Transparency data

Board minutes: 26 January 2023

Published 3 April 2023

Minutes of the 47th Board Meeting

Meeting held remotely, 26 January 2023

14:00 to 17:00

Board members present:	Others present:
Hannah Nixon (Chair)	Alan Brennan
Alastair Groom	Colin Hill
Claire Williams	Colin Sharples (item 6 and 7)
David Johnston	Joe Dean (MOD Representative)
Hugh Kelly	Mike Wetherell
Joanne Watts	Peter Regan (item 6)
Neil Swift
Peter Freeman

1. Welcome, apologies, announcements and declarations of interest

1.1. The Chair welcomed Board members to the meeting.

1.2. Apologies had been received from Tara Usher, the MOD Representative to the Board. Joe Dean was attending as the MOD Representative.

1.3. No interests were declared.

2. Minutes of the 46th meeting of the Board, 13 December 202, and action tracker

2.1. The Chair introduced the minutes of the Board meeting held on 13 December 2022. Nine actions were recorded and their status was noted. The actions were:

• Action 140, that financial planning should be more closely linked with corporate planning, and clarity provided on resource deployment between the SSRO’s objectives. It was noted that, while the deployment of specific resources was a matter for the executive, the Board was obtaining a broad understanding of resource deployment through the corporate planning process and through workshops. The Board workshop on 11 January had included a presentation and discussion specifically about resource deployment. The slides from the workshop would be circulated to Board members, and any further comments would be considered by the executive. Action: Neil Swift.
• Action 143 – a further workshop on corporate planning had taken place on 11 January.
• Action 144, that the executive should review the provisions in the IT Managed Services contract around inflation. It was noted that the contract was a fixed price contract and not subject to inflation. A detailed response had been provided to the Board member who raised the query.
• Action 145, that the Chief Executive should provide the final results from the staff engagement survey. These were included in the Chief Executive’s Report to the January Board.
• Action 146, that more granularity should be provided about the priority of the remaining reporting issues. A review had taken place internally to discuss the feedback from the Board and agree a way forward. Subsequently the dashboard had been updated, with new slides developed and included in the Corporate Performance Report.
• Action 147, that estimates in the workplan should specifically consider the appropriate resources that would be allocated to their workstream. The Board workshop on 11 January had included a presentation and discussion about resource deployment illustrating a proposed shift in resources away from some activities to increase the time available for the data utilisation workstream. This would be further refined following Board and stakeholder feedback on the draft Corporate Plan, in advance of the Board meeting in March 2023.
• Action 148, that a short illustrative brochure should be developed showing the potential uses for DefCARS data. A document had been developed and was being used for discussions with senior stakeholders. This would be developed following further engagement with MOD project teams and the Board data champion. The executive was also developing a more concise document to share with the minister, and this would be shared with Board members when finalised. Action: Neil Swift.
• Action 149, that the Corporate Governance Framework should include an express statement that the Board delegated the final decision on the remuneration of the Chief Executive to the Chair, taking into account the views of the People Committee. The Chief Executive wrote to Board members on 6 January 2023 regarding the changes that had been made to the Corporate Governance Framework as a result of the Board’s discussion.
• Action 150, that further consideration should be given as to whether there was a requirement for an annual review of Board effectiveness. The Chief Executive’s email of 6 January 2023 confirmed that it was best practice to undertake annual reviews of Board effectiveness.

2.2. The minutes of the 46th meeting of the Board were approved as a correct record.

3. Chair’s introduction

3.1. The Chair provided an update on the 18 January meeting with the Minister for Defence Procurement. It had been a constructive meeting that had included a discussion about the SSRO’s role, the relationship between the SSRO and MOD and key issues and upcoming decisions. The SSRO had been asked to provide data, drawn from DefCARS, to the Minister’s office.

3.2. The Chair provided an update on the appointment of a non-executive Board member. Interviews had taken place on 12 January, and the Chair had been joined on the appointment panel by Tara Usher, Kevin Craven (Chief Executive, ADS) and Kate Ellis (independent member, Chief Executive of OPA). The panel’s decision following the interviews was being put forward to the Minister.

3.3. The process to recruit a Chief Executive was ongoing. Shortlisting had taken place on 18 January, and the appointment panel would comprise the Chair, Claire Williams, Andrew Forzani (DG Commercial, MOD) and Kevin Craven (Chief Executive, ADS).

