Policy paper

Framework agreement between DHSC and the Health Services Safety Investigations Body

Published 25 January 2024

Applies to England and Northern Ireland

© Crown copyright 2024

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Introduction and background

Purpose of document

This framework document has been agreed between the Department of Health and Social Care (DHSC or ‘the department’) and the Health Services Safety Investigations Body (HSSIB) in accordance with HM Treasury’s (HMT) handbook Managing Public Money (MPM) (as updated from time to time) and has been approved by HMT.

The framework document sets out the broad governance framework within which HSSIB and DHSC operate. It:

  • sets out HSSIB’s core responsibilities
  • describes the governance and accountability framework that applies between the roles of DHSC and HSSIB
  • sets out how the day-to-day relationship works in practice, including in relation to governance and financial matters

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

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

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.

This framework document should be reviewed and updated at least every 3 years, unless there are exceptional reasons that render this inappropriate that have been agreed with HMT and the principal accounting officer of the sponsor department. The latest date for review and updating of this document is October 2026.

Objectives

DHSC and HSSIB share the common objective to improve patient safety. To achieve this, HSSIB and DHSC will work together in recognition of each other’s roles and areas of expertise, providing an effective environment for HSSIB to achieve its objectives through the promotion of partnership and trust, and ensuring that HSSIB also supports the strategic aims and objective of DHSC and wider government as a whole.

Classification

HSSIB is intended to be classified as a central government organisation by the HMT Classifications team.

It has been administratively classified by the Cabinet Office as a non-departmental public body (NDPB).

Purposes, aims and duties

Purposes

HSSIB has been established under the Health and Care Act 2022. Its purposes are set out in part 4 of that act.

Powers and duties

HSSIB’s powers and duties stem from part 4 of the Health and Care Act 2022.

HSSIB’s statutory duties and functions in summary are to:

  • investigate incidents that occur in England during the provision of health care services and that have or may have implications for the safety of patients
  • as part of these investigations, identify risks to the safety of patients, and address those risks by facilitating the improvement of systems and practices in the provision of NHS services or other health care services in England
  • determine (based on a criteria, principles and processes document, to be signed off by HSSIB and DHSC) which qualifying incidents to investigate and what processes it intends to use during investigation. The Secretary of State may also direct HSSIB to carry out an investigation of particular qualifying incidents
  • include the time periods within which HSSIB aims to complete investigations
  • comply with requests made by the Secretary of State, NHS England or relevant NHS bodies to provide assistance in connection with the carrying out of investigations by disseminating information about best practice, developing standards to be adopted, and giving advice, guidance or training

Aims

HSSIB’s strategic aims are to:

  • build on the work of the Healthcare Safety Investigation Branch, which became operational in April 2017 as part of NHS Improvement (NHS Improvement became part of NHS England in July 2022), to conduct high-level investigations into patient safety incidents in the NHS
  • conduct investigations, and its remit will be extended to include the independent sector, which will enable investigations into patient safety concerns
  • carry out investigations, supported by ‘safe space’, which encourages participants, including patients, families and staff, to share information in confidence with HSSIB for the purposes of an investigation
  • provide system-wide learning through its investigation reports by making recommendations at a national level for the purpose of improving patient safety and to prevent patient safety risks

Governance and accountability

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

In particular (but without limitation), HSSIB should:

  • comply with the principles and provisions of the Corporate governance in central government departments: code of food 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 with MPM, have regard to the relevant Functional Standards as appropriate and in particular those concerning:
    • finance
    • commercial
    • counter fraud
  • take into account the codes of good practice and guidance set out in Annex A of this framework document, as they apply to arm’s length bodies (ALBs)

In line with MPM Annex 3.1, HSSIB 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 HSSIB does intend to materially depart from the code, the sponsor should be notified in advance.

Role of the Department of Health and Social Care

The responsible minister

The Secretary of State for Health and Social Care is accountable to Parliament for all matters concerning HSSIB.

