Intergovernmental Relations Quarterly Report Quarter 1 2021

24 March 2021

0 1 Intergovernmental Relations Quarterly Report Quarter 1 2021

24 March 2021

This information is also available on the GOV.UK website: www.gov.uk/government/collections/intergovernmental-relations

2 © Crown copyright 2021 Produced by Cabinet Office

You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open-government-licence/ or email: [email protected]

Where we have identified any third party copyright material you will need to obtain permission from the copyright holders concerned.

Alternative format versions of this report are available on request from [email protected]

3 Contents

Foreword 7

UK government’s approach to intergovernmental relations 8 1.1 UK government’s transparency commitments 8 1.2 The review of intergovernmental relations 8 1.3 Principles for intergovernmental relations 9 1.4 Context of intergovernmental working and future reporting 9

Intergovernmental engagement: Quarter 1 2021 11 2.1 Cabinet Office 11 2.2 Department for Business, Energy, and Industrial Strategy 12 2.3 Department for Digital, Culture, Media and Sport 12 2.4 Department for Education 13 2.5 Department for Environment, Food and Rural Affairs 14 2.6 Department of Health and Social Care 14 2.7 Department for International Trade 15 2.8 Department for Transport 15 2.9 Department for Work and Pensions 16 2.10 Foreign, Commonwealth and Development Office 16 2.11 Her Majesty’s Treasury 17 2.12 Home Office 17 2.13 Ministry of Defence 18 2.14 Ministry of Housing, Communities and Local Government 18 2.15 Ministry of Justice 19 2.16 Northern Ireland Office 20 2.17 Office of the Secretary of State for Scotland 20 2.18 Office of the Secretary of State for Wales 21

4 Intergovernmental Relations Quarterly Report: Quarter 1 2021

5 Intergovernmental Relations Quarterly Report: Quarter 1 2021

The Rt Hon Michael Gove MP

Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office

Chloe Smith MP

Minister of State for the Constitution and Devolution

6 Intergovernmental Relations Quarterly Report: Quarter 1 2021

Foreword

Almost every day ministers and civil servants from each department of the United Kingdom government are in touch with their counterparts in Scotland, Wales and Northern Ireland, discussing joint decision-making and pragmatic ways to work together. Whether these dealings take place at a formal meeting or ad hoc; via a telephone call or in person; or on a bilateral or multilateral basis, they come under the umbrella description of ‘intergovernmental relations’ or IGR. The purpose is to achieve better outcomes for UK citizens.

Ever since powers were devolved, IGR has supported better collaboration, coordination and cooperation between the UK government and devolved administrations. But for too long a great deal of this positive contact has gone under the radar, the many achievements unheralded and citizens largely unaware of what is being worked on in their interests. This new report on IGR – the first in a regular series of quarterly updates to be published by the UK government – seeks to put this right. And it could not be more timely.

Over the past 12 months, regular engagement between the UK government and devolved administrations has been particularly important and complex. The country’s resilience has been tested primarily by the fast-moving COVID-19 crisis, the greatest challenge in peacetime, but also by the need to agree our new trading relationship with the European Union (EU). I could not think of a better moment to open up our IGR to public scrutiny. To set out, department by department, full details of the UK government’s engagement as reassurance that it is being carried out in the interests of the whole UK, and with fairness, trust and accountability at its heart. I believe that the more attention is paid to IGR, the more collaboration will result, encouraging administrations to work together more productively.

This new report is part of a wider culture shift in our approach to IGR and efforts to formalise engagement in the long term with new structures and processes. Day-to-day responsibility for constitutional integrity of the union falls to me as the Chancellor of the Duchy of Lancaster and the Minister for the Cabinet Office.

The establishment of quarterly, and also, annual reports into IGR activity are part of a range of measures that I announced in November 2020 to support greater transparency, reporting and parliamentary engagement. Other UK government steps to improve IGR transparency include a new GOV.UK page1 and publishing communiqués about meetings held through a range of intergovernmental fora. The new arrangements, guided by draft principles published in July 2019, reflect the UK’s constitutional context today and changes in IGR since devolution, in line with the needs of the devolved administrations. Most notably, these include the devolved administrations’ increased powers and responsibilities and also the powers regained by all governments over domestic policy outside the EU.

This government is steadfast in its commitment to protect and champion the shared history, beliefs and interests embodied in our union – the most successful political and economic partnership the world has seen. For it to thrive, it must continue to deliver for each part of the UK, taking into account the many diverse interests. As the COVID-19 response showed, we are at our strongest when we work as one union, prioritising the needs of all our citizens. Turning the spotlight on our IGR will help us all to build back better, as one United Kingdom.

The Rt Hon Michael Gove MP Chancellor of the Duchy of Lancaster and Minister for Cabinet Office

1 https://www.gov.uk/government/collections/intergovernmental-relations

7 Intergovernmental Relations Quarterly Report: Quarter 1 2021

1. UK government’s approach to intergovernmental relations

1.1 UK government’s transparency commitments

The UK government (UKG) deeply values the core principles of transparency of IGR, recognising that accountability and effective parliamentary scrutiny of the government’s participation in intergovernmental structures will support administrations to work together effectively on behalf of all citizens across the UK.

The government announced in November 2020 a number of measures by written ministerial statement in both Houses of Parliament to support transparency, reporting and parliamentary engagement on IGR. These included the creation of a new GOV.UK page2 to improve public access to principal documents, such as records of formal intergovernmental meetings, the Memorandum of Understanding on Devolution3 and quarterly reports on all IGR activity. This increased transparency will be complemented by regular statements in UK Parliament by UKG ministers on IGR, appropriate appearances before select committees, and a report on IGR activity laid annually in the UK Parliament. The measures are intended to support Parliament’s capacity to scrutinise the UKG’s role in IGR with the DAs. The measures do not place any obligations on other administrations to report to their legislatures, although they mirror the approaches taken by the Welsh and Scottish governments.

This document is the first quarterly report to be published since these measures were announced. It includes details of meetings between UKG ministers with the Welsh and Scottish governments, and Northern Ireland Executive, in both bilateral and multilateral settings. It is not, however, an exhaustive list: there are many other fora in which the UKG and the DAs engage, including within Cabinet Committee structures and bodies such as the British-Irish Council, as well as the significant engagement at official level. These meetings are not covered in this report.

The report is being published slightly ahead of schedule, so as not to coincide with the UK Parliamentary recess or the pre-election period for Scottish and Welsh parliamentary elections. Thus it covers ministerial engagement between 1 January - 28 February 2021, rather than a full quarter of the year. In light of the shorter reporting period, it is supplemented by introductory commentary on the overall nature of engagement and relations between administrations since 2019. In addition, certain departments have outlined activity that took place in December 2020 to further enhance transparency. 1.2 The review of intergovernmental relations

The IGR review was jointly agreed by the UKG and DAs to ensure intergovernmental structures remain fit for purpose in the current context. The aim is to revise and build upon the current structures for engagement and the dispute avoidance and resolution process, set out in the Memorandum of Understanding on Devolution.

A progress update on the review, published alongside this first transparency report, explores options for joint reporting. Whilst work will continue to strengthen intergovernmental engagement structures through the IGR review, the UKG recognises the immediate benefits of enabling appropriate parliamentary and public scrutiny of the UKG’s participation in intergovernmental

2 https://www.gov.uk/government/collections/intergovernmental-relations 3https://www.gov.uk/government/publications/devolution-memorandum-of-understanding-and-supplementary- agreement

8 Intergovernmental Relations Quarterly Report: Quarter 1 2021

meetings. This report therefore covers engagement between the UKG and the DAs through existing intergovernmental mechanisms. 1.3 Principles for intergovernmental relations

Draft principles for IGR were developed jointly by the UKG and the DAs as part of the review of IGR and published by the UKG in July 2019. The UKG is committed to ensuring effective joint working according to the following principles:

1. Maintaining positive and constructive relations, based on mutual respect for the responsibilities of the governments and their shared role in the governance of the UK 2. Building and maintaining trust, based on effective communication 3. Sharing information and respecting confidentiality 4. Promoting understanding of, and accountability for, their intergovernmental activity 5. Resolving disputes according to a clear and agreed process.

Since 2019, these principles have guided the review of IGR. They have also supported the UKG’s approach to engagement with the DAs through existing mechanisms. 1.4 Context of intergovernmental working and future reporting

It is important to recognise the extent to which the IGR review, coupled with the UK’s exit from the European Union (EU) and the joint response to COVID-19, have been catalysts for increasing engagement between the UKG and the DAs. All UKG departments have undertaken a wide range of intergovernmental meetings at both official and ministerial level, ranging from ad hoc to regular established working groups, senior official discussions, and ministerial fora, to consider significant policies and operational decisions prior to 2021. Some highlights between July 2019 and November 2020 include:

● over 50 meetings between the Department for Environment, Food and Rural Affairs (Defra) ministers and the DAs through the Interministerial Group for Environment, Food and Rural Affairs (IMG EFRA) and through bilateral engagements on a range of important issues, including delivery of common frameworks, matters relating to the UK’s exit from the EU, and a wide range of regulatory issues across the EFRA sectors

● over 50 meetings between the Department of Health and Social Care (DHSC) ministers and the DAs, and near constant communication with the UKG Secretary of State for Health and Social Care since March 2020, to advance the response to the COVID-19 pandemic, and to prepare for the end of the transition period

● 22 meetings chaired by UKG’s trade ministers on trade policy, export and investment leading up to the end of the transition period

● Cabinet Office ministers hosting, chairing and attending meetings on developments in EU negotiations, preparations for the end of the transition period and the IGR review, including 8 meetings of the Joint Ministerial Committee (EU Negotiations), and many other bilateral and multilateral meetings

● the Department for Education (DfE) ministers engaging their DA counterparts 84 times, with discussions predominantly focused on education recovery from COVID-19, between the start of the COVID-19 pandemic and November 2020

● the Department for Transport (DfT) engaging in 66 ministerial meetings to discuss a range of cross-cutting issues, including the UK’s exit from the EU, COVID-19 travel restrictions, effects on the sector, and wider transport issues

9 Intergovernmental Relations Quarterly Report: Quarter 1 2021

● the Department for Business, Energy and Industrial Strategy (BEIS) engaging in over 70 ministerial meetings on a range of issues including, but not limited to, delivering net zero, unleashing innovation, supporting business through the pandemic and recovery, and backing long-term growth.

Relevant ministers across administrations have also met to consider further COVID-19-related matters, the UK’s exit from the EU, and wider policies to provide support and deliver services. This includes military assistance and the repatriation of nationals during the pandemic and considerations relating to sport, tourism, employment and welfare, justice, and security and asylum matters. The range of this engagement across areas of both reserved and devolved competence is testament to the importance of intergovernmental cooperation for the whole of the UKG.

The Territorial Offices also play an important and unique role in engagement between the UKG and the DAs. They are both the UKG’s voice in Scotland, Wales and Northern Ireland and the voice of the respective parts of the UK in Whitehall. They frequently support and facilitate conversations between the UK administrations, working with other departments in the UKG to ensure the particular issues in each part of the UK are fully considered. They also have an important role to play in engaging with stakeholders in each part of the UK and ensuring their voices are heard during policy development and decision making.

This section of the report provides a brief overview of some of the important topics and issues that have been considered jointly with the DAs, in line with the different devolution settlements and the needs of the policy area, to ensure UK-wide alignment and consideration. The aim of the UKG’s regular reporting commitments is to continue to ensure full openness, transparency, and accountability over all meetings that take place between administrations. This first report is the starting point in that process.

10 Intergovernmental Relations Quarterly Report: Quarter 1 2021

2. Intergovernmental engagement: Quarter 1 2021

2.1 Cabinet Office

The Cabinet Office (CO) is committed to working extensively with the DAs through effective IGR. At both ministerial and official level, the CO regularly brings together all administrations to work collaboratively and cooperate on areas of common priority for the governance of the UK and in order to strengthen the union.

During the COVID-19 crisis, the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office has held regular calls with the First Ministers of Scotland and Wales, and the First and deputy First Ministers of Northern Ireland, to help bring about a coordinated pandemic response that is in the best interests of the whole UK. The meetings, supported by a senior officials group, have regularly focused on topical items raised by all attendees. This includes UK-wide data, strategies for improving compliance with non-pharmaceutical interventions, and communications work across all parts of the UK. This is in addition to opportunities for joint working and further collaboration to ensure that the UK-wide COVID-19 response remains as effective as possible.

The Minister for Constitution and Devolution also chaired the first Interministerial Group (IMG) for Elections and Registration with the DAs in February, where terms of reference for the IMG were agreed. This successful and constructive first meeting has been supplemented by further bilateral engagements in the preparations for the May elections. Ministers agreed to meet again following the elections in May, where one of the agenda items will be to review the May ‘21 polls in England, Wales and Scotland.

The COP26 President Designate chairs the United Nations Climate Change Conference (COP26) DA Ministerial Group, which is attended by climate change ministers from the DAs as well as the UKG Territorial Secretaries of State. The purpose of the group is to ensure effective engagement and collaboration between the UKG and the DAs on the COP26, which is taking place in Glasgow in November 2021. The group met for the first time on 6 November 2020 and will meet quarterly in the run up to the conference.

In partnership with the Ministry of Defence, the CO also engages through the Ministerial Covenant and Veterans Board (MCVB), an intergovernmental group which includes DA ministerial representation. The MCVB provides a forum to discuss and coordinate the strategic direction of the armed forces Covenant and support for veterans, as the departments implement the Covenant and the Strategy for our veterans, and monitors their progress. The Board is due to meet again in Spring 2021, co-chaired by the Chancellor of the Duchy of Lancaster and the Secretary of State for Defence. Furthermore, Veterans Commissioners from the DAs are invited to attend the Veterans Advisory Board, which provides advice, challenge and diversity of thought to the UKG on a range of veterans issues.

The CO remains in close contact with the DAs on matters relating to the UK’s exit from the EU. In December 2020, 2 meetings of the Joint Ministerial Committee (EU Negotiations) (JMC(EN)) were convened, chaired by the Chancellor of the Duchy of Lancaster and attended by ministers from the UKG, Welsh Government, Scottish Government, and Northern Ireland Executive. Upon the successful outcome of the EU-UK Trade and Cooperation Agreement (TCA) and since the end of the transition period on 31 December 2020, engagement has been primarily at official level. The same month, there were also 2 bilateral meetings between the CO Parliamentary Secretary and Welsh Government ministers, the Minister for European Transition and Minister for Finance and Trefnydd, to discuss port infrastructure and procurement reform respectively. Future engagement on issues formerly discussed at the JMC(EN) forum will be in line with outcomes of the IGR review, and reflect the UK’s new relationship with the EU now negotiations have concluded. In February 2021, the Minister of State for Efficiency and Transformation in the Cabinet Office and Secretary of

11 Intergovernmental Relations Quarterly Report: Quarter 1 2021

State for Wales also met with the Minister for European Transition in the Welsh Government to discuss Welsh border infrastructure.

In line with the UKG’s wider transparency proposals, communiqués from many of these meetings are publicly available on the GOV.UK Intergovernmental Relations collections page. This collection will continue to grow as further structures are formalised. 2.2 Department for Business, Energy, and Industrial Strategy

Ministers in the Department for Business, Energy and Industrial Strategy (BEIS) have shown a strong commitment to engagement with their DA counterparts. In particular, the BEIS Business and Industry (B&I) Quadrilateral and the Net Zero IMG (formerly the ‘Energy and Climate Change’ Quadrilateral) have been running for 2 years. The frequency of the B&I Quadrilateral increased from March 2020 to fortnightly where possible in response to COVID-19, with a focus on economic support and recovery.

The department has continued a regular rhythm of both ministerial and senior official engagement with the DAs across the department’s portfolio into 2021, with numerous bilateral and multilateral ministerial engagements. These have focused on delivering against the department’s priorities – including delivering net zero, unleashing innovation, supporting business through the pandemic and recovery, and backing long-term growth.

The B&I Quadrilateral has met on 3 occasions in 2021, represented by the Minister for Small Business, Consumers and Labour Markets in the department. The meetings have a rotating chair with Scottish Government, Welsh Government and the Northern Ireland Executive chairing the 3 to date this year. Discussions have focused on COVID-19 business support, economic recovery, and the end of the transition period. The quadrilaterals will continue to meet throughout the year. The secretariat supporting this quadrilateral, made up of officials from the UKG and the DAs, meets in the preceding week and collectively sets the agenda for upcoming meetings.

The Net Zero IMG has met once in 2021, with the Minister for Business, Energy and Clean Growth and Minister for Climate Change and Corporate Responsibility representing the department. This meeting, chaired by the Welsh Government, focused on the setting of Carbon Budget 6 and the forthcoming net zero strategy; the heat and buildings strategy and the design of the UK Emissions Trading Scheme. The group will next meet in April.

The frequency of engagement of the ministerial structures will be kept under review, in discussion with the DAs.

In addition to the above engagements, the Minister for Business and Industry’s responsibilities changed on 28 November 2020. He now sits across both the BEIS and the Department of Health and Social Care (DHSC) and continues regular engagement with the DAs under his DHSC remit.

At official level, engagement with the DAs is well-embedded and is carried out by teams across the department. 2.3 Department for Digital, Culture, Media and Sport

Ministers and senior officials in the Department for Digital, Culture, Media and Sport (DCMS) take part in regular engagement with their devolved counterparts. These discussions cover important policy areas of mutual interest, including the 2022 Commonwealth Games, Festival UK 2022, UK City of Culture, as well as the effects of COVID-19 and the UK’s exit from the EU on the tourism, culture and sport sectors.

Formal ministerial engagement occurs on a quadrilateral and cyclical basis with ministers from Scotland, Wales, and Northern Ireland, with a view to deepening relationships, improving intergovernmental working and increasing transparency from already good levels. At official level,

12 Intergovernmental Relations Quarterly Report: Quarter 1 2021

the DCMS has developed strong working relationships with their counterparts in the DAs. This is reflected in positive collaboration and an appetite to continue to work closely together.

At present, the DCMS has 3 quadrilateral ministerial engagement structures that are being set up as IMGs.

Of these, Sport Cabinet meetings are held between all 4 administrations’ sports ministers on an annual basis and chaired on a rotating basis. While no meeting fell in this reporting period, with the next scheduled for summer 2021, previous discussions have covered COVID-19’s effect on sport and physical activity, including the National Lottery; the 2022 Commonwealth Games in Birmingham; Sport Agencies’ Chair update; and the World Cup 2030 bid.

Tourism ministers’ meetings, meanwhile, are more frequent, having been held approximately every 2 months during the COVID-19 pandemic between the UKG and the DAs and chaired by the DCMS Minister for Sports, Heritage and Tourism. During the last meeting, on 28 January 2021, the Group discussed COVID-19 recovery and plans for reopening the sector.

Finally, the first Four Nations Ministerial Culture Meeting was held on 16 December 2020, chaired by the UKG Minister for Digital and Culture. The meeting discussed Festival UK 2022, COVID-19 recovery and the UK’s exit from the EU and was mutually recognised as a valuable forum at which to share information on UK-wide initiatives. Those present agreed that similarly constructive meetings should take place in the future, with the DCMS looking to hold a follow-up in May at which City of Culture 2025 issues would be added to the agenda.

Rotating chairs and locations are proposed for the Tourism and Culture IMGs, subject to COVID-19 restrictions. In their absence, the UKG Tourism Minister will continue to chair virtual meetings every 2 months between the 4 tourism ministers, though bilateral meetings in late March will take place instead. 2.4 Department for Education

While education, children’s services and skills are almost entirely devolved, the Department for Education (DfE) works with the DAs in a number of important ways: liaising on domestic policies which require cross-border co-operation, consultation and coordination; exchanging policy thinking and sharing best practice; and coordinating international business, including international statistical returns and participation in international benchmarking studies.

Between them, the UKG Secretary of State for Education, the Minister of State for Universities and the Minister of State for School Standards have met their counterparts in the Northern Ireland Executive, the Scottish Government and the Welsh Government on 20 occasions between December 2020 and February 2021. These meetings were a mix of bilateral and multilateral discussions and built on the extensive ministerial and official engagement between DfE and the DAs that took place throughout 2020.

Engagement focused on addressing the effects of the COVID-19 pandemic on education – for example, approaches taken by each administration to reopening education settings and arrangements for awarding qualifications in 2021. During this period, the UKG Minister of State for Universities also met her counterparts to discuss the new Turing scheme, which will support students in the UK to study and work abroad.

The DfE plans to continue the productive engagement at both official and ministerial levels with the DAs, particularly on education recovery and catch-up on lost learning. It will also explore with the DAs other areas of policy exchange and collaboration at ministerial level that can mutually benefit young people across the UK.

13 Intergovernmental Relations Quarterly Report: Quarter 1 2021

2.5 Department for Environment, Food and Rural Affairs

The Interministerial Group for Environment, Food and Rural Affairs (IMG EFRA) is the forum for discussion between administrations on areas of mutual interest across agriculture, fisheries, environment, food and rural affairs. It meets regularly throughout the year. In 2021, the IMG EFRA met by video conferencing on Monday 25 January and is scheduled to meet again in March.

Details of the discussions at the January IMG are contained in the communique4, which is available on the GOV.UK page on IGR, alongside all other communiqués for the IMG EFRA. 2.6 Department of Health and Social Care

The UKG has worked collaboratively across the whole of the UK to respond to the global pandemic, supporting our UK-wide NHS and social care systems.

Since the start of the pandemic in early 2020, the Secretary of State for Health and Social Care has been in constant communication with the DA health ministers to deliver responses that benefit people across the whole of the UK.

