Dstl Annual Report and Accounts 2024/25

Q: Accountability Report

Our Accountability Report presents information on Dstl ’s key accountability requirements to Parliament as the primary user of our Annual Report and Accounts. It contains 3 sections: Corporate governance, Remuneration and staff, and Parliamentary accountability and audit.

Question 1

Defence Science and Technology Laboratory

Accepted Answer

Annual Report and Accounts 2024 to 2025

On 1 July 2001, in accordance with the Statutory Instrument 2001 No. 1246, the Defence Science and Technology Laboratory (Dstl) was created as a result of the separation of the Defence Evaluation and Research Agency (DERA); Dstl continuing as the Trading Fund.

On 1 April 2017, in accordance with the Statutory Instrument 2017 No. 148, the Defence Science and Technology Laboratory Trading Fund Order 2011(S.I. 2011/1330) was revoked; Dstl continuing as an Executive Agency within the ambit of the Defence vote but no longer operating as a Trading Fund.

Question 2

Performance

Accepted Answer

Our Performance Report details Dstl as an organisation, highlighting our strategy, the principal risks we face in our delivery and the analysis of our performance.

It is split into 2 sections: Overview and Performance Analysis.

These pages complement the detail in our financial statements.

Chief Executive’s statement

I am pleased to present this year’s Annual Report and Accounts, reflecting on a year of considerable achievement, challenge and transformation for Dstl.

We continue to operate in a volatile and unpredictable world, where the nature of threats is evolving rapidly. In this environment, our ability to adapt, innovate and deliver at pace is essential to ensuring the UK maintains its strategic advantage. The contribution of Dstl’s Science and Technology (S&T) to national defence and security has never been more vital – and I am proud of the role we have played ensuring mission success now, and in the future.

2024 to 2025 has seen another year of significant delivery from Dstl within tight financial parameters.

I am particularly proud of the depth and breadth of Dstl’s input into the Strategic Defence Review – with our expertise shaping around 80% of the underpinning papers. This work has ensured that S&T remains central to UK defence posture. We also provided major input to Defence Reform.

As we look ahead, Dstl became part of the National Armaments Director (NAD) Group in April 2025 – a move that further embeds our expertise within the heart of the defence enterprise. This alignment will help the Ministry of Defence (MOD) to procure the right and most cost-effective capability, enhance collaboration, drive efficiencies and strengthen our ability to pull through cutting edge S&T solutions that directly support the UK’s defence and security priorities, at greater pace.

We are also concluding a significant organisational design and development transformation of our own to ensure Dstl is best aligned to the NAD Group. This will support decision making and better acquisition in MOD and offer S&T opportunities that can provide new or more cost effective ways to deliver capability, increasing our agility and ability to deliver at pace. Building upon our newly implemented strategy, and our new operating model, our organisational design is focused on generating greater impact with our work, efficiency and a relentless focus on the delivery of S&T. This will enable mission success, delivering in partnership with defence, industry and academia. We have already reshaped our executive and senior leadership team, and our portfolio delivery office is improving alignment with defence priorities.

This past year has been a year of significant change within the Executive. I want to thank David English and Matt Chinn for their service and leadership, and welcome Tim Sheldon and Simon Donnan to the team. Their experience and insight will be invaluable as we steer Dstl through this next phase of its development and seek to ensure strong UK defence and security through the S&T advantage we generate inside Dstl and with our partners in industry and academia worldwide.

Throughout this period, our people have continued to deliver with professionalism, dedication and remarkable resilience. I am grateful to colleagues – and to our partners across defence, academia and industry – for their continued support to our mission. Together, we remain focused on delivering world-class science and technology to protect the nation and secure our future.

Dr Paul Hollinshead

Chief Executive

14 July 2025

Directors’ report

In last year’s report I commended the magnificent achievement of Dstl delivering, for the first time, over £1 billion of S&T. 2024 to 2025 has once again seen another huge contribution from Dstl, but in the context of a continuing high level of support to operations.

The Board has focused on ensuring that critical S&T capabilities have been protected, as well as being assured that progress continues to be made in tightening up the overall control environment, with particular attention on Health and Safety. The Board was also pleased to note the growing success of the ‘single front door’ through which demand for S&T is channelled. As a result of the single front door, Dstl has been able to avert expenditure by identifying where solutions can meet multiple demands, or where requests are not wholly in line with Defence priorities.

It has also been pleasing to note the contribution Dstl has made to Defence Reform. Looking ahead, from April 2025 Dstl has formed part of the new NAD Group and thus will be well placed to ensure that S&T plays an even more pivotal role in the nation’s defence and security, as well as being better placed to contribute to the anticipated future growth in the defence industry.

None of this would have been possible without the extraordinary work of more than 5,000 people who work at Dstl, colleagues in MOD and its many partners and suppliers, who together ensure that S&T plays such a vital role keeping our armed forces equipped with the best possible solutions both now and for the future. Particular thanks are due to the Dstl Executive led by Paul Hollinshead, who have worked tirelessly to achieve delivery.

During 2024 to 2025 we said farewell to one of our long-standing Non-Executive Board members, Jeremy Monroe, to whom we extend our thanks. In his place, we welcome Mark Barclay who joins us with an impressive array of defence industry experience.

Adrian Belton

Chair of the Dstl Board

Question 3

Who we are and what we do

Accepted Answer

Dstl – delivering mission success through science and technology advantage

Dstl is an integral part of the MOD, focusing on delivering impactful S&T at pace, helping to solve the most important challenges for UK defence and security.

We moved into the NAD Group from April 2025, to be aligned with Defence Equipment and Support, the Defence Infrastructure Organisation and Defence Digital.

Our role is to supply specialist services to MOD, the Home Office and across government using evidence and insights to shape strategic decisions, guiding our stakeholders to make informed choices from the outset.

We use our networks and combine our understanding of UK defence problems, UK’s adversaries and S&T opportunities to find, develop and integrate technologies to provide operational advantage for the front line – whether that be in the Armed Forces or for our security and emergency services, at home and abroad. Our embedded Military Advisors provide an essential conduit into appropriate military areas to ensure that our work remains relevant, both to operational needs and the requirements of our customers.

We work with colleagues across government to understand the needs of defence and security, with our main customer being MOD. We collaborate to integrate the best solutions, wherever they may be found, with academia, small businesses and defence primes, helping to generate economic growth and prosperity through investment in skills, innovation and infrastructure across the UK. Through targeted international research collaboration, we collaborate with our allies, leverage their work and burden-share challenges to reach joint and interoperable outcomes.

Some work must remain in government, such as that of a sensitive nature, or where we need to ensure collaboration with international partners – and it is for that purpose that we must invest in our own people, who can provide that expertise and know-how, while working collaboratively across the S&T ecosystem.

As well as delivering scientific and technological advantage, Dstl also acts as an engine for economic growth. Our work supports jobs across the innovation ecosystem with our unique partners in industry and academia. Through Ploughshare, Dstl-developed intellectual property is commercialised creating jobs through spinouts and licensees, contributing exports and gross value to the UK economy.

During 2024 to 2025 we continued to host DASA, the Defence and Security Accelerator, which finds and funds exploitable innovation to support UK defence and security quickly and effectively, and support UK prosperity. DASA seeks ideas from innovators small and large and provides support to those who have not previously worked with Government.

Our ability to accelerate technology development to deliver direct support to operations is through sustained long-term investment in the core S&T base, through our people, capabilities and facilities. Our work on generation-after-next technologies will allow us to continue to save lives and defeat our adversaries for many years to come.

Our plans for the future – our strategy

The Secretary of State for Defence has made it clear: as a nation we need to be able to deter, fight and win in this volatile world. The Strategic Defence Review (SDR) has set the direction to ensure defence is fit for the future, with Defence Reform providing the foundation of how we will deliver against that new direction.

Dstl launched its 5-year strategy in May 2023, based on an appraisal of defence and security’s challenges and the constantly evolving operating environment. Our strategy sets out the key areas or ‘strategic themes’ for Dstl to address defence and security’s most important challenges and respond to the threats presented by a technology driven future. Achievement of the 4 strategic themes will be underpinned by improvements to Dstl’s organisation, through investment in its people, estate and IT, whilst continuing to operate safely and securely; enabling Dstl to position itself for the future while delivering more effectively against the requirements of the present.

Our stated intent to deliver mission success through S&T advantage and to focus on our stakeholders’ most important challenges is entirely consistent with the new direction for defence. It is vitally important we continue to deliver and champion the impact of our great S&T whilst these strategic conversations play out. Dstl will continue to collaborate with colleagues across defence to ensure S&T is appropriately positioned in the new defence operating model. Our strategic themes and underpinning activity will continue to align with the priorities of the SDR as they emerge.

To deliver its S&T and to achieve its strategic themes, Dstl must continue to evolve and work to do so is already underway:

Transformation programmes

Safety Reset is leading improvements to ensure everyone at Dstl operates safely at all times.
Supply Chain transformation to ensure we engage and collaborate more effectively with industry and academia to grow the UK’s S&T capability, resilience and economy.
Operating Model/Organisational Design is changing how Dstl operates and become better structured to support our Strategy. This will enable us to deliver greater impact at increased pace, focusing on our stakeholders’ most important challenges.

S&T delivery

Bolstering Support to Operations to deliver high-impact and timely support to defence and security’s top priorities.
Working to better prioritise work and increase external collaboration, to deliver improved outcomes for defence.
An S&T Capability Strategy to build a more resilient S&T base, efficiently balancing current operational requirements with future demands.
Rebalancing our portfolio of work to ensure we are concentrating our resource against defence and security’s top priorities.

People and infrastructure

The People Plan is focusing on supporting our staff to help deliver Dstl’s strategic aims.
Our local workforce planning activity is making sure we prioritise the right people, with the right knowledge and skills to meet our S&T priorities.
A 10-year infrastructure plan to help us prioritise our funding in critical areas and collaborate with cross-government partners to find solutions.
A change to our organisational culture drives us towards our vision of a ‘One Dstl’, helping us collaborate and deliver on our stakeholders’ most important challenges.

Dstl’s Strategy 2023 to 2028

Preparing for the future

To maintain an operational advantage in the future, UK defence and security will need new capabilities. This theme focuses on:

Dstl working at the heart of delivering new capabilities and de-risking the future integrated force with our industrial and academic colleagues, to make sure we have got technologies that will matter - to ensure defence has the technology it needs and has battle winning solutions for the future.
Dstl’s knowledge of S&T opportunities informing future force capabilities that are genuinely new, exploiting novel technology and innovation rather than simply upgrading legacy systems.
Providing accessible, diverse networks focused on delivering innovative, cost-effective and affordable solutions to defence and security challenges.
Enabling cost-effective access to niche and critical S&T capabilities, including skilled and capable people.

Enabling operational advantage at pace

It’s imperative that UK defence and security has the S&T it needs. This theme is about Dstl:

Providing S&T support to operations at home and abroad.
Integrating across the innovation ecosystem - assisting users to collaborate, find and fund affordable technology solutions in the near and medium term.
Accelerating exploitation of S&T through greater experimentation, technology demonstration, prototyping and support for test and evaluation working across the defence Value Chain.
Having a greater focus on S&T support to key capabilities and projects, including Directed Energy Weapons (DEW) and the Global Combat Air Programme.

Leveraging and influencing internationally

To best support the UK’s defence and security, Dstl needs to make best use of its specialist knowledge, skills and networks. This theme focusses Dstl’s expertise in leveraging peer to peer technical exchanges to bring together the best groups of people to solve capability problems and have a greater impact.

To do this Dstl needs to focus on:

Strategic influence built through targeted international research collaboration.
Securing access to, and work-sharing in, allied programmes.
Burden sharing and mutual reliance to drive value for money and capability benefit.
Shared solutions to enable trusted, integrated allied partnerships.
Playing our role in making the UK a scientific leader and contributing to growth.

Shaping the defence and security landscape

To maximise the impact of S&T Dstl is actively supporting defence, security and their partners to understand current and emerging threats and priorities and the optimum means of answering them. It also means advising when Dstl and S&T are not being used to best effect in extant practices.

To do this Dstl will:

Work with our key stakeholders to ensure that defence and security ask the right questions and make cost-effective, evidence based decisions at the right time.
Work with our key stakeholders to ensure that Dstl is appropriately configured to provide defence and security the best scientific skills and expertise and can provide excellent scientific advice.

With focused Dstl support, defence and security will:

Achieve value for money - through understanding of technical feasibility and deliverability.
Be agile, technologically-advanced departments harnessing S&T intelligence, independent advice and constructive challenge.
Have faster modernisation through understanding, developing and exploiting new ideas.
Have more innovation and cost-effective end-to-end delivery through stronger collaborative partnerships.

Ensuring successful delivery

Risk is both inherent in our S&T activities and embarked upon to further the science that supports UK defence and security. Effective management of these risks helps to ensure the successful delivery of our objectives. As an MOD organisation, we continue to apply MOD’s risk management framework to our risk management approach. We have embedded risk management practices into our planning and forecasts, minimising disruption that could be caused by threats, as well as maximising the exploitation of opportunities.

By proactively identifying, assessing, and managing the risks to the organisation, we improve the confidence of our stakeholders, and allow Dstl to improve its decision-making and take the most appropriate course of action in pursuit of its objectives.

Our Corporate Risks

Our Corporate Risks are those threats and opportunities that could impact the achievement of Dstl’s strategic objectives. Management of Corporate Risks is delegated to the Executive Management Committee (EMC) with oversight by the Board. Through a process of risk deep dives, the Board and its Audit and Risk Assurance Committee (ARAC) undertake assurance of these risks to review the effectiveness of current controls and risk response plans and ensure the level of risk carried by the organisation is within both its tolerance and delegation. Further assurance is provided in quarterly reporting to the ARAC and reporting to our MOD sponsors.

A re-baselined Corporate Risk Register (CRR) was launched for the start of Financial Year (FY) 2024 to 2025, aligned with Dstl’s Strategy 2023-28, and updates to MOD’s Risk Management Joint Service Publication (JSP) 892. We apply MOD’s Risk Categories to our risks, and where applicable, there is line of sight between our Corporate Risks and MOD’s Principal Risks. Preconditions such as keeping our people safe and secure, will remain enduring essential components of our CRR. The composition of our CRR was revisited by the Board at the end of the FY, to ensure continued alignment with our strategic objectives, and internal and external context. The impacts of upcoming contextual changes on our Corporate Risks will continue to be monitored by our Executive Risk Owners.

Risk is defined as the effect of uncertainty on objectives. Global uncertainty and instability have only increased in 2024 to 2025. We continue to see high levels of conflict; with further uncertainty linked to geopolitical shifts with the potential of far-reaching consequences. It has become more important than ever that Dstl has proactive and robust risk management in place, to mitigate and respond with agility to this volatile external context.

Our Opportunity risk around strategic engagement ensures that our expertise can be put to maximal use to generate impact and value in the defence and security ecosystem.

Managing our risk around prioritising our in-house S&T resources has ensured that Dstl continues to demonstrate our agility in providing specialist support, in response to the ongoing conflict in Ukraine and wider geopolitical conflict.

Our suite of Security risks has been represented at Strategic level, in an overarching Security risk, to ensure that existing arrangements retain senior oversight.

In spite of challenging circumstances presented by ongoing MOD recruitment measures, we have been able to make good progress in ensuring our workforce shape meets current and future requirements, with benefits to be embedded through our new Operating Model and Organisational Design.

A new Environmental Protection risk completes a set of Health, Safety and Environmental Protection Corporate Risks, and will remain in place whilst we track the implementation of a JSP-aligned Environmental Management System.

Risk	Outline controls and mitigations	Progress and changes in 2024/25
CR-CAPABILITY-1 – Loss or degradation of critical national S&T capabilities	Current controls to ensure the viability of unique S&T capabilities which only Dstl can provide, include maintaining Strategic Capability Plans, aggregated under the Dstl S&T Capability Strategy; and undertaking Capability Health Assessments, assured through the External Review Colleges.	Capability Stewardship roles have been embedded in the new Organisational Design. A review of the Capability Assurance process is underway.
CR-ENVIRONMENT-1 – Environmental Protection Failure	Controls include layered protections in line with regulations and legislation applicable to the activity in question; a programme of regulatory inspections; and maintaining onsite and offsite emergency response arrangements.	We have conducted a gap analysis against JSP 816 (Defence Environmental Management System Framework) and launched activities to enhance processes. We have identified training and socialisation needs for Environmental Awareness Training.
CR-GOVERNANCE-1 – Ineffective leadership and governance to effect transformational change	Our Senior Leaders have shared objectives linked to Dstl’s Business Plan to support delivery of the Dstl Strategy. Progress is monitored through regular Executive Management Committee Performance meetings.	Executive roles and responsibilities have been reviewed and updated under our new Organisational Design. Our Leadership Strategy has been approved and is designed to achieve a ‘One Dstl’ approach to leadership.
CR-INFO/CYBER-1 – Major information security breach or loss	In line with MOD information security protocols, Dstl has robust policies, procedures and practices in place, to ensure that its information remains protected and within its control. Layered controls are commensurate with the threat and the value of Dstl’s information.	Cyber and information security defences are continually monitored, tested, audited and enhanced, to ensure they remain robust and proportionate.
CR-INFO/CYBER-2 – Failure to effect rapid Data transformation and enable underpinning S&T capability	Digital and data transformation governance structures are embedded in our Organisational Design, to support Dstl’s Data Strategy	Ongoing activities align with safety and technical standards, and a ‘secure by design’ approach.
CR-INFRASTRUCTURE-1 – Key infrastructure component fails	Dstl’s infrastructure assets are protected and enhanced via a programme of integrity and maintenance schedules and projects. Additionally, key infrastructure components have associated resilience plans and Dstl maintains robust Continuity planning arrangements.	This risk is managed through life, due to the varied and complex nature of Dstl’s infrastructure and its evolution. This is approached through an ongoing cycle of pursuing funding avenues to upgrade our infrastructure, and managing and maintaining the infrastructure we have. During 2024/25, Dstl’s Business Continuity planning arrangements were validated through a phased cross-organisational exercise which took place over 6 weeks.
CR-PEOPLE-1 – Workforce shape not matched to current and future requirements	Dstl recognises its people as our greatest asset and undertakes strategic workforce planning to ensure workforce capabilities support business needs. Outputs of Capability Health Assessments inform workforce planning activities.	Dstl has continued to undertake targeted recruitment to prioritised roles, in response to Government / MOD recruitment controls. Implementation of the Pan-Defence Skills Framework is underway, as is development of enhanced Talent Development schemes. Our Reskilling and Redeployment process has been reviewed, to align with our new Operating Model and Organisational Design.
CR-PORTFOLIO-1 – Inability to prioritise and focus Dstl’s in-house S&T resources	Dstl has a series of measures in place to provide a single, centralised and coordinated approach (a ‘single front door’) for triaging and assessing the priority for new work. This ensures that resources are appropriately balanced across new and existing demands	Dstl’s strengths in this area continue to be extensively demonstrated through our ongoing response to the Ukraine conflict and to urgent requests from Partners Across Government. Current developments to further reinforce controls, relate to gaining enhanced insights from Management Information.
CR-REPUTATIONAL-1 – Poor advice and substandard products / services	Dstl prides itself on the quality of its outputs, ensured by the rigorous Technical Quality Assurance (TQA) of all formal S&T outputs. This is supported by the effective contract management and Technical Partnering of Dstl suppliers/sub-contractors. Various feedback mechanisms, including Customer Satisfaction Surveys, ensure our exacting standards are maintained.	Ongoing continual improvement activities include a review of TQA processes and training.
CR-SAFETY-1 – A failure in health and safety management causes a life-threating injury to a worker	Dstl’s primary priority of ensuring that all work is undertaken safely, is ensured by suitable and sufficient Health & Safety Risk Assessments, and comprehensive work procedures, carried out by competent, trained personnel. The source of harm is designed out in the planning phase wherever possible, to prevent accidents and injuries. Regular monitoring and auditing processes provide assurance that Health & Safety management arrangements are effective and compliant.	In 2024/25, enhanced training has been delivered for those undertaking or authorising H&S Risk Assessments. In-person delivery of ‘Safety Baseline Training’ was rolled out and is on track for delivery to all personnel by early Q2 2025/26. Dstl’s Safety Assurance Plan has been developed
CR-SAFETY-2 – Major Health and Safety Event Harms the Public	Dstl protects the public via effective defence-in-depth engineered safeguards. These are assured through an internal regime of first and second party audits of operating effectiveness and Health and Safety compliance. A Safety Argument (through a Safety Case or the application of a Safe System of Work) is used for all high-hazard / complex activities.	Tranche 2 of Dstl’s Safety Reset is underway and includes activities to embed a ‘learning organisation’ approach and reinforce our controls to manage hazards.
CR-SECURITY-1 – Degradation of Dstl’s ability to deliver critical outputs	Dstl has robust physical and personnel protective security measures in place to ensure that we operate securely, in line with applicable policy requirements.	Dstl’s security arrangements are constantly monitored, maintained, and reinforced.
CR-STRATEGY-1 – Influencing Dstl’s position in the Defence S&T ecosystem	Our unique positioning in the defence and security enterprise allows Dstl to put the breadth and depth of our expertise to maximal effect, to support the informed exploitation of S&T. The controls in this Opportunity risk centre on coordinated strategic engagement activities, led by suitably skilled personnel, to maximise the impact of our science and technology.	In 2024/25, we have further cohered our approach, to ensure that that all stakeholders have a clear pathway for accessing Dstl’s advice, products and services. As part of our Organisational Design, we have made provision for the Strategy and Strategic Engagement Team to work with the new Mission Partner Engagement (MPE) and Delivery Partner Engagement (DPE) Functions. It is anticipated that our move to NAD Group will provide further opportunities to maximise the impact of our expertise.
CR-TECHNOLOGY-1 – Digital - Lack of digital investment (infrastructure, services and SQEP)	Dstl takes active measures to address the increasing reliance over time, on Digital Service to deliver S&T and run the business. These include our approach to managing funding; Business Relationship Management to understand and respond to the needs of the business; and the alignment of Dstl’s Digital Strategy to the Defence Digital Framework.	Ongoing activities include a 6-monthly Digital Health report to the Executive. Being party to the defence-wide upskilling of the workforce in Digital Skills, to align workforce skills with strategic direction.

Question 4

Our performance summary

Accepted Answer

Foreword

2024 to 2025 was the final year of the 4 year Spending Review settlement. Over the first 3 years of the settlement Dstl grew to meet the increased S&T demand, both in terms of our routes to market and in our output (total operating income increasing by 48% over the first 3 year period to a record £1,102 million in 2023 to 2024). Whilst income dropped 12% to £971 million, demand for Dstl’s scientific services remains strong and integral to defence and security. We have worked with partners in industry and academia to help mitigate the impact, on long-term capability in the wider S&T eco-system.

Our capital investment programme was also constrained and, as a result, we focused on replacement of equipment and de-risking the safety and security of our critical infrastructure.

Operating income

Total operating income for the year fell, from the record high set the previous year, by £131 million to £971 million (2023 to 2024: £1,102 million). The fall in income is largely against the MOD Core (CSA-funded) programme with delivery constrained as MOD balanced its financial position.

Our charge rates increased by 7.5%, recognising the need for significant investment in our physical and digital infrastructure as well as continued underlying inflationary pressures. There were no changes to fees and charging policies. An analysis of our key top-level customer groups is set out in the table below:

	2024/25	2023/24
	£ million	£ million
MOD:
Core S&T Programme	481	597
Other	422	430
	903	1,027
Non-MOD
Wider Government	56	52
Non-Exchequer	11	13
Total Customer Sales	970	1,092
Other Operating Income	1	10
Total	971	1,102

MOD accounted for 93% of the £970 million customer contract income (2023 to 2024: 94%). Most of the MOD income is generated by the Core S&T Programme, which saw significant growth in the first 3 years of the Spending Review period but was constrained in this final year with a resulting £116 million reduction to £481 million (2023 to 2024: £597 million). This programme now represents 50% of total customer contract income (2023 to 2024: 55%).

There was also a fall in Other MOD income, by £8 million down to £422 million (2023 to 2024: £430 million). Demand for Dstl’s expert S&T services remaining buoyant across other key markets with funding prioritised to the equipment programmes and support to the Front Lines Commands:

Head Office (Non-Core Programme) delivery was down £14 million to £126 million (2023 to 2024 £140 million).
Defence Equipment and Support (DE&S) delivery increased by £13 million, to £101 million (2023 to 2024: £88 million).
Business with the rest of MOD, covering the Front Line Commands (Air, Army, Navy and Strategic) and the Defence Nuclear Enterprise, fell by £7 million to £195 million (2023 to 2024: £202 million).

Non-MOD delivery increased by £2 million to £67 million (2023 to 2024: £65 million). Dstl continues to deliver to a number of UK Government departments, with the Home Office our largest customer outside of MOD. Non-Exchequer income relates mainly to collaborative and jointly funded work with our defence allies and alliances. Other operating income reduced by £9 million, to £1 million (2023 to 2024: £10 million). The reduction is representative of a change in funding policy, whereby MOD customers now transfer Parliamentary supply to Dstl for the acquisition of S&T assets, where previously they were procured through delivery programme income. For further information please see Note 3 of the Financial Statements.

External delivery costs

External delivery costs comprising subcontracted work and purchases of materials and services fell by 26% to £416 million (2023 to 2024: £562 million), representing 43% of all S&T work delivered in the year (2023 to 2024: 52%). This fall in sub-contracted delivery is directly linked to the pressure on the MOD Core CSA programme, where investment was focused on MOD’s highest priorities. We continue to work collaboratively with our S&T partners to leverage innovation and align to our strategy to enhance and harness the S&T eco-system. As we move forward into 2025 tp 2026 our new operating model comes into effect with the formulation of our new Mission and Delivery Partner Engagement functions (MPE and DPE). The MPE function will work closely with new MOD interfaces, created under Defence Reform, to shape strategic direction and ensure we deliver to the highest priorities in Defence and Security. The DPE function will work with our partners in industry and academia to help build and maintain critical capabilities in the S&T eco-system aligned to those priorities.

Operating expenses

Operating expenses increased by £33 million to £624million (2023 to 2024: £591 million).

	2024/25	2023/24
	£ million	£ million
Staff Costs	374	365
Non-Staff Costs	178	150
Depreciation, Amortisation and Impairment	72	76
Total	624	591

Staff costs increased by £9 million to £374 million (2023 to 2024: £365 million). Discounting the one-off Cost of Living Allowance payment in 2023 to 2024 at a cost of £8 million the real increase is £17 million, which reflects annual pay inflation of 4.5%.

Non-staff costs increased by £28 million to £178 million (2023 to 2024: £150 million). Last year non-staff costs were reduced by release of an £8 million accrual following a one-off favourable assessment of business rates liabilities. In 2024 to 2025 we also made critical investment in planned estates maintenance and new digital service provision. These essential increases and unavoidable inflationary pressures have been offset by savings measures across defence on discretionary expenditure.

Depreciation, amortisation and impairment costs are down £4 million to £72 million (2023 to 2024: £76 million). At £16 million property impairment cost is down £15 million (2023 to 2024: £31 million) offset by other asset impairments of £4 million and increased depreciation / amortisation charges on new assets. For further information please see Note 12 of the Financial Statements.

Net operating income/expenditure

Our income arises principally from charges to customers. Our MOD customers are charged at rates representing the recovery of cash operating costs only, in accordance with the department’s policy for internal charging. Charges to Non-MOD customers continue to reflect full economic cost and include a contribution towards our capital costs in the form of a fee based on a representative proportion of capital spend. The proportion is based on estimates of projected sales to Non-MOD customers at the time when budgets are finalised.

	2024/25	2023/24
	£ million	£ million
Operating Income	971	1,102
Costs of Sales – Direct Purchases	(416)	(562)
Other Operating Expenditure	(624)	(591)
Net Operating Income / (Expenditure)	(69)	(51)

The net operating expense for FY2024/25 is £69 million (2023 to 2024 £51 million). Excluding depreciation / amortisation charges of £72 million and customer-funded (donated asset) income of £1 million the underlying net operating income is £2 million (2024 to 2025 £18 million), which reflects the fee on income from our Non-MOD customers, offset by pressures created, yet well managed, by the overall retraction in MOD income.

Capital investment

Capital investment was £51 million (2023 to 2024: £52 million), which included £1 million of assets either funded by MOD customers or donated by other government departments.

Site rationalisation has featured significantly in our capital investment delivery in recent years but since leaving the Fort Halstead site in 2023 to 2024 and completing registration of the final associated new building into service at Porton Down in 2024 to 2025 we see a planned rebalance to the portfolio, aligning to our strategy to invest in our physical and digital infrastructure.

Key investments were made to our infrastructure to ensure safe and secure working, and we continued to make acquisitions of new specialist scientific equipment to enhance our capabilities. Some planned investments were postponed to future financial periods as part of compromises to help balance the MOD financial position.

Across the portfolio we invested: £16 million on IT, £16 million on our physical estate and £19 million on Laboratory Equipment.

Funding and treasury management

We are equity funded by MOD as explained in the financial statements and accompanying notes. The funding requirement arises from a combination of cash and non-cash transactions. We operate within the departmental control framework as described in the Parliamentary Accountability and Audit Report. We receive cash directly from Non-MOD customers and retain responsibility for settling external liabilities with the exception of payroll, which is funded directly by MOD. This gives rise to a net cash outflow that is funded by MOD Treasury.

Supplier payments

During the year, we paid 98% of invoices within 5 days of being approved and cleared for payment (2023 to 2024: 93%), against the target set by government of 80%.

Distorting factors

There were no significant distorting factors affecting our primary financial statements. A full explanation of our accounting policies and other explanatory information can be found within the notes to the financial statements. We continue to prepare our financial statements on a going concern basis based principally on funding projections from our parent department.

Events after the reporting date

There have been no significant events since the end of the financial year that affect the results for the year or the year-end financial position, or that are likely to have a material impact on future performance.

Accounting policies

These accounts have been prepared under International Financial Reporting Standards (IFRS), as adapted for the public sector in the Government Financial Reporting Manual (FReM), issued by His Majesty’s Treasury. There were no new accounting or reporting standards adopted in year.

The likely impact from future adoption of new accounting and reporting standards, are outlined in Note 1 to the financial statements.

Financial outlook

Our core purpose and role remain unchanged as a supplier of S&T services to defence and security customers, mainly within Government. We continue to operate principally in specialist areas where there are often few private sector suppliers or no effective commercial market.

Under Defence Reform, Dstl becomes part of NAD Group with effect FY2025/26, uniting MOD’s delivery organisations. Working together as one group will make us more efficient and strengthen our systems. It will drive nimble innovation, rapid procurement, sustained growth, and make us a better partner to the defence enterprise. Whilst Dstl’s principal operations will not change there is ongoing review on how the entities in the group will operate and interface in the future.