4. Chief Executive’s Report

4.1. Neil Swift, Chief Executive, presented his report to the Board. The report provided an overview of stakeholder engagement, including recent meetings and site visits to industry facilities.

4.2. The Chief Executive discussed recent publications, including the recent launch of a consultation on DefCARS enabling changes.

4.3. The report set out the results from the recent staff engagement survey, which were largely positive. The information had been shared with SSRO staff and would be discussed at an all staff open forum in February, in order to inform an action plan in response. It was acknowledged that the recent pay award and application of a new pay and grading structure had had an impact on staff views relating to pay and benefits and engagement. The scores for engagement, which formed a KPI in our Corporate Plan, had also decreased by 5 per cent to 57 per cent. In discussion, Board members explored in detail the scores on leadership, engagement, bullying and harassment and asked for the action plan to be reported to the People Committee. Action: Mike Wetherell.

4.4. Following the Capability Review, the SSRO had been working with the MOD to organise a workshop between the SSRO, MOD and industry on the SSRO’s role. The workshop was likely to take place in March. Feedback from the tri-partite workshop would inform updates to the SSRO’s workforce strategy and stakeholder engagement strategy.

4.5. The Director of Corporate Resources provided an update on accommodation. The GPA had provided a project initiation checklist, which the SSRO was reviewing. The date that the SSRO would move to Parliament Street was currently being considered. It was expected that the MOTO would be received in the near future, at which point an equality impact assessment would be undertaken with staff.

The Board:

• noted the information provided in the report.

5. Corporate Performance Report

5.1. Neil Swift, Chief Executive, introduced the Corporate Performance Report, which provided an update on how the SSRO was delivering against its corporate priorities as set out in the Corporate Plan.

5.2. Directors then discussed issues arising within their work areas that were not covered in greater detail elsewhere on the agenda.

5.3. The Chief Regulatory Officer discussed the extra information that had been provided about reporting issues, including better distinguishing between internally and externally raised issues. It was agreed that further consideration would be given to the coverage of reporting issues, and a discussion would take place with the non-executive member who had raised the issue. Action: Jo Watts.

5.4. The Chief Regulatory Office provided an update on the Review of Legislation. It was noted that the Procurement Bill had passed the second reading stage in the House of Commons, and that no Government amendments were likely to be proposed as the Bill received further scrutiny. Operations team had already considered the consequences of no amendments going through but members of the executive would meet again to discuss mitigation plans in further detail, and the SSRO’s consultation on resultant changes to guidance was expected to be published in early March but would need to follow the MOD’s timetable.

5.5. Board members discussed the SSRO’s draft guidance on inflation, including engagement with MOD and industry on the document. They discussed MOD access to DefCARS and it was confirmed that, while work-arounds were in place, full access to DefCARS data in Power BI was not available to MOD staff This was being raised at a senior level. The executive was asked to give further thought to the appropriate rating provided on the DefCARS workstream in the Corporate Performance Report. Action: Jo Watts.

5.6. The Director of Corporate Resources discussed the potential underspend in the budget, which would be repurposed onto DefCARS work and communications support. The SSRO currently had no active vacancies. Board members were asked to complete mandatory online training on information security; a reminder email would be circulated. Action: Mike Wetherell.

The Board:

• reviewed and commented on the Corporate Performance Report.

6. Corporate Plan

6.1. Jo Watts, Chief Regulatory Officer, and Colin Sharples, Head of Policy, Referrals and Support, gave a presentation about the draft SSRO Corporate Plan 2023-2026 and draft Budget 2023-2024. The draft Plan signalled a shift in strategy, in line with the steer provided by the Board during the workshops that had been held throughout its development.

6.2. The foreword of the Plan set out the key messages and priorities for the SSRO. These included: supporting stakeholders with new guidance and DefCARS changes in response to changes to the regulatory framework arising from the Procurement Bill; using data to derive insights, through closer engagement with commercial teams; and potential changes to the referral process, including pre-referral engagement and a fast track for opinions. The Plan contained a new vision (‘Advancing value for money and fair prices in defence procurement’), objectives and KPIs. It was shorter in length than in previous years.

6.3. The presentation covered the key activities that would be undertaken in order to deliver the Plan, including a series of “we will” statements on each. It considered all corporate objectives, and the operational plan activities and KPIs that would underpin each objective. An operational plan would also be developed in advance of the March 2023 Board meeting.

