Transparency data

Board minutes: 28 May 2020

Published 14 September 2020

Single Source Regulations Office

Minutes of the 32nd Board Meeting

Meeting held remotely

Tuesday, 28 May 2020

14:00 to 16:30

Board members present:	Others present:
George Jenkins (Chairman)	Andy Brittain (MOD Representative)
David Johnston	Colin Hill
Marta Phillips	Mike Wetherell
Mary Davies	Malcolm Botting
Peter Freeman	Ben Johnston (item 4)
Neil Swift	Monika Kochanowska-Tym (item 4)
David Galpin	Alan Brennan (item 4)
Matthew Rees	Colin Sharples (item 6)

1. Welcome, apologies, announcements and declarations of interest

1.1. The Chairman welcomed members to the 32nd meeting of the Board. There were no apologies or declarations of interest.

1.2. The Chairman announced that, in view of the situation regarding Covid-19, government guidance on this matter and in accordance with Standing Order 3.10, the Board meeting was being undertaken remotely by telephone for all Board members.

1.3. The Chairman noted that staff were continuing to perform well and produce high quality work while working remotely as a result of the Covid-19 pandemic.

1.4. The Chairman reflected on progress made following the publication of the Tailored Review of the SSRO. He was grateful that the Board supported his position that in order to progress the recommendations, matters should be dealt with in a proper, sequential and ordered manner. He had agreed with the MOD’s DG Finance that the SSRO and MOD would work jointly to implement the entirety of the individual recommendations in the report.

1.5. The Chairman welcomed Andy Brittain (Director of Finance at Defence Nuclear) to the meeting. He had been appointed by the Permanent Secretary as the MOD Representative to the Board, fulfilling one of the recommendations from the Tailored Review. The role would provide a key link and interface between the Board and the MOD. While not a non-executive Board member, the role holder would provide a two-way flow of information and engagement. Andy Brittain thanked the Chairman for his introduction and stated that his intention was to undertake the role in a way that respected the SSRO’s independence.

No interests were declared.

2. Minutes of 31st meeting of the Board, 26 March 2020, and action tracker

2.1. The Chairman introduced the minutes of the Board meeting held on 26 March 2020. Four actions were recorded on the action tracker and had been completed or were reported on in papers elsewhere on the agenda.

The minutes of the 31st meeting of the Board were approved as a correct record.

3. Chief Executive’s Report

3.1. Neil Swift, Chief Executive, presented his report to the Board, which provided an update on items not included elsewhere on the agenda.

3.2. The report provided an overview of recent stakeholder engagement. This included meetings between the Chairman and DG Finance and the Chief Executive of ADS. The Chief Executive and Directors had met with the MOD’s Chief Operating Officer and senior representatives from DE&S.

3.3. The report sought the Board’s approval for two amendments to the SSRO’s Corporate Governance Framework. The first was intended to reduce the length of some Board papers by clarifying which “associated publications” required Board or committee approval. Those documents that did not require committee approval would still be made available to members but would not be included within packs of committee papers. The second amendment updated the description of DefCARS functions in the table of delegations within the Framework.

3.4. The report provided a summary of the results from the annual staff survey. There had been reductions in scores in some areas of the survey, and in response the executive was taking action to improve staff engagement and address those areas where matters had been raised. Board members expressed concern over the declines in some areas and queried what action had been taken to ensure staff were aware of routes to raise any concerns over bullying and harassment. The Board endorsed the reminders that had been issued and the proposed staff workshops that would be held in response to the survey, with Mary Davies acting as an NEBM sponsor for this exercise. A paper setting out recommendations in response to the survey would be brought to the Board in September.

3.5. Neil Swift provided an update on the implementation of the recommendations from the Chairman’s review of Board effectiveness. These included the appointment of new non-executive Board members, and it was noted that the Minister had extended the appointment terms of three of the current Board members in advance of the recruitment exercise resuming.

3.6. The Board discussed the recently issued pay remit guidance from the government, which provided for salary increases of between 1 and 2.5 per cent, with approval from the Secretary of State required at higher levels. The Board had previously agreed to a 1.5 per cent award in the budget and funding was capped at this level in the SSRO’s Grant In Aid settlement. The Board noted the Chief Executive’s decision to press ahead with a pay remit submission at the approved level for all staff.

The Board

• noted the information provided in the report; and
• approved the changes to the Corporate Governance Framework

4. Review of Legislation

4.1. David Galpin, Director of Legal and Policy, presented a report on the SSRO’s response to consultation feedback on its reviews of contract profit rate steps and reporting requirements. The report set out findings from the reviews, which were intended to support the Secretary of State’s next periodic review of the regulatory framework.

4.2. The Board’s attention was drawn to three points: the first was the bandwidth of the cost risk adjustment, on which the executive had taken on board the Regulatory Committee’s views in the version of the report that had been submitted to the Board; the second on the Profit On Cost Once adjustment; and the third on overheads and the potential recommendation to broaden the channels by which parties could refer issues to the SSRO.

