Commission for Ethical Standards in Public Life in Scotland
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1 Commission for Ethical Standards in Public Life in Scotland REPORT TO PARLIAMENT Laid before the Scottish Parliament by the Public Appointments Commissioner for Scotland in pursuance of Section 2(8) a of the Public Appointments and Public Bodies etc. (Scotland) Act 2003 (the 2003 Act). TITLE: SUCCESSION PLANNING & REAPPOINTMENTS MATERIAL NON COMPLIANCE WITH THE CODE OF PRACTICE FOR MINISTERIAL APPOINTMENTS TO PUBLIC BODIES IN SCOTLAND MINISTER: ALL SCOTTISH MINISTERS WHO HAVE REAPPOINTED MEMBERS TO THE BOARDS OF REGULATED BODIES SPONSORED BY DIRECTORATES LISTED IN APPENDIX TWO SUMMARY 1. The current Code of Practice for Ministerial Appointments to Public Bodies in Scotland (the 2011 code) came into force on 1 September The 2011 code makes clear the responsibilities of the Scottish Ministers when reappointing board members: Paragraph 2: The Scottish Ministers are responsible for succession planning to ensure boards have the skills and knowledge necessary to fulfil their role economically, efficiently and effectively. They will determine the period for which an appointment, reappointment or extension to an appointment term is to be made based on the needs of the body concerned. Paragraph 3: The Scottish Ministers will consider whether the needs of a board will most effectively be met by an appointment, reappointment or extension to an appointment term. They will balance the continuity provided by reappointment and term extensions with the opportunity to increase the diverse range of relevant skills and knowledge on a board by making a new appointment through open competition. Section I: The skills and knowledge needed by the board are maintained I1: The Scottish Ministers may reappoint a board member to the same position once. Decisions to reappoint will be based on: i. evidence of effective performance during the current term ii. evidence that the member has the skills and knowledge required on the board at the time of reappointment and for the reappointment period. 2. I have reviewed twenty four cases made in support of reappointment and one made in support of a term extension; all were made after 1 September The timing of twenty two of the twenty four reappointment submissions did not enable the Scottish Ministers to acquit their responsibility for succession planning as required by Paragraph 2 of the 2011 code. 3. None of the twenty two was submitted in sufficient time to allow the appointing minister to appoint a replacement through open competition, rather than reappoint
2 the incumbent, should that be the minister s preferred option. This represents noncompliance with Paragraph 3 of the 2011 code. 4. I am not in a position to question the ability of any board member reappointed by Scottish Ministers. In a number of instances, however, material presented to me did not provide evidence of effective performance. In addition, it was not always clear from the material that Scottish Ministers were aware of the needs of the board going forward. Both are requirements of Section I of the 2011 code and apply to reappointment and term extension. 5. Overall, taking points 2, 3, and 4 above together, I have evidence of twenty three cases of non-compliance in a six month period. Details are provided in Appendix Two. 6. I did not consider each individual case where evidence did not meet the code s requirements to represent material non-compliance. This was because I had no evidence that the outcome of the reappointment or term extension would have been different had the process complied with the code s requirements. On each occasion that a reappointment submission was made to me I did indicate my concern about the lack of succession planning. I am of the opinion that the Scottish Ministers continuing inability to meet the requirements of Paragraphs 2 and 3 represents material non-compliance with the 2011 code. In addition, the approach taken to date to demonstrate compliance with the requirements of Section I has not provided reassurance that the Scottish Ministers or their officials are able to comply with the requirements of the code. Karen Carlton Public Appointments Commissioner for Scotland 22 March 2012
3 CONTENTS PAGE Background 4 Current Position 6 Definition of material non-compliance with the code 7 Nature of non-compliance with the code 7 Recommendations 7 Appendices: One Two Three Relevant principles and paragraphs of the 2011 code Instances of non compliance with the 2011 code Relevant requirements of prior codes of practice
4 BACKGROUND I. The Commissioner for Public Appointments in Scotland was appointed on 1 June Initially, the Commissioner adopted the Code of Practice for Ministerial Appointments published by the UK Commissioner as the interim code for Scotland, first informally and then formally following consultation with the Scottish Parliament. That code makes clear the evidence required to support reappointment decisions. Details are contained in appendix three. II. III. IV. The first code developed specifically to reflect the needs of the Scottish ministerial appointments process came into effect on 1 April That code made clear the Scottish Ministers responsibility for succession planning and defined it, so that there could be no doubt about what was required. The 2006 code was specific about the requirement for evidence of effective performance