BDUK Framework Agreement

Question 1

Introduction and background

Accepted Answer

1. Purpose of document

1.1 This Framework Agreement has been agreed between the Department for Digital, Culture, Media and Sport (DCMS) and Building Digital UK (BDUK) in accordance with HM Treasury’s handbook Managing Public Money (MPM) ^{[footnote 1]} as updated from time to time) and has been approved by HM Treasury.

1.2. The Framework Agreement sets out the broad governance framework within which BDUK and DCMS operate. It sets out BDUK’s core responsibilities; describes the governance and accountability framework that applies between the roles of DCMS and BDUK; and sets out how the day-to-day relationship works in practice, including in relation to governance and financial matters.

1.3. The document does not convey any legal powers or responsibilities but both parties agree to operate within its terms.

1.4. References to BDUK include all its subsidiaries and joint ventures that are classified to the public sector and central government for national accounts purposes. If BDUK establishes a subsidiary or joint venture, there shall be a document setting out the arrangements between it and BDUK agreed with DCMS.

1.5. Copies of the document and any subsequent amendments have been placed in the Libraries of both Houses of Parliament and made available to members of the public on GOV.UK.

1.6. This Framework Agreement should be reviewed and updated at least every 3 years unless there are exceptional reasons that render this inappropriate that have been agreed with HM Treasury and the Principal Accounting Officer of the sponsor department. The latest date for review and updating of this document is April 2025.

2. Objectives

2.1. DCMS and BDUK share the common objective of delivering government subsidies into building digital infrastructure. To achieve this BDUK and DCMS will work together in recognition of each other’s roles and areas of expertise, providing an effective environment for BDUK to achieve its objectives through the promotion of partnership and trust and ensuring that BDUK also supports the strategic aims and objective of DCMS and wider government as a whole.

3. Classification

3.1. BDUK is classified as a central government organisation by the Office for National Statistics (ONS) and His Majesty’s Treasury Classifications team.

3.2. It has been administratively classified by the Cabinet Office as an Executive Agency (EA).

Question 2

Purposes, aims and duties

Accepted Answer

4. Purposes

4.1. Digital infrastructure is central to the future of the UK economy. For the majority of the country, fixed and wireless broadband infrastructure is delivered commercially, without government support. However, there are some areas of the UK which are hard to reach and will not receive commercial investment in a timely fashion. In these harder to reach areas it is BDUK’s role to deliver government subsidies for digital infrastructure to facilitate or encourage network deployment. This will enable businesses and residents to receive the connectivity they need.

4.2. BDUK will engage with DCMS, other government partners, local bodies and industry to ensure and demonstrate the efficient and value for money delivery of its infrastructure subsidy programmes. BDUK will engage with suppliers for the purposes of these interventions, and communicate externally with the market, the public and other stakeholders on the progress made in delivering these programmes.

5. Powers and duties

5.1. As an EA, BDUK will remain legally within DCMS and retain a close relationship with DCMS policy officials, but will possess a robust new governance structure. DCMS ministers will retain overall control of, and responsibility for BDUK and broadband rollout, and BDUK will continue to operate under the authority of the Secretary of State.

5.2. DCMS retains responsibility for digital infrastructure delivery per the Communications Act 2003 and the Digital Economy Act 2017. The relevant powers granted in legislation will now be exercised through BDUK.

6. Aims

6.1. BDUK delivers government subsidies into building digital infrastructure, including gigabit-capable broadband and rural mobile coverage, in a manner aligned with UK government policy. BDUK’s particular role is, where requested by the Secretary of State, to:

deliver the government’s ambition for gigabit connectivity, with the help of Project Gigabit, providing coverage to at least 5% of UK premises within the National Infrastructure Strategy’s 85% target by the end of 2025, and as close as possible to 100% as soon as possible afterwards
provide ongoing assurance to the remaining Superfast delivery projects, which have been contracted in the past via other bodies
deliver government subsidies to increase 4G coverage to 95% of UK landmass, through the Shared Rural Network programme

6.2. More detail about BDUK’s programmes and objectives can be found in its corporate plan, published on GOV.UK.

6.3. Changes to the scope of BDUK’s objectives will be approved by the BDUK Board, subject to Accounting Officer and ministerial sign-off in the case of the Corporate and Three Year Business Plans.

Question 3

Governance and accountability

Accepted Answer

7. Governance and accountability

7.1. BDUK shall operate corporate governance arrangements that, so far as practicable and in the light of the other provisions of this Framework Agreement or as otherwise may be mutually agreed, accord with good corporate governance practice and applicable regulatory requirements and expectations.

7.2. In particular (but without limitation), BDUK should:

comply with the principles and provisions of the Corporate Governance in Central Government Departments Code of Good Practice (as amended and updated from time to time) to the extent appropriate and in line with their statutory duties or specify and explain any non-compliance in its annual report
comply with MPM
in line MPM have regard to the relevant Functional Standards^{[footnote 2]} as appropriate and in particular those concerning Finance, Commercial and Counter Fraud
take into account, the Code of Good Practice on Partnerships Between Departments and Arm’s Length Bodies (ALB)

7.3. In line with MPM 3.1, BDUK shall provide an account of corporate governance in its annual governance statement including the board’s assessment of its compliance with the Code with explanations of any material departures. To the extent that the Agency does intend to materially depart from the Code, the sponsor should be notified in advance and their agreement sought to this approach.

