Publication - Advice and guidance

Guidance on instructing Counsel: common legislative solutions

Published: 16 Jan 2018
Justice Directorate
Part of:
Law and order

This guidance is intended to help officials to develop policy and produce instructions for primary legislation of certain commonly occurring types.

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74 page PDF

804.0 kB

Guidance on instructing Counsel: common legislative solutions
Establishing a Statutory Corporation

74 page PDF

804.0 kB

Establishing a Statutory Corporation

Description of the legislative solution

This legislative solution establishes a body or office to exercise statutory functions, where it has been decided that those functions should be exercised by a new public authority, rather than by Ministers [1] , an existing public authority or a voluntary or private sector body. [2]

The reasons for establishing a new body or office as a statutory corporation, rather than in another form such as an unincorporated association, generally relate to the fact that a statutory corporation has its own legal personality distinct from that of the individual members or office-holder. It can therefore enter into legal relations and hold property, and continues to exist despite changes in the membership of the body or holder of the office. Executive and regulatory agencies are commonly statutory corporations with their own staff and budgets, whereas advisory bodies and tribunals are not usually statutory corporations.

In England, Wales or Northern Ireland, a statutory corporation may be a body corporate ( i.e. a body with a number of members) or a corporation sole ( i.e. an office held by a single individual). Scots law does not have the concept of a "corporation sole," but legislation may provide that an office constitutes a "distinct juristic person" from the individual holding it, which is intended to achieve a similar effect to creating a corporation sole. [3]

Instead of creating a body or office directly, an Act may delegate the power to establish it (for example, by giving Ministers the power to establish it through subordinate legislation).

Related legislative solutions

Designation: an alternative to establishing a new statutory corporation may be to designate an existing person or body to exercise particular functions.

Collaboration: it may be appropriate to require the newly created statutory corporation and other bodies to work together in exercising their functions.

Elements of the legislative solution

1. Name and status of the statutory corporation

1.1. What will be the name of the body or office (including, where appropriate, the name in Welsh, Gaelic etc. as well as English)?

1.2. Should the body or office have Crown status, either generally or for particular purposes? The main effects of a body having Crown status are that it is not bound by legislation that does not bind the Crown, and that its staff are Crown servants. Most statutory corporations (and most other public bodies) are not Crown bodies.

2. Positions to which appointments are made

2.1. In the case of a body corporate:

2.1.1. How many members should there be? It is more usual to set a maximum and minimum number of members than to legislate for a specific number.

2.1.2. Should there be different types of member (such as executive and non-executive members, or professional and lay members)? Must there be members of every type?

2.1.3. Should all members be appointed to the body, or should any of them be members automatically by virtue of holding another office (such as the relevant Auditor General [4] )?

2.1.4. Should there have to be a chair? And a deputy chair? Should they be appointed directly to those positions, or chosen from the members of the body?

2.2. In the case of an individual office:

2.2.1. Should there be one or more deputies to the office-holder? Should a deputy be a separate office-holder, or a member of staff designated for the purpose?

2.2.2. In which circumstances should the corporation's functions be exercised by a deputy (for example, if the office is vacant or the office-holder is unable to act)?

3. Appointment of members or office-holder

3.1. Who should appoint the office-holder and any deputy, or the chair and members of the body? Appointments might, for example, be made by Ministers, the legislature, the Queen, other members or staff of the statutory corporation, or by another body.

3.2. Should appointments have to be made on the recommendation or nomination of another body, or be approved by another body (such as Ministers or the legislature)?

3.3. Should any criteria have to be applied in making appointments, or should there be any qualifications for appointment (such as particular skills or experience)? Should any matters disqualify people for appointment (such as membership of the legislature or a local authority)?

3.4. Should the appointment process be subject to external oversight? (Where appointments are made by Ministers, this is likely to require an amendment to the relevant public appointments legislation: see the Annex.)

3.5. Should membership of the statutory corporation disqualify a person from membership of the House of Commons or devolved legislature? (This may require an amendment to the relevant disqualification legislation: see the Annex.)