4.3. In discussion, the Board endorsed the conclusions and proposals for legislative change from the draft document and discussed the positioning of some of the findings. It was noted that the COVID-19 pandemic was likely to impact on the timings and focus of the MOD and SSRO’s reviews and, in view of the circumstances, the Board stated that flexibility would be advisable. The document, and a covering letter to the Minister, should state that the recommendations presented were provisional. The SSRO should be clear what work it could continue with and retain the flexibility to provide further and formal recommendations, if required, at a later time.

4.4. The Board endorsed the report and agreed that it should be finalised and published. A letter should be sent to the Minister to inform him that it had been published.

The Board:

• considered and commented on the draft response document;
• agreed that the response document should be published on the SSRO’s website and provided to the MOD; and
• authorised the Chairman to agree changes to the response document prior to publication, provided these do not significantly change the document and are consistent with views expressed by the Board.

5. Implementation of the Tailored Review

5.1. Neil Swift, Chief Executive, introduced a report on the Tailored Review of the SSRO that had been undertaken by UK Government Investments on behalf of the MOD. The Tailored Review had received Ministerial approval and had subsequently been published. The report summarised progress on the implementation of its recommendations.

5.2. The Board acknowledged the main finding from the report: that there was a continuing need for the SSRO. Responsibility for taking forward the other recommendations rested variously with the MOD and the SSRO Board. The SSRO has either completed, or was progressing, all recommendations it was responsible for and an update was provided on individual recommendations. The updates included that the Chairman had discussed at length with DG Finance the recommendation that a MOD Representative to the SSRO Board should be appointed, and this had now been implemented. Another recommendation related to secondments, and the Board was informed that staff were being encouraged to explore such opportunities where this could be supported operationally, and that inward secondments were also being considered. The interim Director of Corporate Resources was due to meet with the Head of the SSAT soon to discuss this issue further, although it was acknowledged that the pandemic presented some barriers to implementing the recommendation.

5.3. In discussion, the Board noted the importance of the recommendation relating to revised sponsorship arrangements in the MOD and reaffirmed that the SSRO should continue to work with the MOD to develop and implement a joint action plan for all shared recommendations. The Board also noted that it would fall within the MOD Representative’s role to ensure the recommendations in the report were implemented.

The Board noted the:

• Ministerial approval and publication of the Tailored Review;
• core finding from the review regarding the continuing need for and effective performance of the SSRO; and
• update on the ongoing plans to implement the recommendations arising from the report.

6. Stakeholder survey results

6.1. David Galpin, Director of Legal and Policy, introduced a report setting out the results of the SSRO’s second stakeholder survey. The results from the survey were positive for the SSRO, and the scores and comments provided helpful feedback from which to improve further. The points made would be considered and, in some places, incorporated into the revised stakeholder engagement strategy that would be brought to the Board in June.

6.2. The paper highlighted areas for improvement, including that respondents had raised issues with the timing and volume of SSRO consultations and how responses were reflected. Guidance was also an area that had attracted several comments.

6.3. The Chairman stated that he considered the stakeholder survey a good result and a vote of confidence in the regime and the SSRO team. In discussion, the Board recommended that consideration should be given as to whether to publish the full report or an executive summary only. The Board noted the differences in responses between government and industry respondents.

The Board:

• considered and discussed the key findings of the SSRO Stakeholder Survey 2020 results set out in in the summary presentation and the report;
• approved the proposed next steps set out in section 6 ‘Actions to take’ to address the findings of the survey; and
• approved the publication of the Stakeholder Survey results with the Chairman and the Chief Executive to agree the final format of publication.

7. Corporate Performance Report

7.1. Mike Wetherell, Interim Director of Corporate Resources, introduced the Corporate Performance Report, which provided a regular update on how the organisation was delivering against its priorities as set out in the 2019-22 Corporate Plan. Board members welcomed the report and the refreshed format, which had been updated for the new financial year.

7.2. In discussion, the Board asked for a new risk to be added to the Corporate Risk Register regarding the impact that the pandemic would have in the medium to long term. It was noted that there may be resulting changes to the procurement environment, either due to limited finances or the state of the economy. The SSRO would also have an opportunity to consider new ways of working as a result of the pandemic. Action: Mike Wetherell.

The Board:

• reviewed and commented on the Corporate Performance Report.

9. Minutes from Regulatory Committee meeting of 18 March 2020 and update from meeting of 19 May 2020

9.1. Peter Freeman, Chair of the Regulatory Committee, presented an update from the Committee’s meetings held on 18 March 2020 and 19 May 2020. The Committee had considered the SSRO’s review of legislation at both meetings, and its considerations had been included in the report earlier on the agenda. The Committee had also considered the annual compliance report process, reporting activity and referrals.

The Board noted the minutes and update from the Committee.

10. Future agendas and any other business

10.1. The Chairman introduced the two-page document showing the business of all Board and sub-committee meetings for the next year.

10.2. The next meeting would take place on 25 June 2020 at 2:00pm.