Question 4

Role of the department

Accepted Answer

8. The responsible minister

8.1. The Secretary of State for Digital, Culture, Media and Sport (“the Secretary of State”) will account for BDUK on all matters concerning BDUK in Parliament.

8.2. Through the exercise of these powers the Secretary of State, (or where appropriate, the Minister for Digital Infrastructure):

is responsible for the policy framework within which BDUK operates
provides guidance and direction to ensure the strategic aims and objectives of BDUK are consistent with those of the department and government
approves BDUK’s corporate plan and business plan
has a power of appointment in relation to the appointment of BDUK’s chair
has a power of appointment in relation to non-executives
has a power of appointment in relation to the appointment of BDUK’s Chief Executive

Appointments to the board

8.3. The chair is appointed by the Secretary of State.

8.4. The Chief Executive is appointed by the Secretary of State.

8.5. At least 3 non-executive members are appointed by the Secretary of State.

8.6. All such appointments should have regard to the principle that appointments should reflect the diversity of the society in which we live, and appointments should be made taking account of the need to appoint boards which include a balance of skills and backgrounds.

Other ministerial powers and responsibilities

8.7. The minister is also responsible for:

the policy framework within which BDUK operates
setting the performance framework within which BDUK will operate including approving BDUK’s Strategy and Annual Plan
matters regarding spending approvals, acquisitions, disposals, and joint ventures in line with delegations as set out in the delegation letter
such other matters as may be appropriate and proportionate

9. The Principal Accounting Officer

9.1. The Principal Accounting Officer (PAO) is the Permanent Secretary of the department.

PAO’s specific accountabilities and responsibilities

9.2. The PAO of DCMS designates the Chief Executive as BDUK’s Accounting Officer and ensures that they are fully aware of their responsibilities. The PAO issues a letter appointing the Accounting Officer, setting out his or her responsibilities and delegated authorities.

9.3. The respective responsibilities of the PAO and accounting officers for BDUK are set out in Chapter 3 of MPM.

9.4. The PAO is accountable to Parliament for the issue of any grant-in-aid to BDUK.

9.5. The PAO is also responsible, usually via the sponsorship team, for advising the responsible minister on:

in appropriate framework of objectives and targets for BDUK in the light of the department’s wider strategic aims and priorities
an appropriate budget for BDUK in the light of the sponsor department’s overall public expenditure priorities
how well BDUK is achieving its strategic objectives and whether it is delivering value for money

9.6. The PAO via the sponsorship team is also responsible for ensuring arrangements are in place in order to:

monitor BDUK’s activities and performance
address significant problems in BDUK, making such interventions as are judged necessary
periodically and at such frequency as is proportionate to the level of risk, carry out an assessment of the risks both to the department and BDUK’s objectives and activities in line with the wider departmental risk assessment process
inform BDUK of relevant government policy in a timely manner
bring ministerial or departmental concerns about the activities of BDUK to the full BDUK Board, and, as appropriate to the departmental board requiring explanations and assurances that appropriate action has been taken
helping to facilitate an environment in which BDUK can be successful

10. The role of the sponsorship team

10.1. The Digital Infrastructure team and within that, the Broadband Regulation and Investment Team in the department, is the primary contact for BDUK. The responsible Senior Civil Servant for this relationship is the Director for Digital Infrastructure, and the Director General for Digital and Media is responsible overall. They are the main source of advice to the responsible minister on the discharge of his or her responsibilities in respect of BDUK. They also support the PAO on his or her responsibilities toward BDUK.

10.2. Officials of the Digital Infrastructure Team in the sponsor department will liaise regularly with BDUK officials to review performance against plans, achievement against targets and expenditure against its DEL and AME allocations. The Broadband Regulation and Investment Team will also take the opportunity to explain wider policy developments that might have an impact on BDUK.

10.3. The DCMS sponsorship team, which sits within the Digital Infrastructure Directorate in the department, is responsible for planning and supporting the annual evaluation of the performance of the BDUK chair by DCMS’s Permanent Secretary or responsible Director General, taking into account the views of relevant stakeholders. The outcome of that evaluation should be made available to the Secretary of State.

10.4. The sponsorship team has a key role in ensuring matters impacting BDUK are discussed with the relevant people within BDUK. This includes ensuring BDUK are engaged where there is advice to ministers and others that impact on delivery, choices and operations.

11. Resolution of disputes between BDUK and department

11.1. Any disputes between the department and BDUK will be resolved in as timely a manner as possible. The department and BDUK will seek to resolve any disputes through an informal process in the first instance. If this is not possible, then a formal process, overseen by the Director for Digital Infrastructure will be used to resolve the issue. Failing this, the Director for Digital Infrastructure will ask the Senior Sponsor, the Director General for Digital and Media, to oversee the dispute. They may then choose to ask the Permanent Secretary to nominate a non-executive member of the department’s board to review the dispute, mediate with both sides and reach an outcome, in consultation with the Secretary of State.

12. Freedom of Information requests

12.1. Where a request for information is received by either party under the Freedom of Information Act 2000, or the Data Protection Act 1998 or 2018, the party receiving the request will consult with the other party prior to any disclosure of information that may affect the other party’s responsibilities.