3.6. For what period should a person be appointed? An Act may fix the term of office, or give the person making the appointment power to fix it, perhaps subject to a maximum. [5]

3.7. Should a person be eligible to be re-appointed at the end of the period of appointment? Should there be any restriction on the number of times a person may be re-appointed?

3.8. Who should set the terms of appointment (insofar as they are not set by the legislation)?

4. Termination of appointment

4.1. Should a person be able to resign from office, and if so how ( e.g. notice to Ministers or the chair)?

4.2. Should it be possible to suspend or dismiss a person from office? Who should be able to suspend or dismiss a person, and on what grounds? The grounds should reflect the nature and functions of the body or office.

4.3. Should the Act set the grounds and procedure for dismissal, or give the person making the appointment the power to deal with them in the appointment letter?

4.4. Where an Act specifies grounds for dismissal, the general ground of unfitness, unwillingness or inability to act seems to be universal. Other more specific grounds that may be mentioned include:

  • unauthorised absence from meetings of a body for a period (often 6 months);
  • conviction for a criminal offence;
  • insolvency or indebtedness.

4.5. If insolvency is to be a ground for dismissal, which types of insolvency proceedings or arrangements should give rise to the power to dismiss?

4.6. Should any events (such as election to the legislature) automatically terminate a person's appointment?

5. Conflicts of interest

5.1. Is anything needed to prevent or regulate conflicts between the personal interests of members or office-holders and the performance of their functions?

5.2. Should it be sufficient to rely on the person who makes appointments to consider potential conflicts of interest in the appointment process?

5.3. Should a prejudicial conflict of interest be a ground for dismissal?

5.4. Alternatively, should members be required to declare conflicts of interest ( e.g. at meetings of the body) and prohibited from taking part in decisions in which they have an interest? Or should the corporation just be required to make arrangements for dealing with conflicts of interest?

5.5. Should the body be required to keep and publish a register of members' interests? (This is the norm for Scottish devolved bodies but less common elsewhere.) If so, which interests must be registered? When does the duty to register them arise?

6. Effect of vacancy or other defect on validity of acts

6.1. Who should exercise the functions of an individual office-holder if the office (and any post of deputy) is vacant or if the office-holder (and any deputy) cannot act because of a conflict of interest? Should there be provision for Ministers to appoint another person to act?

6.2. If the position of chair of a body corporate is vacant, or if the body has fewer members than it is required to have, should the body still be able to act? Or should anything done by the body be invalid?

6.3. If the appointment of a member is procedurally defective, or was made in breach of any eligibility rules, should a decision in which the member participates be valid?

6.4. Should a decision be valid if it is made in breach of rules relating to conflicts of interest?

7. Payments to members

7.1. What sort of payments (if any) should the statutory corporation make to its members? Should they receive remuneration (such as a salary or fees) for performing their duties? Should they receive payments in respect of expenses they incur, or other allowances?

7.2. Should the statutory corporation have a power or a duty to pay remuneration or allowances? Should Ministers be able to require it to pay them? Should the amount of the payments be set by Ministers, or by the corporation with the approval of Ministers?

7.3. Should other payments be possible, such as compensation for loss of office? Is such compensation paid by Ministers, or by the statutory corporation with their approval? Must there be special circumstances to justify paying compensation?

7.4. Should the corporation make pension arrangements for its members? Should it have a power or duty to do so? Should it be free to choose whether to operate its own pension scheme, make payments into another scheme, or provide pensions in some other way? Should its pension arrangements require Ministerial approval?

7.5. Should members be entitled to join the GB or NI civil service pension scheme? (This may require an amendment to the relevant legislation: see the Annex.)

8. General powers

8.1. A statutory corporation will have the power to do things that are incidental to the exercise of its functions. Examples may include holding land and other property, making contracts, participating in companies, co-operating with others, receiving assistance in performing the corporation's functions, and bringing legal proceedings.

8.2. Should any of the corporation's general powers be restricted? For example, should it be allowed to invest money only in certain ways, or require Ministerial approval to dispose of property or form a company? Should it be prevented from doing any things that might otherwise be regarded as incidental to its functions?

8.3. Should the corporation be able to provide assistance to others for purposes that go beyond its own aims and functions? Should it have the power to give assistance to other bodies for the performance of the functions of those other bodies?

