Annual Report and Accounts for year ended 2023-24

3.1 Corporate Governance Report

This section reports on who the Members and Accountable Officer are for SCoSS’s governance framework and the Accountable Officer’s responsibilities. SCoSS’s governance, audit functions and risk management arrangements are discussed in the Performance Report and further expanded upon in the Framework Document.

The Co-Chairs’ and Members’ Report

The Co-Chairs and Members

The Social Security (Scotland) Act 2018 provides that there shall be a Chair and at least two but no more than four other members. The Interim Co-Chairs and Members have been appointed to SCoSS by Scottish Ministers in line with the Code of Practice for Ministerial Public Appointments in Scotland. As of 31 March 2024 there were four Commissioners: Judith Paterson (Interim Co-Chair), Dr Mark Simpson (Interim Co-Chair), Marilyn Howard and Jackie Gulland (Temporary Board Member).

As noted in last year’s annual report, Judith Paterson and Dr Mark Simpson were appointed as Interim Co-Chairs in August 2023. At the same time, a temporary Board Member, Dr Jackie Gulland was appointed to the Board by the Cabinet Secretary for Social Justice. All three appointments were initially made until 31 March 2024. In order to avoid the recruitment process for a new Chair and permanent Board Member taking place at the same time as a recruitment exercise for a Chair to the Independent Review of Adult Disability Payment (ADP) the terms of these appointments were extended¹The extensions to the terms of these appointments was agreed by the Ethical Standards Commissioner and the Cabinet Secretary for Social Justice., in October 2023, to 31 July 2024. A recruitment exercise, to appoint a Chair and Board Member, took place in 2024-25. The recruitment exercise resulted in the appointment of a Chair and Member to the Board with the new Chair and Board Member taking up their positions on 1 August 2024.

An Audit Adviser, Graeme Hill, was appointed in 2022-23 in response to a previous external audit recommendation. The role of the Audit Adviser was to provide advice and challenge to the SCoSS Board and Secretariat with regard to audit, finance and governance matters. The Audit Adviser’s contract concluded in March 2024. The Audit Adviser produced a legacy report which made a number of recommendations which sought to ensure that there was no diminution in the governance of SCoSS resulting from the loss of the Audit Adviser position. The Audit Sub-Committee, in February 2024, agreed to the recommendations in the report and in May 2024 agreed a plan to implement the legacy report recommendations.

The SCoSS Commissioners register any relevant interests in the SCoSS ‘Register of Interests’ which is published on the SCoSS website at—

Register of Interests – Scottish Commission on Social Security (socialsecuritycommission.scot)

The Accountable Officer for SCoSS is Ian Davidson, Deputy Director, Head of Social Security Policy, Scottish Government.

There were no personal data related incidents formally reported to the Information Commissioner’s Office (ICO) during the reporting period (2023-24).

Statement of Accountable Officer’s responsibilities

Under Schedule 1, Chapter 4 of the Social Security Act (Scotland) 2018, the Scottish Ministers have directed SCoSS to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of SCoSS and of its income and expenditure, Statement of Financial Position and cash flows for the financial year.

In preparing the accounts, the Accountable Officer is required to comply with the requirements of the Government Financial Reporting Manual and in particular to—

• Observe the accounts direction issued by the Scottish Ministers, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
• Make judgments and estimates on a reasonable basis;
• State whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the financial statements;
• Prepare the financial statements on a ‘going concern’ basis; and
• Confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.

The Permanent Secretary of the Scottish Government, as Principal Accountable Officer for the Scottish Administration, designated that Ian Davidson is the Accountable Officer for the Commission. The responsibilities of an Accountable Officer include responsibility for the propriety and regularity of the public finances for which the Accountable Officer is answerable, for keeping proper records and for safeguarding the Commission’s assets, are set out in the Scottish Government Memorandum to Accountable Officers of Other Public Bodies and published within the Scottish Public Finance Manual.

