Corporate report

DESNZ annual report 2024 to 2025: Accountability report (HTML)

Published 15 September 2025

© Crown copyright 2025

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This publication is available at https://www.gov.uk/government/publications/desnz-annual-report-and-accounts-2024-to-2025/accountability-report

Purpose of the accountability report

The accountability report sets out how the department meets the key accountability requirement to Parliament. It comprises of the 3 reports below.

The corporate governance report:

  • provides the names of ministers and directors with oversight for the department
  • explains the governance structures in place and activities during the year

The staff and remuneration report:

  • presents staff numbers and costs, and other employee matters
  • discloses the remuneration of our ministers and directors

The Parliamentary accountability and audit report:

  • presents the department’s expenditure against the budgets set by Parliament
  • presents the auditor’s report and opinion on the financial statements

Corporate governance report

Statement of accounting officer’s responsibilities

Under the Government Resources and Accounts Act 2000 (GRAA), HM Treasury has directed the Department for Energy Security and Net Zero to prepare, for each financial year, consolidated resource accounts detailing resources acquired, held or disposed of, and the use of resources, during the year by the department and its sponsored non-departmental public bodies and other arm’s length public bodies designated by order made under the GRAA by Statutory Instruments 2024 No. 295 and 2024 No. 1323 (together known as the ‘departmental group’, consisting of the core department and sponsored bodies listed in note 26 to the accounts).

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the department and departmental group, and of the income and expenditure, statement of financial position and cash flows of the departmental group for the financial year.

In preparing the accounts, the accounting officer is required to comply with the requirements of ‘Government Financial Reporting Manual’ and in particular to:

  • observe the Accounts Direction issued by the Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
  • ensure that the department has in place appropriate and reliable systems and procedures to carry out the consolidation process
  • make judgements and estimates on a reasonable basis, including those judgements involved in consolidating the accounting information provided by non-departmental and other arm’s length public bodies
  • 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 accounts prepare the accounts on a going concern basis
  • confirm that the annual report and accounts 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

HM Treasury has appointed the permanent head of the department as accounting officer of the Department for Energy Security and Net Zero. The accounting officer of the department has also appointed the chief executives (or equivalents) of its sponsored non-departmental and other arm’s length public bodies as accounting officers of those bodies.

The accounting officer of the department is responsible for ensuring appropriate systems and controls are in place to ensure any grants the department makes to its sponsored bodies are applied for the purposes intended and that such expenditure and the other income and expenditure of the sponsored bodies are properly accounted for, for the purposes of consolidation within the resource accounts. Under their terms of appointment, the accounting officers of the sponsored bodies are accountable for the use, including the regularity and propriety, of the grants received and the other income and expenditure of the sponsored bodies.

The responsibilities of an accounting officer, including responsibility for the propriety and regularity of the public finances for which the accounting officer is answerable, for keeping proper records and for safeguarding the assets of the department or non-departmental or other arm’s length public body for which the accounting officer is responsible, are set out in Managing Public Money published by HM Treasury.

Accounting officer’s confirmation

As accounting officer, I have taken all the steps I ought to have taken to make myself aware of any relevant audit information and to establish that the Department for Energy Security and Net Zero’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.

I also confirm that this annual report and accounts is fair, balanced and understandable.

Jeremy Pocklington
Permanent Secretary and Principal Accounting Officer

5 September 2025

Directors’ report

The directors’ report covers the period from 1 April 2024 to 31 March 2025. It provides names and ministerial titles of those who served as ministers. It also provides names of non-executive board members and executive directors.

Joiners and leavers refer to those who joined or left relevant posts. In the case of executive directors, they may not have left the department, particularly if they served as interim executive directors.

Conflicts of interest

Board members are required to declare personal or business interests which may influence (or be perceived to influence) their judgement, when performing their duties.

DESNZ has an established Conflicts of Interest (CoI) procedure, including declaring interests at the start of board meetings. No CoIs were declared during board meetings in 2024-25.

The Register of Board Members’ Interests is published on GOV.UK.

Ministers:

  • The Rt Hon Ed Miliband MP, Secretary of State for Energy Security and Net Zero –from 5 July 2024
  • The Rt Hon Claire Coutinho MP, Secretary of State for Energy Security and Net Zero – to 5 July 2024
  • Sarah Jones MP, Minister of State (Minister for Industry) – from 8 July 2024
  • The Rt Hon Lord Hunt of Kings Heath OBE, Minister of State (Minister for Energy Security and Net Zero) – from 9 July 2024
  • Justin Tomlinson, Minister of State (Minister for Energy Security and Net Zero) – from 12 April 2024 to 5 July 2024
  • The Rt Hon Graham Stuart MP, Minister of State (Minister for Energy Security and Net Zero) – to 12 April 2024
  • Kerry McCarthy MP, Parliamentary Under Secretary of State (Minister for Climate) –from 9 July 2024
  • Michael Shanks MP, Parliamentary Under Secretary of State (Minister for Energy) –from 9 July 2024
  • Miatta Fahnbulleh MP, Parliamentary Under Secretary of State (Minister for Energy Consumers) – from 9 July 2024
  • Lord Martin Callanan, Parliamentary Under Secretary of State (Minister for Energy Efficiency and Green Finance) – to 5 July 2024
  • Andrew Bowie MP, Parliamentary Under Secretary of State (Minister for Nuclear and Renewables) – to 5 July 2024
  • Amanda Solloway MP, Parliamentary Under Secretary of State (Minister for Energy Consumers and Affordability) – to 5 July 2024

Non-Executive Board Members:

  • Humphrey Cadoux-Hudson, Lead NEBM, Board and NomCo Chair
  • Mary Archer, Departmental Board
  • Peter Mather, Departmental Board, ARAC –to 29 March 2025
  • Vikas Shah, Departmental Board, ARAC Chair

Non-Executive Independent Members:

  • Elaine Clements, ARAC
  • Alison Rodwell, ARAC – to 1 May 2024
  • Andre Katz, ARAC
  • Anne Marie Millar, ARAC
  • David Scott, ARAC
  • Tristan Morgan, ARAC
  • Andrew Jamieson, PIC
  • Erik Wilson, POpCo – from 1 September 2024
  • Sam Ulyatt, PIC (non-remunerated)
  • Jill Adam, PIC (non-remunerated)

Executive Directors:

  • Jeremy Pocklington, Permanent Secretary
  • Clive Maxwell, Second Permanent Secretary
  • Ashley Ibbett, Director General Energy Infrastructure
  • Lee McDonough, Director General Net Zero, Nuclear and International
  • Jonathan Mills, Director General Energy Markets and Supply
  • Ben Rimmington, Director General Net Zero, Buildings and Industry
  • Paul Monks, Chief Scientific Adviser
  • David Thomas, Chief Financial Officer
  • Simon Hulme, Director for Portfolio and Data
  • Alice Hurrell, Chief People Officer
  • Donna Leong, Director of Analysis and Chief Economist
  • Johanna Cowan, Director Strategy
  • James Sorene, Director of Communications (Standing Member)
  • Wendy Hardaker, Legal Director (Standing Member)

Our governance structure

Our governance: diagram data

Departmental board:

Sub-committees:

  • Audit and Risk Assurance Committee
  • Nominations and Governance Committee

Executive Committee:

Sub-committees:

  • Portfolio and Investment Committee
  • People and Operations Committee

Areas:

  • Clean Energy Superpower Mission (x-govt)
  • Net Zero Strategy (x-govt)
  • Clean Power 2030
  • International

Departmental Outcome Boards:

  • Energy Affordability
  • Energy Security
  • Power Sector Decarbonisation
  • Net Zero Delivery
  • Energy Market

Our 12 Portfolios:

  • International Net Zero
  • Net Zero Strategy
  • Net Zero Innovation
  • Energy Market Reform and Consumers
  • Nuclear
  • Renewable Electricity
  • CCUS and Hydrogen
  • Energy Security Resilience
  • Oil, Gas and Coal
  • Energy System and Networks
  • Net Zero Industry and Businesses
  • Net Zero Buildings

Departmental Board

Chair:

Rt Hon Ed Miliband MP, Secretary of State and Chair, Departmental Board

Meeting Attendance:

Total number of meetings held: 1

(x/x = number attended /number eligible to attend.)

Ministers No. of meetings attended
Secretary of State, Ed Miliband (from 5 July 2024) 1/1
Minister Jones (from 8 July 2024) 1/1
Lord Hunt (from 9 July 2024) 1/1
Secretary of State, Claire Coutinho (to 5 July 2024) 0/0
Minister Tomlinson (from 12 April 2024 to 5 July 2024) 0/0
Lord Callanan (to 5 July 2024) 0/0
Minister Solloway (to 5 July 2024) 0/0
Minister Stuart (to 12 April 2024) 0/0
Non-executive directors No. of meetings attended
Humprey Cadoux-Hudson 1/1
Peter Mather 1/1
Vikas Shah 1/1
Mary Archer 1/1
Senior officials/executive directors No. of meetings attended
Jeremy Pocklington 1/1
Clive Maxwell 1/1
David Thomas 1/1
Jonathan Mills 1/1
Lee McDonough 0/1
Role:

The departmental board provides expert advice, support and challenge on the overall direction on strategy, performance and risk management. It is chaired by the Secretary of State and its members are non-executive members, selected ministers and selected executives, including the Permanent Secretaries. The departmental board is supported by 2 delegated committees: The Audit and Risk Assurance Committee (ARAC) and the Nominations and Governance Committee (NomCo).

On 5 July 2024 there was a General Election and a change in Secretary of State, which meant the departmental board did not take place again until 3 December 2024 when the Board was at full composition again.

Key Areas of Discussion:

At the inaugural meeting of the departmental board, the key areas of discussion were around the objectives of the Clean Energy Superpower Mission and how the department was organised to deliver its mission.

Other key areas of discussion included:

  • The Spending Review
  • Departmental performance, delivery and risk
Compliance with the Corporate Governance Code:

Our approach to governance is in line with ‘the code’ – ‘Corporate Governance in Central Government Departments: Code of Good Practice’. We were compliant with the code in all areas except for the requirement that the board meets at least quarterly. The board only met once during the year due to a change in Secretary of State, and in both Ministers of State. However, there was ongoing engagement between non-executive board members, ministers and the executive during the period.

Board Appointments;

Ed Miliband was appointed as Secretary of State on 5 July 2024. Minister Jones was appointed as Minister of State on 8 July 2024 and Lord Hunt was appointed as Minister of State on 9 July 2024. Previous appointments can be found in the above table.

At end of 2024-25, the board’s gender diversity was at 16.67% and ethnic minority members at 8.33%.

Board Effectiveness:

An internal board effectiveness review was carried out in March 2025. This reviewed the effectiveness of the departmental board and its delegated committees and the effectiveness of the executive board and its newer delegated committees.

The key findings were that the role of the departmental board was well understood by its members and generated good discussion and actions. As the departmental board was in its relative infancy given the change in government, it would benefit from the development of a more comprehensive programme of work for the non-executives outside of formal board meetings to ensure their skills and experience were effectively used to deliver the department’s mission.

Recommendations will be delivered over the next financial year.

Quality of Data Used by the Board:

The papers received by the board were of high quality. The meeting was held in person and was efficiently chaired. Challenge and discussion were encouraged.

The DESNZ governance team provided a comprehensive secretariat service to the board and committees. This ensured the effective and efficient administration of the board and its activities.

Biographies of Board Members:

Departmental board member biographies.

Nominations and Governance Committee

Chair:

Humphrey Cadoux-Hudson, Lead Non-Executive and Chair, Nominations and Governance Committee

Meeting Attendance:

Total number of meetings held: 2

(x/x = number attended /number eligible to attend.)

Non-executive directors No. of meetings attended
Humprey Cadoux-Hudson 2/2
Peter Mather 2/2
Senior officials/executive directors No. of meetings attended
Jeremy Pocklington 2/2
Clive Maxwell 2/2
Alice Hurrell 1/2
Role:

The Nominations and Governance Committee is an advisory committee of the departmental board, providing assurance and input to key decisions and processes. Its purpose is to provide assurance on the department’s strategies and plans for talent management, succession planning, capability building, senior performance management and incentives and rewards.

Key Areas of Discussion:
  • Senior performance
  • Organisational planning
  • Directors’ General development
  • Oversight of leadership

Audit and Risk Assurance Committee

Chair:

Vikas Shah, Non-executive Board Member and Chair, Audit and Risk Assurance committee

Meeting Attendance:

Total number of meetings held: 6

(x/x = number attended /number eligible to attend.)

Non-executive directors No. of meetings attended
Vikas Shah 6/6
Peter Mather 6/6
Elaine Clements 5/6
Alison Rodwell 1/1
Andre Katz 6/6
Anne Marie Millar 6/6
David Scott 6/6
Tristan Morgan 6/6
Senior officials/executive directors No. of meetings attended
Jeremy Pocklington 3/6
Clive Maxwell 6/6
David Thomas 6/6
Simon Hulme 4/6
National Audit Office representative 6/6
Government Internal Audit representative 6/6
Role:

The Audit and Risk Assurance Committee (ARAC) is an advisory committee of the departmental board. It assures the quality of audit and risk control functions within the department.

Key Areas of Discussion:
  • The preparation of the Annual Report and Accounts
  • The work of internal and external audit
  • The management of departmental risks, the risk management framework, and the departmental risk appetite
  • Deep dives into each of the departmental risks covering:
    • people risks
    • security of supply
    • Public Sector Equality Duty
    • the loss of sensitive information
    • supply/network resilience
    • critical infrastructure
    • near-term disruption to gas/electricity/fuel
  • The Clean Energy Superpower Mission
  • The use of advance payment bonds in the Public Sector Decarbonisation Scheme
  • The response to poor quality solid wall insulation installed under ECO 4 and GBIS Portfolio management
  • Health and Safety risks, arm’s length bodies, physical security, reputational risk management and Integrated Corporate Services
  • Corporate assurance including whistleblowing, functional standards, the annual assurance process and the governance assurance process

Executive Committee

Chair:

Jeremy Pocklington, Permanent Secretary and Chair, Executive Committee

Meeting Attendance:

Total number of meetings held: 45

(x/x = number attended /number eligible to attend.)

Executive directors No. of meetings attended
Jeremy Pocklington 42/45
Clive Maxwell 41/45
David Thomas 41/45
Simon Hulme 39/45
Paul Monks 39/45
Jonathan Mills 41/45
Johanna Cowan (on parental leave until September 2024) 24/25
Ben Golding (covering Johanna Cowan on parental leave until September 2024) 19/20
Ashley Ibbett 42/45
Lee McDonough 35/45
Ben Rimmington 38/45
Alice Hurrell 36/45
Donna Leong 42/45
Paro Konar (joined on 1 April 2025) 1/1
James Sorene (Standing Member) 42/45
Wendy Hardaker (Standing Member) 42/45
Role:

The Executive Committee (ExCo) is responsible for the day-to-day management of the department and the delivery of its strategic objectives. ExCo is the forum to discuss key cross-cutting issues impacting the entire organisation. ExCo develops and delivers the department’s vision in line with ministers’ priorities, oversees the delivery of departmental strategy, with particular emphasis on corporate delivery and cross-cutting issues, as well as overseeing the monthly performance report review, regular risk review and discussion of ad hoc issues.

Key Areas of Discussion:

ExCo has discussed a variety of items across its remit, including the department’s Spending Review return, delivering the department’s mission and the department’s Strategic Risk Register. The items discussed can be broadly put into 5 groups:

  • Portfolio management – provides senior oversight on the department’s portfolio and strategic risks
  • Change management – sets the direction of, and manages, any major change decision
  • People management – provides senior oversight on the department’s people policy
  • Communication and stakeholder management – responsible for the department’s overall engagement strategy with stakeholders and setting the overall departmental communications strategy
  • Operational management – provides senior oversight of the department’s operational functions

Executive Committee sub-committees

Portfolio and Investment Committee

Chair:
Clive Maxwell, Second Permanent Secretary

Role:
The Portfolio and Investment Committee (PIC) is a delegated committee of ExCo and has responsibility for approving investments with a whole life cost of £50m or above, or of any amount deemed as novel, contentious or repercussive. In addition, it reviews the departmental portfolio to assess project delivery and where interventions may be necessary.

Key areas of focus:
PIC has reviewed and appraised projects across the departmental portfolio acting as a formal gateway and to monitor progress and delivery.

People and Operations Committee

Co-Chairs:
Ashley Ibbett, Co-Chair, People and Operations Committee

Alice Hurrell, Co-Chair, People and Operations Committee

Role:
The People and Operations Committee (POpCo) is a delegated committee of ExCo and considers matters relating to operations, Human Resources (HR), accommodation, security, Equality, Diversity and Inclusion (ED&I), and Information Technology (IT).

Key Areas of Discussion:
The committee’s specific responsibilities include:

  • Monitoring the delivery, communication and direction of people/operational related strategies as agreed by ExCo
  • Scrutinising and deciding the direction and communication of programmes, activities and workstreams delegated by ExCo. To this end, POpCo has a specific responsibility of overseeing office moves and Places for Growth (PfG)
  • Offering assurance through challenge and scrutiny of the delivery of the main operational strategies and programmes
  • Considering people and operational risks on the departmental risk register and the corporate risk register

Key Areas of Focus:
The Committee’s key areas of focus include:

  • Places for Growth
  • People Survey results and actions
  • HR matters
  • Office management
  • Equality, Diversity and Inclusion, including DESNZ as a workplace
  • Building capability
  • Culture and Values

Net Zero and Energy Governance:
Our governance is designed to support successful delivery. Most of our work affects several of our priorities.