8.4. Should the corporation have a duty to do anything that it might otherwise have an incidental power to do? For example, should it be required to consult other public authorities, share information with them, or co-operate with them?

8.5. If the corporation is expected to share information with others, is it necessary to remove or qualify any restrictions that might otherwise prevent it from doing so?

8.6. In Northern Ireland, legislation establishing a body corporate usually applies section 19 of the Interpretation Act (Northern Ireland) 1954, which contains a number of general provisions about the powers and procedures of statutory corporations.

9. Procedure

9.1. Should the corporation be free to make its own rules regulating its decision-making procedure, including the quorum for meetings? Should it be required to make rules or standing orders? Should the rules be approved, or even made, by Ministers?

9.2. Do any aspects of the corporation's procedures need to be specified or regulated by the legislation? For example, are special rules needed about quorum, to ensure that different categories of member are represented at meetings?

10. Committees

10.1. Is the corporation likely to establish committees? Should it be required to establish particular types of committee ( e.g. regional committees, advisory committees)?

10.2. Should there be requirements relating to the membership of any of its committees?

10.3. Is a committee, or the corporation itself, likely to establish sub-committees? Should there be any membership restrictions for sub-committees?

10.4. Should people who are not members of the body be eligible for appointment to its committees? Should people who are not members of a committee be eligible for appointment to its sub-committees? If non-members are appointed:

10.4.1. Should there be a limit on how many non-members can be appointed?

10.4.2. Can a committee or sub-committee consist entirely of non-members?

10.4.3. On what terms should non-members be appointed? Can they be paid?

10.4.4. Are non-members entitled to vote at committee or sub-committee meetings?

11. Staff

11.1. Will the statutory corporation need staff? Will it employ its own staff? Will it be staffed by civil servants provided by the sponsoring department or administration? Will staff be seconded to the statutory corporation from other organisations?

11.2. Should the corporation be required to have a chief executive (or any other posts)? Should the chief executive be appointed by the corporation itself? Should the appointment have to be approved by Ministers? Should the first appointment be made by Ministers?

11.3. Should the corporation be free to determine the terms and conditions on which staff are employed (including their remuneration), or should the terms and conditions be approved or set by Ministers?

11.4. Should the corporation have a power to make pension arrangements for staff, or a duty to do so? Should it be free to decide whether to operate its own pension scheme, make payments into another scheme, or provide pensions in some other way? Should its pension arrangements require Ministerial approval?

11.5. Should staff be entitled to join the principal civil service pension scheme? (That follows automatically where people employed by the corporation are civil servants; otherwise it may be necessary to amend the relevant legislation: see the Annex.)

11.6. Should the statutory corporation be exempt from the obligation to have employer's liability insurance in respect of injury or disease suffered by its employees?

12. Delegation

12.1. Should the statutory corporation have the power (or be under a duty) to delegate the exercise of any of its functions? The corporation might, for example, have the power to delegate functions to:

  • committees or sub-committees;
  • individual members of the corporation;
  • members of staff.

12.2. Where there is a power to delegate to a committee or sub-committee, should it only permit delegation to a committee or sub-committee that meets certain membership requirements (or other requirements)? Should a power to delegate to members of the corporation or its staff be limited to particular types of member?

12.3. Should any functions be excluded from a general power to delegate, so that they must be exercised by the corporation itself, for example because of their importance?

12.4. Should the statutory corporation retain the power to exercise a function it has delegated? Or can only the delegate exercise the delegated function?

12.5. Should a committee be able to sub-delegate functions that have been delegated to it, for example to a sub-committee or an individual member of the committee?

12.6. Should any other delegation between parts of the statutory corporation be possible?

13. Execution and authentication of documents

13.1. If the corporation has a seal for executing deeds (which is generally only needed for land transactions), should there be any requirement for the use of the seal to be accompanied by the signature of particular members or employees of the corporation? Should this be left to the corporation to decide for itself?

13.2. Should there be a presumption that a document has been properly signed and sealed, so that there is no need to prove its authenticity (in the few cases where that would be required by the law of England & Wales or Northern Ireland)?