This has included weekly Secretary of State and health minister meetings to share information, resolve shared issues and address areas of mutual concern in response to the pandemic. Items of discussion have included the COVID-19 vaccine deployment, the National Testing Programme and ensuring sufficient testing capacity and capability across the UK. This is in addition to the supply of crucial products, including personal protective equipment (PPE), global threats and the interventions to support the UK response to new variants and health measures at the border.

Several productive bilateral meetings have been held this year by the Minister for COVID-19 Vaccine Deployment. It should be noted that the Minister’s responsibilities changed on 28 November 2020, to cover both the BEIS and the DHSC and he has engaged the DAs under his DHSC remit.

There has also been multilateral and bilateral ministerial engagement on other priority areas, such as preparation for the end of the transition period and taking forward the UK’s new relationship with the EU. In late 2020, in the lead up to the end of the transition period, the Minister for Health had a number of bilateral and multilateral engagements with DA counterparts. The Minister also met in early March 2021 with the Minister for Health in Northern Ireland on the implementation of the Northern Ireland Protocol. The Minister for Innovation also held several collaborative bilateral meetings throughout 2020 with ministers in the DAs to discuss issues within his portfolio of responsibilities, including on the UK-wide vision for the future of clinical research delivery, the UK response to long-COVID-19 and the Medicines and Medical Devices Act 2021.

In addition to this ministerial engagement, there has been daily official level engagement with DA counterparts. The 4 chief medical officers continue to meet regularly too which has supported coordinated scientific advice to the UKG and the DAs and the DHSC has solidified a number of fora across areas such as, PPE; COVID-19 vaccine deployment; therapeutics; NHS Test and Trace; shielding and protecting the vulnerable; EU and trade policy; supply of medicines and medical goods; Adult Social Care; and Emergency Preparedness, Resilience and Response (EPRR) teams.

4https://www.gov.uk/government/publications/communique-from-the-inter-ministerial-group-for-environment-f ood-and-rural-affairs/inter-ministerial-group-for-environment-food-and-rural-affairs-img-efra-communique-25-j anuary-2021

14 Intergovernmental Relations Quarterly Report: Quarter 1 2021

The DHSC is considering how to build further on these working relationships and provide greater transparency. Officials are commencing discussions with DA officials on establishing an IMG, complementing the extensive ministerial engagement which is underway. 2.7 Department for International Trade

The Department for International Trade (DIT) has established a programme of ministerial engagement with the DAs to strengthen and support the UK’s international trade programme.

The Ministerial Forum for Trade was established in 2019 and is chaired by the Minister of State for Trade Policy, with the relevant ministers from each of the DAs in attendance. The forum meets at least 3 times a year with further meetings convened by agreement. The forum provides a regular arena for strategic updates and discussions on all crucial trade matters, such as developments on the free trade agreements (FTAs) the UKG is negotiating. The forum last met on 9 December 2020 and is scheduled to meet again before the pre-election period in Scotland and Wales commences. It is supported by a senior officials group, which meets every 6 weeks.

Outside of the more formal structures, DIT ministers and officials meet regularly with their counterparts in each of the DAs to engage on all aspects of the department’s priorities. This includes regular updates from chief negotiators in relation to important areas of interest in FTA developments or disputes.

The DIT also holds meetings on a bilateral basis with DA ministers to discuss trade promotion and investment. The most recent bilateral meetings took place in February 2021, led by the Minister for Investment, to discuss the Office for Investment. 2.8 Department for Transport

The Department for Transport (DfT) is engaging with the DAs regularly at a senior official and ministerial level across modes, as well as on cross-cutting issues.

Following the start of the COVID-19 pandemic, a ministerial working group was set up to discuss the transport issues across the UK. It has been led by 2 Parliamentary Under Secretary of States in the department. This is in addition to regular engagement with other ministers in relation to their respective portfolios.

The meeting now takes place approximately bi-monthly, with discussion predominantly centered on the second wave of COVID-19’s effect on transport and financial support packages, and how the vaccine will affect the sector. It will continue to engage on wider portfolio matters post COVID-19.

The COVID-19 ministerial working group meeting has been adopted as the department’s IMG as part of the IGR review work. The subjects for discussion will widen as the forum offers the opportunity to harness the current engagement to further consider departmental matters of mutual interest.

The joint communiqués5 are published on GOV.UK after meetings, which includes the date, location, list of participants and a summary of the discussion points.

The Union Connectivity Review, independently chaired by Sir Peter Hendy, has required engagement with the DAs. Sir Peter has met all DA ministers and will continue to engage before and after publication of the interim report in March 2021.

The department is engaging with the DAs on all matters relating to the UK’s exit from the EU.

5https://www.gov.uk/government/publications/communiques-from-the-inter-ministerial-group-for-transport-mat ters

15 Intergovernmental Relations Quarterly Report: Quarter 1 2021

2.9 Department for Work and Pensions

Issues of work and welfare – and in particular making sure people around the UK continue to be supported – are at the heart of the engagement carried out by the Department for Work and Pensions (DWP)’s Secretary of State and ministers. Their involvement with the DAs is centred on the relationship between reserved and devolved welfare support, and making sure information is shared in areas such as employment, which are partly reserved and partly devolved. The picture for work and welfare is a complex one across the UK. In Wales, all powers are reserved. Whereas, in Northern Ireland, social security, pensions and child support powers are transferred. In Scotland, the DWP is currently managing the transfer and implementation of powers outlined in the Scotland Act 2016 (building on the 2014 Smith Commission), which devolved considerable social security and employment support functions.

The Joint Ministerial Working Group on Welfare between the UK and Scottish governments is held regularly to oversee the implementation of the relevant provisions of the Scotland Act 2016. This is co-chaired by the Secretary of State for Scotland and the Cabinet Secretary for Social Security and Older People in Scottish Government, and attended by the Minister of State for Disabled People, Work and Health, who is the UKG department’s lead minister for the union and devolution. The Joint Ministerial meetings were initially held once every 4 months but at the request of the Scottish Government are now biannual. They are supplemented by bilateral meetings between DWP ministers and their Scottish Government counterparts responsible for the social security and employment portfolios.

In addition to ministerial activity, engagement with the DAs at official and working level is frequent. Senior policy officials meet with their counterparts in the DAs at least monthly, and often weekly in the case of devolution policy, and contact at working-level is even more regular. In relation to the implementation of the powers devolved in the Scotland Act 2016, a number of meetings and joint workshops have taken place, including familiarisation visits to both the DWP processing sites and Jobcentres, in order to support the Scottish Government as it seeks to establish elements of its own welfare system. Additionally, although the department does not currently operate in Northern Ireland, the DWP engages in regular discussions with the Department for Communities (DfC) in Northern Ireland on both policy and operational matters.

Significant engagement between the DWP’s ministers and the DAs took place in December 2020. This included a trilateral meeting between the DWP’s Secretary of State and ministers from the Welsh and Scottish governments to discuss the UKG’s Plan for Jobs, as well as the Joint Ministerial Working Group on Welfare between the UK and Scottish governments. Engagement continued at official level during January and February. Ministerial engagement with the Northern Ireland Executive is planned for March 2021.

At senior official level, there have been numerous engagements across many specialisms (policy, analytical, legal, digital, operational and others). Engagement at working level remains frequent, not least given the DWP’s significant physical presence through its Jobcentres and other operational sites in Scotland and Wales. 2.10 Foreign, Commonwealth and Development Office

While the UK retains responsibility for international relations, at ministerial and official level there is regular engagement with colleagues in the DAs on a range of matters relating to UK nationals overseas, relationships with international partners and development goals and opportunities. This engagement is carried out by the Foreign, Commonwealth and Development Office (FCDO), also taking up areas that used to come under the former Department for International Development (DFID).

Throughout the period, FCDO officials – in support of ministers and all parts of the UK – have remained in close contact with their colleagues in the DAs in the UK and overseas. They have

16 Intergovernmental Relations Quarterly Report: Quarter 1 2021

attended to issues such as consular support for UK nationals, COVID-19 and human rights; continued to identify opportunities of mutual interest through their soft power networks, and at the same time carried on with their regular contacts with the UKG's international partners.

Ministerial engagement shortly before the period covered by the quarterly report includes an introductory meeting between the Minister for South Asia and the Commonwealth and the Scottish Government Minister for Europe and International Development. This took place on 1 December 2020 as part of the former’s itinerary for his virtual visit to Glasgow. On the agenda were a range of topics, including the importance of the South Asian diaspora, the Scottish Government’s work in international development, and the forthcoming UN COP26 conference on climate change in Glasgow in November 2021.

Over the next quarter, the FCDO will work with the DAs to agree a timetable for regular engagement between the FCDO and DA senior officials, to ensure continued delivery for all parts of the UK, including through future formalised intergovernmental structures. 2.11 Her Majesty’s Treasury

Responsibility for UK fiscal policy, macroeconomic policy and funding allocation across the UK remains with Her Majesty’s Treasury (HMT). It is important that the way in which funding to the DAs is determined is clear, transparent, unambiguous and capable of timely examination and analysis by the devolved legislatures and the UK Parliament.

The other shared interests – particularly as the country builds back from the COVID-19 crisis – include the need to encourage sustainable economic growth in all parts of the UK; maintaining and improving the management of public finances; providing high quality public services at the best possible value; and ensuring that the UK remains internationally competitive for the good of people all across the country.

While at ministerial level this relationship is led by the Chief Secretary to the Treasury, the rest of the ministerial team, including the Chancellor of the Exchequer, the Financial Secretary to the Treasury and the Exchequer Secretary to the Treasury, also engage with ministers from the Scottish and Welsh governments, and the Northern Ireland Executive.

In the period covered by the quarterly report, the Chief Secretary to the Treasury met two Welsh Government ministers and one Scottish Government minister in January 2021 regarding the delivery of freeports. In February 2021, the Exchequer Secretary to the Treasury met two Scottish Government ministers, one Welsh Government minister and one minister from the Northern Ireland Executive to discuss Net Zero, energy and climate change. 2.12 Home Office

Home Office (HO) engagement with the DAs at official level is extensive across all business areas. The engagement varies depending on whether the matter is reserved or devolved, and the resulting nature of the partnership working. The department leads on some important quadrilateral fora, such as those for managing the UK-wide approach to modern slavery, serious organised crime, internal security and fire and rescue services.

Over the past quarter, the HO has engaged with the DAs on health measures at the border, the future border and immigration system and on contingency asylum accommodation at ministerial and/or official level.

The HO is also actively engaged with the DAs on issues relating to drug misuse, including participation in regular monthly meetings between the UKG and the DAs. The Crime and Policing Minister met the Scottish Government Drugs Minister in February 2021 to discuss, amongst other things, holding a further UK Drugs ministerial meeting in the future.

17 Intergovernmental Relations Quarterly Report: Quarter 1 2021

Home Office ministers have also engaged with ministerial counterparts on prospective bills, including the Domestic Abuse Bill 2020 and Police Crime Sentencing and Courts Bill 2021. The Minister for the Lords met the Lord Advocate to discuss the Covert Human Intelligence Sources (Criminal Conduct) Bill 2021 in which the HO committed to working with the Lord Advocate’s office and operational partners to enable the implementation of guidelines in the absence of a Legislative Consent Memorandum.

The department will continue to engage the DAs on all areas of the business and is currently developing plans for an IMG on safety and security matters. The Home Secretary is committed to working collaboratively and sharing core activity and learning for all the people of the UK. 2.13 Ministry of Defence

Successful working and engagement with the DAs is important to defence to increase mutual understanding and improve policy making and outcomes. The armed forces and their families based in Northern Ireland, Scotland and Wales rely on devolved services. The complementary efforts across the UKG and the DAs to support our personnel and veterans provide positive examples of how the UKG and the DAs can work together to achieve common interests.

Defence ministers do not have devolved counterparts as such, but ministerial engagement is focused on portfolios covering industry, economy, military basing and support for the armed forces covenant and veterans. Throughout 2020 military assistance on the COVID-19 pandemic also presented opportunities for ministers and others to engage. The Ministry of Defence (MoD) ministers value regular bilateral ministerial engagement and will look for opportunities to increase and deepen those relations throughout 2021. The publication of the MoD Integrated Review Command Paper and the review of the Defence Security and Industrial Strategy in March 2021 will mark a renewed programme of engagement. Ministers will want to discuss implementation of conclusions from these reviews and opportunities created for the UKG and the DAs. Together with the Scottish Government, the MoD is exploring further collaboration on Defence Science, Technology, Engineering and Mathematics (STEM) and youth programmes and will look to roll these out further across the UK.

Senior military officers based in Northern Ireland, Scotland and Wales and elsewhere also engage the DA ministers on issues relevant to the British Army, Royal Navy and Royal Air Force. This will continue throughout 2021. The Office for Veterans Affairs, based in the Cabinet Office, also co-chairs with the MoD the Ministerial Covenant and Veterans Board (MCVB). Details on this are covered in section 2.1. 2.14 Ministry of Housing, Communities and Local Government

As the UKG’s department for ‘place’, the Ministry of Housing, Communities and Local Government (MHCLG) is committed to building positive, constructive relationships with the DAs at all levels across its portfolio. These relationships are vital as MHCLG sets the pace on developing UK-wide programmes focused on left behind places and which will level up investment, prosperity and opportunity for all people, communities and businesses across the UK.

The MHCLG built these relationships through formal and informal engagement with the DAs. Senior officials lead discussions across the MHCLG portfolio, including on matters relating to local growth, housing market analysis, planning reform, building safety, local government and the ongoing response to COVID-19.

The department recognises the importance of constructive discussions at ministerial level. On 12 January 2021, the then UKG Minister for Rough Sleeping and Housing met with Scottish Government’s Minister for Local Government, Housing and Planning to discuss amendments to the Building Safety Bill 2020.

18 Intergovernmental Relations Quarterly Report: Quarter 1 2021

To formalise the arrangements for ministerial discussions, officials are currently working with their counterparts in the Scottish Government, Welsh Government and the Northern Ireland Executive to establish a new IMG on housing, communities and local government. This IMG will provide the UKG and the DAs with a forum for discussions on devolved and reserved policy matters within the MHCLG’s portfolio. Details of the meetings of this group will be published according to agreed transparency arrangements. It is intended that this IMG meets regularly, providing ministers from the UKG and the DAs the opportunity to discuss important areas of mutual interest.

In the coming months, the MHCLG’s ministerial engagement will include several bilateral and multilateral discussions on the UKG’s UK-wide investment programmes announced at the Budget on 3 March 2021, including the UK Community Renewal Fund, the Levelling Up Fund and the UK Community Ownership Fund. This engagement will also extend to local governments from all 4 nations who are being invited to a ministerial webinar hosted by the UKG. In the longer term, the aim is also to have broader discussions in areas of shared interest, including on the future role of communities and local government across the UK on crucial issues such as tackling climate change and the recovery from the pandemic.

This engagement will bring a better understanding of communities and places across the UK to the UKG and strengthen relationships between the UKG and the DAs. The aim is to include details of the first IMG meeting and the engagement following announcements made at the 2021 Budget in the next quarterly report. 2.15 Ministry of Justice

Because justice is devolved in Scotland and Northern Ireland, but a reserved matter in Wales, the major focus of the Ministry of Justice’s (MoJ) engagement with the DAs is with the Welsh Government. A concordat published in 2018, setting out good practice for working relationships between the MoJ and the Welsh Government, was an important step forward for improved IGR and justice outcomes for both administrations. It encourages MoJ ministers and officials to ensure the Welsh Government’s interests when designing and implementing UK justice policy and activities likely to have an effect in Wales; and the Welsh Government, in turn, to consider the interests and responsibilities of the MoJ when exercising devolved functions. This clarity and accountability has fostered productive working relationships and the sharing of best practice.

However, there is also scope for closer work between the MoJ and the Scottish Government, Northern Ireland Executive, and their justice partners, on areas of shared mutual interest, such as prison policy. The MoJ is planning to increase this engagement.

Under the Concordat with the Welsh Government there is no fixed timetable for meetings. The primary relationship has been between the Minister for Prisons and Probation at the MoJ and the Deputy Minister and Chief Whip in the Welsh Government. They have met on an ad hoc basis around particular topics or decisions, supplemented by correspondence. The last meeting took place in January 2021. The Lord Chancellor has also met the Welsh Government’s First Minister, Counsel General and Deputy Minister and Chief Whip and is committed to continuing to engage with them on justice matters.

MoJ agencies in Wales engage closely with the Welsh Government on a range of devolved responsibilities that are essential to delivering services to offenders, and within the civil and family justice system.

In terms of wider DA engagement, MoJ hosts a regular criminal justice discussion. This provides an opportunity for senior officials from the Scottish Government and Northern Ireland Executive and MoJ operational officials from Wales, to meet to consider the latest criminal justice policy and operational issues, including COVID-19 management.

19 Intergovernmental Relations Quarterly Report: Quarter 1 2021

Ad hoc meetings take place regularly on cross-cutting policy issues, such as criminal compensation, legal services and judicial policy. 2.16 Northern Ireland Office

The Secretary of State for Northern Ireland (SoSNI) and Minister of State for Northern Ireland (MoSNI) undertake regular bilateral engagements with ministers in the Northern Ireland Executive focused on a wide range of topics.

This year a core focus of such engagements has been in relation to the Northern Ireland Protocol and its implementation following the trade agreement with the EU. There has also been regular engagement on COVID-19 related matters, including the ongoing vaccination programme, economic recovery and easing of restrictions. Ministers also held a number of positive engagements in the lead up to the recent City Deals announcement for Derry/Londonderry, which reflects a real world example of how the successful collaboration of IGR can achieve significant milestones. The Northern Ireland Office (NIO) ministers and the Northern Ireland Executive ministers will continue to meet frequently, to discuss the major issues affecting Northern Ireland and encourage collaborative working between the UKG and the DAs.

This will include the ongoing quarterly Joint Board meetings, established as a part of the New Decade, New Approach deal, and which will be attended by the SOSNI, Northern Ireland’s First and deputy First Minister and other Northern Ireland Executive ministers as required. The Joint Board provides oversight of the funding arrangements for the transformation in health, education and justice measures. This engagement will ensure that the UKG can support the Northern Ireland Executive to take steps to improve public services and increase the sustainability of Northern Ireland’s finances. The last meeting of the Board took place on 3 March 2021. 2.17 Office of the Secretary of State for Scotland

The Office of the Secretary of State for Scotland (OSSS) ensures Scottish interests are fully and effectively represented at the heart of the UKG, and the UKG’s responsibilities are fully and effectively represented in Scotland. The OSSS plays a central role in leading, facilitating and supporting engagement between the UKG and the Scottish Government.

The OSSS leads certain engagements with the Scottish Government and also supports respective lead policy departments in the UKG in their engagement with the Scottish Government. This broad spectrum of engagement with the Scottish Government, includes (but is not limited to) policy-based IMGs, regular COVID-19 meetings led by the Chancellor of the Duchy of Lancaster, the Scottish Seafood Exports Taskforce, and ad hoc engagement as and when required.

In January and February 2021, OSSS ministers met with counterparts in the Scottish Government 18 times. The OSSS led or chaired 4 engagements with the Scottish Government, while 14 engagements were led by another UKG department, with the OSSS supporting. In these meetings, OSSS ministers discussed a broad range of issues with Scottish Government counterparts, including the transition to new arrangements under the EU-UK Trade and Cooperation Agreement, the Scottish seafood industry, and seed potato exports.

A strong example of engagement involving the Scottish Government in the early months of 2021 is the Scottish Seafood Exports Taskforce, a time-limited group which is chaired by the OSSS and will run until May 2021. The taskforce meets fortnightly to identify issues with export, develop and recommend practical solutions, and ensure there is effective communication with the industry. It brings together the UKG departments, the Scottish Government, and stakeholders in the Scottish seafood export industry. Other examples of engagement include the announcement of a new £70 million Rural Growth Deal for Argyll and Bute in February 2021 by the UKG Minister for Scotland alongside the Scottish Government’s Cabinet Secretary for Transport, Infrastructure and Connectivity and the Argyll and Bute Council Leader. The Minister also jointly announced a

20 Intergovernmental Relations Quarterly Report: Quarter 1 2021

£4.5million investment in broadband for Central Scotland together with the Scottish Government’s Minister for Connectivity.

Looking ahead to the next quarter, the OSSS will continue with the regular rhythm of engagement through IMGs covering areas of mutual interest to the UKG and the Scottish Government. The OSSS will continue to chair the fortnightly Scottish Seafood Exports Taskforce until its conclusion in May 2021. In June, the next meeting of the Joint Ministerial Working Group on Welfare is set to take place. This group is co-chaired by the Secretary of State for Scotland and the Cabinet Secretary for Social Security and Older People in Scottish Government. It meets every 6 months to ensure the implementation of welfare and employment-related aspects of the Scotland Act 2016. 2.18 Office of the Secretary of State for Wales

Throughout January and February 2021, the Office of the Secretary of State for Wales (OSSW) ministers met with the Welsh Government on 20 occasions, 12 of these engagements were led by other UKG departments with OSSW in a supporting role. This highlights the significant role of the OSSW in supporting and facilitating engagement between the UK and Welsh governments.

Discussions have taken place on a wide range of issues, including regional growth, border infrastructure and freeports. OSSW ministers also attend regular meetings chaired by the Chancellor of the Duchy of Lancaster on the UK-wide response to COVID-19 and various IMGs. OSSW ministers have also met Welsh Government ministers to discuss topics such as the upcoming Senedd elections and coal tips safety in Wales.

