Ordnance Survey Limited Annual Report & Accounts 2016−17 Ordnance  Survey Limited Annual Report & Accounts 2016−17 Presented to Parliament by the Secretary of State for Business, Energy & Industrial Strategy by Command of Her Majesty July 2017 Cm 9458 © Crown copyright 2017 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open‑government‑licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/government/publications Any enquiries regarding this publication should be sent to us at [email protected] Print ISBN 9781474144575 Web ISBN 9781474144582 ID 08051701 07/17 Printed on paper containing 75% recycled fibre content minimum Printed in the UK on behalf of the Controller of Her Majesty’s Stationery Office 2 | Ordnance Survey Limited Annual Report & Accounts 2016−17 Contents Directors 5 Chairman’s statement 6 Chief Executive Officer’s statement 7 Strategic report 8 Financial review 12 Corporate and social responsibility 14 Employee information 16 Sustainability 18 Principal risks and uncertainties 22 Governance statement 23 Directors’ report 28 Directors’ responsibility statement 30 Directors’ remuneration 31 Audit report 35 Financial statements 36 Notes to the consolidated financial statements 43 Ordnance Survey Limited Annual Report & Accounts 2016−17 | 3 4 | Ordnance Survey Limited Annual Report & Accounts 2016−17 Directors Executive Leadership team Non‑Executive Directors and Member Executive Statutory Directors Kieran Murphy Nigel Clifford Non‑Executive Chairman Chief Executive Officer Jacques Cadranel Neil Ackroyd Non‑Executive Director Chief Operations Officer and Deputy Chief Executive Officer Mike Carr Non‑Executive Director Andrew Loveless Commercial Director Michael Harrison Non‑Executive Director Clive Mosey Chief Financial Officer Stephen Lake Non‑Executive Director Executive Directors Anne Jessopp Non‑Executive Member Will Davies Director of Human Resources Nick Giles External Auditors Director of Marketing & The National Audit Office Communications Registered in England and Wales David Henderson under number 09121572. Director of Products & Registered Office: Explorer House, Innovation Adanac Drive, Southampton, SO16 0AS. +44 (0)3456 050505 (General enquiries) +44 (0)2380 056146 (Textphone) Company Secretary [email protected] www.os.uk Jon O’Meara Ordnance Survey Limited Annual Report & Accounts 2016−17 | 5 Chairman’s statement It was an honour to be appointed as applications on our smart phones and on customers to be able to access our data in Chairman of Ordnance Survey (OS) in May many other map applications. OS data is more sophisticated ways than currently 2016, succeeding Sir Rob Margetts. I am used extensively in the commercial sector possible. We have also undertaken some grateful to Sir Rob for his contribution to in applications such as land planning, wide‑ranging organisational changes, the development of the organisation over building, asset management by utilities which Nigel discusses in more detail in the last eight years and I extend my best and telecommunications groups and in his report, to focus the organisation more wishes to him in his future endeavours. the financial services sector. The range effectively on its chosen customers and Both my non‑executive colleagues on the of public sector applications is wider markets and to operate more effectively Board of OS and the executive team led still, including land registration, flood with our Partners. Those Partners deserve by Nigel Clifford have made great efforts management, public health, highways our continuing thanks for their role in to welcome me into my new role. I am management, infrastructure development adding value to our data and promoting grateful to them for all their hard work and emergency service provision. the use of geospatial information over the last 12 months. throughout the economy. Finally, we have These applications will evolve and done all this while continuing to deliver For many people, OS produces the finest, continue. But there is much more a financial profit which is available to our most detailed and up‑to‑date maps in scope for OS data to be used to support shareholder the Secretary of State for the world. While that is true, and the Digital Britain. I am pleased that the Business, Energy and Industrial Strategy organisation is rightly proud of it, OS organisation is putting itself forward to reinvest as it sees fit. occupies a far more important position as an active member in a number in the UK economy. The geospatial of projects to test the potential for 2016 marked two milestones for us. The data which OS collects, processes and detailed geospatial data to power the first was the 225‑year anniversary of distributes to its many users provides an technologies of the future, whether Ordnance Survey. Our history is traced essential underpinning to a vast range Smart Cities, 5G telecommunications or back to 1791 when the Master‑General of current economic and other activity. autonomous vehicles. of the Army’s Board of Ordnance It will also be essential for the digital paid for a surveying instrument, and economy of the future. I believe that OS Our Chief Executive, Nigel Clifford, appointed three men to undertake data will come to be seen as essential to discusses these in more detail later in this national mapping. We also celebrated the development of that future economy report. I would only say that they reflect 80 years of the trig pillar. In 1936 the first in the way electricity has been to the the spirit of intellectual adventure and triangulation or trig pillar was built in development of the industrial economy. enthusiasm to contribute to the future of Cold Ashby, Northamptonshire – the start OS’s strategy is accordingly clear and the country which I have found to be so of a programme which would see some ambitious: to build the capability to evident within the organisation. 