We continue to work with MOD, as our sponsoring Department, to ensure our future investment requirements are funded as part of the Spending Review 2025 that will secure funding for the next 4 years.

Measuring how we are doing

Performance reporting

Dstl’s performance is systematically monitored through a monthly Corporate Performance Report, reviewed by the EMC and evaluated during quarterly EMC Performance meetings. The Dstl Board also assesses performance at every meeting, tracking progress against objectives, including KPIs. To strengthen reporting processes, Dstl continues to collaborate with the Board and its MOD Sponsor.

This framework integrates both current and forward-looking performance assessments, allowing timely interventions to ensure the achievement of KPIs and strategic goals.

Beyond KPIs, Dstl regularly tracks a broader set of Performance Measures (PMs). Collectively, these KPIs and PMs offer a comprehensive view of performance, enabling informed decision-making at all organisational levels. Dstl, in partnership with its MOD Sponsor, Board, and Defence Science and Technology (DST), determines and agrees the KPIs that measure organisational performance.

For 2024 to 2025, Dstl established ambitious but achievable KPI targets. Achieving the agreed targets presented challenges throughout the year, as reflected in the performance outcomes. Of the 6 KPIs:

one (Safety) successfully met its target
three (Delivery, People and Enabling Cost) remained within the accepted tolerance range
two (External Delivery and Delivery per Fixed Term Equivalent (FTE)) fell short of their targets due to external factors beyond Dstl’s control

KPIs

	What we measure (KPI)	2024/25 Target	2024/25 Achieved
How well are we delivering to our customers?	Delivered to agreed date of S&T Programme milestones	>85%	82%
Are we safe and secure?	Fewer than 140 RIDDOR injuries, per 100,000 employees	<140	77.4
Do we have the enablers in place to deliver S&T?	Level of Employee Engagement, through the completion of the People Survey	60%	58%
Are we becoming more efficient?	Average S&T delivered per Full Time Employee (at Dstl level)	£200k	£189k
	EMR (Extra Mural Research) spend (sub-contract only), as a percentage of the Total Cost of Sales	>37.1%	34.9%
	Enabling Cost, as a percentage of the Overall Cost	<21.8%	22.6%

Key Performance Messages 2024 to 2025

How well are we delivering to our customers?

Delivery of S&T Programme outcomes benefiting defence and security from the baseline portfolio plan.

This year, Dstl achieved 82% of its reported S&T programme milestones on time, falling just short of the 85% target.

Are we safe and secure?

Fewer than 140 RIDDOR injuries, per 100k employees.

In 2024 to 2025, there was a total of 6 RIDDORs (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations). Each incident stemmed from distinct and unrelated events.

The overall RIDDOR incident rate related to personal injury was 77.4 per 100,000 employees, remaining below the KPI threshold of 100. The equivalent frequency rate was 0.04. This marks a positive improvement from the previous year’s rate of 95.5 per 100,000 employees, indicating a favourable trend in safety performance against increasing engagement.

Do we have the right enablers in place to deliver S&T

Level of employee engagement

The results from the 2024 to 2025 annual People Survey showed Dstl’s engagement index at 58%, slightly below the KPI target and representing a modest decline compared to both the target and the previous year’s score in what was a year of unprecedented internal and external change for Dstl.

Are we becoming more efficient?

Average S&T delivered per Full Time Employee (at Dstl level).

The saving measures imposed on Dstl during 2024 to 2025 presented significant challenges in meeting efficiency KPIs, many of which were beyond the organisation’s control. As a result, the S&T delivery per FTE dropped to £189,000, reverting to pre-Spending Review levels (FY2022/23).

EMR (Extra Mural Research) spend (sub-contract only), as a percentage of the Total Cost of Sales

Dstl continues to deliver a significant volume of its S&T through a diverse external supply base in industry, academia and internationally. For 2024 to 2025, a total of £336 million of research was delivered through partners giving a total EMR percentage spend of 34.9%, which was lower than targeted due to external spending constraints.

Type	FY2021/22	FY2022/23	FY2023/24	FY2024/25
EMR	354	388	461	336
EMR%¹	42.0%	40.5%	42.4%	34.9%

¹ EMR as a percentage of total cost of sales

Enabling cost percentage of overall cost

The enabling costs percentage, as a proportion of Dstl’s overall total costs, ended FY2024/25 at 22.6%. This was slightly above the target by 0.6%. Over the past year, this metric has gradually increased, primarily due to overall cost constraints and the limited ability to place external contracts.

Question 5

Managing the impact of our activities

Accepted Answer

At Dstl, we are committed to building a sustainable future for our environment, each other, and our community.

Sustainability Strategic Direction

Dstl moved forward with its sustainability agenda, within our business and in support of the UK government and MOD’s sustainability ambitions. Our sustainability goals continued to support the UK government’s net zero greenhouse gas emissions by 2050 (NZ50) mandate, and greening government commitments (GGC).

Dstl has focused on the United Nations 17 Sustainable Development Goals (SDGs) where we can make an impactful difference.

SDG 3 Good Health and Well-being	SDG 4 Quality Education	SDG 6 Clean Water and Sanitation
SDG 7 Affordable and Clean Energy	SDG 8 Decent Work and Economic Growth	SDG 9 Industry Innovation and Infrastructure
SDG 11 Sustainable Cities and Communities	SDG 12 Responsible Consumption and Production	SDG 13 Climate Action
SDG 15 Life on Land	SDG 16 Peace, Justice and Strong Institutions	SDG 17 Partnerships for the Goals

Looking forward to the future

Our ‘Dstl Sustainability Strategic Direction 2021 to 2026’ sets the landscape for sustainability, and our Dstl Sustainability Policy provides direction on how we will manage our responsibilities.

Compliance statement

Dstl’s report on climate-related financial disclosures is consistent with His Majesty’s Treasury’s TCFD-aligned disclosure guidance.

Dstl forms part of MOD’s Principal Risk ‘Reduction in operational effectiveness or readiness caused by the physical effects of climate change and nature degradation’. The Risk Owner during 2024 to 2025 was the Second Permanent Under Secretary of State for Defence. Dstl is a member of MOD’s Climate Change and Sustainability Risk Working Group.

We have complied with the TCFD recommendations and disclosures for Phase 1 and 2, and in line with the UK Government’s implementation timetable, plan to disclose Strategy in future reports.

Disclosures

Governance (a)–Board’s oversight

To date, Dstl’s Board has not had specific oversight of climate-related issues. We have discussed with the Dstl Board and our Audit Risk and Assurance Committee how climate-related issues could be included in appropriate governance, as well as in our strategies, polices, risk management, budgets and plans.

Governance (b)–management’s role

Our Sustainability Committee provides senior level governance, including on climate-related issues, and oversees progress against GGCs. Where relevant, issues can be escalated to the Executive Management Committee and Dstl Board. Our Chief Operating Officer (COO) is our senior sponsor for sustainability, climate-related issues, and environmental protection.

Our Investment Management Committee considers climate-related issues under sustainability. Climate-related issues have been discussed with our Audit and Risk Assurance Committee, and inclusion within future activities is to be agreed.

Risk management (a)–risk identification and assessment

We used DIO’s Climate Impact Risk Assessment Matrix (CIRAM) to identify and assess climate-related risks. The potential size and scope of climate-related risks was determined using an assessment of risk cause, event and consequence, scored for likelihood and impact with current controls and mitigations taken into account. This provided residual risk ratings, following which target risk ratings were agreed.

Risk management (b)–risk management

Using the CIRAM, our relevant subject matter expert stakeholders made collaborative assessments on a response level for each identified climate-related risk, for example to treat, tolerate, terminate, take opportunity etc., along with a response plan of associated activities.

Risk management (c)–overall integration

To date, climate-related risks have not been integrated into our overall risk management. We have commenced consideration of how this can be achieved.

Metrics and targets (a)–metrics

We use greenhouse gas (GHG) emissions and physical risk metric categories to assess our climate-related risks.

GHG emissions are gases in the Earth’s atmosphere that act as an insulator trapping the sun’s heat and, therefore, raise temperatures. Human activity from the burning of fossil fuels causes the release of GHG emissions.

Further information is provided in our emissions reporting metrics and targets below.

Our physical risk metrics are split into acute and chronic. Examples include:

acute risks–heat waves, severe cold, snow or winds, heavy downpours of rain, wildfires, flooding, drought, and electrical storms
chronic risks–worsening air quality, reduced water availability, disrupted energy supplies, and loss of biodiversity

Metrics and targets (b)–emissions reporting

Our reported GHG include:

scope 1–burning fuels (such as, mains gas, oils, and liquid petroleum gas (LPG)), pool cars usage and fugitive gases
scope 2–purchased electricity
scope 3–National Grid transmission and distribution, business travel, water and wastewater, and waste

Our GHG emissions are calculated in-line with the GHG Protocol methodology, using UK Government GHG conversion factors, or those provided by MOD. We report on the intensity metrics of emissions per Net Internal Floor Areas (NIFA) and Full Time Equivalent (FTE) staff numbers to provide an enhanced understanding of our impacts on the environment relevant to the size of our built estate and staff population.

Metrics and targets (c)–targets

Our targets are to achieve the GGCs and NZ50.

The GGCs are a set of actions, supported by targets, that UK Government departments and their agencies take to reduce their impacts on the environment. This is the last reporting year on the current April 2021 to March 2025 GGC Framework. Commitments A and F refer directly to climate change for ‘Mitigating climate change: working towards net zero by 2050’ and ‘Adapting to climate change’ respectively, although all commitments impact on the subject area to some extent.

GGC

The report below provides our performance to date against the GGC 2021 to 2025.

GGC	2021-2025 defence targets	defence scope	Our position at 31 March 2025, compared to 2017/18 baseline	Final status
A: mitigating climate change: working towards net zero by 2050
Headline targets	Reduce overall greenhouse gas emissions by 30% from a 2017/18 baseline	UK estate emissions from grid electricity, mains gas, oil, and LPG	30.6% reduction	Achieved
	As part of overall target, reduce direct greenhouse gas emissions by 10% from a 2017/18 baseline	UK estate emissions from mains gas, oil and LPG	1.3% reduction	Not achieved
	Reduce domestic travelling emissions by 30% from a 2017/18 baseline¹	Domestic UK to UK travel emissions from commercial flights, rail, and grey and white fleet	24% reduction	Not achieved
Sub-targets	Meet the government Fleet Commitment for 25% Ultra-Low Emissions Vehicles² (cars) by 31 December 2022, and 100% of car and van fleet to be fully zero emissions at the tailpipe by 31 December 2027	2022 target–leased and 6th day plus hire cars	7%	Not achieved (2022 target)
		2027 target – leased and 6th day plus hire cars, and N1 vans weighing under 3.5 tonnes	7%	At risk (2027 target)
	Reduce emissions from domestic business flights by 30% from a 2017/18 baseline	Domestic business flights between UK airports via commercial airlines	8.8% increase	Not achieved
	Report distance travelled by international business flights, with a view to better understanding and reducing related emissions where possible¹	International business flights via commercial airlines	27,995,343 pkm	Achieved
	Departments that already have policies in place to compensate for emissions are encouraged to report on their implementation	MOD does not have a policy in place to compensate for business travel emissions	Not applicable	Not applicable
	Update organisational travel policies so that they require rail travel to be considered first as an alternative to each planned flight	Dstl Travel Policy	Travel Policy updated	Achieved
B: Minimising waste and promoting resource efficiency
Headline target	Reduce overall amount of (in-scope) waste generated by 15% from a 2017/18 baseline	UK mixed municipal waste streams	20% increase	Not achieved
Sub-targets	Reduce amount of waste going to landfill to less than 5% of overall (in-scope) waste	UK mixed municipal waste streams	0%	Achieved
	Increase the proportion of waste which is recycled, composted or sent to anaerobic digestion to at least 70% of overall (in-scope) waste	Waste assigned for recycling, composting and anaerobic digestion	51%	Not achieved
	Remove Consumer Single Use Plastic (CSUP) from the central government office estate	Dstl out of defence scope	Not applicable	Not applicable
	Measure and report on food waste by 2022	UK Estate	15 tonnes	Achieved
		Baseline 2021/22 with defence action plan to follow
	Report on introduction of reuse schemes		Extant reuse scheme	No additional reuse schemes introduced as successful extant system in place
	Reduce government’s paper use by at least 50% from a 2017/18 baseline	MOD stationery supply contract	50% reduction	Achieved
C: Reducing our water use
Headline target	Reduce water consumption by 8% from a 2017/18 baseline	Aquatrine contract supplied water consumption, excluding distribution system losses	66% reduction	Achieved
Sub-targets	Ensure all water is measured	Aquatrine contract supplied water	Delivered through Aquatrine measurement methodology	Achieved (incoming supplies)
	Provide a qualitative assessment to show what is being done to encourage the efficient use of water		Qualitative assessment reported	Achieved
D: Procuring sustainable products and services
Headline target	Continue to buy more sustainable and efficient products and services with the aim of achieving the best long-term, overall value for money for society	MOD systems in place and the action taken to buy sustainably. DEFRA to issue reporting template on an annual basis	Aligned to MOD systems	Achieved
E: Nature recovery–making space for thriving plants and wildlife
Headline target	Develop and deliver Nature Recovery Plans for land, estates, development and operations	To be confirmed by MOD	Being developed by DIO on behalf of MOD	Not applicable
F: Adapting to climate change
Headline target	Develop an organisational Climate Change Adaptation Strategy across estates and operations		Climate risk assessments and action plans completed	Achieved
	I. Climate Risk II. Climate Change Adaptation Action Plan Assessments		Draft Climate Strategy produced, intended to be introduced in next reporting year	Not achieved by deadline however, nearing introduction
G: Reducing environmental impacts from ICT and digital
Headline target	Report on the adoption of the Greening Government ICT and Digital Services Strategy and associated targets	Set strategy within the framework of the overarching GGC Strategy focusing on priority areas and delivering core data to support wider sustainability targets	Digital Services Strategy enhanced	Not fully achieved by deadline however, adopted for new contracts

Notes:

LPG – liquid petroleum gas

N1 – small commercial vehicles designed for the carriage of goods and less than 3.5 tonnes

pkm – passenger kilometres

DEFRA – Department for Environment, Food and Rural Affairs

ICT – Information Communication and Technology

¹ MOD disaggregated target for Dstl

² 50 grams carbon dioxide/kilometre emissions at tailpipe

Environmental management

We have been reviewing our Environmental Management System (EMS), and once integrated, it will be assured against the Joint Services Publication (JSP) 816 Defence Environmental Management System Framework.

Energy

We commenced prioritised energy inspections of our built environment to focus interventions on the most impactful areas, this will continue into the next reporting year. Our mission within our Energy Management and Decarbonisation Strategy is to: ‘Enhance and then maintain our energy resilience and security, minimise our energy consumption, and decarbonise our energy supplies to support achieving net zero greenhouse gas emissions by 2050.’

We commenced preparation of a delivery plan to support the strategy. Our consumption and cost of energy is described below.

Dstl Gross Finite Resource Consumption: Energy¹			Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25
Non-financial indicators (kWh)	Gross Direct Consumption - Scope 1
	Energy consumption	Electricity – renewable	4,275⁷	4,574^3,7	10,198⁷	6,637³	7,152⁷
		Mains gas	46,047,589²	51,393,419²	52,660,289⁴	53,326,540⁴	53,371,395⁴
		LPG	432,481²	455,952⁴	282,258⁴	695,752⁴	492,2584⁴
		Oil	12,557,256²	16,989,941²	8,070,636⁴	7,619,215⁸	9,087,174⁴
		Total direct consumption – Scope 1	59,041,601	68,843,886	61,023,381	61,648,144	62,957,979
	Gross Indirect Consumption – Scope 2
	Energy consumption	Electricity – non-renewable	50,210,960²	78,506,540²	51,739,468⁴	45,492,487⁴	47,228,310⁴
	Total Gross Energy Consumption – Scopes 1 and 2
	Total Gross Energy consumption – Scopes 1 and 2		109,252,561	147,350,426	112,762,849	107,140,631	110,186,289
	Normalisation
	Normalisation gross energy consumption per FTE		29,041	31,338	22,307	20,323	22,607
	Normalisation gross energy consumption per NIFA		857	1,074	1,058	958	989
Financial indicators (£’000)	Electricity - renewable		0⁷	0⁷	0⁷	0⁷	0⁷
	Mains gas		Note⁵	Note⁵	2,605⁴	2,956⁴	3,587⁴
	LPG		Note⁵	Note⁵	17⁴	43⁴	35⁴
	Oil		Note⁵	Note⁵	682⁴	555⁴	634⁴
	Electricity – non-renewable		Note⁵	Note⁵	9,358⁴	10,438⁴	12,351⁴
	Total energy expenditure⁶		7,778²	10,168^2,4	12,66²	13,992⁴	16,607⁴

Notes:

kWh – Kilowatt hour

FTE – Full time equivalent staff number. 2017/18 = 3,762, 2021/22 = 4,702, 2022/23 = 5,055, 2023/24 = 5,272, 2024/25 = 4,874

NIFA – Net internal floor area, as Valuation Office Agency’s Code of Measuring Practice: Definition for Rating Purposes. 2017/18 = 127,506 m2, 2021/22 = 137,204 m2, 2022/23 = 106,575 m2, 2023/24 = 111,837 m2, 2024/25 = 111,377 m2

¹ Dstl consumption, including consumption of tenants and lodgers. This enables all consumption attributed to MOD energy contracts to be included in reporting

² Data source: MOD/DIO

³ Estimated

⁴ Data source: utility invoices

⁵ Not available

⁶ Dstl does not purchase accredited offsets therefore, no cost included

⁷ Date source: Facilities Management Partner

⁸ Date source utility invoices and fuel purchased off-site

Business travel

Our business travel is procured through the Crown Commercial Services Framework.

We have enhanced our Travel Policy to include the requirement for rail travel to be considered first as an alternative to each planned flight, and we have implemented an internal platform for staff car sharing for commuting.

Although electric vehicle charging points are included as standard in the design of our new buildings, we remain unable to support additional electric vehicles in our Car Club fleet due to infrastructure and resource restrictions.

We had another successful year with 45,431 total passengers using our shuttle bus service, an increase of 6% on the previous reporting year. In addition, we offer staff a Dstl Cycle Scheme, including Cycle to Work and Bike Rental, both of which are salary sacrifice schemes.

Dstl Gross Business Travel¹				Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25
Non-financial indicators	Gross Business Travel (pkm)	Domestic business flights		968,469	466,473	995,501	1,032,378	920,089
		International business flights	Short haul international class unknown	0	0	553,203	9,070	24,554
			Short haul international economy class	2,184,828	542,095	2,473,653	2,517,445	2,388,976
			Short haul international business class	7,200	90,623	298,234	94,677	70,629
			Long haul international class unknown	0	0	0	0	0
			Long haul international economy class	4,400,903	435,735	2,312,390	3,430,258	2,423,277
			Long haul international premium economy class	10,350,252	1,372,041	6,797,213	6,930,587	6,726,799
			Long haul international business class	13,162,363	2,954,461	11,644,338	15,140,059	11,630,316
			Long haul international first class	15,237	0	57,783	0	0
			International non-UK class unknown	Note²	0	0	0	0
			International non-UK economy class	Note²	210,499	668,666	886,360	1,012,108
			International non-UK premium economy class	Note²	9,008	160,085	31,252	98,826
			International non-UK business class	Note²	217,336	3,491,180	5,038,556	3,619,858
			International non-UK first class	Note²	4,114	7,364	0	0
			Total International business flights	30,120,783	5,835,912	28,464,109	34,078,264	27,995,343
		National rail		2,427,415	667,733	1,542,631	2,121,008	2,089,920
		Eurostar rail		Note²	19,345	107,382	89,527	80,083
		Car		10,000,033	5,439,073	8,171,066	7,373,135	7,705,441
		Bus		Note²	0	0	0	0
		Taxi		Note²	54,359	207,241	286,427	318,900
		Total business travel		43,516,700	12,482,895	39,487,930	44,980,739	39,109,776
		Normalisation per FTE		11,567	2,654	7,811	8,532	8,024
	Gross Flights (No.)	Domestic business flights		1,070	875	1,912	1,946	1,819
		International business flights		Note²	1,525	7,308	8,076	4,793
		Total number business flights		1,070	2,400	9,220	10,022	6,612
Financial indicators (£’000)	Total cost business travel			6,964	2,605	10,158	11,682	15,608

Notes:

pkm: passenger kilometres

FTE – Full time equivalent Civil Service staff number. 2017/18 = 3,762, 2021/22 = 4,702, 2022/23 = 5,055, 2023/24 = 5,272, 2024/25 = 4,874

¹ Data provided by Dstl Travel Partner

² Not recorded

Dstl GCC in-scope business travel data¹		Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25
Non-financial indicators (pkm)	In-scope international business flights	30,120,783	5,835,912	28,464,109	34,078,264	27,995,343
Dstl GCC in-scope ULEV and ZEV data¹		Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25	End Dec 2022 Target	End Dec 2027 Target
Non-financial indicators (%)	In-scope vehicles as ULEV	Note³	8%⁴	10%⁴	4%⁵	N/A	25%	N/A
	In-scope vehicles as ZEV	Note³	Note³	Note³	3%⁵	7%⁵	N/A	100%

Notes:

pkm: passenger kilometres

ULEV – Ultra low emissions vehicle

ZEV – Zero emissions vehicle

¹ Data provided by Dstl Travel Partner

² Not recorded

³ Includes pool cars

⁴ Includes pool cars, hire cars, and Dstl owned vehicles

GHG emissions

As the GGC targets have specific scope for GHG emissions, we have included 2 parts to our reporting data below: gross GHG data and in-scope GGC GHG data.

Dstl gross GHG emissions			Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25
Non-financial indicators (tCO2e)	Gross direct emissions - scope 1
	Energy¹	Mains gas	8,778⁴	8,808⁴	9,645¹⁰	9,755¹⁰	9,763¹⁰
		LPG	93⁴	9⁸	61¹⁰	149¹⁰	105¹⁰
		Oil	3,466⁴	4,362⁴	1,942¹⁰	1,911¹⁰	2,304¹⁰
		Fugitive gases	35⁵	1,495^6,7	3,860⁶	1,328^5,6	330⁶
	Business travel	Pool cars	207	218	285¹⁰	286	311¹⁰
		Dstl owned fleet vehicles – fuel purchased off-site	Note³	Note³	Note³	20	1
	Total gross direct emissions - scope 1		12,579	14,981	15,792¹⁰	13,449	12,814
	Gross indirect emissions – scope 2
	Grid electricity¹		19,302⁴	18,144⁴	11,948¹⁰	9,420¹⁰	9,780¹⁰
	Gross other indirect emissions – scope 3
	Energy	National grid transmission and distribution⁸	1,650	964	915¹⁰	815¹⁰	864¹⁰
	Business travel	Domestic business flights²	287	73	272⁹	316⁹	282⁹
		International business flights²	10,316	1,200	10,054⁹	16,028⁹	12,823⁹
		National rail²	131	29	69⁹	94⁹	93⁹
		International rail²	Note3	1	1⁹	1⁹	1⁹
		Hire Cars²	1,342	380	509⁹	622⁹	547⁹
		Pool Cars ‘well to tank’	78	59	76⁹	81⁹	82⁹
		Dstl owned fleet vehicles, fuel purchased off-site ‘well to tank’	Note³	Note³	Note³	5	0
		Bus²	Note³	0	0⁹	0⁹	0⁹
		Taxi²	Note³	11	41⁹	74⁹	83⁹
		Staff owned vehicles¹²	765	491	789	471	648
	Water and wastewater		474⁴	357⁴	279⁴	57⁴	53⁴
	Waste		19	46	148¹¹	20¹¹	11¹¹
	Total gross other indirect emissions - scope 3		15,062	3,611	13,153	18,584	15,487
	Total gross direct, indirect and other indirect emissions – scopes 1, 2 and 3		46,943	36,736	40,893	41,453	38,081
	Normalisation
	Normalisation gross emissions per FTE		12	8	8	8	8
	Normalisation emissions per NIFA		0.4	0.3	0.4	0.4	0.3

Notes:

FTE – Full time equivalent staff number. 2017/18 = 3,762, 2021/22 = 4,702, 2022/23 = 5,055, 2023/24 = 5,272, 2024/25 = 4,874

NIFA – Net internal floor area, as Valuation Office Agency’s Code of Measuring Practice: Definition for Rating Purposes. 2017/18 = 127,506 m2, 2021/22 = 137,204 m2, 2022/23 = 106,575 m2, 2023/24 = 111,837 m2, 2024/25 = 111,377 m2

¹ Emissions for Dstl consumption, including consumption of tenants and lodgers. This enables all emissions attributed to MOD energy contracts to be included in reporting

² Data includes radiative forcing (air travel only), and ‘well to tank’ emissions

³ Data not available

⁴ Data source MOD/DIO

⁵ Dstl Science and Technology use

⁶ Laboratory containment testing and fugitive emissions from mechanical plant

⁷ Estimated

⁸ Emissions associated with energy loss that occurs in getting electricity from the power plant to the organisation that purchases it

⁹ Data source Dstl’s Travel Partner, MOD and UK Government GHG conversion factors

¹⁰ Data source utility invoices, UK Government GHG conversion factors

¹¹ Data source Dstl’s Waste Management Contracts and UK Government GHG conversion factors

¹² Private vehicles owned by staff, based on business mileage travelled

Dstl GGC in-scope GHG emissions

Dstl GGC in-scope GHG emissions		Baseline year 2017/184	2021/22⁴	2022/23	2023/24	2024/25	End 2024/25 target
Non-financial indicators (tCO2e)	In-scope overall GHG emissions¹	31,640^4,8	31,412⁴	23,577⁹	21,235⁹	21,952⁹	22,148 tCO2e -30%⁶
	In-scope direct GHG emissions²	12,337⁴	13,268⁴	11,629⁹	11,815⁹	12,172⁹	11,103 tCO2e -10%⁶
	In-scope GHG emissions from domestic travel^5,7	2,032	1,005	1,526	1,467	1,542	1,422 tCO2e -30%⁶
	In-scope GHG emissions from domestic business flights^3,5	136⁴	64⁴	129	166	148	96 tCO2e -30%⁶

¹ GHG emissions from UK estate grid electricity, mains gas, oil and LPG

² GHG emissions from UK estate mains gas, oil and LPG

³ GHG emissions from domestic business flights between UK airports on commercial airlines, excluding radiative forcing and ‘well to tank’ emissions

⁴ Data source MOD (DIO)

⁵ Data source Dstl’s Travel Partner, MOD and UK Government GHG conversion factors, unless otherwise stated

⁶ Against baseline year

⁷ Emissions from domestic travel commercial flights, rail, grey and white fleet, including staff owned vehicles, taxi, excluding radiative forcing and ‘well to tank’ emissions

⁸ Dstl previously reported data included EDF specific emissions conversion factor, MOD data used Department for Business, Energy and Industrial Strategy (BEIS) general emissions conversion factor

⁹ Data source utility invoices, UK government GHG conversion factors

Waste management

We provided bespoke staff waste management training, continued to grow our pool of trained Waste Supervisors, and triaged all of our waste requests applying the waste hierarchy. We also amalgamated and enhanced our waste processes to improve customer experience.

Although we offer related schemes, improving our recycling remains a challenge. This will be an area for our continuing focus, including the introduction of further battery segregation. In preparation for Simpler Recycling legislation, we have introduced food waste caddies across the organisation.

Our embedded ‘Steptoe’ online reuse platform provides the opportunity to internally advertise items for sharing or exchange that would otherwise be disposed of. Following staff communications, use of the scheme has increased substantially.

As the GGC scope is limited to specific non-hazardous municipal and commercial waste streams, we have included 2 parts to our waste reporting data below: gross waste data and in-scope GGC waste data. A breakdown of costs for each waste disposal stream is not available under the MOD’s Hestia Waste Management Contract, instead costs for hazardous and non-hazardous waste disposal have been included.

Dstl gross waste			Baseline year 2017/18³	2021/22³	2022/23³	2023/24⁴	2024/25⁴
Non-financial indicators (tonnes)	Hazardous waste	On-site incineration	232	40	33	Note⁵	Note⁵
		Off-site disposal	163	78	59	Note⁵	Note⁵
		Incinerated (without energy recovery)	Note⁵	Note⁵	Note⁵	40	48
		Incinerated (with energy recovery)	Note⁵	Note⁵	Note⁵	5	0
		Recycled	Note⁵	Note⁵	Note⁵	31	86
		Landfill	Note⁵	Note⁵	Note⁵	34	33
	Total hazardous waste		395	118	92	110	167
	Non-hazardous waste	Incinerated (without energy recovery)	Note¹	120	148	118	128
		Incinerated (with energy recovery)	165	363	368	228	233
		Recycled	265	852	1,354	524	1,014
		Composted	0	0	0	6	0
		Landfill	6	31	0	0	0
		Anaerobic digestion	0	5	5	6	158
		ICT equipment	0	3	7	2	1
	Total non-hazardous waste		436	1,374	1,882	884	1,391
	Total waste		831	1,492	1,974	994	1,558
	Normalisation
	Normalisation of waste per FTE		0.2	0.3	0.4	0.2	0.3
	Normalisation of waste per NIFA		0.007	0.01	0.02	0.009	0.014
Financial indicator (£’000)	Hazardous waste – disposal cost		129	350	504	379⁶	Note⁷
	Non-hazardous waste – disposal cost		64	778	844	1,133⁶	Note⁷
	Total disposal cost		193	1,128	1,348	1,512⁶	1,319
Dstl gross paper			Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25
Non-financial indicator (tonnes)	Paper		24	132	14	8	12

Notes:

FTE – Full time equivalent staff number. 2017/18 = 3,762, 2021/22 = 4,702, 2022/23 = 5,055, 2023/24 = 5,272, 2024/25 = 4,874

NIFA – Net internal floor area, as Valuation Office Agency’s Code of Measuring Practice: Definition for Rating Purposes. 2017/18 = 127,506 m2, 2021/22 = 137,204 m2, 2022/23 = 106,575 m2, 2023/24 = 111,837 m2, 2024/25 = 111,377 m2

Paper data source – Crown Commercial Services Framework contract

¹ Included in ‘Incinerated with energy recovery’ figures

² Estimated

³ Source FM Partner Waste Management Contract and Dstl incinerator

⁴ Source Waste Management Services provider and Dstl incinerator

⁵ Enhanced reporting amended format of data

⁶ Source Dstl Finance, excludes Hestia core contract costs as unknown at time of reporting

⁷ Breakdown not available

⁸ Due to Hestia Contract reporting, includes Dstl and ESS catering waste

Dstl GGC In-scope waste data			Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25	End 2024/25 target
Non-financial indicator (tonnes)	In-scope waste¹	Incinerated (without energy recovery)	8²	9	20	11	7	N/A
		Incinerated (with energy recovery)	197²	259	320	220	225	N/A
		Recycled (excluding food)	188²	153	484	191	226	N/A
		Composted	0²	0	0	6	0	N/A
		Landfill	0²	0	0	0	0	<5%
		Anaerobic digestion – food waste only	0²	14	44	34	155	Report
		Total In-scope waste	393³	422	828	431	473	334 tonnes -15%
Non-financial indicator (%)		Total in-scope recycled/composted/anaerobic digestion waste	48%²	36%	59%	46%	51%	>70% (in year)
Dstl GGC in-scope paper data			Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25	End 2024/25 target
Non-financial indicator (tonnes)	In-scope paper		24	13²	14	8	12	12 tonnes -50%
Dstl GGC in-scope ICT waste data			Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25	End 2024/25 target
Non-financial indicators (tonnes)	In-scope ICT waste	Recycled	0	2	7	0	0	N/A
		Incinerated (without energy recovery)	0	1	0	2	1	N/A

Notes:

Waste data source - Dstl’s Facilities Management Partner Waste Management Contract and Dstl incinerator, unless otherwise noted

Paper data source – Crown Commercial Services Framework contract

¹ In-scope waste EWC Codes

Paper and cardboard 15 01 01 and 20 01 01
Plastic 15 01 02 and 20 01 39
Metallic packaging and metals 15 01 04 and 20 01 40
Glass 15 01 07 and 20 01 02
Residual waste 20 03 01
Dry mixed recycling 20 03 01
Food (biodegradable kitchen waste) 20 01 08

² Estimated

³ Gross data provided by MOD/DIO. Weights per disposal stream proportioned

⁴ Food waste trial period

⁵ Due to Hestia Contract reporting, includes Dstl and ESS catering waste

Water

All our incoming water supplies and wastewater services at our core sites are provided and measured through MOD’s Aquatrine water contract.

