Corporate report

Royal Botanic Gardens, Kew framework document

Published 4 July 2022

Introduction and background

1. Purpose of document

1.1 This framework document (the ‘framework document’) has been agreed between the Department for Environment Food and Rural Affairs (Defra) and the Royal Botanic Gardens, Kew (RBG Kew) in accordance with HM Treasury’s handbook Managing Public Money (‘MPM’) (as updated from time to time) and has been approved by HM Treasury.

1.2 The framework document sets out the broad governance framework within which the RBG Kew and Defra operate. It describes the governance and accountability framework that applies between the roles of Defra and RBG Kew alongside those set out in the legal framework that establishes and governs RBG Kew, and sets out how the day-to-day relationship works in practice, including in relation to governance and financial matters. RBG Kew and Defra, as the sponsor department, will ensure that they understand each other’s strategic priorities and those of other relevant parties, agree plans that reflect these appropriately, and keep each other informed, in good time, of risks and issues with the potential to affect delivery or performance, as more particularly described in the framework document including in particular section 8.

1.3 The legal framework that defines the relationship between RBG Kew and Defra is described in Annex A, and reflects RBG Kew’s status as both an executive non-departmental public body (NDPB) and an exempt charity. Annex B lists the legislation and other documents in addition to this framework document, which are relevant to understanding the relationship between the 2 bodies.

1.4 The document does not convey any legal powers or responsibilities but both parties agree to operate within its terms. It sets out how RBG Kew and in particular the board of trustees of RBG Kew (‘the board’ and members of the board, ‘the trustees’) and Defra, as its sponsoring department and principal charitable regulator, will work together.

1.5 References to RBG Kew include all its subsidiaries and joint ventures that are classified to the public sector and central government for national accounts purposes unless the specific circumstances are to the contrary. References to RBG Kew does not include its commercial trading subsidiary RBG Kew Enterprises Ltd given its current status. If RBG Kew establishes a subsidiary or joint venture, as per s25 of the National Heritage Act, consent of the Responsible Minister is required subject to any conditions he may impose, there shall be a document setting out the arrangements between it and RBG Kew agreed with Defra.

1.6 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 the Kew webpage.

1.7 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 HM Treasury and the Principal Accounting Officer of the sponsor department. The latest date for review and updating of this document is July 2025.

2. Objectives – working as Defra Group

2.1 The Defra group Outcome Delivery Plan (ODP) shows how the diverse range of outcomes and activities across the group contribute to Defra’s priority outcomes and strategic enablers. All of Defra’s public bodies, regardless of their role and positioning, play a role in contributing to Defra’s overarching single vision of improving and protecting our environment by making our air purer, our water cleaner, our land greener and our food more sustainable Defra’s group operating model supports joint working in pursuit of shared outcomes, but this does not replace the accountability of RBG Kew’s accounting officer and its board of trustees having regard to RBG Kew’s status as an independent charity and its statutory functions.

2.2. RBG Kew’s mission is to understand and protect plants and fungi for the wellbeing of people and the future of all life on Earth, an objective shared with Defra. RBG Kew and Defra will work together in recognition of each other’s roles and areas of expertise, providing an effective environment for RBG Kew to achieve its mission and the relevant outcomes of the Defra group ODP through the promotion of partnership and trust. However, Defra acknowledges that in pursuit of RBG Kew’s statutory functions/charitable purposes, RBG Kew may have other objectives that do not necessarily directly contribute to Defra’s priority outcomes; s29 of the act is the statutory basis on which the Responsible Minister has the power to grant fund RBG Kew to deliver its general statutory functions/charitable purposes. Both partners will also commit to keeping each other informed of any significant issues and concerns. The terms of engagement are included in this document including a description of the meetings that will take place and how any disputes between the department and RBG Kew will be resolved.

3. Classification

3.1 RBG Kew has been classified as a central government organisation by the Office for National Statistics.

3.2 It has been administratively classified by the Cabinet Office as a non-departmental public body and has exempt charitable status (Schedule 3 Charities Act 2011), sponsored by Defra. It carries out its statutory functions with technical expertise, impartiality, and transparency, at arm’s length from its sponsor, Defra.

