: 2,740k) at one of four rates in the range 17.1% - 25.5% (2006-07: 17.1% to 25.5%) of pensionable pay, based on salary bands. The scheme's Actuary reviews employer contributions every four years following a full scheme valuation. Employer contribution rates were revised from 2005-06 and will remain unchanged until 2008-09. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employer contributions are age-related and range from 3% to 12.5% (2006-07 3% to 12.5%) of pensionable pay. Employers also match employee contributions up to 3% of pensionable pay. In addition, employer contributions of 0.8% of pensionable pay are 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. During 2007-08, no employees of the Department opted for a partnership pension account.

Judicial office holders are mainly covered by the provisions of the Judicial Pensions Scheme. The terms of most of the pension arrangements are set out in (or in some cases are analogous to), the provisions of two Acts of Parliament, the Judicial Pensions Act 1981 and the Judicial Pensions & Retirement Act 1993 (JUPRA).

The Judicial Pension Scheme (JPS) is an unfunded public service scheme, providing pensions and related benefits for members of the judiciary. Participating Judicial Appointing or Administering Bodies make contributions known as accruing superannuation liability charges (ASLCs), to cover the expected cost of benefits under the JPS. ASLCs are assessed regularly by the Scheme's Actuary - The Government Actuary's Department.

The contribution rate required from the Judicial Appointing or Administering Bodies to meet the cost of benefits accruing in the year 2007-08 has been assessed as 30.75% of the relevant judicial salaries. This includes an element of 0.25% as a contribution towards the administration costs of the scheme. A contribution rate of 32.15% has been recommended for the year commencing 1 April 2008.

The liability for future payment is not chargeable to the Northern Ireland Court Service but is a charge on the JPS. The Northern Ireland Court Service is unable to identify its share of the underlying assets and liabilities. There is a separate scheme statement for the JPS as a whole and a full actuarial valuation was carried out as at 31 March 2005. Details of the Resource Accounts of the Department for Constitutional Affairs: Judicial Pensions Scheme can be found on the Department for Constitutional Affairs website (www.dca.gov.uk).

Average number of persons employed

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

2007 -08
Number
2006-07
Number
Objective Total Permanent
Staff
Others Ministers Special advisors Total
1 31 30 1 - - 33
2 34 34 - - - 39
3 685 659 26 - - 693
             
Total 750 723 27 - - 765

8. Administration Costs

2007-08 2006-07

(restated)

Note

000

000

000

000

Rentals under operating leases:

Hire of plant and machinery

9

14

Rentals for accommodation

702

368

Interest charges:

Finance leases

-

-

On-balance sheet PFI contracts

-

-

PFI service charges

Off-balance sheet contracts

717

1,033

Non-cash items

Depreciation

712

966

Amortisation

1

22

Loss on disposal of fixed assets

-

92

Permanent diminution in value

128

241

Cost of capital charge

1,662

1,631

Auditors' remuneration and expenses

46

50

Provision provided for in year

17

77

128

Unwinding of discount on provisions

17

11

9

2,637

3,139

Other expenditure 2,644

3,466

6,709

Total

8,020

9. Programme Costs

          2007-08 2006-07
(restated)
    Note £000 £000 £000 £000
Publicly funded legal services: Grant     73,735   68,522
  Grant in Aid     6,126   5,560
  Criminal Appeals     1,169   1,968
NI Judicial Appointments Commission: Grant in Aid     1,406   1,433
Queen's University of Belfast: Grant in Aid     25   25
Rentals under operating leases       27   31
Rentals for accommodation       553   510
PFI service charges:            
Off-balance sheet contracts            
Service element of on-balance sheet contracts            
Non-cash Items            
Depreciation     7,440   8,312  
Amortisation     1   61  
Cost of capital charges     4,455   4,370  
Provision provided for in year   17 346   300  
Other expenditure       12,242   13,043
Judicial costs (Non-consolidated fund)       12,969   13,441
Judicial costs       5,071   4,693
Judicial pensions       2,632   2,397
Consolidated Fund standing services            
Judicial wages and salaries       6,657   6,436
Judicial social security costs       767   745
             
