1 The Framework Document 2013 sets out the governance and management framework within which the Nuclear Decommissioning Authority (NDA) operates. The document was drawn up by the Department of Energy & Climate Change (DECC) and the Scottish Government in consultation with the NDA. It has not been updated since 2013, and therefore does not reflect key changes to the stakeholders mentioned within. This includes:
• In July 2016, the Department for Business, Energy & Industrial Strategy (the Department) took on the responsibilities of DECC after it was abolished in machinery-of-government changes. This includes the sponsorship of the NDA.
• UK Government Investments (UKGI) began operating on 1 April 2016 as a government company wholly owned by HM Treasury. It brings together the functions of the Shareholder Executive (ShEx) and UK Financial Investments under a single company.
The Department and UKGI fulfil the roles of DECC and ShEx respectively within the Framework Document 2013.
2 Part Two of the Framework Document sets out ministerial accountability for DECC (now the Department). It states that the Secretary of State is accountable to Parliament for the activities and performance of the NDA. Responsibilities in this regard include:
• setting the performance framework within which the NDA will operate including approving the NDA's strategy and annual plan;
• appointing the chair of the NDA and other non-executive members and approving the appointment of the CEO by the non-executive members, after consultation with Scottish ministers for each appointment;
• setting the pay and incentive structure for the chair and other non-executive members;
• issuing directions, and issuing and removing designations and making transfer schemes in accordance with the provisions of the Energy Act 2004;
• determining the terms on which the NDA will have access to Grant in Aid in order to discharge its duties and responsibilities, maintenance of appropriate funding mechanisms;
• providing information to Parliament about the NDA as required, and seeking Parliamentary approval for expenditure;
• issuing Accounts Directions on the basis for preparation of the NDA's annual accounts; and
• laying the NDA's Annual Report and Accounts before Parliament.
3 Part Two of the Framework Document sets out the responsibilities and accountabilities of the Department for Business, Energy & Industrial Strategy's accounting officer. It notes that accounting officer's responsibilities are set out in more detail in Managing Public Money. The Department's accounting officer:
• designates the NDA accounting officer (who may also be the NDA chief executive) and ensures that he/she is suitably trained and fully aware of his/her responsibilities;
• is responsible for ensuring that the financial and other management controls applied by the Department to the NDA are appropriate and sufficient to safeguard public funds and for ensuring that the NDA's compliance with those controls is monitored effectively;
• ensures that the NDA complies with central HM Treasury and Cabinet Office expenditure controls, as outlined in Managing Public Money and Cabinet Office guidance;
• must be satisfied that the internal controls applied by the NDA, and any subsidiary companies, conform to the requirements of regularity;
• is responsible for propriety and good financial management and for ensuring that an adequate flow of information is supplied by the NDA to the Department on matters of performance, budgeting, control and risk management;
• is accountable to Parliament for any Grant in Aid paid to the NDA and for ensuring that monies issued to the NDA are used for the purposes intended by Parliament; and
• may be required to give evidence to the Committee of Public Accounts, or the Departmental select committee on the systems of financial and management control applied to the NDA.
4 Part Two of the Framework Document sets out the NDA accounting officer's responsibilities for accounting to Parliament. They include:
• signing the accounts and ensuring that proper records are kept relating to the accounts and that the accounts are properly prepared and presented in accordance with any directions issued by the Secretary of State;
• signing a statement of accounting officer's responsibilities for inclusion in the Annual Report and Accounts; signing a governance statement regarding the system of internal control for inclusion in the Annual Report and Accounts and giving evidence - supported as necessary by other Board members - on the use and stewardship of public funds by the NDA if summoned before the Committee of Public Accounts or the Departmental select committee.
5 The NDA accounting officer is responsible to the Secretary of State for:
• ensuring that management information systems are in place and that any information required or requested by the Department is provided on a timely basis;
• ensuring that effective systems of corporate governance are in place including adequate systems for internal and financial control and effective measures against fraud and theft; and
• ensuring that any significant problems, whether financial or otherwise, are notified to the Secretary of State in a timely fashion.