13.3. In Scotland, provision about these issues is not required, as they are addressed by the Requirements of Writing (Scotland) Act 1995; in Northern Ireland, section 19(1)(c) of the Interpretation Act (Northern Ireland) Act 1954 may be sufficient.

14. Money

14.1. Should the statutory corporation receive payments (or "grants") from Ministers? (This would not be appropriate for a Scottish body that is to form part of the Scottish Administration.) Should it be possible for the payments to be made subject to conditions (including conditions that could mean the money has to be repaid)?

14.2. Should the statutory corporation have the power to borrow money? Should it be able to borrow from any lender, or only from Ministers? Should there be any limit on how much it can borrow? Should borrowing require the approval of Ministers?

14.3. Might Ministers provide any other forms of financial assistance (such as guarantees or indemnities)?

14.4. Should the corporation be able to accept gifts, even if the property is likely to be held for the long term and money may need to be spent to maintain it?

14.5. Should the statutory corporation be able to charge fees for providing services or carrying out any of its functions? Should it be free to decide how much to charge, or should the fees require the approval of Ministers or be set by them?

14.6. Should the corporation be required to pay any sums that it receives to Ministers or into the relevant Consolidated Fund?

14.7. Should the corporation have the power to make grants, lend money or give other financial assistance? Should it be able to give assistance subject to conditions?

14.8. Should there be any restrictions on its powers to give financial assistance, such as requirements that assistance is only given for particular purposes or on particular terms, or a requirement to obtain the agreement of Ministers?

15. Plans, estimates and reports

15.1. Should the statutory corporation be required to produce an estimate of income and expenditure for each financial year (other than its first financial year)?

15.2. Should it be required to prepare a plan for each financial year, or for a longer period, setting out how it proposes to carry out its activities during the period? Occasionally both annual and longer-term plans are required, or annual plans are required to include financial estimates.

15.3. Should the statutory corporation be required to make annual reports on how it has exercised its functions during each financial year?

15.4. If any of these documents are required:

15.4.1. When must the statutory corporation prepare the document? Consider which period the first estimate, plan or report must cover, and when it must be prepared.

15.4.2. Are there any specific matters that an estimate, plan or report must deal with, or any criteria or standards that it must apply?

15.4.3. Should there be any requirement to consult in preparing the document?

15.4.4. Should the document be submitted to Ministers? Should there be a requirement to lay it before the relevant legislature (by the corporation or Ministers), or for it to be published?

15.5. In the case of an estimate or plan:

15.5.1. Should the document require the approval of Ministers? Should they be able to modify it?

15.5.2. Should the corporation be required to exercise its functions in accordance with its plan? Should Ministers be required to provide funding in accordance with a plan or estimate?

16. Accounts and audit

16.1. If there are accounting and audit requirements, they should appear in the legislation establishing the statutory corporation. (But for Scottish bodies, rely on sections 19, 21 and 22 of the Public Finance and Accountability (Scotland) Act 2000 if they apply.)

16.2. The usual form of accounting provision requires the corporation to keep proper accounts and accounting records, and to prepare a statement of accounts for each financial year in accordance with directions given by Ministers (or HM Treasury).

16.3. Are special rules needed about the appointment, identity or responsibilities of the corporation's accounting officer? For example, is it necessary to require that the accounts are signed by the statutory office-holder, or to enable Ministers to appoint the accounting officer or specify the officer's responsibilities?

16.4. The standard features of audit provisions are:

16.4.1. The accounts must be submitted to the relevant Auditor General.

16.4.2. The Auditor General must examine, certify and report on the accounts.

16.4.3. The certified accounts and report must be laid before the relevant legislature.

16.5. Consider:

16.5.1. whether the accounts should be submitted to the relevant Auditor by the statutory corporation itself or by Ministers;

16.5.2. whether to specify a date by which the accounts must be submitted (31 August and 30 November are common) or give Ministers the power to do so;

16.5.3. whether the certified accounts and report should be laid before the relevant legislature by the Auditor or by Ministers;

16.5.4. whether to specify a period within which the certified accounts and report must be laid (4 months from submission of the accounts is common).

16.6. Occasionally statutory corporations are required to establish audit committees. If an audit committee is to be required, what functions and membership should it have?

