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Annual Report and Accounts 2020 to 2021

The Gambling Commission's 2020 to 2021 Annual Report and Accounts

Published: 28 July 2021

Last updated: 28 July 2021

This version was printed or saved on: 1 December 2021

Online version: https://www.gamblingcommission.gov.uk/report/annual-report-and-accounts-2020-to-2021

Performance report

Who we are

The Gambling Commission exists to make gambling fairer and safer.

We do that by licensing and regulating in the public interest and providing advice and guidance. We want a fair and safe gambling market where all consumers and the interests of the wider public are protected.

We are an independent non-departmental public body sponsored by the Department for Digital, Culture, Media and Sport (DCMS) (opens in new tab) and license operators and individuals in Britain that provide arcades, gaming machines, betting, lotteries, bingo, remote gambling (online, telephone), casinos and gambling software.

We are also responsible for awarding the licence and regulating the operator of the National Lottery.

There are two main pieces of legislation that underpin our work:

We have 340 employees, most of whom are normally based at our Birmingham office. There are also around 20 people based in London working on the 4th National Lottery Licence Competition.

Licensing objectives

We regulate in the public interest, as guided by our statutory duties, to:

In respect of the National Lottery, our objectives are to ensure that:

Foreword

We present our latest Annual Report and Accounts following what has been a hugely testing and difficult year for everyone across the world – caused by the devasting effects of the global Covid-19 pandemic.

The pandemic has had a bearing on all corners of daily life and the economy, whilst also widely impacting on the gambling industry, its people and its customers, whether they be on the high street or online.

We identified in the very early stages of the pandemic the significant impacts on our regulatory approach and took action to devise a new model and ways of working to protect consumers. In May 2020, and whilst recognising the difficulties operators have had to face, this included instructing tighter measures to protect consumers such as banning reverse withdrawals and requesting improved affordability checks with more people being based at home due to lockdown.

The pandemic, which included the closure of land-based operations due to lockdown, has not affected our tough enforcement regime which aside from licence suspensions and revocations, saw over £30 million issued in fines or regulatory settlements in the past 12 months.

Building on the consumer protections we have introduced, and our rule changes which will vastly improve the safety and design of online casino games and clean up the malpractice of so-called VIP schemes, we also launched our new three-year Corporate Strategy in April alongside our annual business plan.

The Strategy, which will take us through to 2024, is based on five refreshed priority areas and will give improvements around:

Ultimately, it will build on the success of our previous strategy, with the gambling industry now in a different place in terms of technology, innovation and the daily operational changes which will be brought by Covid-19.

The launch of our new Corporate Strategy also comes at a time where we enter the third and final year of the National Strategy to Reduce Gambling Harms. The Strategy has done so much to promote a long-term, health-led approach to dealing with gambling harms and we have seen widespread support from our public health and statutory partners across England, Scotland and Wales.

Now into the last 12 months, the Strategy’s steering and implementation groups will be vital in delivering and driving the priorities through the Strategy’s action map – allowing us to evaluate its success and importantly, the next steps for the years ahead in terms of research, education and treatment.

Turning to the wider external environment, in November we published our first ever National Strategic Assessment which assessed the issues and risks gambling presents to consumers and the public, alongside our priorities to address those risks and where progress has already been made.

Shortly after the launch of that document, December saw the start of the Government’s Review of the 2005 Gambling Act. Given the Review is considering our own powers and resources, as the statutory advisor to the Secretary of State, we are contributing our advice and expertise to the Review which we hope will allow us to build on our work to make gambling safer.

We are keen to see the outcomes that the Review will bring for the industry and consumers, alongside the Fees Review, allowing us to be even more effective in regulating what is a fast-paced, constantly evolving sector.

We also responded last summer to three key reports into gambling regulation, including from MPs and the House of Lords. We are considering the wider points raised and also taking a variety of actions to address the recommendations made within those reports.

The ever-changing industry was also reflected in our decision this year to introduce another advisory panel – this time so we can officially hear the independent voices of those with lived experience of gambling harms. The new Lived Experience Advisory Panel (LEAP) is already helping to inform our decision making as part of a wide range of evidence we must consider and sits closely alongside our work with the Digital Advisory Panel (DAP) and the Advisory Board for Safer Gambling (ABSG). All three chairs from these advisory bodies are now also attending our Board meetings on a regular basis, reflecting the importance of their views and evidence.

Staying on collaboration with our stakeholders, despite the impacts of Covid-19, we worked hard to maintain our stakeholder and partner engagement over the past year. This included a briefing with industry CEOs and a separate session with the chairs of a variety of gambling operators, which gave us the opportunity to discuss key regulation and consumer protection issues. We value those relationships greatly and hope to continue to build on those, continuing to work alongside our sponsored department, DCMS.

We have continued to strongly regulate the National Lottery which has had another successful year despite the challenges of the pandemic – whilst ensuring the operator protects players and maximises returns to good causes, especially after such a tough 12 months. A further £1.83 billion going to good causes through the National Lottery over the past year is another excellent milestone and the financial support given to the arts, sports, heritage and charities was vital.

The competition for the fourth National Lottery licence is now successfully underway and we plan to announce the winner within the current financial year following the fair and open contest we are currently overseeing. This follows a delay to the launch of the competition by three months which was due to the unique circumstances caused by the Covid-19 pandemic.

In closing, we would like to say thank you to everyone across the Commission for their huge amount of hard work, commitment and professionalism over the past year. We would also like to thank former chief executive Neil McArthur, who left earlier this year, for his contribution to the Commission over many years.

We have regulated through difficult and unprecedented circumstances but are in a good position for the year ahead as lockdown restrictions begin to ease for the whole of the country.

William Moyes
Chairman

Sarah Gardner
Deputy Chief Executive (Joint Acting Chief Executive)

Sally Jones
Chief Operating Officer (Joint Acting Chief Executive)

Overview of the British gambling sector

This section covers key statistics relating to the gambling industry in Great Britain during 2020-21.

Due to the Covid-19 pandemic, we have been monitoring how the continued measures and changing lockdown restrictions across Great Britain have impacted gambling behaviour – especially the ways in which people are gambling. Those specific changes and risks, along with our priority actions, were covered in our first National Strategic Assessment which was published in November 2020.

We have monitored gambling behaviour during the pandemic by gathering, analysing and publishing data from operators, as well as conducting consumer research. Released on a monthly basis, the publications can be found on our website.

We have continued to stress the need for extra operator vigilance and they still need to be mindful that:

With the level of restrictions under constant review, during the coming months and over the next financial year we will continue to urge operators to be mindful about the potential of some consumers to increase their spend on some of the more intensive products whilst at the same time still engaging in real event betting activity such as sports.

The industry

Graph A) Gross gambling yield (£m)1 vs participation2* gross gambling yield vs participation

In Great Britain, there are:

Consumers

Our consumer and industry engagement work therefore continues to be of vital importance.

Consumer trust in gambling

Graph B) Respondents agreeing that gambling in this country is conducted fairly and can be trusted2 respondents agreeing that gambling in this country is conducted fairly and can be trusted

All respondentsGambled in the past 12 monthsNot gambled in the past 12 months
201634%38%29%
201733%38%27%
201830%34%25%
201929%32%25%
202029%32%25%

Move to mobile

Graph C) Devices used for online gambling in the past four weeks33 devices used for online gambling in the past four weeks

Laptop/PC/TabletMobile
201692%29%
201786%39%
201877%44%
201971%50%
202071%50%

National Lottery

A year in review

In this section we reflect on the work we have done in the final year of our three-year Corporate Strategy to ensure strong regulation whilst protecting consumers from gambling harm.

As set out in our corporate business plan, our five key focus areas are:

  • protect the interests of consumers
  • raise standards in the gambling market
  • prevent harm to consumers and the public
  • improve the way we regulate
  • optimise returns to good causes from lotteries.