• As Accountable Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the Commission’s auditors were aware of that information.
• So far as I am aware, there is no relevant audit information of which the auditors are unaware.
• I confirm that the annual report and accounts as a whole is fair, balanced and understandable and that I take personal responsibility for the annual report and accounts and the judgments required for determining that it is fair, balanced and understandable.

Governance Statement

As Accountable Officer, I have responsibility for maintaining a sound system of corporate governance and internal control that supports the achievement of SCoSS’s policies, aims and objectives, set by Scottish Ministers, whilst safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities set out in the “Accountable Officer’s Memorandum”.

In the discharge of my personal responsibilities, I ensure organisational compliance with the Scottish Public Finance Manual (SPFM). The SPFM is issued by the Scottish Ministers to provide guidance to the Scottish Government and other relevant bodies on the proper handling and reporting of public funds. It sets out the relevant statutory, parliamentary, and administrative requirements, emphasises the need for economy, efficiency, and effectiveness, and promotes good practice and high standards of propriety.

The Framework Document, drawn up by Scottish Government, sets out the broad framework within which SCoSS has agreed to operate. It does not convey any legal powers or responsibilities. The relationship between the SCoSS Board and Scottish Ministers and the SCoSS Board and the Secretariat is outlined in Section 2.1 of this report entitled ‘Purpose and Structure’.

Business at the Board and its Committees are governed through the Standing Orders which the Board approves and which are regularly reviewed. In addition, the Minutes of Board meetings are published on the SCoSS website.

The SCoSS Board, in 2023-24, met a total of eleven times during the reporting period with the attendance rate of Board Members detailed below.

In addition to the SCoSS Board, there are two sub-committees, namely the Audit Sub-Committee and the Charter Sub-Committee. The rules governing the operation of the sub-committees are set out in the Standing Orders.

The Board established an Audit Sub-Committee to support it in its responsibilities on risk, governance and assurance.

The Audit Sub-Committee advises the Board and the Accountable Officer on the effectiveness of the internal control system. This includes considering risk matters at each meeting, and scrutinising financial management and the annual report and accounts.

Membership of the Commission can be found in the Co-Chairs’ and Members’ Report. The Members of the Audit Sub-Committee are Judith Paterson and Dr Mark Simpson.

The Audit Sub-Committee met on a quarterly basis in 2023-24. The minutes of all meetings of the Audit Sub-Committee are published on the SCoSS website.

The Charter Sub-Committee was established to manage the scrutiny work of the Commission in relation to the Social Security Charter. The rules governing the operation of the Charter Sub-Committee were agreed by the SCoSS Board in January 2024 and are set out in the SCoSS Standing Orders. The members of the Charter Sub-Committee are Dr Mark Simpson and Dr Marilyn Howard.

Since the establishment of SCoSS, no written authorities have been provided to the Accountable Officer; there have been no lapses of data security; and no significant risk-related matters have arisen.

Accountability for governance

The governance and accountability framework document, based on a Scottish Government document for use across all NDPBs, sets out the broad framework within which we operate and defines key roles and responsibilities which underpin the relationship between us and the Scottish Government. We are held accountable against this framework through regular accountability meetings with our sponsor department in the Scottish Government.

Financial management

The Scottish Government sets a budget for our administration. We allocate that budget internally based on activity required to deliver our core functions and our strategic priorities. That budget allocation is discussed with and approved by the Board. We carry out regular budget reviews of expenditure and the Board is presented with papers detailing our financial position on a quarterly cycle to enable oversight of our financial performance.

This governance statement relates to SCoSS’s governance system as it applied during 2023-24 and up to the date of approval of the annual report and accounts. Scottish Government Internal Audit carry out a programme of reviews across the range of Scottish Government corporate systems which are used by SCoSS. The Audit Adviser also provided advice and challenge, in 2023-24, in relation to SCoSS financial management and audit processes. No issues have been identified as a result of Scottish Government internal audit reviews that would affect SCoSS. The 2023/24 Scottish Government Internal Audit Annual Assurance Report outlined a reasonable assurance opinion and detailed plans to implement Oracle Cloud from October 2024.