There has been an unprecedented level of engagement between the UKG and the DAs throughout the COVID-19 pandemic. The outbreak of COVID-19 is the biggest challenge the UK and Welsh governments have faced in generations. Throughout it, the 2 governments have worked more closely than ever before and OSSW ministers remain committed to a UK-wide approach to tackling the virus.

In the coming months, the OSSW will continue to engage with the Welsh Government bilaterally and in various ministerial fora. The OSSW will continue to work with other UKG departments to support engagement with the Welsh Government.

21 Intergovernmental Relations Quarterly Report: Quarter 1 2021

22 Intergovernmental Relations Quarterly Report: Quarter 1 2021

23 PROGRESS UPDATE ON THE REVIEW OF INTERGOVERNMENTAL RELATIONS

This document provides the latest picture of progress in the joint review of intergovernmental relations. Significant work between officials and ministers has gone into providing as complete a picture as possible. The square brackets denote areas where joint agreement has not been possible. We look forward to resuming discussions with devolved administrations after the elections.

PRINCIPLES FOR RELATIONS

1. The UK Government, the Scottish Government, the Welsh Government and the Northern Ireland Executive are committed to ensuring effective joint working, recognising that devolution is an established part of the UK’s constitutional arrangements. The governments will work collaboratively together, according to the following principles: a. Maintaining positive and constructive relations, based on mutual respect for the responsibilities of the governments and their shared role in the governance of the UK b. Building and maintaining trust, based on effective communication c. Sharing information and respecting confidentiality d. Promoting understanding of, and accountability for, their intergovernmental activity e. Resolving disputes according to a clear and agreed process

2. The following reforms of intergovernmental structures and processes are drafted on the basis of the current constitutional arrangements, whilst not precluding constitutional developments in the future. They provide a statement of political intent, but are not intended to create new, or override existing, legal relations or obligations, or to be justiciable. Nothing within them should be construed as conflicting with the Belfast Agreement.

MACHINERY

3. Delivering for people across the UK requires effective collaboration between the governments. The governments therefore affirm their commitment to work more effectively together through new machinery dedicated to this purpose. On matters of mutual interest, the governments will seek to proceed by consensus, including ensuring the earliest possible resolution of issues. All governments agree that the intergovernmental machinery should: a. sustain positive and constructive relations, based on mutual respect for the responsibilities of the governments and their shared role in the governance of the UK; b. facilitate effective collaboration and regular engagement between the governments in the context of increased interaction between devolved and reserved competence following departure from the EU; c. promote dispute avoidance by ensuring there are effective communication and governance structures at all levels, from working-level officials to ministers; d. provide equal opportunity for all governments to influence the choice of issues under consideration in intergovernmental fora and to propose, operate and participate in new fora; e. ensure that all governments respect and abide by all jointly agreed guidance, rules and processes; f. facilitate increased accountability and transparency which, in turn, can help develop and enhance the culture of engagement; g. ensure that the processes serve all governments equally and fairly.

1 4. Effective IGR must be underpinned by regular official-level engagement, within a collaborative environment created and fostered by ministers. As a general principle, therefore, intergovernmental business should be conducted on an ongoing basis through normal administrative channels wherever possible. This should take place between the respective officials in charge of the policy area and with the appropriate expertise to deal with the issues at stake on a day to day basis, supported as helpful by those with specific IGR or constitutional expertise.

5. Ministerial oversight is however essential to promote effective collaboration between the governments and to provide political accountability. Ministerial forums should therefore be in place to consider and, where appropriate, reach agreement on issues of mutual interest across policy areas. These forums will be supported by multilateral official-level discussions. The principles for relations will provide a standard for all ministerial engagement. Regular and tailored engagement within these fora will strengthen the governments’ shared ambition to operate a culture change across all administrations in their conduct of IGR.

6. Intergovernmental decisions will continue to work on the basis of agreement by consensus. The default position will remain that a joint approach will not be taken in the absence of such agreement. There will be clarity throughout on the territorial extent of policy and representation in engagement.

Communication

7. Intergovernmental relations are best facilitated by effective sharing of information and respecting confidentiality of the content of the discussions. The governments have committed to effective and timely communication with each other, particularly where one government’s work may potentially have some bearing on the responsibilities of another; and to transparency in the conduct of their relations. The governments believe that sharing information freely between them is likely to be of benefit both to each government and to the people they serve. They will ensure that appropriate formal and informal processes are available for sharing information, both multilaterally between all governments and bilaterally between governments where that is appropriate. The governments commit to respecting the terms under which information is shared.

Future conduct of intergovernmental relations

8. Overall accountability for intergovernmental relations will remain with the Prime Minister, the First Ministers of Scotland and Wales and the First Minister and deputy First Minister of Northern Ireland.

9. As the principles make clear, however, new IGR structures and processes need to be established to improve collaboration between governments, seek consensus on matters of mutual interest, and be underpinned by an ethos of mutual respect. New structures and processes should serve all governments equally, fairly and with respect for each government’s respective responsibilities. The principles must therefore be uniformly applicable but remain flexible enough to vary engagement according to the policies and competences under discussion. To meet the objectives set out above, future intergovernmental relations would most effectively be conducted within forums established as part of a three tier structure: a. Portfolio engagement at official and ministerial level b. Engagement on cross-cutting issues, including an Interministerial Standing Committee c. [The UK Government and Devolved Administrations Council]

2 10. A standing IGR secretariat will also be established to provide administrative support and promote the efficient and effective maintenance of relations at each tier and for the handling and resolution of disputes. The role and functions of each tier are set out below.

Tier 1 - Portfolio engagement

11. To best serve all citizens of the UK, effective coordination of policies should take place between relevant portfolio ministers on a regular basis. Department-level multilateral structures will ensure cooperation across policy areas and promote understanding of respective policies in all areas of mutual interest. This will further allow for conversations to be informed by the appropriate expertise of ministers and officials closest to the policy detail.

12. All governments will therefore commit to regular portfolio-level engagement on areas of mutual interest. This engagement should formally take place within Interministerial Groups (IMGs), which will aim to meet regularly on a quadrilateral basis with established terms of reference. It may be more practical in some areas for this to be less frequent or in a different format, for example bilaterally, with exact form determined jointly. IMGs are expected to cover a number of policy areas as outlined in Annex A. This is not an exhaustive or definitive list, allowing the flexibility for structures to be established or adapted according to need. Each forum will be responsible for jointly agreeing and updating their terms of reference depending on changes to their structures and priorities.

13. Many of these structures are already in place and will be rebranded to align with this new agreed structure. These meetings provide an important locus for discussion of the impacts of policy change in different parts of the UK upon each other, for learning and cooperation between governments, and for agreement on the use of mixed-competence levers (which have both reserved and devolved elements) in support of outcomes. These meetings will be organised, and secretariat support provided by, the participating departments and ministries through arrangements agreed between them. However, the IGR secretariat will maintain a record of engagement within IMGs, including a record of IMG meetings as provided by IMG secretariats. Any government will have the right to request that an item for discussion from an IMG be referred for consideration at the middle tier of engagement. The IGR secretariat will facilitate inclusion of such items for discussion in accordance with the principles for relations, the relevant forum’s terms of reference (for example ISC’s Terms of Reference), or the dispute avoidance and resolution process set out below. The ISC, supported by the IGR secretariat, will also support the review of the effectiveness of portfolio-level engagement as necessary.

Middle tier of engagement

14. As policy-specific conversations should take place between the relevant ministers at the portfolio level, the middle tier of engagement should provide some oversight to portfolio engagement but will not replace or duplicate it. The middle tier of engagement should consider issues bearing wider implications for relationships between the governments, including issues cutting across different portfolios, cross-governmental programmes of work, or policy issues which have moved beyond technical considerations and into a wider political agenda. It will ensure that the relevant fora are in place to consider broader items of intergovernmental policy and escalate issues when necessary.

15. The Interministerial Standing Committee (ISC) should therefore be established to consider issues which cannot be considered at the portfolio-level within the relevant

3 IMG or to bring together strategic considerations affecting many different portfolios. The ISC should provide oversight of all IMGs and will therefore have the remit to consider issues falling within all policy areas of mutual interests if they have a bearing on the wider relationships between the governments. It will meet every other month, according to rotating arrangements, but might meet more or less frequently according to need and if agreed by consensus. The ISC may also consider issues that the [Council] has delegated. The ISC, and supporting officials structures, will also be responsible for reviewing the effectiveness of portfolio-level engagement. The IGR secretariat, impartially servicing all administrations, will support and facilitate these functions, including maintaining a record of engagement within IMGs and overseeing requests for items to be added to the ISC agendas of the middle-tier fora. Draft terms of reference are included in Annex A below.

16. If particular issues are identified as needing in-depth and focused consideration by ministers, time-limited Interministerial Committees (ICs) will be established by consensus, and at the request of any governments, to consider and as required drive delivery on specific areas of cross-cutting policy. In the immediate future, a [time-limited] IC, to complement the ISC, will offer a platform for engagement on international issues which are relevant to devolved areas, as well as on the implementation of our new relationship with the EU. Draft Terms of Reference are included in Annex A below.

17. [Building on existing engagement in the Finance Ministers Quadrilateral, a Finance ISC (FISC) will consist of representatives from Her Majesty’s Treasury, together with the relevant ministers in the [devolved governments/administrations], to consider finance and funding matters. The FISC will sit alongside the ISC in the middle tier of engagement. The regular operation and organisation of the FISC will be determined separately by Her Majesty’s Treasury and relevant ministers in the [devolved governments/administrations].]

Top tier of engagement - [UK Government and Devolved Administrations Council]

18. Intergovernmental relations in the UK will be overseen by the overarching [UK Government and Devolved Administrations Council (‘the Council’)]. All middle-tier and departmental engagement should be accountable to this forum. The functions of the [Council] will include: a. considering policy issues of strategic importance to the whole of the UK; b. overseeing the functioning of and providing strategic direction to the system of multi-level governance created by devolution; c. overseeing and regularly reviewing this intergovernmental agreement; d. reaching decisions on strategic direction for IGR by consensus; and e. acting as the final escalation stage of the dispute resolution process.

19. [The Prime Minister or their nominated deputy will host an annual meeting of the Council with the First Ministers of Scotland and Wales and the First Minister and deputy First Minister of Northern Ireland.]

20. [Meetings will be chaired by the Prime Minister or nominated deputy. Delegation should be at Cabinet or equivalent level. When the forum is operating in a dispute resolution format, delegation to another Cabinet minister would not be appropriate.] Other ministers and relevant parties will be invited to attend depending on the specific agenda items under discussion. In addition to its annual meeting, the [Council] may meet more frequently at the request of any member or as determined by the IGR secretariat, for example, for the purpose of dispute resolution.

4 21. If agreed by consensus by all governments, the [Council] will be able to delegate responsibility to the middle-tier fora as appropriate and will also be able to create or stand down time-limited Interministerial Committees. The ICs can also be stood down or extended by agreement of their members. The [Council] might assign one of the middle-tier fora with one or several issues to review within its functions, while aligning with the final escalation stage of the dispute avoidance and resolution process.

SECRETARIAT

22. The [Council] and ISC will be supported by a standing IGR secretariat, consisting of officials seconded from all governments. The secretariat will be accountable to the [Council] rather than to individual sponsoring governments. While the new structures are expected to limit areas of disagreement, the IGR secretariat will facilitate the prompt and effective resolution of all intergovernmental disputes.

23. The IGR secretariat’s functions will include: a. Determining dates, agenda, location and chairing of intergovernmental meetings of the [Council], ISC and ICs; b. Compiling / commissioning background papers for discussion; c. Reporting back on the outcome of meetings, including drafting minutes and sharing joint communiqués; d. Facilitating the process of dispute resolution; e. Promoting transparency and accountability wherever possible: f. Gathering data relevant to the exercise of its functions.

24. The IGR secretariat will operate in accordance with the following set of guidelines. The IGR secretariat will: a. Be accountable at all times to the [Council] rather than to individual governments; b. Serve all governments equally and act impartially in accordance with guidance, rules and processes that are jointly agreed by the [Council]; c. Respond to a request by any government to exercise its right to submit an item, supported by any relevant background papers, for a meeting in accordance with the agreed terms of reference (ToRs) of the particular fora; d. Assess whether the appropriate steps have been followed to resolve a disagreement and decide whether it should be escalated as a dispute through the formal process. Where appropriate, it will appoint a third-party to provide

5 third-party advice or conduct mediation, subject to the agreement of all parties to pursue these options; e. Compile reports on IGR activity, noting the separate reporting arrangements each government has in place with its respective legislatures. It will be responsible for gathering information about meetings that have taken place during the year, and collating this information into an annual report to be shared with all governments, with governments remaining responsible for how the information is reported to their legislatures.

27. The IGR secretariat will work with a Senior Officials Group, with representation from each government, which will oversee and assure the new system, ensuring that the new structures, processes and behaviours are fully realised.

28. The IGR secretariat will be hosted by one government and be staffed by officials seconded from all governments (on a rotating basis if overall numbers of staff are lower than four). The host government will be responsible for overseeing the IT arrangements for all IGR secretariat staff, but they will remain accountable to their home governments for the purposes of pay, conditions, promotions etc.

DISPUTE AVOIDANCE AND RESOLUTION

29. All governments are committed to promoting collaboration and the avoidance of disagreements, facilitated by the new intergovernmental machinery in which discussions will take place at the lowest level possible. The escalation of a disagreement between governments as a dispute will be considered only where due and full consideration has been given at portfolio-level. This process may also follow bespoke dispute resolution mechanisms established within common frameworks areas. In this context, the following model should be seen as part of a much wider system of active IGR and dispute management, and as a process of last resort.

Stage 1 - escalation from portfolio-level disagreement to IGR secretariat as dispute

30. Where a disagreement is incapable of resolution at portfolio level because it has ‘significant implications for the relationship between two or more governments’ or a disagreement arising in regular FISC engagement has not been resolved, any government may refer it to the IGR secretariat as a dispute. This will include circumstances where governments disagree about the interpretation of, or actions taken in relation to, matters governed by intergovernmental agreements, rules or procedures (including Common Framework Agreements). This is without prejudice to the legal provisions within the devolution settlements which govern matters relating to legislative competence.

31. The final stage for a disagreement before escalation to the IGR secretariat will usually be considered by the relevant IMG or any other relevant machinery, for example regular FISC engagement. After portfolio level routes have been exhausted and the disagreement meets the criteria identified in the above paragraph, any government may refer the matter to the IGR secretariat as a dispute. This model sets out a series of escalation points and seven main resolution stages of the process. However, ministers can commission further work from senior officials (with responsibility for supporting the operation of the ISC or FISC) to help resolve the dispute at any stage of the process.

32. [The Terms of Reference (ToR) for the FISC have not yet been agreed.]

6 Stage 2 - consideration of dispute by IGR secretariat

33. On referral, the role of the IGR secretariat will be to provide impartial advice to governments about the nature of the dispute, including an assessment of whether the issue has the capacity to bear significant implications for the relationship between two or more governments. No secretariat or government can reject the decision of a government to raise a dispute.

34. The IGR secretariat will base the assessment of the nature of the disagreement according to a clear set of criteria: a. Has the disagreement been discussed extensively at senior civil servants level for the relevant portfolio? b. Was a solution proposed at the senior civil servants discussion (that was not satisfactory to all parties to the disagreement)? c. Has the disagreement been discussed extensively by the relevant portfolio ministers? d. Is the disagreement having implications beyond its policy area, impacting the wider relationships between the parties involved?

35. Only if the issue fulfils all the above criteria can it be escalated as a dispute to either the ISC or FISC. If it does not, the IGR secretariat will refer it back for consideration at an earlier stage of the process in accordance with the principle of dispute avoidance.

Stage 3 - options for consideration at senior officials level

36. On escalation of a disagreement as a dispute, the relevant secretariat (with responsibility for supporting the operation of the ISC or FISC) will coordinate and initiate the process by convening a meeting of senior officials within two weeks, unless all parties agree to an extension, which will consider collective recommendations to ministers for resolving the dispute. Portfolio senior officials will also be invited to attend. The meeting will be facilitated by the relevant secretariat including setting the agenda in consultation with the relevant portfolio senior officials involved, providing a paper which sets out the background to the dispute, the positions of the parties, any information considered material in accordance with the process set out in this process, and guidance on an appropriate chair. The secretariat may commission position papers from each of the parties to the dispute.

37. The chair must not be a representative of a government which is party to the dispute. The chair could therefore either be a representative of a government not party to the dispute or an independent representative. The role of the chair will be to ensure that the discussion proceeds efficiently, positively and keeps to time. The chair will not have a decision-making role. Instead the chair will record any consensus which is reached or, alternatively, outline the next steps under the dispute resolution process if an agreement is not reached.

Stage 4 - escalation from senior officials to ISC or FISC

38. If senior officials request that the dispute be further considered by ministers, the relevant secretariat will convene a meeting of the relevant ministers within two weeks of the senior officials meeting unless an extension is agreed by all relevant ministers. The secretariat will issue the agenda to the relevant ministers and officials summarising the background to the dispute and the recommendations of senior officials. The chair of the meeting will have been agreed at the senior officials meeting and the recommendation endorsed by ministers. This could be a minister from a government not party to the dispute or an independent third-party. As in the

7 senior officials meeting, the chair will be responsible for ensuring that the discussion proceeds efficiently, positively and keeps to time. The chair will not have a decision-making role. Instead, it will record any consensus reached, or alternatively outline the next steps under the dispute process if an agreement is not reached.

39. The ISC or FISC will seek to agree to resolve the dispute, either by agreeing senior officials’ recommendations or through further discussion. If a resolution is not reached, third-party (non-binding) advice or mediation should be sought unless all parties to the dispute agree not to do so. Alternative means of resolving the dispute can also be sought should all parties agree.

40. On some occasions, third party intervention will not be appropriate, for example matters of national security or commercially sensitive material. It will be for the senior officials of the ISC or FISC to provide advice to their ministers on whether it is appropriate to seek third-party advice.

41. Ministers must either resolve the dispute, pursue further alternative means of resolving the dispute should all parties agree, or refer the dispute to the [Council]. The dispute escalates to the [Council] if parties cannot agree a resolution, unless all parties agree not to escalate and instead to report to legislatures on the outcome of the dispute.

Stage 5 - Third-party involvement to resolve dispute

42. The appointment of third parties to provide advice must be agreed by the relevant governments. This includes the commission for the third party and the scope of their advice. This process will be facilitated by the relevant secretariat.

43. [For ISC disputes,] where it is not possible to agree the appointment of a third party, a panel of experts (one representing the interests of each party to the dispute) may be appointed. The composition of a panel will usually be agreed by the governments, on the recommendation of the secretariat or if this is not possible, each party to the dispute must nominate a panel member. If, as a result of those nominations, the panel comprises an even number of members, those panel members must agree to a further member, so that it is possible for the panel to reach a majority view if necessary. If required, an independent mediator will be appointed, as agreed by the parties to the dispute, on the recommendation of the secretariat. The timescales for the mediation process will be agreed by the parties.

44. The key criteria for appointment to provide third-party input into the new process are likely to include: a. Ability to act impartially and independently, without political affiliation; b. Extensive expertise in constitutional and related matters; c. Willingness and capability to respond at short notice and deliver at pace; d. Ability to participate in the process without compromising the confidentiality of discussions.

45. The key criteria for appointment to provide third-party input to a particular dispute are likely to include: a. Specific expertise relating to the nature of the dispute (but not necessarily policy expertise as this will have been dealt with at portfolio level); b. Absence of conflict of interest or ability to manage this within the organisation; c. Availability to deliver within the prescribed timescales; d. No public position on matters relevant to the dispute which would create a perceived or actual conflict of interest;

8 e. Ensure the confidentiality of conversations of a sensitive nature is respected and protected.

46. The secretariat will appoint the panel and set a deadline of no later than one month for the panel to report unless ministers agree to an extension. The secretariat will issue it to all governments simultaneously.

Stage 6 - review of third-party input at ministerial meeting

47. Following this, an ISC or FISC meeting will be reconvened to review the outcome within two weeks unless an extension is agreed by the parties to the dispute to review the outcome. Ministers must either resolve the dispute, pursue further alternative means of resolving the dispute should all parties agree, or refer the dispute to the [Council]. If no resolution is found at the ISC or FISC, the default would be for the dispute to be considered by the [Council] within a month of the ISC or FISC meeting, with the option to seek independent advice.

Stage 7 - consideration by the [Council]

48. For all disputes, the agenda item will be supported by a paper produced by the IGR secretariat.

49. Any member of the [Council] may initiate a discussion about the status of an emerging or ongoing dispute, but a decision will not be made on it until the dispute has been referred to it by the IGR secretariat as a result of the earlier steps identified in the process or if governments agree to reach a solution outside the process.

50. A secretariat report on the outcome of the dispute at the final escalation stage, including any third-party advice obtained, must be prepared by the secretariat and laid by each government before its legislature. If governments reach a stage in the process where they are unable to reach a resolution and progress the dispute further, each government must make a statement in their respective legislatures setting out the circumstances for the failure to reach a solution.

Flowchart of dispute resolution process

9 TRANSPARENCY AND PARLIAMENTARY ACCOUNTABILITY

51. The governments are accountable to their respective legislatures for the conduct of intergovernmental relations and will seek to promote a wider understanding of this activity. All governments commit to increased transparency of intergovernmental relations through enhanced reporting to their respective legislatures.

