DEPARTMENT FOR EDUCATION .gov.uk

DEPARTMENT FOR EDUCATION

CONSOLIDATED ANNUAL REPORT AND ACCOUNTS

For the year ended 31 March 2018

DfE CONSOLIDATED ANNUAL REPORT AND ACCOUNTS 2017-18

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DEPARTMENT FOR EDUCATION

CONSOLIDATED ANNUAL REPORT AND ACCOUNTS

For the year ended 31 March 2018

Ordered by the House of Commons to be printed on 23 July 2018 Accounts presented to House of Commons pursuant to Section 6(4) of the Government Resources and Accounts Act 2000 Annual Report presented to the House of Commons by Command of Her Majesty

HC 1288

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DfE CONSOLIDATED ANNUAL REPORT AND ACCOUNTS 2017-18

? Crown copyright 2018

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ISBN 978-1-5286-0629-5

CCS0618974272

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Printed in the UK by the APS Group on behalf of the Controller of Her Majesty's Stationery Office

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CONTENTS

PERFORMANCE REPORT

Permanent Secretary's overview............................................................................................................... 8 Lead non-executive's overview............................................................................................................... 11 Performance overview............................................................................................................................ 13 Financial review of the year..................................................................................................................... 45

ACCOUNTABILITY REPORT

Corporate governance report................................................................................................................. 55 Governance statement........................................................................................................................... 64 Remuneration and staff report................................................................................................................ 80 Parliamentary accountability and audit report.......................................................................................... 97

FINANCIAL STATEMENTS

Consolidated Statement of Comprehensive Net Expenditure................................................................ 119 Consolidated Statement of Financial Position....................................................................................... 120 Consolidated Statement of Cash Flows................................................................................................ 121 Consolidated Statement of Changes in Taxpayers' Equity..................................................................... 123 Department & Agencies Statement of Changes in Taxpayers' Equity.................................................... 124 Notes to the Accounts.......................................................................................................................... 125

ANNEXES

Annex A ? Departmental statistics........................................................................................................ 169 Annex B ? Data tables.......................................................................................................................... 173 Glossary of key terms........................................................................................................................... 180

PERFORMANCE REPORT

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DfE CONSOLIDATED ANNUAL REPORT AND ACCOUNTS 2017-18

PERMANENT SECRETARY'S OVERVIEW

I am pleased to be introducing the 2017-18 Annual Report and Accounts (ARA), which sets out the Department's key achievements and progress against our strategic and corporate objectives over the past financial year.

As ever it has been another busy year, during which time we welcomed the Rt Hon Damian Hinds MP as our new Secretary of State in January 2018. I would like to take this opportunity to thank the outgoing Secretary of State, Minister for Women and Equalities the Rt Hon Justine Greening MP for her leadership of the Department over the past year, with a strong focus on improving social mobility, as set out in the action plan published in December 2017.

The Department is responsible for children's services and for education and training in England, including Early Years, schools, Further and Higher Education, apprenticeships and skills. This year the Department brought together the responsibilities of the Education Funding Agency (EFA) and the Skills Funding Agency (SFA) to create the Education & Skills Funding Agency (ESFA). The ESFA is accountable for funding education and training for children, young people and adults.

As well as the formation of the ESFA, the Department reviewed the functions of the National College for Teaching and Leadership (NCTL), and made a decision to repurpose the agency. On 1 April 2018, the majority of NCTL's operations were transferred over to the Department, creating the opportunity for seamless

policy and delivery work on recruiting, developing and retaining teachers and leaders. NCTL has been renamed the Teaching Regulation Agency (TRA) and continues to lead on the regulation of the teaching profession, including misconduct hearings. In January 2018, following a cabinet reshuffle, all Ministerial posts for the Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) were moved, first to the Home Office and then to the Department for International Development.

In October 2017, the Department also published the first Academy Sector Annual Report and Accounts (SARA)1 for 2015/16. This aligned the reporting of financial results with educational performance, and has provided greater visibility of academies' funding and spending.