The department continued to manage its work through DG groups, with governance and controls gradually updated during the year with a focus on the Clean Energy Superpower Mission.

Below our top tier governance, we look at our work in 2 ways:

  • Portfolios: We previously had 13 portfolios (including Corporate Services). Following the Spending Review, this has been reduced to 11 portfolios. However, these have not yet been formally grouped. Our policy and delivery work is organised into portfolios, which currently report progress to ExCo
  • Outcome Boards: Our 5 strategy boards (as outlined in the diagram above) take a cross-cutting view on the impact of our policy and delivery agenda towards our strategic outcomes. These boards are chaired by the SRO for our priority outcomes (DG, Energy Markets and Supply)

Management of outside interests

Register of interests for directors

See directors’ report on page 67.

Process for managing outside interests

The department has a policy in place for the management and declaration of outside interests for all staff. This was updated following new Cabinet Office guidance issued in November 2024. The policy provides a framework to deal with any actual, potential or perceived conflicts of interest between staff, suppliers, and other stakeholders.

It provides guidance to employees holding any outside employment, work or appointment (paid or otherwise remunerated). The policy follows Cabinet Office guidance with a particular focus on political interest and aligning recruitment practices to ensure that Conflicts of Interest are addressed as early as the onboarding stage.

All staff must ensure declarations are made when they become aware that a conflict of interest may exist. Once a declaration is made, line managers must ensure they review and agree any mitigating actions, and if required escalate declarations that are particularly contentious or pose a risk to the reputation of the department.

All senior civil servants (SCS) are required to complete a conflicts of interest declaration annually. Nil returns are also declared. The annual collation of SCS conflicts of interest declarations is conducted by HR, and we have steps in place to ensure central examination of all SCS declarations.

The DESNZ 2024-25 SCS annual collation process concluded at the end of May 2025. DESNZ had no SCS with remunerated outside employment during the monitoring period 2023-24. Details of remunerated outside employment held by SCS in previous years are published on GOV.UK.

Special Advisers

In line with the current Declaration of Interests Policy for special advisers, all special advisers have declared any relevant interests or confirmed they do not consider they have any relevant interests. The Permanent Secretary has considered these returns, and the following relevant interests are set out in public:

Full name Details of interest
Sophia True (employed until 24/05/2024) Father held a ministerial position in Cabinet Office

Business Appointment Rules

The Business Appointment Rules are designed to uphold the core values in the Civil Service Code of integrity, honesty, objectivity, and impartiality.

Before accepting any new appointment or employment, individuals must consider whether an application under the rules is required. If it is required, they should not accept or announce a new appointment or offer of employment before it has been approved. Countersigned applications are sent to the Human Resources function for assessment and action. Human Resources have a process in place for handling business appointment applications. This involves completion of the application form and mitigations which are countersigned by an appropriate person within the line management chain. The outcome is also shared with the new employer’s HR function.

All SCS3 and above applications are referred to the Advisory Committee for Business Appointments.

In compliance with the Business Appointment Rules, the department is transparent in the advice given to individual applications for senior staff, including special advisers. Advice regarding specific business appointments has been published on GOV.UK. To raise awareness, the department includes information on Business Appointment Rules in staff contracts, induction packs, leaver guidance and the departmental intranet pages.

Number of exits from the Senior Civil Service (SCS): 15

Number of BARs applications submitted to the department over the year (by grade – SCS3, SCS2, SCS1, SpAd and delegated grades): 29

Grade No. submitted
SCS3 2
SCS2 0
SCS1 2
SpAd 2
Delegated Grade 23

Number of BARs applications approved by the department over the year (by grade – SCS3, SCS2, SCS1, SpAd and delegated grades): 27

Grade No. submitted
SCS3 2
SCS2 0
SCS1 2
SpAd 0
Delegated Grade 23

Number of BARs applications where conditions were set by the department over the year (by grade – SCS3, SCS2, SCS1, SpAd and delegated grades): 25

Grade No. approved
SCS3 0
SCS2 0
SCS1 2
SpAd 0
Delegated Grade 23

Number of applications that were found to be unsuitable for the applicant to take up by the department over the year (by grade – SCS3, SCS2, SCS1, SpAd and delegated grades):

Grade No. approved
SCS3 0
SCS2 0
SCS1 0
SpAd 0
Delegated Grade 0

Number of breaches of the rules in the preceding year: 0

Governance statement

Overview

The governance statement sets out how the department was governed by management during the year and provides an outline of our risk management and internal control systems.

Risk management

Risk management responsibilities

The department is responsible for having a risk management framework and reviewing its effectiveness. The framework includes the standard process of – identify, assess, address, review and report risks. Effectiveness reviews take the form of regular engagement with portfolio and programme risk leads, Heads of Risk for DESNZ arm’s length bodies, arm’s length bodies sponsor teams and an annual consultation on the risk framework’s drafting. The department completes an annual Risk Control Framework Assessment, which is cross-referenced to the risk elements of the various functional standard self-assessments. This brings about continuous improvement and allows the risk framework to respond to changes in departmental structure and governance.

Processes and structure

Our principal risks in 2024-25, as owned and managed by ExCo on the Departmental Strategic Risk Register (DSRR), are disclosed under risks affecting delivery of our objectives in the performance report. The process to identify these risks involves horizon scanning by ExCo on an annual basis, and escalations from portfolio level, as appropriate throughout the year. Additionally, each of the risks on the DSRR are reviewed through a deep dive at ExCo and, where this reveals gaps in our risk coverage, either new risks or new mitigations to the existing risks are added to the DSRR. Both the DSRR and the ExCo deep dives are discussed at the Audit and Risk Assurance Committee to provide additional independent assurance. During the year, we updated our risk management framework and risk appetite statement to ensure consistency with government best practice in the Orange Book. Following several ExCo discussions, starting in October 2024, the Framework and Appetite Statement were approved in March and April 2025 respectively. Versions of both documents are available to all staff through the departmental intranet, as are screen-reader accessible versions of the documents.

Monitoring and assurance of risk

All risks, regardless of level, are evaluated and managed monthly using the department’s online reporting systems, and the outputs from this are reported to key governance boards.

The information provided for risks on the DSRR is assured by the corporate risk team, who review the portfolio and DSRR risks and consider and flag potential escalations to the departmental leadership teams. The department’s outcome boards also review risks across the DESNZ delivery portfolios in relation to the boards’ policy focus.

Risks at the programme level are managed locally through programme and portfolio management boards, with the corporate risk team and the group risk champions having a role to promote best practice.

Effectiveness reviews

ExCo have reviewed and monitored the risks on the DSRR on a quarterly basis. They have also undertaken deep dives into each of the risks on the DSRR to ensure that they are correctly assessed and that they are mitigated robustly. During the year we continued to improve the online risk management tool to drive regular reporting, adding issue management to the system in Q4.

Compliance

The department’s risk management practices are compliant with the requirements of the Orange Book’s 5 principles. The Risk Control Framework (RCF) assessment has been enhanced by HMT for 2024-25, with 75 criteria, compared to 35 in 2023-24. Against this new test, DESNZ complies with 61 of the 75 criteria, including meeting all the criteria for the Orange Book principle of integration, with partial compliance for the remaining 14. We will include activity to address the areas of partial compliance under the principles of governance and leadership, collaboration and information, processes, and continuous improvement in our 2025-26 ‘Risk Management Improvement Plan’. We will also review each of the department’s functional self-assessments, to identify areas to improve risk management in those functions and where there are shared improvement themes across functions.

Priorities will be to:

  • Socialise the new issue management functionality with system users and begin reporting issues in ExCo, ARAC and DG Stocktake products
  • Refresh the department’s Risk Appetite Statement, to ensure that ExCo establish the department’s baseline risk appetite
  • Introduce the ability to set and manage against local risk appetites at the portfolio and programme/project level in our online reporting, ensuring that when we report risks as in/out of tolerance, local circumstance and appetite is reflected

Government Internal Audit Agency

The Government Internal Audit Agency (GIAA) provides the internal audit service for DESNZ. For 2024-25, the Group Chief Internal Auditor provided a moderate annual opinion to the accounting officer on the departmental framework of governance, risk management and control. This incorporated 2 sub-opinions for the core department and the Integrated Corporate Services (ICS) function.

The sub-opinion for the core department was moderate, which reflects the relatively stable position of the core programmes, consistent senior leadership and maturing controls. GIAA noted that where core governance and assurance processes were inherited from BEIS, they have been broadly effective, and work was ongoing throughout the year to tailor them specifically for the needs of DESNZ.

GIAA noted that DESNZ faced a challenging environment in 2024-25, including the uncertainty of the Spending Review and political changes resulting from the general election. Nevertheless, the department achieved several major milestones, including publication of the ‘Clean Power 2030 Action Plan’, Royal Assent of the Great British Energy Bill and the launch of NESO (National Energy System Operator).

GIAA reflected positively on the design of DESNZ portfolio management approach and how governance and delivery structures continued to develop throughout the year, including evolution of the Assurance Panels, first mission board, and additional senior leadership through the creation of an additional DG role. They also commented that the department’s decision to move the grants team to report to the Second Permanent Secretary should improve the team’s ability to work across all aspects of the department.

Key areas of focus for the department in the next year according to GIAA include central oversight of grants activity, implementation of data governance improvements, and appropriate oversight of its growing portfolio of arm’s length bodies.

The sub-opinion for ICS was assessed as limited, reflecting the dynamic and evolving nature of the organisation. However, GIAA acknowledged the positive trajectory of improvement, noting progress in governance and assurance processes. ICS will need to continue in this direction of travel to achieve its ambition of expanding further to encompass more activities and customers.

National Audit Office and the Public Accounts Committee

The National Audit Office (NAO) have shown continued interest in the work of the department, publishing 3 studies focusing on DESNZ-specific activities as well as one overview of the department between April 2024 and March 2025:

  • 23 Jul 2024 – Carbon Capture, Usage and Storage programme
  • 23 Oct 2024 – Decommissioning Sellafield: managing risks from the nuclear legacy
  • 14 Nov 2024 – Energy bills support: an update
  • 26 Nov 2024 – DESNZ Departmental Overview 2023-24

DESNZ has also been involved in the following cross-government studies, including 4 overviews, published between April 2024 and March 2025:

  • 23 Jul 2024 – Government’s general grants schemes
  • 23 Jul 2024 – Government compensation schemes
  • 29 Jul 2024 – Making public money work harder
  • 15 Oct 2024 – Overview: government’s approach to the environment and climate change 2023-24
  • 16 Oct 2024 – Achieving environmental improvement and responding to climate change
  • 14 Nov 2024 – Overview: Regulation 2023-24
  • 18 Nov 2024 – Overview: The impact of fraud and error on public funds 2023-24
  • 5 Dec 2024 – Overview: How the NAO provides assurance on good governance and propriety 2023-24
  • 16 Jan 2025 – Government’s approach to technology suppliers: addressing the challenges
  • 22 Jan 2025 – Maintaining public service facilities
  • 14 Mar 2025 – Governance and decision making on megaprojects

Given the significance of DESNZ priorities, there have been 5 Public Accounts Committee (PAC) hearings drawn from DESNZ value for money studies and involving DESNZ witnesses, whose hearings were held between April 2024 and March 2025:

  • 24 Apr 2024 – Decarbonising Home Heating
  • 12 Dec 2024 – Carbon Capture, Usage and Storage
  • 6 Feb 2025 – Energy Bills Support
  • 3 Mar 2025 – The government’s support for biomass
  • 20 Mar 2025 – Decommissioning Sellafield

DESNZ provides responses to the PAC after each hearing via the HM Treasury minutes process, and twice a year via the HM Treasury minutes progress updates. These are published on GOV.UK: HM Treasury Minutes and HM Treasury Minutes Progress Update.

DESNZ also provides responses to National Audit Office (NAO) recommendations twice a year through the recommendations tracker updates, which are published on the NAO website.

Project assurance

A project assurance review is a key requirement within the department before submitting a business case for approval. Timely and proportionate assurance reviews are conducted for projects/programmes throughout the lifecycle.

In 2024-25, programmes and projects continued to follow the department’s Integrated Assurance and Approvals Framework. During 2024-25, 44 assurance reviews were conducted. As of March 2025, the department has 19 projects/programmes on Government Major Projects Portfolio (GMPP). The department works closely with IPA to manage assurance requirements for GMPP projects/programmes.

Project teams review the assurance report recommendations and record actions against each to address these. The actions against recommendations are reviewed by Portfolio Investment Committee as part of the approvals process. The Assurance Team conducts regular analysis of the DESNZ Assurance Reports, drawing key themes out and working with the wider department to identify initiatives to bring about improvements. Both the analysis and actions identified are reported to PIC on a bi-annual basis.

Quality assurance of analytical models

The department uses analytical models to inform its policy making, evaluation and operations. The models are assured to ensure they are fit for purpose and comply with the government’s Analytical Quality Assurance (AQUA) Book. The Modelling Integrity (MI) Team’s system tracks the 66 models in use in DESNZ as at March 2025. 94% had the required very high level of assurance, with plans in place to achieve the required level of assurance for all models. The MI Team’s second line assurance programme reinforces the established system of active monitoring. The department also requires arm’s length bodies undertaking modelling to assure us that they have AQUA Book compliant quality assurance processes.

Data protection

No personal data breaches were reported to the Information Commissioner’s Office (ICO).

We have evolved our services in response to the machinery of government change. This has included working with United Kingdom Vetting Services to realign vetting records across multiple departments as well as the continuity of secure services across Whitehall, whilst supporting a change in our London headquarter locations. We have provided GovPass to most staff across our national estate, and we continue to work with the Government Property Agency to ensure adequate security at sites where we have staff. Looking forward, we will be launching a security culture programme to improve security compliance, as well as undertaking a review of security processes to create efficiencies for our shared services.

Ministerial directions

Ministerial directions are formal, technical instructions from the Secretary of State which allow the department to proceed with a spending proposal in a situation where the accounting officer has raised an objection.

The accounting officer is accountable to Parliament for ensuring that all expenditure meets the standards under Managing Public Money (MPM). They have a duty to seek a direction if they believe 1 of the 4 accounting officer standards cannot be met – regularity, propriety, value for money and feasibility. There were no ministerial directions during 2024-25.

Effectiveness of our whistle blowing arrangements

Internal whistle blowing:

In DESNZ, we encourage our employees to speak up and raise any concerns they may have about a potential wrongdoing. We participated in the annual cross-Whitehall ‘Speak Up’ campaign in November 2024, with reinforcing messages from our Permanent Secretary on the importance of speaking up, the avenues for doing this and reassurance that concerns would be listened to, and action taken where appropriate.

Our values are at the heart of everything we do and were reflected in the campaign. We have also introduced a suite of line manager resources to support leaders to sustain a speak-up culture.

Our procedures for raising concerns are accessible to all DESNZ employees and we offer 6 different routes for this including via an external whistleblowing hotline. To reinforce the importance that we place on people speaking up we have a cadre of 4 Whistleblowing Nominated Officers who are members of our Senior Management Team and whose role is to provide confidential support and signposting to employees who raise concerns.

In 2024-25 we had one whistleblowing concern raised by an employee working in DESNZ. However, on further investigation this was not deemed to fall under the policy so was instead treated as a grievance. The 2024 People Survey highlighted that 77% of employees had confidence that any concerns raised under the Civil Service Code would be properly investigated (an increase from 76% the previous year).

External whistle blowing:

In 2024-25, DESNZ received no direct reports of external whistleblowing. The department is in the process of reviewing its whistleblowing policies and procedures to ensure that they remain fit for purpose.

Any reports of external whistleblowing relating to ALBs will be disclosed in their respective annual reports and accounts. The Permanent Secretary, as accounting officer, ensures accountability throughout the group as any whistleblowing reports for ALBs are handled by DESNZ whistleblowing nominated officers and tracked centrally.

Governance of DESNZ’s public bodies

The department sponsors a range of public bodies, referred to as arm’s length bodies (ALBs), which underpin the delivery of essential government schemes, services, and regulatory functions. Most ALBs are governed by their own independent boards, supported by appropriate governance and internal assurance structures. Details of these can be found in the annual reports and accounts for each ALB. The Permanent Secretary is appointed by HM Treasury as the Principal Accounting Officer for the department. They are personally responsible for safeguarding all public funds which fall under the auspices of the department.

Throughout this year we have continued to shape our oversight and we are working with ALBs to ensure sponsorship is fit for purpose and provides the optimum conditions for effective delivery. This includes refreshing the DESNZ sponsorship model, allowing for a proportionate approach to oversight and engagement and adjusting to new government priorities following the July 2024 General Election. This takes account of the size, nature, funding, and risk of different ALBs, and aligns with the Cabinet Office Sponsorship Code of Good Practice.

Each ALB has a designated senior sponsor at Senior Civil Service level, up to Director General, responsible for overseeing strategic engagement, performance, and delivery. They are closely supported by policy sponsor teams leading the day-to-day relationship with ALBs and a small central hub team including staff who manage regulated public appointments to ALB boards. Their activities help to facilitate strategic alignment between the department and the ALB, as well as support regular oversight of ALB performance, risk, and delivery.