13. Reporting on legal risk and litigation

13.1. BDUK shall provide a quarterly update to the sponsorship team and DCMS Legal on the existence of any active litigation and any threatened or reasonably anticipated litigation. The parties acknowledge the importance of ensuring that legal risks are communicated appropriately to the sponsor in a timely manner.

13.2. In respect of each substantial piece of litigation involving BDUK, the parties will agree a litigation protocol which will include specific provisions to ensure appropriate and timely reporting on the status of the litigation and the protection of legally privileged information transmitted to the sponsor to facilitate this. Until such time as a protocol is agreed, the parties will ensure that:

material developments in the litigation are communicated to the sponsor in an appropriate and timely manner
legally privileged documents and information are clearly marked as such
individual employees handling the legally privileged documents are familiar with principles to which they must adhere to protect legal privilege
circulation of privileged information within government occurs only as necessary

Question 5

BDUK governance structure

Accepted Answer

14. The Chief Executive

14.1. The role of the Chief Executive is to lead and manage BDUK. The Chief Executive will set the strategy for the successful delivery of BDUK’s Corporate Plan.

Appointment

14.2. The Chief Executive of BDUK is appointed by the Secretary of State in consultation with the Minister of State for Media, Data and Digital Infrastructure.

Responsibilities of BDUK’s Chief Executive as Accounting Officer

14.3. The Chief Executive as Accounting Officer is personally responsible for safeguarding the public funds for which they have charge; for ensuring propriety, regularity, value for money and feasibility in the handling of those public funds; and for the day-to-day operations and management of BDUK. In addition, they should ensure that BDUK as a whole is run on the basis of the standards, in terms of governance, decision-making and financial management, that are set out in Box 3.1 of MPM. These responsibilities include the below and those that are set in the Accounting Officer appointment letter issued by the Principal Accounting Officer of the sponsor department.

Responsibilities for accounting to Parliament and the public

14.4. Responsibilities to Parliament and the public 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
preparing and signing a Governance Statement covering corporate governance, risk management and oversight of any local responsibilities, for inclusion in the annual report and accounts
ensuring that effective procedures for handling complaints about BDUK in accordance with Parliamentary and Health Service Ombudsman’s Principles of Good Complaint Handling are established and made widely known within BDUK and published on GOV.UK
acting in accordance with the terms of MPM and other instructions and guidance issued from time to time by the Department, HM Treasury and the Cabinet Office
ensuring that as part of the above compliance they are familiar with and act in accordance with:
- any governing legislation
- this framework agreement
- any delegation letter issued to body as set out in paragraph 18.1
- any elements of any settlement letter issued to the sponsor department that is relevant to the operation of BDUK
any separate settlement letter that is issued to BDUK from the sponsor department
ensuring they have appropriate internal mechanisms for the monitoring, governance and external reporting regarding compliance any conditions arising from the above documents
giving evidence, normally with the PAO, when summoned before the PAC on BDUK’s stewardship of public funds

Responsibilities to DCMS

14.5. Responsibilities to DCMS include:

establishing, in agreement with the department, BDUK’s corporate and business plans in the light of the department’s wider strategic aims and agreed priorities
informing DCMS of progress in helping to achieve the department’s policy objectives and in demonstrating how resources are being used to achieve those objectives
ensuring the DCMS sponsor team are sighted on planned advice to ministers and the DCMS Communications team is sighted on preparations for external communications activity
ensuring that timely and accurate forecasts and monitoring information on performance and finance are provided to DCMS
that the Department is notified promptly if over or under spends are likely and that corrective action is taken; and that any significant problems whether financial or otherwise, and whether detected by internal audit or by other means, are notified to DCMS in a timely fashion
leading, and acting as a role model for BDUK, on building a strong network of open and collaborative relationships and partnerships with DCMS and across government, to help deliver shared organisational, departmental and wider Whitehall priorities

Responsibilities to the board

14.6. The Chief Executive is responsible for:

advising the board on the discharge of BDUK’s responsibilities as set out in this document, any relevant legislation and in any other relevant instructions and guidance that may be issued from time to time
advising the board on BDUK’s performance compared with its aims and objectives
ensuring that financial considerations are taken fully into account by the board in providing its advice to BDUK, and that financial appraisal techniques are followed

Managing conflicts

14.7. In the Executive Agency model, final decisions and the responsibility and accountability for those rest with the Chief Executive. However, the expectation is that the Chief Executive will follow the advice of the board.

14.8. If the board, or its chair, is contemplating a course of action involving a transaction which the Chief Executive considers would infringe upon the requirements of propriety or regularity or does not represent prudent or economical administration, efficiency or effectiveness, is of questionable feasibility, or is unethical the Chief Executive in their role as AO should reject that course of action.

14.9. The Chief Executive must ensure that the board has a full opportunity to discuss the rationale. The Chief Executive should confirm the rationale for not following the advice of the board in writing to the chair of the board and the Principal Accounting Officer, and copy that to the Treasury Officer of Accounts.

14.10. If the responsible minister agrees with the proposed course of action of the board it may be appropriate for the minister to direct the Accounting Officer in the manner as set out in MPM paragraph 3.4 onwards.

15. The board

Composition of the board

15.1. The board has no executive functions. Its role is to advise ministers, generally through the departmental sponsor, on the strategies to be adopted by BDUK as set out in its Corporate Plan, the delivery against its targets and KPIs and the resources needed to meet those targets. The board also provides advice and guidance to the Chief Executive and his/her senior team on BDUK’s performance, operation and development, including its management of risk.