52. All intergovernmental fora will be encouraged to produce communiques and publish these on GOV.UK or [devolved governments/administrations]’ websites. These would include: a. date, location, Chair and list of participants; b. a summary of discussion points

53. The IGR secretariat will support any requirements of individual governments in making their reports to their legislatures and also prepare an annual report to be published online, including: a. a list of all engagements for each fora; b. agenda items; c. any resolved disputes and their outcomes and associated third-party reports when relevant.

10 ANNEX A: DRAFT TERMS OF REFERENCE FOR THE [COUNCIL] AND THE INTERMINISTERIAL COMMITTEES, AND DRAFT LIST OF IMGS

[UK Government and Devolved Administrations Council]

Attendance

1. The [UK Government and Devolved Administrations Council (‘the Council’)] will bring together the Prime Minister, the First Ministers of Scotland and Wales, and the First Minister and deputy First Minister of Northern Ireland. [Attendance may be delegated to Cabinet-level or equivalent senior ministers] (unless in dispute mode).

2. Other ministers and relevant parties will be invited depending on the specific agenda items under discussion.

Functions

3. The functions of the [Council] will include: a. considering policy issues of strategic importance to the whole of the UK; b. overseeing the functioning of and providing strategic direction to the system of multi-level governance created by devolution; c. overseeing and regularly reviewing this agreement; d. reaching decisions on strategic direction for IGR by consensus; and e. acting as the final escalation stage of the dispute resolution process.

4. The [Council] will be responsible for overseeing intergovernmental relations in the UK. Overall accountability for intergovernmental relations will remain with the Prime Minister, the First Ministers of Scotland and Wales and the First Minister and deputy First Minister of Northern Ireland.

5. If agreed by all governments, the [Council] will be able to delegate responsibility to the middle tier fora as appropriate and will also be able to create or stand down time-limited Interministerial Committees as agreed by consensus. If agreed at the ICs, members of those committees can also stand down committees if the need is no longer there. The [Council] might assign one of the middle-tier fora with one or several issues to review within these functions, while aligning with the final escalation stage of the dispute avoidance and resolution process.

Operation

6. [The Prime Minister or their delegate (Cabinet rank) will host an annual meeting of the [Council] with the First Ministers of Scotland and Wales and the First Minister and deputy First Minister of Northern Ireland.] The IGR secretariat will oversee the operation of this meeting.

7. Meetings will be chaired by the Prime Minister or their delegate. In addition to the annual meeting, the [Council] may meet in other formats according to need. Any meeting at this level, even with delegated responsibility to representatives, would be considered a meeting of the [Council]. Extraordinary meetings of the [Council] may be called for the purpose of dispute resolution.

11 Interministerial Standing Committee

Attendance

8. The Interministerial Standing Committee (ISC) will be led by the relevant IGR ministers from all governments.

9. When portfolio-level expertise is deemed beneficial to the particular conversation at hand, ministers from other departments and ministries can be invited to attend.

Function

10. The aim of the ISC is to consider issues cutting across several ministerial portfolios and ensuring positive policy collaboration across all four governments. It will also consider issues that require collaborating across multiple IMGs, the breadth of which prevents them from falling into the remit of any given IMG and be an escalation route between individual IMGs and the top-tier forum in the dispute resolution process.

11. The ISC will aim to achieve the following objectives: a. Provide oversight of the common frameworks programme and their governance arrangements. Consideration of individual frameworks will be considered in the relevant departmental fora as necessary. b. Consider matters which cut across multiple policy areas and competences. c. Provide oversight and central coordination for intergovernmental engagement across all devolved policy areas. d. Provide oversight of portfolio-level engagement. e. Consider matters relating to the implementation, development and impact of reserved policies in devolved areas, including but not limited to international issues. f. Provide an escalation route for international issues, which cannot be adequately addressed in the relevant Interministerial Group or require further strategic oversight across multiple policy areas. g. Consider issues bearing an impact on regulatory standards across the UK for internal trade. h. Share expertise on devolved areas which are required for the operation of cross-cutting reserved policies. i. Consider the impact of diverging approaches in establishing cross-cutting local policies impacting on another government’s area of responsibility. j. Consider disagreements which bear an impact on the relationships between the governments, and escalate intergovernmental disputes when necessary.

12. Items will be added to the agenda according to a strict set of rules overseen by the secretariat: a. The issue must cut across multiple policy areas within multiple portfolios. b. The issue must not fall within the remit of an existing IMG. If it does, it should be referred back to the relevant IMG for consideration or the government which has suggested the item should provide an explanation as to why it should be considered by the ISC rather than the relevant IMG. c. For disputes, the issue must be assessed to qualify as a dispute by the secretariat, as having implications beyond its policy area, impacting the wider relationship between the parties involved, having already been considered by the relevant IMG and gone through stage 1 of the dispute resolution process.

12 Operation

13. Meetings will take place every other month, but can meet more or less frequently according to need and if agreed by consensus.

14. Locations and chairing would rotate between the governments and be determined in advance.

15. When the agenda relates to reserved policies led by a specific UK Government department, the items would be introduced and led by the relevant UK Government minister. The Chair would still be the relevant IGR minister in line with the pre-agreed rota. Discussions would follow an agenda agreed by all four governments, and the process would be facilitated by the secretariat.

16. Any government would have the right to submit an item to the secretariat to request it be considered at the relevant ISC meeting. The secretariat would be responsible for comparing the item against the above terms of reference and consider the appropriate timings for the item to be considered.

Time-limited Interministerial Committees

17. If a cross-cutting issue normally falling within the remit of the ISC requires consideration in isolation from other issues, due to political developments, repeat appearances on the ISC agenda, or urgency, a time limited Interministerial Committee (IC) should be established for that purpose.

18. Time-limited ICs will be established by consensus and at the request of any governments. Frequency of meeting, chairing arrangements and attendance will be determined upon the creation of each IC depending on the particular needs of the issue under consideration. The IGR secretariat will draft the ToR for each IC in consultation with the senior officials’ group, to be agreed by the relevant ministers from all governments.

19. Any number of ICs can be created at any given time but must have a predetermined life-span, which can be extended by consensus. ICs, just like the ISC, will however only consider issues which cannot be considered by the relevant IMG.

[Interministerial Committee on Global UK

Function

20. The IC will principally consider matters relating to 2021 events where the UK is taking a global leadership role, for example the G7 and COP26. It may also consider other limited and specific international matters which are relevant to devolved areas and cannot be addressed in an existing Interministerial Group. This includes areas which require further strategic oversight across multiple policy areas, including on EU governance arrangements and the Withdrawal Agreement Joint Committee. The IC will also provide oversight over portfolio-level engagement on international issues. The forum will not consider issues of national security or diplomatic sensitivity.

21. Engagement through the forum is based on the current Devolution Memorandum of Understanding and its accompanying International Relations Concordat.

13 Attendance

22. The Interministerial Committee on Global UK (ICGUK) will be attended by the relevant IGR ministers from all governments. This includes, but is not limited to, IGR ministers and Territorial Secretaries of State from the UK Government and relevant UKG ministers depending on the topic at hand.

23. Recognising that international relations is a reserved competence, discussions will be chaired by UKG. When the agenda relates to reserved policies led by a specific UK Government department but are relevant to devolved areas the items would be introduced and led by the relevant UK Government minister. The Chair would still be the relevant UKG IGR minister.

24. When portfolio-level expertise is deemed beneficial to the particular conversation in hand, ministers from other departments and ministries can be invited to attend.

Operation

25. The Committee will seek to take place every other month until the end of 2021, but can meet more or less frequently according to need and if agreed by all relevant IGR ministers.

26. Discussions will follow an agenda agreed by the UK Government and [devolved governments/administrations], and the process will be facilitated by the IGR secretariat.

27. Any government will have the right to submit an item to the secretariat to request it be considered at the ICGUK meeting. In line with the established role of the IGR secretariat, it will be responsible for comparing the item against the above terms of reference and consider the appropriate timing and forum for the item to be considered which could include determining that it is not appropriate for the ICGUK to consider a matter at that time.

Review point

28. This arrangement will be reviewed after the UK completes the events it is leading globally for 2021 and when IMGs are fully established and operational to determine continued appropriateness.]

Portfolio engagement and list of potential IMGs

29. This section includes a number of preliminary IMGs to be established, but this is not an exhaustive or definitive list, with the intention of structures to be established or adapted according to need. There are a number of issues where we know engagement between the four governments will be mutually helpful, but the appropriate form of this engagement has not yet been agreed. It will be the role of the IGR policy officials and the new IGR secretariat to advise on the most appropriate IMG or ISC where those issues will be discussed.

30. When this package has been agreed by all four governments, guidance will also be issued to departments and ministries to shape collaborative attitudes towards engagement in the post-EU exit context of increased interaction between devolved and reserved competence. This will include recommendations for rotating chairing and location and frequency of meetings, but leaving the precise arrangements to be jointly agreed between administrations to ensure they are appropriate for the nature of the forum, and flexible and adaptable for the future. Each department and ministry

14 will be responsible for agreeing and updating their terms of reference depending on changes to their structures and priorities.

UKG department* Name

Defra IMG (Efra)

Home Office IMG - to be established

BEIS IMG (Net Zero)

IMG (Business and Industry)

Engagement on science and research - format TBC

MoJ IMG - to be established

DfE IMG (Higher Education) - to be established

IMG (Education) - SoS level - to be established

DCMS IMG (Sports Cabinet)

IMG (Tourism)

IMG (Culture)

DfT IMG (Transport)

MHCLG IMG - to be established

DIT IMG (Trade)

DHSC IMG - to be established

MoD x Office of IMG (Covenant Veterans) Veterans Affairs

DWP Engagement on welfare - format TBC

*The inclusion of the name of UKG departments is intended to illustrate the likely department/policy area leading on this, but this will differ depending on the government.

15 Review of UK Government Union Capability

November 2019

Lord Dunlop

Lord Dunlop served as Parliamentary Under Secretary of State at the Northern Ireland Office from July 2016 to June 2017. He also served as Parliamentary Under Secretary of State at the Scotland Office from May 2015 to June 2017. He was Prime Minister David Cameron’s devolution advisor in Number 10 from February 2012 to May 2015. He is currently a member of the House of Lords Constitution Committee.

Contents

Foreword 7

Summary 9

Introduction 12

Chapter 1 Machinery of government 14

Chapter 2 Civil Service capability 21

Chapter 3 Spending 27

Chapter 4 Intergovernmental relations 31

Chapter 5 Appointments to UK bodies 40

Chapter 6 Communications 43

Review of UK Government Union Capability: Terms of reference 49

Foreword

In the 20 years or so since the to change. Devolution has been a significant Scottish Parliament, National constitutional change. It has empowered Assembly for Wales and Northern local decision-making while also preserving the UK’s ability to act collectively when size Ireland Assembly met for the first and heft matters. time, significant powers have been transferred from the UK Parliament Diversity is a feature of devolution and the management of difference one of its natural and Government to devolved consequences. Solidarity is an attribute of institutions. the Union and the promotion of common During this period much less attention interests one of its essential roles. Being able has been paid to the implications of this to successfully marry the two offers the whole power transfer for the way our Union runs. country the best of both worlds. The focus has not been on the machinery A core principle underpinning our devolution and arrangements which enable the UK settlements is the respect of the UK Government to discharge sensitively its own Government and the devolved governments unique duties to people across all parts of for each other’s areas of competence. For the country, and to work constructively with the last 20 years this has largely worked devolved governments where responsibilities remarkably well. overlap. This machinery and these arrangements are part of the essential glue More recently, the working relationships that binds together our United Kingdom. devolution requires have been tested by withdrawal from the European Union. In such a The UK’s withdrawal from the European highly contested political space, it is often not Union – with the accompanying repatriation possible to resolve fundamental differences. It of powers from Brussels – makes a review should nevertheless be possible to establish of these arrangements urgent. They are, in professional working relationships based on a any case, ripe for review as the devolution higher level of trust than currently exists. settlements have evolved since 1998, with increasing areas of shared competence.1 How the UK Government is structured and operates can make a significant contribution Working together is no longer an optional to developing relationships and building trust. extra, if ever it was. It is fundamental It can also improve democratic accountability to the business of government in these by encouraging a better understanding islands. More importantly, it’s what people of the respective roles of the UK and across the UK want and expect from their devolved governments, and in particular elected governments. the UK Government’s role in serving people Our Union – the United Kingdom – is the most across the country. successful multinational state in the world. Its This report assesses the UK Government’s success is built, in part, on an ability to adapt current Union capability and makes a set

1 By which the Review means a dependence on respective competences.

7 Review of UK Government Union Capability

of practical recommendations, which can be taken forward in a timely manner to strengthen the working of the Union. They are intended to: • embed the Union at the heart of UK Government policy development and decision-making • achieve the optimum balance between the representational value of the offices of the Secretaries of State for Scotland, Wales and Northern Ireland, and the convening power of the Cabinet Office • provide a more predictable and robust process for managing intergovernmental relations

Lord Dunlop

8 Summary

The recommendations in this report aim responsibility for the constitutional integrity to ensure that the UK Government is of the United Kingdom. The new role, with working in the most effective way possible the suggested title ‘Secretary of State for to realise fully all the benefits of being a Intergovernmental and Constitutional Affairs’, United Kingdom. It makes the case for a should have a status akin to the Chancellor transformation to guarantee that the Union of the Exchequer, Foreign Secretary or Home is a mainstream consideration embedded in Secretary. The new Secretary of State will policy development, decision-making and speak in Cabinet for the constitution and will delivery, and sets out a package of measures take a holistic view across the UK, arbitrating to support this change. between other ministers. Just as the Lord Chancellor is responsible for defending judicial This report proposes: independence (as recognised in the Cabinet • a new Great Office of State in the Cabinet Manual), the new Secretary of State will have a duty to uphold the integrity of the constitution, • a new structure supporting the separate including intergovernmental relations. offices of the Secretaries of State for Scotland, Wales and Northern Ireland with The Secretary of State for Intergovernmental a single Permanent Secretary and Constitutional Affairs should be supported • a new fund for UK-wide projects, including by a new Cabinet sub-committee tasked joint projects with devolved governments with preparing cross-government strategic priorities to enhance the Union and ensure • a new UK Intergovernmental Council their effective delivery. (replacing the Joint Ministerial Committee), supported by an independent secretariat These suggested changes will give Union issues greater visibility at ministerial level. These proposals, taken together, form To amplify these effects, departments too a coherent plan to make sure that both must sharpen their focus on the vitality of the Union and devolution sensitivity are a the Union. It is therefore recommended that fundamental part of the structure of the UK, HM Treasury set aside a fund for UK-wide delivering better governance for the UK as projects, which aims to incentivise and a whole. Trust, respect and co-operation support departments to initiate projects that between governments would be more than strengthen the Union. Allocation of the funding aspirations – they would be built into our would be the responsibility of the new Cabinet system of government. Some of this will sub-committee under the leadership of the require increases in resources, and some new Secretary of State and fully involving the requires existing resources to be redirected Secretaries of State for Scotland, Wales and more effectively. Northern Ireland and Treasury ministers. These changes will require leadership from In addition, a second portion of the fund, the highest level of the UK Government. It is open to bids from UK Government recommended that a new senior Cabinet departments and devolved governments is formally recognised within the position working in co-operation will be made machinery of government with specific available. This part of the fund will

9 Review of UK Government Union Capability

encourage collaborative working and it should provide a platform for informed policy innovation in different parts of the consultation by the UK Government on UK. Departments will have an incentive to reserved matters.2 Greater transparency, and find support from devolved governments, scrutiny by Parliament, would incentivise the and devolved governments will have an new body to reach consensual decisions. incentive to work in co-operation with UK Government departments. UK Government ministers should be able to reach agreement at the Cabinet In tandem with the new government sub-committee. As a consequence, UK structure and funding initiatives, the Civil Government representation at the UKIC Service must also meet the challenges of meetings could be smaller, and more delivering policies for the whole of the UK. effectively tailored to the agenda, which should To that end, there should be system-wide improve intergovernmental discussion and reforms to the structure of departments to make consensus easier to achieve. equip them with the necessary Union and devolution capability. To give all parties to the UKIC confidence Any civil servant with that it is run fairly and impartially, it ambitions to reach the higher levels of the should service should acquire such capability. be supported by a standing independent In particular, devolution teams should not secretariat. Sub-committees should be be peripheral within departments – they constituted with specific aims and objectives. should be located at the heart of strategy and Taken as a whole, these proposals are policy development. As a matter of urgency, intended to build trust and respect between departments should address the need for an the institutions of government in the UK. The increased policy presence in Scotland, Wales UK Government is the government of the and Northern Ireland. There should also be whole UK and, if the relationship between the more opportunities for loans and secondments UK Government and devolved governments between the UK, Scottish and Welsh is to be fully mature, its role in all parts of the Governments, and also greater interchange UK must be visible and transparent. If the UK with the Northern Ireland Civil Service. Government’s activities in Scotland, Wales and It is also important to address the question of Northern Ireland are not recognised publicly, the relationship between the UK Government democratic accountability will be lost. It is and the devolved governments in Scotland, recommended, therefore, that spending by Wales and Northern Ireland. There is a broad the UK Government in Scotland, Wales and consensus, with which the Review agrees, Northern Ireland should be clearly marked that the UK’s intergovernmental relations with UK Government branding. machinery is not fit for purpose. The problem To ensure a focused and effective should be addressed by the creation of a communications strategy, UK Government UK Intergovernmental Council (UKIC). It departments should keep up-to-date and would replace the Joint Ministerial Committee accurate data about activities and spending and reset relationships for the future. It would in Scotland, Wales and Northern Ireland. This be a forum for co-operation and joint working would allow the UK Government to test the on both opportunities and challenges. As well effect of their policies across the four nations as looking to make decisions by consensus and equip UK Government ministers visiting on areas of devolved or shared responsibility, any part of the UK with the information they

2 In this report, the term ‘reserved’ is used, for ease of expression, to matters which are not within the competence of the devolved legislatures.

10 need to explain the impact of their own departments on that part of the country. The Strengthening the Secretaries new Secretary of State for Intergovernmental of State for Scotland, Wales and and Constitutional Affairs should oversee a Northern Ireland. communications strategy for Scotland, Wales and Northern Ireland. Taken together, the Review’s recommendations greatly enhance The report also notes the important roles and the status and voice of the Secretaries responsibilities of the many public bodies in of State in Government, through: the UK. Although these bodies often have responsibilities in all parts of the UK, it is not a more focused role, working clear the extent to which a sensitivity to Union alongside the new senior Secretary issues is baked into the appointments process of State for Intergovernmental and and organisational culture. It is suggested that Constitutional Affairs an audit of public bodies is undertaken. It is a requirement – in the Cabinet Manual also recommended that the new Secretary of – to be consulted on policy before it State for Intergovernmental and Constitutional is submitted for collective agreement via Affairs should ensure that public bodies with a the new Secretary of State’s officials UK-wide remit are representative of the UK as a whole in the future. a new Cabinet sub-committee to agree UK Government positions There are some words which readers ahead of engaging with the devolved will see repeated in this report: trust, administrations transparency, strategic, co-operation. over a These words encapsulate its overall direct influence specific aimed at improving the UK theme. Government in the United budget Government’s delivery in Scotland, Kingdom needs a cohesive and co- Wales and Northern Ireland, as well operative approach, which these as cross-border recommendations aim to achieve. Solidarity and diversity are central to the a new shared policy function which character of the Union. The public expect retains distinct nation-specific coverage, UK and devolved institutions to work improving the range of areas covered together in the interests of all. This report and enhancing the quality of the is intended to bring about a step-change advice and support they receive to how government thinks and acts to meet public expectations.

11 Review of UK Government Union Capability

Introduction

As the United Kingdom prepares to leave As the devolution settlements have evolved, the European Union, it does so with a very the UK Government and, as a corollary, different constitutional architecture to the the Civil Service, have evolved to meet this UK that joined the European Economic changing constitutional landscape. It is Community in 1973. In 1998, significant timely for the UK Government to consider powers were devolved from the UK Parliament how, through its institutional arrangements, to legislatures in Scotland, Wales and Northern it ensures that the Union continues to Ireland. In the years since, further powers have prosper in the years ahead. This is more been transferred. The Government of Wales than understanding and being sensitive Act 2006 created the Welsh Government to devolution – the UK Government must and, following a further referendum in 2011, consider its decisions through the specific lens greater fiscal and legislative functions were of their impact on every part of the Union. devolved by way of the Wales Acts of 2014 and 2017. In 2014, voters in Scotland chose decisively to remain part of the United Review of UK Government Kingdom and following the referendum, the Union capability recommendations – including the power to Following an announcement in July 2019 this raise taxes – of the Smith Commission were Review has considered, within the context of enacted by the Scotland Act 2016. the existing devolution settlements, how the England has been subject to decentralisation: UK Government can work to most effectively as well as in the capital, which is governed realise the benefits of being a United Kingdom by the mayor-led Greater London Assembly, and how institutional structures can be many other cities across the country now configured to strengthen the working of the have directly-elected mayors. The many Union. The objective is to articulate a coherent forms which devolution takes across the UK plan to deliver better governance for the UK as result in constitutional asymmetry and indeed a whole, guided by the core principles of trust, there has been a long debate over the ‘West respect and co-operation. Lothian question’.3 That is, whether MPs from The recommendations are intended to Scotland, Wales or Northern Ireland should improve the effectiveness of UK Government be able to vote on matters that affect only Union capability regardless of any future England. Following the McKay Commission changes in the political makeup of the UK (2013), English Votes for English Laws was Government or devolved administrations. implemented by the UK Parliament in 2015 to While the Review has been undertaken in the seek to address this. context of continuing challenges around the The UK Government remains responsible lack of an Executive in Northern Ireland its for huge swathes of UK-wide policy, for recommendations aim to be applicable both example defence, foreign affairs, pensions and in the current situation and following the return the macroeconomy. of an Executive.