At Porton Down, our long-term water resilience project was successfully completed, with all of our critical buildings now connected to a fully established potable water supply. This will also enable enhanced sub-meter measurement of water consumption.

To encourage staff in the efficient use of water, in collaboration with our Facilities Management Strategic Partner, we commenced a review of safe ways to reduce flushing in connection with Legionella prevention; and our water supply contractor uses leak detection on our infrastructure.

Our Helios project, to move capabilities and staff from Fort Halstead to our other sites, has resulted in a substantial reduction in water consumption since the baseline year 2017/18.

Dstl GGC (gross) waste data		Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25	End 2024/25 target
Non-financial indicator (m3)	Scope 1–abstracted	280,588¹	243,156	153,176¹	140,817	148,340	N/A
	Scope 2–mains water supplies	185,851¹	118,994	129,861¹	11,224	12,360	N/A
	Total water consumption	466,439¹	362,150	283,0371	152,041	160,700	429,124¹ -8%
Dstl GGC (gross) waste data		Baseline year 2017/18	2021/22	2022/23	2023/24	2024/25	End 2024/25 target
Non-financial indicator (m3)	Normalisation of gross water consumption per FTE	124	77	56	29	33	N/A
	Normalisation of gross water consumption per NIFA	4	3	3	1	1	N/A
Financial indicators (£’000)	Water supply costs²	1,356	1,662	1,916	1,074	1,184	N/A

Notes:

FTE – Full time equivalent staff number. 2017/18 = 3,762, 2021/22 = 4,702, 2022/23 = 5,055, 2023/24 = 5,272, 2024/25 = 4,874

NIFA – Net internal floor area, as Valuation Office Agency’s Code of Measuring Practice: Definition for Rating Purposes. 2017/18 = 127,506 m2, 2021/22 = 137,204 m2, 2022/23 = 106,575 m2, 2023/24 = 111,837 m2, 2024/25 = 111,377 m2

Water data source – Water Supply contract, unless otherwise noted

Consumption figures include consumption by 3rd party tenants and lodgers. This enables all consumption attributed to MOD water contracts to be included in reporting

¹ Updated to include all Dstl sites – data taken from invoices and revised DIO data, previous reports using MOD/DIO data only included Aquatrine Contract sites

² Financial data taken from invoices, including licence costs

Sustainable construction

We aim to achieve MOD policy of Defence Related Environmental Assessment Methodology (DREAM) ratings of ‘Excellent’ for new builds and ‘Very Good’ for major refurbishments. The MOD’s Sustainability Environmental Assessment Tool (SEAT) is used for construction projects as required. Construction projects and programmes have gateway reviews to ensure sustainability commitments and requirements are included.

Climate adaptation

Governance for climate change adaptation is provided by the Sustainability Committee. We comply with JSP 655 Investment Approvals providing programme and project gateways, and JSP 850 Infrastructure and Estate Policy.

We have produced a draft Climate Strategy, intended to be introduced in the next reporting year.

Conservation and biodiversity

Our Porton Down site of Special Scientific Interest (SSSI) comprises 1,519 hectares, constituting one of the largest uninterrupted tracts of semi-natural chalk grassland in Great Britain. The area supports nationally rare flora and fauna. We have continued with an intensive programme of scrub management and conservation in order to achieve ‘Favourable Condition’ status.

We produced our Site Ecological Plan for Portsdown West and have already completed some important actions including improving the condition of the wildlife pond. A planting plan for courtyard areas has commenced to improve biodiversity and staff well-being.

DIO are developing Nature Recovery Plans and managing a Natural Capital Approach across the MOD estate, including our sites.

The survey report to assess woodlands at Porton Down, to provide data for a Woodland Management Plan and carbon sequestration, was delayed due to resourcing challenges.

Conservation commitment		2020/21	2021/22	2022/23	2023/24	2024/25
Scrub clearance from chalk downland	Hectares of new scrub cleared¹	9.0	5.0	2.2	4.25	2.5
	Hectares of scrub cleared²	Approx. 35 - 40	Approx. 25 - 30	60	50	36
Dstl Stone-curlew Conservation Project	Plots in total	17	17	17	15	15
	Plots fenced	13	13	16	14	14
	Breeding pairs	9	10	8	11	10
	Fledged young	8	8	6	12	8
	Productivity	0.89	0.80	0.75	1.09	0.8
	Pair average over 5 years	11	10	9	9	10
	5-year productivity average	0.64	0.67	0.79	0.94	0.88

Notes:

¹ Scrub not cut for at least 20 years

² Scrub cleared that had been cut at least once before

Sustainable Information Communication and Technology (ICT)

Our IT Strategy 2020 to 2025 aligns to the Defence Digital Strategy. Our new ICT suppliers’ contracts have also been aligned to MOD’s guidance on sustainability, with the suppliers, from 1 March 2025, committing to introducing new technology into the service to increase efficiency and contribute to achieve a ‘greening’ of our estate. In addition, they will focus activity on productivity increases through modernisation and efficient supply chain activity. This will be monitored as the contracts progress through their lifecycle.

We have launched enhanced video conferencing facilities, supporting a reduction in the need for business travel. As we introduce new collaboration tools, our users are able to work more flexibly. Our electronic communications assist in reducing business travel. However, we encourage face to face meetings to support staff well-being and assist in reducing feelings of isolation.

Compared to the previous reporting year, recycled ICT waste remained at zero tonnes, and ICT waste incinerated with energy recovery reduced from 2.0 tonnes to 1.0 tonne. No digital waste was sent to landfill in the reporting year.

Sustainable procurement

Our procurements and contract management continued to be delivered in line with UK Government and MOD policies. We ensured that the MOD Sustainable Procurement Policy, which embeds the Government Buying Standards, has been considered within our specifications. This, in turn, ensured we comply with directives such as the Timber Procurement Policy, Energy Efficiency, and Modern Slavery Act.

Our contract for the delivery of Hard Facilities Management (FM) services incorporates a robust Sustainability Schedule, which requires the supplier to develop and deliver a Social Value (SV) Strategy. During the reporting year, our Hard FM supplier has:

ensured >90% of their supply chain are classed as small to medium sized enterprises (SMEs), and almost one third of that group are based within 50 miles of site
launched a ‘Re-Use Hub’ that allows its colleagues to share surplus consumables across the business
provided 2 days to their employees to deliver social value activities

Our catering and Soft FM services are procured through the DIO Hestia contract which allows us to introduce additional sustainability options across the organisation. During the reporting year, we have worked closely with our strategic partners to introduce more sustainable cleaning, catering, and waste solutions. Examples of this include providing free used coffee grounds for staff to use at home, reducing waste; washing microfibre cloths at lower temperatures, reducing energy consumption; and using non perfect vegetables into recipes in the Staff Restaurants, reducing waste. We will continue to work with our strategic partners to develop further sustainable offerings over the coming year, including the Simpler Recycling legislation being introduced in April 2025.

Our Serapis framework, which enables us, MOD and the frontline commands to quickly and efficiently place contracts for science and technical research and development, has successfully implemented a series of social value initiatives. These include the Bright Corvus contract which has 2 social value KPIs. Of particular note was the KPI focused on developing Sustainable Qualified and Experienced Personnel (SQEP) within the relevant capability area, stipulating that a minimum of 1,500 hours per quarter be dedicated to supporting educational attainment and addressing skills gaps. All 3 suppliers involved successfully met this KPI.

We continued to meet our target spend with SMEs this reporting year. 29% of our external spend was with SMEs, 28.2% of our direct suppliers were SMEs, with 0.8% of our contract tasks placed indirectly with SMEs. The reduction in indirect spend reflects the closure of a number of our Strategic Frameworks and the move to a more direct method of contracting with SMEs largely via our Research Cloud. The MOD’s SME Action Plan will set updated, new and more ambitious targets for the next 5 years.

Community

Many of our employees continue to volunteer within the local communities surrounding our sites. We recognise that volunteering is a rewarding way to use our unique skills while making a big difference within our communities. Many of our people contribute to a wide variety of voluntary roles, from supporting sporting events, the MOD-sponsored Cadet and scouting and guiding organisations, to more formal voluntary roles such as volunteering with school governing bodies, the Red Cross, Royal National Lifeboat Institution (RNLI) and the Samaritans. We also support team members who are Armed Forces Reservists.

Volunteering activities also include work with schools, colleges and universities to encourage more young people to pursue further study and careers in STEM. Throughout 2024 to 2025, Dstl employees have booked just over 3,000 hours to volunteering activities.

Under the Dstl corporate charity approach, we ensure that our procedures and employment contracts are in line with the Civil Service Management Code, and that they reflect the fundamental principles of the Human Rights Act 2000. Our annual remembrance service in November ensures contributions to the Royal British Legion can be made by our community. Throughout 2024 to 2025, we have also continued to support our employees who choose to take part in fundraising activities in their own time.

Dr Paul Hollinshead

Chief Executive

14 July 2025

Question 6

Accountability Report

Accepted Answer

Our Accountability Report presents information on Dstl’s key accountability requirements to Parliament as the primary user of our Annual Report and Accounts.

It contains 3 sections: Corporate governance, Remuneration and staff, and Parliamentary accountability and audit.

Question 7

Corporate governance

Accepted Answer

Our leadership

The Dstl Board (for the financial year 2024 to 2025)

Our Board provides a forum for independent, non-executive support and challenge to our Chief Executive and our Executive Management Committee members. It provides assurance to MOD by monitoring Dstl’s performance against its delivery objectives and ensuring that the organisation is compliant with the appropriate policies and standards.

Adrian Belton, Non-executive Chair
Mark Barclay, Non-executive member (started 16 December 2024)
Brian Bowsher, Non-executive member
Robert MacLeod, Non-executive member
Jeremy Monroe, Non-executive member (departed 30 November 2024)
Sarah Spurgeon, Non-executive member
David Tonkin, Non-executive member (departed 29 April 2024)
Tara Usher, Non-executive member (MOD)
Paul Hollinshead, Chief Executive
Andy Bell, Chief Science and Technology Officer
Rob Cocks, Interim Chief Finance Officer (started 6 January 2025)
David English, Chief Finance Officer and interim Chief Operating Officer (departed 31 December 2024)

The Dstl EMC (for the financial year 2024 to 2025)

Our EMC ensures the effective and efficient strategic leadership and operational delivery of Dstl. It monitors business delivery and financial performance to ensure our strategic direction remains appropriate to our customers’ needs. It also ensures that we operate safely and securely by reviewing performance and managing risks.

Members of the Dstl EMC as at 31 March 2025:

Paul Hollinshead, Chief Executive Officer (CEO)
Andy Bell, Chief Science and Technology Officer (CSTO)
Rob Cocks¹ , Interim Chief Finance Officer (CFO) (started 6 January 2025)
Simon Donnan, Interim Chief Operating Office (COO) (started 25 November 2024)
Tim Sheldon, Chief Delivery Officer (CDO) (started 15 April 2024)
Teresa Stanley, Chief People Officer (CPO)

¹ Rob Cocks attended EMC meetings in his previous role as Head of Finance when representing CFO.

Non-executive members of the Dstl Board (as at 31 March 2025)

Adrian Belton, Chair (appointed as chair of the Board on 1 August 2019)

Key strengths

Corporate governance, risk management, financial management, strategic leadership and stakeholder management at the interfaces of the public, private and academic sectors.

Experience

Adrian was Chief Executive of the government’s Food and Environment Research Agency (FERA) from 2009 to 2014, having established it from a 4 way merger including the Central Science Laboratory (CSL) and the UK government Decontamination Service. He was Chief Executive of the CSL from 2008 to 2009. From 2014 to 2016, Adrian was Chief Executive of the Construction Industry Training Board (CITB) from where he stepped down from full-time executive work to pursue a non-executive career. His earlier career was with Barclays where he held a number of senior executive roles, followed by roles in local government and in establishing a new Non Departmental Public Body in Defra.

Declarations of Interest in year

Non-executive Director of NHS Property Services Limited, Lay Member of the Council of the University of Sheffield (until July 2023), and independent Lead Reviewer for the Public Body Review of the UK Health Security Agency (November 2023 to May 2024).

Mark Barclay, non-executive member (appointed to the Board on 16 December)

Key strengths

Major technology programmes, risk identification and management, business performance improvement, organisational transformation and developing effective strategic partnerships (nationally and internationally).

Experience

Mark has held a number of senior executive positions, both in the UK and abroad, within global aerospace and defence organisations, namely, Thales, Airbus and Cobham. Prior to stepping down from fulltime employment in the summer of 2021, he was Chief Executive Officer of the UK Defence Solutions Centre, that saw him work across MOD, Industry and Academia in developing collaborative Team UK export opportunities. He is a Fellow of the IET, Association of Programme Management and the Royal Aeronautical Society.

Declarations of Interest in year

Non-executive director at Defence Business Services (DBS); providing coaching or mentoring support to a senior executive of an MOD enabling organisation.

Brian Bowsher, non-executive member (appointed to the Board on 1 September 2018)

Key strengths

Strategic and change leadership, operational or assurance excellence, research and innovation (national and international), stakeholder engagement.

Experience

In 2018, Brian retired as the Chief Executive of the Science and Technology Facilities Council (STFC). He has also been a member of the governing bodies of CERN (the European Council for Nuclear Research), the Square Kilometre Array, and the Diamond Light Source. From 2009 to 2015, Brian was the managing director of the National Physical Laboratory (NPL) and before joining NPL, he was on the executive board of AWE initially as Director of Research and Applied Science and then as Director Systems Engineering. He is a Fellow of the Royal Society of Chemistry and the Institute of Physics, an Honorary Fellow of the Institute of Measurement and Control, and holds an Honorary Doctorate of Science from the University of Southampton.

Declarations of Interest in year

Member of Southampton University School of Chemistry Advisory Board, former Chief Executive of the Science and Technology Facilities Council (2016 to 2018) and National Physical Laboratory (2009 to 2015).

Robert MacLeod, non-executive member (appointed to the Board and ARAC Chair on 19 February 2024)

Key strengths

Accounting, finance, mergers and acquisitions, strategy, risk and governance requirements for large companies, strategic and corporate change, driving improvements in the management of health and safety.

Experience

Robert is an experienced business leader with more than 20 years’ experience at Board level, as Chief Financial Officer and also as Chief Executive Officer. Robert has held senior general management and financial leadership roles in large, complex multi-site international industrial businesses. His last full-time role was as CEO of Johnson Matthey Plc, a global leader in sustainable technologies. Having stepped down from Johnson Matthey in March 2022, he now has a series of non-executive positions.

Declarations of Interest in year

Non-Executive Director of RELX Plc, Vesuvius Plc, Balfour Beatty Plc and The British Standards Institution.

Jeremy Monroe, non-executive member, chair of the Remuneration Committee (appointed to the Board on 1 February 2017, departed the Board on 30 November 2024)

Key strengths

Transformation and management of change, IT strategy, programme design, commercial experience, customer relationships.

Experience

Jeremy started in manufacturing with a physics degree and changed to management consultancy, in time becoming a partner in PricewaterhouseCoopers (PwC) and a member of its Supervisory Board. On the sale of PwC’s consulting business, Jeremy became vice-president in IBM’s public sector consulting and systems integration business. Latterly he designed, sold and led large public sector IT enabled transformational projects, particularly for the MOD and the Home Office, building organisational relationships that lasted many years. His final role at IBM was as Global Leader Defence and Intelligence, bringing people together across the globe.

Declarations of Interest in year

Chair of VSPM Ltd, shareholder of Melrose Industries, and relation of Sarah Munby, Permanent Secretary of the Department for Science, Innovation and Technology (DSIT).

Sarah Spurgeon, non-executive member (appointed to the Board on 1 July 2018)

Key strengths

Engineer, research and innovation management, education and skills development, science and technology evaluation.

Experience

Sarah is Professor of Control Engineering, and Head of the Robotics Institute at University College London. She is currently a Vice President of the International Federation of Automatic Control and was a past President of the Engineering Professors’ Council and a past President of the Institute of Measurement and Control. In 2000, she was awarded the Institute of Electrical and Electronics Engineers millennium medal, and in 2010 she received the Honeywell international medal for distinguished contribution as a control and measurement technologist to developing the theory of control. Sarah is currently a member of the Police Science Council.

Declarations of Interest in year

Professor and Director of UCL Robotics Institute, University College London, Vice President of the International Federation of Automatic Control, and Board member of the IEEE Foundation.

David Tonkin, non-executive member, chair of the Audit and Risk Assurance Committee (appointed to the Board on 1 September 2017, departed the Board on 29 April 2024)

Key strengths

Improving business performance; implementing and managing financial and organisational risk management frameworks, leading organisational change, process improvement, health and safety management.

Experience

David is a commercially focused business leader with more than 20 years’ experience in strategic and operational leadership. He has held both senior general management and financial leadership roles in complex multi-site operations, internationally and across various industry sectors. His last full-time role was with Atkins Plc as UK and Europe Chief Executive, the UK’s largest engineering consultancy. He now fulfils a series of non-executive positions and coaching roles.

Declarations of Interest in year

Chair and Director of the Railway Industry Association.

Tara Usher, Non-executive member (MOD) (appointed to the Board on 1 October 2019)

Key strengths

MOD civil servant and former City solicitor, banker and company secretary, governance, assurance and portfolio management. Conduit with MOD Head Office.

Experience

Tara leads the MOD Public Bodies and Appointments Team. Tara joined MOD in 2018 after working for the Department for Transport, first as a legal adviser (maritime and aviation) and subsequently in policy and governance roles. Her work included creating a new governance and portfolio management framework for Department for Transport’s large-scale capital investments and later leading the sponsorship team for the newly created National Highways GovCo. Prior to joining the Civil Service Tara worked in the City, initially at the law firm, Freshfields, and latterly in investment banking. Tara is also the MOD Board representative for the UK Hydrographic Office, the Oil and Pipelines Agency and the Single Source Regulations Office (observer).

Declarations of Interest in year

Head of Public Bodies and Appointments at MOD, and Co-opted independent Member of the Audit and Transparency Committee of Kensington and Chelsea Council.

Executive Management Committee members on the Dstl Board (as at 31 March 2025)

Paul Hollinshead, Chief Executive (appointed to the Board on 14 February 2022)

Key strengths

Management of large complex projects and organisations; leading multi-disciplinary teams; and setting strategy and direction.

Experience

Paul joined Dstl as Chief Executive in February 2022, having led complex, large science and technology programmes in the defence and civil sector for more than 20 years. His varied career has included policy and strategy work including involvement in several strategic defence reviews and national strategy development in the Prime Minister’s Strategy Unit. He was Head of Wealth Creation at DERA, Science and Innovation Director in the Department of Energy and Climate Change, and led nuclear research collaboration with the USA. Paul was most recently Operations Director for Defence Test and Evaluation and a Director in the Defence Nuclear Organisation. He was the Procurement Director and Senior Responsible Owner for a large portfolio of complex defence and energy programmes including submarines, strategic systems, nuclear infrastructure and green energy.

Declarations of Interest in year

Nothing significant to report.

Andy Bell, Chief Science and Technology Officer (appointed to the Board on 22 October 2018)

Key strengths

Strategic outlook; broad science and technology knowledge; leadership; cross-government experience; change programmes.

Experience

Following a degree (University of Oxford) and PhD in Chemistry, and 3 post-doctoral research posts (in Japan, France and the UK) Andy joined MOD in 1994 as a scientist researching chemical weapon detection technologies. He was seconded to the Home Office in 2005 as Chief Scientist for CBRN, returning to Dstl in 2007. Andy was the Dstl Chief Technical Officer from 2012 to 2015, when he left to head up the Centre for Applied Science and Technology (CAST) at the Home Office. Andy led the CAST integration to Dstl, returning to Dstl with CAST in 2018 and is now the Chief S&T Officer. Andy is a Non-Executive Member of the Ploughshare Innovation Ltd Board, Chair of the National Authority for Counter-Eavesdropping S&T Advisory Board and a Member of a Charitable Trust improving youth accessibility to music making.

Declarations of Interest in year

Non-executive director (NED) of Ploughshare Innovations Ltd; and Visiting Chair and Honorary Fellow at the University of Southampton.

Rob Cocks, Interim Chief Finance Officer (appointed to the Board on 06 January 2025)

Key strengths

Finance, Audit

Experience

Prior to joining Dstl in 2007, Rob started his career at HMRC, before going on to train as a Chartered Accountant in Public Practice. Upon joining the Dstl finance team in 2007, Rob initially supported Dstl’s Physical Sciences Department, before going on to support the following other areas: Information Management, Biomedical Sciences and Sensors & Countermeasures Departments. In 2012 he moved into Dstl’s Senior Finance Leadership Team, playing a significant role in both Dstl’s status transition in 2017 and merger with the Centre of Applied Science and Technology in 2018. In 2020 he was appointed Dstl’s Head of Finance, overseeing the implementation of the Finance module as part of Dstl’s journey to the Cloud. He is a Fellow of the Institute of Chartered Accountants in England and Wales and has a BSc in Mathematics from the University of Exeter.

Declarations of Interest in year

Nothing significant to report.

David English, Chief Finance Officer and interim Chief Operating Officer from 7 November 2022

(Appointed Finance Director on 1 January 2016. He joined the Board on 30 May 2015 as the MOD non-executive director. Departed the Board on 31 December 2024.)

Key strengths

Finance; government relations; governance.

Experience

Before joining Dstl, David was the Head of Business Strategy and Governance in MOD. He joined MOD in 1996 having achieved a first class honours degree in Avionic Systems Engineering at Bristol University and some hands-on engineering in industry. During his MOD career, David has worked in the Defence Evaluation and Research Agency, central MOD finance, Defence Equipment & Support, and has been a Private Secretary to the Defence Secretary. He has also completed an MBA with distinction at Imperial College and is a graduate of the Higher Command and Staff Course.

Declarations of Interest in year

NED of Ploughshare Innovations Ltd.

Total length of service by the Board’s Non-executive members at 31 March 2025

Non-executive member	Total length of service	Date of most recent appointment	Date of expiry
Adrian Belton	5 years, 7 months	20 June 2025	30 April 2026
Mark Barclay	0 years, 3 months	16 December 2024	15 December 2027
Brian Bowsher	6 years, 6 months	1 September 2021	31 August 2025
Robert MacLeod	1 year, 1 month	19 February 2024	18 February 2027
Jeremy Monroe¹	7 years, 10 months	1 February 2023	30 November 2024
Sarah Spurgeon	6 years, 8 months	4 June 2025	31 December 2026
David Tonkin²	6 years, 7 months	1 September 2023	29 April 2024
Tara Usher	5 years, 5 months	1 October 2022	No fixed term

¹ Jeremy Monroe’s appointment was extended until 30 November 2024 to cover the recruitment period for Mark Barclay.

² David Tonkin departed the Board on 29 April 2024. His appointment extension was up to 30 August 2024 to ensure the new ARAC Chair was in place.

Statement of the Accounting Officer’s responsibilities

Under Sections 7(1), (2) and (5) of the Government Resources and Accounts Act 2000, His Majesty’s (HM) Treasury has directed Dstl to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of Dstl and of its income and expenditure, Statement of Financial Position and cash flows for the financial year.

In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual and in particular to:

observe the Accounts Direction issued by HM Treasury including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
make judgements and estimates on a reasonable basis
state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the financial statements
prepare the financial statements on a going concern basis
confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable

The Accounting Officer of the Ministry of Defence, the MOD Permanent Secretary, has appointed the Chief Executive as Accounting Officer of Dstl. 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 Dstl’s assets, are set out in Managing Public Money published by the HM Treasury, and in Dstl’s Framework Document.

As the Accounting Officer, 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 Dstl’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

Question 8

Governance statement

Accepted Answer

Scope of responsibility

As Accounting Officer for Dstl, it is my responsibility to ensure that there is a sound system of governance, risk management and internal control in place. In addition, I ensure that Dstl business is conducted in accordance with Managing Public Money so that public money is safeguarded, properly accounted for and used economically, efficiently and effectively. To demonstrate this, our governance statement covers:

our corporate governance
our risk management
our control environment
our control activities
our performance reporting.

Our corporate governance

We comply with HM Treasury’s Code of Good Practice on Corporate Governance in Central Government Departments (2017). As at 31 March 2025, our corporate governance framework is defined by the Dstl Framework document and summarised in the diagram below:

The Dstl Board

The Dstl Board held 4 regular meetings including a strategy session during the year.

Membership

Non-Executive Member (NEM) Sarah Spurgeon had her term extended for a further 12 months from 1 July 2024. NEM Brian Bowsher had his term extended for a further 12 months from 1 September 2024. NEM Jeremy Monroe had his term extended for a further 4 months from 31 July 2024, to provide resilience and continuity for the ARAC during the recruitment for his replacement. NEM Mark Barclay was appointed to the Board (and member of the ARAC) on 16 December 2024 for a 3 year term. Our NEMs are often deployed across the organisation in supportive ways that play to their experience.

Paul Hollinshead as Chief Executive, and Andy Bell as Chief Science and Technology Officer, are both members of the Board. David English was a member of the Board as Chief Finance Officer until his departure on 31 December 2025. Rob Cocks was appointed as interim Chief Finance Officer and member of the Board on 6 January 2025.

The Chief People Officer, Chief Operating Officer, and Chief Delivery Officer attend by invitation.

Attendance of Board meetings in 2024 to 2025

Board member	Date started	Date ended	Number of meetings attended	Number of meetings that could have been attended
Adrian Belton (Chair)	-	-	4	4
Jeremy Monroe	-	30 November 2024	3	3
David Tonkin	-	29 April 2024	0	0
Sarah Spurgeon	-	-	3	4
Brian Bowsher	-	-	4	4
Tara Usher	-	-	4	4
Robert MacLeod	-	-	4	4
Mark Barclay	16 December 2024	-	1	1
Paul Hollinshead	-	-	4	4
Andy Bell	-	-	4	4
David English	-	31 December 2024	3	3
Rob Cocks	6 January 2025	-	1	1

Business 2024 to 2025

The business taken at Board meetings reflects the responsibilities of the Dstl Board, in its advisory capacity to exercise strategic oversight of Dstl in the delivery of its objectives.

An overriding theme for Board discussions was the changing landscape of defence and the ongoing tight financial parameters. The Board noted in the final meeting of the year the impact of these parameters on Dstl’s performance and the ability to meet key performance indicators.

Along with monitoring performance of Dstl’s delivery, the Board continued its focus on risk, finalising the review of Dstl’s corporate risk register and conducting regular deep dives and health checks of the corporate risks. The Board also continued to focus on the health of Dstl’s critical S&T capabilities, through the External Review Colleges and Follow Up Reviews.

Standing items included an update from the Chief Executive, MOD NEM and from the Chair of the Audit and Risk Assurance Committee (ARAC) following the quarterly ARAC meetings.

Annual review of effectiveness

In line with good practice the Dstl Board undertook an annual evaluation via a questionnaire in September 2024, with the Board considering the findings at their meeting in November 2024. All members provided a response to the evaluation. There were no areas that received a significantly low score however the evaluation did highlight the need to review and agree where the Board can have the greatest impact. The Board agreed that further discussion was needed to work through the findings of the self-assessment and this is ongoing.

Audit and Risk Assurance Committee

The ARAC met 4 times during 2024 to 2025.

Membership

There are 4 NEMs who sit on this committee–Robert MacLeod (Chair), Mark Barclay, Brian Bowsher, and MOD NEM Tara Usher. I attend by invitation, as do my Chief Operating Officer, Chief Finance Officer, Head of Risk, Assurance and Governance, Senior Principal Assurance Adviser, and Head of Finance. Representatives from the National Audit Office and the Government Internal Audit Agency also attend by invitation.

Attendance at Dstl Audit and Risk Assurance Committee for 2024 to 2025

Board member	Role	Number of meetings attended	Number of meetings that could have been attended
Robert MacLeod	NEM (Chair)	4	4
Mark Barclay	NEM	1	1
Brian Bowsher	NEM	4	4
Jeremy Monroe	NEM	3	3
Tara Usher	MOD NEM	4	4

Business 2024 to 2025

The ARAC conducted its regular review of Dstl’s financial performance, the outcomes of internal and external audits, counter-fraud activities, and information risk and assurance. The ARAC conducted deep dives and health checks of the corporate risks, and also continued its focus on the assurance of safety arrangements at each meeting.

Dstl’s return to moderate assurance was a key focus for the ARAC over the year. The Committee recognised the good progress made to improve the overall assurance framework but noted that this needs to fully embed. Good progress was also recognised with the improvements to safety, delivered through the Safety Reset Programme.

However, the ongoing impact of financial constraints on Dstl’s ability to invest in necessary improvements to the internal control framework, particularly in response to increasingly stringent legal and regulatory obligations, was a continuing challenge.