We have a strong Department which is constantly working to deliver excellent results while providing value for money. Achievements over the last year include:

? Introducing a new national funding formula for schools and high needs, which will be supported by an additional ?1.3 billion of funding over 2018-19 and 2019-20. This is the most significant improvement to the school and high needs funding system for well over a decade, and will ensure that for the first time funding will be distributed fairly and consistently according to a formula based on the needs and characteristics of every school and local area across the country.

? Successfully completing the first securitisation of a portfolio of ICR (income contingent repayment) student loans, generating ?1.7 billion of proceeds for the Exchequer. The loan sale programme aims to generate between ?9.2 billion and ?12 billion in proceeds by 2021-22, supporting the Chancellor's fiscal mandate to reduce Public Sector Net Debt.

? Publishing ambitious delivery plans for each of the 12 Opportunity Areas. These followed detailed analysis of the unique social mobility challenges each area faces, looking at a range of outcomes, from Early Years to post-19.

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We consulted a wide range of local partners, including parents, teachers, businesses, and voluntary sector organisations. The partnerships we have built, and the detailed plans we have published, establish the platform to raise school attainment and social mobility in 12 of the most challenging areas of the country. Focus is now on successful implementation.

? Introducing the apprenticeship levy requiring all employers with an annual pay bill of ?3 million or more to pay 0.5% of their annual pay bill to help in providing more access to apprenticeship training. The Apprenticeships Funding Service was set up as a means for English employers to procure apprenticeship training from providers funded from the levy charge. This provides a real opportunity to tackle skills issues and is funding a step change in apprenticeship numbers and quality. Regulations are in place to stipulate the amount of off-the-job training for apprentices. This formal programme of learning is one of the main things that makes an apprenticeship distinct from other workbased learning. There has been a lot of change for employers and training providers, so we have seen a drop in the number of people starting apprenticeships. However, the number of people starting on the newstyle apprenticeships has grown well above expectations. These reforms have made sure that apprenticeships are high quality and valuable to both employers and apprentices, giving them the skills they need to get on.

? Establishing the Institute for Apprenticeships, to put employers at the heart of decisionmaking processes, and supporting the quality of new apprenticeship standards being developed by employers themselves. There are currently 262 standards in development and 275 have already been approved for delivery, taking the total above 500. The number of standards will increase as employers identify more occupations for which they would like to offer an apprenticeship.

? The total reported apprenticeship starts from May 2015 to January 2018 are 1,313,700.

? Consulting on the implementation of our historic T Levels reforms, including confirming that the first three will be in Education & Childcare, Digital, and Construction and the first teaching will take place from 2020 with 52 selected providers. I recognise that these are ambitious reforms and the Department will continue to work closely with our delivery partners to ensure T Levels are a success.

? Reforms to primary school sector assessment in England to develop a stable and trusted assessment system, focusing on pupil progress, mastering of literacy and numeracy and removing unnecessary burdens on teachers.

? Making excellent progress in our mission to ensure as many families as possible have access to high quality, affordable childcare. 294,000 children accessed a 30 hours place in the spring-term 2018.

? More children are now in schools rated good or outstanding.

? In 2017/18 we continued to open new free schools to increase access to high quality education.

? Record number of 18 year-olds from disadvantaged backgrounds applying to full time Higher Education (HE) in England.

? A step change was made in the quality of our reporting to Parliament. By producing the separate Sector Annual Reports and Accounts, we overcame the previous exceptional challenges we faced as a Department consolidating over 3,000 academy trusts (ATs), and we got back on track with our reporting timetable; we produced an unqualified ARA for 2016-17, and laid pre-summer recess.

Following on from the successful `Building our Department Together' programme, we made the decision to move to a more strategic, longterm approach led by the Leadership Team. We focused on embedding our four transformation aims in everything we do, so we can fully achieve our ambition of creating a department that is more user-centred, empowered, evidence-based and focused on end-to-end delivery. This helps the Department to provide its ministers and the public we serve the best possible service, as well as adapt to an increasingly complex political and external landscape.

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