16.7. Should the relevant Auditor General have the power to carry out examinations into the economy, efficiency and effectiveness with which the statutory corporation is using or has used its resources? If so:

16.7.1. Does the power need to exclude any questioning of the policies pursued by the corporation?

16.7.2. Should there be a duty to consult anyone before exercising the power?

16.7.3. Should the Auditor have a duty or only a power to make a report of the results of the examination?

16.7.4. Should reports be published, or made to Ministers or the relevant legislature?

16.8. Accounts usually relate to financial years running from 1 April to 31 March, but where a corporation is established on a date other than 1 April it will be necessary to determine what its first accounting period should be.

17. Control by Ministers or legislature

17.1. Should Ministers have a general power to give directions to the statutory corporation in relation to the exercise of its functions? Should there be exceptions?

17.2. Should the corporation be required to comply with requests from Ministers to give them information or advice?

17.3. Should the corporation be under a general duty to have regard to Ministerial guidance when exercising its functions?

17.4. Should there be any procedure for giving directions or issuing guidance (such as a requirement to consult the corporation)? Must they be published?

17.5. Alternatively, does the nature of the body or office mean that it must not be subject to the direction or control of Ministers?

17.6. In that case, should it be subject to any special form of oversight by the legislature instead?

18. Other legislation relating to duties and scrutiny of public bodies

18.1. Should freedom of information legislation apply to the corporation, so that there is a general right of access to information it holds?

18.2. Should the records of the statutory corporation be public records that must be managed and made available in accordance with public records legislation?

18.3. Should the corporation be subject to investigation by an Ombudsman where there is a complaint of maladministration?

18.4. Should the corporation be required to comply with public sector equality legislation?

18.5. Should the corporation be subject to review or investigation by other Commissioners concerned with children, older people, etc.?

(The Annex lists the legislation dealing with these issues.)

19. Reorganisation of existing public bodies

19.1. Is the new statutory corporation intended to replace one or more existing bodies, in whole or in part?

19.2. Should the new corporation take on any or all of the functions that are currently exercised by an existing body? Which functions should be transferred to it?

19.3. Should the new corporation be put into the position of the existing body, so that it can continue anything that the existing body was doing at the time of transfer? (Should that be the case where existing functions are not being transferred but the new corporation is being given functions similar to those of a predecessor body?)

19.4. Should the new corporation assume any or all of an existing body's property, rights and liabilities?

19.5. Should Ministers have the power to determine which property, rights and liabilities are transferred? The usual method for doing this is by making a transfer scheme. Consider whether there are particular issues that the scheme may or must include.

19.6. Should any transfer include property, rights or liabilities that could not otherwise be transferred (for example because their transfer requires someone's consent)? Should it include criminal liabilities, or rights and liabilities that have not yet arisen?

19.7. Will staff be transferred from an existing body to the new statutory corporation? Legal advice will be needed on whether TUPE will apply to the transfer of staff, so that contracts of employment are continued. If TUPE does not apply, it will be necessary to make equivalent provision for continuity of employment.

19.8. Should staff transferred from an existing body be entitled to continue as active members of their existing pension scheme?

19.9. Might the new corporation need a right of access to property or information held by an existing body, or vice versa? Might ownership of property need to be shared?

19.10. Should any property, rights or liabilities of an existing body be transferred to a person other than the new corporation, such as Ministers?

19.11. If an existing body is being wound up, consider what provision needs to be made about its final annual report and accounts. Who should be required to prepare them (for example, the successor body or Ministers)? What procedure should apply to their preparation and to the audit of the final accounts?

20. Power to dissolve the new statutory corporation

20.1. Should there be a power for Ministers to bring the corporation's existence to an end? This may be appropriate where:

20.1.1. the statutory corporation is intended to perform a fixed set of tasks or to have a limited lifespan;

20.1.2. circumstances can be envisaged in which the corporation would no longer need to exist, for example because it had achieved its aims;

20.1.3. a group of authorities is being established which may need to be reorganised in future.

