Scottish City Region and Growth Deal Delivery Board: governance operating model
Governance operating model (GOM) for the Scottish City Region and Growth Deals Delivery (SCRGDD) board or its successor (’SCRGDD board’ or ‘the board’).
Updated January 2021. Date of next review: January 2022.
Overview
This paper sets out the Governance Operating Model (GOM) for the Scottish City Region and Growth Deals Delivery Board or its successor (’SCRGDD Board’ or ‘the Board’), including structure, remit, routes for delegation and escalation, and prioritisation. This is a working document that will be reviewed annually.
The GOM helps the board fulfil its governance role by:
- setting out the Board’s governance structure, and the mechanisms through which governance is implemented
- providing clarity on the roles and responsibilities of Board members and supporting officials
- organising the mechanisms and points of interaction between stakeholders and government officials
- setting out associated jurisdictions
The governance arrangements for the Deals comprise three components that together provide a cohesive and balanced model of governance that operates within the sphere of both Scottish and UK Ministers. These are:
- The Scottish City Region and Growth Deals Delivery Board (SCRGDD Board)
- The Scottish City Region and Growth Deals (SCRGD) Working Group
- Regional governance arrangements, including Joint Committees or their equivalent
Deals and how are they developed
City Region and Growth Deals are agreements between the Scottish Government (SG), the UK Government (UKG), local government, and other regional partners, designed to help deliver long term inclusive and sustainable economic growth.
Each Deal is tailored to its region, reflecting its individual economic strengths and weaknesses, and comprises a programme of interventions to support positive, transformative change. Deals are developed in collaboration with partners drawn from the broader public sector, such as Scottish Enterprise and Skills Development Scotland, as well as from businesses, colleges and universities.
All parties work together to develop proposals, support delivery and ensure robust governance. UK Government engagement is primarily through the Ministry for Housing, Communities and Local Government (MHCLG) and the Office of the Secretary of State for Scotland.
Deals are developed and delivered through a sequential four stage process:
- regional partners develop project and programme proposals that they believe have the ability collectively to deliver transformational, inclusive economic growth. These proposals should be underpinned by a clear regional strategic vision for economic development and fit within the overall framework of Scotland's Economic Strategy - making a clear, measurable, significant, and long-term contribution to both prosperity and fairness. Deals must operate at a functional economic geography, and be underpinned by robust governance at the regional level that includes key stakeholders from the wider public and private sectors. They do not circumvent existing statutory and other processes
- proposals are assessed by Government against a range of criteria, including: potential for transformative impact and fit with regional vision, contribution to improving regional economic growth, contribution to improving inclusion, fit with existing policy, partners’ priorities and capacity to deliver, ability to leverage additional investment and fit within the available government financial envelope
- heads of terms are agreed between both governments and regional partners, identifying projects and programmes to be supported, along with associated financial commitments by government and regional partners, and high level outcomes (e.g. job creation)
- projects and programmes are further developed to provide sufficient detail for government to judge clarity of intent, strategic relevance, deliverability, and synergy with the Deal. Regional partners also prepare Deal-level documentation detailing accountabilities, funding profile, funding flows, project descriptions, and outputs. Once agreed by all parties a Full Deal is signed and moves into delivery
Role of the board
The SCRGDD Board is a partnership between the UK and Scottish Governments, established in August 2016. Its primary responsibilities are threefold:
- to provide assurance and advice to Ministers on the Deals programme, from the point of signing Heads of Terms
- to maintain oversight of Deal delivery, including the effective monitoring of performance, outcomes, budget, risks, and other issues relating to the programme
- to facilitate escalation within and across both governments, should significant issues arise within any of the Deals or the programme as a whole
The Board comprises the following Senior Civil Servants and Treasury / SG Finance representatives (as at January 2021):
- Scottish Government Regional Economic Development Deputy Director
- Office of the Secretary of State for Scotland Deputy Director
- UK Government Cities and Local Growth Unit Deputy Director
- Scottish Government Finance Business Partner
- HM Treasury Senior Policy Advisor
The Board meets quarterly, unless otherwise agreed.