Total       131,987   126,996

10. Income

    2007-08
£000
2006-07
£000
  RfR1 Total Total
Income from external customers 21,000 19,866 17,459
Income from other departments - 611 268
       
Total 21,000 20,477 17,727

An analysis of fees and charges from civil business services provided to external and public sector customers is as follows:

    2007-08     2006-07  
  Income
£000
Full Cost
£000
Surplus/
(deficit)
£000
Income
£000
Full Cost
£000
Surplus/
(deficit)
£000
Court Service            
-Civil Business 17,851 26,220 (8,369) 15,422 25,769 (10,347)
  17,851 26,220 (8,369) 15,422 25,769 (10,347)

Income shown is in respect of civil fee earning business and has been accounted for in accordance with HM Treasury Fees and Charges Guide.

The Department is committed to achieving full cost recovery for the services it provides in respect of civil court business. The income for 2007-08 represents 68% of cost recovery. Further information on the Civil Fees Review can be found in the Management Commentary.

The civil business fee recovery target, above is based on expenditure net of exemptions and remissions. Applicants in receipt of certain means-tested benefits are entitled to automatic fee exemption. Remission of fees is considered on an individual basis and is granted in cases of hardship. Total fees remitted during 2007-08 amounted to 15.5k.

11. Analysis of net operating cost by spending body

2007-08
£000
2006-07
£000
Spending body Estimate Outturn Outturn
Core department 60,263 57,074 61,156
Legal Services Commission 84,262 79,861 74,085
Judicial Appointments Commission 1,500 1,406 1,433
Queen's University of Belfast 25 25 25
       
Net Operating Cost 146,050 138,366 136,696

12. Tangible Fixed Assets

  Land &
Buildings
excluding
Dwellings
£000
Information
Technology
£000
Plant &
Machinery
£000
Furniture &
Fittings
£000
Payments on
Account &
Assets under
Consturction
£000
Total
£000
Cost of valuation            
At 1 April 2007 (restated) 242,292 7,258 289 2,524 - 252,363
Additions 503 1,068 120 1 - 1,692
Donations - - - - - -
Disposals - - - - - -
Reclassifications - - - - - -
Revaluations 16,780 (2370 20 64 - 16,627
             
At 31 March 2008 259,575 8,089 429 2,589 - 270,682
             
Depreciation 16,780 (237) 20 64 - 16,627
at 1 April 2007 (restated) 259,575 8,089 429 2,589 - 270,682
Charged in year 43,947 3,894 157 1,203 - 49,201
Disposal 6,352 1,505 46 250 - 8,153
Reclassificaitons - - - - - -
Revaluations - - - - - -
  2,632 (109) 11 31 - 2,565
At 31 March 2008 52,931 5,290 214 1,484 - 59,919
Net book value at 31 March 2008 206,644 2,799 215 1,105 - 210,763
Net book value at 31 March 2007 Restated 198,345 3,364 132 1,321 - 203,163
             
Asset financing: 174,514 2,799 215 1,105 - 178,633
Owned - - - - - -
Finance Leased 32,130 - - - - 32,130
On-balance sheet PFI contracts - - - - - -
             
Net book value 31 March 2008 206,644 2,799 215 1,105 - 210,763
Notes Freehold and leasehold land and buildings were valued as at 31 March 2004 by the Valuation and Lands Agency. The valuation was carried out in accordance with the RICS Appraisal and Valuation Manual. All tangible assets were revalued on the basis of indicies dated March 2008. Indicies for land and buildings were obtained from the Valuation and Lands Agency and those for other assets from the Office for National Statistics: MM17 Price Index Numbers for Current Cost Accounting.