15.2. The board should ensure that effective arrangements are in place to provide assurance on risk management, governance and internal control. The board must set up an Audit and Risk Committee chaired by an independent non-executive member to provide independent advice. The board is expected to assure itself of the effectiveness of the internal control and risk management systems.

15.3. Remuneration of the board will be disclosed in line with the guidance in the Government Financial Reporting manual (FReM).

15.4. The board will consist of a chair, together with the Chief Executive, two executive members; the Chief Financial Officer and the BDUK Chief Commercial Officer, at least three non-executive members that have a balance of skills and experience appropriate to directing BDUK’s business and at least one representative from DCMS. For BDUK there should be members who have experience of the telecommunications sector, infrastructure delivery, operations, data and IT, and corporate services such as Finance and HR. This will include as an executive and voting member an appropriately qualified finance director as described in Annex 4.1 of MPM. Non-executive members should ensure that executive members are supported and constructively challenged in their roles.

Board Committees

15.5. The board may set up such committees as necessary for it to fulfil its functions. As is detailed below at a minimum this should include an Audit and Risk Committee chaired by an independent non-executive member of the board and with representation on this board of appropriately qualified members.

15.6. While the board may make use of committees to assist its consideration of appointments, succession, audit, risk and remuneration it retains responsibility for, and endorses, final decisions in all of these areas. The chair should ensure that sufficient time is allowed at the board for committees to report on the nature and content of discussion, on recommendations, and on actions to be taken.

15.7. Where there is disagreement between the relevant committee and the board, adequate time should be made available for discussion of the issue with a view to resolving the disagreement. Where any such disagreement cannot be resolved, the committee concerned should have the right to report the issue to the sponsor team, PAO and responsible minister. They may also seek to ensure the disagreement or concern is reflected as part of the report on its activities in the annual report.

15.8. The chair should ensure board committees are properly structured with appropriate terms of reference. The terms of each committee should set out its responsibilities and the authority delegated to it by the board. The chair should ensure that committee membership is periodically refreshed and that individual independent non-executive directors are not overburdened when deciding the chairs and membership of committees.

Duties of the board

15.9. The board is specifically responsible for:

advising on strategic direction and provide the context for the corporate plan and overall targets
providing strategic challenge and endorsing the corporate plan
examining and endorsing the annual report and accounts for submission by the Accounting Officer
advising on exposure to risks to BDUK and its management
advising on and monitoring performance against agreed KPIs and targets, particularly in ensuring fit with wider government aims and performance against them, as well as providing an independent assessment of the targets and the underlying processes, and management information
advising on the scope and outcome of BDUK reviews
advising on major business developments which imply a significant change in BDUK’s role and activities
assessing BDUK capability and plans for the future
advising on the allocation of BDUK resources and capability plans for the future
ensuring that any statutory or administrative requirements for the use of public funds are complied with; that the board operates within the limits of any statutory authority and any delegated authority agreed with the sponsor department, and in accordance with any other conditions relating to the use of public funds
ensuring that in reaching decisions, the board takes into account guidance issued by the sponsor department
ensuring that as part of the above compliance they are familiar with:
- this framework agreement
- any delegation letter issued to body as set out in paragraph 18.1
- any elements of any settlement letter issued to the sponsor department that is relevant to the operation of BDUK
- any separate settlement letter that is issued to BDUK from the sponsor department
ensuring they have appropriate internal mechanisms for the monitoring, governance and external reporting regarding any conditions arising from the above documents and ensure that the Chief Executive and BDUK as a whole act in accordance with their obligations under the above documents
demonstrating high standards of corporate governance at all times, including by using the independent audit committee to help the board to address key financial and other risks

16. The chair’s role and responsibilities

16.1. The chair is responsible to the named minister. Communications between BDUK’s Board and the responsible minister should normally be by the chair through the DCMS sponsor team. They are responsible for advising BDUK to enable the Chief Executive to take decisions on policies and actions that support the responsible minister’s wider strategic policies and that its affairs are conducted with probity. Where appropriate, these policies and actions should be clearly communicated and disseminated throughout BDUK by the Chief Executive. Such responsibility should be exercised in the light of their duties and responsibilities as set out in their contract of employment/appointment letter, the priorities in the chair’s letter issued to them by the sponsor team, any relevant statute governing BDUK, this document and the documents and guidance referred to within this document.

16.2. The chair is bound by the Code of Conduct for Board Members of Public Bodies,^{[footnote 3]} which covers conduct in the role and includes the Nolan Principles of Public Life.^{[footnote 4]}

16.3. In addition, the chair is responsible for:

ensuring, including by monitoring and engaging with appropriate governance arrangements, that BDUK’s affairs are conducted with probity
ensuring that policies and actions support the responsible minister’s (and where relevant other ministers’) wider strategic policies and where appropriate, these policies and actions should be clearly communicated and disseminated throughout BDUK

16.4. The chair has the following leadership responsibilities: formulating the board’s strategy; ensuring that the board, in advising the Chief Executive, takes proper account of guidance provided by the responsible minister or the department; promoting the efficient and effective use of staff and other resources; delivering high standards of regularity and propriety; representing the views of the board to the general public; and building a strong network of collaborative relationships and partnerships with DCMS, across government and commercial suppliers.

