Shareholder Executive

Met Office

Purpose

The Met Office is the official national meteorological service for the UK. It provides weather and climate related services to a range of public and commercial customers in the UK and around the world. The Met Office is a world-leading centre for the science of climate change and numerical weather prediction.

Legal Status and Ownership

The Met Office is a trading fund of the Ministry of Defence.

Government's Objectives

Providing essential services

From the general public and Government to local authorities, civil aviation, utilities and transport, the Met Office’s capacity to predict the weather, as well as producing seasonal and longer-term climate forecasts, makes them a critical partner in decision-making and contingency planning.

To the majority of people in the UK, the Met Office is known for the Public Weather Service which includes National Severe Weather Warning Service, Environmental Monitoring and Response Centre and Public Weather Service Advisors.The Met Office Hadley Centre leads the world in understanding and predicting climate change. It offers expert advice to help governments, businesses and societies around the world make better- informed decisions such as controlling harmful emissions and safeguarding energy provision for the future.

Agreement on the funding of the Met Office’s new supercomputer has been a key achievement in the year, as it will allow the Office to run forecasts at a much higher resolution of 1.5 km. This will create the only facility in the world to offer seamless prediction from tomorrow through the next 100 years.

The supercomputer will help define new science and develop new opportunities to collaborate with other scientific and academic organisations around the world.

Alongside powerful new hardware, the Met Office has invested heavily in developing new partnerships. This includes work with the Natural Environment Research Council with whom they have created the Joint Climate Research Programme, and the new Flood Forecasting Centre where Met Office forecasters are working side-by-side with flood experts from the Environment Agency. This is an example of joined-up working and thinking, a need identified by the Pitt Review, following the devastating floods in 2007.

Critical support for the military

Wherever military action is taking place, Met Office specialists in the Mobile Met Unit (MMU) – a sponsored Reserve Unit of the RAF – provide critical weather and environmental advice on the ground. UK and coalition forces in Afghanistan and Iraq have benefited enormously from the support of the MMU, advising the MOD on the environment of each region and its effect on operations.

Financial Performance

£m	2009	2008	2007
Turnover	185	177	171
Operating Profit	8	13	8
Profit/(Loss) for the year	9	14	9
Net Cash flow	(0)	(0)	(3)
Net Operating Assets	177	180	180
RONA	4.3%	7.0%	4.4%
ROCE	3.8%	6.3%	4.1%
Shareholders' Funds	204	206	199
Dividends	17	11	7

Commentary

Turnover increased in year by 4.6%, from £176.6m in 2007-08 to £184.8m. Growth has been in both Government and commercial revenue streams. The upward trend in commercial revenue has continued during 2008-09 rising to £29.4m (2007-08: £27.0m), largely derived from growth in the Health and Marine programmes together with increased telephone sales of core products. A dividend of £17.2m was declared in the period.

Given the increasing pressure on the public purse, the Met Office will continue to seek out new sources of revenue by selling products and services to both Government and non-Government customers.

The Met Office is also part of the Operational Efficiency Review.

For the fourth year in succession, Key Performance Targets (KPTs) on ROCE, profi tability and Customer-Supplier Agreements (CSAs) were achieved, but the Probability of Precipitation element of the Forecasting Accuracy KPT was narrowly missed. This is a key area of focus for the setting of the Forecast Accuracy target for 2009-10.