PART 2: FINANCIAL MEMORANDUM FOR CALEDONIAN MARITIME ASSETS LIMITED
1. CALEDONIAN MARITIME ASSETS LIMITED FUNDING
1.1 Contracts Fees & Charges
1.1.1 Caledonian Maritime Assets Limited obtain funding from a number of sources including revenue from pier and harbour charges, Grant in Aid for pier and harbour upgrading/enhancing, loans to fund vessels and from the ferry operator under the Fleet Charter Agreement, the Harbour Access and Operating/ Management Agreement and as set out in the Public Service Contract covering delivery of the Clyde and Hebrides Ferry Service.
1.1.2 Grant in Aid for pier and harbour works will be paid to Caledonian Maritime Assets Limited in instalments, on the basis of a written application from Caledonian Maritime Assets Limited showing evidence of need. The application shall provide the sponsor Directorate with, as a minimum, information, which will enable the satisfactory monitoring by the sponsor Directorate of:
- Caledonian Maritime Assets Limited's cash management;
- actual and forecast outturn of expenditure of Grant in Aid;
- actual and forecast outturn of expenditure / consumption.
1.1.3 Grant in Aid for piers and harbours should not be paid out in advance of need. Cash balances accumulated during the course of the year from grant in aid for piers and harbours shall therefore be kept at the minimum level consistent with the efficient operation of Caledonian Maritime Assets Limited.
1.2 Fees or charges for services
1.2.1 Fees or charges for services or goods supplied by Caledonian Maritime Assets Limited, including pier and berthing charges, should be determined in accordance with the Scottish Public Finance Manual, the Clyde and Hebrides Ferry Services Public Service Contract ( PSC) and the Principal contracts meaning; the Fleet Charter Agreement, the Harbour Access and Management Agreement, the Trade Mark Licence Agreement, the Heraldic Device Agreement, the Property and Equipment Licence and the Tripartite Agreement and should be set to recover full costs unless the Sponsor Directorate agrees otherwise. In setting fees and charges Caledonian Maritime Assets Limited shall:
- set fees in accordance with the PSC and Principal Contracts referred to above;
- set fees in accordance with the Scottish Public Finance Manual;
- have due regard to its duty as a public body and to the public purse, bearing in mind that those charges will have implications for other public sector expenditure (e.g. subsidy for lifeline ferry services);
- seek the approval of Scottish Ministers to proposed charges.
1.3 Authority to spend
1.3.1 Caledonian Maritime Assets Limited shall have authority to incur expenditure / consume resources in accordance with the strategic, corporate and operational plans without further reference to the sponsor Directorate, on the following conditions:
- Caledonian Maritime Assets Limited shall comply with the specific delegations set out in the attached Appendix A. These delegations shall not be altered without the prior agreement of the sponsor Directorate;
- Caledonian Maritime Assets Limited shall seek agreement of the sponsor Directorate for any increase in expenditure above £500,000 beyond that detailed in strategic, corporate and operational plans.
- Caledonian Maritime Assets Limited shall comply with the conditions set out in this Financial Memorandum regarding novel, contentious or repercussive proposals and with any relevant guidance in the Scottish Public Finance Manual ( SPFM); and
- Caledonian Maritime Assets Limited shall provide the sponsor Directorate with such information about its operations, performance, individual projects or other expenditure as the sponsor Directorate may reasonably require.
- Caledonian Maritime Assets shall establish and agree with the sponsor Directorate a comprehensive system of internal delegated authorities which should be notified to all staff, together with a system for regularly reviewing compliance with these delegations
1.4 Bad Debt and Impairments
1.4.1 Write-off of bad debt and impairments is subject to the delegated limit set out in the attached Appendix A.