Summary of achievements – 2020-21 corporate business plan milestones

Summary of achievements – 2020-21 corporate business plan milestones Annual operator fee income by sector 2020-21

Annual operator income fee by sectorPercentage
Arcades6%
Betting31%
Bingo4%
Casino28%
Lotteries7%
Machines24%

The following gives details of the Commission’s milestones which were superseded or replanned during 2020-21:

Milestones superseded:

Milestones replanned:

Protect the interests of consumers

Consumers are at the heart of our regulatory approach. As gambling behaviour evolves, we work hard to stay on top of emerging trends, including those caused by the Covid-19 pandemic, to ensure our work is focused in the right areas.

Over the past 12 months we have continued to remind commercial operators of their social and consumer responsibilities and taken decisions, supported by research and our relations with external stakeholders, to take appropriate regulatory actions.

Our key activities in this area were:

Prevent harm to consumers and the public

Minimising and preventing gambling harm is a key focus for the Commission and over the past 12 months, despite the Covid-19 pandemic, we continued to use our full range of powers, working closely alongside our partners, to enhance protections for the public and players and introduce new ideas and ways of working.

Now in its third year, the National Strategy to Reduce Gambling Harms continues to offer the means for collaboration by the Commission and partners to reduce gambling harms. The Commission’s actions map tracks the significant range of positive actions across the nations and regions to support this collaboration.

Through our regulatory powers, we have also continued to take proactive action against online and land-based operators who have not done enough to protect their customers from gambling harm.

Our highlights in this area included:

In April 2020 we introduced a high profile ban on the use of credit cards for gambling and continued to watch closely for any unintended consequences for consumers.

The introduction in September 2020 of strict new guidance for operators to clean up the malpractice of so called VIP schemes.

We announced a package of strict measures in February 2021 around online slots games which included the introduction of limits on spin speeds and the permanent ban on features such as autoplay or those which celebrate losses as wins. The permanent prohibition of reverse withdrawals was also announced alongside these measures.

We closely monitored online and, where appropriate, land-based gambling patterns to understand how the Covid-19 pandemic changed the risks experienced by consumers through the collection of additional industry data and consumer research. We acted on these findings and published the information for stakeholders to inform them of developing consumer trends.

The establishment of a new Lived Experience Advisory Panel (LEAP) in February 2021 which provides independent advice based on its members’ personal experiences of gambling harms – helping to inform our decision making.

In November 2020, we published the latest actions map and update for the continued delivery of the National Strategy to Reduce Gambling Harms. This included how we continued to contribute, alongside our public health and statutory partners, to steering groups and implementation groups across England, Scotland and Wales.

We continued to work closely with a range stakeholders, particularly CAP and the Advertising Standards Authority (ASA), to respond to the recommendations outlined in GambleAware’s research into the effects of gambling advertising on children, young people and vulnerable adults.

We have reviewed and approved regulatory settlements with a cumulative value of millions of pounds for activities to be applied for socially responsible purposes.

Supporting the delivery of independent research commissioned by GambleAware, which has included the publication of reports into the impact of the behavioural change principle of anchoring, guidance for designing safer gambling messaging, and interim results from the Patterns of Play project.

Following our implementation of the requirement for online operators to participate in Gamstop, the national self-exclusion system, we continue to monitor compliance closely.

Through a consultation with the industry and other stakeholders we reviewed our approach to measuring gambling participation and prevalence.

Raise standards in the gambling market

To protect consumers, the Commission’s role is to ensure standards are constantly being raised across the gambling industry. We do this through a variety of ways – via our day-to-day licensing work, targeted compliance activity, and using our enforcement powers where we see standards are not being met.

During the past 12 months we carried out our compliance and enforcement activity through a number of challenges brought by the Covid-19 pandemic – which saw large parts of the gambling sector, including land-based businesses, closed for the majority of the year.

We continuously engaged with operators to understand the impacts of Covid-19, which included understanding which products had seen an increase in play, splits between new and existing players and increase in spend and customer interactions. This was backed up by a programme of targeted assessment work to collate evidence.

Our highlights in this area included:

We continued with our programme of compliance activity as much as possible during 2020-21. As part of our refined focus and process, we conducted 25 full assessments of online operators and five targeted assessments of land-based operators.

Additionally, we carried out 83 website reviews and 262 security audits. 29 personal licence reviews were commenced and 57 were finalised, including from the previous financial year.

We also continued with our tough enforcement activity against gambling operators and personal licence holders who failed to meet our standards. We have continued to hold operators to account for failings around anti-money laundering, social responsibility controls and customer interaction issues. Our casework led to the suspension of five operators and the revocation of one operator and nine personal management licence holders. A total of £32.1m was paid by 15 operators as a result of fines or regulatory settlements. This covered £13.2m in fines and £18.9m in regulatory settlements.

In 2020-21, our intelligence team, who provide a confidential ear to the industry and the public, as well as being our main gateway to partner agencies such as the National Crime Agency, international law enforcement organisations, and sports governing bodies, generated 3,836 intelligence reports, relating to a number of issues including social media lotteries, unlicensed remote operators and money laundering. 29 Incident Referral Forms (IRFs) were submitted by the unit to Incident Management Group (IMG) for consideration.

Aside from a variety of other intelligence which was processed, our Sports Betting Intelligence Unit received over 700 specific reports which included issues such as suspicious betting activity, sports rules breaches, misuse of inside information, Gambling Act offences or other criminality. Football and tennis continue to be the source for the majority of these reports, despite disruption to the calendar due to Covid-19.

Following the test house framework consultation, we worked with the United Kingdom Accreditation Service (UKAS) and all test houses to implement changes aimed at raising standards in the industry.

We have continued to work to shut down illegal gambling, working closely with law enforcement agencies, the UK Cyber Centre and consumers to gather intelligence and take action against black market gambling.

We have assessed the ongoing suitability of our licensees by using a variety of tools, such as regulatory data and interaction with stakeholders. In the past year we have processed 170 operator licence applications, with 545 individuals applying for a personal licence.

We published our third annual Compliance and Enforcement Report which outlined case work during 2019-20 alongside recommendations and case studies for operators.

We continued to ensure Boards focused on their responsibilities to be tested via corporate evaluations and assurance statements.

We supported the UK Government in developing the role of the Regulatory Supervisor for Money Laundering.

Optimise returns to good causes from lotteries

Lotteries, including the National Lottery, make significant contributions to society and generate important funds for good causes – with £43 billion raised by the National Lottery since its launch in 1994. Those good causes include funding sports, arts, heritage and community projects.

The National Lottery has made a difference to the lives of millions and continues its positive impact on society. The Commission’s role is to ensure it is run with propriety whilst protecting the interests of every player, whilst making sure funds are maximised for good causes.

Last year we launched the competition for the next National Lottery licence which will begin in 2023. The preferred bidder will be announced in late 2021.

Our highlights in this area included:

We worked with the Operator to enable the National Lottery to continue to run smoothly during the Covid-19 pandemic and resultant lockdowns and monitored performance closely to ensure players continued to be protected during the rapid and significant increase in online play.

We continued to focus on players’ interests more broadly, undertaking a review of our approach to Interactive Instant Win Games to protect players from harm.

We approved joint marketing investment proposals between the Operator and good causes for Lotto, EuroMillions, Set for Life and the National Lottery Brand. Performance of existing marketing investment proposals indicate that previous such approvals have delivered for good causes and that these decisions stand to significantly benefit good causes during the 2021/22 financial year.

Returns to good causes finished the financial year at £1.83bn. It has been a strong year, particularly given the challenging circumstances this year.

In July 2020, following a public consultation, we strengthened several important aspects of our licence conditions and codes of practice which apply to society lotteries. New requirements and accompanying guidance ensure consumers have information available to help them make fully informed decisions about whether to participate in lotteries. At the same, time limits on the size of society lotteries were raised in line with Government legislation.

We outlined our conclusions following a consultation of society lottery prize limits and transparency measures.

Through a Selection Questionnaire, we officially launched the competition for the next National Lottery franchise in August 2020.

Following the launch of the Selection Questionnaire, we published the Invitation to Apply to successful applicants and are pleased with the number of entrants.