to support reappointment decisions and made clear the fact that performance appraisal was a requirement. Details are contained in appendix three. The 2006 code was developed in consultation with stakeholders and the Scottish Government was actively involved in its development. The Scottish Government was quite clear about, and supported, the reappointment requirements. Reappointment decisions were not routinely scrutinised by the Commissioner but the evidence required to support such decisions had to be retained and made available for retrospective audit. V. A retrospective audit of reappointment activity conducted by the Commissioner and published on 26 June 2009 uncovered significant examples of non-compliance with the 2006 code. This audit reviewed the material supporting the reappointment of fourteen board members to six different Non-Departmental Public Bodies sponsored by different departments within the then Scottish Executive. Against code requirements 29.1, 29.2 & 29.4 (detailed in appendix three) the audit found that 50% of cases reviewed did not meet these individual requirements. In addition the audit found no instance of a submission that met the requirement specified at 29.5 (detailed in appendix three). Findings indicated that the Scottish Ministers based decisions to reappoint fourteen people to the boards of public bodies on incomplete evidence. VI. VII. The Commissioner published her findings and wrote to the then Permanent Secretary asking what steps Scottish Ministers would put in place to ensure compliance with the code and importantly to ensure that reappointment decisions were based on appropriate evidence. A substantive response from the Permanent Secretary advised that new policies and teams would be created to ensure that Scottish Government met the requirements of the 2006 code and that the Scottish Ministers were supported to make informed decisions regarding the future composition of public body boards. The current code was finalised in January 2011, published on 1 April and implemented from 1 September. The period from April to September was designed to provide the Scottish Ministers and their officials with time to develop their people and systems in readiness for the requirements of the new code and the risk-based regulatory framework introduced alongside the code. The code was developed through extensive consultation and, once again, the Scottish Government played an active part in its development.
5 VIII. o o o IX. o o o The 2011 code is designed to provide a framework for ensuring the requirements of the 2003 Act are met by the Scottish Government s appointment practices encourage flexibility of approach to tailor the appointments process to the body, the role and the target audience address areas of past non-compliance by being explicit about certain requirements of the process. The 2011 code is explicit about the need for the Scottish Ministers to plan for succession the requirement for evidence of effective performance by the member being considered for reappointment during his or her current term the requirement for consideration of the needs of the board, at the time of the reappointment and for the reappointment period. The code makes clear that, where any of the code s requirements are considered inappropriate due to prevailing circumstances, the Scottish Ministers will discuss the options open to them with the Commissioner. Thus, where there is uncertainty about the future of a body or the future requirements of its board, this will be discussed and an appropriate course of action agreed. X. Given the foregoing, the requirements for reappointment specified in the 2011 code and its predecessors have been made clear and have been communicated at appropriate levels. There should be no doubt about the requirements. Evidence reviewed by the Commissioner indicates that they are not, and have not been, adequately met. XI. XII. XIII. XIV. In her investigation into reappointment practices the Commissioner reviewed requests to grant term extensions dating back to the period before her appointment. She noted a continuing trend for term extensions to be requested to meet a short term need arising as a result of a failure to plan effectively for the future needs of the board. As far back as 1999 the Office of the Commissioner for Public Appointments highlighted concern at the practices in Scotland. Report CPA/2010/04 presented by the Commissioner to the Standards, Procedures and Public Appointments Committee of the Scottish Parliament in July 2010 identified material non-compliance regarding reappointment practices. Another report identifying non-compliant practices, CPA/2010/1705, was provided to the Scottish Government for consideration in August The fact that reappointment decisions by Scottish Ministers are not being considered in a timely fashion suggests a lack of prioritisation for the public appointments process and a lack of respect for the individuals who give of their time to sit on the boards of public bodies. This is particularly disappointing in light of the assurances previously provided by the Scottish Government; this disappointment is exacerbated by the fact that prior applicable codes have been explicit regarding the requirements for reappointment and succession planning. Overall, it is the Commissioner s opinion that the failure to follow code compliant practices for reappointment and succession planning are endemic.