Matters concerning HSSIB form part of the Secretary of State’s overall ministerial responsibility for, and oversight of, NHS delivery and performance. The ministers’ statutory powers in respect of HSSIB are set out in the Health and Care Act 2022.

These are:

  • the Secretary of State may direct HSSIB to carry out an investigation of a ‘qualifying incident’, specifying when the report for this investigation must be published
  • HSSIB must comply with any request by the Secretary of State to provide an NHS body with assistance in carrying out investigations
  • the Secretary of State may direct HSSIB to exercise its functions within a particular time period and manner, if the Secretary of State considers that HSSIB is failing to exercise any of its functions
  • if HSSIB fails to comply with a direction under subsection (2), the Secretary of State may:
    • exercise the functions specified in the direction
    • make arrangements for some other person to exercise them on the Secretary of State’s behalf

Appointments to the board

The chief executive, known as the chief investigator, of HSSIB is appointed by the non-executive members of the HSSIB board under schedule 13, paragraph 3(1) to the Health and Care Act 2022, with the consent of the Secretary of State.

The Secretary of State shall have the following appointment and approval rights in relation to the rest of the HSSIB’s board:

  • the chair is appointed by the Secretary of State under schedule 13, paragraph 2 to the Health and Care Act 2022
  • non-executive members are appointed by the Secretary of State under schedule 13, paragraph 2 to the Health and Care Act 2022
  • the non-executive members may not appoint more than 5 executives (in addition to the chief executive) without the consent of the Secretary of State (see schedule 13, paragraph 4 to the Health and Care Act 2022)

The chair and non-executive members are public appointments made by the Secretary of State. The process by which they are appointed is managed by DHSC, subject to the Governance Code for Public Appointments and is regulated by the Commissioner for Public Appointments.

In appointing executives, non-executive members should have regard to the principles that the membership of the boards of public bodies should reflect the diversity of the society in which we live and offer a balance of skills and backgrounds that reflect the needs of the organisation.

Other ministerial powers and responsibilities

The minister is also responsible for:

  • the governance arrangements within which HSSIB operates
  • setting the performance framework within which HSSIB will operate, including approving HSSIB’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

The principal accounting officer

The principal accounting officer (PAO) is the Permanent Secretary of DHSC.

PAO’s specific accountabilities and responsibilities

The PAO of DHSC designates the chief executive as HSSIB’s accounting officer (AO) and ensures that they are fully aware of their responsibilities. The PAO issues a letter appointing the AO, setting out their responsibilities and delegated authorities.

The respective responsibilities of the PAO and AOs for ALBs are set out in Chapter 3 of MPM.

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

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

  • an appropriate framework of objectives and targets for HSSIB in the light of the department’s wider strategic aims and priorities
  • an appropriate budget for HSSIB in the light of the sponsor department’s overall public expenditure priorities
  • how well HSSIB is achieving its strategic objectives and whether it is delivering value for money
  • the exercise of the ministers’ statutory responsibilities concerning HSSIB as outlined above

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

  • monitor HSSIB’s activities and performance
  • address significant problems in HSSIB, 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 DHSC and HSSIB’s objectives and activities in line with the wider departmental risk assessment process
  • inform HSSIB of relevant government policy in a timely manner
  • bring ministerial or departmental concerns about the activities of HSSIB to the full HSSIB board, and, as appropriate to the DHSC departmental board, requiring explanations and assurances that appropriate action has been taken

The role of the sponsorship team

The sponsorship team in DHSC, which sits within the Quality, Patient Safety and Investigations branch, is the primary contact for HSSIB. The responsible senior civil servant for this relationship is the Director for the Quality, Safety and Investigations Directorate. They are the main source of advice to the responsible minister on the discharge of their responsibilities in respect of HSSIB. They also support the PAO on their responsibilities toward HSSIB.

Officials of the Quality, Patient Safety and Investigations branch in DHSC will liaise regularly with HSSIB to review performance against plans, achievement against targets and expenditure against its departmental expenditure limits, and annually managed expenditure allocations. The Quality, Patient Safety and Investigations branch will also take the opportunity to explain wider policy developments that might have an impact on HSSIB.