Improve the way we regulate

Our risk and evidence-based approach to regulation continues to ensure high standards are maintained by all operators we licence. This approach also plays a role in setting the direction for others in the industry to follow as we work to ensure gambling is safe, fair, free from crime and free from the risks of money laundering.

We continue to monitor and review our performance with the pace of innovation and technology constantly accelerating. Despite the impact of the Covid-19 pandemic, in the past year our administrative and licensing procedures continued to be streamlined and improved to ensure they were more digitally accessible for the industry, licensees, the public and players.

Our highlights in this area included:

As part of our response to the Covid-19 pandemic, we collected and published regular data about the trends we were seeing throughout the year and during the various lockdowns across the country. This enabled us to respond effectively and provide clear guidance to operators as the country transitioned to virtual and remote working.

We welcomed reports into gambling regulation by Members of Parliament and the House of Lords, following an earlier National Audit Office report. We continue to take forward the key recommendations.

The work on our new website has been a success and has ensured full compliance with new online accessibility legislation. The new-look site was launched in June 2021.

We continued to improve and consolidate our internal software and hardware estate, moving further towards an entirely cloud based infrastructure - improving resilience, information security and user experience.

Our project to automate the personal management licence application process was delayed due to Covid 19 but will be delivered in Summer 2021. We have continued to see the positive impacts from automation of the personal licence maintenance service with reductions in processing time of 50% or more and are looking to achieve similar outcomes in the next financial year.

We worked hard to respond to the challenges presented by Covid-19 on our colleagues and remote working processes to ensure there was a minimal impact on recruitment, training and wellbeing.

We undertook a culture diagnostic and have developed a programme that continues to develop us as an inclusive and diverse organisation and a great place to work.

Financial review

Commission funding

The Commission is an independent public body. We are funded in two ways:

Income

Our total income from fees and other sources was £18.87m for the year (£19.90m for 2019-20). This figure does not include the £19.520m (2019-20: £17.020m) of grant-in-aid funding in respect of the National Lottery functions which is transferred directly to reserves.

Our fee income for the year was made up of the following:

This was mainly attributable to contributions to compliance and enforcement costs received from operators.

Expenditure

During the year, total expenditure on operational costs including depreciation was £38.06 million (2019-20: £37.45 million), an increase of £0.61 million on the prior financial year (0.02%).

Expenditure on gambling regulation totalled £20.47 million (2019-20: £21.20 million) National Lottery functions accounted for £17.59 million (2019-20: £16.26 million). This included £14.83 million on the National Lottery 4th licence competition (2019-20: 13.29 million). Employee costs for the year were £21.39 million (2019-20: £19.49 million), an increase of £1.90 million.

Employee costs for gambling regulation were £15.94 million (2019-20: £14.31 million) and National Lottery regulation £5.45 million (2019-20: £5.18 million). Of this, £3.19 million related to the National Lottery 4th licence competition (2019-20: £2.83 million).

For comparative purposes, the following table shows year on-year operational expenditure comparison for gambling and National Lottery regulation expenditure, and the costs of Horserace Betting Levy activity which was funded by the Horserace betting levy and ceased in 2018-19.

2016 to 2017
£m
2017 to 2018
£m
2018 to 2019
£m
2019 to 2020
£m
2020 to 2021
£m
National Lottery regulation2.672.982.812.972.76
National Lottery competition0.200.644.0813.2914.83
Gambling regulation18.0119.5320.5421.2020.47
Horserace Betting Levy activity-0.040.16--
Total costs of operation20.8823.1927.5837.4538.06

Net expenditure for the year

During the year, the regulation of gambling under the 2005 Gambling Act, as amended and updated by the Gambling (Licensing and Advertising) Act 2014, produced an income and expenditure deficit of £0.809 million.

The deficit for the year was budgeted under the Commission’s medium-term financial plan using reserves created from the fee income collected in prior years because of the continuing expansion of the gambling industry, particularly within the remote sector.

The Commission sought to address this by achieving a deficit in 2020-21 through expenditure exceeding licence fee income. Expenditure on the Commission’s regulatory activity, particularly in relation to technological developments, is increasing and together with the reduction in licence fees that came into efect from 6 April 2017, this resulted in the planned deficit for the year.

The total income and expenditure deficit arising for the year is £19.30 million, including regulating the National Lottery. This deficit is due to the requirement to transfer grant-in-aid funding in respect of National Lottery regulation direct to reserves and not being included as income.

Statement of financial position

At 31 March 2021 the book value of non-current assets was £5.19 million (2019-20: £6.57 million). Assets less liabilities at 31 March 2021 amounted to £3.95 million(2019-20: £3.97 million). The year-end closing cash balance at 31 March 2021 was £17.56 million (2019-20: £16.61 million).

The cash balance reaches its peak between August and November each year, after the largest tranche of annual fees fall due, which are paid in advance by operators. Grant-in-aid to fund National Lottery regulation is drawn down on a monthly basis as required, satisfying the normal conventions applying to Parliamentary control over income and Payment performance.

The Commission’s policy is to pay all invoices within 30 days of receipt unless a longer payment period has been agreed or the amount billed is in dispute. In the year to 31 March 2021, 71% (target 95%, 2019-20: 74%) of invoices totalling £15.08 million were paid within 30 days of receipt. Steps will be made to improve performance during 2021/22, by reviewing invoice processing to reduce time taken to resolve queries.

Sustainability report

This sustainability report complies with the requirements of the Greening Government Commitments – the UK government’s commitments to delivering sustainable operations and procurement.

Corporate Responsibility

As part of our commitment to corporate responsibility the Commission seeks to have a positive role in the lives of our employees and our community. We do so by:

Greenhouse gas (GHG) emissions

These are commonly referred to as carbon accounting or carbon footprinting and are split into three:

Scope 1:

Direct GHG emissions – these occur from sources owned or controlled by the Commission, for example, emissions as a result of combustion in boilers, or emissions from fleet vehicles.

Scope 2:

Energy indirect emissions – as a result of electricity that we consume which is supplied by another party, for example, electricity supply in buildings.

Scope 3:

Other indirect GHG emissions – all other emissions which occur as a consequence of our activity but which are not owned or controlled by the Commission, for example emissions as a result of staf travel on ofcial business.

Non-financial indicators2020-21 tonnes CO2e2019-20 tonnes CO2e
Total Gross Emissions for Scopes 1 & 2 (procured electricity, gas and fleet vehicles incl pool cars)41.5387.93*
Gross emissions attributable to Scope 3 (indirect emissions and official business travel)5.2296.00
Related energy consumptionthousand kWhthousand kWh
Electricity: non-renewable
Electricity151.41291.83
Gas33.8721.94**
Financial indicators£'000s£'000s
Expenditure on energy22.7228.99
Expenditure on official business travel1.03293.67

Waste minimisation and management

Data on waste is collated (in line with Sustainable Operations on the Government Estate (SOGE) targets) for all ofces and land owned by the Commission:

Non-financial indicators2020-21 tonnes CO2e2019-20 tonnes CO2e
Total waste arising9.7722.56
Hazardous waste--
Non-hazardous waste
Landfill--
Reused/recyled2.699.14*
Waste composted--
Incinerated with energy recovery7.0713.41*
Incinerated without energy recovery--

Use of finite resources

This category is broken down into use of water, energy and other finite resources. Water sources are classified by:

Scope 1: Water owned or controlled by the Commission. This would include water reserves in lakes, reservoirs and boreholes.

Scope 2: Purchased water, steam or ice. This would include mains water supply as well as other deliveries of water i.e. for coolers.

Scope 3: Other indirect water. This would include embodied water emissions in products and services.

Non-financial indicators 2020-21 m3 2019-20 m3
Water consumption (office estate), Scope 3
Supplied 1,709.00 2,365.00*
Per FTE 4.84 6.70*
Financial indicators £'000s £'000s
Water supply costs (office estate) - -
Water supply costs (non-office estate) - -

Sustainable procurement

Many of the Commission’s contracts are awarded through pan government frameworks operated by Crown Commercial Services (CCS). This allows us to take advantage of the CCS active sustainable procurement policy to ensure that environmental obligations are properly reflected.