3 The question of the perceived imbalance in voting rights between MPs representing constituencies in Scotland, Wales or Northern Ireland and those representing English constituencies has been known as the ‘West Lothian Question’ since 1977 when it was raised by the MP for West Lothian at that time during a debate on devolution.

12 The findings of the Review were shaped by The role of appointments in ensuring public discussions with a range of stakeholders services are delivered for the whole of the UK across the UK. These stakeholders included is the subject of Chapter 5. Finally Chapter 6 politicians, officials and academics. The considers the strategic role of communications wealth of literature, including academic in strengthening how the Union works. papers and parliamentary inquiries, was of great help in informing these conversations. The Review is not intended to be a complete The Review was also aided by a number implementation plan, but rather a package of of UK Government departments including reforms across a wide range of areas. Taken those which provided clarification on together, the reforms respond to the significant factual background. constitutional changes of the last 20 years and aim to transform the conduct of government The Review is indebted to all those involved business to put the Union at the heart of in discussions, who provided input, or who decision-making. engaged with the Review via its webpage.

Report structure This report seeks to address a number of areas. Chapter 1 discusses how the machinery of government has adapted to devolution. In particular, this section looks at whether the structure of the UK Government and its departments enables proper consideration of the Union in the process of policy development and delivery.

Chapter 2 explores the capability of the Civil Service in respect of the Union. This constitutes an assessment of departmental capability to deliver policies for the whole of the UK and an examination of the support civil servants receive to learn and develop the necessary skills to be effective in a UK-wide context.

In Chapter 3, the report turns to the role of spending and whether there should be financial incentives across government to encourage more collaborative working and the development of Union-enhancing policies.

Chapter 4 examines intergovernmental relations and how, particularly given the UK’s exit from the European Union, these might be reformed with a new set of structures to replace the Joint Ministerial Committee.

13 Review of UK Government Union Capability

Chapter 1

Machinery of government

Over the last ten years, successive Prime Ministerial responsibility Ministers have been increasingly explicit The UK Government has, since 1998, about the priority they attach to the overall organised itself in a variety of ways to manage health, strength and value of the Union. its responsibilities in Scotland, Wales and Their commitment cannot be doubted. The Northern Ireland and relationships with challenge has been to determine how this devolved institutions. translates to practical policy development, decision-making and delivery to ensure that Ministerial responsibilities for these interests Union considerations are integral to the way in have ranged from having Secretaries of State which Whitehall thinks and acts. for Scotland, Wales and Northern Ireland jointly appointed to another department, Sensible improvements have been made to through to the Deputy Prime Minister, First the way in which the UK Government works Secretary of State or Chancellor of the Duchy and its awareness of devolution issues has of Lancaster having specific responsibility improved. These represent helpful steps for the UK Government’s relationship with in the right direction. However, it is widely devolved administrations. More recently, the accepted that there is still some way to Prime Minister has added the title ‘Minister for travel to reach a consistent and systematic the Union’ to his portfolio and set up a new consideration of how the UK Government unit in Number 10 to consider Union issues delivers for the whole of the UK, with robust more carefully. Both these steps demonstrate actionable plans. Moreover, it has never been the importance he attaches to the Union. more important for officials and ministers to possess a heightened sense of awareness However, although a current priority, Union of the implications of UK Government policy issues are not embedded in the machinery and action for Scotland, Wales and Northern of government. Recent practice has been for Ireland at this critical juncture. Understanding the Minister for the Cabinet Office to have the devolution settlements is necessary, but is departmental responsibility for the Union. not sufficient to enable officials and ministers The weight and influence of the role has to deliver a holistic Union strategy. The UK depended on who holds it. For example, the Government should be sophisticated enough Review heard of the recent positive influence to design policy for the UK as a whole or of David Lidington, building on the work of his differential policy for its constituent parts. A predecessor Damian Green. Their seniority transformation is required to make the Union and proximity to the Prime Minister made a mainstream policy consideration. There is them particularly effective in the role. no silver bullet to achieve this – a package of mutually reinforcing measures is necessary More robust and systematic arrangements to provide the right balance of incentives to are required to secure the effective and bring about change. consistent management of Union issues in the future. The importance of the role must

14 Machinery of government

transcend the holder of the post at any one in Whitehall and they must try to cover the time. The position and office holder need to whole of the UK Government’s policy agenda be of sufficient stature and influence within alongside developments in Scotland, Wales government to both facilitate relations with the or Northern Ireland. The Review heard of the devolved administrations and to drive effective specialist local knowledge and experience joint working across government. The right the offices provide. However the small outcome can best be secured by adopting policy teams in each are stretched having to best practice, not relying on serendipity. balance producing briefings and responding to parliamentary questions with driving and The Prime Minister needs to be supported as influencing the broader policy agenda. This Minister for the Union by the establishment means they may at times struggle to exert of an operational arm, in ministerial terms, the right level of influence within the UK with day-to-day oversight of matters related Government. This must be addressed. to Scotland, Wales and Northern Ireland and the constitution. A ministerial role with An enhanced process has been introduced that brief, and with responsibility for advising to support the write-round process within and involving the Prime Minister at the right the UK Government to record the devolution moments, should be established. The parallel or UK-wide implications of policy proposals is the Prime Minister’s title of First Lord of the being submitted for collective agreement. This Treasury, which does not obviate the need for seeks to ensure that all officials are conscious a Chancellor of the Exchequer. of the implications of their policy and helps avoid the three Secretaries of State offices or The Cabinet’s responsibility for the Cabinet Office having to ‘catch’ issues in the development of Union strategy, led by the write-round process. minister with that portfolio, has often been supported by a Cabinet committee. Under the Coalition Government this took the shape Machinery of the Devolution Committee, chaired by the Deputy Prime Minister Nick Clegg and then Several UK Government departments have by the First Secretary of State William Hague. responsibility for policy areas with implications There was also a Scotland Committee chaired for the constitutional landscape. For example, by the Chancellor of the Exchequer, George the Ministry of Housing, Communities and Osborne. The Review has received evidence Local Government leads the UK Government’s that the Devolution Committee did not work English devolution agenda. With its joint as effectively as it might have done because BEIS unit, it has brokered City and Growth it had insufficient clarity of purpose. By way Deals across England, the latest in a range of of contrast, the Scotland Committee, with a initiatives designed to support localism. clearer objective, is regarded as having been Overall responsibility for Union policy sits with more successful. the Cabinet Office, supported by the newly As well as the importance of a ministerial established Number 10 Union Unit. The UK portfolio for the Union, the Secretaries of State Governance Group (UKGG) was established for Scotland, Wales and Northern Ireland and in June 2015 to lead the UK Government’s their separate offices are integral to the vitality work on the constitution and devolution. of the Union. Indeed, they play a crucial role in It brings together, under one Civil Service managing the UK Government’s relationship command, the Cabinet Office’s Constitution with each devolved administration. That said, Group, the Office of the Secretary of State for their departments are some of the smallest Scotland, the Office of the Advocate General

15 Review of UK Government Union Capability

for Scotland and the Office of the Secretary of later Permanent Secretary of the Department State for Wales. The Northern Ireland Office for Exiting the European Union was also a (NIO) remains under a separate management critical factor. A like-for-like replacement has structure although more recently, the UKGG not been appointed following his retirement has created a bespoke team to complement from the Civil Service. The objective for the the NIO’s work and some cross-cutting policy future is to ensure that his example is the norm issues are now considered in collaboration. and not an exception. The UKGG was set up to reflect the As part of UKGG, the HR, IT and finance changes to the structure of the centre of functions of the offices of the Secretaries the UK Government that occurred during of State for Scotland and Wales are not the Coalition Government (2010 to 2015). streamlined. Their HR services, for example, An office was created for the Deputy Prime are still provided by the Ministry of Justice Minister within the Cabinet Office, headed as the successor to the Department for up by a Senior Civil Servant. The Deputy Constitutional Affairs. Prime Minister’s portfolio, which included constitutional reform, necessitated bringing civil servants with the relevant expertise into Recommendations the centre of government. They came largely The Review makes four main from the Ministry of Justice, which held the recommendations to address these issues. constitutional brief before then. When the Coalition Government ended, a decision was First, a senior Cabinet position taken to maintain this pool of expertise under with specific responsibility for the the newly established UKGG. constitutional integrity and operation of the United Kingdom needs to be more The creation of UKGG has greatly enhanced formally recognised within the machinery the way in which the centre and three of government. The Review finds that the Secretary of State offices work together and standing of the previous incarnations of this given the UK Government a greater presence role should be enhanced. It should have a in Scotland, Wales and Northern Ireland. It status equivalent to one of the Great Offices has provided a more powerful collective voice of State (the Chancellor, Foreign Secretary, or within the upper echelons of the government Home Secretary). for issues related to Scotland, Wales and Northern Ireland and the Union. The Review Providing greater clarity and visibility to the role received evidence of the significant value will leave no doubt as to who in Cabinet has of the role performed by Philip Rycroft, the responsibility to speak for the constitution. In inaugural Permanent Secretary of UKGG. He this context, functional descriptions matter. was able to represent the interests of Scotland It is suggested that ‘Secretary of State for and Wales with his senior colleagues in the Intergovernmental and Constitutional Affairs’ UK Government and vice versa. The Review would be an appropriate title. The Prime also heard that much of this flowed from his Minister will also want to consider how career experience working in senior positions the seniority of this post is recognised and in both the UK Government and Scottish guaranteed. For example, the title of First Government. His knowledge and experience Secretary of State or one of the historic titles undoubtedly enhanced the influence of UKGG could also be attached to the role, although within Whitehall. His seniority as Second the Review felt that Chancellor of the Duchy of Permanent Secretary in the Cabinet Office and Lancaster is a curiously inappropriate title for a

16 Machinery of government

minister with prime responsibility for managing The Prime Minister will clearly wish to consider the UK Government’s interaction with the whether this post-holder also acts as chair or devolved administrations. The status of the deputy chair of any cabinet committees. In role could also be recognised in the Cabinet doing so, the Review thinks the importance order of precedence. of the core functions of the role and the need to devote sufficient time to them should An updated Cabinet Manual should attach be recognised. certain duties to the role to uphold the integrity of the constitution, including the operation The holder of this senior Cabinet role, will work of intergovernmental relations. These duties with the Secretaries of State for Scotland, would be akin to the Lord Chancellor’s Wales, and Northern Ireland and their separate responsibilities, which transcend politics, departments to discharge their important regarding the rule of law and independence representative role in Cabinet and on behalf of of the judiciary. The Review believes that the UK Government in Scotland, Wales and this would also be a helpful innovation in the Northern Ireland. context of strengthening the machinery of intergovernmental relations. In the wake of devolution the need for these roles has been questioned.4 The The purpose of this role would be to take a Review concludes that there is great value holistic view across the UK, arbitrating when in continuing to have ministers of Cabinet necessary between other ministers to make rank, providing a distinct voice and collective sure policy decisions are taken cognisant of conscience for the interests of Scotland, the broader Union implications. The post- Wales and Northern Ireland within the UK holder will also act as the principal interlocutor Government. This role cannot be performed for the devolved administrations, supported by by the devolved governments, who are the Secretaries of State for Scotland, Wales not part of the UK Government and whose and Northern Ireland. responsibilities are in their own areas of devolved competence. The influence of the The role should remain within the Cabinet Secretaries of State for Scotland, Wales and Office, rather than establishing a new Northern Ireland within the UK Government government department. This takes will be reinforced by the new Secretary of advantage of that department’s convening State for Intergovernmental and Constitutional power and overall responsibility for the Affairs. The recommendations set out in implementation of government policy. The this report are aimed at strengthening their portfolio should include oversight of the capacity and influence to the positive benefit wider constitutional implications of English of the UK as a whole. devolution. However, the Review does not make the case for extending responsibility to To build on the enhanced process for write- English local government policy delivery, which rounds, a new addition should be made to should remain with the Ministry of Housing, the Cabinet Manual. This should assign a Communities and Local Government. specific role to the new Secretary of State for Intergovernmental and Constitutional Affairs’ officials to approve, earlier in the process of collective agreement, the release of policy for write-rounds, which has a Union impact.

4 https://publications.parliament.uk/pa/cm201719/cmselect/cmscotaf/1586/1586.pdf

17 Review of UK Government Union Capability

This is a role akin to that set out for HM government delivery against a particular theme Treasury (HMT) in the Cabinet Manual and is or project it has agreed. This ensures that designed to have the effect of incentivising different policy options can be tested against consideration earlier in the policy development a range of different departmental interests. process, not at the point the policy is The National Security Council has adopted submitted for clearance. Officials should seek this approach to make sure security policy to ensure the views of the Secretaries of State balances the sometimes conflicting objectives for Scotland, Wales and Northern Ireland are in this sphere. taken account of before collective agreement is sought as part of this process As a sub-committee of Cabinet it will be a forum for collective agreement. However, it The Cabinet is responsible for the should not replace other committee structures development of Union strategy. To support and processes used for discussing and this role and complement the enhanced collectively agreeing cross-government Secretary of State, a new Cabinet policy. The aim is for this sub-committee to sub-committee should oversee supplement these processes and ensure the delivery and implementation in parallel that Union issues are effectively of a set of strategic priorities and considered at all times. This forum could departments’ plans to support the UK also be used to consider a limited range of Government’s Union agenda. spending decisions in concert with HMT, as discussed later in this report. This new sub-committee would avoid the pitfalls of predecessor committees by having While a new Cabinet sub-committee will drive a clear and focused remit: to agree a small list a more strategic approach to the Union, the of cross-government strategic priorities that Cabinet Manual should also be updated to further enhance the Union and ensure their make clear that all Cabinet sub-committees effective delivery. This committee should be have a responsibility in their deliberations to supported by the Cabinet Secretariat. consider the Union priority. It is envisaged this sub-committee will The Cabinet Manual makes clear that, by comprise standing membership of the new exception, devolved administrations can be Secretary of State for Intergovernmental and invited to some Cabinet sub-committees with Constitutional Affairs, the Chancellor (or, at the agreement of the relevant chair. It notes their delegation, the Chief Secretary to the that emergency responses may be one such Treasury) and the Secretaries of State for example of this. The Review considers there is Scotland, Wales and Northern Ireland. Other an opportunity to build on this provision. Even Cabinet ministers will be invited to attend when the chair determines it is not appropriate depending on the agenda, not least to ensure to invite the devolved administration to the effective accountability for the development Cabinet sub-committee, if matters related to and delivery of their Union plans. devolved competence are being discussed efforts should be made to share relevant Consideration should be given to using extracts of documents in advance. An addition the Fusion Doctrine to support the sub- 5 should be made to the Cabinet Manual to committee. This is where a Director General make this clear. is given specific responsibility for cross-

5 UK Parliament, ‘Revisiting the UK’s national security strategy: The National Security Capability Review and the Modernising Defence Programme’, available at: https://publications.parliament.uk/pa/jt201719/jtselect/jtnatsec/2072/207206.htm

18 Machinery of government

As well as the changes to the structure of To improve efficiency, career progression Cabinet and its committees, Whitehall would opportunities and ensure appropriate benefit from a similar development of its accountability, the back office functions (IT, structures. The Review concludes that now is HR, finance) of the offices of the Secretaries the time to fully realise the benefits of UKGG of States for Scotland and Wales, and the NIO and makes two specific recommendations to should be merged into a single operating unit. achieve this. In practice, this means:

The first is the establishment of a single • A single shared IT platform across all four Permanent Secretary Head of UKGG to units (likely adopting the Cabinet Office’s lead the three offices of the Secretaries system already in place in the NIO and of State for Scotland, Wales and Northern planned for the Office of the Secretary Ireland as well as the relevant Cabinet of State for Scotland). This will allow for Office teams, supporting the new senior a more progressive and digital means of minister and three Secretaries of State. cross site collaborative working This will give Union strategy a coherent • Moving to a single HR system with shared voice within government, for example at the terms and conditions, and, where relevant, weekly meeting of Permanent Secretaries loan arrangements when staff are from chaired by the Cabinet Secretary, to which the other UK Government departments or Scottish and Welsh Government Permanent devolved administrations. The result would Secretaries and the Head of the Northern be greater ease of movement between Ireland Civil Service are also invited. constituent units, more obvious career The NIO has an important role in a number progression paths and a single ‘brand’ for of sensitive issues in Northern Ireland, recruitment purposes, under the Cabinet not least security and political strategy. Office. It is likely within this structure a This recommendation aims to ensure the more standard HR Business Partner importance of these issues is maintained and function could be created their status enhanced within the centre of • Creating a shared service model for government, ensuring there is a wider depth back office and finance functions, while of understanding about Northern Ireland retaining specialist support bespoke to issues outside of the NIO. Although there the different block grant transfer function may be advantages to the NIO having its own for each nation Permanent Secretary, which, it is argued, enhances the status of Northern Ireland While there will be some upfront costs issues, the Review is not persuaded these associated with this, it is expected that benefits outweigh the gains that would be in a new shared operating structure that made by bringing the NIO into the fabric of efficiencies could be realised in the longer UKGG. This will better enable a more joined- term, which the Review strongly recommends up approach to devolution issues, while are reinvested in policy functions. The Review protecting the unique features of the individual further notes the importance of market-facing devolution settlements. As a consequence, pay. It may therefore be necessary to have a the risk of NIO exclusion from important degree of flexibility in current arrangements to conversations and decisions is minimised, ensure those based in geographical areas with and their voice is amplified by the power and other high public sector employment are able capacity of the Cabinet Office. to compete for the highest quality candidates.

19 Review of UK Government Union Capability

The second recommendation under this each nation. The Review recognises there theme is that a shared policy function for will be times when the Secretaries of State all three offices should be created in have different priorities and will want to argue the Cabinet Office as soon as possible. for distinct policy positions. The retention of The Review proposes the creation of a Scotland, Wales and Northern Ireland ‘leads’ shared policy function to improve the in each area will allow for this with the added support available to the Secretaries of State benefit of avoiding duplication of policy advice for Scotland, Wales and Northern Ireland, on the basic factual and analytical aspects. structured around themes like ‘infrastructure’, ‘environment’ and ‘economy’. The aim would In London, these teams should be co-located. be to enhance the provision of high-quality While the Office of the Secretary of State policy advice and improve the collective for Scotland will still reside in Dover House, influence of the Scotland, Wales and Northern and the Office of the Secretary of State for Ireland policy interests across government. Wales in Gwydyr House, the shared themed This function should be created from new policy teams will be located, in London at resources in the centre and a pooling of least, in just one of these buildings. Outside most policy resources from the offices of the of London, the creation of UK Government Secretaries of State for Scotland, Wales and Hubs will allow for this type of working Northern Ireland. It is expected this move will arrangement and provide candidates applying allow greater time to invest in building cross- to roles in this shared policy function more government and external relationships, with flexibility on location. outward facing engagement being a core part In practice, this means, and entirely in keeping of everyone’s role within these policy teams. with moves to refer to the relevant Secretary This recommendation aims to achieve the of State for Scotland, Wales and Northern best of both detailed policy expertise and Ireland as the ‘Offices’, the main teams that local knowledge by enhancing capacity and will continue to be exclusively organised by enabling policy teams to specialise. It is on a nation specific basis will be: Private hoped this would also have a positive impact Office, Communications, Constitution teams on retention by providing greater and clearer (where there is a direct nation specific policy career opportunities. responsibility) and a small specialised project This change would represent a further based unit to act as an intelligent customer development of UKGG, which has already of advice from the shared policy function. been very successful in creating this sort of The remainder of services would then be function for constitutional issues. It may be ‘bought in’ from the shared function. In helpful to pick one or two themes to pilot a addition, it is likely the NIO will need to retain proof of concept. For the NIO in particular, its specialist political strategy, legacy and this proposal will enable policy focus to be security teams given their important expertise. better separated between managing the The function complements recommendations most immediate and high priority issues and considered under the capability chapter those focusing on longer-term strategy and for all departments to greatly improve the policy development. effectiveness of their work in relation to Scotland, Wales and Northern Ireland. Recognising that Scotland, Wales and Northern Ireland have, at times, differing policy interests, these teams should have a named lead with principal responsibility for

20 Civil Service capability

Chapter 2

Civil Service capability

Successive Prime Ministers have made the Departmental Union a priority. It is vital the Civil Service has Each UK Government department has its own the requisite knowledge and most importantly, ‘Devolution Team’. For some departments the skills, to support this priority. While the these teams can be sizeable, for example UK Government must respect the devolved in the Department for Business, Energy administrations’ responsibilities in devolved and Industrial Strategy (BEIS) and HMT. For areas, it must ensure the Union is embedded others the team can be as little as one full- at the heart of its policy development and time equivalent. These teams are responsible decision-making. It is important to recognise for straddling both devolution capability and that although devolution capability is vital, ensuring, where appropriate, that UK-wide it is not the same as ensuring the Union delivery is embedded in policy development. priority is ingrained in policy development and Teams can also support interactions with the decision-making. Departments need to move devolved administrations and engagement much more firmly and quickly to develop the with stakeholders in Scotland, Wales and confidence of their staff in discharging their Northern Ireland. It is important to recognise UK-wide responsibilities. that even when policy is wholly devolved, it This chapter of the report considers two is possible policy changes have a spillover aspects of capability: effect on another nation or administration. The Review heard of the example of the • departmental capability to deliver policies Teaching Excellence and Student Outcomes for the whole of the UK, cognisant of where Framework (TEF). The TEF was introduced this has implications for devolved areas by the Department for Education and is • the capabilities of individual civil servants primarily an English policy. That said, the TEF and the support (including incentives) they has consequences for the higher education receive to continuously learn and develop sector across the UK: although each nation the necessary skills to be effective in the has its own quality assurance mechanisms, context of the devolution settlements those institutions that do not subscribe to the TEF will need to demonstrate their quality to prospective international students in some other way. Indeed, while participation in the TEF is mandatory only in England,6 concerns that the TEF could be perceived as an indicator of teaching quality for the whole of the UK have led universities from all parts of the UK to participate.