Both HSSIB and DHSC will act in accordance with the communications protocol, to be signed by both bodies. This should lay out information and data sharing between the bodies in greater detail and be reviewed each year.

Resolution of disputes between HSSIB and DHSC

Any disputes between DHSC and HSSIB will be resolved in as timely a manner as possible. DHSC and HSSIB 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 senior sponsor, will be used to resolve the issue. Failing this, the senior sponsor will ask the relevant policy director general 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.

Freedom of information requests

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

HSSIB shall provide a quarterly update to DHSC 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.

In respect of each substantial piece of litigation involving HSSIB, 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

HSSIB governance structure

The chief executive

Responsibilities of HSSIB’s chief executive as accounting officer

The chief executive (known as the chief investigator) as AO is personally responsible for:

  • safeguarding the public funds for which they have charge
  • ensuring propriety, regularity, value for money and feasibility in the handling of those public funds
  • the day-to-day operations and management of HSSIB

In addition, they should ensure that HSSIB 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 AO appointment letter issued by the PAO of the sponsor department.

Responsibilities for accounting to Parliament and the public

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 HSSIB in accordance with Parliamentary and Health Service Ombudsman’s principles of good complaint handling are established and made widely known within HSSIB and published on GOV.UK
  • acting in accordance with the terms of MPM and other instructions and guidance issued from time to time by DHSC, HMT 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 documents
    • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of HSSIB
    • any separate settlement letter that is issued to HSSIB from DHSC
  • ensuring they have appropriate internal mechanisms for monitoring, governance and external reporting regarding non-compliance with any conditions arising from the above documents
  • giving evidence, normally with the PAO, when summoned before the PAC on HSSIB’s stewardship of public funds

Responsibilities to the Department of Health and Social Care

Responsibilities to DHSC include:

  • establishing, in agreement with DHSC, HSSIB’s corporate and business plans in the light of DHSC’s wider strategic aims and agreed priorities
  • informing DHSC of progress in helping to achieve DHSC’s policy objectives and in demonstrating how resources are being used to achieve those objectives
  • ensuring that:
    • timely forecasts and monitoring information on performance and finance are provided to DHSC
    • DHSC is notified promptly if over or under spends are likely and that corrective action is taken
    • any significant problems, whether financial or otherwise and whether detected by internal audit or by other means, are notified to DHSC in a timely fashion

Responsibilities to the board

The chief executive is responsible for:

  • advising the board on the discharge of their responsibilities as set out in this document, in the founding legislation and in any other relevant instructions and guidance that may be issued from time to time
  • advising the board on HSSIB’s performance compared with its aims and objectives
  • ensuring that financial considerations are taken fully into account by the board at all stages in reaching and executing its decisions, and that financial appraisal techniques are followed

Managing conflicts

The chief executive should follow the advice and direction of the board, except in very exceptional circumstances with a clear cut and transparent rationale for not doing so.

If the board, or its chair, is contemplating a course of action involving a transaction that the chief executive 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, the chief executive in their role as AO should reject that course of action and ensure that the board have a full opportunity to discuss the rationale for that rejection.

Such conflicts should be brought to the attention of the PAO and the responsible minister as soon as possible.

Furthermore, and if agreed with the responsible minister, the AO must write a letter of justification to the chair of the board setting out the rationale for not following the advice and recommendation of the board and copy that letter to the Treasury Officer of Accounts.

If the responsible minister agrees with the proposed course of action of the board, it may be appropriate for the minister to direct the AO in the manner as set out in MPM paragraph 3.6.6 onwards.

The board

Composition of the board 

HSSIB will have a board in line with good standards of corporate governance, and as set out in its establishing statute and in guidance as set out in Annex A. The role of the board shall be to run HSSIB, and to deliver the objectives, in accordance with the purposes as set out above, their statutory, regulatory, common law duties and their responsibilities under this framework document. Detailed responsibilities of the board shall be set out in the board terms of reference. Remuneration of the board will be disclosed in line with the guidance in the government Financial Reporting Manual (FReM).