Commenting on the work of the committee over the past year, the Chair of the ARAC Robert MacLeod said:

“After my first year as ARAC Chair, I must firstly thank my predecessor, David Tonkin, for helping me with my introduction to the organisation. In addition, I would like to thank my fellow non-executive members and the wider Dstl leadership for their engagement and support.

“During the year, I have learned a lot about the business and met many members of the Dstl team. I have been impressed with everyone that I have met and their commitment to the successful running and control of operations of Dstl.

“During the last year, the organisation has been operating under tight financial parameters which has impacted our ability to address some of the known risks in the business. This is the third year that we have reported a Limited Assurance status. While we are disappointed not to have achieved our planned Moderate Assurance in the year, some good progress has been made in a number of areas, including most importantly Health and Safety.

“At the same time, there have been increasing risks to Dstl due to the increasingly volatile global environment. That said, we have a clear plan to improve our control environment and while there is a lot that we can do ourselves, getting back to the position that we all aspire to will require investment in resources and infrastructure.

“My focus in the last year, has been ensuring that there is a clear set of processes and controls to manage the key risks in the business and then that management has an assurance plan to ensure that these controls are being effectively managed. This is still a work in progress but once we have this in place and are satisfied that it is being well managed, we will be able to report Moderate Assurance status. I am confident that we will make further strong progress in the year ahead.”

Annual review effectiveness

A self-assessment of the effectiveness of the ARAC was conducted using the NAO effectiveness tool and reported in July 2024. Overall, the assessment concluded that the ARAC is operating effectively and meeting required standards. The review identified the need to ensure that the ARAC has sufficient skills when reviewing some specialist topics. This was not necessary during the year, and succession plans for current non-executive members has allowed us to ensure the continued balance of skills and experience across the committee. An ARAC self-assessment for 2025 to 2026 has been initiated and will report in 2025 to 2026.

EMC

The EMC has continued to be the key meeting for the Executive Team to ensure the effective and efficient strategic leadership and operational delivery of Dstl. The EMC met twice per month, with 1 meeting per quarter focused on performance.

Membership

The EMC is chaired by the Chief Executive, and comprises the Chief Operating Officer, Chief Delivery Officer, Chief Finance Officer, Chief Science and Technology Officer, and Chief People Officer. The Chief Safety Officer; Head of Risk, Assurance and Governance; and the Chief Executive’s Chief of Staff each have a standing invitation to all meetings.

The EMC membership as of March 2025

Business 2024 to 2025

The EMC operates with a clear forecast of business based on the Dstl Strategy and the deliverables in the Dstl Business Plan and devotes a quarterly session to scrutinising performance in depth. The EMC has continued to prioritise improvements in safety and security with a standing update at the start of each meeting. The EMC reviewed and re-committed to its Safety Charter.

Dstl has undertaken a significant programme through 2024 to 2025 to reshape its Operating Model and Organisational Design. Implementation of this has begun early into the Financial Year 2025 to 2026. The EMC has taken a lead role in this programme, endorsing key Programme Board decisions and driving forward the intended benefits.

The EMC also focused its business in line with the continuing changes to the wider Defence structure, with frequent discussions and reviews to ensure Dstl and its expertise was used to best effect during the Strategic Defence Review and Defence Reform.

Throughout the year, the EMC has placed a high level of attention on returning Dstl to at least a moderate level of assurance. For most of the year this has included a monthly report tracking detailed actions. This has shown good progress.

Dstl follows the principles laid out in Section 172 of the Companies Act 2006, and has met the requirements with specific items of business and by managing Corporate Risks as follows:

Section 172 requirement	EMC response	Corporate risks
The likely consequences of any decision in the long term	EMC has developed a 3-year Corporate Plan as part of the 2023-28 Strategic Direction.	CR-GOVERNANCE-1, CR-INFRASTRUCTURE-1
	EMC has developed a 10-year infrastructure plan aligned with departmental priorities and the Dstl strategy.
	Each quarter EMC discharges its role as the sponsoring body for the Dstl Transformation Portfolio, and has played a significant role in leading the changes to Dstl’s Organisational Design for implementation in 2025-26
The interests of the company’s employees	Every EMC meeting begins with a discussion of Safety and Security matters. There is a quarterly EMC agenda item devoted to considering Dstl’s People issues, including pay, recruitment, retention and fair treatment.	CR-SAFETY-1, CR-SECURITY-1, CR-PEOPLE-1
	The EMC has reviewed the results of the annual People Survey.
	EMC has heard, discussed and taken action on reports relating to the treatment of women in defence.
Fostering business relationships with suppliers, customers and others	A quarterly EMC Performance meeting, which included attendance from all the S&T Delivery Heads and Head of Commercial.	CR-STRATEGY-1, CR-PORTFOLIO-1, CR-REPUTATIONAL-1
Impact of operations on the community and the environment	This year the EMC has refreshed and agreed new Terms of Reference for its Health, Safety and Environmental Protection sub-committee.	CR-SAFETY-2, CR-ENVIRONMENTAL-1
Maintaining a reputation for high standards of business conduct	The EMC declares any potential conflicts of interest annually and at the start of each meeting.	CR-REPUTATIONAL-1
	Investigations, audits and fraud risks are reported in the quarterly Assurance Report.
Acting fairly between members	EMC has maintained a responsibility matrix which makes clear the respective responsibilities of its members and their interdependencies. Significant work has been undertaken to improve Dstl’s Organisational Design and Operating Model.	CR-GOVERNANCE-1

EMC sub-committees

The efficiency of the EMC has been improved by the use of its formal sub-committees during the year, the purposes of which are outlined below.

Investment Management Committee (IMC)

Purpose: to assist the Chief Executive in the execution of his financial delegations. The IMC ensures that expenditure proposals are subject to requirement and financial scrutiny. The IMC is responsible for considering all investment proposals (capital and significant revenue) above a defined threshold

The IMC is chaired by the Chief Finance Officer and is held monthly.

Dstl Executive Health, Safety and Environmental Protection Committee (DEHSEC)

Purpose: to review the measures taken to ensure the health and safety at work of Dstl staff and others affected by Dstl activities, and health, safety, welfare and the environment is managed as a key enabler to world-leading science and technology (S&T).

The DEHSEC is chaired by the Chief Executive and is held quarterly.

Our risk management

Dstl’s risk management framework is designed to ensure we counter or exploit the uncertainties faced by both Dstl and our delivery partners. We have embedded our risk management practices across the organisation, allowing us to consider tactical and operational risks as well as long-term strategic risks to the successful delivery of our objectives.

Dstl’s central risk management function defines, maintains and supports the correct application of our risk management approach. The function promotes a consistent approach and continual improvement, alongside their support to the Executive and Board to ensure risk management arrangements are proportionate and effective. This is achieved by Business Risk Partnering of Risk Managers and Business Managers. The Board and the ARAC regularly review our Corporate Risks.

In addition, the Board and its ARAC undertake assurance of these risks to review the effectiveness of controls and mitigations and the progress of planned risk response actions, to ensure the level of risk carried by the organisation is within both its tolerance and delegation.

A re-baselined Corporate Risk Register was stood up for the start of this Financial Year, aligned with the Dstl Strategy 2023-28. In this year, Dstl has updated its risk management framework, which supports an Enterprise Risk Management approach.

Dstl’s approach seeks to foster a risk-aware culture, in which decision making is informed by a shared understanding of risk, to enhance the operation of organisational activities, ultimately protecting and enhancing value.

Managing risk

Dstl’s risk management approach complies with the directives and guidance of the MOD’s Joint Service Publication 892–Risk Management, which in turn aligns with the principles of HM Treasury’s Orange Book (Management of Risk–Principles and Concepts), interpreting them for MOD Organisations. In our assessment of compliance with the 5 principles of the Orange Book, we have identified further opportunities for compliance with Principle A (Governance and Leadership).

Improvements to our Operating Model and Organisational Design will embed the roles and responsibilities detailed in our updated Enterprise Risk Management framework. During Q3 of this Financial Year, our Executive Risk Owners attended an SCS Risk Culture Workshop, delivered by the Institute of Risk Management.

Dstl’s core process for risk management reflects the MOD’s 4-step process of Risk Identification; Risk Assessment; Risk Response; and Risk Monitoring and Reporting.

The process is iterative and supported by further activities such as assurance and escalation. The process relies on those in designated roles (including Risk Owners, Risk Managers, Control Owners and Action Owners) correctly and proactively carrying out their responsibilities. The identification process takes account of Dstl’s operating context.

Following the appropriate articulation of a risk, it is assessed, taking into account existing controls and mitigations, to give an indication of current likelihood and impact. Assessed risks are assigned an appropriate response. The progress of implementing any further planned controls and mitigations is monitored, along with the ongoing effectiveness of existing controls, and other changes to the risk profile. Emerging or increasing risks are brought to the attention of areas of the business best-placed to manage them.

Compliance with the principles of the Orange Book

As mentioned previously, the UK government Orange Book outlines 5 principles for risk management, applicable to Public Sector organisations.

Each government organisation is required to undertake a self-assessment for compliance with the principles and make a statement of compliance within their Annual Report and Accounts, explaining any areas of non-compliance.

We assessed our compliance with the Orange Book Principles using the HMT Risk Control Framework Bank of Questions.

Comply or explain statement

With the exception of Principle A (Governance and Leadership) our practices comply with the Orange Book principles (see below for further details).

Our self-assessment indicates that risk management is an integral part of all organisational activities to support decision making in achieving objectives (Principle B), with risks linked to objectives, and risk specifically considered within decision-making fora.

Our approach to risk management is collaborative and informed by the best available information and expertise (Principle C)–we seek to embed risk management capability throughout the organisation, collaborate with SMEs in the articulation and management of risk, and provide risk partnering by risk professionals whose skills are aligned with the Orange Book Skills and Capabilities Framework.

Our risk management processes are structured to include risk identification and assessment to allow prioritisation of how risks should be managed; the selection, design and implementation of risk treatment options that support the achievement of intended outcomes and the management of risks to acceptable levels; and risk reporting to support decision making and managing organisational performance (Principle D).

These arrangements have been reinforced by a significant revision of our Enterprise Risk Management Framework and supporting process in 2024 to 2025. We seek to continually improve our Risk Management approach (Principle E), learning from assurance activities and leading practice. Our annual self-assessment against the Principles of the Orange Book, identifies further opportunities for improvement.

We do not fully comply with Principle A (Leadership and Governance), albeit that we partially meet several requirements of this principle. We have made significant progress in 2024 to 2025, with the publication of an updated Enterprise Risk Management framework, which includes clear roles, responsibilities and accountabilities. We anticipate that our drive to promote ‘a risk aware culture’ will be embedded through our new Operating Model and Organisational Design.

In Q3 2024 to 2025, our Executive Risk Owners attended a Senior Civil Service (SCS) Risk Culture workshop delivered in-house by the Institute of Risk Management, to support them in their role to promote optimal risk management behaviours.

Our control environment

Our control environment sets the tone for how our people engage in their day-to-day activities in line with behavioural and ethical standards. In addition, we also clearly clarify our people’s responsibilities and the limits to their authority.

Our written policies and processes, together with people’s responsibilities, are currently undergoing review and update to support Dstl’s Organisational Design Transformation and, together with standards of conduct and codes of ethics, are available on Dstl’s internal Business Management System ‘Themis’.

Dstl processes

We operate a process hierarchy that gives strategic direction and intent to our business processes, sub-processes and process activities. These are aligned with our process families–the key sets of activities that Dstl performs in order to help manage corporate risks while achieving our purpose of delivering mission success.

In February of this year we initiated a full review and re-brigading of all of our processes into fourteen updated process families to support Dstl’s Organisational Design (OD) Transformation, to ensure they continue to:

meet the needs of our staff, customers and other stakeholders
continue to support delivery of our strategic intent
mitigate risk to the operation of Dstl’s business

Process reviews and updates, to ensure that all processes and supporting information are aligned with our revised structures, roles and responsibilities, is initially focused on our most critical processes. The following is a diagram summarising our processes and the revised process families.

Our control activities

Our policies and processes form the basis of our directive control activities, mitigating risks to the achievement of our objectives, ensuring the effectiveness and efficiency of our operations, and ensuring compliance with applicable laws and regulations. Our risk control framework, which supports the definition of our key controls and ongoing monitoring of the assurance activities required to measure their effectiveness, is a key component of our overall assurance opinion.

This year we have implemented a new assurance framework, based on principles aligned with the HM Treasury Orange Book, allowing some flexibility in the delivery of assurance but clear on the priorities for assurance. This framework provides a common understanding of what is meant by assurance, its importance to the successful operation of our organisation, and the approach to assurance in Dstl, all predicated on The Three Lines of Defence Model.

Line of defence	Description	Dstl
1st line	Managers and employees who are responsible for identifying and managing risk as part of their accountability for achieving objectives.	All
2nd line	Functions who provide the policies, processes, frameworks, tools, techniques and support to enable risk and compliance to be managed in the first line.	Specialist functions who set the controls e.g. Finance, Security, Health and Safety
3rd line	Independent internal audit reporting to the Board/Audit and Risk Assurance Committee	Government Internal Audit Agency MOD regulators

Incident investigations

Learning from incidents, to prevent recurrence and improve our business to the benefit of Dstl and its stakeholders, remains a key commitment.

This year we have focused on how we make the reporting of incidents simpler and how we improve our reporting culture. Improved guidance on reporting and the promotion of good news stories from the reporting of near misses and incidents, alongside our unrelenting advocacy of a ‘just culture’, has had a positive impact.

We continue to assess incidents at our weekly corporate incident triage meeting, allowing us to ensure a proportionate response including, when appropriate, investigation of significant incidents based on the potential impact the incident could have in balance with the actual harm or damage caused.

In 2024 to 2025, Dstl reported 4 specified injury accidents to the Health and Safety Executive (HSE) under RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations). This resulted in an Accident Incident Rate of 77.4 per 100,000 employees.

Whistleblowing

We remain committed to achieving the highest possible standards of service and ethics in public life, as demonstrated by our whistleblowing process which was re-written this year to incorporate the latest Cabinet Office guidance and remains in line with the Public Interest Disclosure Act 1998, the Fraud Act 2006 and the Bribery Act 2010. We always take any such incidents extremely seriously, undertaking an assessment of any concern followed by a corporate investigation if appropriate.

This year 12 concerns were raised, of which 4 were fully investigated, but none of these were via our whistleblowing process.

Identifying and managing conflicts of interest

We place high value on exemplifying integrity and impartiality, which we achieve through our ‘Standards in Public Life’ process.

In line with the Civil Service Management Code, this requires all employees to declare any actual or potential conflict of interest arising between their personal and financial interests and their official dealings as a Civil Servant.

All declarations, together with how potential or actual conflicts are being managed, are retained and undergo 6-monthly review, allowing greater assurance of our compliance and increased scrutiny over and above that provided by line managers. Failure to declare such interests may be treated as misconduct.

Declarations made by Senior Civil Servants in Dstl are reviewed by Chief People Officer as per Cabinet Office Guidance. We publish interests declared by our Board members here.

Protected personal data incidents

In 2024 to 2025, there were no reported breaches of personal information by Dstl declared to the Information Commissioners Office. We handled 7 Data Subject Access Requests (DSAR) under the Data Protection Act (DPA) 2018. There were also 11 enquiries to the Porton Down Former Volunteers Helpline, all of which were handled in accordance with the DPA.

Fraud management

Effectively managing our risk of fraud remains core to our Counter Fraud Policy and fraud controls. Our highest likely risk of fraud is within our procurement activity although we also focus on potential insider threats including theft and misuse or misappropriation of public funds by staff.

We comply with Cabinet Office’s Government Functional Standard (GovS 013: Counter Fraud) and align with the Defence Counter Fraud Strategy. This year, in collaboration with MOD Fraud Defence, we established an initial data analytics capability to aid detection of fraud and error that has already led to some lower value recoveries.

During the reporting period we have formally investigated 2 allegations of potential fraud, each of which were satisfactorily resolved with the allegations of fraud being unfounded.

Quality assurance of analytical models

A model is a way to appraise, assess, evaluate, plan or forecast future responses or outcomes by processing a variety of input data and assumptions. Our Modelling and Simulation Strategy Group manages the coherence and governance of our modelling.

We declare our business critical models responding to information requests from the MOD Analysis Directorate. We continue to work with MOD and wider government to improve the quality and operation of analytical modelling through the mutual sharing of best practice.

Group Head of Defence Internal Audit’s summary

In line with Public Sector Internal Audit Standards, the Defence Group Head of Internal Audit from the Government Internal Audit Agency (GIAA) must provide a professional opinion on the adequacy and effectiveness of Dstl’s arrangements for risk management, internal control and governance.

I have used the following GIAA audit opinion to help me in the production of this year’s Governance Statement; it summarises the results of GIAA’s internal audit work relevant to our objectives from April 2024 to March 2025. Seven Dstl sponsored audits were delivered by GIAA. The Defence Group Head of Internal Audit from GIAA has said:

“Overall, and based on the internal audit work delivered throughout FY24/25, GIAA provide limited assurance over Dstl’s systems of governance, risk management and internal control. Whilst our key review of Dstl’s new Assurance Framework determined that it was designed adequately, we identified that further work was required to embed it across the organisation to provide co-ordinated and proportionate coverage of key controls that mitigate Corporate Risks. This was found to be the case in our review of Security Risk and Assurance whereby it was identified that further work was needed to enhance the overall control framework.

“Further, our reviews of Waste Management and Fire Safety Management System identified that improvements were required in respect of 2nd line assurance, oversight and the maturity of management information. Notwithstanding, it was recognised that the Safety Reset Programme had sufficient programmatic controls in place and that Dstl’s bespoke Facilities Management operating model was designed and operating effectively.

“Additionally, the New Information Systems Service Solution (NISSS) programme was deemed to have adequate assurance mechanisms across the lines of defence that confirmed it was well managed and had embedded oversight mechanisms.”

As Accounting Officer, I recognise the critical importance of having robust systems of governance, risk management and internal control. We will address all the remedial actions to address the limited assurance findings from 2024 to 2025 and work to fully embed our improved approach to assurance in 2025 to 2026.

External certification

In July 2024 BSI Assurance UK Ltd audited Dstl, recommending continuation of Dstl’s ISO 9001:2015 (Quality Management Systems) and TickITplus (software development) certifications.

Chief Executive’s summary

Dstl has undertaken significant work through the year to improve its governance and control and has made positive strides in our journey back to ‘moderate’ assurance. This includes a large amount of detailed work to redefine Dstl’s Operating Model and Organisation Design. This will be implemented in the coming year and is the next, major phase of ensuring that the UK can continue to benefit from a safe, secure, sustainable and high-impact Dstl for many years to come.

Question 9

Remuneration policy

Accepted Answer

Remuneration and staff

Remuneration policy

During the financial year, 5 directors were members of the SCS and subject to SCS terms and conditions, including the remuneration policy. These directors were:

Paul Hollinshead
Andy Bell
David English
Simon Donnan
Teresa Stanley
Tim Sheldon

As SCS, their pay is set through recommendations made by the Review Body on Senior Salaries (SSRB). The SSRB provides independent advice to the Prime Minister and to the Secretary of State for Defence on the remuneration of the SCS. Visit their web page for further information about the SSRB’s work.

Their non-consolidated performance award arrangements fall under SCS rules rather than the Dstl performance-award system.

The non-executive members (NEMs) are not Dstl employees and, apart from 1 who is employed by MOD, are paid a fee for their services.

Performance conditions

Directors who are subject to SCS terms and conditions are also subject to the SCS performance conditions.

Service contracts

The Constitutional Reform and Governance Act 2010 requires civil service appointments to be made on merit on the basis of fair and open competition. The Recruitment Principles published by the Civil Service Commission specifies the circumstances when appointments may be made otherwise.

Unless otherwise stated, the officials covered by this report hold appointments which are open-ended. Early termination, other than for cases of misconduct, would result in the individual receiving compensation as outlined in the Civil Service Compensation Scheme.

Further information about the work of the Civil Service Commission can be found online.

Fees paid to non-executive members of the Dstl Board for the financial year 2024 to 2025

This information is subject to audit opinion

	Fee	Fee
	2024/25	2023/24
	£’000	£’000
Adrian Belton	25-30	25-30
Brian Bowsher	15-20	15-20
Jeremy Monroe¹	10-15	15-20
	(15-20)
Sarah Spurgeon	15-20	15-20
Mark Barclay²	5-10	-
	(15-20)
David Tonkin³	0-5	15-20
	(15-20)
Robert MacLeod	15-20	0-5
		15-20
Tara Usher⁴	-	-

Figures in brackets denote full-year equivalent fee

¹ Jeremy Monroe terminated employment in November 2024.

² Mark Barclay joined Dstl in December 2024.

³ David Tonkin terminated employment in April 2024.

⁴ Tara Usher did not receive a fee in 2024 to 2025; Tara is employed by MOD and represents MOD as a non-executive member (and receives a standard civil service salary from MOD). This is a related party with which Dstl has material transactions. Please see Related Party Note at Note 22. Tara began her tenure on 1 October 2019.

Question 10

Senior management remuneration and pension entitlement

Accepted Answer

Remuneration paid to executive directors for the financial year 2024 to 2025

This information is subject to audit opinion

	Salary band 2024/25	Salary band 2023/24	NCPA 2024/25	NCPA 2023/24	Pension benefits 2024/25	Pension benefits 2023/24	Total 2024/25	Total 2023/24
	£’000	£’000	£’000	£’000	Nearest £’000	Nearest £’000	£’000	£’000
Andy Bell	110-115	105-110	0-5	0-5	86	34	200-205	145-150
Matt Chinn¹	5-10	110-115	0-5	5-10	4	52	10-15	170-175
	(100-105)
Rob Cocks²	20-25	N/A	0-5	N/A	-	N/A	20-25	N/A
	(85-90)
Simon Donnan³	30-35	N/A	0-5	N/A	129	N/A	160-165	N/A
	(95-100)
David English⁴	75-80	105-110	0-5	0-5	18	92	90-95	200-205
	(95-100 )
Paul Hollinshead	165-170	155-160	0-5	0-5	-	-	165-170	155-160
Tim Sheldon⁵	120-125	N/A	0-5	N/A	117	N/A	240-245	N/A
	(135-140 )
Teresa Stanley	80-85	80-85	0-5	0-5	75	92	160-165	175-180
		(85-90 )

Figures in brackets denote full-year equivalent salary

We have not disclosed pension benefits for Rob Cocks and Paul Hollinshead as we raised queries in relation to the accuracy of the information provided by MyCSP. We have not been able to get a response to our queries on the timetable required for publishing the ARA. We will therefore include the information in our future ARA once the queries have been resolved.

¹ Matt Chinn acted as interim Chief Delivery Officer (CDO) until April 2024. He departed Dstl in September 2024.

² Rob Cocks has acted as interim Chief Finance Officer since January 2025.

³ Simon Donnan joined Dstl as the interim Chief Operating Officer (COO) in November 2024 on a 1-year loan period.

⁴ David English departed Dstl as the Chief Finance Officer and interim COO in December 2024.

⁵ Tim Sheldon joined Dstl as the CDO in April 2024.

Executive Agency Board members’ emoluments

The details of our Board members can be found above under our leadership. They are summarised as follows:

This information is subject to audit opinion

	2024/25¹	2023/24²	2022/23
Salaries, NCPAs and fees (£’000)	479.5	483.6	536.1

¹ The figure for 2024 to 2025 reflects David English’s departure as Chief Finance Officer (CFO) and Rob Cocks acting as interim CFO.

² The figure for 2023 to 2024 has reduced from 2023 as the COO role was not filled. David English continued to act as interim COO during this period.

Pension provision for executive directors for the financial year 2024 to 2025

This information is subject to audit opinion

	Real increase in pension [and related lump sum at pension age]	Total accrued pension at pension age at 31/03/25 [and related lump sum]	Cash equivalent value at 31/03/25	Cash equivalent value at 31/03/24	Real increase in cash equivalent transfer value as funded by employer
	£’000	£’000	£’000	£’000	£’000
Andy Bell	2.5-5 [5-7.5]	45-50 [120-125]	1,187	1,060	81
Rob Cocks		-	-	-	-
Matt Chinn	0-2.5 [0]	40-45 [110-115]	951	942	2
Simon Donnan	5-7.5 [15-17.5]	35-40 [85-90]	728	594	118
David English	0-2.5	45-50	920	877	8
Paul Hollinshead	-	-	-	-	-
Tim Sheldon	5-7.5 [7.5-10]	50-55 [125-130]	1,114	971	103
Teresa Stanley	2.5-5	45-50	1,012	902	69

We have not disclosed pension provision for Rob Cocks, David English and Paul Hollinshead as we raised queries in relation to the accuracy of the information provided by MyCSP. We have not been able to get a response to our queries on the timetable required for publishing the ARA. We will therefore include the information in our future ARA once the queries have been resolved.

Pension information is provided by MyCSP, the administrators of civil service pensions. Our directors belong to the classic, classic plus or alpha CSPSs. All schemes are part of the civil service pension arrangements. See pension information.

Fair pay disclosure (relationship between the highest-paid director and the workforce median)

This information is subject to audit opinion

	2024/25	2024/25	2023/24	2023/24
	Total pay	Salary	Total pay	Salary
Band of highest-paid director total remuneration	£165,000 to £170,000	£165,000 to £170,000	£155,000-£160,000	£155,000-£160,000
Median total remuneration	£44,565	£43,815	£44,198	£43,348
Median pay ratio	3.76	3.82	3.62	3.69
25th Percentile pay	£34,058	£33,658	£34,088	£33,663
25th Percentile pay ratio	4.92	4.98	4.69	4.75
75th Percentile pay	£54,856	£54,106	£54,083	£53,177
75th Percentile pay ratio	3.05	3.10	2.96	3.01

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the lower quartile, median and upper quartile remuneration of the organisation’s workforce.

Total remuneration includes salary, non-consolidated performance related pay, and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

The banded remuneration of the highest-paid director in Dstl in the financial year 2024 to 2025 was £165,000-£170,000 (2023 to 2024: £155,000-£160,000). This was 3.76 times (2023 to 2024: 3.62) the median remuneration of the workforce, which was £44,565 (2023 to 2024: £44,198).

In 2024 to 2025, remuneration ranged from £18,000 to £165,000-£170,000 (2023 to 2024: £18,000 to £155,000-£160,000). Total remuneration includes salary, non-consolidated performance-related pay, and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

Percentage change in total salary and bonuses for the highest paid director and staff average

This information is subject to audit opinion

	2024/25	2024/25	2023/24	2023/24	2022/23	2022/23
	Total salary and allowances	Bonus payments	Total salary and allowances	Bonus payments	Total salary and allowances	Bonus payments
Staff average	2%	42%	19%	-40%	9%	22%
Highest paid director	4.02%	No change	3%	No change	2.20%	No change

There was no change in highest paid director bonus payments as none were received, the same as the prior year.

The total salary and allowances between 2023 to 2024 and 2024 to 2025 have decreased due to there being no cost-of-living payment being paid in the 2024 to 2025 financial year. The cost-of-living payment was taken from the bonus budget. Therefore, bonuses look to have increased as a result of this payment not being provided in 2024 to 2025.

Question 11

Our people

Accepted Answer

Dstl employs some of the world’s brightest people. We recognise that a highly skilled, inquisitive and dedicated workforce is crucial to delivering our high-impact work.

Our people continue to make us proud and have received prestigious recognition throughout the year. Within the King’s Birthday Honours we had 2 colleagues appointed Officer of the Order of the British Empire (OBE). These were in recognition of outstanding service to the Defence and Security of the UK, and its allies.

The awards recognised how scientific expertise can support specialist users to deliver a counter Chemical Biological and Radiation capability and ground-breaking work, leading the development of the UK’s engineering and synthetic biology research. Additionally, an individual received a prestigious Joint Commander’s Commendation (JCC) recognising exceptional operational impact and strategic expertise.

A number of individuals were awarded Vice Chief of Defence Staff (VCDS) Commendations. The VCDS Commendations are awarded twice a year, in tandem with the state honours, to individuals and teams who have performed exemplary service to MOD.

Three individuals received individual awards for contributions made to the UK’s defence and security. There were also awards for support to operations, recognising numerous individuals who have worked extremely hard, often deploying at short notice to provide frontline expert advice which has been invaluable in shaping UK operations.

We continue to develop our Support to Operations pool and pipeline of deployable scientists and engineers, ready to deploy on operations at short notice so we can further enhance the breadth and depth of S&T support to enable UK operational advantage.

The DragonFire team were also recognised with a VCDS award. The final laser weapon demonstration at the Hebrides was the culmination of over 6 years of work with a very large number of significant contributions from a wide range of people. We are delighted to celebrate the contributions of people who are often unsung in the delivery of technical work including commercial staff, media experts, project managers and safety experts. It was great to have such dedicated people across a team of varied skill sets who were pulling in the same direction.

We were pleased to have had 2 members of staff shortlisted for the Women in Defence Awards 2024. The awards recognise the extraordinary contributions that individuals and teams make to defence and aim to inspire others to step forward and challenge barriers. With both staff members, their contribution both inside and outside of work has made a huge difference to UK defence and their nominations were well deserved.

We are incredibly proud of our people, and for the recognition of their work. Engagement is measured through the People Survey and the overall engagement index for Dstl is 58%, which has reduced by 2 percentage compared to last year. A significant amount of work is ongoing to further develop our culture and leadership aligned to our organisational redesign.

Right size, right shape, right skills

There has been a focus on reorganising Dstl this year whilst also ensuring we reduced our size to align with the priorities of the Civil Service Reform and become a more efficient organisation as a result. As such we have focused on the reskilling and retention of our people throughout this year with external recruitment focused on key growth areas, roles created through organisational redesign and critical roles.

We welcomed over 130 new starters to Dstl this year. We also had 51 inward rotations, seconded from across Civil Service and other organisations, into our organisation this financial year. We continue to review our apprentice and graduate (early careers) intake and future recruitment pipeline to align with Dstl strategy and wider defence workforce planning.

We have reduced our recruitment advertising costs to £250,000. This aligns with wider civil service recruitment targets and the drive to be more efficient. All of Dstl recruitment spend is agreed within Civil Service Frameworks, with our advertising partner, developing advertising materials and products to use across all media.

We have no other advertising or marketing costs at Dstl.

Exciting, innovative and supportive workplace

In 2024, we continued to focus on diversity and inclusion. Transparency, inclusion and equality are key principles in every deliverable within our People Plan. Put simply, inclusion is ‘One Dstl’ and it creates a better place to work. The focus this year has been:

Increasing the diversity of our workforce including at the most senior levels, to more closely reflect the society we represent and serve.
A measuring what matters campaign. The aim of the campaign was to increase the completion rates of diversity declarations, with an emphasis on the disability demographic to help us better understand our workforce and tailor interventions. Declarations increased across all protected characteristics with disability declaration rates increasing by over 50%.