16.5. The chair also has an obligation to ensure that:

the work of the board and its members are reviewed and are working effectively
they provide advice to DCMS on the balance of skills of the board appropriate to advising the Chief Executive on DCMS’s business, as set out in the Government Code of Good Practice for Corporate Governance
board members are fully briefed on terms of appointment, duties, rights and responsibilities
they, together with the other board members, receive appropriate training on financial management and reporting requirements and on any differences that may exist between private and public sector practice
the responsible minister is advised of BDUK’s needs when board vacancies arise
they provide advice on the performance of individual board members when being considered for reappointment
there is a board Terms of Reference in place setting out the role and responsibilities of the board consistent with the Government Code of Good Practice for Corporate Governance there is a code of practice for board members in place, consistent with the Cabinet Office Code of Conduct for Board Members of Public Bodies
through monitoring and engaging with appropriate governance arrangements that BDUK affairs are conducted with probity
policies and actions support the responsible minister’s wider strategic policies and where appropriate, these policies and actions should be clearly communicated and disseminated throughout BDUK

17. Individual board members’ responsibilities

17.1. Individual board members should:

comply at all times with the Code of Conduct for Board Members of Public Bodies^{[footnote 5]}, which covers conduct in the role and includes the Nolan Principles of Public Life^{[footnote 6]}as well as rules relating to the use of public funds and to conflicts of interest
demonstrate adherence to the 12 Principles of Governance for all Public Body Non-Executive Directors as appropriate^{[footnote 7]}
not misuse information gained in the course of their public service for personal gain or for political profit, nor seek to use the opportunity of public service to promote their private interests or those of connected persons or organisations
comply with the board’s rules on the acceptance of gifts and hospitality, and of business appointments
act in good faith and in the best interests of BDUK
ensure they are familiar with any applicable guidance on the role of public sector non-executive directors and boards that may be issued from time to time by the Cabinet Office, HM Treasury or wider government

17.2. Any Director appointed by DCMS has the same responsibilities, as a board member, as other Directors, sharing in the collective responsibilities of the board and fostering collegiate working relationships with non-executive and executive board members and colleagues. Without prejudice to, and mindful of, these duties they will provide an insight into government thinking and approach on particular issues affecting BDUK as well as on the government’s wider views and priorities.

Question 6

Management and financial responsibilities and controls

Accepted Answer

18. Delegated authorities

18.1. BDUK’s delegated authorities are set out in the delegation letter attached to this Framework Agreement. This delegation letter may be updated and superseded by later versions which may be issued by the sponsor department in agreement with HM Treasury.

18.2. In line with MPM Annex 2.2 these delegations will be reviewed on an annual basis.

18.3. BDUK shall obtain the department’s and where appropriate HM Treasury’s prior written approval before:

entering into any undertaking to incur any expenditure that falls outside the delegations or which is not provided for in the BDUK’s annual budget as approved by the department
incurring expenditure for any purpose that is or might be considered novel or contentious, or which has or could have significant future cost implications
making any significant change in the scale of operation or funding of any initiative or particular scheme previously approved by the department
making any change of policy or practice which has wider financial implications that might prove repercussive or which might significantly affect the future level of resources required
carrying out policies that go against the principles, rules, guidance and advice in MPM

19. Spending authority

19.1. Once the budget has been approved by the sponsor department, BDUK shall have authority to incur expenditure approved in the budget without further reference to the sponsor department, on the following conditions:

BDUK shall comply with the delegations set out in the delegation letter. These delegations shall not be altered without the prior agreement of the sponsor department and as agreed by HM Treasury and Cabinet Office as appropriate
BDUK shall comply with MPM regarding novel, contentious or repercussive proposals
inclusion of any planned and approved expenditure in the budget shall not remove the need to seek formal departmental approval where any proposed expenditure is outside the delegated limits or is for new schemes not previously agreed and where a formal business case is required
BDUK shall provide the sponsor department with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require

20. Banking and managing cash

20.1. BDUK must maximise the use of publicly procured banking services (accounts with central government commercial banks managed centrally by Government Banking).

20.2. BDUK should only hold money outside Government Banking Service accounts where a good business case can be made for doing so and HM Treasury consent is required for each account to be established. Only commercial banks which are members of relevant UK clearing bodies may be considered for this purpose. Commercial bank accounts should only be created following liaison with the department and the establishment of a robust business case.

20.3. BDUK will continue to follow the DCMS Banking Policy. The BDUK Accounting Officer is responsible for ensuring this policy is complied with.

20.4. BDUK will continue to report to DCMS (for the purposes of HM Treasury cash forecasting) the expected daily cash receipts and payments for the following month, by working day 10 on a monthly basis.

21. Procurement

21.1. BDUK shall ensure that its procurement policies are aligned with and comply with any relevant UK or other international procurement rules and in particular the Public Contracts Regulations 2015.

21.2. BDUK Programme Procurement activities will be managed by BDUK and subject to DCMS Commercial and Cabinet Office controls.

21.3. BDUK shall establish its programme procurement policies and document these in a Procurement Policy and Procedures Manual.

21.4. In programme procurement cases where BDUK is likely to exceed its delegated authority limit, procurement strategy approval for the specific planned purchase must be sought from the department’s sponsor team.