3.3. As an exempt charity, RBG Kew is subject to charity law. The trustees of an exempt charity have the same general duties and responsibilities as trustees of other charities. The overriding duty of RBG Kew trustees, as for all charity trustees, is to advance the purposes of their charity.

3.4 The Secretary of State (SoS) is the nominated principal regulator for RBG Kew under the Charities Act 2011 and as such has a statutory duty to ensure that RBG Kew and the trustees comply with their duties under charity law.

3.5 RBG Kew Enterprises Ltd (‘Enterprises’) is a wholly owned subsidiary of a public body. Enterprises is also a company limited by shares, hence Enterprises is subject to company law requirements. As Enterprises accounts are fully consolidated into RBG Kew’s accounts (and therefore are consolidated in Defra’s Annual Report and Accounts), rules set out in MPM still apply to Enterprises, although its employees are not public servants (see Annex C).

3.6 UNESCO (United Nations Educational, Scientific and Cultural Organization) seeks to encourage the identification, protection, and preservation of cultural and natural heritage around the world considered to be of outstanding value to humanity. This is embodied in the World Heritage Convention 1972, of which the UK government is a State Party (or signatory). The World Heritage Committee at UNESCO inscribed the site of Kew Gardens onto its World Heritage List on 5 July 2003. On behalf of the UK government, as the ‘State Party’, Defra – working with RBG Kew – is expected to protect the World Heritage values of the properties inscribed and is encouraged to report periodically on their condition.

Purposes aims and duties

4. Purposes

4.1. RBG Kew has been established under The National Heritage Act 1983. Its purposes are set out in section 24 of that act, as further described below.

4.2 Where permitted by statute, subject to funding and consistent with RBG Kew’s status as a charity, the government may ask RBG Kew to take on additional functions or new work, on a permanent or temporary basis. The decision to take on the additional work will be made jointly by the Secretary of State and the RBG Kew board.

5. Powers and duties

5.1 RBG Kew’s powers and duties stem from sections 23-29 and Schedule 1 Part IV of the National Heritage Act 1983.

5.2 RBG Kew’s statutory duties and functions (s24 Act) are to:

• carry out investigation and research into the science of plants and related subjects, and disseminate the results of the investigation and research
• provide advice, instruction and education in relation to those aspects of the science of plants with which the board are for the time being in fact concerned
• provide other services (including quarantine) in relation to plants
• care for their collections of plants, preserved plant material other objects relating to plants, books and records
• keep the collections as national reference collections, secure that they are available to persons for the purposes of study, and add to and adapt them as scientific needs and the board’s resources allow, and
• afford to members of the public opportunities to enter any land occupied or managed by the board, for the purpose of gaining knowledge and enjoyment from the board’s collections

5.3 In addition, the following ministerial directions have been issued under the act:

• direction to board of trustees to manage land at Kew Gardens and Wakehurst (27 March 1984)
• direction to board of trustees to manage Kew Palace grounds (29 March 1984) as subsequently varied in respect of the transfer of management responsibility from RBG Kew to Historic Royal Palaces for the land and buildings forming the Royal Kitchens at Kew and the Pagoda (effective 1 April 2011 and 1 April 2015 respectively)

5.4 As provided for in s.29 of the act, the SoS, with HM Treasury (HMT) approval, may impose conditions on funding provided by Parliament to RBG Kew. The SoS must ensure that any such conditions are consistent with the General Functions and are consistent with RBG Kew’s status as a charity.

6. Aims

6.1 The RBG Kew’s strategic aims are to:

Understand and protect plants and fungi for the well-being of people and the future of all life on Earth. To deliver this mission, RBG Kew have 5 key aims:

• to deliver science-based knowledge and solutions to protect biodiversity and use natural resources sustainably
• to inspire people to protect the natural world
• to train the next generation of experts
• to extend their reach globally
• to influence national and international opinion and policy

6.2 As applicable and appropriate, RBG Kew will deliver its strategic aims in the context of the Defra Group Outcome Delivery Plan outcomes.