A focus on women’s safety which:

subjected our reporting process to both an internal and external review
created a Personal Protective Equipment (PPE) Working Group to look at how we can make the procurement of PPE more equitable
improved women’s changing facilities
modernised pre-trial briefs
increased engagement with teams across Dstl to discuss what steps they can take to help create more inclusive workplace environments
implemented an anti-bullying and harassment hub, which contains useful information and resources in one place
enabled engagement with colleagues working on Organisational Development to ensure that respect and how that aligns to women’s safety is embedded in our new culture and is fully considered in all of our work on culture

We continue to strive to create a more inclusive Dstl and to attract the widest range of candidates in an increasingly competitive pool to improve representation across Dstl. Our Employee Support Networks (ESNs) continue to deliver support for our people and the organisation.

One of the ways our leaders listen is through our many active ESNs, which are run by our people and supported by our senior management teams and executive champions.

These groups help us obtain honest feedback from our people, influence and facilitate change, help us develop our policies and culture, and provide support for individuals who may need it. Our networks cover different protected characteristics, including:

disability
gender equality
parents and carers
race, faith and culture
sexual orientation and gender identity

Our people are mainly Civil Servants and as such, the Civil Service governs our people policies. We ensure that our procedures and employment contracts are in line with the Civil Service Management Code and that they reflect the fundamental principles of the Human Rights Act 2000.

We successfully implemented year 3 of our multi-year pay agreement which has run from 2022 to 2025. This has made a significant improvement in our pay offering and has addressed challenges within our pay structure. It has provided a platform for Dstl to consider pay and reward in the long-term beyond the expiry of the current deal in 2025.

We will continue to look at how we can offer a flexible, fair and modern pay and reward offering for our staff now and in the future.

We offer exciting career opportunities and a range of flexible working options alongside a range of rewards and benefits, which are continually reviewed to ensure they are fair and attractive.

We need to continue to be creative and flexible in our approach to rewarding our people for the skills they provide, in order to ensure we can attract and retain our workforce and deliver Dstl’s strategy. Our staff turnover for 2024 to 2025 was 5.4% representing a reduction from the previous year (2023 to 2024: 6.9%).

The health and wellbeing of our employees is of utmost importance to us, and we work closely with our onsite occupational health team and our Employee Assistance Programme provider to support our employees’ wellbeing. We saw 2.52% of hours lost due to sickness absence this year, compared to 2.35% in 2023 to 2024.

During the year we have focused on supporting our people’s wellbeing through a time of change. This has included specific workshops to support individuals’ wellbeing with a particular focus on navigating change and building resilience, specifically:

exploring the impacts change can have on personal wellbeing
considering strategies for building resilience
examining the importance of cultivating connection for supportive workplace environments

Moving forwards, we will launch a one Dstl approach to wellbeing, aligned to health and safety, to really put the wellbeing of our people at the heart of Dstl’s agenda. This will be underpinned by a phased program of activities.

Our workforce

The average full-time equivalent number of people (including members of the Board) employed during the year was:

This information is subject to audit opinion

	Permanent (UK) employment contract	Permanent (UK) employment contract	Agency and short-term contract staff	Agency and short-term contract staff	Inward secondees	Inward secondees	Total	Total
	2025	2024	2025	2024	2025	2024	2025	2024
Professional and technical staff	3,847	3,880	285	323	66	66	4,198	4,269
Administrative and industrial staff	879	886	46	52	0	0	925	938
Total	4,726	4,766	331	375	66	66	5,123	5,207

Staff costs

Staff costs incurred during the year comprise:

This information is subject to audit opinion

	2025	2024
	£m	£m
Wages and salaries	248.3	243.0
Social security costs (including apprenticeship levy)	28.7	28.0
Other pension costs	67.3	60.8
Inward secondees	8.8	7.8
Agency and contract staff	23.3	27.7
Less recoveries in respect of outward secondments	(2.3)	(2.1)
Total	374.1	365.2

No staff costs were capitalised during the year (2023 to 2024: £nil).

Our off-payroll engagements

Following the Review of Tax Arrangements of Public Sector Appointees published by the Chief Secretary to HM Treasury on 23 May 2012, Dstl must publish information on our highly paid and/or senior off-payroll engagements. To complement our committed employed workforce, and to cover temporary capacity or to deliver particular niche scientific expertise, we engage a number of Contracted Temporary Workers (CTWs)/Contingent Labour.

Identified in the following tables are the numbers of our non-permanent staff (contractors) at Dstl whom we hire under contingent labour route–PSR (Public Sector Resourcing) framework RM3749. CTWs are not employees and nor are they off-payroll appointments to public office, for which there are none at Dstl.

All off-payroll engagements

Highly paid off-payroll worker engagements as at 31 March 2025, earning £245 per day or greater	119
of which
Number that have existed for less than 1 year at time of reporting	9
Number that have existed for between 1 and 2 years at time of reporting	34
Number that have existed for between 2 and 3 years at time of reporting	20
Number that have existed for between 3 and 4 years at time of reporting	19
Number that have existed for 4 or more years at time of reporting	37

All highly paid off-payroll workers engaged at any point during the year ended 31 March 2025, earning £245 per day or greater	200¹
of which
Not subject to off-payroll legislation	0
Subject to off-payroll legislation and determined as in-scope of IR35	196
Subject to off-payroll legislation and determined as out-of-scope of IR35x	4
No. of engagements reassessed for compliance or assurance purposes during the year	0²

Notes:

¹ Figure is total of those engaged at any point during the year ended 31 March 2025, and therefore includes those whose contracts have ceased.

² Dstl does not undertake a reassessment for consistency/assurance purposes due to the small number of contracts falling outside of IR35. Dstl would only perform a consistency check where the scope and nature of a role changed mid-contract.

Off-payroll and on-payroll engagements of Board members and/or senior officials with significant financial responsibility

Number of off-payroll engagements of Board members and/or senior officials with significant financial responsibility during the financial year	0
Total number of individuals on-payroll and off-payroll that have been deemed Board members and/or senior officials with significant financial responsibility during the financial year	14

Exit packages

Redundancy and other departure costs were paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme, made under the Superannuation Act 1972.

Exit costs are accounted for in-full in the year the departure is agreed. Where the Executive Agency has agreed early departures, the additional costs are met by the Agency, not the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table below.

This information is subject to audit opinion

Exit package cost band	Number of compulsory redundancies	Number of compulsory redundancies	Number of other departures agreed	Number of other departures agreed	Total number of exit packages by cost band	Total number of exit packages by cost band
	2025	2024	2025	2024	2025	2024
Less than £10,000	0	0	1	0	1	0
£10,000 - £25,000	0	0	1	0	1	0
£25,001 - £50,000	0	0	1	1	1	1
£50,001 - £100,000	0	0	1	0	1	0
£100,001 - £150,000	0	0	0	0	0	0
£150,001 - £200,000	0	0	0	0	0	0
More than £200,000	0	0	0	0	0	0
Total number of exit packages	0	0	4	1	4	1
Total cost of exit packages (£)	0	0	132,920	44,251	132,920	44,251

There were no adjustments for differences between estimates and final settlements relating to previous years.

Pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015, a new pension scheme for civil servants was introduced–the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career-average basis with a normal pension age equal to the member’s state pension age or 65 if higher.

From 1 April 2015, all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has 4 sections: 3 (classic, premium, classic plus) provide benefits on a final-salary basis with a normal pension age of 60, and 1 (nuvos) provides benefits on a whole-career basis with a normal pension age of 65.

Existing members of the PCSPS who were within ten years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between ten years and 13 years and 5 months from their normal pension age on 1 April 2012 switched or switch into alpha sometime between 1 June 2015 and 1 February 2022. Because the government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the Cash Equivalent Transfer Values shown in this report.

All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. As a result all members in the older schemes outlined above were moved into Alpha with effect from the 1 April 2022.

The pension figures quoted for officials show pension earned in PCSPS or alpha–as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes). Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a defined contribution (money purchase) pension with an employer contribution (partnership pension account).

These multi-employer defined benefit schemes are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha increase annually in line with Pensions Increase legislation.

The Executive Agency is unable to identify its share of the underlying assets and liabilities. The Scheme Actuary reviews employer contributions usually every 4 years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2022 to 2023 to be paid when the member retires and not the benefits paid during this period to existing pensioners. Details can be found in the resource accounts of the Cabinet Office.

Employee contributions are salary-related and range between 4.6% and 8.05% of pensionable earnings for members of classic, premium, classic plus, nuvos and alpha.

For the year ending 31 March 2025, the Agency’s employer contributions of £67.0 million were payable to MyCSP (2023 to 2024: £60.5 million) at one rate 28.97% of pensionable earnings (2023 to 2024: 26.6% to 30.3%), based on salary bands. More details on the classic, premium, classic plus, nuvos and alpha pension schemes, including information about benefits and contributions, are available online.

Since October 2002, employees joining the Agency can opt for either the appropriate defined-benefit arrangement as above or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account). The Agency makes a basic contribution of between 8.0% and 14.75% (depending on the age of the member) into the stakeholder pension.

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).

For the year ending 31 March 2025, employee contributions of £278,046 (2023 to 2024: £318,393) were paid into partnership pension providers. Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill-health retirement). Contributions due to the partnership pension providers at 31 March 2025 were £9,413 (2023 to 2024: £11,271). There were no prepaid contributions at that date.

This year, there were 2 individuals who retired on ill health grounds; for the first individual there were accrued pension liabilities of £2,988 due to an upper tier being applied. For the second individual there was no liability, as enhancement was given due to a lower tier being applied. Further details about the Civil Service pension arrangements can be found online.

Our staff composition

As of 31 March 2025, the gender numbers for our non-executive members, senior leadership team members, SCS and employees were:

	Male	Female	Total
Non-executive members¹	4	2	6
Senior Leadership Team²	5	1	6
Employees³	3,129	1,922	5,051
Total	3,138	1,925	5,063

Notes:

¹ The MOD non-executive member on the Dstl Board is SCS.

² The Chief Executive, Chief Delivery Officer, Chief Operating Officer (currently an inward rotation from an OGD), Chief People Officer, and Chief Science and Technical Officer roles are Senior Civil Servants; the Chief Finance Officer is currently filled on an interim basis by non-Senior Civil Servant.

³ All the above figures are headcount. Employee numbers include our permanent staff, our apprentices, and our fixed-term appointments. There is 1 other member of SCS at Dstl who is not a member of the Dstl Executive Team (Head of Commercial).

Question 12

Parliamentary accountability and audit

Accepted Answer

This section presents information about Dstl that is useful to readers for accountability and decision-making purposes.

As Accounting Officer, our Chief Executive is personally accountable to the MOD Permanent Secretary (who is directly accountable to Parliament) for ensuring that public money is safeguarded, properly accounted for and used economically, efficiently and effectively. Additionally, our Chief Executive is personally accountable to the MOD Chief Operating Officer for the performance and management of Dstl.

Our Chief Executive is designated as Dstl’s Accounting Officer by the MOD Principal Accounting Officer (the MOD Permanent Secretary), and must operate in accordance with Managing Public Money. This designation is conveyed via an Accounting Officer letter of delegation from the MOD Permanent Secretary.

As the Dstl Accounting Officer, our Chief Executive may be called to account directly by Parliament. He is personally responsible for: safeguarding the public funds for which he has charge; for ensuring propriety, regularity, value for money and feasibility in the handling of those public funds; and, for the day-to-day operations and management of Dstl.

The Dstl Accounting Officer’s specific accountabilities to Parliament include:

signing the Dstl Annual Report and Accounts ensuring that proper records are kept and that accounts are properly prepared
ensuring that effective procedures for handling complaints about Dstl are established and widely communicated
acting in accordance with: Managing Public Money; the Dstl Framework document; and, other instructions and policy as issued by MOD, His Majesty’s Treasury and the Cabinet Office
giving evidence, normally with the MOD’s Principal Accounting Officer, when summoned before the Public Accounts Committee

Our annual report and accounts are subject to audit by the Comptroller and Auditor General, who heads the National Audit Office and is responsible for scrutinising public spending and safeguarding the interests of taxpayers on behalf of Parliament.

View the Comptroller and Auditor General’s audit certification of this report.

More details on our governance, key roles and our accountabilities relating to the MOD ownership function of Dstl’s governance are published in our Framework Document .

Our ownership structure is designed to balance the risk of Dstl’s operations to MOD, and to encourage diversity of thought and reasonable challenge.

Statement of Parliamentary Supply (subject to audit)

As an on-vote Executive Agency, we operate within MOD’s control framework and are subject to delegated control totals for (net) resource and capital funding from within MOD’s departmental allocation.

We require net cash funding from MOD to cover the balance of expenditure that cannot be met from receipts paid directly to Dstl. We conduct our transactions within MOD on a non-cash basis via intra-departmental accounting and bookkeeping constructs. Our financial statements represent the result of transactions pertaining to our operations, set in the context of MOD’s overall Statement of Outturn against Parliamentary Supply.

Regularity of expenditure (subject to audit)

Our internal controls identified no material breaches of regularity, and all expenditure has been applied to the purposes intended by Parliament.

Remote contingent liabilities (subject to audit)

In addition to any contingent liabilities reported in the Notes to the Accounts, we also disclose relevant material remote contingent liabilities. The likelihood of a transfer of economic benefit arising is too remote to meet the definition of a contingent liability in accounting standard IAS37 (provisions, contingent liabilities, and contingent assets).

Remote contingent liabilities are by nature uncertain and very unlikely, but we recognise that they could lead to further expenditure if certain conditions are met. They could materialise as a combination of unlikely and uncertain future conditions or events that are not wholly within the Agency’s control.

Our research activities are clearly related to the activities, materials and equipment used in the defence and security context, and by inference we are therefore exposed to similar hazards and risks during the conduct of trials, experimentation and engineering development. The nature of the special and generic risks and indemnities arising from such activities are self-insured and long-term residual liabilities are underwritten by our parent department. Against those activities the Agency has identified the following 2 potential remote material liabilities:

Satellite collision (subject to audit)

The Agency invests in space operation capabilities, which includes a satellite ground station to task satellites for research purposes. Mitigations are in place against accidents but there remains a remote possibility of satellite collision through software or system failure, or by human error during the operation of a satellite. HM Treasury approval has been received for up to £500 million to cover this remote contingent liability for operations that commenced during October 2020. The contingent liability is currently estimated to expire by 31 December 2030.

Decommissioning of Fort Halstead (subject to audit)

Up to the 31 March 2023 Dstl leased a site at Fort Halstead. As part of the lease exit agreement a decommissioning review was successfully completed by an independent body which cleared Dstl of immediate remediation liability.

However, there remains an enduring risk of discovery of ordnance or depleted uranium at the site by future users. An assessment of the likely cost of cleaning up a contamination incident has been made, together with an assessment of the probability of such an incident happening, for the purpose of implementation of IFRS17 (Insurance Contracts).

The risk of contamination is considered very low, and the worst case would be the discovery of depleted uranium which would likely cost up to £0.5 million to remove safely. More details in Note 1 to the Financial Statements.

Losses and special payments (subject to audit)

There were 2 individual losses of £300k or more this year, as follows.

Termination of IT System:

During the year Dstl terminated the build of a bespoke IT system for satellite operations. At the final stages of the project it was found that the system could not be installed in Dstl data centres due to unforeseen technical issues. Alternative options were considered but a joint decision was made with Space Command to terminate the project. £2.2 million that had been capitalised under the project has been expensed as a constructive loss because there were no assets of future benefit to Dstl or MOD.

Termination of a network access solution:

The Agency also terminated a project to improve user access to digital files across its networks. The project used software that worked in a pilot for 200 users but failed when scaled up to 2,000 users. Subsequent improvements in accessibility to Dstl’s cheaper long-term storage solution effectively negated the need for this project. The entire £1.5 million cost of the project has been expensed as a constructive loss because there were no assets of future benefit created.

Other <£300k:

Dstl recorded fruitless payments this year totalling £430k, relating to duplicate and expiring software licence purchases. A special severance payment to a member of staff of £62k was paid in year as an out of court tribunal settlement.

Fees and charges (subject to audit)

We charge for goods and services in accordance with the principles in Managing Public Money. Our core activity is to provide S&T services to MOD and wider government. Please see our performance summary for details of these services. Operating income recognised in return for the provision of these services is disclosed in note 3 to the financial statements. The cost of providing these services, purchase of direct goods and services, is in note 4. Other operating income is derived from receipts relating to non-core activities. Further details are in accounting policy note 1 (u) to these financial statements.

Public spending and administration budgets

Our Chief Executive receives his letter of authority as Accounting Officer directly from the MOD Permanent Secretary. We recover our resource costs as an Executive Agency via charges to our customers; we do not classify these as administrative costs. All our operating expenditure is associated with delivery of our S&T outputs. See our performance summary for further detail.

Our capital costs are subject to a separate funding line within MOD’s overall control framework. All our capital expenditure is associated with the provision of equipment, facilities and infrastructure to enable the safe and secure delivery of our S&T outputs.

Question 13

The certificate and report of the Comptroller and Auditor General to the House of Commons

Accepted Answer

Opinion on financial statements

I certify that I have audited the financial statements of the Defence Science and Technology Laboratory for the year ended 31 March 2025 under the Government Resources and Accounts Act 2000.

The financial statements comprise the Defence Science and Technology Laboratory’s:

Statement of Financial Position as at 31 March 2025
Statement of Comprehensive Net Expenditure, Statement of Cash Flows and Statement of Changes in Taxpayers’ Equity for the year then ended
the related notes including the significant accounting policies

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK adopted international accounting standards.

In my opinion, the financial statements:

give a true and fair view of the state of the Defence Science and Technology Laboratory’s affairs as at 31 March 2025 and its net expenditure for the year then ended
have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions issued thereunder

Opinion on regularity

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

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs UK), applicable law and Practice note 10 Audit of Financial Statements and Regularity of Public Sector Bodies in the United Kingdom (2022). My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I am independent of the Defence Science and Technology Laboratory in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the Defence Science and Technology Laboratory’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Defence Science and Technology Laboratory’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the Accounting Officer with respect to going concern are described in the relevant sections of this certificate.

The going concern basis of accounting for the Defence Science and Technology Laboratory is adopted in consideration of the requirements set out in HM Treasury’s Government Financial Reporting Manual, which requires entities to adopt the going concern basis of accounting in the preparation of the financial statements where it is anticipated that the services which they provide will continue into the future.

Other information

The other information comprises information included in the Annual Report but does not include the financial statements and my auditor’s certificate and report thereon. The Accounting Officer is responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

Opinion on other matters

In my opinion the part of the Remuneration and Staff Report to be audited has been properly prepared in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000.

In my opinion, based on the work undertaken in the course of the audit:

the parts of the Accountability Report subject to audit have been properly prepared in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000
the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements

Matters on which I report by exception

In the light of the knowledge and understanding of the Defence Science and Technology Laboratory and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance and Accountability Reports.

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

adequate accounting records have not been kept by the Defence Science and Technology Laboratory or returns adequate for my audit have not been received from branches not visited by my staff
I have not received all of the information and explanations I require for my audit
the financial statements and the parts of the Accountability Report subject to audit are not in agreement with the accounting records and returns
certain disclosures of remuneration specified by HM Treasury’s Government Financial Reporting Manual have not been made or parts of the Remuneration and Staff Report to be audited is not in agreement with the accounting records and returns
the Governance Statement does not reflect compliance with HM Treasury’s guidance

Responsibilities of the Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Chief Executive as Accounting Officer is responsible for:

maintaining proper accounting records
providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters
providing the C&AG with additional information and explanations needed for his audit
providing the C&AG with unrestricted access to persons within the Defence Science and Technology Laboratory from whom the auditor determines it necessary to obtain audit evidence
ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error
preparing financial statements which give a true and fair view and are in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000
preparing the annual report, which includes the Remuneration and Staff Report, in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000
assessing the Defence Science and Technology Laboratory’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Accounting Officer anticipates that the services provided by the Defence Science and Technology Laboratory will not continue to be provided in the future

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Government Resources and Accounts Act 2000.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations, including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

considered the nature of the sector, control environment and operational performance including the design of the Defence Science and Technology Laboratory’s accounting policies
inquired of management, Defence Science and Technology Laboratory’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Defence Science and Technology Laboratory’s policies and procedures on:
- identifying, evaluating and complying with laws and regulations
- detecting and responding to the risks of fraud
- the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Defence Science and Technology Laboratory’s controls relating to the Defence Science and Technology Laboratory’s compliance with the Government Resources and Accounts Act 2000 and Managing Public Money
inquired of management, Defence Science and Technology Laboratory’s head of internal audit and those charged with governance whether:
- they were aware of any instances of non-compliance with laws and regulations
- they had knowledge of any actual, suspected, or alleged fraud
discussed with the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud

As a result of these procedures, I considered the opportunities and incentives that may exist within the Defence Science and Technology Laboratory for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions, and bias in management estimates. In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the Defence Science and Technology Laboratory’s framework of authority and other legal and regulatory frameworks in which the Defence Science and Technology Laboratory operates. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the Defence Science and Technology Laboratory. The key laws and regulations I considered in this context included Government Resources and Accounts Act 2000, Managing Public Money, employment law, tax legislation and health and safety legislation.

I considered:

the results of analytical procedures designed to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud
reviews of internal audit reports

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

I reviewed the financial statement disclosures and supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements
I enquired of management, the Audit and Risk Assurance Committee and legal counsel concerning actual and potential litigation and claims
I reviewed minutes of meetings of those charged with governance and the Board; and internal audit reports
I addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and other adjustments; assessing whether the judgements on estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business
I attended Audit and Risk Assurance Committee meetings and had regular communication with management and internal audit to identify any instances of fraud, non-compliance with laws and regulations, or irregular transactions

I communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain sufficient appropriate audit evidence to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control I identify during my audit.

Report

I have no observations to make on these financial statements.

Mr Gareth Davies Comptroller and Auditor General

National Audit Office,
157-197 Buckingham Palace Road
Victoria,
London SW1W 9SP

15 July 2025

Question 14

Dstl Annual Report and Accounts 2024 to 2025

Accepted Answer

Our annual report and accounts is prepared in line with the Government Financial Reporting Manual (FReM), Managing Public Money and any applicable HM Treasury instructions. Dstl’s Framework Document requires us to prepare our own annual report and accounts and present it to Parliament following certification by the Comptroller and Auditor General to the House of Commons.

The Dstl Board endorsed this report out of committee on the 10 July 2025, and I, as Accounting Officer, signed the accounts on 14 July 2025.

I can confirm that our annual report and accounts gives a fair, balanced and understandable view of Dstl’s activities for the year ended 31 March 2025 and of our financial position as at 31 March 2025. I also confirm that I am personally responsible for this annual report and accounts and the judgements required for determining that it is fair, balanced and understandable.

As required in the FReM, I have signed and dated our Performance Report, as well as signing the Accountability Report here, which meets Dstl’s key accountability requirements to Parliament. I have also signed our Statement of Financial Position, as part of the fully audited Financial Statements that follow in the rest of this document.

I hope you find our annual report and accounts an interesting read and helpful in furthering your understanding of Dstl’s business and performance over the past financial year.

Paul Hollinshead Chief Executive

14 July 2025

Question 15

Financial statements

Accepted Answer

Our financial statements and disclosure notes make up the final report in this year’s annual report and accounts; they have been audited by the Comptroller and Auditor General.

They have been prepared under International Financial Reporting Standards (IFRS), as adapted for the public sector in the Government Financial Reporting Manual (FReM). New reporting standards and any changes to accounting policy that affect our financial statements are outlined in Note 1. Changes are driven by a desire to align, where appropriate, with the policies of our parent department (MOD), subject to relevance and materiality considerations.

Statement of Comprehensive Net Expenditure (SoCNE)

for the year ended 31 March 2025

	Note	2025	2024
		£million	£million
Operating income from contracts with customers	2	970.0	1,092.4
Other operating income		1.3	9.6
Total operating income	3	971.3	1,102.0

Staff costs		(374.1)	(365.2)
Purchase of direct goods and services		(416.2)	(562.4)
Depreciation, amortisation and impairment charges		(72.1)	(76.3)
Loss on transfer of non-current financial asset		0.0	(1.4)
Provision expense		(0.3)	2.8
Infrastructure running costs		(141.6)	(112.7)
Other operating expenditure		(35.6)	(37.8)
Total operating expenditure	4,5	(1,039.9)	(1,153.0)

Net operating expenditure		(68.6)	(51.0)

Finance income	6	0.0	0.0
Finance expense	7	0.0	0.0
Net expenditure for the year		(68.6)	(51.0)

Other comprehensive net income / (expenditure)
Items which will not be reclassified to net operating income / (expenditure):
Net surplus / (deficit) on revaluation of property, plant and equipment	SoCiTE	2.2	0.1
Net surplus / (deficit) on revaluation of intangible assets	SoCiTE	0.9	0.3
Total comprehensive expenditure for the year		(65.5)	(50.6)

These notes form an integral part of these accounts.

Statement of Financial Position (SoFP)

as at 31 March 2025

	Note	2025	2024
		£million	£million
Assets
Non-current assets
Property, plant and equipment	8	712.2	733.3
Financial assets	9	0.0	0.0
Intangible assets	10	33.4	21.6
Leases: Right of use assets	11	1.7	0.6
Receivables	14	2.0	3.6
Total non-current assets		749.3	759.1

Current assets
Work in progress	13	0.0	0.0
Receivables	14	23.0	31.5
Cash and cash equivalents	15	19.9	12.6
Total current assets		42.9	44.1

Total assets		792.2	803.2

Current liabilities
Trade payables and other liabilities	16	151.4	209.3
Short-term lease liabilities	17	0.2	0.2
Short-term provisions	18	2.4	1.0
Total current liabilities		154.0	210.5

Non-current assets less net current liabilities		638.2	592.7

Non-current liabilities
Trade payables and other liabilities	16	3.7	3.9
Long-term lease liabilities	17	0.4	0.2
Long-term provisions	18	0.1	1.2
Total non-current liabilities		4.2	5.3

Assets less liabilities		634.0	587.4

Taxpayers’ equity and other reserves
Revaluation surplus	SoCiTE	237.2	234.1
General fund	SoCiTE	396.8	353.3
Total taxpayers’ equity		634.0	587.4

The financial statements were signed on 14 July 2025. The Accounts were authorised for issue on the date of certification by the Comptroller and Auditor General.

Paul Hollinshead Chief Executive

14 July 2025

Statement of Cash Flows (SoCFs)

for the year ended 31 March 2025

	Note	2025	2024
		£million	£million
Cash flows from operating activities
Net operating expenditure	SoCNE	(68.6)	(51.0)
Adjustments for non-cash transactions:
Depreciation and impairment	4,8	62.0	70.5
Loss on sale of property, plant and equipment	4	0.7	0.1
Loss on sale of intangible assets	4	0.2	0.0
Loss on transfer of non-current financial asset investment	4,9	0.0	1.4
Amortisation and impairment	4,10	10.1	5.8
Reclassification of previous year property, plant and equipment spend as revenue	8	1.1	6.1
Reclassification of previous year intangible asset spend as revenue	10	0.1	0.1
Notional audit fee	4	0.1	0.1
Fair valuation of peppercorn lease	11	0.0	(0.2)
Provisions provided / (decreased) in year	4	0.3	(0.1)
Provisions not required written-back	4	0.0	(2.7)
Net operating income before changes in working capital		6.0	30.1

(Increase) / decrease in work in progress		0.0	0.0
(Increase) / decrease in trade receivables and other receivables		10.1	(6.1)
Decrease in trade payables and other liabilities¹		(54.1)	(47.4)
Capitalisation of a dilapidation provision relating to a lease		(0.1)	0.0
Use of provisions		0.0	(2.7)
Net cash outflow from operating activities		(38.1)	(26.1)

Cash flows from investing activities
Purchases of property, plant and equipment¹	8	(48.5)	(53.4)
Purchases of intangible assets¹	10	(6.6)	(6.4)
Finance income		0.0	0.0
Net cash outflow from investing activities		(55.1)	(59.8)

Cash flows from financing activities
Net funding received from MOD in-year²	SoCiTE	100.9	74.0
Repayment of lease liability principal	17	(0.4)	(0.4)
Right of use asset finance expense	17	0.0	0.0
Interest paid	7	0.0	0.0
Net cash inflow from financing activities	15.1	100.5	73.6

Net financing
Net increase / (decrease) in cash and cash equivalents		7.3	(12.3)
Brought forward cash and cash equivalents		12.6	24.9
Carried forward cash and cash equivalents	15	19.9	12.6

Notes:

¹ Decrease in trade payables and other liabilities is after taking account of £3.9 million decrease of non-cash movement for purchase of non-current assets (2023 to 2024: £1.8 million decrease). Property, plant and equipment additions of £44.6 million disclosed in Note 8 includes a decrease of non-cash trade payables and other liabilities of £3.9 million.

²	Note	2025	2024
		£million	£million
Cash received from MOD		702.5	827.7
Bookkeeping adjustments for transactions with MOD		(601.6)	(753.7)
Net funding received from MOD in-year	SoCiTE	100.9	74.0

Statement of Changes in Taxpayers’ Equity (SoCiTE)

for the year ended 31 March 2025

	Note	General fund	Revaluation surplus	Total taxpayers’ equity	Total comprehensive net expenditure
		£million	£million	£million	£million
Balance at 1 April 2023		320.1	233.7	553.8

Surplus on revaluation of property, plant and equipment	8		9.7	9.7	9.7
Surplus on revaluation of intangible assets	10		0.8	0.8	0.8
Transfer to general fund realised depreciation			(9.6)	(9.6)	(9.6)
Transfer to general fund realised amortisation			(0.5)	(0.5)	(0.5)
Net gains and losses recognised in the Statement of Comprehensive Net Expenditure		0.0	0.4	0.4	0.4

Auditor’s remuneration (notional)	4	0.1		0.1
Net operating expenditure	SoCNE	(51.0)		(51.0)	(51.0)
Net finance income / (expense)	6,7	0.0		0.0	0.0
Transfer from revaluation surplus realised depreciation and amortisation		10.1		10.1
Net equity investment received from MOD during the year		74.0		74.0
Balance as at 31 March 2024		353.3	234.1	587.4	(50.6)

Surplus on revaluation of property, plant, and equipment	8		12.8	12.8	12.8
Surplus on revaluation of intangible assets	10		1.4	1.4	1.4
Transfer to general fund realised depreciation			(10.6)	(10.6)	(10.6)
Transfer to general fund realised amortisation			(0.5)	(0.5)	(0.5)
Net gains and losses recognised in the Statement of Comprehensive Net Expenditure		0.0	3.1	3.1	3.1

Auditor’s remuneration (notional)	4	0.1		0.1
Net operating expenditure	SoCNE	(68.6)		(68.6)	(68.6)
Net finance income / (expense)	6,7			0.0	0.0
Transfer from revaluation surplus realised depreciation and amortisation		11.1		11.1
Net equity investment received from MOD during the year¹	15.1	100.9		100.9
Balance at 31 March 2025		396.8	237.2	634.0	(65.5)

Notes:

¹ Net equity investment received from MOD:

	Note	General fund
		£million
Balance at 31 March 2024		266.5
Net equity investment received during the year	15.1	100.9
Balance at 31 March 2025		367.4

Question 16

Notes to the accounts

Accepted Answer

1. Accounting policies

a) Statement of accounting polices

The financial statements have been prepared in accordance with the 2024 to 2025 Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public sector context. The particular policies adopted by the Executive Agency are described below. They have been applied consistently in dealing with items that are considered material to the accounts.

b) i) Accounting convention

These accounts have been prepared under the historical cost convention, modified for the application of fair value where appropriate. The balances affected are property, plant and equipment (see Note 1(f) below), intangible assets (see Note 1(j) below), and non-current financial assets (see Note 1(d)(ii) below).