6.4. In discussion, Board members asked for a one-page summary of the Plan to be included in the document, in bullet point form. They also discussed whether more time could be added to the timetable to allow for changes, for example by reducing the length of the consultation from four weeks. It was decided that the timetable should remain as planned.

6.5. Board members also discussed the financial page of the plan, and the profile of the stated running costs and one-off costs. It was noted that the SSRO’s draft budget would be submitted to the MOD following the meeting. Action: Mike Wetherell.

6.6. Following Board approval, the Corporate Plan would be sent to the MOD, ADS and members of the Operational Working Group on 1 February for consultation, with a deadline for responses of 1 March 2023. The final Plan would be presented to the Board for approval on 30 March and sent to the Minister for Defence Procurement for consideration before publication in April 2023.

The Board:

• approved the draft Corporate Plan for consultation with key stakeholders;
• authorised the Chair of the SSRO, after consultation with the Chief Executive, to agree minor changes to the draft Corporate Plan before circulation to stakeholders;
• agreed the consultation plan which included a four-week consultation period; and
• approved the draft Budget 2023/2024 for submission to MOD.

7. Risk management

7.1. Neil Swift, Chief Executive, and Colin Hill, Defence Advisor, gave a presentation on risk management. The presentation set out the list of the corporate risks that had been previously discussed by the Board, to assist members in identifying the most significant risks for the SSRO. The Board was asked to consider the mitigations in place, and to reach a consensus on the risks that should be taken forward in the corporate risk register, in accordance with the SSRO’s risk management policy.

7.2. The Board discussed at length each risk that had been put forward, drawn from earlier Board discussions on risk, and agreed the specific risks that would be included on the corporate risk register. The Executive would populate the approved Corporate Risk Register with the agreed risks and map current mitigating action to these risks. The corporate risks would be overseen at the Board level, while the other identified risks would be monitored by the executive committee or by relevant project teams. The corporate risk register would be brought back to the Board annually for discussion. The Audit Committee would continue to monitor the register at each meeting, and would undertake a programme of “deep dives” into separate risks.

The Board:

• Agreed the most significant corporate risks to be included on the Corporate Risk Register.

8. Review of Board effectiveness

8.1. The Chair introduced the annual review of Board effectiveness, thanking members for contributing to the review by completing the questionnaire and meeting with the Chair individually to discuss their views. The report had found that the Board was operating effectively, but that it was currently going through a period of transition, with a strategic shift in the SSRO’s priorities and new members bringing a new perspective. The report identified ways to improve Board harmonisation through this transitional period, to ensure Board members were aligned and working together effectively. It was agreed that the Board could be better supported to ensure that it remained focused on strategy, for example through the executive providing more concise, tailored and well-signposted Board papers.

8.2. In discussion, Board members discussed how Board members could improve engagement with other members and with the staff team. They also discussed the frequency and spread of Board meetings throughout the year, noting that the report recommended the number should be reduced to five. It was agreed that the Chair would consider the annual timetable of meetings. Action: Chair.

The Board approved the recommendations from the Board effectiveness review 2022/23.

9. Minutes from Regulatory Committee meeting of 30 November 2022 and update from meeting of 18 January 2023

9.1. Peter Freeman presented the minutes from the Regulatory Committee meeting of 30 November 2022 and provided an update from the meeting of 18 January 2023. At its January meeting, the Committee had discussed the SSRO’s baseline profit rate recommendation, reviewing information relating to the rate and agreeing that the methodology remained robust and should continue unamended. The Committee also discussed the letter recommending the rate, which would be sent from the Chair to the Secretary of State.

9.2. The minutes recorded an action that the Audit Committee should consider process issues arising from the response to a recent freedom of information request. The Chief Regulatory Officer would provide a short paper to the Audit Committee, briefing it on the background to the issue. Action: Jo Watts.

The Board noted the minutes.

10. Future agendas, reflections on meeting and any other business

10.1. The Chair introduced a two-page document showing the business of all Board and sub-committee meetings for the next 12 months.

10.2. The next meeting of the Board would take place on 30 March 2023 at 14:00.

11. Non-Executive Board Member discussion

11.1. Only Non-Executive Board Members remained for this discussion. The members discussed actions arising from the meeting and requested that the SSRO staff behaviours document should be shared with Board members. Action: Neil Swift.