RBG Kew governance and structure

7. Governance and accountability

7.1 The Arm’s Length Body (ALB) shall operate corporate governance arrangements that, so far as practicable and in the light of the other provisions of the act, its charitable status and this framework document 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), RBG Kew 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. Specifically, “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”
• comply with Managing Public Money
• in line with Managing Public Money have regard to the relevant Functional Standards as appropriate and in particular those concerning Finance, Commercial and Counter Fraud, and
• take into account, the codes of good practice and guidance set out in Annex B of this framework document, as they apply to Arms’ Length Bodies

7.3 In line with Managing Public Money Annex 3.1 and the Charities Statement of Recommended Practice (SORP) the RBG Kew 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 RBG Kew does intend to materially depart from the Code, the Sponsor should be notified in advance and their agreement sought to this approach.

Role of the department

8. Partnership between Defra and RBG Kew

8.1 Both Parties recognise and understand RBG Kew’s powers and duties set out in paragraphs 4 and 5 and Annex A.

8.2 Defra acknowledges that the board is:

• a body corporate with a separate legal identity that is expected to operate at arms-length, and
• not a servant or agent of the Crown (except in so far as it exercises management functions of the SoS in connection with land and properties at Kew Gardens)

8.3 Defra further acknowledges that:

• RBG Kew is an exempt charity
• the trustees must exercise independent judgment in order to fulfil their duties as charity trustees
• as RBG Kew’s principal regulator, Defra has a statutory duty to ensure that RBG Kew and the trustees comply with their duties under charity law, and
• in its regulation and monitoring of RBG Kew, a proportionate, risk-based regulatory regime is appropriate

8.4 RBG Kew acknowledges that:

• the SoS has certain express powers in relation to RBG Kew and the board under the act
• the SoS has express power under the act to attach conditions to grant-in-aid subject to HMT approval in accordance with 29(2) of the act
• through its funding relationship with RBG Kew, Defra can set out what it expects RBG Kew to achieve in support of Defra’s aims and objectives, in return for the funding received by RBG Kew from Defra – consistent with RBG Kew’s statutory functions and status as a charity
• RBG Kew should provide prompt and frequent management information so that Defra can fulfil its responsibilities as RBG Kew’s principal regulator and sponsor department
• RBG Kew’s accounting officer has personal responsibilities in accordance with MPM, as detailed in paragraph 17 below
• RBG Kew shall follow the principles, rules, guidance and advice in MPM, mindful of RBG Kew’s charitable status and shall also have regard to wider government initiatives such as those which seek to improve the efficiency, economy and effectiveness of public services, and
• RBG Kew is committed to relevant international law, conventions and agreements to which the UK Government is a signatory party

8.5 Both Parties recognise that, in seeking to fulfil their diverse duties and responsibilities as set out above, it may be difficult sometimes for the Parties to reconcile conflicting obligations.

8.6 Consequently:

• both Parties will approach the relationship in a spirit of trust, cooperation and good faith
• as a public body, RBG Kew will exercise reasonable and prudent control over the use of public money, and
• RBG Kew will respect Defra’s duty to operate within central government constraints
• any statements in the framework document which express Defra’s control over the activities, functions and objectives of RBG Kew, the board or individual trustees must be read in the context of their independent and charitable status and are intended to be and operate as legitimate, reasonable and prudent control over the use of public money. If RBG Kew considers that there is a specific concern that a control may interfere with the trustees’ obligation to fulfil their charitable duties then the Department must be notified at an early stage of the specific instance, setting out the detail of the non-compliance, so that an exemption can be considered

9. Funding and resources

9.1 s.29 of the act is the statutory basis on which the SoS has the power to grant fund RBG Kew. The SoS can impose conditions on such payment. However, any such conditions must, as a matter of public law and charity law, be reasonable, proportionate and consistent with RBG Kew’s statutory functions and powers under the act, and not have the effect of undermining RBG Kew’s status under charity law.

9.2 Subject to those caveats, the SoS can attach conditions to the funding and set out the framework within which RBG Kew receives grant-in-aid. As such within the context of the funding relationship Defra can set out what it expects RBG Kew to achieve, in terms of its delivery of objectives, in return for the public funding.

9.3 Defra expects RBG Kew to utilise its expertise, data, collections, and resources to support the development and delivery of UK government policies where they fit with RBG Kew’s statutory functions, mission and strategic objectives.