For the 2024-25 reporting year central assurance on DESNZ ALBs was provided by:

  • An annual assurance exercise looking at the governance and accountability arrangements in place for each ALB
  • A review of ALB governance statements, to ensure that the essential criteria were met and to identify any significant risks and issues that should be included in the consolidated DESNZ governance statement
  • An annual self-assessment of the department’s alignment with the principles and standards of the Sponsorship Code
  • GIAA strategic reviews of DESNZ sponsorship arrangements, and response to pay breaches
  • An annual audit for 2024-25 by the Office for the Commissioner for Public Appointments. This confirmed that all appointments by DESNZ ministers to the boards of public bodies were made in accordance with the government’s ‘Principles of Public Appointments’ and ‘Governance Code’
  • A review of ALB risk by the departmental ExCo
  • A review of the Climate Change Committee, carried out as part of the Cabinet Office and HM Treasury Public Bodies Reform Programme
  • Ongoing support and advice provided to DESNZ policy teams in setting up new public bodies in accordance with Cabinet Office and HMT policy and controls, including Great British Energy

Through audit and assurance exercises the department identified instances of breach of Treasury senior pay guidance in several ALBs. The department was fined £280,000 by the Treasury in respect of failing to recruit a permanent Chief Executive Officer (CEO) to Great British Nuclear by May 2024 as required by the Chief Secretary to the Treasury when the pay for the interim CEO was approved. The department has implemented a response plan to strengthen assurance and reduce the likelihood of future breaches.

For 2025-26, our focus will be on strong assurance and scrutiny of ALBs to ensure their alignment with the government’s missions and priorities, value for money, and operational effectiveness and efficiency.

Governance Assurance Exercise:

A governance assurance exercise took place at the end of the financial year to reflect on the effectiveness of governance arrangements, internal controls and risk management.

Governance Assurance Panels held with each of the Directors General examined the evidence from their portfolios of their governance, risk, performance and financial management, oversight of the ALBs, implementation of NAO/PAC/GIAA recommendations, and internal control failures. Panels were also held with the Chief Operating Officer and the Integrated Corporate Services’ Managing Director, to examine the self-assessments conducted by the functions within DESNZ against the relevant Government Functional Standards, and evidence of the governance arrangements. Each panel was chaired by the ARAC Chair, supported by other non-executive directors and our internal auditors.

The outcomes of the panels, as well as further evidence demonstrating various aspects of internal control of the department as a whole, have been presented to ARAC. ARAC agreed that based on the evidence gathered through the governance assurance exercise, and other inputs gathered by ARAC throughout the financial year 2024-25, in the Committee’s opinion the department overall had a sound system of governance, assurance and internal control.

Key improvements flagged through the Governance Assurance Exercise included improved reporting of the legal risks, focus on management of the cybersecurity risk, and standardisation in documentation of governance bodies within the Director General groups.

Accounting officer’s conclusion Having reviewed the annual governance statement, the findings of the Government Internal Audit Agency (GIAA), and the independent scrutiny and advice of the Audit and Risk Assurance Committee (ARAC), I have considered the adequacy and effectiveness of the department’s governance, risk management and internal control arrangements during the year ended 31 March 2025.

The department has continued to deliver against an ambitious and complex portfolio of programmes, whilst strengthening its internal governance and assurance processes in response to evolving risks and challenges. In line with the GIAA annual opinion, the department’s overall assurance rating for 2024–25 is ‘moderate’.

This rating reflects 2 component opinions:

  • A ‘moderate’ opinion for the core department, underpinned by stable leadership, maturing controls and progress in tailoring inherited governance processes to the department’s specific needs
  • A ‘limited’ opinion for Integrated Corporate Services (ICS), which, despite noted improvements over the year, continues to require further development to meet the demands of its expanding remit

The internal audit work and ARAC’s oversight have highlighted key areas requiring continued focus in 2025–26, including:

  • Embedding and strengthening data governance and oversight mechanisms
  • Improving grant oversight and ensuring consistent governance across the department’s ALBs
  • Completing and embedding improvements in ICS core processes, including financial planning, business continuity and governance maturity
  • Developing the portfolio management framework further to support effective delivery of departmental priorities

I am satisfied that the department has made meaningful progress in strengthening its governance, assurance, and risk management arrangements this year, and responding to recommendations from internal and external assurance providers. I recognise that work remains to fully embed and mature controls, particularly in the areas identified above, and I am committed to maintaining this focus through the coming year.

The department will build on the progress made to date, adapting and enhancing its governance and control arrangements to support the effective delivery of its priorities, ensure value for money, and respond to current and emerging risks.

Jeremy Pocklington
Permanent Secretary and Principal Accounting Officer

5 September 2025

Staff report

Number of senior civil service staff by band

The table below shows the number of senior civil servants grouped by their salary bands. Salary bands represent actual salary rates. Bonuses are not included.

The numbers are based on the full year equivalent as at 31 March 2025. They include both permanent and fixed term contracts. It includes active workers only, and exclude inactive workers such as those on maternity leave, outward loans etc.

Range As at 31 March 2025 As at 31 March 2024
SCS 3 (£135,000 – £185,000) 7 7
SCS 2 (£95,000 – £165,000) 41 37
SCS 1 (£70,000 – £120,000) 172 160
Total 220 204

Staff numbers (audited information)

The table below shows numbers based on the full year equivalent average. The figures include both permanent and fixed term contracts. It includes active workers only, and excluded inactive workers such as those on maternity leave, outward loans etc.

Permanently employed staff Others Ministers Special advisers 2024‑25
Total		 2023‑24
Total
Core department 4,399 97 6 3 4,505 4,274
Non-departmental public bodies (NDPBs) 4,289 692 - - 4,981 4,562
Total 8,688 789 6 3 9,486 8,836

Staff costs (audited information)

Permanently employed staff
£m		 Others

£m		 2024‑25
Total
£m		 2023‑24
Total
£m
Wages and salaries 501 74 575 490
Social security costs 58 10 68 51
Other pension costs 115 - 115 96
Sub total 674 84 758 637
Less recoveries in respect of outward secondments (2) - (2) (2)
Total net costs 672 84 756 635
Core department 355 22 377 324
NDPBs and other designated bodies 317 62 379 311
Total net costs 672 84 756 635

Staff costs have increased by £121m during the current financial year. This is primarily due to an increase in staff numbers during the year.

Capitalised staff costs:

In the departmental group, £11,072,683 of staff costs were capitalised (2023–24: £4,448,432). 108 employees were engaged on capital projects (2023–24: 67 employees).

The reason for the year on year increase in capitalised staff costs is due to the following:

  • Sizewell C – capitalised staff costs have increased by £2.7m during the current financial year. In the previous financial year, costs related to 2 managing directors, for part of the financial year. Costs for the current year reflect a full year of expenditure for an increased number of board members as the ALB has grown
  • LCCC – capitalised staff costs have increased by £2m during the current financial year. This is due to the development of several in-house systems, including a Green Hydrogen settlement system, Contracts for Difference (CfD) management system and a contract management system. A new model to forecast cash flows is also in development
  • UKAEA – capitalised staff costs have increased by £2m during the current financial year. The increase is largely due to the new LIBRTI (Neutron Source) project and the continuation of the Tritium Loop project

Staff severance costs are included in wages and salaries. For further details on staff severance costs, see exit packages in the staff report.

Total net costs of ‘others’ includes ministers’ total net costs of £181,693 (2023–24: £229,076).

Staff numbers and costs included in utilisation of provisions – Nuclear Site Licence Companies, Civil Nuclear Police Authority and UK Atomic Energy Authority

(audited information):

Staff costs of nuclear site licence companies (SLCs) and partially for Civil Nuclear Police Authority and UK Atomic Energy Authority for staff that are engaged in decommissioning activities for which provisions were recognised in prior periods are disclosed separately.

They are included in the amounts shown for utilisation in the Nuclear Decommissioning Authority’s (NDA) and UK Atomic Energy Authority nuclear decommissioning provisions in note 19, rather than being reported as staff costs in the Statement of Comprehensive Net Expenditure (SoCNE).

Permanently employed staff Others 2024‑25
Total		 2023‑24
Total
Number of staff (full time equivalent) 17,140 1,133 18,273 17,239
Costs: Wages and salaries (£m) 1,165 57 1,222 1,139
Costs: Social security costs (£m) 132 - 132 123
Costs: Other pension costs (£m) 198 - 198 198
Total costs (£m) 1,495 57 1,552 1,460

Principal Civil Service Pension Scheme

Nuclear Site Licence Companies (SLCs) are not included in these pension schemes. Details of those are provided in note 20.

The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS), known as ‘alpha’, are unfunded multi-employer defined benefit schemes in which the department is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the PCSPS as at 31 March 2020. Further details can be found in the resource accounts of the Cabinet Office Civil Superannuation: www.civilservicepensionscheme.org.uk/about-us/resource-accounts/.

For 2024–25, employer contributions of £90,420,656 were payable to the PCSPS (2023–24: £79,147,894) at 1 of 4 rates in the range 26.6% to 30.3% (2023–24: 26.6% to 30.3%) of pensionable pay, based on salary bands.

The scheme’s 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 2024–25 to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £626,214 (2023–24: £537,421) were paid to 1 or more of the panel of 3 appointed stakeholder pension providers. Employer contributions are age-related and range from 8% to 14.75%. Employers also match employee contributions up to 3% of pensionable earnings. In addition, employer contributions of £20,022 (2023–24: £16,679), 0.5% (2023–24: 0.5%) were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees.

Contributions due to/ (from) the partnership pension providers as at 31 March 2025 were £5,404 (2023–24: £7,470). Contributions prepaid at that date were £nil (2023–24: £nil).

Ill-health retirement:

In 2024–25, 21 persons (2023–24: 24 persons) across the departmental group retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £1,225,611 (2023–24: £2,161,240).

Other pension schemes

Employer contributions to other pension schemes in 31 March 2025, amounted to £37,580,525 (2023-24: £33,011,611). Employer contributions include employers’ contributions, current service costs and where appropriate past service costs of funded pension schemes. Further details can be found in the accounts of the department’s NDPBs and other designated bodies. A list of these bodies is provided in note 26.

Staff composition

The table below shows staff composition as at 31 March 2025.

The numbers are based on headcount and include both permanent and fixed term contracts. It includes active workers, and inactive workers such as those on maternity leave and outward loans. It excludes all contingent labour.

Gender:
2024‑25 2023‑24
All employees 4,781 4,356
Men 51% 50%
Women 49% 50%
Senior civil servants 236 212
Men 54% 57%
Women 46% 43%
Executive committee 14 16
Men 57% 69%
Women 43% 31%
Disability:
2024‑25 2023‑24
Declaration rate 79% 79%
No 80% 82%
Yes 13% 12%
Prefer not to say 6% 6%
Ethnicity:
2024‑25 2023‑24
Declaration rate 86% 85%
White 74% 74%
Ethnic minority 22% 22%
Prefer not to say 4% 4%
Sexual orientation:
2024‑25 2023‑24
Declaration rate 86% 85%
Straight 80% 81%
LGBT+ 11% 10%
Prefer not to say 9% 9%

*Please note that percentages may not add up to 100% due to rounding

Sickness absence data

The table below shows average working days lost (AWDL) to sickness absence.

2024‑25 2023‑24
Core department 3.85% 3.7%

Staff turnover percentage

The table below shows the staff turnover percentage in 2024-25 for the core department as defined for the Civil Service statistics collection.

‘Departmental turnover’ includes employees who left the department. ‘Turnover’ refers those who also left the Civil Service.

Prior year comparisons were estimated based on average workforce and leavers, due to the creation of the department in September 2023. The methodology requires a full 12 months of data, so leavers between September 2023 and March 2024 were used to estimate the full year position.

2024‑25
Departmental turnover		 2024‑25
Turnover		 2023‑24
Departmental turnover		 2023‑24
Turnover
Core department 9.9% 5.4% 15.3% 6.2%

Civil service people survey staff engagement scores

2024 2023
Engagement score 67% 61%

The Civil Service People Survey ran from September to October 2024. The department achieved a response rate of 84% and an engagement index of 67%. This is DESNZ’s second departmental People Survey since the machinery of government change in 2023.

The department has improved scores on 6 key areas, which are above the Civil Service benchmark score, namely:

  • Inclusion and fair treatment (85%) is 4 points higher than the Civil Service benchmark, and 2 points higher than 2023 results
  • Leadership and managing change (59%) is 7 points above the Civil Service benchmark, and 6 points higher than 2023 results
  • My work (79%) is 2 points above Civil Service benchmark and 1 point higher than 2023 results
  • Organisational objectives and purpose (86%) is 3 points above the Civil Service benchmark and 9 points higher than our 2023 results
  • Pay and benefits (35%) and My manager (79%) are both 1 point higher than the Civil Service benchmark and 13 points and 1 point higher respectively than our 2023 results

Staff policies applied for disabled persons

Supporting disabled people at recruitment and throughout their employment is important to DESNZ.

Applications for employment:

We are accredited under the Disability Confident Leader scheme. The department welcomes applications from disabled candidates and candidates with long-term health conditions, and fully supports reasonable adjustments throughout the recruitment process.

Continuing employment:

We offer reasonable adjustments where practical for both office and home working environments. We support disabled staff or staff with long-term health conditions by carrying out assessments, providing equipment and training. We work closely with our ‘CAN’ disability staff network to ensure our policies and processes are as inclusive as possible for disabled staff. We also support the mental health and wellbeing of staff through our Employee Assistance programme, the Mental Health and Wellbeing staff network, and trained Mental Health First Aiders.

Training, career development and promotion:

Disabled participants of the Future Leaders Scheme (FLS) are offered additional support through the Disability Empowers Leadership Talent (DELTA) scheme. DELTA is an accelerated development programme aimed at supporting disabled participants. A percentage of places on internal talent programmes are ring-fenced for those declaring a disability.

Trade union facility time

Facility time is time off for employees who are trade union (TU) representatives to carry out their TU roles. TU roles may be duties or activities. Reps are entitled to paid time off to carry out trade union duties. They are not entitled to paid time off for trade union activities. However, an employer can choose to pay for time off for activities.

Relevant union officials:
2024‑25
Total		 2023‑24
Total
Number of trade union representatives employed 20 22
Full-time equivalent 19 22
Percentage of time spent on facility time:

Working hours each representative spent on facility time.

2024‑25
Total		 2023‑24
Total
0% of working hours 11 9
1 – 50% of working hours 9 13
Percentage of pay bill spent on facility time:

Pay bill refers to the total for all employees, not union representatives only.

2024‑25
Total		 2023‑24
Total
Total cost of facility time (£) £69,892 £49,977
Total pay bill (£m) £343 £303
Facility time as a % of pay bill 0.02% 0.01%
2024‑25
Total		 2023‑24
Total
(Hours spent on paid trade union activities ÷ total paid facility time hours) * 100 2.87% 0.00%

Health, safety, and wellbeing

Building on the experience of the previous departments, we continued to provide a safe work environment. We ensured staff had the correct equipment and training to carry out their duties safely, both in the office and working from home.

In 2024-25, there were no reported accidents within ‘Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013’.

The wellbeing offers during the year included:

  • Stress management guidance
  • Resilience and mental health training
  • Health, wellbeing and disability campaigns
  • Access to the Employee Assistance Programme for confidential counselling
  • 225 trained Mental Health First Aiders
  • Staff networks to provide peer support

Equality, diversity and inclusion

Equality, Diversity and Inclusion matter to DESNZ. By drawing on a diverse range of skills, backgrounds and perspectives, we will be able to benefit from different experiences and ideas as well as transform to achieve our mission. During the year we have:

  • Launched our first multi-year Equality, Diversity and Inclusion strategy
  • Published our first departmental Equality Objectives
  • Published our first departmental Gender Pay Gap Report
  • Continued to improve our Inclusion and Fair Treatment score from 83% to 85%
  • Set clear goals to support under-represented groups of colleagues at more senior grades, including women, disabled colleagues and ethnic minority colleagues
  • Driven up confidence for colleagues to complete their diversity data across all areas, enabling us to take a data-led approach to EDI
  • Continued to enable our staff networks to support and represent colleagues
  • Continued to embed public sector equality duty obligations through implementing clear guidance and standards, incorporating equalities risks and issues into departmental governance arrangements, working strategically across the department on shared challenges, and providing regular training and bespoke support across policy areas

Staff redeployments

The table below shows the number of staff loaned and hosted as at 31 March 2025.

Staff loaned (outward staff loans) were staff permanently employed by the core department, who were on loan to another organisation. Staff hosted (inward staff loans) were those attached to the core department, who were on loan from other organisations.

As the home department, short-term costs relating to outward staff loans were charged to the administration budget, if the core department paid the cost.

The department does not currently hold information centrally to support the disclosure of average likely durations of redeployments.

Loans in

Non‑Payroll
Short‑term		 Non‑Payroll
Long‑term		 Payroll
Short‑term		 Payroll
Long‑term		 Total
Short‑term
total		 Total
Long‑term
total
EO 2 - - - 2 -
HEO 2 - - 6 2 6
SEO 4 - - 2 4 2
G7 2 - - 14 2 14
G6 2 - - 15 2 15
SCS 1 - - 4 1 4
Total 13 - - 41 13 41

Loans out

Non‑Payroll
Short‑term		 Non‑Payroll
Long‑term		 Payroll
Short‑term		 Payroll
Long‑term		 Total
Short‑term
total		 Total
Long‑term
total
EO - - - - - -
HEO - 2 - - - 2
SEO - 5 1 - 1 5
G7 - 3 - - - 3
G6 - 3 - - - 3
SCS - 2 - - - 2
Total - 15 1 - 1 15

Consultancy and temporary staff expenditure

The departmental group’s expenditure on consultancy in 2024–25 was £160.9m (2023–24: £122.9m). The consultancy expenditure relating to arm’s length bodies was £31.3m (2023–24: £23.5m) of which £11.2m (2023–24: £12.5m) was related to Site Licence Companies (SLCs).

