Scottish Government relationships with public bodies: progress review

2 Scope of review and relationship to Smarter Sponsorship

2.1 This progress review of relationships with public bodes was commissioned by the Scottish Government (SG) Public Bodies Unit on behalf of the Director General Communities. The agreed remit is set out in Annex A.

2.2 There has been a substantial amount of work done on Scottish Government's relationships with its public bodies over the years. Most recently, Linda McKay carried out the 'Smarter Sponsorship' review in 2015. An Executive Team paper in October 2015 gave the following summary of the key outcomes of that review.

• There is some excellent sponsorship practice, including through "family groups" across portfolios in which strategic plans are jointly developed and risks are identified and managed.
• There is almost universal agreement that sponsorship should be a strategic activity, based on strong relationships characterised by openness, trust, respect and mutual support. There are many examples of sponsorship undertaken in this way, but there are also examples of less positive and more process-driven sponsorship.
• There are aspects of sponsorship practice and culture that could be updated, particularly support for the operational aspects of sponsorship, appetite for risk (particularly financial risk, noting potential for reputational damage arising from pulling back on oversight) and communications (which don't always feel joined up or strategic).
• There is a degree of urgency in improving performance and not tolerating the inconsistencies that may have gone unnoticed in the past, given the imminent pressures facing public bodies.
• Roles and responsibilities are not always understood and boundaries are not always respected. There is scope to provide more training, development and networking opportunities to all those involved in governance (including sponsors).
• It is important to have appropriately skilled and diverse Boards to provide strategic leadership and oversee bodies' performance. Effective succession planning for both Executive Directors and Non-Executive members is vital.
• There is scope to remove or revise some operational 'asks' of bodies both in terms of their content and the way in which they are implemented.

2.3 Overall, the approach outlined in Smarter Sponsorship is still highly relevant. New guidance and training have been developed in response to the recommendations. Many interviewees were not aware of Smarter Sponsorship itself, although there was quite widespread recognition of the approach even if not by that name. The recommendations in this report aim to see the Smarter Sponsorship fully implemented and to address some issues that have become more pressing since 2015, particularly in relation to creation of new public bodies and to criticisms from Audit Scotland and the PAPLS Committee.

2.4 The key areas explored in this report – Accountability, Assurance, Escalation and Risk and Capacity and Capability – relate to and build upon all of the bullet points in paragraph 2.2 except the penultimate point on appropriately skilled and diverse Boards. This is not because the requirement for skill and diversity of Board members has reduced or been fully met, but because the work of the Public Appointments team was widely commended by interviewees. There is no doubt still plenty to do in this area, but it seems that progress is being made so recommendations for further improvement in this report focus on other aspects.

2.5 A list of bodies, teams and groups who made representatives available for interview is included in Annex B, and I would like to thank all interviewees here for their time and input, especially the NDPB Chief Executives' Forum and the SG Delivery Bodies Group, each of which made time for two meetings to contribute to the review. This review cannot sit in isolation from a range of other important work being done across SG and in public bodies. Particular thanks are due to many people who helped me understand how this review relates to work they are leading: Jennifer Henderson and Jennie Barugh, who shared developing thinking from the Scottish Leaders Forum on accountability for outcomes; Jonathon Curry, who provided insight into how SG's approach to its relationships with public bodies should fit with its organisational vision; Lauren Murdoch, who shared thoughtful insights from her leadership of work on public appointments; Kathleen Marshall, who shared findings from her project on Ministerial Appointments; Linda McKay, who provided a valuable non-executive perspective as well as helping ensure that this review built on her earlier work on Smarter Sponsorship; Laura Turney, who made connections with work on Public Service Reform; Sarah O'Donnell, who shared both her public body experience and her experience of developing assurance arrangements for DG Communities; and Andrew Fleming, who shared early thinking from a review of relationships with Health Boards. The Public Bodies Unit commissioned and supported this review and it could not have been completed without huge contributions from Ian Thomson, Scott McQueen, Euan Campbell and Anna Bragg, as well as senior sponsors Catriona Maclean and Paul Johnston.