20.2. A power to use subordinate legislation to dissolve a body established by primary legislation may be controversial.

Examples of the solution in Acts passed in 2012-2016

Acts of the UK Parliament

Acts of the National Assembly for Wales

Acts of the Scottish Parliament

Acts of the Northern Ireland Assembly

Annex: other legislation about public bodies

The legislation mentioned below lists the public bodies or categories of body to which it applies, and may therefore need to be amended to apply to a new statutory corporation. Check the legislation in question to see how it describes the types of body it applies to.

Oversight of appointments

  • Oversight by Commissioner for Public Appointments of appointments by Ministers of the Crown or the Welsh Ministers: Public Appointments Order in Council 2015
  • Oversight by Commissioner for Public Appointments for Northern Ireland of appointments by NI Departments: Commissioner for Public Appointments (Northern Ireland) Order 1995
  • Oversight by Commissioner for Ethical Standards in Public Life in Scotland of appointments by the Scottish Ministers: Public Appointments and Public Bodies etc. (Scotland) Act 2003

(If appointments to a body are to be monitored by the UK or NI Commissioner, the body should be listed in the next Order in Council replacing or amending the current Order.)

Disqualification from membership of legislature

  • House of Commons: House of Commons Disqualification Act 1975
  • Northern Ireland Assembly: Northern Ireland Assembly Disqualification Act 1975
  • National Assembly for Wales: Order in Council under section 16 of Government of Wales Act 2006
  • Scottish Parliament: Order in Council under section 15 of Scotland Act 1998

(If the members or employees of a statutory corporation are to be disqualified from the NAfW or SP, this should be done by an Order in Council under the relevant section.)

Civil service pensions

  • GB: Superannuation Act 1972 and Public Service Pensions Act 2013
  • NI: Superannuation (Northern Ireland) Order 1972 and Public Service Pensions Act (Northern Ireland) 2014

Freedom of information

  • UK, England, Wales and NI public authorities: Freedom of Information Act 2000
  • Scottish public authorities: Freedom of Information (Scotland) Act 2002

Public records

  • Records of UK Government departments and sponsored bodies: Public Records Act 1958
  • Welsh public records: Government of Wales Act 2006, sections 146-8 (but until an order is made under section 147, the Public Records Act 1958 applies)
  • Records of Scottish public bodies: Public Records (Scotland) Act 2011
  • NI records: Public Records Act (Northern Ireland) 1923


  • UK Government departments and other bodies exercising non-devolved functions: Parliamentary Commissioner Act 1967
  • Wales: Public Services Ombudsman (Wales) Act 2005
  • Scotland: Scottish Public Services Ombudsman Act 2002
  • NI: Public Services Ombudsman Act (Northern Ireland) 2016

Public sector equality legislation

  • GB: Equality Act 2010, Part 11 (general public sector equality duty and specific duties imposed by a Minister of the Crown, the Welsh Ministers or the Scottish Ministers)
  • NI: Northern Ireland Act 1998, sections 75 and 76 (general public sector equality duty and prohibition on religious discrimination)

Reviews and investigations by other Commissioners


  • Review by Children's Commissioner for Wales of the effect of a body's exercise of its functions on children: Care Standards Act 2000, Part 5
  • Review by Older People's Commissioner for Wales of the effect of a body's exercise of its functions on older people: Commissioner for Older People (Wales) Act 2006
  • Potential for body to be required to comply with Welsh language standards enforced by the Welsh Language Commissioner: Welsh Language (Wales) Measure 2011
  • Duty of public bodies to carry out sustainable development, subject to examination by the Auditor General for Wales and review by the Future Generations Commissioner for Wales: Well-being of Future Generations (Wales) Act 2015


  • Requirement for body to produce code of conduct for members, and power for the Commissioner for Ethical Standards in Public Life in Scotland to investigate alleged breaches of the code: Ethical Standards in Public Life etc. (Scotland) Act 2000

Northern Ireland:

  • Review by Northern Ireland Commissioner for Children and Young People of arrangements made by authorities and investigation of complaints that they have infringed the rights or adversely affected the interests of a child or young person: Commissioner for Children and Young People (Northern Ireland) Order 2003
  • Review by Commissioner for Older People in Northern Ireland of arrangements made by authorities and investigation of complaints that they have adversely affected the interests of an older person: Commissioner for Older People Act (Northern Ireland) 2011