The board will consist of a chair, together with the chief executive (known as the chief investigator) at least 4 other non-executive members and executive members (who must be fewer in number than non-executive members).  They should have a balance of skills and experience appropriate to directing HSSIB’s business. The consent of the Secretary of State for Health and Social Care should be sought in the case that more than 5 executive members are to be appointed.

For HSSIB, there should be executive members who have experience of business, operational delivery and corporate services such as:

  • human resources
  • technology
  • property asset management
  • estate management
  • communications
  • performance management

This will include as an executive and voting board member an appropriately qualified finance director (or equivalent) as described in Annex 4.1 of MPM. The board should include a majority of non-executive members, who should support, constructively challenge and hold to account the executive team.

Board committees

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 appropriately qualified non-executive member of the board.

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.

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.

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 over-burdened when deciding the chairs and membership of committees.

Duties of the board

The board is specifically responsible for:

  • establishing and taking forward the strategic aims and objectives of HSSIB, consistent with its overall strategic direction
  • providing effective leadership of HSSIB within a framework of prudent and effective controls that enable risk to be assessed and managed
  • ensuring the financial and human resources are in place for HSSIB to meet its objectives
  • reviewing management performance
  • ensuring that the board receives and reviews regular financial and management information concerning the management of HSSIB
  • ensuring that it is kept informed of any changes that are likely to impact on the strategic direction of HSSIB’s board or on the attainability of its targets, and determining the steps needed to deal with such changes and, where appropriate, bringing such matters to the attention of the responsible minister and PAO via the executive team, sponsorship team or directly
  • ensuring that any statutory or administrative requirements for the use of public funds are complied with, and that the board operates within the limits of its 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 document
    • they are familiar with any elements of any settlement letter issued to the sponsor department that is relevant to the operation of HSSIB
    • they are familiar with any separate settlement letter that is issued to HSSIB from the sponsor department
    • that 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 HSSIB 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 and risk committee to help the board to address key financial and other risks
  • the non-executive members of the board are responsible for appointing (with Secretary of State consent) a chief executive and, in consultation with the department, setting performance objectives and remuneration terms linked to these objectives for the chief executive, which give due weight to the proper management, use and utilisation of public resources
  • determining all such other things that the board considers ancillary or conducive to the attainment or fulfilment by HSSIB of its objectives

The board should ensure that effective arrangements are in place to provide assurance on risk management, governance and internal control.

The board should make a strategic choice about the style, shape and quality of risk management, and should lead the assessment and management of opportunity and risk. The board should ensure that effective arrangements are in place to provide assurance over the design and operation of risk management, governance and internal control in line with the Management of risk - principles and concepts (Orange Book). The board must set up an audit and risk committee chaired by an independent and appropriately qualified non-executive member to provide independent advice and ensure that the department’s audit and risk committee are provided with routine assurances with escalation of any significant limitations or concerns. The board is expected to assure itself of the adequacy and effectiveness of the risk management framework and the operation of internal control.

The chair’s role and responsibilities 

The chair is responsible for leading the board in the delivery of its responsibilities.  Such responsibility should be exercised in the light of their duties and responsibilities as set out in their appointment letter, the priorities in the chair’s letter issued to them by the sponsor team, the statutory authority governing HSSIB, this document, and the documents and guidance referred to within this document.

Communications between HSSIB’s board and the responsible minister should normally be through the chair.

The chair is bound by the Code of conduct for board members of public bodies, which covers conduct in the role and includes the Nolan Principles of Public Life.

