Shareholder Executive

Other Businesses

Defence Science and Technology Laboratory

www.dstl.gov.uk

Dstl’s core role is to deliver independent, objective, research, scientific and engineering advice, analysis and support to the MOD and UK Armed Forces. Its mission is to create the winning edge for the UK Armed Forces and Government through the best use of science and technology.

This year, Dstl achieved all its financial targets in terms of cash flow management and the continuing affordability of internal investments.Turnover rose to £404.7m, a rise of 6.8% (2007-08: £378.9m). As anticipated, the costs of staff relocation, non capital expenditure associated with the i lab programme, and a significant increase in the price of utilities meant that Dstl’s profit for the financial year fell from £18.9m in 2007-08 to a loss of £2.1m. ROCE fell from 5.5% to -1.2% over the same period.

Dstl paid a dividend of £28m in 2008-09 (2007-08: £3m).

Defence Support Group

www.dsg.mod.uk

DSG was created by the merger of ABRO and DARA on 1 April 2008, to be MOD’s in-house provider of skilled maintenance, repair, overhaul and upgrade services to the UK’s Armed Forces.

In its first operating year, DSG concentrated on stabilising and transforming its businesses to deliver the performance targets.With turnover of £227m, DSG gave a significant price rebate to its customers and still delivered a profit of £9.6m along with a dividend of £5.2m to Government.

DSG achieved all five Key Targets which is significant given the pace of change in its first operating year. More accurate financial reporting now gives management the assurance and confidence in the performance figures and DSG is on track to deliver even greater benefits.

Northern Ireland Water

www.niwater.com

In the past year, there have been a series of issues for the Northern Ireland governance team and Northern Ireland Water (NIW) to address following the decision of the Northern Ireland Executive to commission a review by an independent panel of the arrangements put in place on vesting of NIW.This review supported the continued involvement of the Shareholder Executive and the GovCo model, but made a number of recommendations relating to the financial position of the company which have required substantial Shareholder Executive input.

QEII Conference Centre

The Queen Elizabeth II Conference Centre’s (QEIICC) role is to provide conference facilities for national and international meetings and to market its facilities commercially as a high quality venue for use by all sectors.The Shareholder Executive has an advisory role on the QEIICC, leading on its involvement in the Operational Efficiency Programme, and sits on CLG’s QEIICC Advisory Board.

In 2008-09, the QEIICC reported a very successful trading performance.Turnover rose by 7.3% to £11.5m, and its surplus on ordinary activities grew from £2.2m to £3.1m. It paid a dividend of £1.7m to the Exchequer.

In the April 2009 Budget, the Chancellor confirmed the Government’s intention to sell the asset by mid2012, in line with OEP objectives.A firm of property consultants has recently been appointed to advise Government on the disposal strategy. In the meantime, a key priority is to maintain and develop the existing successful conference centre business.

Scottish Water

www.scottishwater.co.uk

The Scottish Government adopted new governance arrangements based on the Shareholder Executive model. In April 2008, the Scottish Government opened up the retail market for non-domestic water and sewerage customers. Scottish Water has continued to make considerable progress in delivery of substantial capital programmes and the increased efficiency of the business in a sector in which there are readily available private sector comparators.

Tote

The Tote is one of the principal betting organisations in Great Britain, with more than 3,500 employees, over 500 shops and a major presence on all of the country’s 60 racecourses, as well as internet and telephone betting facilities. The Shareholder Executive has an advisory role to DCMS.

The Government had been preparing for a sale of the Tote, but in October 2008 it announced that conditions were not right for a sale and that it should remain in public ownership for the medium term. However, sale remains the Government’s ultimate policy objective.

The Tote’s turnover in 2008-09 was £2.9bn, an increase of 3.9% compared to 2007-08. However, due to the economic downturn and particular challenges in the telephone business, operating profit before exceptional items of £22.3m was 18.3% down on last year.The Tote has responded to this by focusing on operating costs, in order to best position the business for the coming financial year.

UK Hydrographic Office

www.ukho.gov.uk

UKHO’s vision is to remain the world leader in the supply of marine navigational information and services. The products and services supplied to the defence customer (primarily the Royal Navy) are crucial to the conduct of operations globally.

The UKHO plays a central role in support of the Maritime and Coastguard Agency in discharging the UK’s Treaty obligations under the UN Safety of Life at Sea convention. In addition, the UKHO has established a significant commercial business, supplying navigational charts, publications and other services to mariners throughout the world.

The UKHO has enjoyed a successful year. Turnover increased by 14.8% to £108.3m with sales growth achieved in both the commercial and defence sectors. This generated a profit on ordinary activities of £12.9m and a net profit of £7.6m after exceptional charges.