Public bodies in Scotland: guide

Public bodies in Scotland

1. The following bodies make up the public bodies landscape in Scotland:

• Executive Agencies
• Non Ministerial Offices (NMOs)
• Executive Non Departmental Public Bodies (NDPBs)
• Advisory NDPBs
• Tribunal NDPBs
• Public Corporations
• Health Bodies
• Parliamentary Bodies
• Other Significant National Bodies

Use of the term 'public body'

2. Clarity on the use of the term public body and the scope of its coverage is important in providing an understanding of the range of organisations which the Scottish Government is responsible for, and the framework of governance and accountability which individual organisations operate within.

3. While the term 'public body' is often used as a generic description for any organisation operating in the public sector in Scotland, this can be misleading. More accurately, the term 'public body' describes the range of public bodies which have a direct relationship with the Scottish Government or Scottish Parliament and for which they are responsible. Not all public bodies share the same relationship with Government or operate within the framework which applies to the categories of public bodies set out above. Details of public bodies in Scotland are available in the National Public Bodies directory.

Classification of public bodies

4. Each category of public body displays particular characteristics which in turn help define the relationship with Scottish Government or the Scottish Parliament. The different categories are described below and classification guidance is provided at Annex B, describing the general characteristics of the different categories of public body and accountability arrangements. Within each category there will be variations from the general characteristics. The precise characteristics, roles and responsibilities, and accountability of individual public bodies, will be set out in their framework document agreed with Scottish Ministers. Framework documents will be reviewed continuously and updated at least every three years.

5. The Office for National Statistics (ONS) operates in accordance with guidance produced by Eurostat (the statistical office of the European Union). ONS determines a body's national accounting classification (central government, local government etc), based on whether an organisation is public or private, and market or non-market, in order to produce accurate national accounts.

The Scottish Government (or Parliament) determines the organisational type (Executive Agency, Executive NDPB etc), depending on the body's functions and its relationship with Scottish Ministers and/or the Scottish Parliament.

Executive Agencies

6. Executive Agencies are an integral part of the Scottish Government. They support Ministers in their work, focussing on delivering parts of Government business or providing a specialised function. They have well-defined remits which are aligned with and help deliver the Government's purpose and objectives. They generally have a strong focus on the management and direct delivery of public services. However, our Agencies also, to one extent or another, provide strategic policy input. In some cases, our Agencies carry responsibility for a discrete area of Government policy and activity and thus work very closely with Ministers. Their staff are civil servants including the Chief Executive, who is directly accountable to Ministers. Agencies are not statutory bodies but operate in accordance with a Framework Document which is approved by Ministers and may be reviewed, amended or revoked at any time. Director Generals and Directors (depending on the seniority of the Chief Executive) are responsible for ensuring that agencies play a full part within portfolios in support of Ministers' policies and priorities.

Functions of Agencies are such that:

• they involve delivering public services which do not require day to day Ministerial oversight but for which Ministers should nevertheless remain accountable

• it is appropriate for the service to be delivered by civil servants and for Ministers to set the strategic direction

• there are good reasons for the service being delivered at 'arm's length' from Ministers while remaining part of the Scottish Government, as opposed being part of an SG core department, the responsibility of another public body or the private sector or contracted out

Non-Ministerial Offices (NMOs)

7. NMOs are statutory bodies headed by a boards or statutory officeholders appointed by Ministers.  NMOs are not part of the Scottish Government but are part of the Scottish Administration in their own right. The NMOs are generally funded by Parliament and are required to publish their own annual report and accounts in the same way as the Scottish Government is required to do. They are directly accountable to the Scottish Parliament for the discharge of their statutory functions, but may carry out statutory duties for Ministers.  As these are Crown bodies the staff are civil servants.  Note - In England there are “Non Ministerial Departments” (NMD) which term covers a whole range of different governance structures, but in Scotland since devolution Minister create NMOs.