The Chair of the Board alternates every six months between the SG Deputy Director for Regional Economic Development, and the Deputy Director for Policy in the Office of the Secretary of State for Scotland.
Board meetings are facilitated by a Secretariat, which is responsible for:
- scheduling meetings and making associated practical arrangements
- collating and issuing papers
- updating the board action tracker and risk register
- taking and issuing minutes
Responsibility for providing the Secretariat function alternates every six months between the Scottish Government’s Regional Economic Development Division and the Office of the Secretary of State for Scotland, in parallel with the Chairing arrangements described at 3.4 above.
The SCRGDD Board’s terms of reference are published separately.
Role of the working group
The SCRGD Working Group (‘Working Group’) is a joint UKG and SG group that supports the work of the SCRGDD Board.
All UKG and SG officials who lead on the implementation of City Region and Growth Deals in Scotland are members of the Working Group by default, alongside the relevant SG Finance Business Partner.
The Working Group is responsible for agreeing a draft agenda for each Board meeting and commissioning associated papers. The Secretariat is responsible for agreeing this draft agenda with the SCRGDD Board Chair and ensuring papers are issued at least one week prior to each Board meeting.
The Working Group’s full terms of reference are published within the SCRGDD Board’s terms of reference.
Oversight responsibilities
Effective oversight of Scottish City Region and Growth Deals consists of the monitoring of performance, outcomes, budget, risks and other issues relating to the programme. All monitoring is carried out in accordance with best practice and any recommendations issued by auditors, including Audit Scotland and the National Audit Office (NAO).
The SCRGDD Board has oversight of the Working Group’s activities, where officials take action in relation to the day-to-day management and accountability of the Deals. The Board also has the authority to escalate matters through both governments should major issues arise that the Board itself is unable to resolve.
Accountability
The Scottish Ministers determine policy and are accountable to the Scottish Parliament for the policy decisions and actions of the Scottish Administration. A similar arrangement applies between UK Government Ministers and the UK Parliament.
A Memorandum of Understanding (MOU) on the use of funding for City Region and Growth Deals allocated to the Scottish Government has been agreed by both UK and Scottish Governments. It summarises and formalises the approach to the use of UK Government funding.
In accordance with the principles set out in the Statement of Funding Policy, and as the UK Government has agreed to add Deal funding to the Scottish Block Grant, formal accountability for its use rests with the Scottish Government, which is in turn accountable to the Scottish Parliament for its use.
The Permanent Secretary of the Scottish Government is the Principal Accountable Officer (PAO) for the Scottish Administration, in accordance with Section 14 of the Public Finance and Accountability (Scotland) Act 2000. Thus overarching responsibility and accountability for all City Region and Growth Deals public finance that flows through SG rests with the Permanent Secretary.
Delegated authority
The responsibilities of Accountable Officers for parts of the Scottish Administration and Portfolio Accountable Officers, as designated by the PAO, are set out in the Accountability section of the Scottish Public Finance Manual, and in further detail in the Memorandum to Accountable Officers for Parts of the Scottish Administration at Annex 1.
Accountable Officers have a personal responsibility for the propriety and regularity of the public finances for the part of the Scottish Administration for which they are answerable, and for ensuring that the resources for that part of the Scottish Administration are used economically, efficiently and effectively.
Accountable Officers are personally answerable to the Scottish Parliament for the exercise of their functions and have a statutory duty to obtain written authority from, as the case may be, the Scottish Ministers or relevant governing body before taking any action that they consider may be inconsistent with the proper performance of their functions.
The Scottish Government’s Director of Economic Development, as the Directorate Budget Holder, has delegated authority for financial management of City Region and Growth Deals to the Deputy Director for Regional Economic Development. This delegation complements the Certificates of Assurance process that underpins the signing, by the PAO, of the Governance Statement in the Scottish Government’s consolidated accounts.
