Strategic commercial interventions - initiating companies in public ownership: standard operating procedures - part 1

1. Introduction

This guidance can be applied to circumstances where officials are required to initiate a completely new company as a public corporation or Non-Departmental Public Bodies (NDPB), or where an existing private company is brought under Ministerial control or public ownership.

Public corporations and NDPBs are constituted with an independent board and management teams. Governance measures should seek to preserve the company’s independence to achieve objectives as far as possible, while balancing Ministerial control and oversight. Yet, given the diversity of such public bodies and the political contention which often surrounds their establishment, effective control to deliver public value is challenging to achieve.

In exercising oversight on behalf of Ministers, officials must ensure a requisite degree of control is secured, exercised and able to be demonstrated in practice. Those serving on public body boards, Chief Executives etc. are acting on behalf of Scottish Ministers. They must adhere to the principles of public life, Model Code of Conduct, etc. and not seek to contradict Ministers wishes or follow policies radically different to that of the Scottish Government (SG). Ministers are ultimately accountable for these bodies; they are not fully independent, but are at arms length from central government, and should conduct themselves as such.

This manual seeks to supplement, not replace, existing guidance with a focus on sharing practical experience when public corporations and NDPBs should be considered as an effective means to achieve specific policy objectives, and the critical factors needed to make them a success. Please note, this manual does not constitute as legal advice, officials should instruct legal advisors if required.

The manual is comprised of the following chapters which highlight the areas to consider when establishing public corporations and NDPBs to deliver public value:

Chapter 1: Classification of Public Bodies

Chapter 2: Initiating and Financing a Public Corporation or NDPB

Chapter 3: Articles of Association & Framework Documents