13. Intangible Fixed Assets

Cost or valuation 2007-08
£000
At 1st April 2007 -
Additions 67
Donations -
Disposals -
Revaluation -
   
At 31st March 2008 67
   
Amortisation  
At 1 April 2007 -
Changed in year 2
Disposals -
Revaluation -
   
At 31 March 2008 2
   
Net book value at 31 March 2008 65
   
Net book value at 21 March 2007 -
   

14. Debtors

14(a) Analysis by type

Amounts falling due within one year: 2007-08
£000
2006-07
£000
Deposits and advances 6 7
Value Added Tax 837 769
Other debtors 1,022 964
Prepayments and accrued income 2,662 3,985
Amounts due from the Consolidated Fund in respect of Supply   -
  4,527 5,725
There are no debtor amounts falling due after more than one year.

There are no amounts included within debtors that will be due to the Consolidated Fund once the debts are collected.

14(b) Intra-Government Balances

  Amounts falling due within one year Amounts falling due after more than one year
£000
  2007-08 2006-07 2007-08 2006-07
Balances with other central government bodies 2,626 1,839 - -
Balances with local authorities - - - -
Balances with NHS Trusts - - - -
Balances with public corporations and trading funds - - - -
Subtotal: intra-government balances 2,626 1,839 - -
Balances with bodies external to government 1,901 3,886 - -
Total debtors at 31 March 4,527 5,725 - -

15. Cash at bank and in hand

Amounts falling due within one year: 2007-08
£000
2006-07
£000
Balance at 1 April 3,191 7
Net change in cash balances 5,805 769
Balance at 31 March 8,996 964
The following balances at 31 March were held at:   3,985
Office of HM Paymaster General 8,655 2,505
Commercial banks and cash in hand 341 686
Balance at 31 March 8,996 3,191

16. Creditors

16(a) Analysis by type

Amounts falling due within one year: 2007-08
£000
2006-07
£000
Taxation and social security - 2081
Trade creditors 203 341
Other creditors 630 142
Accruals and deferred income 116 6,478
Amounts issued from the Consolidated Fund for supply but not spent at year end 10,248 2,017
Consolidated Fund extra receipts due to be paid to the Consolidated Fund    
Received 749 1,174
Receivable - -
  20,555 12,233
     
Amounts falling due after more than one year    
Imputed finance lease element of on-balance sheet PFI - Contracts 22,816 25,192
  22,816 25,192

16(b)Intra-Government Balances

    Amounts falling due within one year Amounts falling due after more than one year
£000
  2007-08 2006-07 2007-08 2006-07
Balances with other central government bodies 11,100 4,701 - -
Balances with local authorities 9 - - -
Balances with NHS Trusts 1 2 - -
Balances with public corporations and trading funds - - - -
Subtotal: intra-government balances 11,110 4,703 - -
Balances with bodies external to government 9,445 7,530 22,816 25,192
Total debtors at 31 March 20,555 12,233 22,816 25,192 

17 Provisions for liabilities and charges

Early
Departure
Costs
£000
Legal
claims
£000
Other
£000
Total
£000
Balance at 1 April 2007 223 126 2,654 3,003
Provided in the year 62 15 346  423
Provisions not required written back - - - -
Payable within one year 116 - - 116
Provisions utilised in the year 62 126 - 188
Provisions settled directly from Consolidated Fund - - - -
Unwinding of discount 11 - - 11
Balance at 31 March 2008 118 15 - 3,133

17.1 Early departure costs

The Department 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 Department provides for this in full when the early retirement programme becomes binding by establishing a provision for the estimated payments discounted by the Treasury discount rate of 2.2% in real terms.

17.2 Legal claims

Provision has been made for various legal claims against the Department. The provision reflects all known claims where legal advice indicates that it is more than 50% probable that the claim will be successful and the amount of the claim can be reliably estimated. The amount provided is on a percentage expected probability basis. Expenditure is likely to be incurred over a period of 5 years. The provision is based on the estimated cash flow. No reimbursement will be received in respect of any of these claims. Legal claims, which may succeed but are less likely to do so or cannot be estimated reliably, are disclosed as contingent liabilities in Note 28.

17.3 Other

Provision has been made for a long service award for members of the judicial pension scheme. The purpose of the long service award is that, subject to any future changes in legislation, the award will compensate for any tax or National Insurance charges on lump sums payable from the deregistered judicial pension schemes on retirement, whatever the personal circumstances of the judge or his other pension benefits.