In addition, the chair is responsible for ensuring that:

  • including by monitoring and engaging with appropriate governance arrangements, HSSIB’s affairs are conducted with probity
  • 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 HSSIB

The chair has the following leadership responsibilities:

  • formulating the board’s strategy
  • ensuring that the board, in reaching decisions, 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

The chair also has an obligation to ensure that:

  • the work of the board and its members are reviewed and are working effectively, including ongoing assessment of the performance of individual board members with a formal evaluation of the performance of individual non-executive board members annually and when being considered for re-appointment
  • in conducting assessments, the view of relevant stakeholders, including employees and the sponsorship team, are sought and considered
  • the board has a balance of skills appropriate to directing HSSIB’s business, and that all directors including the chair and chief executive continually update their skills, knowledge and familiarity with HSSIB to fulfil their role both on the board and committees. This will include but not be limited to skills and training in relation to financial management and reporting requirements, risk management and the requirements of board membership within the public sector
  • 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
  • as part of wider board development and succession planning, the department is advised of the HSSIB board’s needs around 12 months in advance of when non-executive member board terms are due to end
  • there is a board operating framework 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

Individual board members’ responsibilities 

Individual board members should:

  • comply at all times with the Code of conduct for board members of public bodies, which covers conduct in the role and includes the Nolan Principles of Public Life 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
  • 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 HSSIB
  • 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, HMT or wider government

Management and financial responsibilities and controls

Delegated authorities

HSSIB’s delegated authorities are set out in the delegation letter. This delegation letter may be updated and superseded by later versions that may be issued by the sponsor department in agreement with HMT.

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

HSSIB shall obtain DHSC’s and, where appropriate, HMT’s prior written approval before:

  • entering into any undertaking to incur any expenditure that falls outside the delegations or that is not provided for in HSSIB’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

Spending authority

Once the budget has been approved by DHSC (and subject to any restrictions imposed by statute, the Secretary of State or HMT settlement or delegation letters), HSSIB shall have authority to incur expenditure approved in the budget without further reference to the sponsor department, on the following conditions:

  • HSSIB shall comply with the delegations set out in the delegation letter. These delegations shall not be altered without the prior agreement of DHSC and as agreed by HMT and Cabinet Office as appropriate
  • HSSIB 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
  • HSSIB shall provide DHSC with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require

Banking and managing cash

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

HSSIB should only hold money outside Government Banking Service accounts where a good business case can made for doing so and HMT consent is required for each account to be established. Only commercial banks that are members of relevant UK clearing bodies may be considered for this purpose.

Commercial accounts, where approved, should be operated in line with the principles as set out in MPM.

The AO is responsible for ensuring HSSIB has a banking policy as set out in MPM and that policy is complied with.

Procurement

HSSIB 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.

HSSIB shall establish its procurement policies and document these in a procurement policy and procedures manual.

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

Goods, services and works should be acquired by competition.

Procurement by HSSIB of works, equipment, goods and services shall be based on a full option appraisal and value for money, that is, the optimum combination and whole life costs and quality (fitness for purpose).

HSSIB shall:

  • engage fully with department and government-wide procurement initiatives that seek to achieve value for money from collaborative projects
  • comply with all relevant procurement policy notes issued by Cabinet Office
  • co-operate fully with initiatives to improve the availability of procurement data to facilitate the achievement of value for money
  • ensure that their commercial capability is developed in line with Government Commercial Function people standards

HSSIB shall comply with the commercial and grants standards. These standards apply to the planning, delivery and management of government commercial activity, including management of grants in all departments and ALBs, regardless of commercial approach used, and form part of a suite of functional standards that set expectations for management within government.

Risk management

HSSIB shall ensure that the risks that it faces are dealt with in an appropriate manner, in accordance with relevant aspects of best practice in corporate governance, and develop a risk management strategy, in accordance with the HMT guidance Management of risk - principles and concepts (Orange Book).

Counter fraud and theft

HSSIB should adopt and implement policies and practices to safeguard itself against fraud and theft.

HSSIB 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. 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.

HSSIB should keep records of and prepare and forward to the department an annual report on fraud and theft suffered by HSSIB, and notify DHSC of any unusual or major incidents as soon as possible. HSSIB should also report detected loss from fraud, bribery, corruption and error, alongside associated recoveries and prevented losses, to the counter fraud Centre of Expertise in line with the agreed government definitions as set out in Counter Fraud Functional Standard.