6 CURRENT POSITION XV. XVI. Information available on the Scottish Government s public appointments website (29 February 2012) indicates that there are at least seventeen board members whose terms will come to an end within a six month period from 1 March To enable the Scottish Ministers to decide whether to fill a position through open competition or to reappoint the current incumbent, advice relating to Section I of the code should by now have been presented to the appointing ministers. If it has not there will be future instances of non-compliance with Paragraphs 2 and 3 and Section I. Each time a decision is taken at too late a stage, the period of notice provided to the board member is inadequate; this applies equally to people who will be and will not be reappointed. This damages confidence in the public appointments process. I am currently hearing from body chairs and members that they have been informed of the decision within days of the expiry of their terms; in some cases they have been informed after their term has ended. XVII. When it is not clear that reappointment decisions are evidence based there are risks to the level of public confidence in the process. Poor succession planning puts the work of boards at risk and demonstrates a lack of respect for members of public body boards. Despite the long-standing requirements for effective succession planning and evidence-based reappointment decisions, it appears that the Scottish Ministers and their officials remain unaware of or unconcerned about the organisational and personal impact of their actions.
7 DEFINITION OF MATERIAL NON-COMPLIANCE WITH THE CODE The 2003 Act does not provide a definition of material non-compliance. It is therefore for the Commissioner to determine whether the actions of the Scottish Ministers represent material non-compliance. In doing so the Commissioner considers the following questions. Were the principles of the code breached? Was any non-compliance with the code not simply of a trivial or minor nature but something more serious or substantive? Did the non-compliance affect, or have the potential to affect, the outcome of the process? NATURE OF NON-COMPLIANCE WITH THE CODE Appendix two lists the instances of non-compliance with the 2011 code. The cumulative effect of the non-compliance means it is a substantive issue. The inability to present the Scottish Ministers with the necessary information at an appropriate time has the potential to affect their appointment decisions. Paragraphs 2 and 3 and Section I of the 2011 code are not being complied with in a material regard. In addition, current practice makes it difficult to determine how the Scottish Ministers are complying with the code s outcome-focused principle: Decisions and actions taken at each stage of an appointment round will enable the Scottish ministers to appoint the applicant(s) who best demonstrate their merit in relation to the role and their ability to contribute effectively to the work of the board in question. This non-compliance has been brought to the attention of the Scottish Ministers on a number of occasions since June In an attempt to encourage compliance the Commissioner offered the Scottish Government the opportunity to specify the improvement action it will take. This is outlined in the following section. RECOMMENDATIONS Prior to submitting this report to the Committee the Scottish Government was provided with the opportunity to specify what they will do to address the succession planning noncompliance. They responded as follows: There are a number of actions currently underway that include - a reorganisation and restructure of the Scottish Government Public Appointments Centre of Expertise (PACE) that will involve the recruitment of more experienced team members - the introduction of experienced diversity staff to PACE to build on the positive work that the centre of expertise has been taking forward - data held on the PACE tracking system used to prompt Scottish Government Directors about appointments/reappointments due to be considered over the next 12 months
8 - during further work to develop the understanding of the public appointment process among members of the Scottish Government Senior Civil Service where they have sponsor team responsibilities - PACE to regularly update the Commission for Ethical Standards in Public Life in Scotland on progress regarding its succession planning and reappointments programme for Ministerial public appointments to Public Bodies in Scotland - PACE will continue to build on its activities promoting public appointment opportunities to a wider and more diverse range of individuals across Scotland s population. The response indicates planned improvement action across the spectrum of ministerial public appointment activity, not only succession and reappointment. As indicated at paragraph VI of the background section in this report, similar assurances of improvement from the previous Permanent Secretary have not been delivered on. It is recommended that the Commission monitors the implementation and impact of the above improvement actions and reports instances of material non-compliance to the Scottish Parliament.