21.5. Goods, services, and works should be acquired by competition. Proposals to let single-tender or restricted contracts shall be limited and exceptional. Where they exceed delegated authority DCMS will consider Single Tender Action (STA) requests from BDUK on a case-by-case basis, in accordance with any relevant central guidance. The DCMS Commercial Director will consider the delegated limit for single tender action contracts annually each March and may adjust as appropriate. A quarterly report explaining any STAs should be sent to the department.

21.6. Programme procurement by BDUK of works, equipment, goods, and services shall be based on, a full option appraisal and value for money (VfM), ie the optimum combination and whole life costs and quality (fitness for purpose).

21.7. BDUK shall: a) engage fully with department and government wide procurement initiatives that seek to achieve VfM from collaborative projects b) comply with all relevant Procurement Policy Notes issued by Cabinet Office c) cooperate fully with initiatives to improve the availability of procurement data to facilitate the achievement of VfM

21.8. BDUK shall comply with the Commercial^{[footnote 8]} and Grants Standards^{[footnote 9]}. These standards apply to the planning, delivery, and management of government commercial activity, including management of grants in all departments and BDUK, regardless of commercial approach used and form part of a suite of functional standards that set expectations for management within government.

22. Risk management

22.1. BDUK shall ensure that the risks that it faces are dealt with through the risk management process cycle, including: identification, assessment, treatment, monitoring and reporting, in accordance with relevant aspects of best practice in corporate governance, and develop a risk management strategy, in accordance with HM Treasury guidance Management of Risk: Principles and Concepts^{[footnote 10]} .

23. Counter fraud and theft

23.1. BDUK should adopt and implement appropriate policies and practises to safeguard itself against fraud, error, bribery and corruption.

23.2. BDUK should act in line with guidance as issued by the Counter Fraud Function and in compliance with the procedures and considerations as set in in MPM Annex 4.9 and the Counter Fraud Functional Standard^{[footnote 11]}. It should also take all reasonable steps to appraise the financial standing of any firm or other body with which it intends to enter a contract or to provide grant or grant-in-aid.

23.3. BDUK will notify the DCMS Counter Fraud team, and any relevant departmental sponsor team(s) of any and all instances of suspected financial crime, including but not limited to fraud, bribery, and corruption, as soon as they have reasonable grounds to suspect such, in relation to any aspect of their business-as-usual activities.

23.4. BDUK will adhere to all the 13 functional standards and work with DCMS/Cabinet Office to enhance these further.

24. Staff

Broad responsibilities for staff

24.1. Within the arrangements approved by the responsible minister and HM Treasury, BDUK will have responsibility for the recruitment, retention and motivation of its staff. The broad responsibilities toward its staff are to ensure that:

the rules for recruitment and management of staff create an inclusive culture in which diversity is fully valued; appointment and advancement is based on merit: there is no discrimination on grounds of gender, marital status, sexual orientation, race, colour, ethnic or national origin, religion, disability, community background or age
the sponsor department has in place appropriate procedures for the consideration of the pay of senior officials
the level and structure of its staffing, including grading and staff numbers, are appropriate to its functions and the requirements of economy, efficiency and effectiveness
the performance of its staff at all levels is satisfactorily appraised and BDUK performance measurement systems are reviewed from time to time
its staff are encouraged to acquire the appropriate professional, management and other expertise necessary to achieve BDUK’s objectives
proper consultation with staff takes place on key issues affecting them
adequate grievance and disciplinary procedures are in place
whistle-blowing procedures consistent with the Public Interest Disclosure Act are in place
a DCMS standard of conduct for staff is in place, which BDUK are aligned with

Staff costs

24.2. Subject to its delegated authorities, BDUK shall ensure that the creation of any additional posts does not incur forward commitments that will exceed its ability to operate within the headcount cap, pay for them in the medium term and including staff attrition.

Pay and conditions of service

24.3. The transfer of staff will be governed by the Cabinet Office Statement of Practice (COSOP). BDUK staff will continue to be civil servants and crown employees, and there are no changes to their terms and conditions.

24.4. BDUK’s staff are subject to levels of remuneration and terms and conditions of service (including pensions) within the general pay structure approved by the sponsor department and HM Treasury. BDUK has no delegated power to amend these terms and conditions, but is responsible for ensuring compliance within BDUK.

24.5. If civil service terms and conditions of service apply to the rates of pay and non-pay allowances paid to the staff and to any other party entitled to payment in respect of travel expenses or other allowances, payment shall be made in accordance with the Civil Service Management Code^{[footnote 12]} and the annual Civil Service Pay Remit Guidance, except where prior approval has been given by the department to vary such rates.

24.6. Staff terms and conditions are set out in DCMS policies which BDUK will continue to abide by. These will be accessible to all BDUK staff.

24.7. BDUK shall abide by public sector pay controls, including the relevant approvals process dependent on the organisations classification as detailed in the Senior Pay Guidance^{[footnote 13]}and the Public Sector Pay and Terms Guidance^{[footnote 14]}. Any exceptions sought to this rule must be discussed with DCMS before a full business case is submitted by BDUK for approval by HM Treasury.

24.8. BDUK shall operate within the general pay structure shared with DCMS and approved by HM Treasury, subject to the delegations set out in a letter attached to this document, where relevant with due regard to the senior pay guidance.

24.9. The travel expenses of board members shall be tied to the rates allowed to senior staff by departmental rates. Reasonable actual costs shall be reimbursed.