Consultants are hired to work on projects in a number of specific situations:

  • where the department/body does not have the skill set required
  • where the requirement falls outside the core business of civil servants
  • where an external, independent perspective is required

When used appropriately, consultancy can be a cost effective and efficient way of getting the temporary and skilled external input that the department needs.

The departmental group’s expenditure on temporary staff in 2024–25 was £84m (2023–24: £73m), as detailed in the staff costs note below.

Off-payroll engagements

Off-payroll engagements refer to workers paid off-payroll, without deducting tax and national insurance at source, typically contractors.

SLCs are subsidiaries of the NDA and fall within the departmental accounting boundary. But they operate with a high degree of autonomy. SLCs’ high number of off-payroll workers represent a small proportion of the overall workforce. There is a need to bring in unique skills and experience which cannot be found in-house, due to the specialised, project driven nature of their work. Further information about NDA can be found within their annual report and accounts.

Table 1: Highly paid off-payroll worker engagements as at 31 March 2025, earning £245 per day or greater

Core department Others in the departmental group (no SLCs) Others in the departmental group (SLCs only) Entities outside the departmental group
No. of existing engagements as of 31 Mar 2025 192 334 671 -
Of which, no. that existed for:
less than 1 year		 124 143 175 -
Of which, no. that existed for:
between 1 and 2 years		 25 78 103 -
Of which, no. that existed for:
between 2 and 3 years		 5 45 51 -
Of which, no. that existed for:
between 3 and 4 years		 10 30 39 -
Of which, no. that existed for:
4 or more years		 28 38 303 -

Table 2: All highly paid off-payroll workers engaged at any point during the year ended 31 March 2025, earning £245 per day or greater

Core department Others in the departmental group (no SLCs) Others in the departmental group (SLCs only) Entities outside the departmental group
No. of temporary off-payroll workers engaged during the year ended 31 March 2025 192 445 858 1
Of which:
Not subject to off-payroll legislation		 - 319 599 -
Of which:
Subject to off-payroll legislation and determined as in-scope of IR35		 144 79 201 -
Of which:
Subject to off-payroll legislation and determined as out-ofscope of IR35		 48 47 58 1
No. of engagements reassessed for compliance or assurance purposes during the year - 2 28 -
Of which:
No. of engagements that saw a change to IR35 status following review		 - 2 28 -

Table 3: For any off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, between 1 April 2024 and 31 March 2025

Core department Others in the departmental group (no SLCs) Others in the departmental group (SLCs only) Entities outside the departmental group
No. of off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, during the financial year - 2 - -
Total no. 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. This figure should include both on payroll and offpayroll engagements. - 43 14 17
Details of the exceptional circumstances that led to the off-payroll engagement of board members/ senior officials with significant financial responsibility:

AEA Insurance Ltd: AEA Insurance Ltd (AEAIL) is a captive insurance company registered in the Isle of Man and subject to their tax and NI legislation. AEAIL does not employ anyone, so directors are off-payroll by default.

Exit packages – Civil Service and other compensation schemes (audited information)

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

Under the terms of section 4 of the Ministerial and Other Pensions and Salaries Act 1991, ministers who cease to hold office are entitled to receive a statutory payment equivalent to one-quarter of their annual salary.

Where the department has agreed early retirements, the additional costs are met by the department and not by the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table.

The table below shows the total cost of exit packages (including compulsory redundancies and other departures) for permanently employed staff and ministers, agreed and accounted for in 2024-25. Of this, £1,265,256 exit costs were paid during the year (2023-24: £2,145,285), the year of departure.

2024‑25
Number of compulsory redundancies		 2024‑25
Number of other departures agreed		 2024‑25
Total number of exit packages by cost band		 2023‑24
Number of other departures agreed		 2023‑24
Total number of exit packages by cost band
Less than £10,000 1 21 22 20 20
£10,000 – £25,000 1 8 9 8 8
£25,000 – £50,000 - 4 4 3 3
£50,000 – £100,000 1 11 12 7 7
£150,000 – £200,000 - - - 1 1
More than £200,000 - 1 1 - -
Total number 3 45 48 39 39
Of which:
Core department		 - 14 14 4 4
Of which:
NDPBs and other designated bodies		 3 31 34 35 35
Total number 3 45 48 39 39
Total cost (£) 58,005 1,353,053 1,411,058 960,785 960,785
Of which:
Core department		 - 567,135 567,135 226,234 226,234
Of which:
NDPBs and other designated bodies		 58,005 785,918 843,923 734,551 734,551
Total cost (£) 58,005 1,353,053 1,411,058 960,785 960,785

Remuneration report

Overview

The remuneration report sets out the remuneration policy and the amounts awarded to DESNZ ministers and directors. Just like the staff report, it is fundamental to demonstrating transparency and accountability to Parliament.

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 specify the circumstances when appointments may be made otherwise.

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

Further information about the work of the Civil Service Commission can be found at www.civilservicecommission.org.uk

Remuneration policy

Ministers:

Remuneration of ministers is determined in accordance with the provisions of the Ministerial and other Salaries Act 1975 (as amended by The Ministerial and other Salaries Order 1996) and the Ministerial and other Pensions and Salaries Act 1991.

Executive directors:

The Senior Salaries Review Body provides independent advice to the Prime Minister on the remuneration of senior civil servants. The review body considers economic considerations such as local variations in labour markets and funds available to departments. Further information about the work of the review body can be found at www.gov.uk/government/organisations/review-body-on-senior-salaries.

Ministers – single total figure of remuneration (audited information)

The table below shows each component, and the single total figure of remuneration for each minister in 2024-25. For members of the House of Commons, this only reflects their pay as a minister, separate from their pay as an MP. However, the arrangement for ministers in the House of Lords is different in that they do not receive a salary but rather an additional remuneration, which cannot be quantified separately from their ministerial salaries. This total remuneration, as well as the allowances to which they are entitled, is paid by the department, and is therefore shown in full in the figures below.

Where ministers have moved to or from another department during the year, details of any remuneration relating to their subsequent or prior roles will be in that department’s remuneration report. Ministers who transfer from another department continue being paid at the appropriate rate of pay with effect from the first day of the month following the date of appointment. Former ministers who transfer to other departments are paid at their current rate of pay up to the end of the month. Any increase in ministers’ salaries on transfer from the date of appointment is paid by their new department.

Secretary of State:

2024‑25
Salary [Note 1]
£		 2024‑25
Full year equivalent salary if different
£		 2024‑25
Pension benefits [Note 2]
to nearest £1,000		 2024‑25
Total
to nearest £1,000		 2023‑24
Salary [Note 1]
£		 2023‑24
Full year equivalent salary if different
£		 2023‑24
Pension benefits [Note 2]
to nearest £1,000		 2023‑24
Total
to nearest £1,000
The Rt Hon Ed Miliband MP (from 5 Jul 2024) 49,903 67,505 13,000 63,000 - - - -
The Rt Hon Claire Coutinho MP (to 5 Jul 2024)[Note 3] 34,660 67,505 4,000 39,000 39,559 67,505 10,000 50,000

Ministers of State:

2024‑25
Salary [Note 1]
£		 2024‑25
Full year equivalent salary if different
£		 2024‑25
Pension benefits [Note 2]
to nearest £1,000		 2024‑25
Total
to nearest £1,000		 2023‑24
Salary [Note 1]
£		 2023‑24
Full year equivalent salary if different
£		 2023‑24
Pension benefits [Note 2]
to nearest £1,000		 2023‑24
Total
to nearest £1,000
Sarah Jones MP (from 8 Jul 2024)[Note 4] 23,079 31,680 6,000 29,000 - - - -
The Rt Hon Lord Hunt of Kings Heath OBE (from 9 Jul 2025)[Note 5] - - - - - - - -
Justin Tomlinson MP (from 13 Apr to 5 Jul 2024)[Note 6] 15,210 31,680 2,000 17,000 - - - -
The Rt Hon Graham Stuart MP (to 12 Apr 2024)[Note 7] 8,976 31,680 - 9,000 31,680 - 8,000 40,000

Parliamentary Under-Secretaries of State:

2024‑25
Salary [Note 1]
£		 2024‑25
Full year equivalent salary if different
£		 2024‑25
Pension benefits [Note 2]
to nearest £1,000		 2024‑25
Total
to nearest £1,000		 2023‑24
Salary [Note 1]
£		 2023‑24
Full year equivalent salary if different
£		 2023‑24
Pension benefits [Note 2]
to nearest £1,000		 2023‑24
Total
to nearest £1,000
Miatta Fahnbulleh MP (from 9 Jul 2024) 16,300 22,375 4,000 20,000 - - - -
Kerry McCarthy MP (from 9 Jul 2024) 16,300 22,375 4,000 20,000 - - - -
Michael Shanks MP (from 9 Jul 2024) 16,300 22,375 4,000 20,000 - - - -
Lord Callanan (to 5 Jul 2024)[Note 8] 45,530 107,335 4,000 50,000 107,335 - 19,000 126,000
Andrew Bowie MP (to 5 Jul 2024)[Note 9] 11,487 22,375 1,000 12,000 22,375 - 6,000 28,000
Amanda Solloway MP (to 5 Jul 2024)[Note 10] - - - - - - - -

Notes:

1. Salary information excludes employer national insurance contributions. None of the ministers of the department received benefits in kind during the year. Minsters in the House of Commons are remunerated on a different basis to those in the House of Lords as explained in notes to the remuneration report.

2. The value of pension benefits accrued during the year is calculated as (real increase in pension multiplied by 20) less (contributions made by the individual). Real increase excludes increases due to inflation or any increase or decrease due to transfer of pension rights.

3. The Rt Hon Claire Coutinho salary includes £16,876 statutory payment on cessation of Ministerial office.

4. Sarah Jones MP Jointly Minister of State at Department for Business and Trade but paid by DESNZ

5. The Rt Hon Lord Hunt of Kings Heath OBE does not draw salary or pension benefits.

6. Justin Tomlinson MP salary includes £7,920 statutory payment on cessation of Ministerial office.

7. The Rt Hon Graham Stuart MP salary includes £7,920 statutory payment on cessation of Ministerial office.

8. Lord Callanan salary includes £36,366 Lords Office Holders Allowance and £17,742 statutory payment on cessation of Ministerial office.

9. Andrew Bowie MP salary includes £5,593 statutory payment on cessation of Ministerial office.

10. Amanda Solloway MP was not remunerated for the Parliamentary Under Secretary of State DESNZ role. Government Whip, Lord Commissioner of HM Treasury role was paid by HM Treasury which included £4,479 statutory payment on cessation of Ministerial office.

Ministers – pension benefits (audited information)

The table below shows the pension entitlements for each minister.

Secretary of State:

Pension benefits at age 65 as at 31 March 2025
£’000		 Real increase in pension at age 65
£’000		 CETV at 31 March 2025 [Note 1]
£’000		 CETV at 31 March 2024 [Note 1]
£’000		 Real increase in CETV
£’000
The Rt Hon Ed Miliband MP (from 5 Jul 2024) 15‑20 0‑2.5 317 294 9
The Rt Hon Claire Coutinho MP (to 5 Jul 2024) 0‑5 0‑2.5 17 14 2

Ministers of State:

Pension benefits at age 65 as at 31 March 2025
£’000		 Real increase in pension at age 65
£’000		 CETV at 31 March 2025 [Note 1]
£’000		 CETV at 31 March 2024 [Note 1]
£’000		 Real increase in CETV
£’000
Sarah Jones MP (from 9 Jul 2024) 0‑5 0‑2.5 7 - 4
The Rt Hon Lord Hunt of Kings Heath OBE (from 9 Jul 2024)2 - - - - -
Justin Tomlinson MP (from 13 Apr to 5 Jul 2024) 0‑5 0‑2.5 41 38 1
The Rt Hon Graham Stuart MP (to 12 Apr 2024) 5‑10 0‑2.5 115 115 -

Parliamentary Under-Secretaries of State:

Pension benefits at age 65 as at 31 March 2025
£’000		 Real increase in pension at age 65
£’000		 CETV at 31 March 2025 [Note 1]
£’000		 CETV at 31 March 2024 [Note 1]
£’000		 Real increase in CETV
£’000
Miatta Fahnbulleh MP (from 9 Jul 2024) 0‑5 0‑2.5 4 - 2
Kerry McCarthy MP (from 9 Jul 2024) 0‑5 0‑2.5 25 20 4
Michael Shanks MP (from 9 Jul 2024) 0‑5 0‑2.5 4 - 2
Lord Callanan (to 5 Jul 2024) 10‑15 0‑2.5 204 198 4
Andrew Bowie MP (to 5 Jul 2024) 0‑5 0‑2.5 9 7 1
Amanda Solloway MP (to 5 Jul 2024) [Note 2] - - - - -

Notes:

1. Where ministers joined or left during the year, their CETV opening or closing amounts are as at their joining or leaving dates. See Notes to the remuneration report for explanation of CETV.

2. Does not draw salary or pension benefits from DESNZ.

Senior officials – single total figure of remuneration (audited information)

The table below shows each component, and the single total figure of remuneration for each senior official in 2024-25. Senior officials comprise members of the departmental board.

Where officials have moved to or from a similar senior role in another department during the year, details of any remuneration relating to their subsequent or prior roles will be in that department’s remuneration report.

Permanent secretary:

2024‑25
Salary [Note 1]
£’000		 2024‑25
Full year equivalent salary if different
£’000		 2024‑25
Bonus
£’000		 2024‑25
Pension [Note 2]
to nearest £1,000		 2024‑25
Total
£’000		 2023‑24
Salary [Note 1]
£’000		 2023‑24
Full year equivalent salary if different
£’000		 2023‑24
Bonus
£’000		 2023‑24
Pension [Notes 2, 3]
to nearest £1,000		 2023‑24
Total
£’000
Jeremy Pocklington 180-185 - 15-20 97 295-300 170-175 - 15-20 112 300-305
Clive Maxwell 165-170 - - 41 210-215 165-170 - - 43 210-215

Director General:

2024‑25
Salary [Note 1]
£’000		 2024‑25
Full year equivalent salary if different
£’000		 2024‑25
Bonus
£’000		 2024‑25
Pension [Note 2]
to nearest £1,000		 2024‑25
Total
£’000		 2023‑24
Salary [Note 1]
£’000		 2023‑24
Full year equivalent salary if different
£’000		 2023‑24
Bonus
£’000		 2023‑24
Pension [Notes 2, 3]
to nearest £1,000		 2023‑24
Total
£’000
Lee McDonough 150-155 - 10-15 68 235-240 145-150 - 5-10 51 205-210
Jonathan Mills 160-165 - 5-10 95 260-265 150-155 - 5-10 60 220-225

Director:

2024‑25
Salary [Note 1]
£’000		 2024‑25
Full year equivalent salary if different
£’000		 2024‑25
Bonus
£’000		 2024‑25
Pension [Note 2]
to nearest £1,000		 2024‑25
Total
£’000		 2023‑24
Salary [Note 1]
£’000		 2023‑24
Full year equivalent salary if different
£’000		 2023‑24
Bonus
£’000		 2023‑24
Pension [Notes 2, 3]
to nearest £1,000		 2023‑24
Total
£’000
David Thomas 125-130 135-140 10-15 84 220-225 120-125 125-130 15-20 195 330-335

Notes:

1. Salary information excludes employer national insurance contributions. Departure costs have been 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 of departure. Where officials have moved to or from a similar senior role in another department during the year, details of any remuneration relating to their subsequent or prior roles will be in that department’s remuneration report.

2. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.

3. The pension benefits of any members affected by the public service pensions remedy which were reported in 2022-23 on the basis of alpha membership for the period between 1 April 2015 and 31 March 2022 are reported since 2023-24 based on PCSPS membership for the same period.

Senior officials – pension benefits (audited information)

The table below shows the pension entitlements for each senior official for the year ending 2025. Senior officials comprise members of the departmental board.

Permanent secretary:

Accrued pension at pension age as at 31 March 2025 and related lump sum [Note 3]
£’000		 Real increase in pension and related lump sum at pension age
£’000		 CETV at 31 March 2025 [Note 1]
£’000		 CETV at 31 March 2024 [Notes 1, 2]
£’000		 Real increase in CETV
£’000		 Employer contribution to partnership pension account
Nearest £100
Jeremy Pocklington 85 – 90 plus a lump sum of 35 – 40 5 – 7.5 plus a lump sum of 0 – 2.5 1,672 1,515 86 -
Clive Maxwell 75 – 80 plus a lump sum of 185 – 190 2.5 – 5 plus a lump sum of 0 1,639 1,549 19 -

Director General:

Accrued pension at pension age as at 31 March 2025 and related lump sum [Note 3]
£’000		 Real increase in pension and related lump sum at pension age
£’000		 CETV at 31 March 2025 [Note 1]
£’000		 CETV at 31 March 2024 [Notes 1, 2]
£’000		 Real increase in CETV
£’000		 Employer contribution to partnership pension account
Nearest £100
Lee McDonough 70 – 75 plus a lump sum of 170 – 175 2.5 – 5 plus a lump sum of 7.5 – 10 1,630 1,546 68 -
Jonathan Mills 55 – 60 plus a lump sum of 135 – 140 5 – 7.5 plus a lump sum of 2.5 – 5 1,126 1,006 69 -

Director:

Accrued pension at pension age as at 31 March 2025 and related lump sum [Note 3]
£’000		 Real increase in pension and related lump sum at pension age
£’000		 CETV at 31 March 2025 [Note 1]
£’000		 CETV at 31 March 2024 [Notes 1, 2]
£’000		 Real increase in CETV
£’000		 Employer contribution to partnership pension account
Nearest £100
David Thomas 60 – 65 2.5 – 5 1,050 949 58 -

Notes:

1. Where senior officials joined or left during the year, their CETV opening or closing amounts are as at their joining or leaving dates.

