Scottish Government relationships with public bodies: progress review
This report, conducted by Glen Shuraig Consulting, contains 14 recommendations for improving how the Scottish Government manages its relationships with public bodies. The recommendations look to strengthen existing policies, address concerns, and allow for consistently effective sponsorship.
Summary of Recommendations
Recommendation 1
Portfolio Accountable Officers should ensure that sponsor teams work with public bodies and the public body Accountable Officers to make roles and responsibilities as clear as possible, discussing the wording in the framework document to ensure a shared understanding.
Risk if not implemented:
Important issues of governance are missed and/or SG undermines the operational effectiveness of the body.
Likelihood: Low
Impact: High
Resource required to implement:
Senior attention in each DG area, plus some time from existing sponsor or equivalent teams.
Support from the Public Bodies Unit within resource in recommendation 14.
Recommendation 2
Portfolio Accountable Officers should ensure that a full business case and evaluation of different governance options is carried out, drawing on advice from Public Bodies Unit and other central teams including Finance and SG Legal Directorate, before any new public body is created, that advice reflects a presumption against the creation of further small public bodies, and that all of the analysis and eventual decision are retained to inform future sponsorship of the body.
Risk if not implemented:
Governance structures are established and long-term costs locked in without proper consideration of options – increasing the chances of governance failure and adding pressure to budgets.
Likelihood: Medium
Impact: High
Resource required to implement:
Senior attention and time from the policy team in each DG area where the creation of a new public body is being considered – but there may be a reduction in resource in the longer term as problems may be avoided.
Support from the Public Bodies Unit within resource in recommendation 14.
Recommendation 3
If there is a decision that the creation of a small public body is essential, the relevant Portfolio Accountable Officer should ensure that arrangements are made for the body to access corporate functions through shared services or collaborative contracts, to increase the resilience of the body.
Risk if not implemented:
Small bodies have multiple single points of failure and are undermined by the loss of key staff.
Likelihood: Medium
Impact: High
Resource required to implement:
Initial senior attention and time from the sponsor or equivalent team in any DG area where a small public body is being created – but there may be a reduction in resource in the longer term as problems may be avoided
Support from the Public Bodies Unit within resource in recommendation 14 to coordinate advice from central teams.
Recommendation 4
Public Bodies Unit should coordinate work with senior sponsors and sponsor teams to seek views from Chairs and Board members on how SG manages its relationship with the Board.
Risk if not implemented:
The Board perspective is not fully recognised in further work to improve relationships with public bodies and Boards' key role in public body governance is undermined.
Likelihood: High
Impact: Medium
Resource required to implement:
Main resource requirement would be leadership from the Public Bodies Unit – within resource in recommendation 14.
Recommendation 5
Portfolio Accountable Officers should ensure that each NDPB and agency in their area of responsibility has in place a well-developed performance framework that sets out Ministers' priorities within the overall National Performance Framework outcomes, defines as clearly as possible how success will be measured and ideally covers expectations over several years. This performance framework would usually be a central feature of the body's Corporate Plan and should be aligned with a medium-term financial plan and the projected budget for the public body.
Risk if not implemented:
A narrower focus on specific outputs or commitments fails to fully recognise and harness public bodies' potential contribution to achieving challenging outcomes, including tackling Climate Change and reducing inequality.
Likelihood: High
Impact: High
Resource required to implement:
Arguably within existing resource in sponsor teams but will require senior attention in each DG area to review existing arrangements and negotiate necessary changes.
Support and challenge from the Public Bodies Unit would be essential - within resource in recommendation 14.
Recommendation 6
Portfolio Accountable Officers should require that sponsor teams and senior sponsors who report to them are using the templates and following the guidance, and require that any decisions not to follow the guidance or template are clearly documented for the corporate record.
Risk if not implemented:
Inconsistencies of approach (e.g. not using standard terms and conditions for Board appointments) make governance failures more challenging to resolve when they do occur.
Likelihood: Low
Impact: High
Resource required to implement:
Small amount of senior attention to send and periodically reinforce the message.
Recommendation 7
Portfolio Accountable Officers should ensure that there is regular contact between NDPB Boards and both Ministers and SG officials, particularly senior officials. This is likely to include attendance at Board meetings for discussion of relevant topics, to ensure a good understanding of strategic priorities and issues. Routine attendance of SG officials at all NDPB Board meetings as observers can undermine the proper accountabilities within the system so should only be approved by Portfolio Accountable Officers where this is justified as an escalation beyond normal governance arrangements.
Risk if not implemented:
Boards fail to get the strategic perspective from Ministers or senior SG officials. Board discussion is inhibited by the presence of observers. Anything discussed in the presence of the observers is perceived as known by Ministers and senior officials.
Likelihood: Medium
Impact: High
Resource required to implement:
Likely to be resource neutral. Sponsors may save time in not attending all meetings, but will still need to read Board papers and/or consider other information provided and hold regular discussions with the team in the public body.