CCS has also implemented the DEFRA2 sustainable procurement prioritisation tool to support decision making and, where appropriate, sustainability obligations are included within contracts let by CCS to ensure that:

The use of small and medium sized enterprises (SMEs) for supply of goods and services across the Commission exceeds the Government’s 25% target. During 2020-21, 26% of our procurement expenditure was sourced from SMEs (2019-20: 30%).

Accountability report

Corporate governance report

Remuneration and staff report

Remuneration report

This report covers the 12 months ending 31 March 2021 and sets out the policy and disclosures in relation to the remuneration of the Commissioners and senior managers of the Commission.

Commissioners

The Chairman and Commissioners are appointed by the Secretary of State on terms set on the basis of advice from the Civil Service Senior Salaries Review Body.

Appointments are for a period of between three and five years and may be renewed for a further term. Appointments may be terminated at any time by either party giving written notice.

Bill Moyes was appointed as Chairman for a five-year term commencing 5 September 2016. His contract provides for the Chairman to work two days per week on average. Commissioners work on average one day per week.

Commissioners’ contracts may be terminated by written notice where the Secretary of State has reason to believe that the Commissioner has been absent from Commission meetings, without explanation, for a period of longer than three months; has become bankrupt or made an arrangement with a creditor; has been convicted of a criminal ofence; has breached the Code of Conduct for Board members; or has become incapacitated by physical or mental illness.

The Commissioners’ appointments are not pensionable under the Civil Service pension scheme and no contributions have been paid by the Commission to any other scheme.

Diversity breakdown for the Board of Commissioners:

Independent member of Audit and Risk Committee

The Commission appointed Chris Andrew on a three-year contract with efect from 2 January 2019 as an independent member of the Audit and Risk Committee, for which a payment is made. His appointment followed the departure of previous independent member, Ann Harris.

Senior managers

Senior managers are normally employed directly by the Commission. Increases in pay are performance based and are broadly in line with senior Civil Service pay bands. Performance targets are set and measured in accordance with the Commission’s policy on pay and reward.

The process for the agreement of the executive teams’ performance targets, achievements against targets, and recommendations on changes in remuneration, is reviewed by the Remuneration Committee. Except during probation or where guilty of gross misconduct, senior managers’ contracts may be terminated by either party giving 12 weeks written notice.

Details of all executive directors serving during the year are provided at Appendix 1 from page 78, including the duration of their service.

Remuneration (including salary) and pension entitlements

The following sections provide details of the remuneration and pension interests of the Commissioners and Directors. This has been subject to audit review.

Remuneration of Senior Managers (salary, expenses and payments in kind) – audited information

Directors2020 to 20212019 to 2020
Salary
in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000)
Total
(in bands of £5k)
Salary
(in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000 )
Total
(in bands of £5k)
Victoria Beaumount
Executive Director – HR
100-105--41,000140-145100-1050-5-39,000140-145
Sarah Gardner
Deputy Chief Executive (Joint Acting Chief Executive – from12 February 2021)
115-120
(130-135 fye)*
--99,000215-22075-80
(105-110 fye)*
--33,000110-115
Sally Jones
Chief Operating Officer (from 26 Oct 20) (Joint Acting Chief Executive – from12 February 2021)
45-50
(120-125 fye)*
-19,00065-70-----
Neil McArthur
Chief Executive (left the organisation 30 June 2021)
145-150-71,000215-220140-14510-15-59,000215-220
Tim Miller
Executive Director - Insight and Safer Gambling
110-115--43,000150-155105-1105-10-43,000160-165
Marie Perry
Chief Financial Officer
100-105--40,000140-14520-25
(100-105fye)*
--10,00030-35
John Tanner
Executive Director - 4NLC
140-145--165,000305-310100-105
(135-140fye)*
--314,000415-420
Alistair Quigley
Chief Technology Officer
95-100--59,000150-15590-95
(95-100fye)*
0-5-59,000150-155
Helen Venn
Executive Director - Licensing and Compliance
100-105--41,000140-14595-1000-5-40,000140-145
Richard Watson
Executive Director - Enforcement and Intellegence
100-105--41,000140-14595-1000-5-40,000145-150

Former employees

Directors2020 to 20212019 to 2020
Salary
in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000)
Total
(in bands of £5k)
Salary
(in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000 )
Total
(in bands of £5k)
Ann Harris
Interim Executive Director - 4NLC(from 30 July 2018 to 31 May 2019)
-----10-15
(60-65fye)*
-3004,00010-15
Nicky Heathcote
Interim Executive Director - Regulatory Policy and Governance(from 21 May 2018 to 31 May 2019)
-----15-20
(100-105fye)*
--25,00040-45
Paul Hope
Executive Director – Consumers and Regulatory Strategy(to 31 December 2020)
75-80(110-115 fye*)--35,000110-115100-1050-5-41,000195-200
Philip Lloyd
Interim Chief Financial Officer(from 30 July 2018 to 17 January 2020)
-----105-110
(130-135fye)*
--41,000145-150
Tamsin Morgan
Director of Communications(to 19 February 2021)
90-95(100-105 fye*)---90-9595-100---95-100
David Pemberton
Executive Director – digital and planning(from 19 June 2017 to 19 July 2019)
-----30-35
(100-105fye)*
--12,00040-45
Natalie Prosser
General Counsel(from 02 November 2020 to 31 January 2021)
20-25(90-95 fye*)--12,00030-35-----
Details2020 to 20212019 to 2020
Band of highest paid directors total remuneration (£'000)145-150155-160
Median total remuneration39,16336,754
Range of staff remuneration (£'000)18 to 145-15018 to 155-160
Ratio3:76:14.29:1

Fair pay disclosures:

Remuneration of Commissioners (salary, expenses and payments in kind) – audited information

Directors2020 to 20212019 to 2020
Salary
in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000)
Total
(in bands of £5k)
Salary
(in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000 )
Total
(in bands of £5k)
Chris Andrew
Independent Audit Committee Member
0-5---0-50-5-1,200-0-5
David Rossington
Independent Committee Member NL
0-5---0-50-5---0-5
Terry Babbs (from 30 April 2020)10-15---10-15-----
John Baillie10-15-600-10-1510-15-3,900-15-20
Brian Bannister (from 30 April 2020)10-15---10-15-----
Carol Brady10-15---10-1510-15-400-10-15
Stephen Cohen10-15-100-10-1510-15-1,400-15-20
Jo Hill***(from 30 April 2020)0
(10-15fye)*
---0
(10-15fye)*
-----
Bill Moyes
Chairman
55-60-800-55-6055-60-7,600-60-65
Trevor Pearce10-15---10-1510-15-2,500-15-20
Catharine Seddon10-15-100-10-1510-15-800-10-15

Previous non executives

Directors2020 to 20212019 to 2020
Salary
in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000)
Total
(in bands of £5k)
Salary
(in bands of £5k)
Bonus Payments
(in bands of £5k)
Expenses as BiK**
(to nearest £100)
Pension Benefits
(to nearest £1,000 )
Total
(in bands of £5k)
Alison Hastings
(to 30 August 2019)
-----5-10-900-5-10
Martin Narey
(From 30 April 2020 to 31 May 2020)
0-5---0-5-----
Sarika Patel
(to 25 November 2019)
-----5-10-600-10-15
Simone Pennie
(to 31 May 2019)
-----0-5---0-5
Jonathan Scott
(to 30 April 2020)
0-5--0-510-15-1,400-15-20

Salary:

‘Salary’ includes gross salary, overtime, reserved rights to London weighting or London allowances, recruitment and retention allowances, private ofce 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 Commission and thus recorded in these accounts.

Apart from the Chair and Chief Executive, all Commissioners are paid a fixed amount for work that entails approximately one day of time per week. No employees or Commissioners were remunerated by way of service companies or third parties.