Pensions, redundancy and compensation

24.10. Compensation scheme rules and pension scheme rules should reflect legislative and HM Treasury guidance requirements regarding exit payments^{[footnote 15]}.

24.11. BDUK staff shall normally be eligible for a pension provided by PCSPS. Staff may opt out of the occupational pension scheme provided by BDUK, but that employers’ contribution to any personal pension arrangement, including stakeholder pension, shall normally be limited to the national insurance rebate level.

24.12. Any proposal by BDUK to move from the existing pension arrangements, or to pay any redundancy or compensation for loss of office, requires the prior approval of the department. Proposals on severance must comply with the rules in chapter 4 of MPM.

Question 7

Business plans, financial reporting and management information

Accepted Answer

25. Corporate and business plans

25.1. From 15 March 2023 BDUK shall submit once every three years to the sponsor department a corporate plan covering three years ahead and from 15 March 2023 BDUK shall submit annually a business plan covering the financial year ahead, a final draft should be submitted to the DCMS Executive Board by 28 February 2023.

25.2 By financial year 2022 to 2023 BDUK shall submit to the sponsor department a business plan covering the financial year ahead, a draft should be submitted to the DCMS Executive Board by 4 February BDUK shall agree with the department the issues to be addressed in the plan and the timetable for its preparation. The plan shall reflect BDUK’s statutory and key aims, including its programme spending objectives. Within those duties, plans should be detailed, showing how the priorities set from time to time by the responsible minister (including decisions taken on policy and resources in the light of wider public expenditure decisions) will be focused on by the EA. The plan shall demonstrate how BDUK contributes to the achievement of the department’s medium-term plan and priorities and, with aligned performance metrics and milestones.

25.3. The business plan for the financial year ahead shall form the first year of the Corporate Plan, to include key targets and milestones for the year immediately ahead and shall be linked to budgeting information so that resources allocated to achieve specific objectives can readily be identified by the department. The corporate plan covering three years ahead, shall be designed so that the first year of the corporate plan, amplified as necessary, shall form the business plan. Subject to any commercial considerations, the corporate and business plans should be published by BDUK on its website and separately be made available to staff.

25.4. The following key matters should be included in the plans:

key objectives and associated key performance targets for the forward years, and the strategy for achieving those objectives
key non-financial performance targets
a review of performance in the preceding financial year, together with comparable outturns for the previous 3 years, and an estimate of performance in the current year
alternative scenarios and an assessment of the risk factors that may significantly affect the execution of the plan but that cannot be accurately forecast
other matters as agreed between the department and BDUK

26. Budgeting procedures

26.1. Each year, in the light of decisions by the department on the updated draft business plan, the department will send to BDUK by end of March:

a formal statement of the annual budgetary provision allocated by the department in the light of competing priorities across the department and of any forecast income approved by the department
a statement of any planned change in policies affecting BDUK

26.2. The approved annual business plan will take account both of approved funding provision where this applies and any forecast receipts and will include a budget of estimated payments and receipts together with a profile of expected expenditure and of draw-down of any departmental funding and/or other income over the year. These elements form part of the approved business plan for the year in question.

27. Annual report and accounts

27.1. The BDUK Board must publish an annual report of its activities together with its audited accounts after the end of each financial year, with the first annual report, for financial year 2022 to 2023 being produced in 2023. In line with Treasury guidelines for central departments and their agencies, BDUK will be expected to lay their accounts in parliament before summer recess. BDUK shall provide the department its finalised consolidation accounts pack in line with the annual accounts timetable issued by DCMS each year in order for the accounts to be consolidated within the DCMS Group. For 2022 and 2023, production of BDUK accounts will be ‘outsourced’ to the DCMS Financial Accounting and Control Team (FACT) and will fall in line with DCMS’ overall pre-recess annual accounts timetable. In addition, BDUK will produce audited agency accounts which should be submitted and cleared with the department before the proposed laying date in line with the agreed timetable. The accounts should be prepared on a FReM basis (Government Financial Reporting Manual) and in accordance with the relevant statutes and specific accounts direction issued by the department. Information on performance against key financial targets is included within the annual report and subject to the auditor’s consistency opinion. The report and accounts shall be laid in Parliament and made available on the BDUK website, in accordance with the guidance in the FReM.

27.2. The annual report must:

cover any corporate, subsidiary or joint ventures under its control
outline main activities and performance during the previous financial year and set out in summary form forward plans
provide a review of performance in the preceding financial year, together with comparable outruns for the previous 3 years, and an estimate of performance in the current year
comply with the FreM and in particular have regard to the illustrative statements for an NDPB^{[footnote 16]}

28. Reporting performance to the department

28.1. BDUK shall operate management, information and accounting systems that enable it to review in a timely and effective manner its financial and non-financial performance against the budgets and targets set out in the corporate and business plans, and against the key performance indicators set out in the attached letter.

28.2. BDUK shall inform the sponsor department of any changes that make achievement of objectives more or less difficult. It shall report financial and non-financial performance, including performance in helping to deliver ministers’ policies, and the achievement of key objectives regularly, at least every quarter (see next paragraph).

28.3. BDUK’s performance shall be formally reviewed by the department four times a year.

28.4. The Secretary of State and/or the Minister for Digital Infrastructure will meet the chair and Chief Executive at least four times a year, or more often as required.