The operation of the governing Board is referred to at ‘Purpose and Structure’ [Section 2.1].

The main features that support regular monitoring, review and assurance are detailed in the Performance Report.

Risk management

We have a risk management framework which was subject to a major review in 2022. The framework sets out how we manage risk, and the different roles and responsibilities in the risk management cycle. The framework includes a corporate risk register which sets out our biggest and cross organisation risks. The framework includes the Board’s risk appetite in a number of areas which drives our response to the risks that we face.

A detailed assessment of SCoSS’s risk management arrangements is referred to at ‘Risks facing SCoSS’ [Section 2.2].

An assessment of corporate governance arrangements is provided in the Governance section of the Performance Report [Section 2.1].

An independent, external review of SCoSS governance was commissioned by the Scottish Government. An improvement plan implementing the recommendations of the review was progressed in 2023-24.

External Audit Recommendations: 2022-23

There was one recommendation from Audit Scotland in the 2022-23 audit which is noted below alongside commentary on the corresponding action taken. There were no outstanding recommendations from previous audits which required action.

2022-23 Recommendation One (Financial Sustainability): The SCoSS secretariat should continue to work closely with Scottish Government finance to maintain effective financial monitoring and plan a response to potential budget pressures in future years.

The SCoSS Secretariat has met on a bi-monthly basis throughout 2023-24 with Scottish Government finance officials in order to monitor the SCoSS financial position and ensure that any budget pressures that may arise are effectively responded to. These bi-monthly meetings have continued in 2024-25.

3.2 Remuneration and Staff Report

All secretariat staff working for SCoSS are civil servants employed by the Scottish Government and bound by the Civil Service Code and other civil service requirements as to their conduct, impartiality and confidentiality. Changes to pay and conditions are made in line with wider Scottish Government arrangements. The SCoSS budget is reviewed to reflect any changes to staff remuneration.

Members of SCoSS, including the Co-Chairs, are non-executive appointments made by the Scottish Ministers in line with the Code of Practice for Ministerial Public Appointments in Scotland. The role of Members is to contribute their expertise to the development of high quality reports, provide direction, support and guidance to ensure the body delivers and is committed to delivering its functions effectively and efficiently and in accordance with the aims, policies and priorities identified within the 2018 Act.

The Co-Chairs and Members have been appointed to SCoSS through a public appointment round that is regulated and monitored by the Ethical Standards Commissioner. As such, their pay and conditions are the responsibility of the Public Appointments branch of the People Directorate within the Scottish Government.

Remuneration (daily fees), allowances and expenses paid to the Co-Chairs and Members must comply with the SG Pay Policy for Senior Appointments and any specific guidance on such matters issued by the Scottish Ministers.

SCoSS Board Member, Staff and Accountable Officer Costs

The analysis of board members costs, staff numbers and costs and accountable officer costs disclosed below, and the fair pay disclosure, form the audited part of the remuneration and staff report.

In addition, in 2023-24, the Audit Adviser received remuneration in the range £0 -£5,000 (2022-23: £0 – £5,000).

Accountable Officer

Ian Davidson, Deputy Director, Social Security Policy, is the Accountable Officer for SCoSS during the reporting period. He is a full-time employee of the Scottish Government and his salary was paid directly from the Scottish Government budget. SCoSS did not contribute to his pay, benefits or pension. He also received no bonuses or benefits in kind.

Remuneration for the Accountable Officer reflects the total amount received in both his roles as Deputy Director of Social Security Policy and no apportionment has been made for his role as Accountable Officer of SCoSS.

In respect of the Accountable Officer’s pension benefits, the liability sits with the Scottish Government.

Staff Report

The staff report contains information relating to staff numbers and costs. As of 31 March 2024, SCoSS did not employ any Senior Civil Servants. As noted above, the SCoSS Secretariat are all civil servants, employed by the Scottish Government and on Scottish Government Pay, Terms & Conditions.

Staff costs for SCoSS, in 2023-24, are set out below.