(ii) Going concern

The Executive Agency is dependent principally on its owning department, MOD, as its main source of revenue. Demand for the Agency’s services is enduring and there is no planned change to MOD’s requirements for these services.

c) Consolidation with MOD

The Executive Agency is within the Accounting Boundary of MOD and its financial statements are consolidated within those of the department.

d) Critical accounting judgements and key sources of estimation uncertainty

In the application of the Executive Agency’s accounting policies, there are necessary judgements, estimates and assumptions made that affect the carrying amounts of certain assets and liabilities. Where information is not readily available, estimates and assumptions are made with reference to advice from management, technical experts, professional third parties, and from historical experience. The estimates and underlying assumptions are reviewed on an ongoing basis.

There have been no revisions of accounting judgement, or revisions to the application of estimation technique during the year. Revisions to accounting estimates are recognised during the period of revision, and future periods if the revision affects both current and future periods.

(i) Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimates (see (ii) below), that the Executive Agency has made in the process of applying its accounting policies. These have had significant effects on the financial statements.

Valuation of property

The accounting policy for the valuation of freehold land and buildings is disclosed in Note 1(f), and the valuations are disclosed in Note 8. The Executive Agency has concluded that the most appropriate method of valuation provided by the Royal Institute of Chartered Surveyors (RICS) is Depreciated Replacement Cost (DRC). The market for the Agency’s specialised laboratories and secure accommodation is extremely limited. The large size of the 2 main sites (Porton Down and Portsdown West) and their remote locations has a limiting effect on the number of alternative users.

The DRC estimation technique for the valuation of freehold land employs the Alternative Site Approach. This represents the lowest price the Agency would pay for an alternative plot of land that is in an appropriate location, and is appropriate for the Agency’s operations.

Consolidation of subsidiary undertaking

Ploughshare Innovations Ltd (Ploughshare) was a wholly owned subsidiary that the Executive Agency had the power to control. The Agency did not consider Ploughshare to be material and had decided not to produce group accounts. Consolidation would have required significant additional disclosure for minor adjustments and would not have improved readers’ understanding of the Agency’s financial performance. Ploughshare was transferred to MOD Defence Science and Technology (DST) during 2023 and 2024. See Note 9.

Biological high containment facility

This facility enables the Executive Agency to maintain the UK strategic sovereign capability for assessing hazards from current and emerging chemical and biological threats. It consists of several assets, including a building, operated together as a distinct facility. As an Agency inside the department boundary, there is a more integrated approach to strategic capability planning that includes the facility, particularly as it is used principally for MOD project work. MOD revalues the facility building asset on a DRC basis providing the Agency with further assurance that the department intends to sustain this capability and strategic asset for the foreseeable future.

For these reasons, the Agency has concluded that going forward, the most appropriate valuation method is DRC for the building, with the application of indices provided by Defence Statistics between independent professional quinquennial valuations. For plant and equipment assets, appropriate indices provided by Defence Statistics are applied. This also aligns with MOD’s valuation method. See Note 8.

Leases

The Agency has several lease contracts where it is the lessee. The main area of judgement is in determining whether the Agency is ‘reasonably certain’ to exercise an option to extend or terminate a contract. There are currently 2 property leases that have remaining future options that enable the Agency to terminate the lease without significant penalty. One of these options falls within financial year 2026 to 2027 and the other option falls within financial year 2027 to 2028. The current judgement is that it is not reasonably certain that the Agency will exercise either of these options. The Blackbarn Road control point modular building property lease was terminated during 2023 to 2024 (resulting in an amendment to the expected term that brought forward the lease expiry accounting into that year).

If all options:

i. to extend lease terms are exercised; and

ii. options to terminate are not exercised;

Two property lease contracts would have a minimum of 5 years duration remaining from the opening Statement of Financial Position date. This is for the lease of an office in Newcastle which expires on 21 October 2029 (if the break clause is not exercised 2027 to 2028), and the lease of property on a science park at Porton Down which expires 14 May 2029 (if the break clause is not exercised 2027 to 2028). The Newcastle lease has a right of use asset carrying value on 31 March 2025 of £0.1 million (based on running for the full term to October 2029), and the lease for property at the science park has a right of use carrying value on 31 March 2025 of £1.3 million (based on running for the full term to May 2029). The lease for the property at the science park is by far the Agency’s most significant lease, the next most significant of which is the Newcastle property lease.

Considerations when determining whether the Agency is reasonably certain to exercise an extension option, or an option to terminate, include operational need, and where alternatives exist, value for money.

The cost model has been used as a proxy for current value in existing use, or fair value, to determine subsequent remeasurement of the Agency’s right of use assets. The cost model is an appropriate proxy because the Agency has only 5 IFRS16 lease contracts at the SoFP date, their right of use values are not material, and their terms are relatively short.

The science park lease began during the year. It had an initial right of use asset value of £1.5 million of which £0.3 million was lease liability, £1.1 million was the initial direct costs of making property alterations, and £0.1 million was a dilapidation provision (see Note 18). This lease expires on 31 March 2029, and there is a break clause that can be exercised for May 2027. The Agency’s other lease contracts have much lower remaining lease liabilities. The next most significant lease had a total remaining lease liability of £0.2 million at the start of the year. It was a lease for property that expired 31 March 2025.

(ii) Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities during the next year.

Accruals

Accruals are estimated with reference to available documentation, advice from the relevant project manager, information provided by third parties, and from experience gained from previous years. Third-party verification is sought from suppliers of all sub-contracted research where the value of uninvoiced work is expected to be £100,000 or above. The total accrual at the SoFP date relating to purchase of direct goods and services is £72.5 million (2023 to 2024: £115.6 million).

Reporting of staff holiday from the central management system has been developed which has removed the uncertainty to within minor tolerance. The holiday pay accrual has increased by 5.0% to £10.6 million (2023 to 2024: £10.1 million). This increase reflects annual pay inflation.

Fair value of non-current financial assets

The fair value of the Executive Agency’s investment in Ploughshare was determined by taking the subsidiary’s net assets, and adjusting for items already recognised in the Agency’s Statement of Financial Position. A further adjustment had been made for non-current assets where it was considered difficult to realise any value. During 2023 to 2024, the Agency’s investment in Ploughshare was transferred to MOD Defence Science and Technology (DST). Further information is provided in Note 9.

Modified Historic Cost Accounting (MHCA)

Non-current plant and equipment and non-current intangible assets are reported at fair value by applying various indices provided by Defence Statistics. Freehold land and buildings are subject to a rolling programme of quinquennial revaluation by an independent professional valuer. Indices provided by Defence Statistics are applied to land and building valuations in the years between independent professional valuations.

There are inherent valuation uncertainties. A professional’s valuation will depend on the method applied (DRC) and judgement on factors such as functional obsolescence, age obsolescence, and the quality of surrounding infrastructure. Where indices are applied, the values are dependent on the particular index adopted. For consistency and comparability, the index used for each class of asset will be applied every year. Further information is provided in Note 1(f) and 1(j).

Depreciation and amortisation

Depreciation of property, plant and equipment, and amortisation of intangible assets, is based on the useful economic life of the asset. It is rare for any of the Executive Agency’s assets to have a residual value. They are often very specialised assets that are used until obsolete. Remaining useful economic lives are reviewed at least annually. The basis for estimating a remaining useful economic life includes experience of similar assets, the condition and performance of the asset, and knowledge of technological advances and obsolescence. Remaining useful economic lives are revised, where appropriate, to reflect any change in these circumstances. The net book value of the asset at the time of the revision, will be depreciated on a straight-line basis over the revised remaining useful economic life.

With respect to the depreciation of buildings, an independent professional evaluation of their remaining useful economic lives is performed during the quinquennial rolling revaluation programme. Further information is provided in Note 1(f) and 1(j).

Leases

With respect to lease liabilities, and right of use assets, the main area of estimation uncertainty is the rate used as the Agency’s incremental cost of borrowing for discounting lease payment cash flows. The implicit interest rates used in lease contracts are not readily determined. HM Treasury rates, published for use as a proxy for government incremental cost of borrowing are used.

For unexpired lease contracts at 31 March 2025, the following is a comparison of the lease liability measurements at the relevant HM Treasury rate compared with what the measurement would have been if a cost of borrowing rate of 7.5% had been applied:

Unexpired lease contracts at 31 March 2025	HM Treasury rate	Lease liability at 31 March 2025	Cost of borrowing rate	Lease liability at 31 March 2025
	%	£’000	%	£’000
Accommodation at Wiltshire County Council Science Park	4.72	245.6	7.50	233.1
University of Newcastle office hub	4.72	124.7	7.50	118.3
Boscombe Down storage facility	3.51	62.8	7.50	58.8
Farnborough storage facility	4.72	116.2	7.50	113.8
Leonardo laser (peppercorn)	N/A	0.0	N/A	0.0
Total		549.3		524.0

The Agency’s lease contracts are not material, and therefore the lease liability is not sensitive to the discount rate used as the incremental cost of borrowing.

Provisions

The measurement of early departure provisions is derived from information provided by the Cabinet Office (My Civil Service Pension). Variations between estimated values and the final cost on crystallisation of the liabilities are not considered material. The measurement of the dilapidation provision is based on a third-party estimate provided during 2021.

Provisions relating to disputes with suppliers are measured following assessment of a range of settlement values attributed to likely outcomes that mature as negotiations progress. For further details, see Note 18. Any change in expectations, or difference between expectation and the actual liability on crystallisation, is accounted in the period of determination.

Contingent liabilities

The agency measures contingent liabilities on a most likely outcome basis, for details of the contingent liabilities disclosed by the Agency, see Note 23.

Remote contingent liabilities

The measurement of the satellite collision remote contingent liability has been derived on a worst case scenario by assessing the typical insurance cover held by commercial space companies for satellite loss and service disruption. For decommissioning of the Fort Halstead site, an assessment of the likely cost of cleaning up a contamination incident has been made, together with an assessment of the probability of such an incident happening. For further details see here.

e) Basis of consolidation

The Executive Agency did not consolidate its wholly owned subsidiary, Ploughshare, on grounds of materiality. Ploughshare was transferred to MOD Defence Science and Technology (DST) during 2023 to 2024. See Note 1(d)(i).

f) Property, plant and equipment

The majority of the Executive Agency’s property, plant and equipment is held on MOD’s non-current asset register. The Agency classifies and measures its property, plant and equipment in accordance with IAS 16: Property, Plant and Equipment as adapted by the FReM.

Property, plant, machinery, transport, IT and communication equipment are capitalised where the cost of acquisition is £25,000 or greater.

All assets are independently inspected on a 5-year rolling programme. Assets are carried at current value in existing use or fair value. The valuation methods for different classes of asset are as follows:

For land and buildings, where independent professional valuations are carried out, they are performed using RICS Red Book methods.

Land	DRC
Buildings	DRC
For land and buildings that have been declared surplus	Market Value
Plant, machinery, transport, and IT and communication equipment	MHCA

For land, the DRC is derived with reference to the lowest amount that a purchaser would pay to acquire an alternate site appropriate for its operations in a relevant location at the valuation date. This would not necessarily be the value that the Agency’s land could be sold for.

Property is revalued in the years between professional independent valuations using indices provided by Defence Statistics. Plant, machinery, transport, IT and communication equipment assets are revalued using indices provided by Defence Statistics.

For consistency, the Agency applies the same Defence Statistics indices to the balance of property, plant and equipment assets held on its own non-current asset register.

Depreciation is provided on a straight-line basis over the useful economic lives of the assets, which are as follows:

Buildings	5-50 years
Plant and machinery	5-30 years
Transport	3-20 years
IT and communication equipment	3-20 years

Land that has a useful economic life of more than 1 year is not depreciated.

Assets under construction are capitalised during the period of construction. On completion of the project, or on construction of an asset with phased deliveries, the costs are transferred to the asset register.

Details of property, plant and equipment values included within these financial statements are disclosed in Note 8.

g) Grant-funded assets

Grants received or receivable for the acquisition or construction of property, plant or equipment are recognised as other operating income after the activity that creates the entitlement has been performed. They are not material and are therefore only separately disclosed within the property, plant and equipment note in the year of their acquisition.

h) Donated assets

Property, plant and equipment and intangible assets donated to the Executive Agency for which no consideration is given or conditions are attached, are brought onto the Statement of Financial Position at their fair value and are revalued, and depreciated or amortised on the same basis as purchased assets. The fair value at initial recognition is credited to the Statement of Comprehensive Net Expenditure as other operating income. The assets are revalued, and depreciated or amortised on the same basis as other non-current assets of the same class. The arrangement with MOD for the acquisition of assets where the Agency retains control of the asset has changed. See Note 3.

i) Customer-funded assets

Where a customer has funded in part or in whole, the purchase or construction of an asset that meets the definition of a non-current asset, and the customer retains an interest in that asset, the asset is initially brought onto the Statement of Financial Position at cost. The asset is depreciated or amortised and revalued on the same basis as other non-current assets of the same class. The customer funding is released to other operating income during the period that the customer has an interest in the asset.

j) Intangible assets

Intangible assets are capitalised in accordance with IAS 38: Intangible Assets as adapted by the FReM. Intangible assets comprise purchased software licences and the cost of software developed in-house where there is reliable cost information and the asset will give rise to future economic benefit. The minimum level for capitalisation of intangible assets is £25,000.

Amortisation is on a straight-line basis over the shorter of the licence term, or the software’s useful economic life. Intangible assets are revalued annually by applying indices provided by Defence Statistics. The majority of the Agency’s intangible assets are held on MOD’s non-current asset register where Defence Statistics indices are applied. For consistency, the Agency applies the same Defence Statistics indices to the balance of intangible assets held on its own non-current asset register.

The useful economic lives of intangible assets are considered to fall within 1 to 10 years.

k) Right of use assets

The Agency applies the short-term lease recognition exemption to all contracts that contain a lease. The definition of a short-term lease is:

i. a contract for twelve months or less; or

ii. any option to extend beyond a term of twelve months is not reasonably certain to be exercised; or

iii. any lease contract for a term of more than twelve months where the Agency has an option to terminate the lease contract in twelve months or less, and is reasonably certain to exercise the option; or

iv. any lease where both the Agency and the lessor has the right to terminate the lease contract in twelve months or less.

Any lease contract that has an option to purchase the underlying asset at the end of the lease term cannot be a short-term lease regardless of whether or not the option is likely to be exercised. The election is across all underlying asset classes. Short-term lease rental payments are expensed on an accruals basis.

The Agency applies the recognition exemption to all contracts containing a lease whose underlying asset values, when new, are low. The Agency has lease contracts whose underlying asset values do not qualify as low-value, as defined by the standard, but the values are not material. The Agency applies the same materiality threshold, of £25,000 or more, to right of use assets that is applied to other categories of non-current assets. This is in line with the materiality objectives of IAS1: Presentation of financial statements. The election is across all lease contracts. Lease contracts whose underlying asset is low-value (or not material), are expensed on an accruals basis.

Irrecoverable VAT is not included within the IFRS16 definition of ‘lease payment’ and is not capitalised.

The cost model has been used as a proxy for current value in existing use or fair value to determine subsequent remeasurement of the Agency’s right of use assets. The cost model has been applied to all underlying asset classes. See Note 1(d)(i) above for further information.

Right of use assets are depreciated on a straight-line basis over the lower of expected lease term, and the useful economic life of the underlying asset. The expected lease term includes any options to extend the term that is reasonably certain to be exercised. Where the Agency has an option to terminate the lease contract, the expected term will not exceed the date of this termination option where it is reasonably certain that the option will be exercised.

l) Impairment

The carrying value of the Executive Agency’s non-current assets is reviewed during the year to determine whether there is any indication of impairment. An impairment may also arise following application of indices. See Note 12. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairments are first offset through other comprehensive net expenditure where sufficient revaluation surplus exists. If impairment is due to consumption of economic benefit, or there is insufficient revaluation surplus, it is expensed through profit or loss. Impairment losses will be reversed if there is an increase in the fair value or service potential of a previously impaired asset. The increased carrying amount attributable to a reversal of an impairment is first credited to profit or loss to the extent of any original impairment expense to profit or loss. Any remaining balance, or the whole reversal (if impairment was fully offset through other comprehensive net expenditure), will be credited through other comprehensive net expenditure.

m) Research and development

Research and development expenditure incurred during work on a contract for a customer is chargeable to the customer. Internally, funded research expenditure is charged to the Statement of Comprehensive Net Expenditure as incurred.

n) Grant funding agreements

The terms and conditions of a grant agreement follow guidance provided by the Cabinet Office. Grant payments provided to academia bodies for eligible science and technology research are to cover expenditure incurred by the recipient for specified funded activities. The Agency will not pay the grant until it is satisfied that the grant recipient has paid for the funded activities in full and the funded activities have been delivered during the funding period.

Eligible science and technology research may be funded by a single payment for specified performance criteria, or by a series of payments linked to multiple performance milestones. Where funding is provided to the Agency to design, put in place and project manage a grant agreement, the Agency is acting as a principal, and revenue and cost of sales are recognised as the performance criteria and deliverables specified in the agreement are met.

o) Work in progress

Work in progress represents the value of partially completed milestones on firm-price contracts, and is stated at the lower of cost and net realisable value.

p) Contract assets

Contract assets represent operating income recognised in excess of the values invoiced (net of VAT) on cost-plus contracts and include an appropriate amount of profit attributed to the contract. For firm-price contracts, contract assets are recognised where there is a timing difference between income recognition (such as on delivery of a milestone) and issuing an invoice to the customer.

q) Financial instruments

Financial assets and liabilities are recognised in the Executive Agency’s Statement of Financial Position where the Agency has become a party to contractual terms of an instrument. With respect to the Agency’s investment in Ploughshare, the method of accounting that had been adopted is fair value through profit or loss. Ploughshare transferred to MOD Defence Science and Technology (DST) during 2023 and 2024. See Note 9.

For information on the Agency’s exposure to risk and categories of financial instruments, see Note 21.

r) Provisions

Provisions are made where the Executive Agency has a present legal or constructive obligation as a result of a past event, and where it is probable that a reliably measured economic outflow will result. Provisions are measured taking into account the risks and uncertainties surrounding the obligation. Where possible, information from third parties is used as a basis for deriving the estimated liability.

s) Pensions

Past and present employees are covered by pension benefits provided through Civil Service pension arrangements that are unfunded multi-employer schemes providing benefits based on either final salary, indexed average lifetime salary, or a mixture of both. The Agency is unable to identify its share of the underlying assets and liabilities and therefore it accounts for the schemes as if they were defined contribution schemes. As a result, the amount charged to the Statement of Comprehensive Net Expenditure represents the contributions paid and payable to the schemes in respect of the accounting period. Details of rates and amounts of contributions during the year are disclosed in our people.

t) Foreign currencies

Transactions denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities that are denominated in foreign currency are retranslated at the rates of exchange ruling at the Statement of Financial Position date. Gains and losses arising on retranslation are included in the Statement of Comprehensive Net Expenditure.

u) Operating income

The amount of operating income recognised by the Executive Agency reflects the consideration due from the transfer of control for promised goods and services to customers. Control is when the customer has the ability to direct the use of, and obtain substantially all of the benefits of the goods or services.

For cost-plus contracts, the transfer of control passes to the customer over time. The customer simultaneously receives and consumes the benefit of the services. The services are specialised, have no alternative use, and the Agency has an enforceable right to payment for the completed performance to date. The recognition of operating income reflects the pattern of consumption of benefits by the customer, and includes the attributable contract profit rate. The total amount of operating income recognised is capped at the contract price limit.

For firm-price contracts, the transfer of control passes to the customer at a point in time. Each point in time reflects the transfer of a performance obligation to the customer (a contract milestone), and each performance obligation has an attributed contract price. The recognition of operating income reflects the price of an achieved performance obligation that is accepted by the customer. Some firm-price contracts have a single performance obligation where there are no specified interim milestones.

Operating income is accrued as contract assets where there is a timing difference between income recognition and invoicing.

Operating income is deferred as a contract liability where a contract allows amounts to be invoiced ahead of the trigger point for income recognition (such as before the completion of performance obligations). Losses are recognised as soon as they are foreseen.

Pre-contract costs, which are not material, are expensed within other operating expenditure. 93% of the Agency’s operating income from contracts with customers is from MOD. All contracts with MOD are charged at cost, with no profit. Under this arrangement, no formal invoicing takes place and therefore no trade receivable is recognised. The Agency recognises income over time, which is simultaneously expensed by MOD using intra-department bookkeeping.

Other operating income is recognised for receipts relating to non-core activities that are not the supply of scientific and technical services. See Note 3 for further information.

The Agency does not have any contracts where the period between the transfer of the promised goods and services to the customer and payment from the customer exceeds a year. Consequently, the Agency does not adjust the contract prices for the time value of money.

v) Value Added Tax (VAT)

The Executive Agency’s VAT falls within MOD’s VAT registration. The Agency accounts for VAT and transfers the net value to MOD on a quarterly basis for inclusion within MOD’s VAT return. Where the VAT is irrecoverable, it is charged to the relevant expense category, or if capital, to the relevant non-current asset class.

w) Segmental reporting

The principal business activities of the Executive Agency are managed through Divisions, and the segmental analysis in Note 2 is presented according to the Agency’s internal management reporting structure. The accounting policies of the operating segments are the same as those of the Agency. Corporate overheads are allocated to operating segments on the basis of headcount with the exception of estates management charges, which are allocated on area of occupancy. Inter-segment trading is at cost.

x) Reserves within taxpayers’ equity

The revaluation surplus represents taxpayers’ equity arising from increases in the value of the Executive Agency’s non-current assets.

y) General fund

Net funding received from the owning Department, MOD, is recorded as equity within the general fund. The Statement of Changes in Taxpayers’ Equity discloses the movement in net funding received from MOD during the year.

The Statement of Cash Flows discloses the cash funding received from MOD within cash flows from financing activities, and the associated footnote 2.

z) IFRS, amendments and interpretations in issue but not yet effective or adopted

IAS8: Accounting Policies, Changes in Accounting Estimates and Errors requires disclosures in respect of new IFRS, amendments and interpretations that are or will be applicable after the reporting period.

The following new standard will be adopted by the Executive Agency as directed, interpreted or adapted by the FReM:

IFRS17: Insurance contracts

The standard was issued during May 2017 and will replace the previous standard for insurance contracts, IFRS4. The UK Endorsement Board has approved the adoption of the standard, effective from 1 January 2023. HM Treasury have interpreted and adapted the standard for the public sector context, with an adoption date for the reporting period beginning on 1 April 2025.

The objective of the standard is to ensure insurance contracts are accounted for on a consistent basis, measuring the liability at the present value of expected future cash flows, plus an adjustment for non-financial risk. It sets out clearer requirements with respect to recognition, classification, and measurement of assets and liabilities arising from insurance contracts.

The standard, together with HM Treasury’s adaptions have been reviewed. Adoption is not expected to have a material impact on the financial statements. The contracts that will fall within the scope of IFRS17 are where non-financial risk is transferred to the Agency by means of indemnities provided to third parties. Indemnities are not routinely included within the Agency’s contracts. Where they are, they would currently be reported as either a contingent liability or a remote contingent liability.

A review of existing contingent liabilities has been carried out and 1 of them falls within the scope of the new standard. The impact on the financial statements will not be material. The contractual obligation (insurance contract) is for the potential remediation of land. Following a thorough screening of the land and tests carried out by environmental experts, the risk of contamination is considered very low. The worst case would be the discovery of depleted uranium that would likely cost up to £0.5 million to remove safely. The standard will be implemented with full retrospective restatement beginning from 1 April 2023, the initial date of the liability. This contract is onerous and the liability at initial recognition will be charged in full to the general fund. The following FReM amendment will be adopted by the Agency:

FReM amendment

In December 2023, HM Treasury released an exposure draft on potential changes to valuing and accounting for non-investment non-current assets. This applies to the Agency’s property, plant and equipment, and intangible assets.

Non-investment assets will be described as held for ‘operational capacity’. This will have no impact on the valuation basis which will remain as Existing Use Valuation. An adaption to IAS16: Property, Plant and Equipment will be introduced to withdraw the requirement to revalue an asset where its fair value materially differs from its carrying value. Assets will be valued using 1 of the following processes:

for property assets, a quinquennial revaluation, supplemented by annual indexation, or a rolling programme of valuations over a 5-year cycle, with annual indexation applied to assets during the 4 intervening years
for non-property assets, application of appropriate indices - where an index is not available, a quinquennial revaluation supplemented by a desktop valuation in the third year

For intangible assets, the option to use the revaluation model will be withdrawn. Carrying values of intangible assets at 31 March 2025 will be considered to be the historical cost at 1 April 2025.

The Agency does not consider that these amendments will have a material impact on its financial statements.

With respect to property, the rolling programme of valuations over a 5-year cycle with annual indexation applied to assets during intervening years will continue. There is no change for plant and equipment. For intangible assets, the following are the valuation movements for the last 4 years:

	2025	2024	2023	2022
	£million	£million	£million	£million
Cost	2.4	1.1	0.8	0.1
Amortisation	(1.0)	(0.3)	(0.4)	0.0
Revaluation reserve	(1.4)	(0.8)	(0.4)	(0.1)

Withdrawal of the revaluation model for intangible assets will not have a material impact to the financial statements.

2. Statement of net expenditure by operating segment

All of the Executive Agency’s business reporting segments are disclosed to enable users of these financial statements to evaluate the nature and financial effects of the Agency’s business activities. The Agency’s corporate support functions have been aggregated. All Divisions derive their revenues from the provision of specialist scientific and technical services. The Agency derives 93% of its operating revenues from MOD, and 99% of its revenues from wider government (which includes MOD). More detailed disclosures can be found in Note 22, related-party transactions.

More than 99% of revenue is derived from UK sources. The chief decision-maker does not review the business on a geographical basis. A geographical analysis would not be necessary to aid users’ understanding of these financial statements.

Operating segment analysis for the year ending 31 March 2025		Chemical, Biological and Radiological division	Cyber and Information Systems division	Counter-Terorism and Security division	Exploration division	Platform Systems division	Defence and Security Accelerator	Support to Operations	Corporate	Internal Trading Adjustments	Total as per financial statements
	Note	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
MOD Chief Scientific Adviser		66.4	148.2	50.5	37.1	151.8	0.0	26.3	0.2		480.5
MOD other		25.8	58.3	72.9	16.1	187.8	33.3	24.3	3.6		422.1
Wider government		14.8	0.8	36.2	0.2	0.1	4.6	0.0	0.0		56.7
Non-Exchequer income		4.9	0.5	1.2	0.0	0.1	0.1	0.0	3.9		10.7
Operating income from contracts with customers	3	111.9	207.8	160.8	53.4	339.8	38.0	50.6	7.7		970.0
Other operating income	3	0.3	(0.3)	0.5	0.0	(0.3)	0.0	0.0	1.1		1.3
Income from other operating segments²		13.8	21.4	21.2	12.1	31.1	0.0	0.3	15.5	(115.4)	0.0
Operating income (internal and external)		126.0	228.9	182.5	65.5	370.6	38.0	50.9	24.3	(115.4)	971.3
Underlying net operating income / (expenditure)		(11.1)	12.5	(9.8)	0.9	14.6	4.2	(0.3)	(50.0)		(39.0)
Significant non-recurring operating items	5	0.0	(2.5)	0.0	0.0		0.0	0.0	(27.1)		(29.6)
Net operating income / (expenditure)³		(11.1)	10.0	(9.8)	0.9	14.6	4.2	(0.3)	(77.1)		(68.6)

Finance income	6	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0		0.0
Finance expense	7	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0		0.0
Net income / (expenditure) for the year		(11.1)	10.0	(9.8)	0.9	14.6	4.2	(0.3)	(77.1)		(68.6)

Notes:

¹ Support to Operations was previously part of Chemical, Biological and Radiological division.

² Internal trading where staff and facility resource, owned by an operating segment, is utilised on an external customer project that is owned and managed by another operating segment. This represents recovery of the cost of providing these services to the recipient operating segment. Cost recovery is included in internal financial performance reporting.

³ Within net operating income / (expenditure) are depreciation, amortisation, impairments, and loss on disposal expensed as follows in the table below.