18. Pension liability

2007-08
£000
Balance at 1 April 2007 367
Movement in provision -
Balance at 31 March 2008 367
Previously, the Department was responsible for the administration of an individual personal pension determination in respect of one judicial office-holder. Defined benefits accrued in line with the PCSPS in an approved scheme. These benefits were then enhanced by one third through an unapproved scheme. The pension provision was unfunded and non-contributory, except in respect of dependants benefits.

On 4 April 2006, the judicial office-holder transferred to the Judicial Pensions Scheme. The provision represents the value of the pension liability at that date, based on the calculation prepared by the Government Actuaries Department (GAD) in April 2006.

19. General Fund

The General Fund represents the total assets less liabilities of the Department, to the extent that the total is not represented by other reserves and financing items.
2007-08

£000
2006-07
Restated
£000
Balance at 1 April 75,380 82,726
Prior Period Adjustment - -
     
Adjusted Opening Balance 75,380 82,726
Net Parliamentary Funding    
Drawn Down 125,034 117,057
Consolidated Fund Standing Services 7,424 7,181
Provisions settled directly from Consolidated Fund - 246
Year end adjustment    
Supply (Creditor)/Debtor - current year 8,248 2,017
Net Transfer from Operating Activities    
Net Operating Cost 138,366 136,127
CFERS repayable to Consolidated Fund - -
Machinery of Government Transfer - 61
Non Cash Charges    
Cost of Capital 6,117 6,001
Auditors' remuneration 46 50
Transfer from Revaluation Reserve - 202
Balance at 31 March 67,387 75,380

20. Reserves

20(a) Revaluation Reserve

2007-08
£000
2006-07
£000
Balance at 1 April 95,903 87,212
Arising on revaluation during the year (net) 14,190 8,890
Transferred to general fund in respect of realised element of revaluation reserve - 202
Balance at 31 March 110,093 95,903

20(b) Donated Asset Reserve

2007-08
£000
2006-07
£000
Balance at 1 April - 22
Additions during the year - -
Revaluations - 1
Release to the Operating Cost statement - 23
  - -

21. Notes to the Cash Flow Statement

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

Note 2007-08
£000
2006-07
£000
Net operating cost 11 138,366 136,127
Adjustments for non-cash transactions   14,879 16,182
(Decrease)/Increase in Debtors   1,198 637
Less movements in debtors relating to items not      
passing through the OCS   - -
Decrease/(Increase) in Creditors   5,946 1,843
Less movements in creditors relating to items not      
passing through the OCS   5,921 1,075
Use of provisions 17,18 1188 113
Net cash outflow from operating activities   122,452 119,927

21(b)Analysis of capital expenditure and financial investment

Note 2007-08
£000
2006-07
£000
Tangible fixed asset additions 12 1,692 2,493
Intangible fixed asset additions 13 67 33
Proceeds of disposal of fixed assets   - 232
Net cash outflow from investing activates   1,759 2,294

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

  Capital expenditure
£000
Loans etc
£000
A in A
£000
2006-07
£000
Request for resources 1 1,759 - - 1,759
Net movement in debtors/creditors - - - -
Total 2007-08 1,759 - - 1,759
Total 2006-07 2,526 - - 2,526

21(d) Analysis of financing

  Note 2007-08
£000
2006-07
£000
From the Consolidated Fund (Supply) - Current year 19 125,034 117,057
From/(To) the Consolidated Fund (Supply) - prior year   2,017 1,374
From the Consolidated Fund (non-Supply) 19 7,424 7,181
leases and on-balance sheet PFI contracts   - -
Net financing 130,441 122,864

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

  Note 2007-08
£000
2006-07
£000
Net cash requirement   116,787 115,040
From the Consolidated Fund (Supply) - current year 21(d) 125,034 117,057
From/(To) the Consolidated Fund Supply – prior year   2,017 1,374
Amounts due to the Consolidated Fund - received in a prior year and paid over 21(d) 1,174 883
Amounts due to the Consolidated Fund received and not paid over   749 1,174
Transitional adjustment   - -
    5,805 934

22. Notes to the Statement of Operating Costs by Departmental Aim and Objectives

Resources per cost centre have been allocated to strategic objectives based on information obtained from managers within the Department. Common overheads have been apportioned to departmental cost centres on the basis of staff numbers.