9 APPENDIX ONE RELEVANT CODE PRINCIPLES AND PRACTICES OF THE 2011 CODE Principles Outcome focused Decisions and actions taken at each stage of an appointment round will enable the Scottish Ministers to appoint the applicant(s) who best demonstrate their merit in relation to the role and their ability to contribute effectively to the work of the board in question. Appropriate Decisions and actions taken at each stage of an appointment round will be tailored to the role to be filled and will demonstrate effective use of resources. Decisions and actions will be clear, will promote and demonstrate equality, will be accurately recorded and will be open to independent external scrutiny. Paragraph 2 The Scottish Ministers are responsible for succession planning to ensure boards have the skills and knowledge necessary to fulfil their role economically, efficiently and effectively. They will determine the period for which an appointment, reappointment or extension to an appointment term is to be made based on the needs of the body concerned. Paragraph 3 The Scottish Ministers will consider whether the needs of a board will most effectively be met by an appointment, reappointment or extension to an appointment term. They will balance the continuity provided by reappointment and term extensions with the opportunity to increase the diverse range of relevant skills and knowledge on a board by making a new appointment through open competition. Section I I1 The Scottish Ministers may reappoint a board member to the same position once. Decisions to reappoint will be made on i. Evidence of effective performance during the current term. ii. Evidence that the member has the skills and knowledge required on the board at the time of reappointment and for the reappointment period. I2 The Scottish Ministers may extend a member s reappointment term. Before doing so they will obtain the written agreement of the Commissioner. Decisions to extend terms will be based on i. Evidence of effective performance during the current term. ii. Evidence that the member has the skills and knowledge required on the board at the time of reappointment and for the reappointment period. iii. Evidence that the board member s contribution is necessary to meet a relatively short-term need.
10 APPENDIX TWO INSTANCES OF NON COMPLIANCE WITH 2011 CODE 1 September February 2012 DIRECTORATE REQUEST DATE OF REQUEST LEARNING & JUSTICE LEARNING & JUSTICE ENTERPRISE AND ENVIRONMENT LEARNING & JUSTICE ENTERPRISE & ENVINRONMENT ENTERPRISE & ENVIRONMENT ENTERPRISE & ENVIRONMENT ENTERPRISE & ENVIRONMENT ENTERPRISE & ENVIRONMENT ENTERPRISE & ENVIRONMENT GOVERNANCE & COMMUNITIES LEARNING & JUSTICE LEARNING & JUSTICE TERM END DATE SUCCESSION PLANNED REAPPOINTMENT 26 /10/11 09/12/11 NO NO REAPPOINTMENT 26 /10/11 09/12/11 NO NO REAPPOINTMENT 01/11/11 30/11/11 NO NO REAPPOINTMENT 01/11/11 30/11/11 NO NO REAPPOINTMENT 07/11/11 30/11/11 NO YES REAPPOINTMENT 07/11/11 31/01/12 NO YES REAPPOINTMENT 01/11/11 30/11/11 NO NO TERM EXTENSION 21/11/11 30/04/12 YES NO REAPPOINTMENT 07/11/11 31/12/11 NO NO REAPPOINTMETN 19/12/11 31/12/11 NO NO SECTION I REQUIREMENTS MET REAPPOINTMENT 19/01/12 31/01/12 NO NOT KNOWN REAPPOINTMENT 18/01/12 31/01/12 NO NO REAPPOINTMENT 19/01/12 31/01/12 NO NOT KNOWN REAPPOINTMENT 30/01/12 31/03/12 NO NOT KNOWN REAPPOINTMENT 30/01/12 31/03/12 NO NOT KNOWN REAPPOINTMENT 06/02/12 31/03/12 NO NO REAPPOINTMENT 08/02/12 30/06/12 NO NO *REAPPOINTMENT 09/01/12 31/12/11 NO NO *REAPPOINTMENT 09/01/12 31/12/11 NO NO *REAPPOINTMENT 09/01/12 31/12/11 NO NO *REAPPOINTMENT 09/01/12 31/12/11 NO NO *REAPPOINTMENT 30/11/11 31/10/11 NO NO REAPPOINTMENT 27/02/12 31/08/12 YES NOT KNOWN REAPPOINTMENT 27/02/12 31/08/12 YES NOT KNOWN REAPPOINTMENT 27/02/12 31/03/12 NO NO *In five cases, submissions were received after the date on which members terms ended. 10