		Chemical, Biological and Radiological division	Cyber and Information Systems division	Counter-Terorism and Security division	Exploration division	Platform Systems division	Defence and Security Accelerator	Support to Operations¹	Corporate	Internal Trading Adjustments	Total as per financial statements
	Note	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Depreciation and impairment of property, plant and equipment		0.0	1.7	0.0	0.0	0.0	0.0	0.0	59.7		61.4
Depreciation of right of use assets		0.0	0.0	0.0	0.0	0.1	0.0	0.0	0.5		0.6
Amortisation and impairment of intangible assets		0.0	0.7	0.0	0.0	0.0	0.0	0.0	9.4		10.1
Loss on disposal of property, plant and equipment		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.7		0.7
Loss on disposal of intangible assets		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.2		0.2
Loss on transfer of non-current financial asset		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0		0.0
Total depreciation, amortisation, impairment, and loss on disposal	4	0.0	2.4	0.0	0.0	0.1	0.0	0.0	70.5		73.0

The comparatives for the year ending 31 March 2024:		Chemical, Biological and Radiological division	Cyber and Information Systems division	Counter-Terorism and Security division	Exploration division	Platform Systems division	Defence and Security Accelerator	Corporate	Internal Trading Adjustments	Total as per financial statements
	Note	£m	£m	£m	£m	£m	£m	£m	£m	£m
MOD Chief Scientific Adviser		95.0	206.3	61.4	46.2	191.6	0.0	(3.1)		597.4
MOD other		44.1	59.1	77.4	11.9	192.2	45.5	0.2		430.4
Wider government		13.1	0.5	36.8	1.0	0.1	0.3	0.0		51.8
Non-Exchequer income		5.5	1.4	2.1	0.0	0.6	0.1	3.1		12.8
Operating income from contracts with customers	3	157.7	267.3	177.7	59.1	384.5	45.9	0.2		1,092.4
Other operating income	3	1.2	3.4	2.7	0.3	0.7	0.0	1.3		9.6
Income from other operating segments¹		14.1	21.2	18.3	13.4	28.8	0.2	9.6	(105.6)	0.0
Operating income (internal and external)		173.0	291.9	198.7	72.8	414.0	46.1	11.1	(105.6)	1,102.0

Underlying net operating income / (expenditure)		(7.3)	12.8	(6.3)	0.0	8.1	3.0	(21.7)		(11.4)
Significant non-recurring operating items	5	0.0	0.0	0.0	0.0	0.0	0.0	(39.6)		(39.6)
Net operating income / (expenditure)²		(7.3)	12.8	(6.3)	0.0	8.1	3.0	(61.3)		(51.0)

Finance income	6	0.0	0.0	0.0	0.0	0.0	0.0	0.0		0.0
Finance expense	7	0.0	0.0	0.0	0.0	0.0	0.0	0.0		0.0
Net income / (expenditure) for the year		(7.3)	12.8	(6.3)	0.0	8.1	3.0	(61.3)		(51.0)

Notes:

¹ Internal trading where staff and facility resource, owned by an operating segment, is utilised on an external customer project that is owned and managed by another operating segment. This represents recovery of the cost of providing these services to the recipient operating segment. Cost recovery is included in internal financial performance reporting.

² Within net operating income / (expenditure) are depreciation, amortisation and impairments expensed as follows:

The comparatives for the year ending 31 March 2024:		Chemical, Biological and Radiological division	Cyber and Information Systems division	Counter-Terorism and Security division	Exploration division	Platform Systems division	Defence and Security Accelerator	Corporate	Internal Trading Adjustments	Total as per financial statements
	Note	£m	£m	£m	£m	£m	£m	£m	£m	£m
Depreciation and impairment of property, plant and equipment		0.0	0.0	0.0	0.0	0.0	0.0	70.0		70.0
Depreciation of right of use assets		0.0	0.0	0.0	0.0	0.0	0.0	0.5		0.5
Amortisation and impairment of intangible assets		0.0	0.0	0.0	0.0	0.0	0.0	5.8		5.8
Loss on disposal of property, plant and equipment		0.0	0.0	0.0	0.0	0.0	0.0	0.1		0.1
Loss on transfer of non-current financial asset		0.0	0.0	0.0	0.0	0.0	0.0	1.4		1.4
Total depreciation, amortisation, impairment and loss on disposal	4	0.0	0.0	0.0	0.0	0.0	0.0	77.8		77.8

A summary of the business activities of the operating segments:

Chemical, Biological and Radiological (CBR)

The CBR division provides an integrated chemical, biological, radiological and medical sciences capability. The division delivers longer-term research as well as short-term advice and consultancy, and supports both the Front Line Commands and wider government.

Cyber and Information Systems (CIS)

The CIS division maintains and develops a range of capabilities that achieve the division’s vision of delivering transformational information superiority. Working with partners, the division offers the capabilities that provide the skills, knowledge, expertise and facilities that underpin the outcomes needed to support defence in cyber, C4ISR and space related areas.

Counter-Terrorism and Security (CTS)

The CTS division delivers innovative science and technology and solutions to support CTS operations, both for MOD and wider government. With in-house laboratories, workshops and other specialised facilities, the division provides rapid response to operational demands. The division maintains the Sovereign UK Energetics capability and provides a source of threat information throughout the Executive Agency.

Exploration (EXP)

The EXP division identifies and accelerates the delivery of transformative technology, systems, concepts and strategy for defence and security.

Platform Systems (PLS)

The PLS division provides a single focus for platform-based capability covering all mission and weapons systems, and the related integrated survivability capabilities. The division is responsible for all advice and solutions to capability gaps that require platform based solutions. This division primarily supports the Front Line Commands.

Defence and Security Accelerator (DASA)

DASA consists of personnel from Dstl, MOD including Defence Equipment and Support, and Home Office. Its remit is to provide funding and other support to wider government, private sector, and academia to help solve the UK’s most pressing defence and security challenges, and to link the Executive Agency’s partners together.

Support to Operations (S2O)

S2O coheres the delivery of support to operations across the Executive Agency by drawing on, and co-ordinating, the Agency’s efforts to meet our stakeholder’s most urgent challenges. The division delivers high impact and timely support to some of defence and security’s highest priorities. S2O enables UK operational advantage, enhancing response to crises by maximising S&T impact on current and planned operations and campaigns.

Corporate

Main functions and activities include:

corporate governance, and centralised functions such as finance and treasury management, human resources, and commercial contracting management
estate and facilities management
business information and communication systems
knowledge services, providing services to the Executive Agency’s internal knowledge base, MOD-funded reports and the wider scientific and technical literature, together with a range of information and analysis services
strategy portfolio and capability, the interface between scientific divisions, key customers, and suppliers, to develop effective programmes and capability plans

3. Operating income

The Executive Agency derives revenue from contracts with customers over time and at a point in time, analysed by major class of customer as follows:

	Timing of income recognition	2025	2024
		£million	£million
MOD		902.6	1,027.8
Chief Scientific Adviser	Over time	480.5	597.4
Other	Over time	422.1	430.4

Non-MOD		67.4	64.6
Wider government	Over time	55.8	51.6
Wider government	At a point in time	0.9	0.2
Non-Exchequer income	Over time	6.2	8.3
Non-Exchequer income	At a point in time	4.5	4.5
Total		970.0	1,092.4

Operating income from contracts with customers is categorised according to the main contracted customer. All revenue is from the sale of goods and services and relates to the same class of business, which is the supply of specialist scientific and technical services. This is conducted principally in the UK in sterling. No other geographical market has contributed significantly to operating income. See Note 2 for operating segment disclosures.

	2025	2024
	£million	£million
Other operating income
Transferred from deferred income for non-MOD customer-funded non-current assets	0.6	0.7
MOD donated non-current assets¹	(0.7)	7.1
Other miscellaneous income	1.4	1.8
Total	1.3	9.6

Notes:

¹ With effect from 1 April 2024, the Agency agreed a revised process with MOD for the acquisition of capital assets funded by MOD S&T. Previously, where the Agency retained control of these capital assets, they were accounted for as donated assets. From 1 April 2024, the acquisition of such a capital asset is appraised by the Agency, and if approved, the MOD customer makes a capital budget transfer. The capital asset is then accounted for as an Agency asset.

The main items representing other miscellaneous income includes:

£0.1 million from Home Office (2023 to 2024: £0.3 million) for the transitioning of former Centre for Applied Science and Technology staff and facilities into the Agency; £0.6 million recovery of non-salary costs for outward secondees (2023 to2024: £0.6 million); £0.1 million received from Ploughshare for the provision of patent protection services and reward to inventors (2023 to 2024: £0.1 million); £0.2 million income for support to UK Health Security Agency (2023 to 2024: £0.2 million).

There is a reversal of MOD donated asset income of £0.7 million due to assets under construction that were recognised during 2023 and 2024, being reclassified as materials during 2024 and 2025. There is no MOD donated asset income for 2024 to 2025 due to the transition to a new process explained in footnote 1 above.

Other operating income excludes recovery of salary costs for outward secondees which is treated as an offset against staff costs. See our people.

4. Other expenditure

Material items expensed / (credited) before stating net operating expenditure:

	2025	2024
	£million	£million
Staff costs¹
Wages and salaries	248.3	243.0
Social security costs (including apprenticeship levy)	28.7	28.0
Other pension costs	67.3	60.8
Other staff costs	29.8	33.4
	374.1	365.2

Other cash items
Purchase of direct goods and services	416.2	562.4
Short-term rental expenses²:
Property	0.0	0.0
Plant and equipment	0.0	0.1
Travel, subsistence and hospitality	3.0	3.8
Training	2.5	2.3
Professional services	1.3	1.9
Foreign exchange gains and losses	(0.1)	0.0
Purchase of other indirect goods and services	169.4	142.1
Total cash costs	966.4	1,077.8

Non-cash items
Depreciation and impairment charge for year:	62.0	70.5
Depreciation of owned property, plant and equipment	33.7	25.0
Depreciation of right of use assets	0.6	0.5
Exceptional costs of impairment of property, plant and equipment	21.0	32.4
Exceptional costs of reversal of impairment of property, plant and equipment	(2.0)	(1.3)
Adjustment valuation of property, plant and equipment	8.7	13.9

Amortisation and impairment charge for year:	10.1	5.8
Amortisation of intangible assets	9.0	4.5
Exceptional costs of impairment of intangible assets	0.7	0.0
Adjustment valuation of intangible assets	0.4	1.3

Loss on disposal of owned property, plant and equipment	0.7	0.1
Loss on disposal of intangible assets	0.2	0.0
Loss on transfer of non-current financial asset³	0.0	1.4
Auditor’s remuneration and expenses⁴	0.1	0.1
Doubtful debt provision / (provision reversal)	(0.1)	0.1
Doubtful debt written-off	0.2	0.0
Provisions provided / (decreased) in year	0.3	(0.1)
Provisions not required written-back	0.0	(2.7)
Total non-cash costs	73.5	75.2

Notes:

¹ Staff costs are disclosed in more detail in our people.

² Short-term leases are where the term is assessed as ‘reasonably certain’ to be for twelve months or less.

³ During 2023 and 2024, the Agency transferred ownership of Ploughshare to MOD Defence Science and Technology (DST). No proceeds were received.

⁴ The notional audit fee is £124,000 (2023 to 2024: £122,000). During the year, the Agency did not contract any non-audit services from its external auditor, the National Audit Office (NAO).

5. Significant non-recurring operating items

Significant non-recurring operating items are defined as operating income or operating expenses that are not routine to the core business and due to their size or incidence are material. They warrant supplementary disclosure to aid user understanding of the Executive Agency’s underlying operating performance. They may occur as a single in-year item, or they can be part of a project that spans several years and whose continued disclosure enable users to assess the on-going impact on financial performance.

	2025	2024
	£million	£million
Helios¹	2.7	3.9
NISSS²	3.1	1.9
CHESS³	2.3	1.3
Impairment of property, plant and equipment assets under construction⁴	3.4	0.0
Impairment of intangible assets under construction⁵	0.7	0.0
Impairment of property, plant and equipment⁶	17.6	32.4
Reversal of Impairment of property, plant and equipment⁷	(0.2)	(1.3)
Loss on transfer of investment in Ploughshare⁸	0.0	1.4

Notes:

¹ Costs of withdrawal from the Agency’s site at Fort Halstead under the Helios Project.

² Costs incurred for the New Information Systems Service Solution (NISSS). The objective of the NISSS programme is the disaggregation of the Agency’s IT services from the current prime contract into 2 new contracts by 2025 and establish a modern, secure and sustainable IT information system service aligned to government and industry best practice.

³ Costs incurred for further development of the Cloud Hosted Enterprise Service Solution (CHESS), which went live during January 2022. This is a government cloud hosted solution that underpins the integrated management of the Agency’s business processes.

⁴ During the year, a project to improve user access to digital files across the Agency’s networks was abandoned due to its benefits not being realised. This resulted in an impairment of £1.6 million. Another project whose objective was to implement a more efficient and streamlined system for automating business processes was not delivered resulting in an impairment of £0.1 million. The Agency completed construction of a space groundstation that was brought into service during the year. A portion of the groundstation’s functionality was not tested and the customer stated that they do not require this functionality. An impairment assessment resulted in approximately 10% write-down before the asset was added to the non-current asset register (£0.2 million).

A bespoke IT Payload Data Ground Segment (PDGS) system was completed by Airbus, but it cannot be delivered and installed on an Agency site due to unforeseen technical issues. Other options were considered, but the customer decided that the system was no longer affordable or feasible. This has resulted in a full write-down of £1.5 million, and a further write-down of associated software of £0.7 million disclosed as an intangible asset under construction impairment (footnote 5).

⁵ A full write-down of software related to the bespoke IT PDGS system impairment (see footnote 4).

⁶ The 2024 to 2025 impairment relates to the professional valuation of building assets at Portsdown West, and the final 2 recently commissioned Helios related buildings at Porton Down. This resulted in an impairment through profit and loss of £17.6 million, and an impairment through other comprehensive income of £0.2 million. The 2023 to 2024 impairment relates mainly to the professional valuation of 8 recent buildings or building refurbishments at Porton Down (£31.8 million). Of these impairments:

a) one of the new Helios related buildings was valued for the first time which resulted in a £16.5 million impairment

b) there was a first-time valuation of 2 newly refurbished buildings to accommodate the former Centre for Applied Science and Technology staff and their facilities which resulted in a £9.2 million impairment

The balance relates to the application of indices during the year.

⁷ Both the current year and previous year impairment reversal relates to the application of indices during the year (almost entirely to building assets).

⁸ During 2023 and 2024, the Agency transferred its investment to MOD Defence Science and Technology (DST). No proceeds were received. See Note 9.

6. Finance income

	2025	2024
	£million	£million
Interest received and receivable from bank accounts	0.0	0.0
Total	0.0	0.0

7. Finance expense

	2025	2024
	£million	£million
Interest expense on right of use assets	0.0	0.0
Unwinding of provision discounting	0.0	0.0
Total	0.0	0.0

No payments were made under the Late Payments of Commercial Debts (Interest) Act 1998 (2023 to 2024: £nil).

8. Property, plant and equipment

Property, plant and equipment movements during the year were:		Land	Buildings	Plant and Machinery	Transport	IT and Communication Equipment	Assets Under Construction	Total
	Note	£m	£m	£m	£m	£m	£m	£m
Valuations and gross modified historic cost
Balance at 1 April 2023		99.0	422.5	101.2	2.8	50.7	221.5	897.7
Additions		0.0	0.0	15.8	1.9	4.0	29.8	51.5
Transfers		0.0	55.0	5.8	0.0	8.0	(68.8)	0.0
Transfers to intangible assets under construction		0.0	0.0	0.0	0.0	0.0	(5.7)	(5.7)
Reclassified as non-capital spend¹		0.0	0.0	0.0	0.0	0.0	(6.1)	(6.1)
Disposals		0.0	(0.1)	(4.8)	0.0	(1.9)	0.0	(6.8)
Revaluations		(2.5)	9.1	5.9	0.0	1.5	0.0	14.0
Impairment		0.0	(32.1)	(0.8)	0.0	0.0	0.0	(32.9)
Impairment reversal		0.0	1.5	0.0	0.0	0.0	0.0	1.5
Balance at 31 March 2024		96.5	455.9	123.1	4.7	62.3	170.7	913.2

Additions		0.0	0.0	14.1	0.6	3.6	26.3	44.6
Transfers		0.0	62.0	14.3	0.0	8.8	(85.1)	0.0
Transfers to right of use asset	11	0.0	0.0	0.0	0.0	0.0	(1.1)	(1.1)
Transfers to intangible assets under construction		0.0	0.0	0.0	0.0	0.0	(14.2)	(14.2)
Reclassified as non-capital spend1		0.0	0.0	0.0	0.0	0.0	(1.1)	(1.1)
Disposals		0.0	0.0	(8.6)	(2.2)	(4.8)	0.0	(15.6)
Revaluations		1.8	11.2	2.1	0.0	3.4	0.0	18.5
Impairment		0.0	(17.7)	0.0	0.0	0.0	(3.4)	(21.1)
Impairment reversal		0.0	2.3	0.0	0.0	0.0	0.0	2.3
Balance at 31 March 2025		98.3	513.7	145.0	3.1	73.3	92.1	925.5

Depreciation
Balance at 1 April 2023		0.0	(72.3)	(41.9)	(1.7)	(27.8)	0.0	(143.7)
Charge for year:
Historical		0.0	(8.8)	(7.4)	(0.8)	(8.0)	0.0	(25.0)
Supplementary		0.0	(4.9)	(6.3)	(0.1)	(2.6)	0.0	(13.9)
Impairment		0.0	0.3	0.2	0.0	0.0	0.0	0.5
Impairment reversal		0.0	(0.2)	0.0	0.0	0.0	0.0	(0.2)
Disposals		0.0	0.1	4.8	0.0	1.8	0.0	6.7
Revaluations		0.0	(1.7)	(1.9)	0.0	(0.7)	0.0	(4.3)
Balance at 31 March 2024		0.0	(87.5)	(52.5)	(2.6)	(37.3)	0.0	(179.9)

Charge for year:
Historical		0.0	(9.3)	(13.2)	(0.3)	(10.9)	0.0	(33.7)
Supplementary		0.0	(6.0)	(1.6)	0.0	(1.1)	0.0	(8.7)
Impairment		0.0	0.1	0.0	0.0	0.0	0.0	0.1
Impairment reversal		0.0	(0.3)	0.0	0.0	0.0	0.0	(0.3)
Disposals		0.0	0.0	7.9	2.2	4.8	0.0	14.9
Revaluations		0.0	(3.0)	(0.6)	0.0	(2.1)	0.0	(5.7)
Balance at 31 March 2025		0.0	(106.0)	(60.0)	(0.7)	(46.6)	0.0	(213.3)

Net modified historic cost:
Balance at 31 March 2025		98.3	407.7	85.0	2.4	26.7	92.1	712.2
Balance at 1 April 2024		96.5	368.4	70.6	2.1	25.0	170.7	733.3

Notes:

¹ Within this balance are purchases of bulk items that individually do not meet the capitalisation criteria and consumables that had been erroneously included in assets under construction.

Land and buildings are subject to a quinquennial revaluation by an independent, professional valuer in accordance with IAS16: Property, Plant and Equipment. Accounting Policy Notes 1(d) and 1(f) provide the basis of valuation. Professional valuations are managed by MOD Defence Infrastructure Organisation (DIO). The land and building assets at Portsdown West were valued by Valuation Office Agency (VOA), an Executive Agency of HM Revenue and Customs, as at 1 November 2024. During the year, professional valuations were applied to 2 recently commissioned buildings at Porton Down. The land and majority of other building assets at Porton Down were valued by VOA as at 1 November 2021.

Included within land and buildings are properties from which rental income is derived. They are not material and are not disclosed separately.

During the year there were acquisitions of plant and equipment that were funded by non-MOD customers. They are not material and are not separately identified.

Included within property, plant and equipment and assets under construction are assets donated by MOD and wider government.

With effect from 1 April 2024, the Agency agreed a revised process with MOD for the acquisition of capital assets funded by MOD S&T. Previously, where the Agency retained control of these capital assets, they were accounted for as donated assets. From 1 April 2024, the acquisition of such a capital asset is appraised by the Agency, and if approved, the MOD customer makes a capital budget transfer. The capital asset is then accounted for as an Agency asset rather than a donated asset.

The following is a sub-set of the note as at 31 March 2025 for property, plant and equipment assets that had previously been donated by MOD to 31 March 2024:

Valuations and gross modified historic cost	Buildings	Plant and machinery	Transport	IT and Communication Equipment	Assets Under Construction	Total
	£m	£m	£m	£m	£m	£m
Balance at 31 March 2024	0.0	51.6	2.7	7.9	18.7	80.9
Additions	0.0	0.0	0.0	0.0	0.0	0.0
Transfers	0.0	7.3	0.1	0.6	(8.0)	0.0
Reclassified as non-capital spend¹	0.0	0.0	0.0	0.0	(0.6)	(0.6)
Disposals	0.0	(4.1)	(2.1)	(0.7)	0.0	(6.9)
Revaluations	0.0	0.9	0.0	0.4	0.0	1.3
Impairment	0.0	0.0	0.0	0.0	(0.3)	(0.3)
Balance at 31 March 2025	0.0	55.7	0.7	8.2	9.8	74.4

Depreciation
Balance at 31 March 2024	0.0	(19.0)	(2.2)	(3.2)	0.0	(24.4)
Charge for year:
Historical	0.0	(7.1)	(0.1)	(1.2)	0.0	(8.4)
Supplementary	0.0	(0.9)	0.0	(0.1)	0.0	(1.0)
Disposals	0.0	3.7	2.1	0.7	0.0	6.5
Revaluations	0.0	(0.2)	0.0	(0.1)	0.0	(0.3)
Balance at 31 March 2025	0.0	(23.5)	(0.2)	(3.9)	0.0	(27.6)

Net modified historic cost:
Balance at 31 March 2025	0.0	32.2	0.5	4.3	9.8	46.8
Balance at 1 April 2024	0.0	32.6	0.5	4.7	18.7	56.5

Notes:

¹ Within this balance are purchases of bulk items that individually do not meet the capitalisation criteria and consumables that had been erroneously included in assets under construction.

9. Non-current financial assets

	Note	Subsidiary undertaking
		£million
Valuation
Balance at 1 April 2023		1.4
Disposals		(1.4)
Balance at 31 March 2024		0.0

Additions		0.0
Disposals		0.0
Impairment	11	0.0
Balance at 31 March 2025		0.0

During 2023 and 2024, the Executive Agency transferred ownership of its wholly owned subsidiary, Ploughshare, to MOD Defence Science and Technology (DST). No proceeds were received, and a loss on transfer is recognised in the Statement of Comprehensive Net Expenditure.

The Agency had not consolidated Ploughshare on grounds of materiality. See Note 1(d)(i).

10. Intangible assets

Intangible asset movements during the year were:

	Purchased intangible assets	Intangible assets under construction	Total
	£million		£million
Gross modified historic cost
Balance at 1 April 2023	18.5	5.3	23.8
Additions	1.2	5.3	6.5
Transfers	9.7	(9.7)	0.0
Transfers from property, plant and equipment assets under construction	0.0	5.7	5.7
Reclassified as non-capital spend	0.0	(0.1)	(0.1)
Disposals	(1.0)	0.0	(1.0)
Revaluations	1.1	0.0	1.1
Balance at 31 March 2024	29.5	6.5	36.0

Additions	5.5	1.1	6.6
Transfers	15.5	(15.5)	0.0
Transfers from property, plant and equipment assets under construction	0.0	14.2	14.2
Reclassified as non-capital spend	0.0	(0.1)	(0.1)
Disposals	(2.4)	0.0	(2.4)
Revaluations	2.4	0.0	2.4
Impairment	0.0	(0.7)	(0.7)
Balance at 31 March 2025	50.5	5.5	56.0

Amortisation
Balance at 1 April 2023	(9.3)	0.0	(9.3)
Charge for year:
Historical	(4.5)	0.0	(4.5)
Supplementary	(1.3)	0.0	(1.3)
Disposals	1.0	0.0	1.0
Revaluations	(0.3)	0.0	(0.3)
Balance at 31 March 2024	(14.4)	0.0	(14.4)

Charge for year:
Historical	(9.0)	0.0	(9.0)
Supplementary	(0.4)	0.0	(0.4)
Disposals	2.2	0.0	2.2
Revaluations	(1.0)	0.0	(1.0)
Balance at 31 March 2025	(22.6)	0.0	(22.6)

Net modified historic cost:
Balance at 31 March 2025	27.9	5.5	33.4
Balance at 1 April 2024	15.1	6.5	21.6

With effect from 1 April 2024, the Agency agreed a revised process with MOD for the acquisition of capital assets funded by MOD S&T. Previously, where the Agency retained control of these capital assets, they were accounted for as donated assets. From 1 April 2024, the acquisition of such a capital asset is appraised by the Agency, and if approved, the MOD customer makes a capital budget transfer. The capital asset is accounted as an Agency asset.

The following is a sub-set of the note as at 31 March 2025 for intangible assets that had previously been donated by MOD to 31 March 2024:

	Purchased intangible assets	Intangible assets under construction	Total
	£million	£million	£million
Gross modified historic cost
Balance at 1 April 2024	3.1	0.1	3.2
Additions	0.0	0.0	0.0
Reclassified as non-capital spend¹	0.0	(0.1)	(0.1)
Disposals	(0.6)	0.0	(0.6)
Revaluations	0.1	0.0	0.1
Balance at 31 March 2025	2.6	0.0	2.6

Amortisation
Balance at 1 April 2024	(1.5)	0.0	(1.5)
Charge for year:
Historical	(0.6)	0.0	(0.6)
Disposals	0.6	0.0	0.6
Revaluations	(0.1)	0.0	(0.1)
Balance at 31 March 2025	(1.6)	0.0	(1.6)

Net modified historic cost:
Balance at 31 March 2025	1.0	0.0	1.0
Balance at 1 April 2024	1.6	0.1	1.7

11. Leases: right of use assets

Right of use asset movements during the year were:

	Note	Property	Plant and equipment	Total
		£million	£million	£million
Cost valuation¹
Balance at 31 March 2023		0.9	0.3	1.2
Additions		0.1	0.2	0.3
Variable lease payment adjustment²		0.1	0.0	0.1
Lease term modification adjustment³		(0.1)	0.0	(0.1)
Derecognition		(0.2)	(0.1)	(0.3)
Balance at 31 March 2024		0.8	0.4	1.2

Additions		0.6	0.0	0.6
Transfers from assets under construction	8	1.1	0.0	1.1
Lease term modification adjustment³		0.1	(0.1)	0.0
Derecognition		(0.7)	(0.1)	(0.8)
Balance at 31 March 2025		1.9	0.2	2.1
Depreciation
Balance at 31 March 2023		(0.3)	(0.1)	(0.4)
Charge for year		(0.4)	(0.1)	(0.5)
Derecognition		0.2	0.1	0.3
Balance at 31 March 2024		(0.5)	(0.1)	(0.6)

Charge for year		(0.6)	0.0	(0.6)
Derecognition		0.7	0.1	0.8
Balance at 31 March 2025		(0.4)	0.0	(0.4)

Net book value:
Balance at 31 March 2025		1.5	0.2	1.7
Balance at 1 April 2024		0.3	0.3	0.6

Notes:

¹ The cost model has been used as a proxy for current value in existing use, or fair value, to determine subsequent remeasurement of the Agency’s right of use assets. See Note 1(d)(i).

² Lease payments are revised annually based on an inflation index for 1 of the Agency’s property lease contracts (3 of the Agency’s property lease contracts during 2023 and 2024). The lease liabilities were remeasured and the right of use assets were adjusted by equivalent values. This lease agreement expired on 31 March 2025.

³ A plant and machinery lease contract term was reduced so that it expired during the year. The lease liability was remeasured and reduced, and the right of use asset carrying value was reduced by an equal amount. The right of use asset was subsequently derecognised when the revised lease term expired. During the previous year, a property lease contract term was reduced and the lease liability was remeasured. The right of use carrying value was reduced by an equal amount. The right of use asset was subsequently derecognised during 2023 and 2024 when the revised lease term expired.

The Agency’s right of use assets are:

	Nature of the lease	Rent (£)/ frequency excluding VAT	Payment terms	Remaining expected term from 1 April 2024 or from start if later	Remaining options
				Months
Accommodation at Wiltshire County Council Science Park	Part building	£17,422 per quarter¹	In-advance	60⁵	Break clause May 2027
Accommodation for the Farnborough evaluation facility	Part building	£53,720 per quarter²	In-advance	Expired⁶	None
Accommodation for the Tempest facility	Part building	£13,750 per quarter¹	In-advance	Expired	None
University of Newcastle office hub	Office	£7,630 per quarter¹	In-advance	67⁷	Break clause October 2027
Boscombe Down storage facility	Building	£10,728 6-monthly³	In-arrears	48	None
Farnborough storage facility	Building	£22,608 per quarter¹	In-arrears	28	None
Leonardo laser	Plant and machinery	£nil, peppercorn lease⁴	N/A	51	None
Telehandler	Plant and machinery	£2,773 per month¹	In-arrears	Expired	None

Notes:

¹ Rentals are fixed.

² There is an annual rental RPI indexation uplift from April 2024.

³ There are fixed annual rental uplifts.

⁴ The lease expired 30 June 2023. The Agency has continued right of use of the asset for the remainder of its useful economic life, without charge.

⁵ Lease term began 15 May 2024.

⁶ Contract expired 22 July 2024. The lease continued without a contract until 31 March 2025 and was terminated at this date. The out of contract period was not accounted for as an IFRS16 lease.

⁷ New contract to extend the lease by 5 years from 22 October 2024.

The Agency assesses value for money considerations such as whether the underlying asset is required for its entire useful economic life, or for a more limited period, when determining if a lease contract or a purchase contract is the best option. Another consideration is whether there is an active market for leasing the particular underlying asset.

The Agency’s most significant lease, that has a right of use asset carrying value of £1.3 million, is for property at the Wiltshire County Council Science Park. The lease began during the year and expires March 2029 with a break clause after 3 years (May 2027). The contract contains a dilapidation clause - see Note 18 for further information.

The Agency’s next most significant lease, whose right of use asset carrying value on 1 April 2024 was £0.2 million, expired on 31 March 2025 and has been derecognised. It was for property at Farnborough to accommodate the Dstl evaluation facility. The contract contains a dilapidation clause - see Note 18 for further information.

Some of the other smaller lease contracts have similar arrangements. There are no restrictions, covenants, or novel arrangements that deviate from industry practice.

Other smaller property leases, tend to be for offices that are used as hubs at strategic S&T locations. This is to help spread the Agency’s geographical reach, harness talent from around the country, and enable the Agency to access new suppliers in a cost effective way.

Peppercorn Lease

Within plant and machinery is a peppercorn lease. A 2-year lease of a laser came to an end on 30 June 2023 and the supplier has agreed that the Agency can continue the lease indefinitely with no rental payments. The initial fair value of the right of use asset is £200,000 based on the cost of building the asset, adjusted for the economic benefit consumed. The expected remaining useful economic life from 1 July 2023 is estimated to be 5 years.

The carrying value of the peppercorn lease at 31 March 2025 is £0.1 million (2023 to 2024: £0.2 million).

12. Impairments

Impairments occurring during the year were expensed either to profit or loss, or other comprehensive net expenditure as follows:

	2025	2024	2025	2024
	Profit or loss	Profit or loss	Other comprehensive net expenditure	Other comprehensive net expenditure
	£million	£million	£million	£million
Property, plant and equipment assets under construction¹	3.4	0.0	0.0	0.0
Property, plant and equipment valuation²	17.6	32.4	0.2	3.5
Property, plant and equipment valuation impairment reversal³	(2.0)	(1.3)	0.0	0.0
Intangible assets under construction⁴	0.7	0.0	0.0	0.0
Total	19.7	31.1	0.2	3.5

Notes:

¹ During the year, a project to improve user access to digital files across the Agency’s networks was abandoned due to its benefits not being realised. This resulted in an impairment of £1.6 million. Another project whose objective was to implement a more efficient and streamlined system for automating business processes was not delivered resulting in an impairment of £0.1 million.

