1. This section gives guidance on the procedures to follow where gifts of cash or other resources are either made or received.
2. The guidance is aimed primarily at the constituent parts of the Scottish Administration (the core Scottish Government (SG), the Crown Office and Procurator Fiscal Service, SG Executive Agencies and non-ministerial departments). Other organisations to which the Scottish Public Finance Manual (SPFM) is directly applicable, including bodies sponsored by the SG, must ensure compliance with any relevant provisions and arrange for procedures consistent with the guidance to be put in place.
3. The prior approval of the relevant SG Finance Business Partner (or equivalent) is required for the making of any gift not covered by a specific delegated authority. Gifts made by the constituent parts of the Scottish Administration should, where practicable, be authorised by Budget Act (as revised by Budget Amendment Order) and Budget Documents should be appropriately footnoted.
4. Where it is not practicable, for reasons of urgency, to secure Budget Act authority gifts made by the constituent parts of the Scottish Administration may be undertaken using Ministers' contingency powers.
5. Gifts made should be reported in notes to the annual accounts. Individual gifts of more than £250,000 should be noted separately.
6. A gift is something voluntarily given or donated without the expectation of receiving anything in return and generally without preconditions. In the context of this guidance gifts made can be defined as:
payments to individuals or bodies other than grant or grant in aid or payments made in the normal course of business
the extent to which assets are sold or transferred (including the sale or assignment of leases) to individuals or bodies at less than market value i.e. the best price reasonably obtainable in the market
income foregone where individuals or bodies are given the use of resources at concessionary rates
other transactions which are virtually indistinguishable from gifts e.g. the loan of an asset for its expected useful life
7. This section is of relevance for bodies considering an asset transfer under the Community Empowerment (Scotland) Act 2015. When the price offered in an asset transfer request is less than the market value of the property the discount will be treated as a gift. The relevant authority will need to consider whether the proposed benefits to be delivered by the community transfer body justify the proposed discount. This will be based solely on the analysis of the information included in the request. The benefits of the request should be proportionate to the value of the asset and the level of discount, with an appropriate level of information to support the application. Any decision to transfer an asset must represent good use of public resources.
8. In the context of this guidance gifts received can be defined as the donation of cash or other resources with a current market value.
9. Losses and special payments should not be regarded as gifts. Nor should any transfers or transactions between constituent parts of the Scottish Administration or transfers of assets related to transfers of functions.
10. The prior approval of the relevant SG Finance Business Partner (or equivalent) is required for the making of any gift not covered by a specific delegated authority.
Budget Act authority
11. Gifts made by the constituent parts of the Scottish Administration should, where practicable, be authorised by Budget Act (as revised by Budget Amendment Order). Gifts of cash received may, where appropriate, be scored as retained income subject to the existence of the necessary powers to undertake the activity giving rise to the associated expenditure.
12. The Parliament should be made aware of any transaction outside the normal course of business. Budget Documents should therefore be footnoted to the effect that £X of Y budget relates to a gift made in respect of Z. In the case of a particularly large or potentially controversial gift, business areas, in liaison with the relevant SG Finance Business Partner (or equivalent), should consider the need for a separate report to the Parliament's Finance Committee and relevant Subject Committee.
13. Where it is not practicable, for reasons of urgency, to secure Budget Act authority gifts made by constituent parts of the Scottish Administration may be undertaken using the Scottish Ministers' contingency powers - provided that these are available. Ministers' contingency powers are described in the section on Expenditure without Parliamentary Authority. This would normally involve Ministers laying a report before the Parliament at least 14 calendar days before undertaking any relevant gift in accordance with a Written Agreement between the Scottish Ministers and the Parliament's Finance Committee. The report should set out briefly the nature of the gift, its value, the circumstances in which it is being given, and the recipient. Should the requirement to use the power arise during a recess, a report will be presented to the Parliament as soon as the Parliament returns from recess.
14. Making gifts of goods with a current market value in excess of £50 may have VAT implications. Advice should be sought on a case by case basis from the SG's VAT Advisory Team.
Record of gifts
15. Relevant finance officials should be made aware of all gifts made or received to enable the compilation of notes to the annual accounts. Property Advice Division and the Financial Reporting Unit should also be informed of relevant gifts involving assets to enable the SG Property Database and the SG Assets Register to be updated.
Reporting in accounts
16. Gifts made should be reported in notes to the annual accounts. Individual gifts of more than £250,000 should be noted separately. Gifts received need not be noted in the accounts unless there is a particular reason for bringing them to the attention of the Parliament. The Government Financial Reporting Manual provides for the specific treatment of assets donated by third parties, either by gift of the asset or by way of funds to acquire assets.
17. The arrangements for bodies sponsored by the SG making gifts within specified limits should be addressed in the framework documents for individual bodies and any proposals to make gifts in excess of these limits should be submitted for approval to the relevant SG Finance Business Partner (or equivalent).
18. Guidance on the acceptance of hospitality/gifts, etc. by Ministers is included in the Scottish Ministerial Code. Detailed guidance on the acceptance of gifts and hospitality by members of staff should be made available on organisational intranets. The guiding principles should be:
- an individual’s conduct should not foster the suspicion of any conflict between official duties and private interests
- an individual’s actions, when acting in an official capacity, should not give the impression of having been influenced by a gift or consideration to show favour or disfavour to any person or organisation
- if an individual is in doubt about the propriety of accepting a gift or an item of hospitality the relevant Human Resources advisers must be consulted
Page updated: November 2019