See Notes to the remuneration report for explanation of CETV.

2. The pension benefits of any members affected by the public service pensions remedy which were reported in 2022-23 on the basis of alpha membership for the period between 1 April 2015 and 31 March 2022 have been reported since 2023-24 based on PCSPS membership for the same period.

3. Accrued pension benefits included in this table for any individual affected by the Public Service Pensions Remedy have been calculated based on their inclusion in the legacy scheme for the period between 1 April 2015 and 31 March 2022, following the McCloud judgment. The Public Service Pensions Remedy applies to individuals that were members, or eligible to be members, of a public service pension scheme on 31 March 2012 and were members of a public service pension scheme between 1 April 2015 and 31 March 2022. The basis for the calculation reflects the legal position that impacted members have been rolled back into the relevant legacy scheme for the remedy period and that this will apply unless the member actively exercises their entitlement on retirement to decide instead to receive benefits calculated under the terms of the Alpha scheme for the period from 1 April 2015 to 31 March 2022.

Non-executive board members – fee entitlements (audited information)

The table below shows fee entitlements for non-executive directors who were members of the departmental board.

2024-25
Fee entitlement
£’000		 2024-25
Full year equivalent if different
£’000		 2023-24
Fee entitlement
£’000		 2023-24
Full year equivalent if different
£’000
Humphrey Cadoux-Hudson [Note 1] 20‑25 - 0‑5 20‑25
Vikas Shah [Note 2] 30‑35 20‑25 25‑30 -
Dame Mary Archer 15‑20 - 0‑5 15‑20
Peter Mather (to 29 Mar 2025) 20‑25 - 30‑35 -

Notes:

1. Lead Non-Executive Board Member for Department for Energy Security and Net Zero (DESNZ).

2. Audit and Risk Assurance Committee Chair for DESNZ. £10k arrears paid in 2024-25

Fair pay disclosure (audited information)

The narrative below shows the relationship during the year ending 31 March 2025 between the remuneration of the highest-paid director and the median remuneration of the workforce across DESNZ. Remuneration figures include salary, non-consolidated performance-related pay and benefits-in-kind. They do not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

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

The banded remuneration of the highest-paid director in DESNZ in 2024-25 was £195,000 – £200,000 (2023-24: £190,000-£195,000). This was 3.44 times (2023-24: 3.66) the median remuneration of the workforce, which was £57,447 (2023-24: £52,655).

In 2024-25, 21 (2023-24: 18) employees received remuneration in excess of the highest-paid director. Remuneration ranged from £18,465 to £323,840 (2023-24: £17,973-£268,180).

The median pay ratio for the relevant financial year is consistent with the pay, reward and progression policies for the entity’s employees taken as a whole. The increase in median remuneration of the workforce is due to the full reflection of a prior year pay increase, plus the in year pay increase for employees. This impacted principally medium to lower pay scales in the department.

The tables below show the percentage change from previous year in total salary and allowances and performance pay and bonuses for the highest paid director and for staff average.

2024-25

Highest paid director Staff average
Salary and allowances 3% 10%
Performance pay and bonuses 0% (14)%

2023-24

Highest paid director Staff average
Salary and allowances 3% 7%
Performance pay and bonuses 100% 11%

Notes:

  1. Highest paid director did not receive a bonus in 2024-25.

The below table shows the ratio between the highest paid directors’ total remuneration and the lower, median, and upper quartile for staff total pay and benefits for 2024-25, with comparatives for 2023-24. The slight decrease in ratio is due to the completion of the DESNZ Pay Award 2023 implementation in 2024-25, and a further increase for the Pay Award paid as at 1 August 2024.

2024‑25
Lower quartile		 2024‑25
Median		 2024‑25
Upper quartile		 2023‑24
Lower quartile		 2023‑24
Median		 2023‑24
Upper quartile
Total pay and benefits 45,021 57,447 66,714 39,793 52,646 61,125
Ratio 4.39:1 3.44:1 2.96:1 4.84:1 3.66:1 3.15:1
Salary 43,162 51,540 62,955 38,405 46,704 56,500

Notes to the remuneration report

The information in the remuneration report relates solely to the core department. Similar information relating to chief executives and most senior managers of other bodies of the departmental family is given in the individual annual reports and accounts of the relevant bodies.

Single total figure of remuneration

Salary:

‘Salary’ includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the department and thus recorded in these accounts.

In respect of ministers in the House of Commons, departments bear only the cost of the additional ministerial remuneration; the salary for their services as an MP is £91,346 (from 1 April 2024) and various allowances to which they are entitled are borne centrally. However, the arrangement for ministers in the House of Lords is different in that they do not receive a salary but rather an additional remuneration, which cannot be quantified separately from their ministerial salaries. This total remuneration, as well as the allowances to which they are entitled, is paid by the department, and is therefore shown in full in the figures above.

Bonuses:

Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses relate to the performance in the year in which they become payable to the individual. The bonuses reported in 2024-25 relate to performance in 2023-24 and the comparative bonuses reported for 2023-24 relate to performance in 2022-23.

Pension benefits

Ministerial pensions:

Pension benefits for ministers are provided by the Parliamentary Contributory Pension Fund (PCPF). The scheme is made under statute and the rules are set out in the Ministers’ etc. Pension Scheme 2015, available at https://mypcpfpension.co.uk/wp-content/uploads/2019/09/ministerial-pension-scheme-rules.pdf.

Those ministers who are Members of Parliament may also accrue an MP’s pension under the PCPF (details of which are not included in this report).

Benefits for ministers are payable from State Pension age under the 2015 scheme. Pensions are re-valued annually in line with Pensions Increase legislation both before and after retirement. The contribution rate from May 2015 is 11.1% and the accrual rate is 1.775% of pensionable earnings.

The figure shown for pension value includes the total pension payable to the member under both the pre and post-2015 ministerial pension schemes.

Ministerial pensions – the Cash Equivalent Transfer Value (CETV):

This is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the pension benefits, they have accrued in their former scheme.

The pension figures shown relate to the benefits that the individual has accrued because of their total ministerial service, not just their current appointment as a minister. CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Ministerial pensions – the real increase in the value of the CETV:

This is the element of the increase in accrued pension funded by the Exchequer. It excludes increases due to inflation and contributions paid by the minister. It is worked out using common market valuation factors for the start and end of the period.

Civil Service pensions:

Pension benefits are provided through the Civil Service pension arrangements. Before 1 April 2015, the only scheme was the Principal Civil Service Pension Scheme (PCSPS), which is divided into a few different sections – classic, premium, and classic plus provide benefits on a final salary basis, whilst nuvos provides benefits on a career average basis. 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. All newly appointed civil servants, and the majority of those already in service, joined the new scheme.

The PCSPS and alpha are unfunded statutory schemes. Employees and employers make contributions (employee contributions range between 4.6% and 8.05%, depending on salary). The balance of the cost of benefits in payment is met by monies voted by Parliament each year. Pensions in payment are increased annually in line with the Pensions Increase legislation. Instead of the defined benefit arrangements, employees may opt for a defined contribution pension with an employer contribution, the partnership pension account.

In alpha, pension builds up at a rate of 2.32% of pensionable earnings each year, and the total amount accrued is adjusted annually in line with a rate set by HM Treasury. Members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004. All members who switched to alpha from the PCSPS had 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.

The accrued pensions shown in this report are the pension the member is entitled to receive when they reach normal pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over normal pension age. Normal pension age is 60 for members of classic, premium, and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. The pension figures in this report show pension earned in PCSPS or alpha – as appropriate. Where a member has benefits in both the PCSPS and alpha, the figures show the combined value of their benefits in the 2 schemes but note that the constituent parts of that pension may be payable from different ages.

When the government introduced new public service pension schemes in 2015, there were transitional arrangements which treated existing scheme members differently based on their age. Older members of the PCSPS remained in that scheme, rather than moving to alpha. In 2018, the Court of Appeal found that the transitional arrangements in the public service pension schemes unlawfully discriminated against younger members (the ‘McCloud judgment’).

As a result, steps are being taken to remedy those 2015 reforms, making the pension scheme provisions fair to all members. The Public Service Pensions Remedy is made up of 2 parts. The first part closed the PCSPS on 31 March 2022, with all active members becoming members of alpha from 1 April 2022. The second part removes the age discrimination for the remedy period, between 1 April 2015 and 31 March 2022, by moving the membership of eligible members during this period back into the PCSPS on 1 October 2023.

Further details about the Public Service Pensions Remedy can be found at the website www.gov.uk/government/collections/how-the-public-service-pension-remedy-affects-your-pension.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Master trust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member).

The employee does not have to contribute but, where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally provided risk benefit cover (death in service and ill health retirement).

Further details about the Civil Service pension arrangements can be found at the website www.civilservicepensionscheme.org.uk.

Civil service pensions – Cash Equivalent Transfer Values:

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost.

CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Civil service pensions – Real increase in CETV:

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Parliamentary accountability report

Statement of Outturn against Parliamentary Supply (audited information)

Overview

In addition to the primary statements prepared under IFRS, the ‘Government Financial Reporting Manual (FReM)’ requires the Department for Energy Security and Net Zero to prepare a Statement of Outturn against Parliamentary Supply (SOPS) and supporting notes.

The SOPS and related notes are subject to audit, as detailed in the certificate and Report of the Comptroller and Auditor General to the House of Commons.

The SOPS is a key accountability statement that shows, in detail, how an entity has spent against their supply estimate. Supply is the monetary provision (for resource and capital purposes) and cash (drawn primarily from the Consolidated Fund), that Parliament gives statutory authority for entities to utilise. The estimate details supply and is voted on by Parliament at the start of the financial year.

Should an entity exceed the limits set by their supply estimate, called control limits, their accounts will receive a qualified opinion.

The format of the SOPS mirrors the supply estimates, published on gov.uk, to enable comparability between what Parliament approves and the final outturn.

The SOPS contain a summary table, detailing performance against the control limits that Parliament have voted on, cash spent (budgets are compiled on an accruals basis and so outturn will not exactly tie to cash spent) and administration.

Non-voted Budgets generally comprise CFERs (Consolidated Fund Extra Receipts) that represent operating income or expenditure financed directly from the Consolidated Fund as a standing service or from the National Insurance Fund. Non-voted expenditure does not require Parliamentary authority, but is included within budgets set by HMT for completeness.

Estimates and outturn spend are disclosed gross (gross expenditure and income) for activities of the core department and net for the activities of the departmental group’s arm’s length bodies.

The supporting notes on pages 113 to 123 detail the following: outturn by estimate line, providing a more detailed breakdown (note 1); a reconciliation of Outturn to Net operating expenditure in the SoCNE, to tie the SOPS to the financial statements (note 2); a reconciliation of Outturn to Net cash requirement (note 3); and an analysis of income payable to the Consolidated Fund (note 4).

The SOPS and estimates are compiled against the budgeting framework, which is similar to, but different from, IFRS. An understanding of the budgeting framework and an explanation of key terms is provided on page 41, in the ‘financial review’ section of the performance report. Further information on the public spending framework and the reasons why budgeting rules are different to IFRS can also be found in chapter 1 of the Consolidated Budgeting Guidance, available on gov.uk.

The SOPS provides a detailed view of financial performance, in a form that is voted on and recognised by Parliament. The financial review, in the performance report, provides a summarised discussion of outturn against estimate and functions as an introduction to the SOPS disclosures.

Summary table 2024-25

Figures in the areas outlined in thick line cover the voted control limits voted by Parliament. Refer to the Supply Estimates guidance manual, available on gov.uk, for detail on the control limits voted by Parliament. Significant variances between Outturn and the Estimate are explained in the financial review on pages 42 to 43.

Departmental Expenditure Limit:

SOPS note Outturn:
Voted
£’000		 Outturn:
Non-voted
£’000		 Outturn:
Total
£’000		 Estimate:
Voted
£’000		 Estimate:
Non-voted
£’000		 Estimate:
Total
£’000		 Outturn vs Estimate: saving/ (excess):
Voted
£’000		 Outturn vs Estimate: saving/ (excess):
Total
£’000		 2023-24 Outturn:
Total
£’000
Resource Note 1.1 2,609,552 (1,146,825) 1,462,726 2,814,846 (1,158,319) 1,656,527 205,294 193,800 1,376,334
Capital Note 1.2 5,240,711 (74) 5,240,637 5,790,283 - 5,790,283 549,572 549,646 5,127,445
Total DEL - 7,850,263 (1,146,899) 6,703,363 8,605,129 (1,158,319) 7,446,810 754,866 743,446 6,503,779

Annually Managed Expenditure:

SOPS note Outturn:
Voted
£’000		 Outturn:
Non-voted
£’000		 Outturn:
Total
£’000		 Estimate:
Voted
£’000		 Estimate:
Non-voted
£’000		 Estimate:
Total
£’000		 Outturn vs Estimate: saving/ (excess):
Voted
£’000		 Outturn vs Estimate: saving/ (excess):
Total
£’000		 2023-24 Outturn:
Total
£’000
Resource Note 1.1 8,998,194 - 8,998,194 56,123,360 - 56,123,360 47,125,166 47,125,166 (13,546,623)
Capital Note 1.2 48,293 - 48,293 218,118 - 218,118 169,825 169,825 (59,911)
Total AME - 9,046,487 - 9,046,487 56,341,478 - 56,341,478 47,294,991 47,294,991 (13,606,534)

Total budget:

SOPS note Outturn:
Voted
£’000		 Outturn:
Non-voted
£’000		 Outturn:
Total
£’000		 Estimate:
Voted
£’000		 Estimate:
Non-voted
£’000		 Estimate:
Total
£’000		 Outturn vs Estimate: saving/ (excess):
Voted
£’000		 Outturn vs Estimate: saving/ (excess):
Total
£’000		 2023-24 Outturn:
Total
£’000
Resource Note 1.1 11,607,746 (1,146,825) 10,460,921 58,938,206 (1,158,319) 57,779,887 47,330,460 47,318,966 (12,170,289)
Capital Note 1.2 5,289,004 (74) 5,288,930 6,008,401 - 6,008,401 719,397 719,471 5,067,534
Total budget expenditure - 16,896,750 (1,146,899) 15,749,851 64,946,607 (1,158,319) 63,788,288 48,049,857 48,038,437 (7,102,755)

Total budget and non‑budget:

SOPS note Outturn:
Voted
£’000		 Outturn:
Non-voted
£’000		 Outturn:
Total
£’000		 Estimate:
Voted
£’000		 Estimate:
Non-voted
£’000		 Estimate:
Total
£’000		 Outturn vs Estimate: saving/ (excess):
Voted
£’000		 Outturn vs Estimate: saving/ (excess):
Total
£’000		 2023-24 Outturn:
Total
£’000
Total budget and non‑budget - 16,896,750 (1,146,899) 15,749,851 64,946,607 (1,158,319) 63,788,288 48,049,857 48,038,437 (7,102,755)

Net cash requirement 2024-25

SOPS note Outturn
£’000		 Estimate
£’000		 2024‑25
Outturn vs Estimate: saving/(excess)
£’000		 Outturn total
£’000
Net cash requirements 3 9,198,480 11,199,646 2,001,166 12,774,130

Administration costs 2024-25

SOPS note Outturn
£’000		 Estimate
£’000		 2024‑25
Outturn vs Estimate: saving/(excess)
£’000		 Outturn total Restated
£’000
Administration costs 1.1 399,650 424,032 24,382 396,967

Although not a separate voted limit, any breach of the administration budget, will also result in an excess vote.

Notes to the SOPS 2024-25 (audited information)

SOPS 1. Outturn detail, by estimate line

SOPS 1.1 Analysis of resource outturn by estimate line

Significant variances between outturn and estimate are explained in the financial review on pages 42 to 43.