Programme grants and other current expenditure have been allocated as follows:

  2007-08
£000
2006-07
Restated
£000
Objective 1 13,591 14,166
Objective 2 766 990
Objective 3 51,864 55,497
Publicly funded legal services 81,030 70,490
Total 147,251 141,143

Capital employed by Departmental Aim and Objectives at 31 March 2008

  2007-08
£000
2006-07
Restated
£000
Objective 1 - -
Objective 2 476 863
Objective 3   170,420
     
Total 177,483 171,283

23. Capital commitments

  2007-08 2006-07
  £000 £000
Contracted capital commitments at 31 March 2008 for which no
provision has been made
- -

24. Commitments under leases

24.1 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.

  2007-08
£000 
2006-07
£000
Obligations under operating leases comprise:    
     
Land and buildings: 283 218
Expiry within 1 year 199 142
Expiry after 1 year but not more than 5 years 796 534
Expiry thereafter 1,278 894
     
Other: - -
Expiry within one year 44 38
Expiry after 1 year but not more than 5 years - -
Expiry thereafter 44 38

24.2 Finance leases

The Department had no finance leases operating during the year.

25. Commitments under PFI contracts

25.1 Off-balance sheet

IS/IT Services

In January 2000, the Department entered into a 10 year IS/IT Service Provision Agreement with Fujitsu Services. The estimated capital value of the agreement is £8m at 1999 prices. The agreement is based on Private Finance Initiative and will enable the Court Service to develop modern information systems to support the administration of justice. To date the following services have been successfully delivered -

Significant progress has been made in the development of the Integrated Court Operations System (ICOS) that will support the business processes across all court tiers. The application is being rolled out in a modular and incremental manner; with the following modules becoming operational

  • Small Claims- November 2002
  • Probate Office - November 2004
  • Jurors Notice - February 2003
  • Matrimonial Office - January 2005
  • Jurors Management - July 2003
  • County Court Divorce - February 2005
  • County Court Civil - July 2004
  • Wardship & Adoption - February 2005
  • Fees Collection - July 2004
  • Criminal Module – May 2006
  • High Court Queens Bench Division - July 2004
  • Family Module – November 2006
  • Chancery Division - November 2004

The scheme also includes the provision of hardware and software support services, training services, legacy support services and help desk support services.

The agreement provides for technology refresh between years 3 and 5 of the agreement. The technology refresh was completed in July 2005.

The PFI property is not an asset of the department. This contract is treated as a contract for services and the operating cost statement will be charged with the service costs in the period to which they relate.

The computer equipment assets held by the Department were transferred to the provider and therefore were treated as a disposal in the 1999-2000 financial statements.

25.2 On-balance sheet

Laganside Complex

During February 1999, the Department entered into a Public Private Partnership (PPP) agreement with a private sector provider for the provision and maintenance of a high quality new court complex in Belfast.

In accordance with the agreement, service charges became payable with effect from February 2002 to December 2026 and these are charged to the operating cost statement. The new court complex has been accounted for as an asset of the Department.

The PFI property is included in the Department's accounts as a fixed asset. The liability to pay for the property is in substance a finance lease obligation. Contractual payments therefore comprise two elements, imputed finance lease charges and service charges. The imputed finance lease obligation is as follows:-

  2007-08
£000
2006-07
£000
Imputed finance lease obligations under on-balance sheet PFI contracts comprises:    
Rentals due within 1 year 2,006 2,500
Rentals due after 2 to 5 years 8,032 10,008
Rentals due thereafter 26,213 36,915
  36,251 49,423
Less interest element 13,435 24,231
  22,816 25,192

25.3 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 and the service element of on-balance sheet PFI transactions was £9,324,975.73 (2006-07: £9,225,642.52); and the payments to which the Department is committed during 2008-09, analysed by the period during which the commitment expires, are as follows.