Expenses as benefits in kind:

The Commission incurred costs for travel, subsistence and accommodation in respect of the Chairman and the Commissioners whilst attending meetings at Victoria Square House. These expenses could be viewed as benefits in kind and treated by HM Revenue & Customs as a taxable emolument. To avoid doubt, such taxes are paid by the Commission.

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. There were no bonuses paid to Directors during 2020-21, the comparative bonuses reported for 2019-20 relate to the performance in 2019-20.

Pay multiples – audited information:

The Commission is required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the Commission’s workforce.

The banded remuneration of the highest paid director in the Commission in the financial year 2020-21 was £145,000-£150,000 (2019-20, £155,000-£160,000). This was 3.76 times (2019-20, 4.29 times) the median remuneration of the workforce, which was £39,163 (2019-20, £36,754). In 2020-21, 0 (2019-20, 0) employees received remuneration in excess of the highest paid director. Remuneration ranged from £18,000 to £147,000 (2019-20, £18,000-£158,000).

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

Pension benefits 2020-21 – audited information

Accrued pension at pension age as at 31/03/21
(in bands of £5,000)
Accrued Lump Sum pension at pension age as at 31/03/21
(in bands of £5k)
Real increase in pension at pension age
(in bands of £2,500)
Real increase in pension Lump Sum at pension age
(in bands of £2,500)
CETV at 31/03/21
£'000s
CETV at 31/03/20
£'000s
Real increase in CETV
£'000s
Employer contribution to partnership pension account
(nearest £100)
Victoria Beaumount
Executive Director – HR
0-5-0-2.5-694118-
Sarah Gardner
Deputy Chief Executive (Joint Acting Chief Executive)
35-4075-805-7.55-7.558049759-
Sally Jones
Chief Operating Officer (Joint Acting Chief Executive)(from 26 Oct 2020)
0-5-0-2.5-15-12-
Neil McArthur
Chief Executive(to 30 June 2021)
55-60120-1252.5-50-2.51,0851,00045-
Tim Miller
Executive Director - Insight and Safer Gambling
10-15-2.5-50-2.51118317-
Marie Perry
Chief Financial Officer
5-10-0-2.5-785118-
John Tanner
Executive Director - 4NLC
60-65185-1907.5-1022.5-251,4661,251167-
Alistair Quigley
Chief Technology Officer
20-25-2.5-5-40835633-
Helen Venn
Executive Director - Licensing and Compliance
35-40-0-2.5-51046323-
Richard Watson
Executive Director - Enforcement and Intellegence
15-20-0-2.5-25721426-

Former employees

Accrued pension at pension age as at 31/03/21
(in bands of £5,000)
Accrued Lump Sum pension at pension age as at 31/03/21
(in bands of £5k)
Real increase in pension at pension age
(in bands of £2,500)
Real increase in pension Lump Sum at pension age
(in bands of £2,500)
CETV at 31/03/21
£'000s
CETV at 31/03/20
£'000s
Real increase in CETV
£'000s
Employer contribution to partnership pension account
(nearest £100)
Paul Hope
Director – Consumers and Regulatory Strategy (to 31 December 2020)
40-4590-950-2.50-2.572769821 -
Tamsin Morgan
Director of Communications (to 19 February 2021)
- - - - - - - -
Natalie Prosser
General Counsel (from 2 November 2020 to 31 January 2021)
20-25 - 0-2.5 - 2912755 -

Civil Service Pensions

Pension benefits are provided through the Civil Service pension arrangements.

From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS).

The PCSPS has four sections:

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and five months from their normal pension age on 1 April 2012 will switch into alpha sometime between 1 June 2015 and 1 February 2022. All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate.)

Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium.

In nuvos a member builds up a pension based on pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate in 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004 (opens in new tab).

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of providers. 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).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. 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 quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes but note that part of that pension may be payable from different ages).

Further details about the Civil Service pension arrangements can be found at the website www.civilservicepensionscheme.org.uk (opens in new tab)

Cash Equivalent Transfer Values (CETV)

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 (opens in new tab) 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.

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.

Compensation for loss of office – audited information

27 employees left under Voluntary Exit terms during the period 30 June 2020 and 7 February 2021. They received separate compensation payments totalling £1,012,350. None of the employees effected were senior managers or executives.

Remuneration Committee

The members of the Remuneration Committee consists of Trevor Pearce (Chair), Carol Brady and Catharine Seddon. Catharine joined the Committee in 2020 with her first meeting in July 2020.

Staff Report

a) Analysis of Commissioners and employee costs – audited information

2020-21 Permanent
£’000s
2020-21 Short term
£’000s
2020-21 Total
£’000s
2019-20 Total
£’000s
Salaries and wages15,40757315,98014,321
Social security costs1,492651,5571,512
Other pension costs3,6861653,8513,658
Total Commissioners and staff costs20,58580321,38819,491

b) Retirement benefits

The following disclosures are made in accordance with IAS 19, 'Employee Benefits'.

(i) Employees

The Commission provides pension benefits for permanent staff under the Principal Civil Service Pension Scheme (PCSPS). The PCSPS is an unfunded multi-employer defined benefit scheme in which the Commission is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out as at 31 March 2021. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (opens in new tab).

For 2020-21, employers' contributions of £3,789,953 were payable to the PCSPS (2019-20: £3,608,473) at one of four rates in the range 26.6% to 30.3% (2019-20: 26.6% to 30.3%) of pensionable pay, based on salary bands.

The Scheme Actuary reviews employer contributions usually every four years following a full scheme valuation. The salary bands and contribution rates were revised for 2019-20 and will remain unchanged until 2021-22. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme. The contribution rates are set to meet the cost of the benefits accruing during 2020-21 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 £52,528 (2019-20: £53,405) were paid to one or more of the panel of three appointed stakeholder pension providers. Employer contributions are age-related and ranged from 8 to 14.75% (2019-20: 8 to 14.75%) of pensionable pay.

Employers also match employee contributions up to 3% of pensionable pay. In addition, employer contributions of £0, 0.0% of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service or ill health retirement of these employees.

Contributions due to the partnership pension providers at the balance sheet date were £370,193. No contributions were pre-paid.

(i) Former Director General – OFLOT

Upon the merger between the Gambling Commission and the National Lottery Commission in 2013, the Commission inherited a pension liability for a former Director General of OFLOT from 1993 to 1998. This pension is an unfunded defined benefit scheme which has benefits by analogy to the PCSPS (opens in new tab) and is paid directly from the Commission's own funds. In 2001, upon the recipient reaching retirement age, pension payments commenced.

A full actuarial valuation of both schemes was carried out by the Government Actuary at 31 March 2021 and the present value of the liability at 31 March 2021 is £215,000.

Sensitivity analysis

  1. Increasing the discount rate by 0.5% would result in a corresponding decrease in liabilities of approximately £9,000 or 4%.
  2. Increasing the CPI inflation assumption by 0.5% would result in a corresponding increase in liabilities of approximately £9,000 or 4%.
  3. Increasing assumed life expectancies in retirement by around one year would result in a corresponding increase in liabilities of approximately £7,000 or 3%.

The opposite changes in assumptions to those previously set out would produce approximately equal and opposite changes in the liability. Similarly, doubling the changes in the assumptions would produce approximately double the changes in the liability.

The sensitivities show the change in each assumption in isolation. In practice the financial assumptions rarely change in isolation and given the interdependencies between them, the impacts of such changes may offset each other to some extent.

Under IAS 19 the Commission is required to show the present value of these liabilities on its Statement of Financial Position.

