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Scottish Public Finance Manual

The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds.


FGN2019/05SPFM amendments: August 2019

FGN2019/05SPFM amendments: August 2019

The purpose of this note is to announce recent amendments to the Scottish Public Finance Manual (SPFM). The amendments are as follows:

Borrowing, lending and investment chapter:

Other than where they are have been given a specific remit, constituent parts of the Scottish Administration must not deliberately invest resources outside the public sector and  SG sponsored bodies should not make any investments of a speculative nature. Where Scottish Ministers decide to make investments directly through the core Scottish Government or associated bodies, Accountable Officers must ensure that appropriate diligence and consideration is carried out before any commitment is made to invest, detailed guidance on this has been added as Annex A: Investment in businesses by Scottish Ministers to the Borrowing, lending and investment chapter.

This guidance sets out the key steps that must be considered when Scottish Ministers are considering an initial or follow-on investment in private businesses and forms the basis for developing proposals and a structure for decision-making.

The first part of this guidance focuses on the key tests for Accountable Officers, that are necessary for a comprehensive view on an investment proposal. This includes guidance on:

  • Powers of intervention
  • Regularity of expenditure 
  • Propriety
  • Value for money

The next section of the guidance sets out the out the other critical areas of consideration when reviewing an investment proposal.  These considerations include: 

  • State aid
  • National accounts classification
  • Budgeting and accounting
  • Governance
  • Purchase/sale
  • Return on investment
  • Security of investment
  • Public body duties
  • Pensions
  • Taxation
  • Legislative and parliamentary considerations

Flow charts supporting the guidance for the Accountable Officer tests have been added as supporting documents. 

The remainder of the guidance covers the decision making process, monitoring, evaluation and management of the investment and exit arrangements.  Disclosure of information and commercial sensitivity is also covered in the guidance, this is further expanded upon in Annex B.

Scottish Government Finance Directorate

August 2019

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