Staff

Broad responsibilities for staff 

Within the arrangements approved by the responsible minister, HSSIB 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 against employees with protected characteristics under the Equality Act 2010
  • 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 HSSIB 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 HSSIB’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 1998 are in place
  • a code of conduct for board members is in place based on the Cabinet Office’s Code of conduct for board members of public bodies
  • any recruitment for current or future executive senior manager staff should fully adhere to the executive senior manager (ESM) pay framework and relevant approvals should be sought via the DHSC Remuneration Committee

Staff costs 

Subject to its delegated authorities, HSSIB shall ensure that the creation of any additional posts does not incur forward commitments that will exceed its ability to pay for them.

Pay and conditions of service 

HSSIB’s staff are subject to levels of remuneration and terms and conditions of service (including pensions) within the general pay structure approved by DHSC and HMT. HSSIB has no delegated power to amend these terms and conditions.

If NHS Agenda for Change terms and conditions 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 these terms and conditions except where prior approval has been given by the department to vary such rates.

Staff terms and conditions should be set out in an employee handbook, which should be provided to the department together with subsequent amendments.

HSSIB shall operate a performance-related pay scheme that shall form part of the annual aggregate pay budget approved by DHSC or general pay structure approved by DHSC and HMT, where relevant with due regard to the senior civil service pay guidance.

The travel expenses of board members shall be tied to the travel and expenses policy for HSSIB. Reasonable actual costs shall be reimbursed.

Pensions, redundancy and compensation 

Compensation scheme rules and pension scheme rules should reflect legislative and HMT guidance requirements regarding exit payments.

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

Any proposal by HSSIB 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 via the DHSC Governance and Assurance Committee. Proposals on severance must comply with the rules in chapter 4 of MPM.

Business plans, financial reporting and management information

Corporate and business plans

HSSIB shall submit annually to DHSC a draft of the corporate plan covering 3 years ahead. The draft should be submitted by the end of the financial year. 

HSSIB shall agree with DHSC the issues to be addressed in the plan and the timetable for its preparation. The plan shall reflect HSSIB’s statutory and/or other duties and, within those duties, 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). The plan shall demonstrate how HSSIB contributes to the achievement of DHSC’s medium-term plan and priorities, and aligned performance metrics and milestones.

The first year of the corporate plan, amplified as necessary, shall form the business plan. The business plan shall be updated 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. Subject to any commercial considerations, a summary of the corporate and business plans should be published by HSSIB on its website and separately be made available to staff.

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 2 to 5 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 DHSC and HSSIB

Budgeting and procedures

Each year, in the light of decisions by DHSC on the updated draft corporate plan, DHSC will send to HSSIB by an agreed date:

  • 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 HSSIB

The approved annual business plan will take account both of approved funding provision and any forecast receipts. It will include a budget of estimated payments and receipts together with a profile of expected expenditure and of drawdown 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.

Grant-in-aid and any ring-fenced grants

Any grant-in-aid provided by DHSC for the year in question will be voted in the department’s Supply Estimate and be subject to Parliamentary control.

The grant-in-aid will normally be paid in monthly instalments on the basis of written applications showing evidence of need. HSSIB will comply with the general principle that there is no payment in advance of need. Cash balances accumulated during the course of the year from grant-in-aid or other Exchequer funds shall be kept to a minimum level consistent with the efficient operation of HSSIB. Grant-in-aid not drawn down by the end of the financial year shall lapse. Subject to approval by Parliament of the relevant estimates provision, where grant-in-aid is delayed to avoid excess cash balances at the year end, DHSC will make available in the next financial year any such grant-in-aid that is required to meet any liabilities at the year end, such as creditors.

In the event that DHSC provides HSSIB separate grants for specific (ring-fenced) purposes, it would issue the grant as and when HSSIB needed it on the basis of a written request. HSSIB would provide evidence that the grant was used for the purposes authorised by DHSC. HSSIB shall not have uncommitted grant funds in hand, nor carry grant funds over to another financial year.