9.4 Defra expects RBG Kew to maximise opportunities to increase income, reducing reliance on grant-in-aid. This is likely to include RBG Kew maximising charitable donations, trading, and other income. RBG Kew must respect the principles of MPM in this context, including following set processes for novel, contentious or repercussive proposals.

10. Operational freedoms

10.1 At the end of 2014 RBG Kew was granted certain operating freedoms from general public sector control on a pilot basis, and from December 2015 this was made permanent. The freedoms are:

• permission to spend previously generated reserves
• flexibility to opt in or out of central procurement on a case by case basis
• power to borrow through voted loans from their sponsoring department subject to a sector cap of £60m per year
• authorisation to invest non-grant income
• HMT commitment to respond to capital business cases within 28 days, and training to ensure business cases are proportionate and cost-effective
• Cabinet Office commitment to respond to redundancy and restructuring applications within 2 business days
• HMT commitment to reduce the administrative burden from severance payment business cases and to achieve quicker decisions
• HMT and sponsoring departments undertaking to consider favourably requests for Departmental Expenditure Limits cover to meet exceptional depreciation charges
• exemption from the requirement to use the Government Banking Service
• exemption from central marketing and advertising controls, and
• opt out of the Principal Civil Service Pension Scheme

On 31 October 2017 RBG Kew was additionally granted pay freedoms which enable RBG Kew to implement pay reforms, on the condition that it does not exceed its funding settlement.

11. The Responsible Minister

11.1 The SoS will account for RBG Kew on all matters concerning RBG Kew in Parliament. A Parliamentary Under-Secretary acts as responsible minister (‘Responsible Minister’) with day-to-day responsibility and accountability for the business of RBG Kew.

11.2 The ministers’ statutory powers in respect of RBG Kew are set out in the National Heritage Act 1983.

11.3 Through the exercise of these powers and accountabilities the minister:

• provides guidance and direction insofar as within their authority under statute or under public law and compatible with RBG Kew’s charitable status
• through the operational planning process reviews the RBG Kew corporate plan and business plan
• has a power of appointment in relation to the appointment of RBG Kew Chair in line with the Governance Code on Public Appointments
• may review the performance of the chair on a regular basis
• has a power of appointment in relation to the board members (trustees) in line with the Governance Code on Public Appointments and as a matter of charity law, the minister must exercise the power solely in the interests of RBG Kew, and
• has a power of approval in relation to the board’s appointment of RBG Kew’s Director
• to monitor, through regular reviews and reports to the Defra Board, the performance of RBG Kew in relation to key targets and risks
• has a power, at their discretion, to allocate resources to RBG Kew for its activities
• to keep Parliament informed about RBG Kew’s performance and answer Parliamentary Questions after consultation with RBG Kew where appropriate
• has a power to remove any trustee appointed by them for unsatisfactory performance or for any other reason specified at the time of appointment
• to lay copies of RBG Kew’s Annual Report and Accounts (‘ARA’) before Parliament each year in accordance with s.39(7) of the act.
• to approve any acquisition or disposal of land (except in the case of the grant of a lease, a licence or concession for less than one year) in accordance with s.24(6) of the act
• to approve the establishment of a company by RBG Kew in accordance with s.25 of the act
• to determine with RBG Kew, as set out fully in Article 5 of Enterprises’ Articles of Association, when Enterprises can:
  • incur any contingent liability
  • establish or promote any other company
  • purchase all of part of a business
  • amalgamate with any other company
• and in addition, the minister is the nominated principal regulator for RBG Kew under the Charities Act 2011 and as such must ensure that RBG Kew and the trustees comply with their duties under charity law

11.4 The Kew Gardens (Leases) Act 2019 additionally provide The Secretary of State’s powers in relation to the management of the Royal Botanic Gardens, Kew, include the power to grant a lease in respect of land for a period of up to 150 years.

Appointments to the board

11.5 The director of RBG Kew is appointed by the board under section Part IV of Schedule 1 with the approval of the SoS. The director is not and cannot be a trustee on the board of trustees because of RBG Kew’s charitable status, but in practice, in accordance with the terms of reference of the board, attends board meetings. As provided by s.24 of Part IV of the act, the director shall be responsible to the board for the general exercise of the board’s functions. The board should set performance objectives for the director which reflect both the responsibilities under the act, AO responsibilities and the director’s role in delivering the strategy set by the board of trustees.