28.5. The PAO will meet the Chief Executive at least once a year.

28.6. See attached letter for further details of the sponsorship relationship.

29.1. The department has the right of access to all BDUK records and personnel for any purpose including, for example, sponsorship audits and operational investigations.

29.2. BDUK shall provide the sponsor department with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require.

29.3. The department and HM Treasury may request the sharing of data held by BDUK in such a manner as set out in central guidance except insofar as it is prohibited by law. This may include requiring the appointment of a senior official to be responsible for the data sharing relationship.

29.4. As a minimum, BDUK shall provide the department with information monthly that will enable the department satisfactorily to monitor:

BDUK’s cash management
its draw-down of grant-in-aid
forecast outturn by resource headings
other data required for the Online System for Central Accounting and Reporting (OSCAR)
data as required in respect of its compliance with any Cabinet Office Controls pipelines or required in order to meet any condition as set out in any settlement letter

Question 8

Audit

Accepted Answer

30. Internal audit

30.1 BDUK shall:

ensure that the sponsor department’s internal audit team has complete access to all relevant records
ensure that any arrangements for internal audit are in accordance with the Public Sector Internal Audit Standards (PSIAS) as adopted by HM Treasury^{[footnote 17]}
set up an audit committee of its board in accordance with the Code of Good Practice for Corporate Governance and the Audit and Risk Assurance Committee Handbook^{[footnote 18]}
forward the audit strategy, periodic audit plans and annual audit report, including the BDUK Head of Internal Audit opinion on risk management, control and governance as soon as possible to the sponsor department
keep records of and prepare and forward to the department an annual report on fraud and theft suffered by BDUK and notify the sponsor department of any unusual or major incidents as soon as possible
share with the sponsor department information identified during the audit process and the Annual Audit Opinion Report (together with any other outputs) at the end of the audit, in particular on issues impacting on the department’s responsibilities in relation to financial systems within BDUK

31. External audit

31.1. The Comptroller & Auditor General (C&AG) passes the audited accounts to the Secretary of State who will lay the accounts together with the C&AG’s report before parliament.

31.2. In the event that BDUK has set up and controls subsidiary companies, BDUK will in the light of the provisions in the Companies Act 2006 ensure that the C&AG has the option to be appointed auditor of those company subsidiaries that it controls and/or whose accounts are consolidated within its own accounts. BDUK shall discuss with the sponsor department the procedures for appointing the C&AG as auditor of the companies.

31.3. The C&AG:

will consult the department and BDUK on whom – the National Audit Office (NAO) or a commercial auditor – shall undertake the audit(s) on his or her behalf, though the final decision rests with the C&AG
has a statutory right of access to relevant documents, including by virtue of section 25(8) of the Government Resources and Accounts Act 2000, held by another party in receipt of payments or grants from BDUK
will share with the sponsor department information identified during the audit process and the audit report (together with any other outputs) at the end of the audit, in particular on issues impacting on the department’s responsibilities in relation to financial systems within BDUK
will consider requests from departments and other relevant bodies to provide regulatory compliance reports and other similar reports at the commencement of the audit. Consistent with the C&AG’s independent status, the provision of such reports is entirely at the C&AG’s discretion

31.4. The C&AG may carry out examinations into the economy, efficiency and effectiveness with which BDUK has used its resources in discharging its functions. For the purpose of these examinations the C&AG has statutory access to documents as provided for under section 8 of the National Audit Act 1983. In addition, BDUK shall provide, in conditions to grants and contracts, for the C&AG to exercise such access to documents held by grant recipients and contractors and sub-contractors as may be required for these examinations; and shall use its best endeavours to secure access for the C&AG to any other documents required by the C&AG which are held by other bodies.

Question 9

Reviews and winding up arrangements

Accepted Answer

32. Review of BDUK’s status

32.1. BDUK will be reviewed as part of the wider Public Bodies Reviews programme, at a time determined by the department’s ministers and their PAO. It is next expected to be reviewed in 2024 to 2025.

33. Arrangements in the event that BDUK is wound up

33.1. The sponsor department shall put in place arrangements to ensure the orderly winding up of BDUK. In particular it should ensure that the assets and liabilities of BDUK are passed to any successor organisation and accounted for properly. (In the event that there is no successor organisation, the assets and liabilities should revert to the sponsor department.) To this end, the department shall:

have regard to Cabinet Office guidance on winding up of BDUK^{[footnote 19]}
ensure that procedures are in place in BDUK to gain independent assurance on key transactions, financial commitments, cash flows and other information needed to handle the wind-up effectively and to maintain the momentum of work inherited by any residuary body
specify the basis for the valuation and accounting treatment of BDUK’s assets and liabilities
ensure that arrangements are in place to prepare closing accounts and pass to the C&AG for external audit, and that, for non-Crown bodies funds are in place to pay for such audits. It shall be for the C&AG to lay the final accounts in Parliament, together with his or her report on the accounts
arrange for the most appropriate person to sign the closing accounts. In the event that another ALB takes on the role, responsibilities, assets and liabilities, the succeeding ALB AO should sign the closing accounts. In the event that the department inherits the role, responsibilities, assets and liabilities, the sponsor department’s AO should sign

33.2. BDUK shall provide the department with full details of all agreements where BDUK or its successors have a right to share in the financial gains of developers. It should also pass to the department details of any other forms of claw-back due to BDUK.

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