  2007-08
£000
2006-07
£000
Expiry within 1 year - -
Expiry within 2 to 5 year 6,664 5,831
Expiry within 6 to 10 year - -
Expiry within 11 to 15 year - -
Expiry within 16 to 20 year 3,840 3,604
Expiry within 11 to 25 year - -
  10,504 9,435

Other financial commitments

As in 2007-08, there are no contracted non-capital commitments at 31 March for which no provision has been made.

Financial instruments

FRS 13, Derivatives and Other Financial Instruments, requires disclosure of the role 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 the Department's activities and the way in which Government Departments are financed, the Court Service 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 the listed companies to which FRS 13 mainly applies. The Department has very limited powers to borrow or invest surplus funds and except for relatively insignificant purchases of foreign currency, 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.

As permitted by FRS 13, the Department has elected to exclude from disclosure all debtors and creditors which mature or become payable within 12 months from the balance sheet date.

Liquidity risk

The Department's net revenue resource requirements are financed by resources voted annually by Parliament, as is its capital expenditure. It is not, therefore, exposed to significant liquidity risks.

Interest rate risk

The Department's financial assets and its financial liabilities carry no rates of interest, and the Court Service is not therefore exposed to interest rate risks.

Interest rate profile and currency profile

The Department's financial assets of 8,996,000 (2007: 3,191,000) are non-interest bearing financial assets and comprise of cash at bank and in hand. Cash at bank and in hand is held in sterling and is available on demand.

The Department's financial liabilities of 3,133,000 (2007: 3,003,000) are non-interest bearing financial liabilities and are sterling liabilities.

Foreign Currency Risk

The department's exposure to foreign currency risk is not significant. Foreign currency income and expenditure is negligible.

Fair values

Fair value is not significantly different from book value since, in the calculation of book value, the expected cash flows have been discounted by the Treasury discount rate of 2.2 per cent in real terms

28. Contingent liabilities disclosed under FRS 12

There is an estimated contingent liability of £959,850.41

  2007-08
£000
legal cases pending 526
Criminal pending 434
  906

The amount for criminal appeals represents the amount of claims before the Taxing Master pending judicial direction. The Taxing Master is a Supreme Court judge and has complete discretion in deciding how much should be paid out in respect of claims put before him. As each case is assessed on an individual basis, it is not possible to predict the financial outcome of these claims. The department has therefore treated these as contingent liabilities in accordance with FRS 12.

There are further contingent liabilities upon which it is not possible to put a value. In particular, claims have been made under past contracts. It is the Department's assertion that these claims are unsubstantiated.

29. Losses and special payments

During the year, there were no losses or special payments that required disclosure.

30. Related-party transactions

During the year the Department provided funding to the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). These bodies are regarded as related parties with which the Department has had various material transactions during the year.

In addition, the Department has had a small number of transactions with other government departments and other central government bodies.

No minister or other related parties have undertaken any material transactions with the Department during the year.

Finance Director and Board Member, David Thompson, is an appointee, recruited via Interchange from PricewaterhouseCoopers (PWC). The total amount paid to PWC in 2007-08 for services in addition to the services of the Finance Director amounted £131,297 (excl. vat). This includes £118,840 paid by the Northern Ireland Court Service on behalf of the Northern Ireland Legal Services Commission.

31. Third-party assets

The Department holds as custodian or trustee certain assets belonging to third parties.

The Court Service, through the Court Funds Office, continues to provide a banking and investment service for funds that are deposited in court. The investment service is carried out by an external service provider. Examples of the types of funds include monies held for minors until they attain the majority, certain assets of some mental health patients, payments into court in satisfaction of a claim as well as statutory deposits and unclaimed balances in court.

These are not departmental assets and are not included in the accounts. The assets held at the balance sheet date to which it was practical to ascribe monetary values, comprised monetary assets such as bank balances and monies on deposit, and listed securities. They are set out in the table immediately below.

