Department for Environment, Food & Rural Affairs

Financial Management and Policy Review of the
Royal Commission on Environmental Pollution

Annex 8:
Skeleton Outline of a Framework Document for the Royal Commission on Environmental Pollution, and commentary on issues arising

1. Foreword
Purpose and status of document
Contact address for further copies/information
Date of document
Procedure for amending document
Date when document will be reviewed

2. Status and Aims
Status of RCEP
Royal Warrant remit

3. Functions and objectives
Purposes as discussed in FMPR chapter 2, drawing on Commission Guidelines
Functions in support of those purposes
Reference to Guidelines for Conduct of Studies

4. Structural framework
Role of the Queen
Responsibilities and accountability of:-

Ministers
The Departmental Accounting Officer
The Head of Environmental Protection Strategy Directorate
The DETR Finance Divisions (FDA and FSP)
The Chairman of the Royal Commission
The Secretary of the Royal Commission
The Members of the Royal Commission, collectively and individually
Devolution - Scotland - RCEP as cross border public authority
Accountability to Parliament
Advice to the Secretary of State

5. Planning, funding and financial management
The corporate planning structure:-

Corporate Plan or equivalent
Annual Business Plan or equivalent
The structure for review and evaluation:-
Annual Report
Funding:-
Departmental Administration Vote, [funding from non-running cost budget]
Single Running Cost Control
Procedure for DETR decision on guideline allocation
Procedure for agreeing allocation
Procedure for varying allocation
Financial management:-
DETR monitoring requirements
Delegations - set out in Annex
RCEP accounting arrangements
Audit arrangements
Insurance arrangements
Use of DETR services - set out in Annex

6. Membership and staffing
Procedure for appointment of Members and Chairman - supported by Annex Arrangements for staffing the secretariat Personnel management, including:-

[IiP?]
Training and development
Staff relations
Equal opportunities
Health and Safety

7. Annexes
Royal Warrant
Delegations
Arrangements for use of DETR services
Guidance on appointments
Code of conduct for members

Commentary
Chapter 3 Functions and objectives
1. We suggest that this chapter explicitly recognise the role and purposes of the Commission as discussed in chapter 2 above. The text could draw on the Commission's 1993 strategy statement as reflected in its 1998 Guidelines for Conduct of Studies.

Chapter 4 Structural framework
2. The aim of this chapter would be to set out the respective roles and responsibilities of the Queen, Departmental Ministers, the Departmental Accounting Officer, the head of EPSD, the DETR Finance Divisions and the Chairman, Secretary and Members of the Commission, encompassing the full range of sponsorship responsibilities. This chapter would also need to deal with the roles and responsibilities of Scottish Ministers and officials, given that the Commission is a cross border public authority.

3. We envisage that the financial and accounting responsibilities would be broadly as set out in the Commission Secretary's SFMR - subject to:-

4. In the case of Next Steps Agencies and executive NDPBs, the Framework Document or Management Statement is often supported by a separate Financial Memorandum. We suggest that in the case of the Royal Commission the necessary arrangements are sufficiently simple for the essential elements of the financial relationship to be incorporated within the Framework Document, with any necessary supporting detail in the Annexes. This would avoid the need either for a Financial Memorandum or for separately updating the SFMR.

Chapter 5 Planning, funding and financial management
5. The arrangements for planning and review are integral parts of the Framework Documents of Next Steps Agencies, and include statements of what is expected in the body's Corporate and Business Plans which normally require the approval of Ministers.

6. In the case of the Commission, its Royal Commission status and its independence from Departmental Ministers place its corporate management systems at a further remove from the sponsor Department. It is not for the Department to approve the Commission's planned work programme, and we see no case for requiring Ministerial approval for the Commission's corporate plans or annual reports. On the other hand the Department does need to have a basis for satisfying itself that the resources allocated to the Commission represent value for money.

7. We recommend that the Framework Document should specify the key components of the Commission's corporate planning arrangements, agreed between the Department and the Commission, and should also specify agreed timetables. The intention should be to specify the inclusion of the data needed by the Department to fulfil its resource allocation and financial management responsibilities. This should obviate the need for separate resource planning statements and stewardship reports, and so reduce duplication and fragmentation of documentation.

8. The Framework Document would incorporate much of the content of the existing SFMR, but would need to update several aspects. These include the need for reference to be made to the new Treasury three year funding arrangements and to resource accounting.

9. We suggest the opportunity should be taken also to review the level of delegations to the Commission - which could be set out in an Annex to the Framework Document.

10. We suggest the basis on which DETR central services may be provided to the Commission should be clarified. A note provided by the Commission Secretary on DETR services currently used is attached at Annex 9. At present there is no formal basis for the use of these services. In some cases the services are provided free, in other cases at a lower cost or higher quality than the Commission would be able to obtain elsewhere. DETR is not always the best placed provider of services, however, partly because the Department's procedures may sometimes be too inflexible to suit the needs of such a small organisation as the Commission, and partly because the DETR is increasingly tied in to computer systems which may not be available to the Commission. In order to plan and manage resources effectively, the Commission needs to know on what terms it can expect DETR services to be provided and what controls if any DETR needs to retain over the Commission's freedom to purchase services externally.

11. On audit, the existing financial management statement entitles DOE to arrange at any time for the inspection of the financial records and procedures of the RCEP's secretariat. We understand that the last Internal Audit report on the Commission was in 1991. We consider that the Commission Secretary needs to be able to have and give assurance about the proper use of the resources allocated to him. The standards which apply are those set out in the Government Internal Audit Manual. DETR Internal Audit (Richard Pickering) are willing on a repayment basis to draw up a tailored audit programme to suit the needs of the Commission, though the Commission would also be free to seek external advice. We suggest that the Framework Document should state the principle that the Secretary is responsible for ensuring that the required standards are met, and also reserve to the Department a right to conduct an audit if it so chose.

Chapter 6 Membership and staffing 12.
The issues and our recommendations on membership are set out in chapter 10 of the main report, and on staffing in chapter 11.

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Published 19 April 2000 / Updated 11 May 2000
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