Scottish Government

SB(07)12th Conclusions

STRATEGIC BOARD MEETING

7 JUNE 2007

Agenda Item 1: Minutes and Matters Arising

1. The minutes of the previous meeting (SB(07)11th conclusions) were agreed for publication. Under matters arising:

Paragraphs 4 and 5: Dr Goudie updated the board on developments since the previous week and said that he was scheduled to meet Mr Swinney later that day to discuss the process to be adopted for the spending review. As part of that process it would be important to conduct a high level re-prioritisation exercise over the next few weeks in order to provide Mr Swinney with advice before Cabinet discussion on 10 July. This would then provide the basis for Directorates to take forward a more focused and, therefore, less onerous spending assessment process over the summer. The Board agreed that responsibility for this priority task lay properly with Directors General and that the process for a deprioritisation exercise should be as simple as possible and concentrate on areas of significant expenditure, say in the region of no less than £50 million.

Paragraph 6: The Permanent Secretary said that the Board had previously agreed the principle of establishing Programme Boards to support the delivery of each strategic objective. There had been some discussion about the composition of each Programme Board and in particular the balance to be achieved between members with a delivery function, and those where there was a broader corporate interest in their participation. The Permanent Secretary asked Directors General to provide proposals for members of their Programme Boards by close of business on 11 June so that he could take a view of the composition and distribution of members in order that the Boards could begin work quickly thereafter (Action: Directors General). The Board also noted that under the proposals considered in correspondence that week, responsibility for overseeing the delivery of the efficient government programme would pass from the Efficient Government Group to the Public Service Reform Group chaired by Dr Goudie and that the Efficient Government Group would cease to operate with immediate effect.

Agenda Item 2: Public Sector Pay Policy (Papers SB(07)24, 25, 26, 27 and 28)

Part of the record of discussion under this agenda item is considered exempt from publication at this time and has been redacted.

Agenda Item 3: Accountability and Governance: Designation of Accountable Officers (Paper SB(07)29)

2. Ms Stafford introduced paper SB(07)29 which provided an opportunity for the Board to comment before final decisions were taken about accountability and other governance related aspects of the restructuring of the organisation. Ms Stafford said that in relation to the Parliamentary facing dimension of governance, the Public Finance and Accountability Act designated the role of the Principal Accountable Officer and sets out a series of statutory requirements. She had agreed with the Permanent Secretary how those functions would be discharged in the organisation. Directors General would continue to be designated as Accountable Officers and would retain their current AO functions. DGs would be responsible for high level propriety and regularity issues but would be able to delegate responsibility to Directors for budget control purposes.

3. There would continue to be a Scottish Executive Audit Committee which would be chaired by Professor Bound in place of Shonaig Macpherson from June 2007, supported by six Audit Committees (one for each of the strategic objectives (portfolio) and one for corporate functions). The formal re-designation of Accountable Officer, on the basis of new budget structures would take place at the Autumn budget revision. Action would be taken now to regularise the present position by allocating AO responsibility for the existing ED budget to Philip Rycroft and for the existing Communities budget to Robert Gordon. Further work would be done to establish an internal structure to ensure that the delegation of financial resources took appropriate account of the respective roles and responsibilities of Directors and Directors General, and in particular did not imply that DGs no longer had a portfolio based role.

4. The Board noted the information set out in the paper about actions underway to adjust accountability and governance structures to reflect changes made to the Executive's organisational structure and agreed the importance of communicating changed governance arrangements clearly internally and externally (Action: Alyson Stafford and Owen Kelly).

Agenda Item 4: Financial Outturn Report (Paper SB(07)30)

5. Ms Cockerell introduced paper SB(07)30 which was the forecast outturn for the year ending 31 March 2007 in terms of DEL budgets and also the forecast outturn for in terms of Scottish Parliamentary budgets. Mr Stewart said that forecast outturn for DEL was 0.7% of budget and was a significant achievement and that staff should be congratulated once the outturn figures had been reported to Parliament. Following previous practice there might be an expectation in portfolios of an automatic entitlement to 25% of resource EYF and 100% of capital EYF. However, Finance Directorate advice to the Cabinet Secretary for Finance and Sustainable Growth was that EYF should not be returned and that further advice would be given about how that would be managed in year. The Permanent Secretary said that it was important to recognise that the start of a new administration was essentially 'year zero' in budgetary terms and that proposals on EYF were an important signal that the new Government has maximum discretion over budget allocation. Managing to 0.7% was a significant achievement and it would be important to consolidate that performance, which compared well against UK departments, while maintaining pressure for improved accuracy around forecasting. Payment performance for March was 94% and again cause for optimism following the introduction of the Purchase to pay system.

6. The Board noted the financial report for year ending 31 March 2007; noted the proposed arrangements for EYF; endorsed 0.7% as a reasonable target to work towards in the coming year while maintaining pressure on improved forecasting; and agreed that staff should be congratulated on managing to 0.7% of budget once Parliament had been informed.

Agenda Item 5: Report from Cabinet

The record of the discussion under this agenda item is considered exempt from publication at this time and has been redacted.

Agenda Item 6: Risk Management

7. The Board noted actions in place to address emerging risks.

Agenda Item 7: Any Other Business

2007 Employee Survey

8. The Board agreed that the 2007 Employee Survey should be deferred to November/December to allow new organisational arrangements to be fully established.

Cabinet Papers

9. The Permanent Secretary highlighted the importance of relevant Directors ensuring that there was sufficient senior input into the preparation of all Cabinet papers. As the foundation for the Government's collective decision making, it was essential that Cabinet memoranda were of the highest possible quality (Action: Directors).

Date of Next Meeting

10. Thursday, 14 June at 8.30am.

Cabinet and Corporate Business Secretariat

June 2007