Spending in Departmental Expenditure Limits (DEL)

Resource outturn:
Administration, Gross
£’000		 Resource outturn:
Administration, Income
£’000		 Resource outturn:
Administration, Net
£’000		 Resource outturn:
Programme, Gross
£’000		 Resource outturn:
Programme, Income
£’000		 Resource outturn:
Programme, Net
£’000		 Resource outturn:
Total
£’000		 Estimate:
Total
£’000		 Estimate:
Virements
£’000		 Estimate:
Total inc. virements
£’000		 2024‑25
Outturn vs Estimate: saving/ (excess)
£’000		 2023‑24
Total
£’000
Voted expenditure                        
A:
Delivering affordable energy for households and businesses		 - - - 195,520 (4,906) 190,614 190,614 256,565 - 256,565 65,951 138,697
B:
Ensuring that our energy system is reliable and secure		 - - - 100,802 (8,424) 92,378 92,378 82,553 9,825 92,378 - (190,125)
C:
Taking action on climate change and decarbonisation		 - - - 176,141 (2,071) 174,070 174,070 169,291 4,779 174,070 - 141,619
D:
Managing our energy legacy safely and responsibly		 - - - 160,954 (2,625) 158,329 158,329 168,067 - 168,067 9,738 174,616
E:
Science and research		 - - - 3,036 - 3,036 3,036 3,224 - 3,224 188 3,029
F:
Capability		 417,334 (59,288) 358,046 29,427 (1,539) 27,888 385,934 464,589 (9,550) 455,039 69,105 382,731
G:
Ensuring that our energy system is reliable and secure (ALB) net		 - - - 5,816 - 5,816 5,816 44,005 - 44,005 38,189 9,880
H:
Taking action on climate change and decarbonisation (ALB) net		 7,511 - 7,511 33,784 - 33,784 41,295 54,782 (9,825) 44,957 3,662 37,164
I:
Managing our energy legacy safely and responsibly (ALB) net		 2,585 - 2,585 57,825 - 57,825 60,410 58,300 4,771 63,071 2,661 57,303
J:
Science and research (ALB) net		 - - - 13,299 - 13,299 13,299 16,721 - 16,721 3,422 10,604
K:
Government as shareholder (ALB) net		 8 - 8 - - - 8 50 - 50 42 41
L:
NDA and SLC expenditure (ALB) net		 31,500 - 31,500 1,452,862 - 1,452,862 1,484,362 1,496,699 - 1,496,699 12,337 1,582,949
Total voted DEL 458,938 (59,288) 399,650 2,229,466 (19,565) 2,209,901 2,609,551 2,814,846 - 2,814,846 205,295 2,348,147
Non-voted expenditure                        
M:
Nuclear Decommissioning Authority income (CFER)		 - - - - (1,146,825) (1,146,825) (1,146,825) (1,158,319) - (1,158,319) (11,494) (971,813)
Total non-voted DEL - - - - (1,146,825) (1,146,825) (1,146,825) (1,158,319) - (1,158,319) (11,494) (971,813)
Total spending in DEL 458,938 (59,288) 399,650 2,229,466 (1,166,390) 1,063,076 1,462,726 1,656,527 - 1,656,527 193,801 1,376,334

Spending in Annually Managed Expenditure (AME)

Resource outturn:
Administration, Gross
£’000		 Resource outturn:
Administration, Income
£’000		 Resource outturn:
Administration, Net
£’000		 Resource outturn:
Programme, Gross
£’000		 Resource outturn:
Programme, Income
£’000		 Resource outturn:
Programme, Net
£’000		 Resource outturn:
Total
£’000		 Estimate:
Total
£’000		 Estimate:
Virements
£’000		 Estimate:
Total inc. virements
£’000		 2024‑25
Outturn vs Estimate: saving/ (excess)
£’000		 2023‑24
Total
£’000
Voted expenditure                        
N:
Delivering affordable energy for households and businesses		 - - - (72,179) (2,234) (74,413) (74,413) 422,000 (23,446) 398,554 472,967 831,888
O:
Ensuring that our energy system is reliable and secure		 - - - (21,083) (24,339) (45,422) (45,422) - - - 45,422 (437,044)
P:
Taking action on climate change and decarbonisation		 - - - 11,009 - 11,009 11,009 (490) 11,499 11,009 - 18,024
Q:
Managing our energy legacy safely and responsibly		 - - - (137,931) (11,962) (149,893) (149,893) (139,853) - (139,853) 10,040 (128,023)
R:
Science and research		 - - - 18,929 - 18,929 18,929 32,668 - 32,668 13,739 (16,192)
S:
Capability		 - - - (4,450) - (4,450) (4,450) (308) - (308) 4,142 3,192
T:
Renewable Heat Incentive		 - - - 1,213,370 - 1,213,370 1,213,370 1,203,000 10,370 1,213,370 - 1,218,131
U:
Ensuring that our energy system is reliable and secure (ALB) net		 - - - 8,571 - 8,571 8,571 6,994 1,577 8,571 - -
V:
Taking action on climate change and decarbonisation (ALB) net		 - - - 2,413,619 - 2,413,619 2,413,619 33,206,000 - 33,206,000 30,792,381 4,009,238
W:
Managing our energy legacy safely and responsibly (ALB) net		 - - - 118,672 - 118,672 118,672 1,470,934 - 1,470,934 1,352,262 (587,756)
X:
Science and research (ALB) net		 - - - (1,815) - (1,815) (1,815) 2,415 - 2,415 4,230 504
Y:
Government as shareholder (ALB) net		 - - - (83,577) - (83,577) (83,577) (80,000) - (80,000) 3,577 (86,285)
Z:
Nuclear Decommissioning Authority (ALB) net		 - - - 5,573,594 - 5,573,594 5,573,594 20,000,000 - 20,000,000 14,426,406 (18,371,822)
Deliver an ambitious industrial strategy - - - - - - - - - - - (478)
Total voted AME - - - 9,036,729 (38,535) 8,998,194 8,998,194 56,123,360 - 56,123,360 47,125,166 (13,546,623)
Non-voted expenditure                        
Total spending in AME - - - 9,036,729 (38,535) 8,998,194 8,998,194 56,123,360 - 56,123,360 47,125,166 (13,546,623)
Total resource 458,938 (59,288) 399,650 11,266,195 (1,204,925) 10,061,270 10,460,920 57,779,887 - 57,779,887 47,318,967 (12,170,289)
Non-budget: voted                        
Total Resource and non-budget spending 458,938 (59,288) 399,650 11,266,195 (1,204,925) 10,061,270 10,460,920 57,779,887 - 57,779,887 47,318,967 (12,170,289)

The total Estimate columns include virements. Virements are the reallocation of provision in the Estimates that do not require parliamentary authority (because Parliament does not vote to that level of detail and delegates to H M Treasury). Further information on virements is provided in the Supply Estimates Manual, available on GOV.UK.

The Outturn vs Estimate column is based on the total including virements. The Estimate total before virements have been made is included so that users can tie the Estimate back to the Estimates laid before Parliament.

SOPS 1.2. Analysis of capital Outturn by Estimate line

Spending in Departmental Expenditure Limit (DEL)

Capital Outturn:
Gross
£’000		 Capital Outturn:
Income
£’000		 Capital Outturn:
Net total
£’000		 Estimate:
Total
£’000		 Estimate:
Virements
£’000		 Estimate:
Total inc. virements
£’000		 2024-25
Outturn vs Estimate, savings/ (excess)
£’000		 2024-25
Outturn
Total
£’000
Voted expenditure                
A:
Delivering affordable energy for households and businesses		 1,329,074 (69,703) 1,259,371 1,451,170 - 1,451,170 191,799 706,012
B:
Ensuring that our energy system is reliable and secure		 812,603 (2,837,862) (2,025,259) (2,049,124) 23,865 (2,025,259) - (325,713)
C:
Taking action on climate change and decarbonisation		 707,799 (1,511) 706,288 1,441,827 (524,103) 917,724 211,436 613,699
D:
Managing our energy legacy safely and responsibly		 17,373 (243) 17,130 12,211 4,919 17,130 - 7,474
E:
Science and research		 70,464 - 70,464 32,265 38,199 70,464 - 28,576
F:
Capability		 26,012 - 26,012 12,829 13,183 26,012 - 133,676
G:
Ensuring that our energy system is reliable and secure (ALB) net		 1,688,707 - 1,688,707 1,832,100 - 1,832,100 143,393 1,274,171
H:
Taking action on climate change and decarbonisation (ALB) net		 446,064 - 446,064 10,842 435,222 446,064 - 3,602
I:
Managing our energy legacy safely and responsibly (ALB) net		 31,711 - 31,711 34,655 - 34,655 2,944 16,904
J:
Science and research (ALB) net		 382,791 - 382,791 374,282 8,509 382,791 - 277,053
L:
NDA and SLC expenditure (ALB) net		 2,637,432 - 2,637,432 2,637,226 206 2,637,432 - 2,392,120
Total voted DEL 8,150,030 (2,909,319) 5,240,711 5,790,283 - 5,790,283 549,572 5,127,574
Non-voted expenditure                
M:
Nuclear Decommission-ing Authority income (CFER)		 - (74) (74) - - - 74 (129)
Total non-voted DEL - (74) (74) - - - 74 (129)
Total spending in DEL 8,150,030 (2,909,393) 5,240,637 5,790,283 - 5,790,283 549,646 5,127,445

Spending in Annually Managed Expenditure (AME)

Capital Outturn:
Gross
£’000		 Capital Outturn:
Income
£’000		 Capital Outturn:
Net total
£’000		 Estimate:
Total
£’000		 Estimate:
Virements
£’000		 Estimate:
Total inc. virements
£’000		 2024-25
Outturn vs Estimate, savings/ (excess)
£’000		 2024-25
Outturn
Total
£’000
Voted expenditure                
O:
Ensuring that our energy system is reliable and secure		 - - - 205,000 (38,967) 166,033 166,033 -  
P:
Taking action on climate change and decarbonisation		 - - - - - - - -
Q:
Managing our energy legacy safely and responsibly		 - - - - - - - 14,099
R:
Science and research		 - - - - - - - 76,500
U:
Ensuring that our energy system is reliable and secure (ALB) net		 51,967 - 51,967 13,000 38,967 51,967 - -
V:
Taking action on climate change and decarbonisation (ALB) net		 - - - 118 - 118 118 (74)
W:
Managing our energy legacy safely and responsibly (ALB) net		 - - - - - - - (225)
X:
Science and research (ALB) net		 (3,674) - (3,674) - - - 3,674 (7,811)
Total voted AME 48,293 - 48,293 218,118 - 218,118 169,825 82,489
Non-voted expenditure                
Y:
Managing our energy legacy safely and responsibly (CFER)		 - - - - - - - (142,400)
Total non-voted AME - - - - - - - (142,400)
Total spending in AME 48,293 - 48,293 218,118 - 218,118 169,825 (59,911)
Total capital 8,198,323 (2,909,393) 5,288,930 6,008,401 - 6,008,401 719,471 5,067,534
Non-budget                
Total capital and non-budget spending 8,198,323 (2,909,393) 5,288,930 6,008,401 - 6,008,401 719,471 5,067,534

Notes:

The total Estimate columns include virements. Virements are the reallocation of provision in the Estimates that do not require parliamentary authority (because Parliament does not vote to that level of detail and delegates to H M Treasury). Further information on virements is provided in the Supply Estimates Manual, available on GOV.UK.

The Outturn vs Estimate column is based on the total including virements. The Estimate total before virements have been made is included so that users can tie the Estimate back to the Estimates laid before Parliament.

Significant variances between Outturn and Estimate are explained in the financial review on pages 42 to 43.

SOPS 2. Reconciliation of outturn to net operating expenditure

As noted in the overview to the SOPS, outturn and the Estimates are prepared in accordance with the budgeting framework – which is similar to, but differs from, I F R S. Therefore, this reconciliation bridges the resource outturn to net operating expenditure, linking the SOPS to the financial statements.

The prior year comparatives present the net operating expenditure as reported at 31 March 2024.

SOPS note 2024‑25
Outturn total
£’000		 2023‑24
Outturn total
£’000
Total resource outturn in Statement of Outturn against Parliamentary Supply SOPS 1.1 10,460,921 (12,170,289)
Add      
NDA remedial decommissioning costs which are capital in budgets but taken through the SoCNE - 2,623,050 6,300,867
Capital grants - 1,809,090 -
Share of profit/loss of joint ventures and associates - (76,588) (73,179)
Other non-budget - 47,943 179,337
Research and development costs - 836,895 1,732,921
Total - 5,240,390 8,139,946
Less      
NDA income scored in SOPS only - (61,506) 34,854
Capital income in SoCNE (844) - (5,969)
Research and development income - (52,648) (72,341)
Other      
Impact of intra-group transactions 82,542 (4,057,939)  
Total - (32,456)8 (4,101,395)
Net operating expenditure for the period in Consolidated Statement of Comprehensive Net Expenditure SoCNE 15,668,855 (8,131,738)

Some N D A decommissioning utilisations are capital in nature and therefore not included in resource outturn, this results in them being a reconciling item.

Capital grants are budgeted for as capital departmental expenditure limit (CDEL) but accounted for as expenditure and income in the SoCNE, and therefore function as a reconciling item between resource and net operating expenditure.

Share of profit/loss of joint ventures and associates is accounted for in the  SoCNE as a non-budget item and therefore function as a reconciling item.

Other non-budget includes intra-group transactions where the cash payment is eliminated and the budget impact is therefore recognised as a reconciling item.

Research and development is budgeted for as CDEL but accounted for as income and expenditure in the SoCNE and therefore function as a reconciling item.

SOPS 3. Reconciliation of net resource outturn to net cash requirement

As noted in the overview to the SOPS, Outturn and the Estimates are compiled against the budgeting framework – not on a cash basis. Therefore, this reconciliation bridges the resource and capital outturn to the net cash requirement.

SOPS note Outturn total
£’000		 Estimate
£’000		 Outturn vs Estimate: saving/(excess)
£’000
Total resource outturn SOPS 1.1 10,460,921 57,779,887 47,318,966
Total capital outturn SOPS 1.2 5,288,930 6,008,401 719,471
Adjustments for ALBs        
Remove voted resource and capital - (14,869,252) (61,179,123) (46,309,871)
Removal of intra-group transactions - (45,546) - 45,546
Add cash in grant in aid - 4,774,318 6,811,451 2,037,133
Add share purchase and loans - 2,031,638 - (2,031,638)
Add asset held for sale purchase - - - -
Less share capital repayment - (175) - 175
Loans repayment - - - -
Dividends from joint ventures and associates - - - -
ALB cash held in core department - 7,720 - (7,720)
Adjustments to remove non‑cash items        
Depreciation and impairment - (19,794) (34,162) (14,368)
New provisions and adjustments to previous provisions - 4,001 (74,244) (78,245)
Movement in fair value – Contracts for Difference - - - -
Prior period adjustments - - - -
Other non-cash items - (25,692) (850) 24,842
Lease payments - 14,335 - (14,335)
Financial guarantees and loan commitment liabilities - - - -
Adjustments to reflect movements in working balances        
Increase/(decrease) in inventories - (222) - 222
Increase/(decrease) in receivables - (162,798) - 162,798
(Increase)/decrease in payables - 334,824 427,056 92,231
Use of provisions - 257,905 302,911 45,006
Financial guarantees called in - - - -
Cash transactions added back - 467 - (467)
Total - (7,698,270) (53,746,961) (46,048,691)
Removal of non-voted budget items        
Other non-voted budget items - 1,146,899 1,158,319 11,420
Total - 1,146,899 1,158,319 11,420
Net cash requirement - 9,198,480 11,199,646 2,001,166

SOP S 4. Amounts of income to the Consolidated Fund

SOPS 4.1 – Analysis of income payable to the Consolidated Fund

In addition to the income retained by the department, the following income is payable to the Consolidated Fund (cash receipts being shown in italics).

The type of income allowed to be retained by the department is set out in the ambit of the Supply Estimate. Income of a type not included in the Estimate, or in excess of amounts agreed with H M Treasury, is required to be surrendered to the Consolidated Fund. This includes the commercial income of the Nuclear Decommissioning Authority and receipts arising from Coal Pension surpluses, which forms the bulk of the amounts shown below, together with other miscellaneous receipts.

2024‑25
Outturn total:
Accruals
£’000		 2024‑25
Outturn total:
Cash basis
£’000		 2023‑24
Outturn total:
Accruals
£’000		 2023‑24
Outturn total:
Cash basis
£’000
Operating income of the NDA within the Ambit 549,162 684,943 515,843 398,208
Income outside the ambit of the Estimate 20,881 20,889 30,656 30,656
[Excess] cash surrenderable to the Consolidated Fund - - 142,400 142,400
Total amount payable to the Consolidated Fund 570,043 705,832 688,899 571,264

SOPS 4.2: Consolidated Fund income

DESNZ also collects income as an agent for the Consolidated Fund. This income is disclosed separately in the Trust statement, and is not included in SOPS 4.1 – income payable to the consolidated fund.

Other parliamentary disclosures (audited)

Losses statement

2024‑25
Core department		 2024‑25
Departmental group		 2023‑24
Core department		 2023‑24
Departmental group
Total number of losses 980 515,980 576 43,049
Total value of losses – £m 2 133 - 4
Losses over £300,000 – core department

There were no losses over £300,000 for the core department 2024-25.

Losses over £300,000 – departmental group

A loss of £127m was reported by NDA in 2024-25. This relates to a change in approach regarding the Replacement Analytical Project (RAP) at Sellafield. The project will not proceed in its original form and costs have been incurred which cannot be utilised in the revised approach.

A loss of £2.3m was reported by NDA in 2024-25. This relates to an overpayment of the Sellafield employee incentive plan originally incurred in 2022-23 which will not be recovered.

There were no other losses over £300,000 for the departmental group.

Special payments

Special payments include extra-contractual, ex gratia, compensation, special severance payments, extra-statutory and extra-regulatory.

