Poverty and Inequality Commission: framework document

The Commission as established by the Act, is  an advisory NDPB established by the Scottish Ministers. The Commission itself is without legal personality and therefore unable to enter into contracts in its own name.

This prohibits the Commission from engaging in the following: financial investments; borrowing; lease holding; lending, etc. This is not intended to be an exhaustive list, and advice should be sought from the sponsor unit on any financial matters not otherwise covered in this framework.

The budget allocated to the Commission will be held on its behalf by the Office of the Chief Social Policy Adviser.

[Many of the provisions included in this section - and other sections - of the framework document highlight specific requirements in the SPFM that are considered of particular relevance to Commission. It should be noted, however, that guidance in the SPFM should always be considered in its entirety as and when relevant issues arise.] 

Delegated authorities

The Commission’s specific delegated financial authorities – as agreed in consultation between the Commission and the Scottish Government – are set out in the attached Appendix. The Commission shall obtain the Scottish Government’s prior written approval before entering into any undertaking to incur any expenditure that falls outside these delegations. The Commission shall also comply with any requirements for prior Scottish Government approval included in the SPFM and/or this document. Prior Scottish Government approval must always be obtained before incurring expenditure for any purpose that is or might be considered novel, contentious or repercussive, or which has or could have significant future cost implications.

Income generation

The Commission does not hold the ability to generate income.

If gifts are offered to the Commission or its Members the Commission shall consider if there are any associated costs in receiving these or any conflicts of interests arising. The Commission shall keep a written record of any such gifts, etc. and what happened to them.

Tax arrangements

The Commission must comply with all relevant rules on taxation, including VAT. All individuals who would qualify as employees for tax purposes should be paid through the Scottish Government payroll system with tax deducted at source. It is the responsibility of the Commission to observe VAT legislation and recover input tax where it is entitled to do so. The implications of VAT in relation to procurement and shared services should be considered at an early stage to ensure that financial efficiency is achieved. 

Third party grants

Unless covered by a specific delegated authority the Commission shall not, without the Scottish Government’s prior written agreement, provide grant funding to a third party. Such funding would be subject to the guidance in the State Aid section of the SPFM. Guidance on a framework for the control of third party grants is provided as an annex to the Grant and Grant in Aid section of the SPFM.

Procurement and payment

Procurement shall be undertaken by Scottish Ministers on behalf of the Commission. Procurement should be undertaken by appropriately trained and authorised staff and treated as a key component of achieving the Commission’s objectives consistent with the principles of Value for Money, the highest professional standards and any legal requirements. All external consultancy contracts over the value of £50,000 or any proposal to award a contract without competition (non-competitive action) over the value of £10,000 must be endorsed in advance by the Accountable Officer.

The Commission shall pay all matured and properly authorised invoices relating to transactions with suppliers in accordance with the Expenditure and Payments section of the SPFM and in doing so shall seek, wherever possible and appropriate, to meet the Scottish Government’s target for the payment of invoices within 10 working days of their receipt.

Special payments and losses

Unless covered by a specific delegated authority the Commission shall not, without the Scottish Government’s prior written approval, make special payments or write-off of losses. Special payments and losses are subject the guidance in the Losses and Special Payments section of the SPFM.

Clawback

Where the Commission has financed expenditure on assets by a third party, the Commission shall make appropriate arrangements to ensure that any such assets above an agreed value are not disposed of by the third party without the Commission’s prior written consent.  The Commission shall put in place arrangements sufficient to secure the repayment of its due share of the proceeds – or an appropriate proportion of them if the Commission contributed less than the whole cost of acquisition or improvement. The Commission shall also ensure that if assets financed by the Commission cease to be used by the third party for the intended purpose an appropriate proportion of the value of the asset shall be repaid to the Commission. 

State aid

State aid is a European Commission term which refers to forms of public assistance, given to undertakings on a discretionary basis, which has the potential to distort competition and affect trade between Member States of the European Union. Any activity that the Commission undertakes itself, or funds other bodies to undertake, that can be offered on a market for goods and services is subject to state aid rules. A state aid assessment is therefore required prior to disbursing any funding and would be subject to the guidance in the state aid section of the SPFM.