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Contents:

Scope

Key Points

Background

Preliminary Expenditure

Implementation Expenditure under Enabling Legislation and Budget Act Authority

Implementation Expenditure under Ministers' Common Law Powers and Budget Act Authority

Implementation Expenditure under Ministers' Common Law Powers and Ministers' Contingency Powers

Appointments to New Sponsored Bodies

New Services Introduced Through Secondary Legislation

Scope

1. This section gives guidance on the circumstances in which expenditure can be undertaken or resources committed on a new service in advance of the enactment of specific legislation. The guidance is aimed primarily at the core Scottish Government (SG).

Key Points

2. A new service in the context of this guidance is one where statutory authority to undertake the activity giving rise to related expenditure is reliant on proposed legislation.

3. Expenditure on preliminary work for a new service may, where the preliminary work is of a nature which could be considered to be covered by existing statutory and parliamentary authority, be met out of existing funds. The relevant SG Finance Business Partner (or equivalent)should be consulted where there is any doubt as to whether expenditure is preliminary to or part of a new service.

4. Expenditure on activities forming part of a new service - implementation expenditure - should not normally be committed or undertaken until after enabling legislation has received Royal Assent and Budget Act authority has been secured. Budget Act authority should not normally be sought until after enabling legislation has received Royal Assent.

5. In certain circumstances it may be possible to undertake implementation expenditure in advance of Royal Assent using Ministers' common law powers in conjunction with the authority in a Budget Act. Where it is not practicable, for reasons of urgency, to secure Budget Act authority it may still be possible to undertake implementation expenditure in advance of Royal Assent using Ministers' common law powers in conjunction with Ministers' contingency powers.

6. Any expenditure undertaken before relevant primary legislation has received Royal Assent or secondary legislation has been approved by the Parliament must be cleared in advance by the relevant SG Finance Business Partner (or equivalent).

Background

7. A new service in the context of this guidance is one where statutory authority to undertake the activity giving rise to related expenditure is reliant on proposed legislation. There are some cases where this is less clear-cut than others e.g. a new service could include an existing service which was to be carried out in a different way from that which the Parliament had approved and where new or additional legislation was planned. The guiding principles should be that the decisions of the Parliament should not be anticipated and that any expenditure should represent value for money. In case of doubt the relevant SG Finance Business Partner (or equivalent)should be consulted.

Preliminary Expenditure

8. The implementation of new services usually involves a number of stages, some of which may be regarded as preliminary to the new service rather than part of it. The formulation and evaluation of alternative policy options through pilot studies, scoping studies designed to identify in detail the implications of a proposal in terms of staff numbers, accommodation costs and other related expenditure, and work which informs the legislative process associated with a new service, are examples which would satisfy the criteria. Expenditure on preliminary work for a new service may, where the preliminary work is of a nature which could be considered to be covered by existing statutory authority, be met out of existing funds subject to Budget Act authority and does not depend on the enactment of proposed legislation.

9. It may not always be clear whether particular types of expenditure are preliminary to or part of a new service. A key test is whether the expenditure would be cost-effective even if the legislation for the new service failed e.g. work on assessing likely staff requirements could be expected to pass the test, whereas the actual appointment of staff would lead to nugatory expenditure in the event of legislation failing. The relevant SG Finance Business Partner (or equivalent)should be consulted where there is any doubt as to whether expenditure is preliminary to or part of a new service.

Implementation Expenditure under Enabling Legislation and Budget Act Authority

10. Making the necessary arrangements for a new service to be performed e.g. activities such as the actual appointment of staff, acquisition of accommodation and development of IT systems should generally be regarded as part of the new service itself. Expenditure on work that is part of the new service should normally only be committed or undertaken after the proposed enabling legislation has received Royal Assent and Budget Act authority has been secured.