6 The NDA accounting officer is responsible to the NDA Board for:
• advising on the discharge of its responsibilities as set out in the Framework Document, the Energy Act 2004, any directions made under section 3 of the Energy Act 2004, and any other relevant instructions and guidance that may be issued by HM Treasury from time to time;
• advising on the NDA's performance compared with its aims and objectives as set out in its strategy and annual plans;
• establishing the NDA's corporate and business plans in light of the NDA's statutory duties;
• ensuring that value for money financial considerations are taken fully into account by the Board at all stages in reaching and executing its decisions, and that decisions are taken on the basis of appropriate financial appraisal; and
• the NDA accounting officer may also take action as set out in Managing Public Money if the Board, or chair, is contemplating a course of action involving a transaction which the accounting officer considers would infringe the requirements of propriety or regularity, or does not represent prudent or economical administration, efficiency or effectiveness, is of questionable feasibility, or is unethical.
7 The chair of the NDA is appointed by the Secretary of State in conjunction with the Scottish ministers and in line with the Code of Practice issued by the Office of the Commissioner for Public Appointments. The appointment will be for a fixed term, with the possibility of extension subject to review of performance. The chair is accountable to the Secretary of State, and to the Scottish ministers where appropriate, for the NDA's activities and performance in implementing the NDA strategy and annual plan. The chair has a particular responsibility for providing effective leadership on the following matters:
• formulating the Board's strategy for discharging its statutory functions and duties, and that in reaching decisions the Board: complies with the Energy Act 2004; has due regard to relevant government policy, guidance and instructions including that of the devolved administrations; and takes proper account of inputs from stakeholders;
• reviewing the balance of skills and experience on the Board against the changing emphasis of the NDA's work in discharging its statutory duties and, as necessary, recommending changes to the Secretary of State who will consult the Scottish ministers;
• providing the Secretary of State and the Scottish ministers with an annual assessment of the performance and effectiveness of the Board and of individual Board members;
• ensuring high standards of propriety, and regularity, and promoting the efficient and effective use of staff and other resources throughout the NDA; and
• ensuring that the NDA's affairs are conducted openly, transparently and with probity, and representing the NDA to the public and stakeholders.
8 The chair shall ensure that all members of the Board, when taking up office, are fully briefed on the terms of their appointment, duties and responsibilities. Where necessary, the chair will ensure that any member of the Board will receive training on financial management and reporting. The chair shall also ensure that a code of practice for board members is in place based on the Cabinet Office publication Code of Conduct for Board Members of Public Bodies. The Code shall commit the chair and other Board members to the seven Nolan principles of public life, and shall include a requirement for a comprehensive and publicly available register of Board members' interests. Communications between the Board and the Secretary of State and the Scottish ministers shall normally be through the chair.
9 Part Three of the Framework Document sets out governance and structure. Key points are:
• DECC (later the Department for Business, Energy & Industrial Strategy): As the government department with the lead sponsorship functions for the NDA, DECC is responsible for all financial aspects of the NDA's governance. However, in accordance with the Energy Act 2004, and as the NDA operates along similar lines as a cross-border public authority, it is also accountable to Scottish ministers and the Scottish Parliament for the activities and performance of the NDA in, or as regards, Scotland. Therefore the Scottish Government also has a role in the governance of the NDA and will work closely with DECC to ensure that the expectations of government (both the UK government and the Scottish Government) are met. NDA should comply with the principles of good corporate governance.
• The ShEx corporate governance team (later UKGI) is responsible for liaising with the NDA on all aspects of its work and is the main point of day-to-day contact between the government and the NDA. This dedicated team is the primary source of advice to the Secretary of State on the discharge of his responsibilities in respect of the NDA. In exercising its responsibilities to the NDA, ShEx will provide advice to the DECC Secretary of State and to the DECC accounting officer, in consultation with DECC policy officials. Responsibility for policy is with DECC although ShEx will be required to provide input on the affordability and value-for-money impacts of DECC's nuclear policy initiatives in so far as they impact on the NDA. ShEx also supports the Departmental accounting officer on his or her responsibilities toward the NDA.
10 The Framework Document sets out ShEx's (later UKGI) responsibilities, to include advising the Secretary of State and Scottish ministers at a strategic level on:
• how well the NDA is achieving its objectives and whether it is delivering value for money;
• appropriate budget and performance targets for the NDA;
• novel, contentious and/or repercussive proposals/projects proposed by the NDA or other parts of government, where those proposals might impact on the NDA and public appointments matters;
• ensuring effective processes, including risk management, are in place and are used by the NDA in producing its strategy and annual plan;
• monitoring and reporting the NDA's performance against agreed targets and against its total financial provision;
• ensuring the responsibilities and duties of the Departmental accounting officer are discharged; and
• advising the NDA on matters arising from the Energy Act 2004, and ensuring proper lines of communication between the NDA and the Scottish Government.