Financial assumptions

The main financial assumptions and life expectancy assumptions used by the actuary in calculation of the liability for the schemes are as follows:

31 March 202131 March 2020
Discount rate for scheme liabilities1.25%1.80%
Rate on increase in salaries2.22%2.35%
Rate of increase for pensions in payment, in line with inflation2.22%2.35%
CPI inflation assumption2.22%2.35%

Life expectancy at retirement

Current pensionersAs at 31 March 2021As at 31 March 2020
Exact ageMen (years)Women (years)Men (years)Women (years)
6026.928.626.828.4
6522.023.721.923.5

c) Average number of persons employed – audited information

The average number of whole-time equivalent persons employed during the year was as follows:

2020 to 20212019 to 2020
Permanent staff327331
Other staff1120
Staff engaged on capital projects0-
Total338351

d) Of-payroll appointments

i For all off-payroll engagements as of 31 March 2021, for more than £245 per day and that last for longer than six months
No. of existing engagements as of 31 March 2021nil
of which...
No. that have existed for less than one year at time of reporting.nil
No. that have existed for between one and two years at time of reporting.nil
No. that have existed for between two and three years at time of reporting.nil
No. that have existed for between three and four years at time of reporting.nil
No. that have existed for four or more years at time of reporting.nil
Confirmation that all existing off-payroll engagements, outlined above, have at some point been subject to a risk based assessment as to whether assurance is required that the individual is paying the right amount of tax and, where necessary, that assurance has been sought.nil
ii For all new of-payroll engagements, or those that reached six months in duration, between 1 April 2020 and 31 March 2021, for more than £245 per day and that last for longer than six months
No. of new engagements, or those that reached six months in duration between 1 April 2020 and 31 March 20211
of which...
No. assessed as caught by IR35.1
No. assessed as not caught by IR35.nil
No. engaged directly (VIA PSC contracted to department) and are on the departmental payroll.nil
No. of engagements reassessed for consistency / assurance purposes during the year.nil
No. of engagements that saw a change to IR35 status following the consistency review.nil
iii. For any of-payroll engagements of board members, and/or senior officials with significant financial responsibility, between 1 April 2020 and 31 March 2021
No. of off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, during the financial year.nil
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 year21

Reporting of Civil Service and other compensation schemes – exit packages – audited information

2020-212019-19
Exit package cost band (including any special payment element)Compulsory redundancies
Number
Other departures agreed
Number
Total exit packages by cost band
Number
Compulsory redundancies
Number
Other departures agreed
Number
Total exit packages by cost band
Number
Less than £10,000------
£10,001 – £25,00011314-44
£25,001 – £50,000-88-11
£50,001 – £100,000-88-11
£100,001 – £150,000------
£150,001 – £200,000------
>£200,000------
Total number of exit packages12930-66
Total cost (£)19,9811,124,6031,144,584-195,524195,524

Redundancy and other 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 (opens in new tab).

The table on the previous page shows the total cost of exit packages agreed and accounted for in 2020-21 (2019-20 comparative figures are also given). £1,012,350 exit costs (27 exits) were paid in 2020-21, the year of departure.

Exit costs are accounted for in full in the year of departure. Provisions have been created for 3 exits which have been agreed in year, but with a departure date after 31 March 2021. 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.

Consultancy costs

As per Note 3(b) of the Annual Accounts, consultancy costs totalling £2.0m (2019-20: £1.02m), £1.8m relates to increased costs relating to the National Lottery Competition on consultancy assignments.

Employment Statistics for 2020-21 (as at 31 March 2021)

Total Employment by contract type
Fixed Term Employees16
Permanent Employees319
Total335
Department split
Strategy13
Research, Statistics & Policy37
Regulatory Projects2
PMO6
People Services11
NSRGH7
Licensing42
Legal6
Enforcement & Intelligence48
Governance6
Finance12
Facilities4
Executive6
Executive Support8
Digital & Technology31
Data Infrastructure Projects1
Contact Centre14
Compliance36
Communications9
4NLC19
3NL, Policy & Major Projects17
Total335
Diversity – disability
Employees with a disability as defined under the Equality Act 201016
Employees without a disability as defined under the Equality Act 20109
Not disclosed310
Total335
Diversity – ethnic origin
Asian or Asian British – Indian16
Asian or Asian British – Other0
Asian or Asian British – Pakistani8
Black or Black British – African2
Black or Black British – Caribbean5
Mixed – White and Asian3
Mixed – White & Black Caribbean4
Not Disclosed34
Other Ethnic Background4
Other Mixed Background0
Other White Background5
White British244
White Irish4
Prefer Not to Say6
Total335
Diversity – age
24 and under10
25-3488
35-44109
45-5486
55-6442
65-740
Total335
Diversity – gender
Female172
Male163
Total335
Sickness absence rates
1 April 2019 to March 2020% of working days lost
Quarter 11.30
Quarter 21.30
Quarter 32.67
Quarter 42.09
Total1.84

Policies and procedures

The Commission has a range of policies and procedures in place relating to recruitment, sickness absence, learning and development and Dignity at Work.

Each of our policies aim to achieve fair practices for all job applicants and employees, ensuring that disability and all protected characteristics are managed fairly and appropriately. The Commission is also signed up to the Disability Confident scheme which guarantees interviews for candidates with disabilities who meet the criteria.

We continue to report on the Gender Pay Gap, and action we are taking to reduce it. We routinely report to the Board on workforce diversity. Equality issues are covered and assessed within each of our policies, and as part of our compliance with the Equalities Act 2010. Our Trade Union Partnership agreement has continued this year, alongside our Trade Union Health and Safety Committee which meets regularly.

Sickness rates

During the year, the average proportion of working days lost to sickness was 1.84% (2019-20: 5.08%) which includes long term absence related to mental health, covid/covid related, underlying health conditions and extended periods of recovery following operations. Our occupational health and employee assistance partners are providing us with ongoing support for colleagues and management alike.

Trade Union facility time

Relevant union officials
Number of employees who were relevant union officials during 2020-219.00
Full time equivalent employees who were relevant union officials during 2020-218.63
Percentage of time spent on facility time
%Number of employees
0-
1-509
51-90-
100-
Percentage of pay bill spent on facility time£'000s
Total cost of facility time24
Total pay bill21,388
Percentage of the total pay bill spent of facility time0.11%
Paid trade union activities
Time spent on paid trade union activities as a percentage of total paid facility time8%

Parliamentary accountability disclosures

Regularity of expenditure

Losses and special payments – audited

Managing Public Money states that individual losses and special payments of more than £300k should be noted separately.

There were no losses or special payments exceeding £300k during 2020-21.

Gifts – audited

Managing Public Money states any gifts made over the limits proscribed limits should be disclosed.

There were no gifts made during 2020-21.

Fees and charges – audited

In accordance with Managing Public Money, entities should provide an analysis of fees and charges income where material.

Remote contingent liabilities – audited

Managing Public Money states any material remote contingent liabilities (that is, those that are disclosed under Parliamentary reporting requirements and not under IAS 37) should be reported.

There were no remote contingent liabilities during 2020-21.

Andrew Rhodes
Interim Chief Executive and Accounting Officer
6 July 2021

William Moyes
Chairman
6 July 2021

Parliamentary accountability and audit report

Opinion on financial statements

I have audited the financial statements of the Gambling Commission for the year ended 31 March 2021 under the Gambling Act 2005. The financial statements comprise:

These financial statements have been prepared under the accounting policies set out within them. The financial reporting framework that has been applied in their preparation is applicable law and International Accounting Standards as interpreted by HM Treasury’s Government Financial Reporting Manual. I have also audited the information in the Accountability Report that is described in that report as having been audited.

In my opinion, the financial statements:

Opinion on regularity

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

Basis for opinions

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

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I have also elected to apply the ethical standards relevant to listed entities. I am independent of the Gambling Commission in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

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

Conclusions relating to going concern

Gambling Commission’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 Gambling Commission's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

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

Other Information

The other information comprises information included in the annual report, but does not include the parts of the Accountability Report described in that report as having been audited, the financial statements and my auditor’s report thereon. The Commission and 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 report, I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, 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, based on the work undertaken in the course of the audit:

Matters on which I report by exception

In the light of the knowledge and understanding of the Gambling Commission and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance and Accountability reports. I have nothing to report in respect of the following matters which I report to you if, in my opinion:

Responsibilities of the Commission and Accounting Officer for the financial statements

As explained more fully in the Statement of the Commission and Accounting Officer’s responsibilities, the Commission and the Accounting Officer are responsible for:

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 Gambling Act 2005.