The Agency completed construction of a space groundstation that was brought into service during the year. A portion of the groundstation’s functionality was not tested and the customer stated that they do not require this functionality. An impairment assessment resulted in approximately 10% write-down before the asset was added to the non-current asset register representing £0.2 million.

A bespoke IT Payload Data Ground Segment (PDGS) system was completed by Airbus, but it cannot be delivered and installed on an Agency site due to unforeseen technical issues. Other options were considered, but the customer decided that the system was no longer affordable or feasible. This has resulted in a full write-down of £1.5 million, and a further write-down of associated software of £0.7 million disclosed as an intangible asset under construction impairment (footnote 4).

² The 2024 to 2025 impairment relates to the professional valuation of building assets at Portsdown West, and 2 recently commissioned building assets at Porton Down. This resulted in an impairment through profit and loss of £17.6 million, and an impairment through other comprehensive income of £0.2 million. The 2023 to 2024 impairment relates to:

a) the professional valuation of 8 recent new buildings or building refurbishments at Porton Down resulted in an impairment through profit and loss (£31.8 million), and an impairment though other comprehensive income (£0.8 million)

b) the application of indices resulted in an impairment through profit and loss (£0.6 million), and an impairment through other comprehensive income (£2.7 million)

³ The current year impairment reversal relates to the professional valuation of building assets at Portsdown West (£1.0 million), and to the application of indices during the year (£1.0 million) (almost entirely to building assets). The previous year impairment reversal relates to the application of indices during the year (almost entirely to building assets).

⁴ A full write-down of software relating to the bespoke IT PDGS system impairment (see footnote 1).

13. Work in progress

	2025	2024
	£million	£million
Total work in progress	0.0	0.0

14. Trade receivables and other assets

Amounts falling due within 1 year:

	2025	2024
	£million	£million
Trade receivables	3.1	6.7
Central government bodies	1.8	5.4
Non-public sector organisations	1.3	1.3

Contract assets	6.9	9.3
Central government bodies	6.2	8.6
Non-public sector organisations	0.7	0.7

Deposits and advances–staff receivables	0.1	0.1

Other receivables	0.2	0.1
Central government bodies	0.1	0.1
Non-public sector organisations	0.1	0.0

Prepayments and accrued income	12.7	15.3
Central government bodies	2.0	1.5
Local authorities	0.0	0.8
Non-public sector organisations	10.7	13.0

Total	23.0	31.5

Amounts falling due after more than 1 year:

	2025	2024
	£million	£million
Deposits and advances–staff receivables	0.1	0.1

Prepayments and accrued income	1.9	3.5
Central government bodies	0.1	1.8
Non-public sector organisations	1.8	1.7

Total	2.0	3.6

Prepayments include software licence agreements and software maintenance agreements managed by the Agency’s Digital Services at £6.6 million (2023 to 2024: £11.7 million) of which £0.4 million (2023 to 2024: £1.6 million) relates to periods beyond a year. There are 2 Memorandum of Understanding (MOU) agreements with US Department of Defense for the provision of science and technology research that totals £3.1 million (2023 to 2024: £2.4 million) of which £1.4 million relates to periods beyond a year (2023 to 2024: £2.4 million). Prepayments for travel and accommodation arrangements are £0.6 million (2023 to 2024: £0.3 million) sourced by the Agency’s travel management service provider. Other items include memberships and subscriptions to professional bodies, and service and maintenance agreements.

15. Cash and cash equivalents

	2025	2024
	£million	£million
Balance brought forward	12.6	24.9
Net change in cash and cash equivalent balances	7.3	(12.3)
Balance carried forward	19.9	12.6

The following balances were held at:
Government banking service	14.9	10.9
Commercial banks	5.0	1.7
Balance carried forward	19.9	12.6

15.1 Reconciliation of cash flows arising from financing activities to Net Equity Investment

	Cash flows	Non-cash flow bookkeeping for transactions with MOD	Non-cash flow bookkeeping for transactions with MOD	Non-cash flow bookkeeping for transactions with MOD	Non-cash flow bookkeeping for transactions with MOD	Non-cash flow bookkeeping for transactions with MOD	Total net cash inflow from MOD financing activities
	Cash received from MOD	VAT recoverable transferred to MOD	Goods and services provided to MOD	Goods and services provided by MOD	Payroll financed by MOD	Infrastructure facilities management soft services provided by MOD
	£million	£million	£million	£million	£million	£million	£million
Balance at 31 March 2024	3,899.2	(364.5)	(5,167.8)	181.2	1,711.9	6.5	266.5
Net change in financing activities for the year	702.5	(77.6)	(904.4)	30.1	344.8	5.5	100.9
Balance at 31 March 2025	4,601.7	(442.1)	(6,072.2)	211.3	2,056.7	12.0	367.4

15.2 Reconciliation of cash flows arising from financing activities

	Total net cash inflow from MOD financing activities (Note 15.1)	Cash flows from lease financing	Cash flows from lease financing	Total net cash inflow from MOD financing activities
		Repayment of lease liability principal	Lease liability finance expense
	£ million	£ million	£ million	£ million
Balance at 31 March 2024	266.5	(0.7)	0.0	265.8
Net change in financing activities for the year	100.9	(0.4)	0.0	100.5
Balance at 31 March 2025	367.4	(1.1)	0.0	366.3

16. Trade payables and other liabilities

Amounts falling due within 1 year:

	2025	2024
	£million	£million
Other taxation and social security	2.6	2.5

Contract liabilities	14.8	14.3
Central government bodies	11.0	12.1
Non-public sector organisations	3.8	2.2

Trade payables	28.7	44.1
Central government bodies	0.7	0.7
Local authorities	3.5	3.1
Non-public sector organisations	24.5	40.3

Other payables	5.3	3.0
Central government bodies	2.5	2.3
Non-public sector organisations	2.8	0.7

Pay and expenses–staff payables	5.6	5.4

Accruals and deferred income	94.4	140.0
Central government bodies	5.0	7.5
Trading funds	0.2	0.0
Local authorities	11.7	13.8
Non-public sector organisations	75.4	116.9
Staff	2.1	1.8

Total	151.4	209.3

Amounts falling due after more than 1 year:

	2025	2024
	£million	£million
Accruals and deferred income	3.7	3.9
Central government bodies	3.6	3.8
Local authorities	0.0	0.1
Non-public sector organisations	0.1	0.0

Total	3.7	3.9

Long-term payables are held undiscounted. The effect of discounting is not material.

Other taxation and social security relates to the PAYE and national insurance associated with the holiday pay accrual.

Contract liabilities represents the balance of payments received on account from non-MOD customers.

Trade payables include purchase of direct goods and services £25.9 million (2023 to 2024: £43.4 million) of which £21.6 million is subcontracted research (2023 to 2024: £39.7 million). Trade payables that relate to capital investment totals £1.0 million (2023 to 2024: £0.8 million).

Other payables consist of the pension liability associated with holiday pay accrual £2.5 million (2023 to 2024: £2.3 million), and a capitalised software license where the Agency has committed to future coverage at an additional cost of £2.8 million (2023 to 2024: £nil).

Staff payables mainly consist of the net pay element of the holiday pay accrual £5.5 million (2023 to 2024: £5.3 million).

Within accruals are purchases of direct goods and services £72.5 million (2023 to 2024: £115.6 million) of which £66.5 million is subcontracted research (2023 to 2024: £106.1 million). Capital accruals account for £3.5 million (2023 to 2024: £6.8 million).

Deferred income mainly relates to non-MOD customer funded assets where the customer has retained an interest in the asset of £4.3 million (2023 to 2024: £4.8 million) of which £3.6 million falls due after more than 1 year (2023 to 2024: £3.9 million).

17. Lease liabilities

Lease liability movements during the year were:

	Property	Plant and equipment	Total
	£million	£million	£million
Balance at 1 April 2024	0.3	0.1	0.4
Additions	0.5	0.0	0.5
Lease term modification adjustment¹	0.1	(0.1)	0.0
Lease payments	(0.4)	0.0	(0.4)
Interest expense	0.0	0.0	0.0
Balance at 31 March 2025	0.5	0.0	0.5

Notes:

¹ A plant and machinery lease contract term was reduced so that it expired during the year. The lease liability was remeasured and reduced, and the right of use asset carrying value was reduced by the same amount. The right of use asset was subsequently derecognised when the revised lease term expired.

HM Treasury’s incremental cost of borrowing was applied to discount lease contract liability payments as follows:

Lease name	HM Treasury rate at IFRS16 adoption date or lease commencement date	IFRS16 adoption date or lease commencement date if later	HM Treasury rate at lease term amendment date	Date of lease term amendment
	%		%
Accommodation at Wiltshire County Council Science Park	4.72	May 2024	N/A	N/A
Accommodation for Farnborough evaluation facility (Expired)	0.95	April 2022	N/A	N/A
Accommodation for the Tempest facility (Expired)	0.95	April 2022	N/A	Expired
University of Newcastle office hub	0.95	April 2022	4.72	October 2024
Boscombe Down storage facility	3.51	September 2023	N/A	N/A
Farnborough storage facility	4.72	April 2024	N/A	N/A
Telehandler (Expired)	0.95	August 2022	4.72	April 2024

An analysis of expected timing of lease payment cash flows is as follows:

	Property	Plant and equipment	Total
	£million	£million	£million
Not later than 1 year	0.2	0.0	0.2
Later than 1 year but not later than 5 years	0.3	0.0	0.3
Later than 5 years	0.0	0.0	0.0
Total undiscounted lease payment cash flows	0.5	0.0	0.5
Interest expense	0.0	0.0	0.0
Balance at 31 March 2025	0.5	0.0	0.5

Comparatives for the year ending 31 March 2024:

	Property	Plant and equipment	Total
	£million	£million	£million
Balance at 1 April 2023	0.6	0.1	0.7
Additions	0.1	0.0	0.1
Variable lease payment adjustment¹	0.1	0.0	0.1
Lease term modification adjustment²	(0.1)	0.0	(0.1)
Lease payments	(0.4)	0.0	(0.4)
Interest expense	0.0	0.0	0.0
Balance at 31 March 2024	0.3	0.1	0.4

Notes:

¹ Lease payments are revised annually based on an inflation index for 3 of the Agency’s property lease contracts. One of these lease contracts was terminated during the year without penalty. Another of these leases expired on 31 March 2024.

² During the year, a property lease contract term was reduced and the lease liability was remeasured. The right of use asset carrying vaue was reduced by the same value. The right of use asset was subsequently derecognised when the revised lease term expired.

An analysis of expected timing of lease payment cash flows is as follows:

	Property	Plant and equipment	Total
	£million	£million	£million
Not later than 1 year	0.2	0.0	0.2
Later than 1 year but not later than 5 years	0.1	0.1	0.2
Later than 5 years	0.0	0.0	0.0
Total undiscounted lease payment cash flows	0.3	0.1	0.4
Interest expense	0.0	0.0	0.0
Balance at 31 March 2024	0.3	0.1	0.4

18. Provisions for liabilities and charges

	Dilapidations and remediation	Supplier claims	Employment tribunals	Early departure costs	Total
	£million	£million	£million	£million	£million
Balance at 1 April 2024	1.2	1.0	0.0	0.0	2.2
Provided in the year	0.2	0.0	0.0	0.1	0.3
Balance at 31 March 2025	1.4	1.0	0.0	0.1	2.5

Analysis of expected timing of cash flows:

	Dilapidations and remediation	Supplier claims	Employment tribunals	Early departure costs	Total
	£million	£million	£million	£million	£million
Between 1 April 2025 and 31 March 2026	1.3	1.0	0.0	0.1	2.4
Between 1 April 2026 and 31 March 2027	0.0	0.0	0.0	0.0	0.0
Between 1 April 2027 and 31 March 2032	0.1	0.0	0.0	0.0	0.1
Balance at 31 March 2025	1.4	1.0	0.0	0.1	2.5

No amounts are expected to be called after 31 March 2032 and therefore no further analysis is necessary for amounts after this date. The provision that is expected to crystallise after more than a year has been discounted. The discount value is not material.

Dilapidations and remediation

A property lease to accommodate an evaluation facility (operated by the Executive Agency) at a site in Farnborough, expired on 31 March 2025. The lease has not been extended or renewed. Under the terms of the lease arrangement, there is a dilapidation clause that requires the Agency to restore the accommodation to its previous state. This is likely to complete during 2025 and 2026.

A property lease for the accommodation of another facility, Tempest, located at the same site as the evaluation facility at Farnborough, also expired during the year. The Agency has not renewed the lease. Under the terms of the lease, there is a dilapidation clause that requires the Agency to reverse all alterations made to the accommodation. This is likely to complete during 2025 and 2026.

The Agency has a lease agreement in place for property on a science park at Porton Down. The agreement has a dilapidation clause. This obligation will not crystallise until after the agreement has expired, currently estimated to be 2030 to 2031.

As part of the terms of the Agency’s exit from the Fort Halstead site on 31 March 2023, and termination of the lease, the Agency had an obligation to make good any dilapidations and remediation of the site. During 2023 and 2024, the Agency released the £0.1 million provision of which approximately half was unutilised. There is a contingent liability for any further possible remediation - see Note 23.

Supplier claims

The Agency has some supplier disputes in relation to its contracts for goods and services. These are expected to be settled during 2025 and 2026.

Employment tribunals

During 2023 to 2024, the outcome of an Employment Tribunal went against the Agency. The settlement resulted in most of the provision being utilised.

Early departure costs

The Executive Agency meets the additional cost of benefits beyond the normal Civil Service pension arrangements in respect of employees who depart early. The Agency provides for this in full when the early departure agreement becomes binding. Payment values are established by My Civil Service Pension.

Comparatives for the year ending 31 March 2024:

	Dilapidations and remediation	Supplier claims	Employment tribunals	Early departure costs	Total
	£million	£million	£million	£million	£million
Balance at 1 April 2023	1.3	6.3	0.1	0.0	7.7
Provided in the year	(0.1)	0.0	0.0	0.0	(0.1)
Provisions not required written-back	0.0	(2.7)	0.0	0.0	(2.7)
Provisions utilised in the year	0.0	(2.6)	(0.1)	0.0	(2.7)
Balance at 31 March 2024	1.2	1.0	0.0	0.0	2.2

Analysis of expected timing of cash flows:

	Dilapidations and remediation	Supplier claims	Employment tribunals	Early departure costs	Total
	£million	£million	£million	£million	£million
Between 1 April 2024 and 31 March 2025	0.0	1.0	0.0	0.0	1.0
Between 1 April 2025 and 31 March 2026	1.2	0.0	0.0	0.0	1.2
Balance at 31 March 2024	1.2	1.0	0.0	0.0	2.2

19. Capital commitments

Capital commitments have been made to:

support the maintenance, development, and enhancement of the Agency’s S&T capabilities
support the delivery of the Agency’s IS Vision–transformation to a modern, agile, and secure digital service
ensure the Agency’s estate remains a compliant, safe, secure, and efficient place to work

	2025	2024
	£million	£million
Property, plant and equipment:
Capital expenditure that has been contracted but has not been provided for in the accounts	15.3	8.5
Capital expenditure that has been authorised but has not been provided for in the accounts	30.0	44.8

Intangible assets:
Capital expenditure that has been contracted but has not been provided for in the accounts	0.0	0.2
Capital expenditure that has been authorised but has not been provided for in the accounts	1.3	0.0

The main investments that had either been committed, or had been authorised for commitment at the year-end include:

site incident centre management system (£0.9 million committed)
laboratory equipment (£0.7 million committed, with a further £0.3 million authorised but not committed)
electrical power supply upgrades (£1.3 million committed)
new chillers (£7.6 million committed)
destructor upgrade (£0.8 million authorised but not committed)
test-bed laboratory refresh (£1.1 million authorised but not committed)
remediation (£2.2 million authorised but not committed)
new autoclaves (£9.0 million authorised but not committed)
windows 11 upgrade (£1.3 million authorised but not committed)

20. Other financial commitments

The Agency has entered into non-cancellable contracts other than capital, lease, or service concession arrangements, for supplies that include goods or services that are either directly attributable to S&T, or are to support the Agency’s enabling infrastructure such as accommodation and IT services. The payments to which the Agency is committed are as follows:

	2025	2024
	£’000	£’000
Not later than 1 year	2.2	3.3
Later than 1 year but not later than 5 years	0.6	0.6
Later than 5 years	0.0	0.0
Total	2.8	3.9

21. Financial instruments

The Executive Agency reviews its credit risk by applying the simplified approach of the expected credit loss model to trade receivables and contract assets. There is currently no expectation of current or future material loss.

The Agency’s principal financial instruments comprise cash, current receivables and current payables.

Cash generated from sales, supplemented with funding provided by MOD, are the primary sources of finance for the Agency.

Trade receivables and trade payables arise directly from the Agency’s operations. As the cash requirement of the Agency is met mainly from funding through its parent organisation, MOD, financial instruments play a limited role in the creation and management of risk when compared with a non-public sector body. 93% of the Agency’s sales are with MOD. Consequently, the overall risk relating to financial instruments created by sales contracts is minimal. Other financial instruments relate to contracts to acquire non-financial items in line with the Agency’s requirements for supply of external resource and services.

The Agency is not exposed to significant credit, liquidity, foreign currency or market risk. The Chief Financial Officer is responsible for the policies to manage these risks on behalf of the Board. These policies have remained unchanged throughout the year. It has been the Agency’s policy throughout the year that no trading in financial instruments for speculative purposes should be undertaken.

The Agency’s customer profile leaves little exposure to credit risk. 99% of the Agency’s operating income is derived from MOD and wider government.

Categories of financial instruments

The Agency’s investment in its wholly owned subsidiary, Ploughshare, was classified as a non-current financial asset and was accounted for using the fair value through profit or loss method. See Note 9. The category of financial instrument that has produced finance income received and receivable, and the category of financial instrument that has produced finance charges paid and payable, are disclosed in Note 6 and 7.

Trade and other receivables, and cash and cash equivalents, have been classified as loans and receivables. Trade and other payables have been classified as other financial liabilities. The fair value of these financial assets and financial liabilities approximates the carrying value due to the short-term nature of these financial instruments.

No capital disclosures are necessary. A buffer for risk to creditors does not arise because public sector financing is tax based.

22. Related-party transactions

Dstl is an Executive Agency of MOD.

MOD

MOD is a related party and has non-executive representation on the Board. During the year, the Agency had various material transactions with MOD, all of which were carried out under contract terms and subject to the normal course of internal and external audit:

	2025	2024
	£’000	£’000
Operating income	902,593.0	1,034,950.5
Purchases	31,142.4	32,116.2
Receivables	22.4	19.2
Prepayments	918.7	374.2
Trade payables and accruals	1,267.2	2,714.0

Ploughshare Innovations Ltd

Ploughshare was a wholly owned subsidiary undertaking of the Agency and during 2023 to 2024, transferred to MOD Defence Science and Technology (DST). During the year, the following trading occurred, carried out under standard contract terms:

	2025	2024
	£’000	£’000
Operating income	173.4	149.0
Purchases	0.0	6,800.4
Receivables	93.4	42.2
Accruals	10.0	0.0

Other public sector bodies

Other public sector bodies are regarded as related parties by virtue of being under the same common control. During the year, the Agency had various material transactions with certain public sector bodies. All transactions are carried out on standard contract terms and are subject to the normal course of internal and external audit.

	Operating income	Operating income	Purchases¹	Purchases¹	Trade receivables¹	Trade receivables¹	Trade payables¹	Trade payables¹
	2025	2024	2025	2024	2025	2024	2025	2024
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Animal and Plant Health Agency²	0.0	0.0	63.2	44.7	0.0	0.0	0.0	0.0
Cabinet Office (excluding My Civil Service Pension)	279.6	39.5	4,718.1	4,151.9	2.6	0.0	123.8	0.0
Centre for Environment, Fisheries and Aquaculture	0.0	0.0	41.0	0.0	0.0	0.0	0.0	0.0
Department for Energy Security and Net Zero	556.3	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Department for Science, Innovation and Technology	1,565.0	258.6	0.0	0.0	0.0	0.0	0.0	0.0
Department for the Environment, Food and Rural Affairs	7,361.4	3,783.6	0.0	3.1	0.0	0.0	0.0	0.0
Department for Transport	9,454.9	7,019.5	0.0	0.0	6.0	199.8	0.0	0.0
Department of Health and Social Care	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Engineering and Physical Sciences Research Council	0.0	0.0	1,593.2	2,135.6	0.0	0.0	17.3	417.3
Foreign and Commonwealth Office	311.5	538.3	7.9	2.6	93.6	310.7	0.0	0.0
Government Office for Science	36.2	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Government Communications Bureau	3,564.0	3,128.0	0.0	0.0	148.5	1,079.2	0.0	0.0
Government Communications Centre	942.9	3,876.0	1,230.7	1,678.7	3.0	1,151.1	1.2	0.0
Government Communications Planning Directorate	1,493.9	1,695.2	1,183.6	1,502.2	220.8	652.7	0.0	0.0
Government Legal Department	0.0	0.0	226.5	185.4	0.0	0.0	0.1	0.0
Health and Safety Executive	0.0	(2.1)	45.6	127.1	0.0	0.0	0.0	0.0
HM Prison Service	285.7	246.0	0.0	0.0	0.0	50.2	0.0	0.0
Home Office	26,299.9	26,324.2	421.2	572.7	335.2	468.5	0.0	0.0
Innovate UK	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Medical Research Council	769.2	774.2	750.0	750.0	60.7	193.1	187.5	0.0
Medicines and Healthcare Products Regulatory Agency	434.5	0.0	0.0	0.0	126.9	0.0	0.0	0.0
Meteorological Office	35.5	27.8	222.4	119.9	0.0	0.0	0.0	0.0
Metropolitan Police	96.5	256.2	0.0	0.0	56.4	0.0	0.0	0.0
Ministry of Justice	20.0	69.8	0.0	0.0	3.8	10.2	0.0	0.0
National Counter Terrorism Security Office	435.2	0.0	0.0	0.0	5.7	0.0	0.0	0.0
National Crime Agency	246.4	222.9	0.0	0.0	0.0	185.0	92.5	0.0
National Physical Laboratory²	0.0	0.0	322.7	321.1	0.0	0.0	0.0	67.8
National Protective Security Authority	1,641.3	2,935.4	0.0	0.0	21.3	477.0	0.0	0.0
Natural Environment Research Council	0.0	0.0	160.2	209.3	0.0	0.0	160.2	0.0
Nuclear Decommissioning Agency	2,511.4	572.9	0.0	0.0	163.7	0.0	0.0	0.0
Porton Biopharma	812.8	652.3	0.0	0.0	231.3	248.5	0.0	0.0
Science and Technology Facilities Council	0.0	0.0	229.8	581.6	0.0	0.0	15.8	0.0
Scottish Government	0.0	0.0	108.7	144.2	0.0	0.0	0.0	11.2
The Mayor’s office for Policing & Crime	30.5	95.2	268.6	470.4	12.1	28.9	0.0	21.0
UK Atomic Energy Authority	0.0	0.0	290.2	0.0	0.0	0.0	0.0	0.0
UK Health Security Agency	1,998.2	1,758.5	337.3	798.3	230.5	468.9	11.3	6.0
UK Space Agency	799.5	210.8	0.0	0.0	0.0	9.2	0.0	0.0

Notes:

¹ Purchases are represented by invoices processed through the purchase ledger during the year. No account of movements in accruals is taken. Only trade receivables and trade payables recorded through the sales and purchase ledgers are disclosed. This more simplified approach focuses on invoices processed through primary ledgers and is considered more meaningful and comparable with the Agency’s related parties.

² Related-party purchase transactions were not disclosed in 2023 to 2024 Annual Report and Accounts for these other public sector bodies.

No Minister, Board member, key manager or other related parties has undertaken any material transactions with the Agency during the year. Any compensation paid to senior management is disclosed in the Remuneration Report.

Tax and pension payments are made by MOD on behalf of the Agency.

23. Contingent liabilities

As at 1 April 2024, there were 3 outstanding employment tribunal cases that had been brought against the Agency and were waiting for a hearing. Two of these have been heard. One was settled at £62,000. Confirmation of final settlement for the second hearing has not yet been received and a value based on legal advice has been accrued.

The third employment tribunal case is expected to be heard during 2025 to 2026. Legal assessment is that the case is likely to be successfully defended, but if unsuccessful, compensation is anticipated to be a maximum of £80,000. There were no new employment tribunals brought against the Agency in 2024 to 2025.

The Agency has other potential liabilities relating to operating its estate, with a total worse case settlement outcome of less than £200,000. Final outcome and settlements are expected during 2025 to 2026.

The Agency has funded PhD students and as a result, there is a potential liability for damage caused by them to university equipment or breach of intellectual property. The total worse case would be expected to be less than £50,000 and based on current PhD funded programmes, the liability will remain until 2027 to 2028.

For remote contingent liabilities, see here.

24. Events after the reporting period

The accounts were authorised for issue on the date of certification by the Comptroller and Auditor General.

There have been no significant events since the end of the financial year that affect the results for the year, or the year-end financial position.

Question 17

Glossary

Accepted Answer

ARAC	Audit and Risk Assurance Committee
CDO	Chief Delivery Officer
CEO	Chief Executive Officer
CFO	Chief Finance Officer
CIRAM	Climate Impact Risk Assessment Matrix
COO	Chief Operating Officer
CPO	Chief People Officer
CRR	Corporate Risk Register
CSA	Chief Scientific Adviser
CSTO	Chief Science and Technology Officer
CSUP	Consumer Single Use Plastic
CTW	Contracted Temporary Worker
DASA	Defence and Security Accelerator
DE&S	Defence Equipment and Support
DEW	Directed Energy Weapons
DEFRA	Defence Related Environmental Assessment Methodology
DIO	Defence Infrastructure Organisation
DPA	Data Protection Act
DPE	Delivery Partner Engagement
DREAM	Defence Related Environmental Assessment Methodology
DSAR	Data Subject Access Request
DST	Defence Science and Technology
EMC	Executive Management Committee
EMR	Extra Mural Research
EMS	Environmental Management System
ESN	Employee Support Networks
FM	Facilities Management
FReM	Financial Reporting Manual
FTE	Full-time Equivalent
FY	Financial Year
GGC	Greening Government Commitment
GHG	Greenhouse Gas
GIAA	Government Internal Audit Agency
HM	His Majesty’s
ICT	Information Communication and Technology
IFRS	International Financial Reporting Standards
ISA	International Standards on Auditing
JCC	Joint Commander’s Commendation
JSP	Joint Services Publication
KPI	Key Performance Indicators
kWh	Kilowatt Hour
LPG	Liquid Petroleum Gas
MHCA	Modified Historic Cost Accounting
MOD	Ministry of Defence
MPE	Mission Partner Engagement
MyCSP	My Civil Service Pension
NAD Group	National Armaments Director Group
NCPA	Non-Consolidated Performance Award
NEM	Non-Executive Member
NIFA	Net Internal Floor Areas
NISSS	New Information Systems Service Solution
NZ50	Net Zero Greenhouse Gas Emissions by 2050
OD	Organisational Design
OBE	Order of the British Empire
PCSPS	Principal Civil Service Pension Scheme
PM	Performance Measure
PPE	Personal Protective Equipment
RIDDOR	Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
RNLI	Royal National Lifeboat Institution
S&T	Science and Technology
SCS	Senior Civil Service
SDG	Sustainable Development Goals
SDR	Strategic Defence Review
SEAT	Sustainability Environmental Assessment Tool
SME	Small and medium-sized enterprise
SoCITE	Statement of Changes in Taxpayers’ Equity
SoCFs	Statement of Cash Flows
SoCNE	Statement of Comprehensive Net Expenditure
SoFP	Statement of Financial Position
SSRB	Review Body on Senior Salaries
SSSI	Site of Special Scientific Interest
SV	Social Value
SQEP	Suitably Qualified and Experienced Personnel
TCFD	Task Force on Climate-related Financial Disclosure
TQA	Technical Quality Assurance
VAT	Value Added Tax
VCDS	Vice Chief of Defence Staff

Cookies on GOV.UK

Defence Science and Technology Laboratory

Annual Report and Accounts 2024 to 2025

Performance

Chief Executive’s statement

Directors’ report

Who we are and what we do

Dstl – delivering mission success through science and technology advantage

Our plans for the future – our strategy

Transformation programmes

S&T delivery

People and infrastructure

Dstl’s Strategy 2023 to 2028

Preparing for the future

Enabling operational advantage at pace

Leveraging and influencing internationally

Shaping the defence and security landscape

Ensuring successful delivery

Our Corporate Risks

Our performance summary

Foreword

Operating income

External delivery costs

Operating expenses

Net operating income/expenditure

Capital investment

Funding and treasury management

Supplier payments

Distorting factors

Events after the reporting date

Accounting policies

Financial outlook

Measuring how we are doing

Performance reporting

KPIs

Key Performance Messages 2024 to 2025

How well are we delivering to our customers?

Delivery of S&T Programme outcomes benefiting defence and security from the baseline portfolio plan.

Are we safe and secure?

Fewer than 140 RIDDOR injuries, per 100k employees.

Do we have the right enablers in place to deliver S&T

Level of employee engagement

Are we becoming more efficient?

Average S&T delivered per Full Time Employee (at Dstl level).

EMR (Extra Mural Research) spend (sub-contract only), as a percentage of the Total Cost of Sales

Enabling cost percentage of overall cost

Managing the impact of our activities

Sustainability Strategic Direction

Looking forward to the future

Task force on climate-related financial disclosure (TCFD)

Compliance statement

Disclosures

Governance (a)–Board’s oversight

Governance (b)–management’s role

Risk management (a)–risk identification and assessment

Risk management (b)–risk management

Risk management (c)–overall integration

Metrics and targets (a)–metrics

Metrics and targets (b)–emissions reporting

Metrics and targets (c)–targets

GGC

Environmental management

Energy

Business travel

GHG emissions

Dstl GGC in-scope GHG emissions

Waste management

Water

Sustainable construction

Climate adaptation

Conservation and biodiversity

Sustainable Information Communication and Technology (ICT)

Sustainable procurement

Community

Dr Paul Hollinshead

Accountability Report

Corporate governance

Our leadership

The Dstl Board (for the financial year 2024 to 2025)

The Dstl EMC (for the financial year 2024 to 2025)