Annual report and accounts 

HSSIB’s board must publish an annual report of its activities together with its audited accounts as soon as practicable after the end of each financial year. HSSIB shall provide the department its finalised (audited) accounts in line with DHSC’s timetable for the accounts to be consolidated within DHSC. A draft of the report should be submitted to the department 2 weeks before the proposed publication date. The accounts should be prepared in accordance with the relevant statutes and specific accounts direction issued by the department as well as HMT’s FReM.

The annual report must:

  • cover any corporate, subsidiary or joint ventures under its control
  • comply with the FreM and in particular have regard to the illustrative statements for an NDPB
  • outline main activities and performance during the previous financial year and set out in summary form forward plans.

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 HSSIB website, in accordance with the guidance in the FReM.

Reporting performance to the department 

HSSIB 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.

HSSIB shall inform DHSC 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.

HSSIB’s performance shall be formally reviewed by DHSC quarterly.

The responsible minister will meet with the chair once a year.

Information sharing  

HSSIB shall provide DHSC with such information about its operations, performance, individual projects or other expenditure as DHSC may reasonably require (subject to restrictions placed on protected material as set out in the Health and Care Act 2022). There is a need to have a signed communications protocol by both bodies, which lays out information and data sharing between the bodies in greater detail.

DHSC and HMT may request the sharing of data held by HSSIB 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.

As a minimum, HSSIB shall provide DHSC with information monthly that will enable DHSC satisfactorily to monitor:

  • HSSIB’s cash management
  • its drawdown 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
  • information on the progress of HSSIB’s functions, including the progress of investigations, number of referrals, progress of the education work, and patient and family engagement rates (ensuring such disclosure is permitted under the Health and Care Act 2022)

Audit

Internal audit 

HSSIB shall:

  • establish and maintain arrangements for internal audit and ensure that DHSC’s internal audit team have complete access to all relevant records
  • ensure that any arrangements for internal audit are in accordance with the Public Sector Internal Audit Standards as adopted by HMT
  • set up an audit and risk committee of its board in accordance with the Corporate governance in central government departments: code of good practice and the Audit committee handbook
  • forward the audit strategy, periodic audit plans and annual audit report, including HSSIB Head of Internal Audit opinion on risk management, control and governance, as soon as possible to DHSC
  • keep records of and prepare and forward to the department an annual report on fraud and theft suffered by HSSIB, and notify DHSC of any unusual or major incidents as soon as possible
  • share with DHSC 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 HSSIB

External audit 

In the event that HSSIB has set up and controls subsidiary companies, HSSIB will, in the light of the provisions in the Companies Act 2006, ensure that the Comptroller and Auditor General (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. HSSIB shall discuss with DHSC the procedures for appointing the C&AG as auditor of the companies.

The C&AG audits HSSIB’s annual accounts and lays them before Parliament, together with their report.

The C&AG:

  • will consult the department and HSSIB on whom – the NAO or a commercial auditor – shall undertake the audits on their 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 HSSIB
  • 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 DHSC’s responsibilities in relation to financial systems within HSSIB
  • 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

The C&AG may carry out examinations into the economy, efficiency and effectiveness with which HSSIB 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, HSSIB 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 that are held by other bodies.

Reviews and winding-up arrangements

Review of HSSIB’s status

HSSIB will be reviewed as part of the wider Public Bodies Reviews programme, at a time determined by DHSC’s ministers and their PAO. The date of the next review will be in 2 years.

Arrangements in the event that HSSIB is wound up

DHSC shall put in place arrangements to ensure the orderly winding up of HSSIB. In particular, it should ensure that the assets and liabilities of HSSIB 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, DHSC shall:

  • have regard to Cabinet Office guidance on winding up of ALBs
  • ensure that procedures are in place in HSSIB 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 HSSIB’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 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 DHSC inherits the role, responsibilities, assets and liabilities, DHSC’s AO should sign

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

Annex A: guidance

HSSIB shall comply with the following guidance, documents and instructions.

Corporate governance

See:

Financial management and reporting

See:

Management of risk

See:

Commercial management

See:

Public appointments

The following are relevant where public bodies participate in public appointments processes:

Staff and remuneration

See:

General

See:

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