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.

FGN2021/01 SPFM amendments: March 2021

FGN2021/01 SPFM amendments: March 2021

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

1. Subsidy control

The section on EC State Aid rules has been replaced by a new section headed Subsidy control. This is to reflect that The EU State aid regime was effectively revoked from UK law from 1 January 2021. The purpose of this note is to highlight the key elements of this new chapter.

This guidance applies to all public authorities who grant subsidies and are responsible for ensuring they understand the UK’s commitments and comply with the obligations in relation to awarding subsidies from 1 January 2021.

The EU State aid regime was effectively revoked from UK law from 1 January 2021 except in limited circumstances (under the Northern Ireland Protocol and certain other cases set out in the UK-EU Withdrawal Agreement) and subsidy control provisions are now covered by the UK-EU Trade and Cooperation Agreement (TCA) and the UK’s international obligations including various Free Trade Agreements and those arising as a consequence of World Trade Organisation membership. This position may be subject if the UK Government establishing its own domestic subsidies control regime: a UK wide consultation on this is set to take place in the first half of 2021.

Subsidy control should be considered as early as possible in the policy development stage.

The Scottish Government’s Subsidy Control Team should be consulted on proposals being awarded under the new subsidy control regime.

2. Certificates of assurance:

Internal Control Checklist

This section of the SPFM relates to the assurance framework and the signing of the governance statements provided by Accountable Officers as part of the annual accounts process. The certificates of assurance guidance relates specifically to constituent parts of the Scottish Administration i.e. the core Scottish Government (SG), the Crown Office and Procurator Fiscal Service, SG Executive Agencies and non-ministerial departments.

The internal control checklist that underpins the assurances from Deputy Directors (or equivalents) to Directors (or equivalents) has been updated. The checklist still covers the same sections as previous versions but some questions have been reviewed, amended and guidance notes have been further developed across all questions. Please take the time to review the checklist to ensure you are aware of the amendments.

1. Risk management – The questions in this section have been fully reviewed but still cover previous requirements, However a further question 1.6 has been added asking areas to assess effective processes to ensure they are able to assess their appetite to key risks.

2. Business planning – Some of the questions have been reworded but content remains substantially the same with specific amendments to questions regarding alignment with National Performance Outcomes and Programme for Government.

5. Financial management – The section remains the same but with the replacement of one question 5.11 relating to the change noted above regarding the move from State Aid to Subsidy Control, teams should consult the Subsidy Control unit on all proposals that may have subsidy implications.

6. Fraud – Question 6.1 has been reworded to reflect teams responsibilities in prevention and detection of fraud. A further question 6.3 has been added asking teams if fraud prevention measures are built in their plans when new grant schemes or other spend programmes are being developed.

9. Equality and diversity – Some questions have been reworded but content remains substantially the same. 9.1 has been reworded to include legislative requirements or the impact on people with one or more of the Protected Characteristics listed in the Equality Act 2010.

10. Information – The majority of questions have been reviewed and amended with specific amendments to questions on, compliance with relevant legislation and processes in place for dealing with security incidents involving data. 10.4 has been amended to focus on the training of Information Asset Owners (IAO) and a new question at 10.5 has been created focusing on if supporting staff have an awareness of the role and responsibilities of an IAO.

11. Health and safety – The majority of questions have been reviewed and amended with specific changes to reflect the arrangements brought into place during the Covid-19 outbreak specifically in relation to risk assessment for essential workers, if staff are aware of the facility to request home working equipment, if teams have an appointed and trained Health and Safety Liaison Officer and if teams have mechanisms to keep in contact with staff who work for them if they are working from home.

12. Sponsored bodies – Some of the questions have been reviewed and amended with specific amendments to questions on, National Outcomes, Framework Documents, Effective boards, and procurement.

Scottish Government Finance Directorate

March 2021

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