6 For providers with more than 500 undergraduates.

21 Review of UK Government Union Capability

UK Government departments have various In addition to Devolution Teams some Devolution Team models. Some have specific departments have stakeholder engagement policy responsibilities; others operate much leads based outside of London. For example, more as a guidance service. All aim to improve BEIS and HMT do this in Scotland and their the department’s overall capability to engage initiative has been warmly welcomed there. with devolved governments across the UK and These roles are designed to engage with local act as catalysts for change. Where Devolution stakeholders, representing their department Teams ‘own’ specific policy in departments, and bringing back insights to inform the policy the Review heard this can have the effect of process. The Review heard that there is insulating the rest of the department from significant appetite for more of these sorts of the need to develop the skills necessary to roles to increase localised engagement. operate UK-wide. In extreme cases this has created a perception that teams absolve One consequence of not having such a the wider department of responsibility for capability is that when a ‘view’ is required understanding the context in Scotland, from one of the constituent parts of the UK, Wales and Northern Ireland. To address this, the first port of call is often the devolved some departments have created a network administration, rather than interested of ‘champions’ to help improve capability in stakeholders or UKGG or the NIO. Some different teams. However there seems to be departments such as the Department considerable inconsistency in the effectiveness for Environment, Food and Rural Affairs of this approach. have developed direct relationships with stakeholders across the UK, in other cases the Every department has a Senior Civil practice has been to delegate responsibility Servant responsible for devolution who for building relationships in Scotland, Wales represents the department at meetings of and Northern Ireland to Devolution Teams the Devolution Leaders Network. Alongside or UKGG and NIO. Each UK government other matters this is the Cabinet Office’s department needs to consider whether it has principal means for discussing other in place adequate mechanisms to engage government departments’ Union priorities. with the full range of stakeholders across The effectiveness of this network – in spite the UK. This will not always be appropriate of attempts to test different structures and on a nation specific basis, and departments agendas – has been questioned as evidenced should also consider where engagement is by the frequency with which attendance better considered on an economic regions is delegated. As a result, the network has basis as well. struggled to significantly support efforts to improve outcomes. The Review, for example, recognises a particularly strong case for the Department More recently, ‘Union plans’ have been for International Trade (DIT) to have significant created as a means of understanding what presence in Scotland, Wales and Northern departments are doing to deliver UK-wide. Ireland, both to improve its offering to This is a useful start. However the plans are stakeholders and help facilitate joint working often a brigading of existing policy. Most lack with the devolved administration. It is vital hard-edged metrics to monitor improvements the whole of the UK benefits from DIT’s work and it’s not always clear how they relate to the and global reach. There is clearly benefit from Cabinet’s wider Union ambitions and strategy. establishing close working relations not just There is a significant opportunity to embed a with the devolved administrations but also with more creative consideration of the whole of the people and businesses in Scotland, Wales and UK right at the heart of policy development. Northern Ireland.

22 Civil Service capability

Foreign affairs are the responsibility of the • evaluates devolution learning, including UK Government, which ensures people and through an annual survey of staff businesses across the UK benefit from the devolution capability, and advises others on Foreign and Commonwealth Office (FCO)’s best practice role to represent the whole of the UK and its global network of nearly 270 diplomatic The Review heard strong support for the offices. In recent years the devolved programme, which has successfully evolved administrations have, to varying degrees, since 2015 and plays an important role in looked to expand their footprint overseas. improving capability. A number of areas for Devolution capability is necessary not just further development have been identified. The to support joint working with the devolved programme is characterised as self-selecting, administrations on matters of shared interest both in terms of those accessing learning but also to maximise the FCO’s contribution opportunities and those undertaking its annual to the UK Government’s Union priority. Civil Service devolution capability survey. It can Since 2016, the FCO has developed a also be characterised in general as providing more systematic approach to devolution those taking part with devolution knowledge capability including under its overseas which, although important, is not the same leadership programme. as having the necessary skills to work in the devolution context. Recently progress has been made to include skills aspects and there Individuals is a strong case to build on this further. Improving Civil Service capability is not only The value of Senior Civil Servants having important for the UK Government but also for experience of working in both the UK the three devolved administrations. Capability Government and one of the devolved needs to exist at all levels in the Civil Service. administrations has been referenced Although significant progress has been elsewhere in this report. However, there made over recent years, the initial focus has appears to be few structural incentives for primarily been on knowledge rather than skills- this sort of experience to be more widely based training. replicated. It is entirely possible, and even the current norm, to reach the highest levels in Since 2015, the ‘Devolution and You’ the Civil Service without ever having operated programme has looked to improve civil within a devolved context. servants’ knowledge of devolution as well as their ability to work across administrations. While the ‘Devolution and You’ programme The programme is run in partnership with both has offered civil servants across the Scottish and Welsh Governments, working administrations the opportunity to take closely with the Northern Ireland Civil Service part in an interchange week, there is less (NICS) as well. proactive encouragement to move between administrations for longer periods of time. The programme: As well as developing devolution learning, • designs and delivers learning and it is clear that all four administrations could development events gain from a greater interchange of staff. This would improve the UK Government’s • co-ordinates, delivers and advises devolution understanding and capability. It on interchange schemes – allowing would also provide opportunities for staff staff to experience working in another working in devolved administrations to gain administration further understanding of how Whitehall works

23 Review of UK Government Union Capability

and aid capability in new policy areas as Cabinet Office should provide devolution they exercise additional powers. Data does and constitutional training for all sitting non- not currently exist on movements between executive board members and establish a the different administrations. While NICS is scheme to ensure all new non-executives a separate Civil Service, with its own Civil undertake training ahead of joining a board. Service Commission, staff interchange with other administrations is still possible. However The Cabinet Office should ensure there this does not seem to be frequent and is rare are outcome-based metrics to continually outside the NIO. assess departmental capability. Within departments, the responsible board member should report to the wider board, Recommendations the department’s ministers, and the new Secretary of State for Intergovernmental Each UK Government department and Constitutional Affairs on the should have a Senior Civil Servant board department’s performance and strategy member with lead responsibility for for continual improvement. The non- the department’s devolution capability executive board member may like to consider and Union strategy. All UK Government undertaking an annual audit to present to the departments should ensure that Union and board to ensure sufficient attention is given devolution issues are represented at the to this agenda. highest level within their organisations and sit at the heart of policy making and delivery. Each UK Government department should This should include having a member of the ensure devolution teams are suitably Civil Service leadership team with specific located within the organisation to have responsibility on departmental management greater visibility and significant influence boards for devolution capability and the Union on wider departmental strategy and priority. Permanent Secretaries should also policy development. Devolution Teams show significant leadership in this area and should therefore be suitably positioned at the this should be reflected in their objectives. centre of departmental strategy functions – Outcome-based metrics should be developed close to ministers – so they have the ability to manage performance and the nominated and tools to have department-wide impact. It board member should work with the is vital Devolution Teams have the capacity to Permanent Secretary to improve performance. fulfil a dual role of implementing improvements in departmental capability and ensuring its Additionally, all UK Government plans are in line with the Government’s Union departments should have a nominated priorities. Although Devolution Teams should non-executive board members with support and enable other policy teams, the specific responsibility to lead on advising Union priority should be embedded at the and challenging the department on its centre of all policy development. Part of Union strategy and devolution capability. the success of Devolution Teams can be This board member should hold the measured by the extent to which departments’ Permanent Secretary to account for these reliance on them continues to be necessary. priorities. Departments should consider the relevant skills and experience such a non- executive board member needs to perform this role. This should not remove the need for all board members to be engaged with the UK Government’s Union priorities. The

24 Civil Service capability

focus on devolution and the Union. Internal The UK Government should urgently communications are an additional and address the case for an increased important means of promoting a better policy presence in Scotland, Wales and understanding of the devolution settlements Northern Ireland. Permanent Secretaries more widely within the Civil Service. of departments with substantial reserved responsibilities should be required to Senior Civil Service job and person produce specific plans outlining how their specifications should be amended to department will move policy posts into include a requirement to demonstrate Hubs. In support of this recommendation, a cross-government programme lead should significant experience working in or with be appointed with strategic responsibility for one of the devolved administrations or a Union-related issue. In future, Civil Service ensuring Hubs are well populated with high leaders should not only have substantial quality policy roles. Having policy officials knowledge of devolution, but also the skills based in Scotland, Wales and Northern to use this knowledge. Adding this to the Ireland will also support co-operation with requirements for entering the Senior Civil the devolved administrations and further Service will encourage civil servants to develop improve individual devolution capability. these skills at an earlier stage in their careers. UK Government Hubs in Scotland, Wales While working towards a more devolution- and Northern Ireland present the greatest confident Civil Service of the future, it is opportunity to implement this change quickly. important existing civil servants in senior roles The UK Government should look to further feel fully devolution literate. Cabinet Office use technology to ensure officials and teams may like to consider a tailored learning course based in Scotland, Wales and Northern Ireland for existing Senior Civil Servants who wish to are able to seamlessly engage with their improve their skills. Whitehall colleagues and ministers. This is entirely in keeping with the UK Government’s The FCO should further build on the wider estates strategy to reduce its expensive devolution and Union aspects of its Head Whitehall footprint. and Deputy Head of Mission overseas leadership programme. It should also BEIS and DIT should urgently create more identify which other overseas roles would posts in Scotland, Wales and Northern benefit from an expanded programme. Ireland. This will ensure local people and businesses have improved access to the In order for the UK, Scottish and Welsh services offered by BEIS and DIT. These Governments to best realise the benefits posts should also be based in the Hubs. of being one Civil Service, the UK Government should look to work with The Civil Service should build on the work the Scottish and Welsh Governments of the ‘Devolution and You’ programme to take steps to encourage more staff by ensuring the full range of Civil Service interchange between administrations. leadership programmes include a Expanding opportunities for staff, for significant devolution dimension. This example via loan and secondments, should apply to leadership programmes across administrations would have the such as the Fast Stream, Future Leadership additional benefits of expanding career path Scheme and Senior Leadership Scheme. opportunities and providing experience within The Cabinet Office should work with other organisations of varying sizes, structures departments to ensure internal departmental and functions. Beyond this, individuals and leadership programmes also have significant institutions could benefit from an expanded

25 Review of UK Government Union Capability

set of working relationships and networks that such interchange will provide. Although staff in the UK, Scottish and Welsh Governments benefit from extensive job opportunities as part of the same Civil Service, the Northern Ireland Executive functions with a separate Civil Service. While this might currently act as a barrier to more regular exchanges, the benefits of previous interchanges were brought to the attention of the Review. There appears to be a mutual appetite to encourage and enable greater interchange among NICS and UK, Scottish and Welsh Governments. While respecting that NICS is a separate service, the UK Government should look to work jointly with NICS to increase interchanges. Cross government roles in the Civil Service should be open to NICS staff, whilst NICS roles should be more routinely open to civil servants working in the other administrations. To support this, NICS roles should be advertised on the Civil Service Jobs platform, which should be also open to NICS staff. The UK Government and NICS should work together to explore where both could benefit more from an increase in sharing best practice and, where suitable, resources. The Review heard a promising case for NICS to benefit from the Civil Service Commission making its expertise available in a Northern Ireland context. Extending its role in this way would allow NICS to benefit from the commission’s wider work, while ensuring it was accountable to Northern Ireland Executive ministers for its work in Northern Ireland. Additionally, where appropriate, Civil Service learning and development, as well as leadership programmes, should be open to civil servants from NICS.

26 Spending

Chapter 3

Spending

The Union is essentially based on solidarity. Its Public Money.7 For a department to spend citizens share an expectation of standard of money, it has to obtain both the approval of living, quality of infrastructure and recognition Parliament for its budget, through the Finance of fundamental rights and freedoms. One of Bill or supplementary estimates, and the the core functions of government is to collect ambit, or legal authority to spend, in any given taxes from its citizens and to redistribute those area. Following devolution, UK Government common resources in the way it considers departments have generally not spent in most appropriate. UK Government funding areas of devolved policy, though some limited should support communities in all parts of powers remain to do so.8 the UK. At the same time, UK funding in Scotland, Wales and Northern Ireland should not undermine the democratic accountability Block grant of different levels of government, or destabilise It is for the devolved administrations to set the the devolution settlements. Changes which budget for devolved services from the block affect the Barnett Formula are out of scope grant they receive from the UK Government for this review. However, significant evidence (and their own tax revenues and borrowing) and commentary was received on other ways according to local needs and priorities. This the UK Government funds public services in second type of funding is calculated using the Scotland, Wales and Northern Ireland, which relatively mechanical Barnett Formula (devised this chapter considers. in 1978). The calculation of how much money is allocated to the block grant is based on looking at changes from the previous year’s UK departmental spending equivalent England spending and applying the The first type of funding in Scotland, Barnett Formula, which applies a population Wales and Northern Ireland is on projects share to these changes. So, if health spending and policies in reserved areas, where UK in England goes up, the Scottish and Welsh Government departments spend money Governments, and the Northern Ireland across the UK on priorities set and approved Executive receive a budget increase, in by UK Government ministers. Examples proportion with the size of their population. include spending on security or defence, broadband, or the work of the Research While the devolved administrations were Councils. At the start of each spending period, initially funded almost exclusively by the UK HMT will allocate each department a budget Government block grant, the devolution of to deliver its priorities. It will then monitor the further tax and borrowing powers means they department’s spending against these priorities now have more accountability for the size of and against the principles set out in Managing their budget, as well as how this is allocated between devolved public services.

7 HM Treasury, ‘Managing Public Money’, available at: https://www.gov.uk/government/publications/managing-public-money 8 As set out in the Local Government Act 2003, Industrial Development Act 1982 and Infrastructure (Financial Assistance) Act 2012 27 Review of UK Government Union Capability

Additional spending Challenges The third type of UK Government funding is Over recent years questions have been raised provided to the devolved administrations to as to whether the UK Government’s spending spend in specific areas or specific projects levers are sufficient in Scotland, Wales and either in reserved or devolved areas. For Northern Ireland and whether changes might example, if there is extreme weather in one be required to ensure better delivery of part of the country but not nationally, it might services and other initiatives for the whole of be more appropriate to provide funding to the UK. In particular, there are concerns about support those areas affected rather than the inability to celebrate UK-wide cultural UK-wide. Similarly, this can work in other initiatives effectively, or to ensure UK-wide areas where there is agreement between the strategic priorities. As the UK leaves the devolved administration and UK Government European Union, there is also a debate around to work in collaboration. One of the most the delivery mechanism for the domestic notable of these is the City and Growth replacement to EU programmes. deals programme, where funding is provided by the UK Government to the devolved It may be argued that UK Government funding administrations. The purpose is to transform in relation to devolved matters, albeit with major cities and areas over a ten to twenty agreement, makes it unclear where different year period according to priorities determined governments’ responsibilities lie. In systems locally between local authorities, business of devolved government, it is important the and universities. electorate understands which government to hold to account for levels of funding and As a matter of technical practice, this UK how funds are spent. However, it is also Government funding is provided alongside important not to overstate this risk. The UK the block grant and ring fenced for pre- Government has no incentive to blur levels of agreed projects. The same is true for Northern accountability. It is in the interests of the UK Ireland funding directed towards addressing Government to ensure that funding is properly specific issues, like that agreed alongside the targeted and does not impinge on the policy Stormont House Agreement. Other examples initiatives for which devolved governments will of this type of expenditure are investments be held to account. It is, however, not clear to of UK-wide significance which, in technical what extent, once additional UK Government accounting terms, fall into devolved areas of funding in devolved areas is agreed (for competence, like UK Government additional example in City Deals), the UK Government investment in V&A Dundee, or the Lloyd has the necessary presence on the ground to George Museum, Llanystumdwy. support delivery. As discussed in the chapter on communications, there is a tendency to Actual spend on public services per head fund and forget as well as devolve and forget. in the UK is: £11,190 in Northern Ireland, £10,881 in Scotland, £10,397 in Wales, and The Review has also considered whether £9,080 in England. The UK average spend per additional UK Government funding in head is £9,350.9 Scotland, Wales and Northern Ireland risks diverting resources from parts of England, which might also have a valid claim for additional funds. However, it should be

9 National Audit Office, ‘Investigation into devolved funding’ available at:https://www.nao.org.uk/wp-content/uploads/2019/02/Investigation- into-devolved-funding.pdf

28 Spending

noted that the sums of money used for Northern Ireland to positively influence UK funding projects in devolved areas – while Government spending priorities, given their significant for those areas – are relatively small own modest departmental budgets. The in comparison with the budgets of larger Review seeks to build on the success of joint departments. Also, the underlying rationale investment by creating greater opportunities for the kind of funding proposed here is that it to work with the devolved governments will improve life in the whole of the UK. Often and encourage co-operation. However, it consideration of spending is done in ‘nation’ is also recognised that funding by the UK terms rather than driven by the need to Government in devolved areas must not consider cross-border shared economic areas. replace core funding and must be applied with Moreover, funds to enhance collaboration the support of the devolved governments. within the UK are modest compared to the potential costs to all parts of the UK that It is recommended that HMT should set would be incurred by all parts of the UK aside a fund for UK-wide projects. In should the current sense of solidarity within reserved areas this fund should be aimed the country ever break down. at UK strategic projects. Departments developing such initiatives should be able to It is also sometimes suggested that the bid for resources from this fund in addition UK Government should be prepared to to the money they receive for UK-wide policy give funding directly to local authorities in implementation from the Spending Review. Scotland, Wales and Northern Ireland as The aim of this fund would be to address a way of ensuring that funds are used for the challenge that when prioritised, projects their intended purpose. While there may be in Scotland, Wales and Northern Ireland will a case for, exceptionally, ringfencing some often compete poorly with those in England. funding to direct at a specified purpose, the It should also allow for greater cross-border Review has concluded that it is not necessary consideration in shared economic areas. It or productive to bypass the devolved would also provide Whitehall departments governments in funding arrangements and with a positive incremental incentive to would be difficult to do without legislation. make the Union a central part of their policy As noted elsewhere, there is a need for development and delivery. This fund should be transparency in funding arrangements, and directed towards increasing reserved activity if such arrangements are open to public in Scotland, Wales and Northern Ireland scrutiny, direct funding should not be required without impacting standard ‘value for money’ to achieve the intended outcome. assessments, which departments will use when considering the allocation of funding for projects. It is anticipated that this fund will be Recommendations used to co-fund projects alongside funding In considering the question of spending, from existing allocations. the Review has rigorously taken note of its As discussed earlier in this report, there terms of reference and has not considered should be a new sub-committee dedicated changes to the Barnett Formula. Instead, the to considering Union policy. The Review Review has sought to balance the concerns concludes this sub-committee would be expressed with creating the right incentives the most appropriate forum to consider the across government to make sure the whole allocation of this funding, under the leadership UK is at the centre of policy considerations. of the new Secretary of State but working in In particular, creating a greater role for the tandem with the Chancellor, or delegated to Secretaries of State for Scotland, Wales and

29 Review of UK Government Union Capability

the Chief Secretary to the Treasury. Projects department with the support of the devolved demonstrating a positive local impact in governments would be in a strong position Scotland, Wales or Northern Ireland would to make a case for funding to HMT. By be most appropriate for this type of fund. In supporting co-operation, this recommendation further support of this, changes could also complements the approach proposed for be considered to guidance on appraising and reformed intergovernmental relations – to evaluating business cases to put the Union change the mindset from simply dispute more central to these considerations. management to a more positive agenda of finding reasons to work together. In devolved areas, there should be a second portion of the same fund, which The Review does not make specific is open to bids from UK Government recommendations on the size of the fund, departments and devolved governments but expects that to deliver significant UK- working in co-operation. That is, the funds wide strategic priorities it is likely to need to would be applied to projects where there be in the hundreds of millions, akin to the was agreement between a UK Government scale of funding allocated to City Deals over department and individually the Scottish a comparable period. As a result, it does Government, Welsh Government or Northern not call into question anything related to the Ireland Executive. Barnett Formula.