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

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulation, including fraud.

My procedures included the following:

Inquiring of management, the Gambling Commission’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Gambling Commission’s policies and procedures relating to:

In addition to the previous, my procedures to respond to identified risks included the following:

I also communicated relevant identified laws and regulations and potential fraud risks 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 (opens in new tab).

This description forms part of my report.

In addition, I am required to obtain evidence sufficient to give reasonable assurance that the income and expenditure reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions 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 that I identify during my audit.

Report

I have no observations to make on these financial statements.

Gareth Davies
6 July 2021
Comptroller and Auditor General

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

Financial statements

Statement of comprehensive net expenditure for the year ended 31 March 2021

Notes31 March 2021
£'000s
31 March 2020
£'000s
Income
Licence fee income4b18,46319,653
Other income5405251
Total operating income18,86819,904
Expenditure
Staff costs3a(21,388)(19,491)
Depreciation and amortisation6 & 7(696)(644)
Right-of-use depreciation16(942)(823)
Other expenditure3b(15,035)(16,495)
Total operating expenditure(38,061)(37,453)
Net operating expenditure(19,193)(17,549)
Finance income4b1565
Finance expense(3)(12)
Finance cost on lease liability3b(102)(114)
Interest cost on pensions liability3a(4)(6)
Net expenditure for the year(19,287)(17,616)
Other comprehensive expenditureNotes31 March 2021
£'000s
31 March 2020
£'000s
Net loss on pension liability3a(9)(1)
Comprehensive expenditure for the year(19,296)(17,617)

The Commission receives grant-in-aid funding which fully covers the National Lottery expenditure. Grant-in-aid is treated as a financing transaction rather than revenue and is taken directly to reserves.

Statement of financial position as at 31 March 2021


Notes
31 March 2021
£'000s
31 March 2020
£'000s
Non current assets
Property, plant and equipment6693910
Intangible assets7553773
Right-of-use assets163,9454,887
Total non-current assets5,1916,570
Current assets
Trade and other receivables8918916
Cash and cash equivalents919,55616,605
Total current assets18,47417,521
Total assets23,66524,091
Current liabilities
Trade and other payables10(14,634)(13,655)
Short Term Lease Liabilities16(932)(782)
Pension Liability and Provisions12(16)(15)
Consolidated Fund payables13-(278)
Total current liabilities(15,582)(14,730)
Total assets less current liabilities8,0839,361
Non-current liabilities
Other payables11(628)(794)
Long Term Lease Liabilities16(3,305)(4,398)
Pension Liability12(199)(203)
Total non-current liabilities(4,132)(5,395)
Total assets less total liabilities3,9513,966
Taxpayers' equity
General Fund3,9513,966
Total equity143,9513,966

Andrew Rhodes
Interim Chief Executive and Accounting Officer
6 July 2021

William Moyes
Chairman
6 July 2021

Statement of cash flow for the year ended 31 March 2021


Notes
31 March 2021
£'000s
31 March 2020
£'000s
Cash flows from operating activities
Net expenditure for the year*(19,196)(17,561)
Adjustments for non-cash transactions6, 7, 12 & 161,6251,774
(Increase)/Decrease in trade and other receivables8(2)714
Increase/(Decrease) in trade and other payables10,11 & 13534(9,418)
Use of provisions12(3)(8)
Net cash inflow from operating activities(17,042)(24,499)
Cash flows from investing activities
Interest received4b1565
Purchase of property, plant and equipment6(194)(440)
Purchase of intangible assets7(65)(299)
Net cash outflow from investing activities(244)(674)
Cash flows from financing activities
Grant-in-aid for revenue expenditure18,48717,020
Grant-in-aid advance for revenue expenditure21794-
Payment of lease liabilities16(1,044)(1,002)
Net cash inflow from financing activities18,23716,018
Net Increase/(Decease) in cash and cash equivalents in the period9951(9,155)

Cash and cash equivalents at 31 March 2020: 16,605
Cash and cash equivalents at 31 March 2021: 17,556

Statement of changes in taxpayers' equity for the year ended 31 March 2021

NotesIncome & Expenditure Reserve
£'000s
Balance at 1 April 20194,563
Changes in reserves
Comprehensive net expenditure for the year(17,616)
Actuarial gain arising on pension scheme(1)
Grant-in-aid for revenue expenditure17,020
Total recognised comprehensive net expenditure for 2019-20(597)
Balance at 31 March 20203,966
Balance at 1 April 20203,966
Changes in reserves
Grant-in-aid for revenue expenditure18,487
Grant-in-aid advance for revenue expenditure21794
Comprehensive net expenditure for the year(19,287)
Actuarial loss arising on pension scheme(9)
Total recognised comprehensive net income for 2020-21(15)
Balance at 31 March 20213,951

Notes to the accounts

Statement of accounting policies

Statement of Operating Costs by operating segment

Annual Report 20-21 - Statement of Operating Costs:

Staff costs

Fee receipts

Other income

Miscellaneous income collected during the year relates to penalties issued for breach of licence conditions, withdrawn applications, contributions to costs arising from enforcement action.

2021
£'000s
2020
£'000s
Miscellaneous income405251
Total other income405251

Property, plant & equipment

IT hardware
£'000s
Furniture & fittings
£'000s
Plant & machinery
£'000s
Assets under the course of construction
£'000s
Total
£'000s
Cost/valuation
At 1 April 20192,1812,242185-4,608
Reclassification*18--(1)17
Additions26845-127440
Disposals44---44
At 31 March 20202,5112,2871851265,109
Accumulated depreciation
At 1 April 20191,5332,093183-3,809
Reclassification*5---5
Provided in year309751-385
At 31 March 20201,8472,168184-4,199
Net book value at 31 March 20206641191126910
Net book value at 31 March 20196481492-799
IT hardware
£'000s
Furniture & fittings
£'000s
Plant & machinery
£'000s
Assets under the course of construction
£'000s
Total
£'000s
Cost/valuation
At 1 April 20202,5112,2871851265,109
Additions1922--194
Assets brought into use126--(126)-
At 31 March 20212,8292,289185-5,303
Accumulated depreciation
At 1 April 20201,8472,168184-4,199
Provided in year33477--411
At 31 March 20212,1812,245184-4,610
Net book value at 31 March 2021648441-4,610
Net book value at 31 March 20206641191126910

Intangible assets

IT software
£'000s
IT software licences
£'000s
Websites delivering services
£'000s
Assets under the course of construction
£'000s
Total
£'000s
Cost/valuation
At 1 April 20196,0382792841736,774
Reclassification*(19)145--126
Additions391314-408
Assets brought into use---(109)(109)
At 31 March 20206,410427298647,199
Accumulated amortisation
At 1 April 20195,534279216-6,029
Reclassification*7145--138
Provided in year234-25-259
At 31 March 20205,761424241-6,426
Net book value at 31 March 202064935764773
Net book value at 31 March 2019504-68173745
IT software
£'000s
IT software licences
£'000s
Websites delivering services
£'000s
Assets under the course of construction
£'000s
Total
£'000s
Cost/valuation
At 1 April 20206,410427298647,199
Additions605--65
Assets brought into use64--(64)-
At 31 March 20216,534432298-7,264
Accumulated amortisation
At 1 April 20205,761424241-6,426
Provided in year258324-285
At 31 March 20216,019427265-6,711
Net book value at 31 March 2021515533-553
Net book value at 31 March 202064935764773

Trade and other receivables

2021
£'000s
2020
£'000s
Trade receivables13098
Deposits and advances1352
Accrued income157-
Prepayments618766
Total918916

Cash and cash equivalents

2021
£'000s
2020
£'000s
Balance at 1 April16,60525,760
Net change in cash and cash equivalent balances951(9,155)
Balance at 31 March17,55616,605
The following balances at 31 March were held at:
Government Banking Service7,2608,930
Commercial banks and cash in hand10,2967,675
Balance at 31 March17,55616,605

The majority of the Commission's cash and cash equivalent balances are held at commercial banks or as cash in hand apart from £7,259,730 (£8,929,892 in 2019-20) which is held with the Government Banking Service.