6,500 pillars installed, most of which provide the next generation of geospatial remain in existence. Only a relatively few data, providing the essential foundation OS also has a role in the promotion of years ago, OS relied on these concrete for a very wide range of public and Great Britain around the world. It is widely and stone triangulation stations to map commercial services and facilitating recognised in the geospatial community the country. Even though technological the development of a ‘smarter’ more to be a leader among national mapping developments have now overtaken them, interconnected Great Britain. agencies, whose opinion is sought they remain as distinctive features of the in many fora, providing the UK with British landscape. During the course of the last year, the influence on the international stage, for Government undertook a detailed example in the development of standards. In conclusion, I would like to thank General Review of OS to examine its role The UK has recently been ranked second all OS employees for their hard work, and value to the UK and how that value in the world in terms of its geospatial enthusiasm and commitment to the can be optimised for the future. As part readiness, recognition both of the quality organisation during this last year. of the Review, an independent economic of the data but also the uses to which it I have met many experts within the study was commissioned to consider is put. business who take justified pride in the contribution of OS activity to the their knowledge, in the work which they economy of Great Britain. This concluded The scope for development in the range do and in the contribution which they that, conservatively, OS could be expected of OS’s activities is very exciting. But as make both to the organisation and to the to contribute some £6bn in value to the a Government‑owned body, we must country more widely. While the future will UK economy in the next ten years, even also be sensitive to the need to spend undoubtedly present challenges to us all, before account is taken of the benefits our resources wisely, to seek where we it will also clearly provide opportunities which OS data might bring to developing can to improve the efficiency with which for us to continue to develop OS as a markets such as autonomous vehicles. we operate and to improve the service thriving and valuable organisation. which we offer. During the course of I have been enormously impressed by the this year, we have continued to work on sheer extent to which OS data is already developments to improve the efficiency used in everyday life. OS OpenData, which of our remote sensing technology and to Kieran Murphy is available to everyone free at the point use point cloud technology to improve Non‑Executive Chairman of use through the Open Government our 3D imaging delivery. We have started 21 June 2017 Licence, underpins the mapping a number of projects to allow our 6 | Ordnance Survey Limited Annual Report & Accounts 2016−17 Chief Executive Officer’s statement We have a vision to be the world’s most and faster decisions when it comes to Department for Business, Energy and inspiring and trusted geospatial partner. understanding and delivering what our Industrial Strategy (BEIS) (formerly By doing this we can make a real customers want and need. Business, Innovation and Skills) is difference on a local, national and in discussion with OS regarding the global scale to citizens, businesses and We are also tasked to run Ordnance Survey re‑negotiation of the PSMA contract. governments. We have the potential and ever more efficiently so we have also made In the Consumer arena, as well as opportunity to significantly improve the changes to reduce our costs. Ultimately, inspiring more people to ‘GetOutside’, lives of millions, perhaps even billions, of we believe these are the right changes for we’re supporting the government health people across the globe. Ordnance Survey to deliver the best for initiative which encourages the public to Britain, grow revenues more widely and be exercise for 150 minutes a week. However, to realise our vision and deliver fit for the future. our strategy, we have to be closer to our I’m thrilled to report our OS Maps app has customers and even more responsive We’re implementing these changes won two awards this year. The Outdoor so we can thrive in a complex and following a year where OS has shown real Industry Awards named it Digital Product changing landscape. To enable this