The second co-operation fund would UK Government departments, when incentivise cross-border working between providing funding in Scotland, Wales and the different administrations and could Northern Ireland, outside of the block enable different types of co-ordinated grant, should monitor the application policy innovation in different parts of the and effect of that funding at local level to UK, including England. Examples include ensure value for money. innovative fishing or farming techniques, to efforts to tackle drug abuse, increase Although, as noted above, funding schemes productivity or reduce carbon emissions. This such as City Deals can be considered a sort of approach to common endeavours success, it is nevertheless essential that the is discussed again in the section on UK Government’s interest in the project does intergovernmental relations. not end when funds are delivered. The impact of the funding at local level must be monitored It is important to recognise that where and assessed to ensure that not only are the something has been devolved there are funds delivered to the right destination, but still opportunities for working together and that they have the intended effect. building a common policy across the UK. In these circumstances the four governments, Where funds are spent in relation to reserved or combinations of them, can come together matters, a UK Government department clearly as partners in a common endeavour. UK has an interest in ensuring that the taxpayer Common Frameworks, in the process of receives value for money. However, even being established for when the UK leaves the where the UK Government does not have European Union, prove this point. The funding a formal accounting officer role, it should incentive would work in two ways: first, still protect the interests of the public purse devolved governments would be presented by close monitoring of the schemes, which with the opportunity to work with the rest of are being funded and putting in place the the UK or, where it did not wish to work jointly, necessary staff resources to do so. to refuse funding. Second, a UK Government

30 Intergovernmental relations

Chapter 4

Intergovernmental relations

Since the transfer of significant powers to therefore handled on a more informal basis devolved institutions in Scotland, Wales through well established party channels. The and Northern Ireland, the three devolution machinery for handling intergovernmental settlements defined in statute have set out the relations was never stress-tested from the roles and responsibilities of UK and devolved beginning for a situation where there are institutions. Throughout this the UK Parliament governments of different political hues in the remains the Parliament of the whole of the UK four capitals. with MPs representing constituencies across England, Scotland, Wales and Northern In the context of these significant changes Ireland. Alongside the statutory framework, there is broad consensus, with which the non-statutory arrangements have supported Review agrees, that the IGR machinery is intergovernmental relations (IGR) between no longer fit for purpose and is in urgent the UK Government and three devolved need for reform. administrations. It is important to be realistic about what Since their establishment these IGR this reform can achieve. No IGR machinery, arrangements have remained broadly however perfect, is capable of resolving unchanged despite significant shifts in fundamentally different political objectives of constitutional and political circumstances. the respective administrations, particularly where these involve very different visions First, changes made over the last ten years for the UK’s constitutional future, and nor have substantially increased the powers and should it. It is, however, realistic to expect that responsibilities of the devolved institutions. serviceable and resilient working relationships, They have also meant the settlements are based on mutual respect and far greater more complex with many areas of shared levels of trust, can be established between competence and overlap. the governments across the UK. Indeed it is clear that beyond well-publicised political Second, the UK’s exit from the European differences, the administrations can and do Union has heightened the imperative for work constructively together. collaborative working, because UK common frameworks will need to replace EU rules Looking to the future it will be essential to put and the UK Government’s reserved policy in place a more transparent, predictable and responsibilities – for example negotiating trade robust system for intergovernmental relations or other international agreements – will interact to support the day-to-day contacts between with areas of devolved competence. administrations. The machinery supporting IGR should act as a stimulus for more mutually Third, the governments in London, Cardiff and beneficial working relationships rather than Edinburgh were, at the outset of devolution, as a platform for public dispute or grievance. predominantly drawn from the same political Whether this machinery is set out in statute party. Intergovernmental relations were

31 Review of UK Government Union Capability

or political agreement is an area of debate, when appropriate. Although the JMC Plenary which the Review seeks to address through its is intended to meet at least once a year, recommendations. it has at times gone much longer without meeting. Unlike summits of the British- An improvement in IGR should also have the Irish Council the JMC is generally restricted positive effect of encouraging more dialogue to the formal meeting and lacks, beyond and relationship building between the UK some bilateral meetings, a wider set of Parliament and the devolved legislatures. This surrounding engagements. could build on the recent welcome innovation of the Inter-parliamentary Forum on Brexit. A Memorandum of Understanding (MoU) and supplementary agreements sets out that “the JMC is a consultative body rather than an Joint Ministerial Committee executive body, and so will reach agreements 11 Since 1999, the primary IGR machinery rather than decisions” Through this the JMC has been the Joint Ministerial Committee does not bind any of the administrations. (JMC), which works to the following Terms Although the MoU has not been updated of Reference:10 since 2013, a Cabinet Office led review into IGR is currently ongoing. To date, the following • to consider reserved matters which draft principles have been agreed (but not yet impinge on devolved responsibilities, formally agreed by the JMC Plenary) to build and devolved matters which impinge on on and sit alongside the existing MoU and reserved responsibilities; inform its future development:12 • where the UK Government and the • maintaining positive and constructive devolved administrations so agree, relations, based on mutual respect to consider devolved matters if it is for the responsibilities of governments beneficial to discuss their respective across the UK and their shared role in the treatment in the different parts of the governance of the UK United Kingdom; • building and maintaining trust, based on • to keep the arrangements for liaison effective communication between the UK Government and the devolved administrations • sharing information and respecting under review; and confidentiality • to consider disputes between the • promoting understanding of, administrations. and accountability for, their intergovernmental activity The Prime Minister chairs JMC Plenary • resolving disputes according to a clear meetings attended by the heads of the and agreed process devolved administrations and Secretaries of State for Scotland, Wales and Northern In addition to the JMC Plenary, the JMC also Ireland. Other UK Government and devolved meets in a number of sub-committees. Prior administration ministers are invited to attend to the EU referendum these comprised a

10 ‘Memorandum of Understanding and Supplementary Agreements’, available at: https://assets.publishing.service.gov.uk/government/ uploads/system/uploads/attachment_data/file/316157/MoU_between_the_UK_and_the_Devolved_Administrations.pdf 11 Ibid 12 ‘Agreement on Joint Working’, available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_ data/file/814304/2019-07-03_Agreement_on_Joint_Working.pdf

32 Intergovernmental relations

JMC Europe (JMC(E)) and a JMC Domestic commitment has been warmly welcomed and (JMC(D)). JMC(E) was to take place in shows the benefits increased transparency advance of European Council meetings and can have in shaping constructive and JMC(D) was designed to discuss a range collaborative behaviours. of issues across the devolved and reserved policy space. However, JMC(D) has not met Outside of the JMC machinery, and in since 2013. Since the EU referendum, a new addition to the everyday interactions between JMC EU Negotiations (JMC(EN)) has met 20 administrations, there are multiple forums times in order to facilitate engagement and for technical discussions which highlight collaboration between the UK Government the benefits of the four administrations’ and devolved administrations on the UK’s ability to work constructively. Following the exit from the European Union. JMC(EN) has, Smith Commission, the UK Government with the exception of one meeting, been and Scottish Government have worked chaired by the UK Government although it has together via the Joint Ministerial Working sometimes taken place outside of London, as Group on Welfare to implement the devolution has its sub-committee the Ministerial Forum of substantial welfare powers. The Inter- (EU Negotiations). Ministerial Group for Environment, Food and Rural Affairs was established following the EU The JMC Plenary and JMC sub-committees referendum to provide central co-ordination are supported by a joint secretariat. The and promotion of greater collaboration in areas Cabinet Office has lead responsibility for this of shared interest between administrations. and despite the secretariat supporting all four Furthermore, there are specific committees administrations, it is not regarded outside the established to help manage matters of UK Government as a truly joint secretariat to finance between HMT and the devolved the extent the MoU would suggest. administrations. After meetings of the JMC(P) or JMC(EN), a There is now a widely-held view that the joint communique is produced setting out the JMC structure sitting above the technical areas discussed. However, communiques are level forums needs to be fundamentally reset. short, largely agreed in advance and provide What has become a forum largely for airing little insight into the matters discussed. The grievances and managing disputes needs to void this creates is filled by media statements evolve into a forum for fostering more effective by attendees focused more on political collaboration. This is not easy to achieve in the messaging than providing transparency. current context of the UK’s as yet unresolved This has resulted in these JMCs being and highly-charged withdrawal from the EU. characterised largely as a forum for airing grievances and managing disputes rather than The JMC machinery must look and feel like a for fostering effective collaboration. This issue joint endeavour. In the absence of a regular has been exacerbated by limited reporting to programme of meetings across the full range Parliament following JMCs. of issues, there is a clear sense that JMC meetings take place at the request of the UK Following the EU referendum the Government. Some have argued that the best administrations have worked closely to way of achieving regularity is to put IGR on a address the need for UK-wide Common statutory footing, and to use that as a means Frameworks once the UK has left the to build trust. The Review concludes this European Union. The UK Government would fundamentally miss the point of what has committed to providing jointly agreed the IGR machinery is there to achieve – the quarterly reports to Parliament on progress management of political matters. towards Common Frameworks. This 33 Review of UK Government Union Capability

While the Review therefore agrees there the devolved administrations, this has led to should be a far greater role for Parliament in frustration from the devolved administrations scrutinising discussions which take place in an around the JMC(EN) process. This has IGR setting, to put their basis in statute risks been compounded by the use of the term dragging the courts into what fundamentally ‘oversight’ in the JMC(EN) Terms of Reference, should be a political and parliamentary realm. which created a false impression from the In order to build respect and trust around IGR outset about what would be possible and it is therefore important political differences are therefore achieved. handled in a political, not legal, space. Indeed, statute could also prevent the necessary The differing nature of JMC(E) and JMC(EN) flexibility required in the system to respond highlight that, although at times the UK to changing circumstances. Moreover, Government is seeking to come to a joint increasing the scope to involve the courts to decision for a UK-wide approach on a resolve disagreements could militate against devolved matter, at other times it is informing reaching timely agreement on contentious on a reserved policy matter. However, issues. Greater transparency and more the approach the UK Government takes robust scrutiny by the UK Parliament and the to constructing these different types of devolved legislatures is a more appropriate discussions does not differ. This has led means of encouraging the right types of to further frustration on the part of those collaborative behaviours. The Review therefore attending from the devolved administrations concludes that this can be far better achieved and criticism of JMC as simply a talking shop. by agreeing a clear statement of intent The UK Government needs to be much clearer between all parties. when it is consulting on reserved matters and when it is seeking to come to a joint decision The Review heard that JMC(E) is often on matters engaging a devolved competence. regarded more positively than other committees, largely because it has a clarity The Review heard varying views on how IGR of purpose alongside a regular drumbeat machinery should approach joint decision- of meetings to coincide with EU Council making on areas of devolved or shared meetings. This resulted in a shared need to competence. There are different ways to establish, beforehand, the UK’s negotiating address this, from co-decision by consensus position. Not doing so risked undermining all through to a voting system. However, parties’ positions resulting in an undesirable formalised voting systems dilutes the need outcome for one or more constituent parts to build trust through consensus and by of the UK. This created a platform for design imposes decisions on administrations compromise, which has not been a universal in their own areas of competence without feature for the wider JMC machinery. their consent. The pace of policy development around The Inter-Ministerial Group for Environment, the UK’s exit from the EU has strained the Food and Rural Affairs provides an example trust required for effective intergovernmental of co-decision by consent. The location relations. As policy issues have developed, and dates of the meetings are agreed on an little time has been afforded to discuss annual basis with the intention of a rotating details and share documents between host and chair. This helps build a sense of administrations. While the UK Government joint endeavour while agendas are provided has at times rightfully completed internal by a supporting officials’ board and jointly collective agreement before sharing with agreed. This style of group not only shows it is possible to create positive opportunities for

34 Intergovernmental relations

IGR to address areas of shared interest but will be best served by regular engagement has the potential to build on the approach with the devolved administrations in the to co-operation funding set out earlier build up to, process of, and conclusion of in this Review. negotiating new trade agreements. The asymmetric nature of the UK’s structure Secondly, there were also differing views and that of the three devolution settlements of the roles of the Secretaries of State for inevitably leads to an imbalance between Scotland, Wales and Northern Ireland within representations from across the UK. The the JMC and IGR more generally. Although, Review heard of two particular issues raised to improve the numerical division between by the asymmetric nature of the current administrations, there is a case for reducing devolution settlements. the number of UK Government ministers attending JMCs, a balance needs to be The first was regarding the representation of struck to ensure that IGR structures allow UK England within intergovernmental structures ministers to suitably carry out their full range of and in particular the ‘dual hatted’ nature of responsibilities. the role of UK Government ministers. While the settlements differ, largely, on reserved matters the UK Government is speaking Recommendations for the whole of the UK. At other points – where the issue concerned is a devolved Intergovernmental relations should be competence – they are speaking primarily recalibrated and the JMC replaced by for England. On the one hand this can be a UK Intergovernmental Council (UKIC) seen as an over-representation of England, with a number of sub-committees. Mutual given the UK Government ministers are respect and trust are central to effective representing both England and the UK. On intergovernmental relations and a new the other hand, some see this as deficient structure is needed to reset relationships from an English perspective, given that UK for the future. This structure should look Government ministers represent the whole to provide regular and high level ministerial of the UK on reserved matters and not just engagement above, and in addition England. As discussed under capability, much to, the wider interactions taking place of this needs to be addressed through a between administrations. As a significant far better understanding in UK Government departure from the current JMC, the title departments of spillover effects of policy. ‘UK Intergovernmental Council’ represents much more than just a change in name, and This issue is further complicated on matters far better reflects the ambitions of this new of shared competence and again highlights IGR machinery. To provide regularity and the need for IGR structures to be clearer when suitable flexibility, the four administrations the UK Government is consulting on reserved should agree a new MoU with a very public matters and when it is seeking to come to a political declaration to underpin the UKIC and joint decision on devolved matters. This will politically bind the administrations into a new become increasingly important as the UK way of working. The new arrangements should looks to negotiate new trade agreements be much more open to scrutiny to further around the world. The UK Government support those involved to conduct business in is responsible for conducting trading the spirit of collaboration. negotiations with foreign states. However, given this will often interact with areas of devolved competence, the UK Government

35 Review of UK Government Union Capability

meeting and seek to build on the sort of The Prime Minister should host a summit reporting agreed on UK Common Frameworks at least twice a year based around a already in place. meeting of the UKIC with the heads of each administration. Summits should not be restricted to the meeting of UKIC and There should be a number of sub- committees within the structure. Given the should provide opportunities to build trusted need to adapt to changing opportunities as relationships by including wider engagements. well as challenges, a one size fits all approach Given the priority Prime Ministers have will not work. Instead, committees should be attached to this issue, the Review considers constituted and meet dependent on individual this level of commitment entirely appropriate aims and objectives. Each committee within the constraints of their diary. Summits should be clear from the outset whether it is could include a press conference afterwards consultative on a reserved area, or whether so all attendees can hear each others’ it is a decision-making forum where all three comments on the discussion and more devolved institutions have competence.13 collegiate behaviours can be encouraged. Some may benefit from the support of the independent secretariat. In reserved areas The UKIC should be supported by an it is more likely to be appropriate for the independent secretariat. A standing independent secretariat should work closely secretariat to be provided from within the with all four administrations on the schedule UK Government, however the principles of and agendas of meetings. This secretariat transparency remain as relevant. would be largely administrative and manage the logistical coordination between all The new UKIC should look to take on parties. Although the secretariat should a decision making role via co-decision by consensus. The result of an inability strive to ensure agreement on agendas, all to proceed with a decision by consensus administrations should be able to propose will differ depending on the topic under items. This will ensure all parties to the council discussion, which is discussed further feel confident their representations are being below. However, whenever it is not possible fairly heard. The recruitment of the secretariat there should be complete transparency should be a joint exercise and roles should on why consensus was not possible be open to staff from all four administrations. and why whatever conclusion has been Consideration should be given to a location reached. The effect of this is to open up the outside of London for this secretariat. process to scrutiny and create incentives to find consensus. UK Government ministers should provide a statement to Parliament following each The UK Government should use the new meeting. The devolved administrations could also consider providing statements to their Cabinet sub-committee (recommended respective legislatures. To further enhance earlier) to agree UK Government positions scrutiny, the secretariat should lead on the in advance of meetings of the UKIC and its sub-committees. While there is a role for production of two annual UKIC reports. These the Secretaries of State for Scotland, Wales should follow the UKIC heads of government and Northern Ireland in supporting the Prime summits but also report on the activity of Minister at UKIC heads of administrations sub-committees. This should be in addition summits, the Cabinet sub-committee to informative communiques following each should be used as their principal means for

13 Where matters only affect one or two administrations, these should be considered outside of this JMC structure.

36 Intergovernmental relations

influencing the UK Government’s position A sub-committee focused on the UK’s future in advance of UKIC sub-committees. This economic partnership with the EU and future should reduce the number of UK Government international trade arrangements should ministers at UKIC sub-committees, creating be chaired by the new Secretary of State better atmospherics in the room, and at the and bring together relevant Brexit and trade same time enhancing the pivotal role the three ministers from the UK Government and the Secretaries of State have in determining and devolved administration. The UK Government influencing the UK Government’s position. should be prepared to share its position at a As a forum for collective agreement, this will developmental stage in confidence with the also allow the UK Government to share more devolved administrations, in the full knowledge information at an earlier stage in the process. of all concerned that any breach of confidence will have adverse consequences. This would While the Review does not make specific follow from extensive technical engagement recommendations about how the English expected to take place outside of the voice is understood, it notes that consideration UKIC architecture. could be given to establishing an English Regions Forum, to feed views in from other DIT and other UK Government sub-national governments in England to departments should build on wider relevant UK Government ministers ahead of examples of technical engagement and UKIC meetings. explore establishing inter-ministerial groups. The Inter-Ministerial Group for The exact nature of sub-committees should be Environment, Food and Rural Affairs provides determined by the Prime Minister and heads one example of this, however departments of the devolved administrations, however should not be restricted by a one size fits the Review considers that frameworks all approach. While UKIC sub-committees and the internal market, as well as trade may meet a number of times a year inter- and future EU negotiations are early areas ministerial groups would provide a platform for appropriate for sub-committees. In addition, more regular engagement and more detailed considerations could also be given to how UK technical discussions. Although separate from wide issues of common interest, like efforts the UKIC structure, these forums could, where to address climate change could feature in suitable, feed into UKIC discussion on a regular this architecture. or ad hoc basis. For example, while UKIC A UKIC sub-committee focused on the should focus on high level issues and strategic internal market could provide a forum for high matters, inter-ministerial groups should level strategic discussions not just regarding consider and discuss details and technical individual frameworks but on a whole range of matters. With regard to international trade, issues relating to the functioning of the UK’s this multi-layer approach will provide devolved internal market. Given discussions are likely to administrations a substantive platform to be primarily based on devolved areas, there be significantly involved in the formulation is a case for this sub-committee to have a of the UK Government’s approach to trade rotating chair between administrations and negotiations, while respecting that trade would be an example of a forum seeking negotiations are ultimately a reserved matter. to make co-decisions by consensus. Non- For UK Government departments responsible consensus could mean there is an agreement for policy primarily in the devolved space, inter- to no change or to proceed with change ministerial groups would provide a new forum but not on a UK-wide basis, conscious of sharing information and best practice while of the impacts to the UK internal market ensuring more substantive engagement around of this action. spillover of policy development and delivery. 37 Review of UK Government Union Capability

Handling disputes following the general election. However, the UK Government did not agree that this The package of IGR reforms proposed by the case should be considered by the dispute Review is specifically aimed at increasing trust resolution process, making clear the funding and reducing tensions leading to disputes. By was provided in line with HMT’s Statement including opportunities for far more scrutiny, of Funding Principles. Although the UK there are many more opportunities to resolve Government set out its reasoning, the fact it areas of political disagreement earlier in the could block the process while also being one process. However, as noted at the outset, of the parties involved was considered by there are limitations to what IGR can achieve many to be a clear conflict of interest. and it is therefore necessary to be clear on what is required should an area of political This highlights the strong case for the creation disagreement become a formal dispute. of a more robust and trusted dispute handling process. The Review heard a number of The current MoU underpinning the JMC sets suggestions to enhance the handling of out a procedure for dispute avoidance and disputes including binding independent resolution. This process includes an attempt arbitration. Although this could provide a more to settle differences at working level before definitive outcome from disputes, it not only reference to the secretariat and allows for, risks confusing political disputes with possible where necessary, a UK Government-chaired legal disagreements and also fails to support JMC meeting to attempt to resolve disputes. wider ambitions for creating more respect and The process also provides an opportunity for trust between administrations. Some have independent analysis to be commissioned suggested a solution would be for one of the with the support of the secretariat. There have four administrations not directly involved in a been only a handful of formal disputes raised dispute to act as a mediator. However, this through the JMC process. risks unnecessarily drawing administrators into While the lack of formal disputes over the disputes unconnected to them and may not past 20 years should be welcomed, it could always be possible, for example if a dispute also be an indicator of a lack of confidence in involved all four administrations. Therefore, the existing resolution process. The Review the new UKIC should have a clear dispute heard criticism of the current JMC dispute handling process. resolution process, particularly in relation to Within these reforms there should be a clear the perceived role of the UK Government as set of robust steps, including extensive the arbitrator of any possible dispute due to its informal discussions at official and ministerial role as the chair of JMC meetings (including level, aimed at resolving a dispute. In addition, where it is one of the parties involved in consideration should be given to including the dispute). Furthermore, the process is an independent element where there is a based on consensus, which means that any benefit to all parties, to address concerns administration involved in a dispute has to about one party being both judge and jury. agree that it is a dispute before it enters into The independent secretariat should be the formal dispute process. This means that responsible for administratively managing the administrations party to a dispute could block dispute process. the dispute from being escalated if they do not perceive it to be a legitimate dispute. For The independent element could include in example, in 2017, the Welsh and Scottish some circumstances the use of a mediator. Governments looked to raise a dispute relating The mediator could facilitate further discussion to the funding agreed for Northern Ireland between the parties if they considered

38 Intergovernmental relations

this helpful, as well as consider evidence, including independent technical evidence, before making an impartial proposal on a way forward. The Review has noted the agreement already reached between the UK Government and devolved governments for an independent report and recommendations to inform the reviews of the fiscal frameworks for Scotland and Wales.14 A role for independent mediation could fulfil a similar function in the context of disputes. In keeping with the Review’s other IGR recommendations, the dispute handling process should be transparent both through reporting to Parliament and the UKIC annual reporting. The history of devolution demonstrates that the vast majority of possible disputes can, despite significant political differences, be avoided at an early stage. It is important that a new dispute resolution system does not hinder earlier action to avoid formal disputes.