Functions of NMOs are such that:

• it is appropriate for the service to be delivered by civil servants but either not necessary or not appropriate for the body to be an integral part of the Scottish Government

• the relevant functions require to be separated from direct Ministerial control and it is appropriate that the body should be directly accountable to the Scottish Parliament

• the nature of the body or the services it provides is such that it should be headed by an office-holder in the Scottish Administration

Non-Departmental Public Bodies (NDPBs)

8. NDPBs, unlike Executive Agencies and NMOs, are not part of the Scottish Government or the Scottish Administration. They carry out administrative, commercial, executive or regulatory functions on behalf of Government; and operate within a framework of governance and accountability set by Ministers. NDPBs comprise:

• Executive NDPBs which carry out administrative, commercial, executive or regulatory functions on behalf of Government. They are normally established by statute; they employ their own staff, who are not civil servants, and manage their own budgets; and are accountable to a board whose members are normally appointed by Ministers

• Advisory NDPBs which provide independent expert advice to Ministers and others or input into the policy-making process in relation to particular subject. They are normally established by Ministers on a non-statutory basis; do not normally employ staff (administrative support is usually provided by the SG); and are not normally responsible for budgets or expenditure other than remuneration for Board members. They are accountable to a board whose members are normally appointed by Ministers

• Tribunals which are responsible for tasks and advice relating to specialist areas of the law and carry out judicial functions such as determining the rights and obligations of private citizens, although they are not part of the court system. They are independent of the Scottish Government. They have both specialist and lay members but do not employ staff and are not responsible for budgets or expenditure other than remuneration for Tribunal members

Functions of NDPBs are such that:

• it is appropriate for Ministers to set the strategic framework for the body and remain ultimately but not directly responsible for the services it provides, as opposed either to bringing it under more immediate Ministerial control or transferring the function or service to a private sector body, contracting it out, or abolishing it

• the functions or services in question require specialist knowledge or expertise which civil servants would be unable to provide

• there is a need for a body to provide independent, expert advice to Ministers

• the services in question should be provided by a body which is responsible for taking its own decisions without political influence or interference

Public corporations

9. Public corporations are industrial or commercial enterprises under Government control which recover more than 50% of their costs through fees charged for services provided to customers. They employ their own staff, who are not civil servants, manage their own budgets and report to a Board whose members are appointed by Ministers. Bodies are normally established as public corporations if they operate in a commercial environment or work closely with private sector providers.

Health bodies

10. These comprise 14 regional health boards, 8 special health boards and the mental Welfare Commission for Scotland. With the exception of the MWCS, health bodies are part of the NHS and provide healthcare services or management, technical or advisory services within the NHS.

Parliamentary commissioners and ombudsmen

11. Parliamentary commissioners and ombudsmen are typically responsible for safeguarding the rights of individuals, monitoring and reporting on the handling of complaints about public bodies, providing an adjudicatory role in disputes and reporting on the activities and conduct of public boards and their members. The jurisdictions of these officeholders usually covers Scottish Government activity, so it is important to ensure independence from the Scottish Ministers.

Parliamentary Commissioners and Ombudsmen are appointed by the Scottish Parliamentary Corporate Body (SPCB) with the approval of the Scottish Parliament. Each office holder is responsible for employing their own staff, who are not civil servants, and managing their own budgets from funding provided by the Scottish Parliament. Whilst these officeholders are independent in function (i.e. in undertaking their respective regulatory responsibilities), they are accountable to and report directly to the Scottish Parliament on the day to day operation of their offices (i.e. funding, accounts, staffing arrangements etc).

Other significant national bodies

12. There are a range of other bodies which have a direct relationship with either the Scottish Government or the Parliament and operate within a framework which is set by Ministers. However, by definition they do not fall within any of the recognised categories of public bodies set out above.

13. The bodies in this category include Audit Scotland; the James Hutton Institute; JP Advisory Committees; Moredun Research Institute; Prison Visiting Committees and Scotland’s Rural College (SRUC).

Annex B Scottish Government Public Body Classification Guidance

The tables below describe the accountability arrangements that apply in the main categories of public body Within each category there will be deviations from the general characteristics. The precise characteristics and accountability of individual public bodies should be set out in an appropriate framework document, and made available through the websites of individual public bodies.