Given the collaborative nature of City Region and Growth Deals funding has been allocated by UKG for SG to administer, and flows from UKG to SG via in-year transfers. This enables funding from both governments to be released to regional Accountable Bodies through a single process.
Authority and decision making
Good governance requires an effective authorisation process and regular reporting, along with more formal oversight and review. The four main levels at which decisions on individual Deals / the programme as a whole can be made are ( In addition, each City Region or Growth Deal has its own governance structures to oversee implementation and Deal delivery at a local level):
- Deal Lead
- SCRGD Working Group
- SCRGDD Board
- Directors/AO/DG and/or Ministers
Our Scottish city region and growth deals management escalation guide sets out indicative decision making levels, which span insignificant to critical impact. It is recognised that this can only act as a guide. City Region and Growth Deal officials are required to exercise professional judgement as to whether to take a decision, consult with others, and/or refer it to more senior colleagues for advice. Those taking decisions about individual Deals should be mindful of the implications for other Deals, the wider regional landscape, and the potential for setting precedents.
As part of the City Region and Growth Deal process agreed by both governments, regional partners need to develop robust business cases based on “a five-case business model” for each project and programme within the Deal. This in turn informs decision making by both governments on the scale of public funding available
The assessment of each business case is undertaken in accordance with HMT Green Book guidance, which considers the costs and impacts of interventions from a public-sector perspective and is used by SG and UKG as best practice.
The decision making process for most projects and programmes is set out below. Exceptions are agreed with regional Programme Management Offices on a case by case basis (for example, where a transport intervention is required to follow Transport Scotland’s Strategic Transport Appraisal Guidance). Where government approval is required, each government adheres to its own internal approval processes when reaching decisions.
Projects
Projects are single interventions and account for most Deal funding. Most of the information government requires should be made available by the project owner at the outline business case (OBC) stage. Government also expects to receive and review each project’s draft Equality Impact, Fairer Scotland, and Environmental Impact Assessments at this stage.
Once government is satisfied that a given project’s OBC is sufficiently well developed the regional Programme Management Office (PMO) is informed that government approves the OBC and is content for regional partners to proceed to full business case (FBC).
Government expects to see all FBCs to ensure any outstanding issues highlighted at OBC stage have been addressed. Final Equality Impact, Fairer Scotland, and Environmental Impact Assessments must also be submitted for review at this stage.
However, final approval of FBCs rests with the region’s principal decision making body (in most instances, a Joint Committee). This ensures that regional partners have full ownership of their Deals and that ultimate decision making authority rests with the body that will be responsible for delivering associated outputs, outcomes, and impacts.
Programmes
Programmes comprise two or more projects. Programme business cases evolve over time as constituent projects are identified, developed, and delivered. In general programme business cases are not expected to progress beyond OBC, as the more granular detail required at FBC stage in order to unlock funding (e.g. procurement arrangements) will be contained within each programme’s constituent project business cases.
However, programme OBCs are expected to move through several iterations and government does require Programme Management Offices to submit them for review at appropriate points, in order to ascertain how constituent projects combine to deliver planned programme outputs/outcomes.
Further requirements may vary depending on the nature and scale of the programme. PMOs are encouraged to engage with government at an early stage of business case development to agree the associated review and approval process.
A change control process is also in development for each City Region and Growth Deal, enabling material changes to any project or programme to be formally agreed by all parties as and when required.
Reporting and communication
The Grant Offer Letter for each of the City Region and Growth Deals sets out the requirement for regular reporting of information for monitoring purposes. Any variation to the terms as set out below would be on an exception basis only and must be agreed by both SG and UKG.
| Annually |
Bi-Annually |
Quarterly |
Monthly |
| (By 30 April) Annual Implementation Plan |
(By 31 August and 28 February) Spending profile for the remainder of the Deal term, both for the overall Deal and by individual project/programme, highlighting where variances are predicted. This should include an explanation as to how such variances will be managed across the Deal as a whole.