11. Budget Act authority should not normally be sought for expenditure where the activity giving rise to the expenditure is to be covered by enabling legislation until after the enabling legislation has received Royal Assent. However, in cases of urgency Budget Act authority may be sought via the relevant SG Finance Business Partner (or equivalent) in advance of Royal Assent provided that there is a reasonable expectation of the legislation eventually being approved. In seeking such Budget Act authority the relevant budget documents should be footnoted to the effect that relevant expenditure is "subject to the passage of legislation which [has been / is to be] laid before the Parliament". No implementation expenditure can be undertaken under Budget Act authority which is "subject to the passage of legislation" until after the enabling legislation has received Royal Assent.

Implementation Expenditure under Ministers' Common Law Powers and Budget Act Authority

12. In cases where it would clearly be contrary to the public interest to delay expenditure until after the enabling legislation has received Royal Assent it may be possible, subject to the provisos set out in paragraphs 13 and 14, to undertake limited implementation expenditure using Ministers' common law powers - provided that these are available - in conjunction with the authority in a Budget Act. Ministers' common law powers are described in the section of the Scottish Public Finance Manual on Expenditure without Statutory Authority. However, the criterion must always be urgency in the public interest and not administrative convenience. Budget Act authority may be secured (and implementation expenditure undertaken) in advance of Royal Assent where the activity giving rise to the expenditure is being undertaken using Ministers' common law powers. However, in seeking such Budget Act authority the relevant budget documents should be footnoted to that effect.

After Stage 1

13. Budget Act authority for implementation expenditure to be undertaken in conjunction with Ministers' common law powers in advance of Royal Assent may be sought and the expenditure undertaken after Stage 1 of the relevant Bill has been successfully completed providing that:

  • there is a reasonable expectation of the legislation being eventually approved;
  • the level of expenditure is modest and proportionate; and
  • the benefits of incurring the expenditure are considered to outweigh the scale of the loss if for any reason the legislation were to fail.

Before Stage 1

14. Budget Act authority for implementation expenditure to be undertaken in conjunction with Ministers' common law powers in advance of Royal Assent may also be sought and the expenditure undertaken before Stage 1 of the relevant Bill has been successfully completed providing that:

  • there is a reasonable expectation of the legislation being eventually approved;
  • the level of expenditure is modest and proportionate;
  • the benefits of incurring the expenditure are considered to outweigh the scale of the loss if for any reason the legislation were to fail; and
  • the Conveners of the relevant subject Committee and the Finance Committee of the Scottish Parliament are informed in advance by the responsible Minister. 

Implementation Expenditure under Ministers' Common Law Powers and Ministers' Contingency Powers

15. Where it is not practicable, for reasons of urgency, to secure Budget Act authority for implementation expenditure to be undertaken in conjunction with Ministers' common law powers in advance of Royal Assent it may still be possible to undertake the expenditure using Ministers' common law powers in conjunction with Ministers' contingency powers. Ministers' contingency powers are described in the section on Expenditure without Parliamentary Authority. The provisos for undertaking expenditure after and before Stage 1 of the relevant Bill has been successfully completed set out in paragraphs 13 and 14 are equally applicable in such circumstances. Where expenditure is to be undertaken before Stage 1 the Conveners of the relevant subject Committee and the Finance Committee of the Scottish Parliament should be informed by the responsible Minister no later than the necessary report on the use of contingency powers is laid before the Parliament i.e. at least 14 calendar days before any expenditure is undertaken.

Appointments to New Sponsored Bodies

16. Appointments to new sponsored bodies being set up under specific legislation should normally wait until the legislation has received Royal Assent. Making appointments is however possible in advance of Royal Assent subject to the guidance in paragraphs 12-15. In addition it should be made clear to the appointees concerned that the appointments would be cancelled if for any reason the legislation were to fail. Any proposals to make appointments before the enabling legislation has received Royal Assent must be cleared by the relevant SG Finance Business Partner (or equivalent).

New Services Introduced Through Secondary Legislation

17. Where a new service is reliant on secondary legislation for its statutory authority implementation expenditure should not normally be incurred before the secondary legislation is approved by the Parliament. Budget Act authority however may be sought "subject to the approval of legislation" via the relevant SG Finance Business Partner (or equivalent) so that implementation expenditure can be incurred immediately on approval.

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Page Published / Updated: April 2009