Staff Composition & Sickness Absence

Due to the low number of staff working in SCoSS, this data cannot be disclosed without risk of identifying individual members of staff and breaching data security. This has therefore been omitted from the report.

Trade Union Time Disclosure

SCoSS had no employees who were relevant trade union officials during 2023-24.

Trade Union Time Regulations 2017 came into force on 1 April 2017. The regulations place a requirement on public sector employers to publish information relating to facility time taken by union representatives. There are no separate arrangements in place for us to publish information relating to facilities time and the requirements are covered within the main Scottish Government annual report and accounts. As an organisation, SCoSS is part of the Scottish Government main bargaining arrangements.

Exit Packages

There were no exit packages in 2023-24.

Fair Pay Disclosure

The FReM requires bodies to disclose the ratio of the mid-point of the highest paid director’s remuneration to the median remuneration of the body’s staff. The FReM also requires bodies to disclose the equivalent ratio for the staff member in the lower and upper quartile. In addition, the FReM also requires disclosure of the percentage change from the previous year for salary and allowances, performance pay and bonuses in respect of the highest paid director and the employees of the body taken as a whole.

SCoSS does not employ any staff or have any Board Members that fulfil the role of a Director or have Directorial responsibilities. In addition, the Accountable Officer does not have Directorial responsibilities and his principal role is as a Deputy Director (Social Security Policy) within the Scottish Government. The SCoSS Secretariat are all employed as Scottish Government civil servants. In addition, the staff complement within the SCoSS Secretariat is extremely small. The number of staff employed ranged from six members of staff to five members of staff towards the end of the reporting period. On that basis, it is not considered to be appropriate or proportionate to make a fair pay disclosure given the organisational structure of SCoSS and the small number of individuals employed within SCoSS.

Equal opportunities and diversity

The Social Security Policy Division works in conjunction with SCoSS to ensure that HR policies, practices and systems comply with employment and equality legislation, and standards expected of public sector employers. All SCoSS’s permanent staff, as Scottish Government employees, are covered by Scottish Government policies including its Delivering Diversity and Equality policy. Further to this, SCoSS also relies on Scottish Government disability policies, which covers areas such as how we fill posts, monitoring and discussing performance and providing reasonable adjustments.

The Scottish Government is also committed to providing all staff, including the SCoSS Secretariat, with opportunities for learning to help staff understand what valuing diversity means in practice, and how to take action to build an inclusive workplace culture.

The Co-Chairs and Board Members appointees also adhere to the Code of Practice for Ministerial Appointments to Public Bodies in Scotland in which Diversity and Equality remains a core principle and are expected to abide by the Civil Service Code.

They also have a responsibility to make sure that they are familiar with, and that their actions comply with, the provisions contained within the agreed Code of Conduct for Board Members which was approved in June 2022. The current Code of Conduct is in the process of being reviewed as part of the wider review of all corporate documentation.

3.3 Parliamentary Accountability Report

Contingent liabilities

SCoSS are required to disclose any legally enforceable undertakings given in the form of a guarantee or indemnity which would bind the body into providing the resources in the event of the guarantee or indemnity maturing; or a letter or general statement of comfort which could be considered to impose a moral financial obligation. SCoSS is also required to report any liabilities for which the likelihood of a transfer of economic benefit in settlement is too remote to meet the definition of contingent liability under IAS37.

There are no contingent liabilities, or remote contingent liabilities, to report.

Losses and special payments

In accordance with the SPFM, we are required to disclose losses and special payments above £300,000. During 2023-24, there were no losses or special payments within this criteria (2022-23: £nil).

Gifts and Charitable Donations

There were no gifts made during the year (2022-23: nil). There were no charitable donations made during the year (2022-23: nil).

Fees and Charges

The fees and charges guidance in the SPFM require charges at market rates whenever applicable. SCoSS has nothing to report for the period to 31 March 2024 relating to fees and charges.

Ian Davidson
Accountable Officer (Deputy Director, Social Security Policy)

30 August 2024