|
Information on spend and latest projections of spend for the remainder of the financial year, highlighting where variances are predicted and how these will be managed. |
Demonstrate monthly expenditure by programme and by individual project, as well as cumulative spend across the Deal as a whole. |
| Statement of Compliance with conditions of Grant (by 30 April) |
|
The risk status against the milestones highlighted in the Deal’s Implementation Plan, as well as overall issues including finance, progress against milestones and overarching project issues and risks (noting the RAG status should be managed on an annual basis rather than by the project lifespan). |
|
| (By 31 July) Annual Performance Report |
|
|
|
| (By end Q3) Annual Conversation |
|
|
|
In addition to the above, each of the City Region and Growth Deals provides regular updates on communications activities that are often valuable in supporting Scottish Government and UK Ministers. The information provided by each of the City Region and Growth Deals is reported to the SCRGDD Board in the form of a Programme Performance Report (see supporting documents).
Each Deal is delivery also participates in an ‘Annual Conversation’ at senior official level, which is informed by the Annual Report. The Annual Conversation presents an opportunity to celebrate success and progress, reflect and work through any concerns that governments and local partners have about the implementation of the Deal, and the ambitions for the Deal going forward. The Annual Conversation Framework and a copy of the draft agenda is attached in our supporting documents, and a guidance template for the Annual Report is also available via the supporting documents.
Parliamentary oversight of city region and growth deals
Both UKG and SG Ministers with responsibility for City Region and Growth Deals may be asked to give evidence to parliamentary committees. The main parliamentary committee with oversight of City Region and Growth Deals is the Local Government and Communities Committee. Other parliamentary committees with an interest are listed below:
| Scottish Parliament |
UK Parliament |
| Economy, Energy and Fair Work Committee |
Scottish Affairs Committee |
| Public Audit and Post-legislative Scrutiny Committee |
|
| Finance and Constitution Committee |
|
| Education and Skills Committee |
|
| Rural Economy and Connectivity Committee |
|
City region and growth deal governance
In addition to the reporting requirements set out above each City Region and Growth Deal has its own governance and assurance arrangements, and each Local Authority has its own Section 95 Officer. With the exception of the Glasgow City Region Deal, which has its own business case process, business cases for individual projects go through various stages, as described at section 8 above. Funding for each project/programme is not ordinarily released until a Full Business Case has been approved by the principal regional decision making body (usually a Joint Committee or equivalent).
Scottish city region and growth deals management escalation guide
The approach taken to risks changes in proportion to the impact and severity of the risk.
Impact is rated from insignificant (impacting less than 10% as proportion of Deal), minor (impacting 10%-24% as proportion of Deal), moderate (impacting 25-49% as proportion of Deal), significant (impacting 50-69% as a proportion of Deal) and critical (impacting over 70% as proportion of Deal).
Severity is rated in terms of minor, moderate, major and critical.
Insignificant impact risks that are minor or moderate severity are dealt with at the Deal Lead level. If they then become major severity they are deal with at the Working Group level. Should they become critical, they are reported to the SCRGDD Board.
Minor impact risks of minor severity are dealt with at Deal Lead level. If they are moderate severity, they are instead dealt with at working group level. Minor impact risks of major or critical severity are always reported to the SCRGDD Board.
Moderate impact risks of minor severity are dealt with at Deal Lead level. If they are moderate severity, they are instead dealt with at working group level. Minor impact risks of major or critical severity are always reported to the SCRGDD Board.
Significant impact risks are always reported to the SCRGDD Board when they are of minor or moderate severity. Significant impact risks of major or critical severity require immediate action and are reported to Directors and Ministers.
Critical impact risks are always reported to the SCRGDD Board when they are of minor or moderate severity. Significant impact risks of major or critical severity require immediate action and are reported to Directors and Ministers.
Severity ratings
Minor- Authority to modify approach to City Region and Growth Deal governance structure, e.g. agreement of the flow of grant to grantee to handle underspends. Maintain the risk register, issues log, dashboards (updating on a monthly basis as a minimum).
Contact
There is a problem
Thanks for your feedback