Recommendation 8
Portfolio Accountable Officers and senior sponsors should review the capacity and capability needed in their teams to ensure that relationships are being managed well with all public bodies, and consider how best to organise that – through policy teams or sponsorship hubs, for instance – to ensure that there is a proper focus on sponsorship activity and a strong link with policy development. In reviewing the capacity and capability, it will be important to have nominated people who can provide support to Portfolio Accountable Officers and senior sponsors in managing relationships with NMOs and agencies as well as NDPBs.
Risk if not implemented:
Over-capacity in sponsor teams leads to over-detailed scrutiny of the public body and unnecessary operating costs in teams. Under-capacity means that SG is not able to work effectively with the body, particularly in challenging circumstances.
Likelihood: Medium
Impact: Medium
Resource required to implement:
Senior attention required initially in each DG area to review current arrangements.
Longer-term resource implications will depend on the conclusions reached but could mean increased demands on the time of more senior staff and a reduction in demand at more junior levels.
Recommendation 9
Portfolio Accountable Officers should work with Internal Audit to draw on their advisory support on the management of public body relationships and to build self-assessment reviews of public body relationships in their areas, using the toolkit which Internal Audit and Public Bodies Unit plan to develop, into their overall assurance planning. Specific internal audits of relationships with an individual body should be built into audit planning where risk assessment suggests this is necessary.
Risk if not implemented:
Any weaknesses in the approach currently taken to managing public body relationships are not identified and addressed, leaving Portfolio Accountable Officers exposed if problems arise.
Likelihood: Medium
Impact: High
Resource required to implement:
Senior attention in each DG area, plus some time from existing sponsor or equivalent teams.
Internal Audit time to develop the toolkit.
Support from the Public Bodies Unit within resource in recommendation 14.
Recommendation 10
Portfolio Accountable Officers should ensure that all public bodies within their area of responsibility are aware that formal escalation of a risk or issue is an accepted part of good governance, and that they are clear on the process for escalation when this is required.
Risk if not implemented:
Opportunities for SG to have early awareness of risks and potentially to take mitigating action are missed.
Likelihood: Low
Impact: High
Resource required to implement:
Senior attention in each DG area, plus some time from existing sponsor or equivalent teams.
Recommendation 11
When public bodies or their sponsors escalate a risk or issue, this should be done through established DG assurance and risk management arrangements taking account of the urgency of the risk or issue. Where time pressure means that decisions relating to a risk or issue cannot wait an appropriate meeting, DG business management teams should ensure that any decision made is documented for the corporate record. In either case, the decision and the reasons for it, plus any further follow up action proposed, should be communicated in writing to the public body and/or the sponsor team.
Risk if not implemented:
SG does not have an audit trail of risks or issues considered and decisions taken, and therefore faces reputational damage when the risk or issue leads to a significant public failure.
Likelihood: Low
Impact: High
Resource required to implement:
Senior attention in each DG area, plus some time from existing sponsor or equivalent teams.
Recommendation 12
Portfolio Accountable Officers should take a formal decision, based on advice from sponsor teams and/or senior sponsors in consultation with the Public Bodies Unit, if a situation has arisen in which SG needs to intervene in the operation of a public body in a way that cuts across established lines of accountability. Any such decision should be communicated in writing to the public body. Interventions in the governance or operation of NMOs should not be made without legal advice.
Risk if not implemented:
SG faces reputational damage and Portfolio Accountable Officers may face personal criticism if there is no clear explanation and audit trail for an intervention in the operation of a public body, even or perhaps especially in a high-risk or crisis situation.
Likelihood: Medium
Impact: Medium
Resource required to implement:
Any situation where an intervention in the operation of a public body is being considered will already be taking up the time of a sponsor or equivalent team, senior sponsor and/or Portfolio Accountable Officer. Approaching the decision in the way proposed should not require significant additional time.
Support from the Public Bodies Unit would help ensure a consistent approach – with the resource in recommendation 14.
Recommendation 13
Public Bodies Unit should ensure that coaching and/or mentoring support is offered to the chief executive of every public body, particularly newly-appointed chief executives and those facing challenging situations or intense scrutiny.
Risk if not implemented:
Chief Executives lack the support to be fully effective in their roles, especially in a crisis.
Likelihood: Medium
Impact: High
Resource required to implement:
Support from the Public Bodies Unit to identify coaches or mentors – within resource in recommendation 14.
Recommendation 14
Identify two experienced team leaders with a good understanding of public body governance issues to take up post in the Public Bodies Unit to provide additional capacity for development, support and challenge, and review what additional staffing would be required to create a Public Bodies Hub to coordinate improvement work on sponsorship and Ministerial appointments and provide a first point of contact to sponsor teams on all public body issues.
Risk if not implemented:
SG does not have the capacity and capability in the Public Bodies Unit to implement the recommendations identified above.
Resource required to implement:
See above.
Contact
There is a problem
Thanks for your feedback