Executive Agencies

Characteristics

• integral part of the Scottish Government
• defined business unit, with a clear focus on delivery and, in some cases a discrete area of policy, headed by a Chief Executive
• large enough to be independently accountable within the parent Portfolio
• part of the Director General 'cluster'
• Chief Executive is supported by an advisory management Board (with some external non-exec members) or a senior management team
• staffed by civil servants, including the Chief Executive
• relationship with Ministers and parent portfolio set out in the Framework Document
• ministers approve and provide funding

Accountability

• ministers set the policy and resources framework and are ultimately accountable to Parliament for the functions and performance of the Agency
• the Chief Executive is accountable for the operation of the Agency and is normally designated as the Accountable Officer
• Ministers hold the Chief Executive to account for the performance of the Agency, supported (as appropriate) by the relevant Director General/Director
• Accountable Officer responsible for the use of resources but Ministers remain accountable to the Parliament for the allocation of public funds
• subject to relevant guidance issued by Ministers e.g. the Scottish Public Finance Manual
• framework document defines the relationship between Ministers, Portfolio Accountable Officer (and Director where appropriate) and the Chief Executive
• prepares its own annual reports and accounts which are presented to Ministers and laid in front of Parliament
• the Chief Executive is appraised by either the relevant Director General or Director within the Ministerial portfolio
• some Agency Chief Executive's are non-ministerial office holders who are not subject to direction of Ministers in the discharge of statutory functions for which the office holder is responsible

Non-ministerial departments

Characteristics

• part of the Scottish Administration and staffed by civil servants
• headed by a non-ministerial office holder in the Scottish Administration - either an individual or a body corporate with a separate legal identity and specific statutory functions
• not subject to direction of Ministers in the exercise of statutory functions for which the office holder is responsible
• established to deliver specific statutory functions that do not require direct accountability through Ministers to Parliament
• funded direct from the Scottish Consolidated Fund rather than via Ministerial portfolios
• accounts not included in the Scottish Government's consolidated accounts

Accountability

• Ministers are responsible for determining the functions of the body and set the overall strategy, policy and organisational framework within which it operates including through founding legislation. Ministers may wind it up (subject to Parliamentary approval where required and in some cases only in certain circumstances specified in statute)
• an Office Holder (which may be a body corporate, that is, a board) is responsible for the delivery and performance of statutory functions
• budget approved by Ministers as part of the Spending Review process and considered by Parliament through the budget process (variations apply in the case of Registers of Scotland)
• corporate and business plans approved by Ministers (or the Lord President for SCS) in line with spending proposals (variations apply in the case of Registers of Scotland)
• Accountable Officer is responsible for the effective and efficient use of resources by the NMD, is not the Office Holder and is directly accountable to the Scottish Parliament
• prepares its own annual reports and accounts, which are presented to Ministers (or the Lord president for SCS) and laid in Parliament
• individual statutory Office Holders appraised by the relevant DG/Director
• body corporate NMDs hold the Chief Executive to account and the Chair carries out the appraisal of the Chief Executive
• where the Office Holder is a body corporate, Ministers (or the Lord president for SCS) have responsibility for appointments to the body
• details of arrangements above are set out in a Framework Document or other formal agreement

Public corporations

Characteristics

• are established by statute or under the Companies Act
• operates within a strategic framework set by Ministers
• are industrial or commercial enterprises, largely trading bodies, under direct control of Scottish Ministers
• headed by a Board whose members are appointed by Ministers
• a body corporate, staff are employed by the body and are not civil servants
• allocated and manage their own budgets
• Ministers appoint (and can remove) the Board

Accountability

• directly accountable to Ministers, and through Ministers to Parliament
• subject to relevant guidance issued by Ministers e.g. the Scottish Public Finance Manual
• subject to a general or specific Ministerial power of direction (with appropriate safeguards in certain circumstances)
• Chief Executive is designated as the Accountable Officer
• relationship between Government and the Body set out in an appropriate Framework document
• Accountable Officer responsible for the use of resources but Ministers remain accountable to the Parliament for the allocation of public funds
• board holds the Chief Executive to account
• Ministers ultimately accountable to Parliament for the functions and performance of the body and have the power to wind it up (subject to Parliamentary approval (as required)
• provided loans from Government
• prepares its own annual reports and accounts which are presented to Ministers and laid in front of Parliament
• Ministers agree Corporate and Business plans

Executive non-departmental public bodies (NDPBs)

Characteristics

• operate within a Strategic Framework set by Ministers
• have their own legal identity i.e. are established by statute or set up as companies ltd by guarantee
• carry out administrative, commercial, executive or regulatory functions on behalf of the Scottish Government
• provide specialist advice to Ministers and others
• headed by a Board which is appointed by Ministers
• a body corporate, staff are employed by the body and are not civil servants
• allocated and manage their own budgets