14 ‘The agreement between the Scottish government and the United Kingdom government on the Scottish government’s fiscal framework’, available at: https://www.gov.uk/government/publications/the-agreement-between-the-scottish-government-and-the-united-kingdom- government-on-the-scottish-governments-fiscal-framework; ‘The agreement between the Welsh Government and the United Kingdom Government on the Welsh Government’s fiscal framework’, available at:https://assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/578836/Wales_Fiscal_Framework_Agreement_Dec_2016_2.pdf

39 Review of UK Government Union Capability

Chapter 5

Appointments to UK bodies

To realise the benefits of embedding the Existing public bodies whole of the UK at the heart of government, consideration needs to extend beyond the No two public bodies are the same and, Whitehall machine. as a corollary, the appointments process for each must be tailored. Indeed, some Each year, the UK Government makes public appointments are regulated by the appointments to the boards of over 550 Commissioner for Public Appointments, of public bodies.15 In total, these organisations which some have an independent panel spend over £200 billion per annum and deliver member, and some are subject to pre- crucial services across all aspects of public appointment scrutiny in Parliament.16 Many life, from running museums to regulating the public bodies have been long established, nuclear deterrent. Public bodies also make well before devolution was a construct of a vital contribution to communities through the UK’s constitution. Since devolution, the organisations such as Network Rail, the BBC legislation underpinning some public bodies and UK Sport. As such, the majority have has required that the devolved administrations an important role in helping to ensure public are consulted during the appointment services are run by, and delivered for, the process. While valuable in ensuring nation whole of the UK. specific representation for some bodies, it is important not to conflate consulting While of course employees of public bodies devolved administrations on candidates with have responsibilities to ensure their service ensuring they have the skills to support their or function is effective across whichever organisations deliver its business in a way jurisdiction they cover, board members have which enhances the whole UK. an incredibly important role in helping shape the tone and values of the organisation as Where public bodies have a responsibility for a whole. For public bodies that have a UK- the whole of the UK, appointing individuals wide responsibility, Union capability is an with an understanding of nation-specific issues essential part of this. The Review has already and how to effectively operate UK-wide should commented on the importance of this for be fundamental. While some departments UK Government departments. To ensure the may actively consider this in their appointment level of sensitivity is considered at all levels process, the Review has found that this is of government, it is therefore important to not sufficiently understood nor strategically consider the same issues with public bodies. assured by the centre.

15 ‘Diversity Action Plan’, available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/ file/812694/20190627-CO_Diversity_Action_Plan_FINAL-6.pdf 16 A list of ‘significant appointments’, agreed by ministers and the Commissioner for Public Appointments, is published. These competitions must have a Senior Independent Panel Member (SIPM) on their Advisory Assessment Panels. A SIPM is an individual who is independent of the department and body concerned, and should not be politically active.

40 Appointments to UK bodies

This problem is compounded by a lack of replicated by new UK-wide bodies. While transparency: it is difficult to ascertain which the collective agreement process, already public bodies require Union skills on their discussed, will help ensure this at the end of board. Indeed, the consideration of these the process, it’s important this is embedded issues in the public appointments process as a strategic factor as departments start is not clear in all cases, which breeds a lack to consider the creation of new bodies as it of confidence that the system works for the should be with all policy. The Review makes whole of the UK. two specific recommendations to that end.

This report recommends that an audit Establishing new public bodies of public bodies is undertaken. This should establish the extent to which an Although Union sensitivity may arise when understanding of nation-specific issues is bodies are being created, the Review considered an important metric by which has found that the ad hoc nature of such to assess candidates for public bodies with interventions is inadequate. The establishment cross-border competence. The outcome of of UK Research and Innovation (UKRI) this investigation should be published in a illustrates this well. public report which contains a list of public The Higher Education and Research Act 2017, bodies that are strategically important to the which underpins UKRI, did not initially contain Union. It should also determine which of these any provisions to ensure that members of the bodies require the consultation of the devolved board had relevant nation-specific experience. administrations and other stakeholders in the Under political pressure, the UK Government appointments process, and which require their amended the legislation to require ministers, agreement. This should be updated at least in appointing the UKRI board, “to have regard annually, and in the process of creating new to the desirability of the members including public bodies, there should be an awareness at least one person with relevant experience that their function might necessitate Union in relation to at least one of Scotland, Wales capability. This should be reflected in the and Northern Ireland”.17 In the UKRI case, the underpinning legislation. problem was resolved too late, and only after It is worth noting that the Review is not it had become politically charged. For other suggesting that every relevant public body public bodies it may not be resolved at all. should have members on its board who are There is no mechanism for addressing Union approved by ministers from the devolved sensitivity at an earlier stage. Although there is administrations. Nor is it recommending that evidence of improvement, much like the issues their consultation is necessarily required. discussed earlier in the report, the challenge is In many cases, the UKRI approach will to make the process more resilient and ensure be sufficient. its efficacy is not reliant on chance. The Secretary of State for It is crucial that these issues are addressed, Intergovernmental and Constitutional particularly at this juncture, as the UK prepares Affairs should oversee this aspect of the to leave the European Union and considers appointments process to ensure that domestic replacements for EU bodies. The public bodies with a UK-wide remit are functions of the 38 European agencies of representative of the UK as a whole. The which the UK is a member, may need to be new Secretary of State should work with UK

17 HC Deb 21 November 2016, Amendment 35 (now Sch 9 2(6) in the Bill agreed in the Commons, 21 November 2016).

41 Review of UK Government Union Capability

Government department to ensure there are sufficient appointees with the relevant nation- specific expertise. To achieve this, relevant data concerning existing appointees should be captured, and a database of individuals who have the relevant depth of knowledge to be appointed in future should be generated. Additionally, checks should be put in place to ensure that the list of public bodies specified by the audit are equipped with the requisite expertise. The new Secretary of State should have oversight of this, working closely with the Secretaries of State for Scotland, Wales and Northern Ireland.

42 Communications

Chapter 6

Communications

The UK Government is the government of However, it is essential for both sound the whole United Kingdom. The challenge is governance and the health of our democracy whether this is how it appears to its citizens that citizens are able to easily understand in all parts of the country. Arguably, in some which responsibilities fall to which levels of parts of the UK, the UK Government has government serving them. This is particularly appeared to retreat from the public sphere true in those parts of the UK which have since the advent of devolved government in two governments. the late 1990s. Although branding is a sensitive area, and The UK Government is in fact active in overly nationalistic branding would be Scotland, Wales and Northern Ireland. It insensitive in some contexts, it is nevertheless directly employs more than 57,000 civil important that the UK Government is visible in servants in Scotland, Wales and Northern what it does and what it funds. It should not Ireland and is responsible for considerable be embarrassed about promoting itself, and it investment in relation to reserved matters. It should, as a matter of principle, be transparent is also involved in joint funding projects with about its activities. the devolved administrations, such as the City Deals funding initiatives. However, the extent As noted in the Civil Service Capability section to which the UK Government’s role in these of this report, there will be UK Government projects is visible and is widely understood by Hubs in Scotland, Wales and Northern Ireland. the general public has been questioned. These new buildings constitute an opportunity for the UK Government to position itself back After 1998, it was important that the devolved at the heart of public life in the capital cities. administrations established themselves in There will be increased public awareness of each nation. Indeed, before devolution the the UK Government’s work in those cities and UK Government would not have considered the UK Government must be sure its work it necessary to the same extent as is now the there will stand up to scrutiny. The quality of case to publicise the extent of the continued the jobs, or the events being held there will be presence of civil servants who work directly noticed locally. for the UK Government. UK Government departments providing services in reserved Some UK Government departments compile, areas did not always market themselves and have ready access to, data about what overtly as arms of the UK Government. the department is doing in different parts of the UK. Where this data is available, it allows There was also, in Whitehall, a sense departments to test the effect of their policies of ‘devolve and forget’, which resulted in each part of the UK. When Government in rowing back in areas where the UK ministers visit any part of the UK they can retained an interest. be given data about what their department is doing there, what its effect is on the local

43 Review of UK Government Union Capability

economy, how many people it employs and degree of critical scrutiny from journalists how much it spends. and academics. However, this practice is not universal among Since the referendum in September 2014, departments which have responsibilities in the papers have not been revised, updated Scotland, Wales or Northern Ireland. The or adapted for use beyond the particular data may not be readily available or compiled circumstances of the 2014 referendum. in such a way as to be useful on ministerial Moreover, there is no equivalent analysis for visits, either by the department’s ministers Wales or Northern Ireland. or by ministers from other departments who might need it as background information for In spite of the ‘write-round’ collective their own visits. agreement process, and a general norm to the effect that UKGG and NIO should be informed Even if a visiting minister has access to their about policy announcements impacting on department’s data, they do not have ready their areas of responsibility, it is often the access to data about other UK Government case that UK Government departments make departments. The absence of specific data announcements without their effect throughout for Scotland, Wales and Northern Ireland also the UK being properly understood. The result prevents the UK Government from receiving is public statements which misfire in Scotland, proper credit for the work of its departments. Wales or Northern Ireland, or which fail to maximise their potential effect in all parts of the The UK Government has aims and aspirations UK. In short, the policy and communications which apply to the whole country. For systems in Whitehall lack a holistic approach example, there is an aspiration to rebalance and can sometimes be poorly co-ordinated, the economy beyond Greater London and particularly in relation to announcements. spread the prosperity of south-eastern England. If data specific to other parts of the UK Government communications are subject UK is not available, how can it test the effect to central co-ordination via Number 10. of its policies in those areas? There is an overarching communications strategy, and, in that context, Union issues are Information and analysis of how being part discussed in a group which meets regularly. of the United Kingdom impacts on each part The offices of the Secretaries of State for of the UK is not readily available. Between Scotland, Wales and Northern Ireland are each February 2013 and August 2014, before represented in this group, and the directors of the Scottish independence referendum, communication for each office keep in touch the UK Government published a series of with each other regularly. papers with detailed research analysis on the benefits to Scotland of being part of the There is, of course, a common strategy and UK. The papers covered, in some detail, those responsible for communications meet topics such as currency and monetary policy, regularly to consider how best to make the financial services, security, energy, welfare case for the Union. What is required is a and pensions.18 strengthening of those efforts and a strong oversight at senior Cabinet level to ensure The analysis papers were carefully prepared. momentum and keep the strategy at the During a highly contested referendum centre of UK Government thinking. campaign, they were subject to a high

18 The conclusions of the series of papers were published in “United Kingdom, united future: conclusions of the Scotland analysis programme” (June 2014, Cm.8869). All of the papers can be found at: www.gov.uk/government/collections/scotland-analysis

44 Communications

A communications strategy aimed at officials present there at all times. It is hard promoting the cohesion of and solidarity within to see how they formulate policy without that the UK must address public perceptions in feedback and without the means to properly all parts of the UK, not only in the parts with assess the effect of their policies. devolved legislatures. The various publics in the UK are not sealed off from each other, and BEIS, for example, has a stakeholder manager share a common culture served by a common for Scotland, who is the first line of contact media industry (albeit with regional and for stakeholders and a line of communication national differences). When communications for businesses and business organisations. are prepared for one part of the UK, It seems a large area for one person to consideration must be given to their effect and cover, and, considering it seems to be an how they sound in the other parts. effective initiative, it also seems surprising that there are not stakeholder managers for UK Government departments frequently all large departments in Scotland, Wales and organise visits for their ministers to Scotland, Northern Ireland. Wales and Northern Ireland as well as all parts of England. As well as listening to the views of communities and stakeholders on Recommendations these visits, ministers also make regular policy The UK Government’s activities announcements, many of which resonate in in Scotland, Wales and Northern different ways in the various parts of the UK. Ireland should be clearly marked In theory, UKGG or NIO should always be with UK Government branding. The aware of, and supportive of, these visits and role of the UK Government should be announcements. However, it is not clear if properly acknowledged. This principle is visits are co-ordinated and supported in such essential for transparency and democratic a way as to gain the maximum benefit from accountability. It is particularly important that them. Similarly, there are occasions where the signage, promotional material and media offices of the Secretaries of State for Scotland, communications in any project include specific Wales and Northern Ireland are not aware of recognition of UK Government funding. forthcoming policy announcements from other departments and their potential effect in each The UK Government should acknowledge and part of the UK. respect the activities of devolved governments in their own areas of responsibility, including Further, ministerial visits do not always fulfil acknowledgement of successes. In return, their potential effect. They may be undertaken the Government should expect that its work only for one narrow policy purpose without in Scotland, Wales and Northern Ireland is any sense of an overarching strategy. At worst correctly attributed. All four governments they may be undertaken out of a sense of should respect each other’s communications duty but lacking in strategic purpose. As with with the public and, for example, respect public announcements, the issue is one of co- embargoes placed on news announcements. ordination and a common vision. It is not suggested in this report that While some departments have stakeholder governments should compete in terms of managers based in Scotland, Wales or branding and publicity. There is no need for Northern Ireland, this is not a universal either government, in a nation with devolved practice. There are UK Government government, to question the legitimacy departments with policy interests in those of the way the other explains its activities nations but no stakeholder strategy involving to the public.

45 Review of UK Government Union Capability

The creation of UK Government Hubs in The kind of data to be compiled will vary from Scotland, Wales and Northern Ireland, department to department. As part of their particularly those in the capital cities, are a departmental plan, each department with major opportunity to improve the visibility of policy responsibilities in Scotland, Wales or the UK Government and its officials. These Northern Ireland should list the data they need buildings should also be venues for active to compile specific to those nations and, if events programmes, which would include that data does not exist, resources should be trade events, HMT briefings and visits by made available to compile it. foreign leaders and officials. The UK Government should revise, All UK Government departments with update and adapt for contemporary policy responsibilities in Scotland, Wales circumstances the Scotland analysis or Northern Ireland should keep up- programme documents it published in to-date and accurate data about their 2014 prior to the Scottish independence activities and spending in those countries. referendum. There should be similar As noted above, UK Government departments programmes for Wales and Northern are not able to test properly the effect of their Ireland. All three analysis programmes should policies unless they have access to data be updated regularly and developed into specific to all parts of the UK. something that is more akin to a ‘State of the Union’ Report. In addition, when UK Government ministers carry out their duties in Scotland, Wales or The analysis produced by the UK Government Northern Ireland, they should have information in advance of the Scottish independence on the impacts of their own department in that referendum was a major and effective nation. It would also be useful if ministers and exercise in creating an authoritative body of their advisers also had access to data about work describing how the UK works today. other UK departments’ activity and impact. Analysis of this kind should be available Ideally, any visiting minister would have all the even where there is not an event such as a necessary data covering all the issues which referendum in prospect. are likely to arise during the visit in relation to the whole range of UK Government policies. An updated and expanded analysis programme would provide a ready source of Ready access to such data would aid the empirical information and analysis to inform cause of transparency about the work of the public debate and would assist both ministers UK Government. It would also allow ministers and officials. and civil servants to ensure that work is properly credited. The same efforts should be applied to making a similar analysis available to the citizens in UK Government departments should compile Wales and Northern Ireland. There would be such data as a matter of course without some overlap between the publications (for a statutory requirement that they do so. example, the benefits of UK membership Although the relevant legislation (the Statistics of international organisations, or the UK’s and Registration Service Act 2007) makes network of diplomatic offices, applies equally provision for the offices of the Secretaries in Scotland, Wales and Northern Ireland) but of State for Scotland, Wales and Northern there would also be analysis specific to each Ireland to produce official statistics, the Review nation (for example the fiscal analysis). understands that this has not been done.19

19 Evidence received from the Office for Statistics Regulation

46 Communications

To achieve their full benefits, the publications All UK Government communications must be current and up-to-date. It is in Scotland, Wales and Northern suggested that an annual update would Ireland should be subject to a strategy be sufficient. overseen by the Secretary of State for UK Government departments should Intergovernmental and Constitutional consult the Secretaries of State for Affairs with the assistance of the Scotland, Wales, Northern Ireland, and Secretaries of State for Scotland, Wales and Northern Ireland. The strategy should Intergovernmental and Constitutional be prepared by a communications group Affairs before making major within Cabinet Office, which meets regularly. announcements in respect of policies At least twice a year those meetings should which apply in Scotland, Wales or . be chaired by the Secretary of State for Northern Ireland Intergovernmental and Constitutional Affairs. Ideally the Secretaries of State for Scotland, Wales, Northern Ireland, and It is essential that the UK Government Intergovernmental and Constitutional Affairs develops a strategy for proactive should be aware of policy developments communications aimed at achieving a in reserved areas in all UK Government clearer understanding of the work of the departments from an early stage. However, UK Government and the benefits of being it is essential that policies in reserved areas part of the UK. Any such strategy must be are seen to be fit for purpose in all parts of backed by the authority of a senior member the United Kingdom. To guard against policy of the Cabinet, the Secretary of State for announcements landing badly in Scotland, Intergovernmental and Constitutional Affairs, Wales and Northern Ireland, they should be and supported by the expertise of the tested in advance with those offices who Secretaries of States for Scotland, Wales and can best assess their effect in all parts of the Northern Ireland. United Kingdom and ensure that the voices Note that this recommendation includes of Scotland, Wales and Northern Ireland are communications which are ostensibly aimed heard in policy development. at an English audience but will ‘bleed’ into all It is also important that opportunities are not parts of the United Kingdom. missed to ensure that UK Government policy This Review also notes that a communications announcements have maximum impact in all strategy cannot be delivered properly without parts of the UK. Departments should be aware adequate resources. Despite the size of its that in some cases a policy which is relatively overall communications spend, there may be minor in UK terms could have a major impact a case for increased communications funding in Scotland, Wales or Northern Ireland. in Scotland, Wales or Northern Ireland. It is up to the relevant Secretary of State and their office to make the case for increased funding specific to the circumstances in Scotland, Wales and Northern Ireland. Any strategy prepared by the communications group should be delivered across all platforms, including digital.

47 Review of UK Government Union Capability

This report has already discussed the Every UK Government department importance of policy officials in the new which is active in Scotland, Wales and shared unit having a clear role in external Northern Ireland should have a network of engagement. To ensure the most tangible stakeholder managers in those nations. results from this role, it should be an expectation that engagement is noted in There are already stakeholder managers a shared record for use in support of the working effectively in different parts of the UK communications strategy and accessible (see, for example, BEIS and HMT in Scotland). by other departments. Ideally, other UK However, there is scope for expanding existing Government departments would also feed into activities and some departments have very this database. little stakeholder engagement in Scotland, Wales and Northern Ireland. There should be The Secretary of State for further consideration of when it is helpful for Intergovernmental and Constitutional these roles to be specific to a nation or to an Affairs should have oversight of all economic region. ministerial visits to Scotland, Wales and Northern Ireland, and all ministerial Stakeholder managers can ensure that the visits should be subject to an overall UK voice of Scotland, Wales and Northern Ireland communications strategy. is heard properly in policy making. They can also be a point of contact for stakeholders All visits to Scotland, Wales and Northern and a visible presence for the UK Government Ireland by UK Government ministers should be in all parts of the UK. In the absence of such directly related to the overall UK Government managers, stakeholders are likely to turn to communications strategy. The visits may be the devolved governments to raise issues, undertaken for specific policy reasons but unhelpfully blurring the lines of responsibility should be subject to the overarching purpose and accountability. of ensuring that the UK is governed for the benefit of all its citizens wherever they live, and is seen to be so. The Secretary of State for Intergovernmental and Constitutional Affairs should have the capacity and resources to ensure that the maximum benefit is obtained from ministerial visits. Cabinet Office will also have the expertise to work with the devolved administrations when liaison and co- operation is necessary. Ministerial visits should not be simply reactive to events. Public visits by UK Government ministers to Scotland, Wales and Northern Ireland should be planned with reference to, and be subject to, a proactive communications strategy.

48 Terms of reference

Review of UK Government Union Capability: Terms of reference

Context In examining the above terms of reference, the reviewer should take into account The successful devolution of powers to the following: legislatures and Ministers in Scotland, Wales and Northern Ireland has taken place gradually • The need to respect and support the over the last twenty years via a succession current devolution settlements, including of Acts of Parliament, including most recently the Scotland, Wales and Northern Ireland the Scotland Act 2016 and the Wales Act Acts, as well as the Belfast agreement and 2017. Over that time the UK Government has its successors. adapted to meet this changing constitutional • The importance of Scotland, Wales and landscape while maintaining its primary Northern Ireland retaining their own responsibility of being a Government serving Secretaries of State who are members the whole United Kingdom. However, as the of Cabinet and Territorial Offices that United Kingdom leaves the European Union, represent the interests of the devolved it is timely for the UK Government to consider nations in Westminster; and how through its institutional arrangements it meets the challenge of strengthening and • That the question of the Barnett Formula sustaining the Union in the future. and the Scottish and Welsh Governments’ fiscal frameworks are out of scope for this review. Objective Within this context, the UK Government has Process asked Lord Dunlop to undertake a short, focused independent review to ensure that, The review will be independent of government within the context of the existing devolution and supported by a small team of civil settlements, we are working in the most servants. It will report to the Prime Minister. effective way possible to realise fully all the The review will be expected to take evidence benefits of being a United Kingdom. The but there will be no formal written consultation. review is forward-looking, and will not consider past decisions. The review will not consider the powers or responsibilities of the devolved Timing administrations and legislatures. The review will consider and make recommendations on The review will begin in July and conclude the following question: in the Autumn through a report to the Prime Minister. To consider whether UK Government structures are configured in such a way as to strengthen the working of the Union, and to recommend changes where appropriate. 49



51