value in supporting Great Britain. We’re of the Year; while it scooped the Avenza greater closeness with our customers, helping Britain to be digitally Smart, for the Award for Electronic Mapping from the and also operate within the commercial benefit of its government, entrepreneurs British Cartography Society. The awards environment OS faces, we’re changing and citizens, and it’s great to see our are testimony to the hard work the entire some of the ways in which we work. data recognised as a fundamental part of team have put in to make OS Maps such a national projects and a vital contributor to great digital, mobile, product. We are creating three business units, each many elements of the Industrial Strategy. with a distinct customer responsibility. These are examples of the innovation at The largest, OSGB, will be responsible These include Manchester’s CityVerve − the heart of OS. We have extended that for our Public Task, working closely the UK’s demonstrator project for culture to a wider audience through our with Government in terms of advice, the large‑scale roll out of Internet of ‘Geovation’ initiative. Geovation sets specification and content delivery. It Things (IoT) technology. We’re part of a challenges and supports entrepreneurs will also be responsible for serving and consortium of public and private sector through our Geovation Hub in supporting our commercial Partners. This organisations who are designing and Clerkenwell − we also learn a great deal team will ensure that Britain remains the delivering people‑focused solutions in about the nature of geo‑problems and best served geospatial nation in the world areas such as transport, energy, health and how we can improve our support. This and an example to others as we support culture. During the two‑year project, our initiative continues to prove both popular developments in smart infrastructure, role is to provide the geospatial framework and productive with several companies transport and mobile communications. and location expertise to support these now being formed from geospatial ideas solutions. Arguably this is now the area of explored in the Hub. The second, OS Ventures, will pursue Britain mapped to the most detail. work that’s competitive in nature − Further external insight comes from our nationally and internationally. For We’ve also been selected by the Partner Advisory Council, Geographic example, it will manage our work in the Department for Culture, Media & Sport to Information Customer Group, PSMA Users geospatial market for internet brands, help develop a ground‑breaking planning Representative Group and Scottish Spatial energy and infrastructure sectors and mapping tool that we believe will be Information Board. They have been most as critical consumers of our digital instrumental in the national roll out of 5G helpful at keeping us on our toes through content. This group will be responsible technology. The tool will be used to plot the year and have my thanks. for building on the excellence in GB to the prime locations to install the antennae create new revenues for our long‑term necessary to enable a 5G mobile network. Finally, I’d like to thank the people of OS future. We believe this clear separation It is being trialled in Bournemouth, and if for giving our organisation such a good of ‘Public Task’ from competitive activity successful we hope it will be scaled up to heart and excellent spirit. There will be will help our public sector customers cover the rest of the UK, and potentially to exciting times ahead, of course, as well and partners be clear on which hat we other countries as they develop their own as challenging and uncertain ones. I’m have on when in discussion: adviser or 5G networks. This year we’ve delivered a confident that the enthusiasm, dedication, commercial provider. new Highways product for government. We skills, vision and tenacity of everyone who believe it represents the next generation works for and with OS will see us continue Thirdly, we have our excellent Consumer of road mapping and offers one single, to strengthen the essential support we business − focused on making the authoritative, view of the whole road offer to Great Britain’s digital economy. outdoors enjoyable, accessible and safe, network. and promoting OS as an iconic leisure brand. They will clearly be contributing to We’re clearly and passionately committed our status as an exemplar as well. to our ‘Public Task’ and following the Nigel Clifford When our new organisation is ‘live’ in collection of feedback from PSMA Chief Executive Officer the summer of 2017 we’ll make better members at regional events, the 20 June 2017 Ordnance Survey Limited Annual Report & Accounts 2016−17 | 7 Strategic report The principal activity of Ordnance Survey Strategy and future outlook our excellence as an Exemplar and Limited is the collection, maintenance delivering a progressive Public Task. and distribution of up to date Over the past decade, the importance 6. Enhance OS resilience in a changing geographic information. of location data for businesses and market. Embed the business resilience governments around the globe has grown framework (including