2024-25
Departmental group		 2023-24
Departmental group
Total number of special payments 2 2
Total value of special payments – £m 5 1
Special payments over £300,000

A special payment of £4.6m was made to Ofgem in relation to its administration of the Non-Domestic Renewable Heat Incentive scheme.

Gifts

Managing Public Money requires annual reports to report on gifts made by departments if their total value exceeds £300,000. Gifts with a value of more than £300,000 should be noted individually. During 2024-25, the core department did not give any reportable gifts above £300,000.

Fees and charges

Core department

Core department has no material fees and charges to report in the financial year 2024-25.

Details of charging polices relating to arm’s length bodies are found in their respective published accounts.

Remote contingent liabilities

In addition to contingent liabilities reported in the financial statements, under IAS37, the department also reports remote contingent liabilities. These are liabilities that have a small, remote likelihood of resulting in a transfer of economic benefit by the department. The department has given the following guarantees, indemnities, or letters of comfort:

Quantifiable remote contingent liabilities
1 April 2024
£m		 Increase / (decrease) in year
£m		 Crystallised in year
£m		 Expired in year
£m		 31 March 2025
£m		 Amount reported to Parliament by Departmental Minute
£m
The core department has indemnified the Mining Remediation Authority against potential claims arising from remunerated advisory work undertaken for other public sector bodies where settlement exceeds the Authority’s professional indemnity insurance. 3 - - - 3 -
Unquantifiable remote contingent liabilities – core department

Statutory indemnities:

  • Indemnities have been given to the U K Atomic Energy Authority to cover certain indemnities provided by the authority to carriers and British Nuclear Fuels plc against certain claims for damage caused by nuclear matter in the course of carriage
  • Indemnity has been given to National Grid’s liabilities with regards to the interconnector linking the U K and France
  • A statutory liability will arise under the Nuclear Installations Act 1965 (as amended by the Nuclear Installations (Liability for Damage) Order 2016) for third-party claims in excess of the operator’s liability in the event of a nuclear accident in the UK
  • Indemnities have been provided to certain nuclear site companies and the Nuclear Decommissioning Authority in respect of personal injury claims in the event of a nuclear incident
  • Indemnities have been provided to the Energy Price Guarantee scheme administrators in relation to legal fees in case of a legal action against the administrators
  • A contingent liability exists in relation to the possibility of claims for any exposure to ionising radiation arising from the fusion activities of the U K Atomic Energy Authority

Legal costs:

  • A contingent liability exists in relation to various ongoing legal cases. The cost is dependent on the outcome of cases which currently cannot be estimated

Indemnities against personal liability:

  • Indemnities have been given to the directors appointed by the core department to wholly owned subsidiaries. These indemnities are against personal liability following any legal action against the companies
  • Indemnities have been provided to directors appointed to the Low Carbon Contracts Company Limited and Electricity Settlements Company Limited against personal liability following any legal action against the companies, to be triggered only after all other means have been exhausted, meaning company and directors’ insurance and recovery of costs through their levies
  • Indemnities have been provided to the Low Carbon Contracts Company Limited and Electricity Settlements Company Limited in respect of their officers, to be triggered only after all other means have been exhausted, meaning company and directors’ insurance and recovery of costs through their levies
  • Indemnities have been provided to trustees of the Nuclear Liabilities Fund appointed by the Secretary of State against personal liability in the event of legal action against the Fund
  • Indemnities have been provided to trustees of the Nuclear Liabilities Fund appointed by British Energy (now EDF Energy) against personal liability in the event of legal action against the Fund, to be triggered only in the event of failed recourse to indemnities from EDF Energy
  • Indemnities have been provided to the Oil and Gas Authority (OGA) who operate as the North Sea Transition Authority (NSTA), in respect of certain liabilities that could arise from the actions or omissions of its directors and otherwise arising from a director holding or having held office in the company
  • An indemnity has been provided to Elexon Limited against third party claims relating to the design and/or implementation of the Contracts for Difference and Capacity Markets settlement systems which are not covered by insurance and/or guarantees by their subcontractors
  • Indemnities have been provided to the MCS Service Company Limited and trustees of the MCS Charitable Foundation for any liability that might arise as a result of actions taken and decisions made for which the core department was ultimately responsible prior to transfer to the Company and Charitable Foundation of responsibility for the Microgeneration Certification Scheme (MCS) in April 2018

Losses or damages under agreements:

  • An indemnity has been provided for any losses or damages caused to other parties to the Energy Research Partnership consortium agreement

Environmental clean-up:

  • A contingent liability exists in relation to the costs of retrieving and disposing of sealed radioactive sources under the Environmental Permitting (England and Wales) Regulations 2016 in the event that a company keeping such sources becomes insolvent.
  • A contingent liability arises in relation to the remediation of land contaminated by a nuclear occurrence as the Secretary of State is deemed to be the appropriate person to bear responsibility under section 9 of The Radioactive Contaminated Land (Modification of Enactments) (England) (Amendment) Regulations 2007 S I 2007/3245
  • Under the United Nations Convention on the Law of the Sea (UNCLOS) 1982, OSPAR decision 98/3, the Energy Act 2004 and the Petroleum Act 1998, the department would become responsible for decommissioning most oil, gas and renewable energy installations in the event that operators are unable to fulfil their decommissioning commitments
  • The department inherited responsibility from British Coal to reimburse certain third parties for costs incurred meeting statutory environmental standards in the restoration of particular coal-related sites

Others:

  • A contingent liability exists in respect of the risks associated with the core department assuming responsibility for uplifts in pension contributions for the U K Atomic Energy Authority’s non-active pension scheme members
  • The Secretary of State Investor Agreement (SOSIA) provides protections in certain scenarios where the Hinkley Point C nuclear plant is shut down for reasons that are political or due to certain changes in insurance arrangements or certain changes in law. Payments under the SOSIA would be expected in the first instance to be made using funds from the Supplier Obligation but in certain circumstances they could also come direct from the Secretary of State, relying on spending powers granted under the relevant Appropriation Act or, if payments were to be made over a period longer than 2 years, seeking a new spending power at the time. The payments could be up to around £22bn excluding non-decommissioning operational costs that may be incurred after any shutdown. However, the liability to make payments under the SOSIA is almost entirely within the control of HM Government
  • The Supplemental Compensation Agreement (SCA) provides protections against leakage risks at the geological store during operations and post closure period of the CCUS and T&SCo. SCA covers certain high impact, but low probability risks beyond those which are manageable by operation of the Economic Regulatory Regime and the Revenue Support Agreement which the investors and/or supply chain, including insurers, of which T&SCo cannot take, or cannot price at an efficient level which is good value for money for UK taxpayers, consumers and users
  • The Discontinuation Agreement provides a right for the Secretary of State to discontinue support to the CCUS T&SCo and entitles investors to be compensated for their investment in certain circumstances
  • The Decommissioning Shortfall Agreement covers potential CCUS T&SCo decommissioning fund shortfall which might arise if decommissioning is required before the fund has been fully built-up
Unquantifiable remote contingent liabilities – departmental group

NDA:

  • The NDA has non-quantifiable contingent liabilities arising from indemnities given as part of the contracts for the management of the nuclear site license companies. These indemnities are in respect of the uninsurable residual risk that courts in a country which is not party to the Paris and Brussels Conventions on third party liability in the field of nuclear energy, may accept jurisdiction to determine liability in the event of a nuclear incident. Indemnities are provided to the previous Parent Body Organisations (PBOs) of LLWR, Magnox, Sellafield and Dounreay covering the periods of their ownership. Post the PBO arrangement, Magnox and Dounreay & LLWR have now joined to form Nuclear Restoration Services

LCCC:

  • LCCC has a non-quantifiable contingent liability arising from the Discontinuation of Capture Project Contract. The contract allows for payment of compensation to capture projects for specified costs and losses due to a qualifying change in law or prolonged CO₂ transport and storage unavailability. This contingent liability expires at the end of the business model contract, which is up to 15 years from the date that the capture project becomes operational. The exposure of the contingent liability reduces over time as the termination compensation amount decreases throughout the duration of the contract, due to debt repayment and equity capital recovery

Other potential or expected liabilities (unaudited)

The department has entered into the following arrangements below, the details of which are provided in the interests of transparency. They are not contingent liabilities which require disclosure under IAS 37 or Managing Public Money, as the obligating events did not exist at the reporting date.

Hinkley Point C Funded Decommissioning Programme (F D P) and Waste Transfer Contracts (WTCs):

The contract with NNB Generation Company Limited (N N B) to build Hinkley Point C (HPC) nuclear power plant includes a Contract for Difference between NNB and the Low Carbon Contracts Company Ltd, an FDP and associated FDP documents including WTCs between NNB and the core department.

The FDP and related documents including WTCs require NNB to make prudent provision for their waste and decommissioning liabilities. To meet their liabilities, the operator must set up a fund with an independent governance framework and will pay into it so that it is on track to fund the liabilities that arise from decommissioning and waste management. The fund will report annually to the Secretary of State and a full review will be conducted every 5 years to ensure that the fund is on track to meet all its liabilities. If it is off track, the operator will be required to take corrective action. These liabilities are strictly the operator’s responsibility and the probability of taxpayers picking up these liabilities is remote.

Alongside the FDP, the government has entered into 2 WTCs. These set out terms on which the government will take title to and liability for the spent fuel and intermediate level waste (ILW) from the site after decommissioning in order to dispose of the waste safely. The WTCs have generally been prepared in line with the government’s published waste transfer pricing methodology.[footnote 1] Although the WTCs provide a default price based on today’s best estimate, they allow the waste transfer price to be set after a specified later date. The final price agreed is subject to a cap, but the likelihood of the future costs exceeding the agreed cap is considered remote.

Capacity agreements:

A capacity agreement is a regulatory and rule-based arrangement between National Energy System Operator and a successful applicant in a capacity market auction. The capacity agreement provides a regular retainer payment to the successful applicant or ‘capacity provider’.

At a capacity auction, applicants who offer the lowest bid can win a capacity agreement. A capacity auction relates to delivery of capacity approximately 4 years ahead (T-4). For instance, the capacity agreements resulting from the 2025 T-4 capacity auction will require capacity to be delivered in the delivery year commencing 2029-30.

As at 31 March there were 13 live capacity auctions out of a total of 22, which have been awarded from the start of the scheme in 2014 for the delivery year commencing 2016-17, and 8 active auctions in financial year 2024-25.

The department has responsibility for administering the settlement process. This role is undertaken by the Electricity Settlements Company (ESC). The obligation for ESC to make capacity payments only arises when the respective levy is received from licensed suppliers and the generator provides the agreed level of capacity.

Reconciliation of contingent liabilities included in the supply estimate to the accounts (unaudited)

Departmental group:

As at 31 Mar 2025:
Due within 1 year
£m		 As at 31 Mar 2025:
Due within 2-5 years
£m		 As at 31 Mar 2025:
Due over 5 years
£m		 As at 31 Mar 2025:
Total
£m		 As at 31 Mar 2024:
Due within 1 year
£m		 As at 31 Mar 2024:
Due within 2-5 years
£m		 As at 31 Mar 2024:
Due over 5 years
£m		 As at 31 Mar 2024:
Total
£m
Capacity Market – ESC 1,741 12,413 11,844 25,998 1,379 10,039 8,784 20,202
Income from levy – ESC (1,741) (12,413) (11,844) (25,998) (1,379) (10,039) (8,784) (20,202)
Total - - - - - - - -

A reconciliation of differences between contingency liabilities reported in the supply estimates and those reported in the annual report and accounts are set out below. Further detail on the contingent liabilities can be found in note 23 and in the Supplementary Estimates 2024-25.

Quantifiable contingent liabilities

Description Amount per supply estimate
£’000		 Amount disclosed in ARA
£’000		 Variance
NDA – AGR Transfer: On 23 June 2021 the NDA, government and EDF Energy entered into new decommissioning arrangements for 7 Advanced Gas-cooled Reactor (AGR) stations in which government has directed NDA to take on the future ownership of the stations for decommissioning. The work will be undertaken by the NDA subsidiary Magnox Limited. The NDA will recognise the estimated future liability in its financial statements for each of the stations at the respective points at which NDA takes ownership. The completion and timing of the transfer of ownership is currently uncertain and contingent on the fulfilment of a number of conditions by the parties involved. The NDA therefore recognises a contingent liability for the future decommissioning costs of the stations. This has been estimated by the current owner of the stations at £22,614m (undiscounted) in its most recently published financial statements. 22,614 Not disclosed Cannot be reliably estimated as certain conditions must be met for transfer of ownership to take place, at a point in the future.

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

Opinion on financial statements

I certify that I have audited the financial statements of the Department for Energy Security and Net Zero and of its Departmental Group for the year ended 31 March 2025 under the Government Resources and Accounts Act 2000. The department comprises the core department and its agencies. The Departmental Group consists of the department and the bodies designated for inclusion under the Government Resources and Accounts Act 2000 (Estimates and Accounts) (Amendment) Order 2024. The financial statements comprise: the department’s and the Departmental Group’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; and
  • the related notes including the significant accounting policies

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

In my opinion, the financial statements:

  • give a true and fair view of the state of the department and the Departmental Group’s affairs as at 31 March 2025 and their net expenditure for the year then ended; and
  • have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and H M Treasury directions issued thereunder

Opinion on regularity

In my opinion, in all material respects:

  • the Statement of Outturn against Parliamentary Supply properly presents the outturn against voted Parliamentary control totals for the year ended 31 March 2025 and shows that those totals have not been exceeded; and
  • 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 department and its Group 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.

The framework of authorities described in the table below has been considered in the context of my opinion on regularity.

Framework of authorities

Authorising legislation:

  • Government Resources and Accounts Act 2000
  • The Energy Act 2004, The Energy Act 2008, The Energy Act 2010, The Energy Act 2011, The Energy Act 2013 The Energy Act 2016, and the Energy Act 2023
  • The Energy Price Act 2022
  • The Contracts for Difference Order and Regulations 2014
  • The Coal Industry Act 1994
  • The Energy Bills Discount Scheme Regulations 2023

Parliamentary authorities:

  • Supply and Appropriations Act

HM Treasury and related authorities:

  • Managing Public Money

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the department and its Group’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 department or its group’s ability to continue as a going concern for a period of at least 12 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 department and its group 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.

Overview of my audit approach

Key audit matters

Key audit matters are those matters that, in my professional judgment, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditor, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of the audit of the financial statements as a whole, and in forming my opinion thereon. I do not provide a separate opinion on these matters.

I have determined that there are no other key audit matters to communicate in our certificate and report.

This is not a complete list of all risks identified through the course of my audit but only those areas that had the greatest effect on my overall audit strategy, allocation of resources and direction of effort. I have not, for example, included information relating to the work I have performed around:

  • presumed risk of management override of controls, other than to the extent where this was part of my work on significant estimates made by management as set out below, and
  • estimation of uncertainty of coal provisions

The key audit matters were discussed with the Audit and Risk Assurance Committee; their report on matters that they considered to be significant to the financial statements is set out in ‘Risk profile’ on pages 35-40.

In this year’s report the following changes to the Key Audit Matters identified have been made compared to my prior year report:

  • I no longer consider the first year production of the department’s financial statements and restatement of prior year figures to be key audit matters for 2024-25 as this is the second year that the department has prepared its Annual Report and Accounts and no further machinery of government (MoG) changes have occurred which would require the department to restate prior year comparators
  • In the prior year I also considered the valuation of defined pension schemes (NDA) to be a Key Audit Matter. I no longer consider this to be a Key Audit Matter due to being primarily determined by external management experts with little judgement by management
  • The department has signed highly material contracts in relation to Carbon Capture Usage and Storage (CCUS) and Low Carbon Hydrogen Agreements (LCHAs). Due to the novel and material nature of the schemes, I have recognised a key audit matter in relation to their accounting treatment

Group Valuation of Nuclear Provisions

Description of risk

The Departmental Group holds nuclear decommissioning provisions from the Nuclear Decommissioning Authority (NDA) which are comprised of several individual estimates of the decommissioning costs associated with the group’s subsidiaries and for several additional sites and entities. In its Statement of Financial Position, the department recognised nuclear provisions totalling £110.1 billion at 31 March 2025 (31 March 2024: £105.3 billion), representing discounted expected cashflows. See note 19 to the financial statements.

The valuation of the nuclear provision is highly material to the Departmental Group financial statements.

I treat this as a significant matter for audit because of the high degree of estimation and uncertainty inherent in the valuation of the nuclear provision. The nature of the work performed is in many ways unique as management must estimate the cost of decommissioning facilities of uncertain content and condition over long timescales as the programme of decommissioning work is currently planned to take until 2137.

The provision also contains uncertainty in respect of the valuation of the Geological Disposal Facility affected by Nuclear Waste Service Ltd’s progress with the siting process. The timing of the completion of construction works may have a material impact on the provision.