Trade and other payables

2021
£'000s
2020
£'000s
Trade payables9821,152
Staff cost payables1,079950
Other payables339240
Accruals and deferred income*11,91911,313
Short term provisions132-
Provision for Bloomsbury Street premises183-
Total14,63413,655

Amounts due after more than one year

2021
£'000s
2020
£'000s
Deferred income628794
628794

Pension liability provision

This provision recognises the payments due in respect of a former chairman of OFLOT.

2020
£'000s
At 1 April 2019226
Interest cost6
Actuarial loss in the period1
Pensions paid in the year(15)
At 31 March 2020218
2021
£'000s
At 1 April 2020218
Interest cost4
Actuarial loss in the period9
Pensions paid in the year(16)
At 31 March 2021215

The pension liability provision of £214,934 is split between, liability not later than one year (£15,679), and liability greater than one year (£199,255).

Consolidated Fund payables

The Commission held the following Consolidated Fund payables at 31 March 2021.

2020
£'000s
2021
£'000s
At 1 April2789,873
Arising in the year2,8174,544
Settled in the year(3,095)(14,139)
At 31 March-278

There are no payables in relation to fines recovered due to be surrendered to HMT as at 31 March 2021.

Effect of pension liability on statement of financial position

Notes2020
£'000s
2021
£'000s
General fund excluding pension liability4,1664,184
Pension liability12(215)(218)
General Fund3,9513,966

Capital commitments

At 31 March 2021 there were no capital commitments (£0 in 2019/20).

Right-of-use assets

Commitments under operating leases

Following the adoption of IFRS 16 in 2019-20 financial accounts, the Commission has categorised all leases are on recognised as lease liabilities, with the exception of those leases which are exempt either by having less than 12 months to run from 31st March 2020 or are considered low value (less than £5,000).

Rentals due under operating leases are charged over the lease term on a straight-line basis, or on the basis of actual rental payable where this fairly reflects usage.

At 31st March 2021 the Commission was committed to making the following payments in respect of operating leases:

As at 31 March 2021As at 31 March 2020
Land and buildings
£'000s
Other
£'000s
Land and buildings
£'000s
Other
£'000s
Obligations under operating leases for the following periods:
Not later than one year-11-11
Later than one year and not later than five years----
Later than five years----
-11-11

Related party transactions

The Commission is a Non-Departmental Public Body funded through the collection of licence fees from the industry and grant-in-aid for National Lottery operations. DCMS is regarded as a related party. During the 12 months to 31 March 2020, the Commission has had a small number of material transactions with DCMS, comprising of:

During the period none of the Commissioners, members of key management staf or other related parties have undertaken any material transactions with the Commission. All Commissioners were paid by the Commission, see remuneration report for further details.

Financial instruments

IFRS 7 and IFRS 9 (Financial Instruments: Disclosures) establishes principles for the presentation, recognition and measurement, and disclosure of financial instruments as liabilities or equity.

In accordance with IFRS 7 and IFRS 9, the carrying values of short term assets and liabilities (at amortised cost) are not considered different to fair value.

Because of the way that the Commission is funded the Commission is not exposed to the degree of financial risk faced by business entities.

Also financial instruments play a more limited role in creating or changing risk than would be typical of listed companies, to which these standards mainly apply.

The Commission has obtained consent from its sponsoring department to place surplus funds on bank deposit. It would also require consent from its sponsoring department prior to acquiring financial instruments or borrowings.

Currency risk

The Commission is a domestic organisation with the great majority of transactions and all assets and liabilities being in the UK and denominated in sterling. The Commission has no overseas operations. The Commission therefore is not exposed to currency rate fluctuations.

Market rate risk

Other than finance leases, the Commission has no borrowings and therefore is not exposed to interest rate risk.

Credit risk

The Commission does not provide credit arrangements for the payment of licence fees by the industry. All fees must be paid on or before the date prescribed to prevent a breach of the licence and the licence being revoked. As the Commission relies on fees receivable from the gambling industry (payable immediately) and departmental grant-in-aid for specific projects the Commission has very low exposure to credit risk.

Liquidity risk

Other than finance leases, the Commission has no borrowings and relies on fees receivable from the gambling industry and departmental grant-in-aid for its cash requirements, the Commission is exposed to minimal liquidity risk.

The Commission adopted IFRS 16 Leases during the 2019-20 financial year. The nature of the lease agreements and the resulting cash flows did not change and, as a result, the impact on liquidity is considered to be negligible.

Financial assets & financial liabilities

Financial assets

Type of financial asset2020-21
£'000s
2019-20
£'000s
Cash and cash equivalentsAmortised cost17,55616,605
Trade and other receivablesAmortised cost13098
DepositsAmortised cost--
LoansAmortised cost1352
Contract assetsAmortised cost--
Subtotal – amortised cost-17,69916,755
Equity investments – held through OCI inc. Investment Funds and Shares and Equity type InvestmentsFVOCI--
Investment in subsidiariesFVOCI--
Subtotal – FVOCI
Derivative financial instrument assetsFVTPL--
FI non Derivatives through PLFVTPL--
Subtotal – FVTPL---
Total financial assets-17,69916,755

Financial liabilities

Type of financial asset2020-21
£'000s
2019-20
£'000s
Trade and other payablesAmortised cost(1,402)(1,678)
Lease liabilityAmortised cost(4,237)(5,180)
Contract liabilitiesAmortised cost--
Subtotal – amortised cost-(5,639)(6,858)
Derivative financial instrument liabilitiesFVTPL--
Subtotal – FVTPL---
Total financial liabilities-(5,639)(6,858)
Totoal-12,0609,897

Definitions under IFRS 9:

Financial assets measured at amortised cost

Held in a business model whose objective is to hold assets to collect contractual cash flows only (e.g. a simple debt instrument not classified at fair value).

Financial assets classified and measured at FVOCI (Financial asset at fair value through other comprehensive income)

Held in business model whose objective is achieved by collecting contracts and selling financial assets. This category is mandatory for some debt instruments (i.e. all except those measured at amortised cost (AC) or FVTPL) and irrevocably elected equity instruments (which can also be measured at FVOCI).

Financial assets measured at FVTPL

(Financial asset at fair value through profit or loss) For all other equity instruments, excluding those elected above, all derivatives and any instruments specifically designated to this category using the fair value option (available on initial recognition as an alternative to measuring at FVOCI to reduce an accounting mismatch).

Contingent liabilities disclosed under IAS 37

There are contingent liabilities of £967,238 as at 31 March 2021 (£275,860, 2019-20).

The contingent liabilities figure is a combination of legal costs (£498,950) and voluntary exits (£468,288) which has been calculated under the guidance of IAS 37, based on events existing at the balance sheet date.

Grant-in-aid (GIA) advance for revenue expenditure

Due to the uncertainty of the Commissions income as a result of the Covid-19 pandemic, DCMS provided additional GIA funding to enable the Commission to maintain its reserves at the minimum level of £3.5m.

This funding is in substance GIA and has been treated in the same way as other GIA receipts from DCMS. In accordance with the FReM, GIA is treated as a financing transaction rather than as revenue as it is a contribution from a controlling entity. This GIA of £794k is offsetable from future GIA receipts from DCMS over the course of the coming four years.

It has been agreed that £451k will be offset early in 2021-22. DCMS have advised that of the remaining balance of £343k, 10% will be offset in 2021-22 and 30% for each of the following 3 years.

Events after the reporting period

These accounts were authorised for issue on the date the Comptroller and Auditor General certified the accounts as shown on the audit certificate.

There are no post balance sheet events to report since 31 March 2021.

Appendix 1

The Executive Group

The Executive Group makes decisions about projects, policy, procedure, issues and cases which cannot be resolved at an operational level as they are novel or contentious, or significantly affect the Commission’s finances or staff.

The scope of the Executive group therefore extends to:

The Executive Group also agrees items for escalation to the Board of Commissioners, setting the agenda for Board meeting and clearing Board papers.