Accountability

• directly accountable to Ministers, and through Ministers to Parliament
• Chief Executive is designated as the Accountable Officer
• Accountable Officer responsible for the use of resources but Ministers remain accountable to the Parliament for the allocation of public funds
• Board holds the Chief Executive to account
• Ministers ultimately accountable to Parliament for the functions and performance of the body and have the power to wind it up (subject to Parliamentary approval (as required))
• the relationship between Ministers, SG and the NDPB is set out in the relevant legislation and the Management Statement/Financial Memorandum
• most NDPBs funded by Grant-in-aid (some are funded through sectoral levies) and receive an annual guidance letter
• subject to relevant guidance issued by Ministers e.g. the Scottish Public Finance Manual
• Ministers agree Corporate and Business plans and appoint (and can remove) Board members
• subject to a general or specific Ministerial power of direction (with appropriate safeguards in certain circumstances)
• prepares its own annual reports and accounts which are presented to Ministers and laid in front of Parliament

Advisory non-departmental public bodies (NDPBs)

Characteristics

• are established by Statute or administratively by Ministers
• operate within a strategic framework set by Ministers
• carry out advisory functions, providing independent specialist/expert advice to Ministers and others
• headed by a Board which is appointed by Ministers
• do not normally employ staff (administrative support is normally provided by Scottish Government staff)
• are not normally responsible for budgets other than remuneration (where paid) and expenses for Board members

Accountability

• directly accountable to Ministers, and through Ministers to Parliament
• ministers ultimately accountable to Parliament for the functions and performance of the body and have the power to wind it up (subject to Parliamentary approval (as required)
• the relationship between Ministers, SG and the NDPB is set out in an appropriate framework document
• Ministers agree the corporate/business plans (where produced) and appoint (and can remove) Board members
• where no budget responsibility, not required to produce annual accounts
• publish an annual report or statement of activity
• costs met by the Scottish Government

Tribunal non-departmental public bodies (NDPBs)

Characteristics

• operate within a strategic framework set by Ministers
• are established by statute
• are responsible for tasks and advice relating to specialist areas of the law
• independently of Government decide the rights and obligations of private citizens toward each other or Government/public authorities
• carry out judicial or semi judicial functions but are separate from the court system
• have specialist and lay members who are appointed by Ministers
• tend not to employ staff (staff support normally provided by the Scottish Government)
• are not normally responsible for budgets or expenditure other than remuneration (where paid) and expenses for Board members

Accountability

• directly accountable to Ministers, and through Ministers to Parliament
• Ministers ultimately accountable to Parliament for the functions and performance of the body and have the power to wind it up (subject to Parliamentary approval (as required))
• the relationship between Ministers, the SG and the NDPB is set out in an appropriate framework document
• do not normally produce annual accounts
• Ministers agree the corporate/business plans (where produced) and appoint (and can remove) Board members
• costs met by the Scottish Government

Health bodies

Characteristics

• operate within a framework of controls determined by DG Health/Chief Executive of the NHS. (Legally any controls are made by Scottish Ministers, not any individual)
• established by statute
• subject to the legal direction of Ministers who also have the power to make regulations re: the exercise of their functions
• Ministers approve and provide funding
• deliver healthcare services or provide management, technical or advisory services within the NHS. They exercise functions of the Scottish Ministers in relation to the NHS; and also certain functions conferred directly on them, in both devolved and reserved areas. They have rights and liabilities which are separate from those of Scottish Ministers
• have a Board whose members are appointed by Ministers [NB In the "pilot" cases of Fife and Dumfries and Galloway Health Boards, there are also directly elected members]
• a body corporate, they normally employ their own staff, who are not civil servants
• normally allocated and manage their own budgets

Accountability

• directly accountable to Ministers, and through Ministers to Parliament
• subject to the legal direction of Ministers, who also have the power to make regulations re: the exercise of their functions
• Chief Executive is designated as the Accountable Officer
• Accountable Officer responsible for the use of resources but Ministers remain accountable to the Parliament for the allocation of public funds
• Board holds the Chief Executive to account
• Ministers ultimately accountable to Parliament for the functions and performance of the body and have the power to wind it up (subject to Parliamentary approval (as required)
• subject to relevant guidance issued by Ministers e.g. the Scottish Public Finance Manual
• the legal relationship between Ministers, SG and the body is set out in the relevant legislation and the Management Statement/Financial Memorandum
• funded by Grant-in-aid as set out in sections 85AA to 88 of the National Health Service (Scotland) Act 1978
• prepares it's own annual reports and accounts which are presented to Ministers and laid in front of Parliament