How the scope of my audit responded to the risk

I designed my procedures on the nuclear decommissioning provision valuation to allow me to evaluate the reasonableness of management’s estimate. I performed the following procedures:

  • Regularly engaged with the Nuclear Decommissioning Authority audit team throughout the audit
  • Reviewed the design and implementation of key controls surrounding the nuclear provision estimate
  • Performed testing of the change control process by which changes are made to the Lifetime Plans underpinning each site’s estimate
  • Assessed management’s processes for challenging key assumptions across the nuclear provisions
  • Reviewed the peer review process over the nuclear provision model
  • Tested the supporting evidence for key judgements and assumptions made by management in valuing nuclear provisions, including management’s response to changes in circumstances since the prior year
  • Reviewed and challenged management’s assessment of evidence supporting the recognition and measurement of efficiency savings that have the effect of reducing the decommissioning provision
  • Assessed and challenged management on the key assumptions in respect of material amounts recognised, including using external experts to assess the reasonableness of the more technical assumptions, in light of the UK Government policy decision to immobilise the UK’s inventory of civil separated plutonium at Sellafield which required a change in assumptions supporting the estimate
  • Agreed the inputs to the nuclear provision to supporting evidence, including change controls raised and annual submissions provided by subsidiaries
  • Assessed the appropriateness of discount and inflation rates used within the provision;
  • Assessed the NDA’s approach to addressing estimation uncertainty in its cost estimates in the provision by taking a granular approach to assess the merits of the approaches used across the different elements of the provision
  • Assessed the accuracy and completeness of utilisation of the provision as reported within the financial statements
  • Assessed the completeness of the provision, by reference to change approvals and other developments
  • Assessed the disclosures over the provision within the financial statements, particularly in how the disclosures address estimation uncertainty; and
  • Tested the consolidation of the Nuclear Decommissioning Authority into the group financial statements

Key observations:

I have obtained sufficient assurance over this risk through my substantive testing. I did not identify material misstatements in relation to the valuation of the nuclear decommissioning provision as a result of the work I have performed.

I draw attention to the disclosures in made in note 19 to the financial statements concerning the uncertainties inherent in the nuclear decommissioning provisions. As set out in these notes, given the very long timescales involved and the complexity of the plants and materials being handled, a considerable degree of uncertainty remains over the value of the liability for decommissioning nuclear sites designated by the Secretary of State. Significant changes to the liability could occur as a result of subsequent information and events which are different from the current assumptions adopted by the department.

Group Valuation of Contracts for Difference

Description of risk:

Through the Low Carbon Contracts Company (LCCC), the Departmental Group holds highly material Contracts for Difference (CfD) assets and liabilities, which present a risk of material misstatement arising from both their significant value and the degree of uncertainty inherent in forecasting generation volumes and wholesale prices into the future, which require significant, complex, and subjective judgements. I consider the valuation of CfDs to be a key audit matter as I consider the fair value measurement of CfDs could be materially misstated due to: the use of inappropriate data; the application of inappropriate assumptions; errors in the design or operation of the valuation model; or insufficient or inappropriate disclosure of estimation uncertainty. The risk is inherently greater for the Hinkley Point C (HPC) CfDs due to: its significance to the financial statements; it relying on forecasting over a much longer timescale in comparison to ‘standard’ CfDs (35 years compared to 15 years for other CfDs); and the contract containing numerous clauses and conditions whose forecasted impact can materially alter the lifetime valuation of the HPC CfD.

At 31 March 2025, the department has reported a net liability for the fair value of CfDs of £90.4 billion (31 March 2024: £89.2 billion), including £3.0 billion of contracts in an asset position (31 March 2024: £2.9 billion), and £93.4 billion (31 March 2024: £92.1 billion) in a liability position. This includes H P C CfDs with a fair value of £49.8 billion (31 March 2024: £56.5 billion). In note 10.1 to the financial statements, the department has further disclosed the approach to valuing CfDs, including observable and unobservable inputs, the forecasting of significant assumptions and an analysis of the sensitivity of the valuation. In note 22, the department further disclose risks impacting the valuation of CfDs.

How the scope of my audit responded to the risk:

I designed my procedures on the recognition and accounting treatment for CCUS to allow me to evaluate the reasonableness of management’s accounting policies, balances and disclosures. I performed the following procedures:

Regularly engaged with the LCCC audit team throughout the audit;

  • Assessed the design and implementation of the Group’s controls relevant to the assessment of accounting treatments and development of valuations pertaining to the DPA and RSA contracts
  • Assessed and challenged, in consultation with independent experts, LCCC’s proposed accounting treatments in relation to relevant clauses within the DPA and RSA contracts
  • Reviewed the model supporting the amount disclosed as a contingent liability in respect of the DPA. My work included testing the input variables, assessing key assumptions with the help of independent sector experts and an independent reperformance of the model
  • Assessed the associated disclosures in the financial statements for both the RSA and DPA, including specific elements of the material accounting policies
  • Assessed the department’s budgeting treatment, including classifications determined by the Office for National Statistics, and their impact on the Statement of Parliamentary Supply; and
  • Tested the consolidation of LCCC into the group financial statements, including the elimination of results in relation to RSA within the Departmental Group accounts

Key observations:

I am satisfied that the controls I reviewed were designed and implemented appropriately to design appropriate accounting policies and determine appropriate disclosures with regards to DPA and RSA. I am also satisfied that appropriate and materially accurate disclosures have been made within the 2024-25 financial statements.

Group accounting for Low Carbon Hydrogen Agreements (LCHA)

Description of risk:

In 2024-25 through its subsidiary the Low Carbon Contracts Company (LCCC), the department signed contracts to become the counter-party to a number of new schemes, including the Low Carbon Hydrogen Agreement (LCHA). The accounting treatment for this new scheme has been assessed for the first time in 2024-25.

In January 2024, the department became counterparty for 11 LCHA contracts awarded in Hydrogen Allocation Round 1; at 31 March 2025, 5 out of the 11 LCHA contracts awarded had been formally signed, with a fair value of £1,243 million. A further 5 contracts were signed during the post balance sheet period, valued at £932m.

This assessment includes whether the appropriate recognition point, valuation method and disclosures have been identified for LCHA. The valuation employs a series of inputs and assumptions, with increased complexity arising from relative infancy of the underlying hydrogen market and therefore a lack of historic data to inform management’s judgements. The accounting treatment of this new scheme has been determined by the relevant contractual terms of the LCHA.

This risk has been recognised due to: the contracts being novel and containing significant differences to the existing ‘standard’ CfDs; the contracts and associated accounting requiring a full assessment in-year; and the risk that 2024-25 financial statements may include inappropriate accounting, recognition, valuation and disclosure. This also includes the risk to the Statement of Parliamentary Supply.

I also recognise the possibility of additional schemes being signed after the year-end, triggering the need for disclosure.

How the scope of my audit responded to the risk:

I designed my procedures on the recognition and accounting treatment for LCHA to allow me to evaluate the reasonableness of management’s accounting policies, balances and disclosures. I performed the following procedures:

  • Regularly engaged with the LCCC audit team throughout the audit
  • Assessed the design and implementation of controls relevant to the assessment of accounting treatments and development of valuations pertaining to the LCHA contracts
  • Assessed the terms and conditions contained in the LCHA contract and the department’s proposed accounting treatments
  • Assessed the department’s budgeting treatment for LCHA, including classifications determined by the Office for National Statistics, and their impact on the Statement of Parliamentary Supply
  • Assessed data inputs for the department’s model, agreeing these to the relevant source data and assessing the appropriateness of the choices of data used by the department
  • Assessed the significant assumptions made by the department in relation to the valuation. This included consulting an external energy market expert to assist us in assessing the reasonableness of the assumption that the natural gas floor price would be an appropriate proxy for the sales price achieved
  • Reviewed the relevant model supporting 2024-25 valuations, including reperformance of the model where applicable
  • Confirmed that the day 1 valuation was materially appropriate and its full deferral is appropriate so that there is no impact on Statement of Financial Position for 2024-25
  • Tested the consolidation of LCCC into the group financial statements; and
  • Assessed the sufficiency and appropriateness of the disclosures and sensitivities contained in the financial statements

Key observations:

I found that the controls around the recognition and valuation of the L C H As were designed and implemented appropriately.

I found that management’s model accurately calculated the L C H A valuations using the model inputs and assumptions.

I am satisfied that the assumptions employed by management are materially appropriate.

I identified 5 further contracts signed after year-end which required disclosure in the 2024-25 financial statements. This is disclosed in note 27 to the financial statements.

Application of materiality

Materiality

I applied the concept of materiality in both planning and performing my audit, and in evaluating the effect of misstatements on my audit and on the financial statements. This approach recognises that financial statements are rarely absolutely correct, and that an audit is designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement or irregularity. A matter is material if its omission or misstatement would, in the judgement of the auditor, reasonably influence the decisions of users of the financial statements.

Based on my professional judgement, I determined overall materiality for the department and its group’s financial statements as a whole as follows. Since the prior year, I have revised my assessment on materiality by combining materialities for the Nuclear Decommissioning Provisions and Contracts for Difference as they demonstrate similar risks to the Group accounts, due to their size, estimation through models, use of experts and estimation uncertainty:

Departmental group Department parent
Materiality £4.0 billion
(2023-24: £3.76 billion when presented on the same basis). This covers balances and transactions associated with the Nuclear Decommissioning Provision and Contracts for Difference net liabilities.		 £122.2 million
(2023-24: £112.0 million)
Basis for determining overall account materiality 2% of nuclear provision and Contracts for Difference liabilities of £201.6 billion
(2023-24: 2% of nuclear provision liabilities of £99.0 billion and 2% of fair value of Contracts for Difference of £89.2 billion).		 1.75% of adjusted departmental group gross operating expenditure of £7.0 billion
(2023-24: 1.25% of adjusted gross expenditure of £9.0 billion)
Rationale for the benchmark applied The nuclear decommissioning provision and Contracts for Difference are the largest items in the Departmental Group Statement of Financial Position and is of primary interest to users of the accounts as the largest and most complex balances being managed by the department. Their valuation is subject to significant uncertainty arising from both the complexity of the decommissioning work to be performed and forecasting of future cashflows and the very long timescales involved. Expenditure is used as the materiality benchmark for the additional group materiality level because the department’s main activities result in grant expenditure in line with their policy objectives – a key area of user interest. Before calculating materiality, I have adjusted total operating expenditure to remove the provision expenditure which is subject to group materiality.

I have capped parent expenditure by the total operating expenditure of the department group to ensure that sufficient assurance from work on the parent is obtained for the group.
Particular classes of transactions, account balances and disclosures where an additional level of materiality has been applied Additional materiality of £122.3 million applies to all transactions, balances and disclosures except for those in relation to the nuclear provisions and Contracts for Difference (2023-24: £132 million). All balances within the Parent financial statements have been audited to this materiality, except for where I consider them to be material by nature.
Basis for determining residual account materiality 1.75% of adjusted gross expenditure of £7.0 billion (2023/24: 1.25% of adjusted gross expenditure of £10.6 billion) N/A
Rationale for the benchmark applied The department’s main activities result in grant expenditure in line with their policy objectives – a key area of user interest. I have therefore used expenditure as the materiality benchmark for balances and transactions not related to the nuclear decommissioning liabilities or Contracts for Difference. I have adjusted the expenditure benchmark to exclude movements relating to the nuclear decommissioning provision and the Contracts for Difference, because this line reflects valuation movements sensitive to external market movements. I have used 1.75% as the basis for determining materiality as this is within the range normally used for departments. N/A

Performance Materiality

I set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality of the financial statements as a whole. Group and parent performance materialities were set at 70% of materiality for the 2024-25 audit (2023-24: 65%). I consider the risk of uncorrected and undetected misstatements exceeding materiality has reduced compared with last year due to this being the second year that the department has prepared its Annual Report and Accounts and no further machinery of government (MoG) changes have occurred. In determining performance materiality, I have also considered the uncorrected misstatements identified in the previous period.

Other Materiality Considerations

Apart from matters that are material by value (quantitative materiality), there are certain matters that are material by their very nature and would influence the decisions of users if not corrected. Such an example is any errors reported in the Related Parties note in the financial statements. Assessment of such matters needs to have regard to the nature of the misstatement and the applicable legal and reporting framework, as well as the size of the misstatement.

I applied the same concept of materiality to my audit of regularity. In planning and performing my audit work to support my opinion on regularity and in evaluating the impact of any irregular transactions, I considered both quantitative and qualitative aspects that would reasonably influence the decisions of users of the financial statements.

Error Reporting Threshold

I agreed with the Audit and Risk Assurance Committee that I would report to it all uncorrected misstatements identified through my audit in excess of £1 million, as well as differences below this threshold that in my view warranted reporting on qualitative grounds and matters I consider irregular. I also report to the Audit Committee on disclosure matters that I identified when assessing the overall presentation of the financial statements.

Total unadjusted audit differences reported to the Audit and Risk Assurance Committee would decrease comprehensive net expenditure and increase assets by a further £63 million.

Audit scope

The scope of my group audit was determined by obtaining an understanding of the department, and its group’s environment, including department and group-wide controls, and assessing the risks of material misstatement at the group level.

The department has total liabilities of £218.5 billion (2023-24: £210.8 billion). This includes liabilities of £111.9 billion managed by the Nuclear Decommissioning Agency (NDA), £95.4 billion managed by the Low Carbon Contracts Company (LCCC) and £5.6 billion managed by the core department. I have audited the full financial information in the core department, as well as the group consolidation. The audit of balances and disclosures managed by components required for me to obtain material assurance over the group’s consolidated results were complete at the time of my completion of the group audit. As group auditor, I have used the work of the auditors of these balances and disclosures and engaged regularly on the group key audit matters and significant risks.

I obtained assurance over the risks of non-compliance with the entity’s framework of authorities through enquiries of component auditors. I also reviewed departmental board minutes and considered finalised audit opinions for evidence of material non-compliance. This gave me the assurances I required for my opinions on the group financial statements.

I also reviewed the Statement of Parliamentary Supply, which includes figures derived from the group financial statements. I obtained assurance over the classification of items within this statement and confirmed that these had been properly disclosed and classified. I also tested reconciling items.

Through my direct audit procedures and the work of component auditors, I have gained assurance over 98% of the group’s liabilities and 98% of the group’s total operating expenditure through audit work on balances and disclosures managed by components required for me to obtain material assurance over the group’s consolidated results. For these other audit areas, audit of the financial information was complete at the point of my analytical procedures. Together with my audit work on consolidation adjustments, this work gave me the evidence I needed for my opinion on the group financial statements as a whole.

Departmental group liabilities by component (as at 31 March 2025)

Group liabilities: diagram data

Component Percentage
Nuclear Decommissioning Authority 52%
Low Carbon Contracts Company 44%
Core department 2%
Other components 2%

Departmental group expenditure by component (as at 31 March 2025)

Group expenditure: diagram data

Component Percentage
Nuclear Decommissioning Authority 50%
Core department 34%
Low Carbon Contracts Company 10%
Other components 6%

Other information

The other information comprises the 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 department and its group and their environment obtained in the course of the audit, I have not identified material misstatements in the Performance Report and Accountability Report.

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 department and its group or returns adequate for my audit have not been received from branches not visited by my staff; or
  • I have not received all of the information and explanations I require for my audit; or
  • the financial statements and the parts of the Accountability Report subject to audit are not in agreement with the accounting records and returns; or
  • 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; or
  • 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 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 department and its group 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; and
  • assessing the department and its group’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 department and its group 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 I S As (U K) 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 department and its group’s accounting policies, and strategic priorities
  • inquired of management, the department’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the department and its group’s policies and procedures on:
    • identifying, evaluating and complying with laws and regulations
    • detecting and responding to the risks of fraud; and
    • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the department and its group’s controls relating to the department’s compliance with the Government Resources and Accounts Act 2000, Managing Public Money, The Energy Act 2004, The Energy Act 2008, The Energy Act 2010, The Energy Act 2011, The Energy Act 2013 The Energy Act 2016, the Energy Act 2023, The Energy Price Act 2022, The Contracts for Difference Order and Regulations 2014, and The Supply and Appropriations Act (Amended)
  • inquired of management, the department’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, including significant component audit teams, 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 department and its group for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions, bias in management estimates and proximity to control totals. 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 department and group’s framework of authority and other legal and regulatory frameworks in which the department and group 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 department and its group. The key laws and regulations I considered in this context included Government Resources and Accounts Act 2000, Managing Public Money, Supply and Appropriation (Main Estimates) Act 2024, The Energy Act 2004, The Energy Act 2008, The Energy Act 2010, The Energy Act 2011, The Energy Act 2013 The Energy Act 2016, the Energy Act 2023, The Energy Price Act 2022, The Contracts for Difference Order and Regulations 2014, and relevant laws and pensions legislation.

Audit response to identified risk

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

  • I reviewed the financial statement disclosures and testing to 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 in-house 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 assessed the methodology used by the department to determine an estimate of the level of fraud and error in its grant streams, including performing a sample test of applications and grant expenditure recorded during the year
  • I assessed the department’s proximity to control totals and the extent to which journal entries could be used to avoid budgetary breaches; and
  • I addressed the risk of fraud in relation to the issuance of new decommissioning activity contracts by assessing whether prescribed group procedures and authorisations were in place for contracts issued or extended in year

I communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members including internal specialists and significant component audit teams 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 at: www.frc.org.uk/auditorsresponsibilities. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain appropriate evidence sufficient to give reasonable assurance that the Statement of Outturn against Parliamentary Supply properly presents the outturn against voted Parliamentary control totals and that those totals have not been exceeded. The voted Parliamentary control totals are Departmental Expenditure Limits (Resource and Capital), Annually Managed Expenditure (Resource and Capital), Non-Budget (Resource) and Net Cash Requirement.

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.

Gareth Davies
Comptroller and Auditor General

11 September 2025

Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

1. DECC (2011) Waste Transfer Pricing Methodology for the disposal of higher activity waste from new nuclear power stations (PDF, 1.05 MB) ↩

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