business These accounts are for the year ending significantly, with latest estimates putting continuity, risk management & security) 31 March 2017. global market for core geographical to support business operations to information (GI) to exceed $13 billion by adapt and respond to changes with Business model 2025 (Navigant, 2016). Today, OS data, limited impact to the business. services and expertise are being used Ordnance Survey Limited (OS) is Britain’s extensively across both public and private To achieve these objectives, OS is actively mapping agency. It collects, maintains sectors to drive efficiencies, support evolving the OS culture and organisation, and distributes the most accurate and up decision making and provide valuable built around a clear sense of purpose, to date geographic information for Great insight and intelligence. informed by customer and market insight Britain in accordance with its Public Task, and efficient and effective delivery. and this data is used and relied upon by OS continues to increase the pace of government, businesses and individuals. development of its new portfolio of 2015−16 commencement It provides services to government and products, services and solutions to businesses to enhance the value they benefit existing and new customers, of trading derive from geographic information. partners and markets. To enable this change, the organisation has reconfigured The 2015−16 year was the first year of OS also provides geospatial services into three market‑facing units. trade for Ordnance Survey Limited. On to other countries, helping them 1 April 2015, the entire functions, business, realise the benefits of good location OSGB will perform its public task for the subsidiaries, operations and assets of based information. Government and ensure that Great Britain the Ordnance Survey Trading Fund were continues to have the best geospatial transferred to Ordnance Survey Limited, Ordnance Survey Leisure is the Group’s infrastructure in the world. OS Ventures a limited company wholly owned by vehicle for selling geospatial products will be our commercial arm, trading the Secretary of State for Business, directly to consumers. GeoPlace® is our both at home and internationally, to Innovation & Skills, and the Company joint venture with the Local Government provide partners and customers with a commenced trading from this date. The Association that oversees the production suite of managed services in geospatial payment for the transfer was £170million, and maintenance of the national address production, land and property and and was initially left outstanding via an and street gazetteers. infrastructure. OS Consumer will continue interest‑free loan from the Secretary of to place our brand at the forefront of State for Business, Innovation & Skills The OS Board remains accountable the outdoor leisure and activity market. (now Secretary of State for Business to the Secretary of State for Business, These new units are supported by a Energy and Industrial Strategy) to Energy and Industrial Strategy (formerly number of internal business units that will Ordnance Survey Limited. the Secretary of State for Business, provide resources, capability and product Innovation and Skills) and the governance development functions. £34million of this loan was repaid via arrangements for the Company are the issue of £34million shares and set out in a Shareholder Framework With this new structure, OS is well placed the remaining balance of the loan of Document signed on 31 March 2015 by to deliver on its key strategic objectives: £136million was subsequently released the Directors of OS and for and on behalf for two additional shares, which of the Secretary of State for Business, 1. Ensure GB remains a world created a share premium account in Energy and Industrial Strategy (formerly showcase for the use of GI. equity of £136million. Subsequent to Business, Innovation & Skills). 2. Diversify and generate recurring this the Company undertook a capital revenue through focused commercial reduction which cancelled the share The majority of revenue is generated offerings in the UK and internationally. premium reserve and transferred it to the through licensing the intellectual 3. Work with partners to create a scalable, distributable retained earnings account of property rights, held under Crown highly efficient managed service the Company. copyright and data base rights, which able to support geospatial, land and is inherent in the OS data. Since April infrastructure use cases, based on our 2010, free and unrestricted access global supply chain and configured to a large range of mapping has using commercial off‑the‑shelf been provided to any prospective technology wherever possible. user via OS OpenData, a service that 4. Develop the high‑end skills, knowledge underpins a range of applications, while and experience needed to fill our promoting government transparency niche in the global ecosystem of the and encouraging greater use of 21st century geospatial market. geographic information. 5. Act as an inspiring and trusted adviser to GB Government, demonstrating 8 | Ordnance Survey Limited Annual Report & Accounts 2016−17