11 APPENDIX THREE RELEVANT REQUIREMENTS OF PRIOR CODES OF PRACTICE EXTRACT FROM THE 2006 CODE 5 Ministerial Responsibility 5.1 Scottish Ministers are responsible for the work of our public bodies. They must be confident that public bodies are directed by appropriately skilled and knowledgeable people. In order to be confident that this is the case it is important that Ministers determine in advance of each appointment round the skills, knowledge and personal qualities they will require on the board of the public body at the time of the appointment and to support the future direction of the body concerned. 5.2 The skills, knowledge and personal qualities will be determined by considering: d. any succession planning requirements 29 Re-appointment 29.1 A member may be reappointed for a second term in the same role without open competition, subject to evidence of effective performance if he or she possesses the skills, knowledge and personal qualities required on the board at the time of reappointment. This will require a review of the person specification prior to reappointment Sponsor departments will ensure that every public body has in place and implements regular and transparent performance appraisal process, the outcomes of which are recorded and provide the evidence on which to base a decision to reappoint Performance appraisals are a requirement of re-appointment and the process to be used to appraise performance will form part of the induction provided on initial appointment No-one may be reappointed unless there is evidence of effective performance during their current term of appointment If recommending re-appointment, the sponsor team will prepare a submission to the Minister which will summarise how the member meets the current person specification, and the member s performance to date Where is does not recommend reappointment the sponsor department will prepare a submission to the minister outlining the reasons for this decision. Succession Planning definition A process that ensures that, in anticipation of the expiry of individuals appointment terms, steps are taken to develop existing members or appoint new members to ensure continuity and the retention of necessary knowledge, skills and personal qualities on the board. 11
12 EXTRACT FROM THE INTERIM CODE (2004) Merit (and diversity) principle 2.05 To ensure that existing board members standing for reappointment meet the current criteria and can compete, when appropriate, in an open competition, departments must have in place a meaningful performance appraisal system. Reappointments 3.11 departments will need to establish how many of the members whose terms of office are due to end are eligible for a further term of appointment and meet the current requirements of the board... The decision to reappoint must be taken in a timely manner, and in all cases before the current term expires. b) Performance assessment 3.13 Departments must have in place regular and transparent performance assessment processes that will provide the necessary, robust evidence for considering reappointments: no-one can be reappointed unless they have performed satisfactorily during their current term; it is essential that, for audit purposes and the investigation of complaints, all performance assessments are fully recorded and documented. ( Making Public Appointments offers detailed guidance on undertaking performance assessments.) Reappointment to upper tier bodies First reappointments (ie a second term of office in the same role) may be made subject to a satisfactory performance assessment as set out in paragraph Second reappointments (ie a third term of office in the same role) will be rare; and can only be made if the individual has been considered alongside other applicants in open competition and has proved to be the most suitable candidate. In making this judgement departments can take into account the fact that the current post holder: i) has particular skills or experience essential to efficient functioning of the board; or ii) will provide continuity during a period of change (perhaps when a number of appointments are coming to an end simultaneously or bodies are merging). Reappointment to lower tier bodies Appointees may serve any number of terms providing their performance has been continuously assessed as satisfactory. 12
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