  31 March
2007
£000
Net
inflows
£000
2007-08
£000
Monetary assets such as bank balances and monies on deposit 122,536 3,190 125,726
Listed securities 112,549 2,412 110,137
       
The Official Solicitor may be appointed to act as a financial controller for persons deemed by the courts to be incapable of managing their financial affairs and assets. In such capacity the Official Solicitor acts as custodian of a number of property assets. Title deeds for property may also be held by the court service as security or bails in relation to legal actions.

Other significant assets held at the balance sheet date to which it was not practical to ascribe monetary values comprised:

  31 March
2008
Number
31 March
2007
Number
Property assets 131 178
Motor vehicles, boats and caravans - 1
     

32. Entities within the departmental boundary

The departmental boundary incorporates only the core department of the Northern Ireland Court Service.

During the year the Department held responsibility for the granting of funds to the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). As executive NDPB's the NILSC and NIJAC are outside the departmental boundary for the purposes of these resource accounts.

The funds invested by the Court Funds Office are specifically excluded from the departmental boundary, following HM Treasury guidance. Third party monies are similarly excluded.

The Northern Ireland Legal Services Commission, Northern Ireland Judicial Appointments Commission and Court Funds Office publish separate audited financial accounts.

33. Criminal Injuries Compensation Appeals Panel Northern Ireland

The administrative functions of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) transferred from the Secretary of State for Northern Ireland (SOSNI) to the Secretary of State for Justice (SOSJ) in the 2007 / 08 financial year and were delivered by a Machinery of Government letter on 1st December 2007. A PES transfer from NIO to Court Service provides the funding for the tribunal.

As a consequence of this transfer CICAPNI ceased to be an NDPB and is therefore not required to produce a separate annual report and accounts for the 2007 / 08 financial year.

The SOSJ has directed a statement of accounts in accordance with the 2002 Order and the Scheme, requiring that he only requires a simple statement providing the full cost of CICAPNI for the year, given as a Note to the Court Service accounts.

This direction is in accordance with The Criminal Injuries (NI) Order 2002 ("the 2002 Order") and with the Northern Ireland Criminal Injuries Compensation Scheme 2002 ("the Scheme") which established the CICAPNI. Both the 2002 Order and the Scheme provide that the Secretary of State may direct the accounts of the CICAPNI.

This accounting note has been prepared in accordance with the accounts direction issued by the Secretary of State for Justice on 22 February 2008.

CICAPNI Statement of Account as at 31 March 2008

Income £ £
Staff Costs   -
Staff Payroll costs (199,346)  
Judicial Payroll costs (221,565)  
Total Payroll costs   (420,911)
     
Other operating costs   (248,457)
     
Net cost of operating   669,368

34. Machinery of Government Changes and Transfers of Function

On the 1st December 2007 the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) transferred from the Northern Ireland Office to the Northern Ireland Court Service by way of a Machinery of Government transfer. The 2006-07 comparatives have been restated to recognise this transfer under the rules of merger accounting. Restatement has resulted in an increase in net operating costs of £568,995.12 and an increase in net assets of £61,117.96. The effect of the restatement is set out below:
Operating Costs Statement 2006-07
   
Operating Income 17,727
Operating Expenditure  
As previously reported 153,854
Transfer of CICAPNI 569
As restated 154,423
Restated Net Operating Cost 136,423
   
Balance Sheet 2006-07
£000
Net assets  
As previously reported 171,222
Transfer of CICAPNI 61
As restated 171, 283

The restatement of £568,995.12 in the Operating Costs Statement includes the following:

Administration Costs £
Staff costs 210,403,45
Other costs 84,859.09
Total Administration Costs 295,262.54
   
Programme Costs 273,732.58
Total Operating expenditure for CICAPNI 568,995.12

35. Post Balance Sheet events/ Prior year adjustments

There were no material post balance sheet events, nor prior year adjustments, for the year ended 31 March 2008.

The annual report and accounts were authorised to be issued on 14 July 2008. Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office PC2340 08/08