11.6 Eleven of the board members are appointed by the Secretary of State and one board member is appointed by His Majesty The King; the Secretary of State appoints the chair in accordance with s.33 of the act. The appointments are subject to the Public Appointments Order in Council and as such must comply with the Governance Code on Public Appointments and as a matter of charity law, the minister must exercise the power solely in the interests of RBG Kew.

11.7 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.

11.8 The sponsor department shall lead the appointment process and shall consult with and engage the chair on the identification of potential candidates for future appointments.

12. The Principal Accounting Officer (PAO)

12.1 The Principal Accounting Officer is the Permanent Secretary of the department.

Sponsor department’s accounting officer’s specific accountabilities and responsibilities as Principal Accounting Officer (PAO)

12.2 The Principal Accounting Officer (PAO) of Defra designates the director as RBG Kew’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.

12.3 The respective responsibilities of the PAO and accounting officers for ALBs are set out in Chapter 3 of Managing Public Money.

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

12.5 The PAO is also responsible, usually via the senior sponsor and sponsorship team, for advising the Responsible Minister on:

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

12.6 The PAO via the sponsorship team led by the senior sponsor is also responsible for ensuring arrangements are in place in order to:

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

13. The role of the sponsorship team

13.1 The Natural Environment, Trees and Landscape (NETL) ALB relationship team in the department is the primary contact for the ALB. The responsible Senior Civil Servant for this relationship is the Director for the Natural Environment, Trees and Landscapes. They are the main source of advice to the Responsible Minister on the discharge of his or her responsibilities in respect of the ALB. They also support the PAO on his or her responsibilities toward the ALB.

13.2 Officials of the NETL ALB relationship management team in the sponsor department will liaise regularly with RBG Kew officials to review performance against plans, achievement against targets and expenditure against its Delegated Expenditure Limit and Annually Managed Expenditure allocations. The NETL ALB relationship management will also take the opportunity to explain wider policy developments that might have an impact on the ALB.

13.3 The sponsorship team will advise the PAO when necessary, on matters related to section 12.5. Defra applies the best practice standards in the CO Sponsorship Code. In doing so the department operates a proportionate, risk-based approach whereby accountability and oversight is managed between the ALB and the sponsor team collaboratively. This function can be separate or integral to the policy team depending on a number of factors, including the size of the ALB. Sponsor teams draw on the central Defra Public Bodies Partnership team and nominated functional experts for support in carrying out their role.

13.4 Defra’s approach to sponsorship adopts a hybrid model, in which sponsorship teams are embedded within the department’s network of policy areas rather than concentrated within a single central ALB partnership team. It retains a single central ALB partnership team to provide strategic coordination and to lead on cross-cutting issues. Sponsorship functional leads remain directly responsible for delivering corporate sponsorship functions, which allows the sponsorship nodes embedded within policy business units to lead on policy, rather than corporate sponsorship, and facilitates a greater focus on strategic engagement rather than on the transactional elements of corporate sponsorship.

14. Resolution of disputes between the RBG Kew and department

14.1 Any disputes between the Department and RBG Kew will be resolved in as timely a manner as possible. The Department and RBG Kew 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.

14.2 The Parties acknowledge that, as an exempt charity, RBG Kew can ask the Charity Commission to exercise its powers to provide advice and guidance on charity law, subject to the Charity Commission consulting with Defra as Principal Regulator in accordance with the memorandum of understanding agreed between them. If a Dispute concerns charity law, either Party may make such an approach to the Charity Commission at any time.

15. Freedom of Information requests

15.1 Where a request for information is received by either party under the Freedom of Information Act 2000 or Environmental Protection Regulations 2004 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 under the acts (for example when a request received by one party relates to information held by the other), including a risk assessment for data protection.

16. Reporting on legal risk and litigation

16.1 RBG Kew shall provide an update, with the frequency, format and content to be agreed between RBG Kew and Defra, to the sponsorship’s legal team 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.

16.2 In respect of each substantial piece of litigation involving RBG Kew, the parties will agree where relevant 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; and circulation of privileged information within government occurs only as necessary

17. Responsibilities of RBG Kew’s director as accounting officer

Responsibilities of the ALB’s director as accounting officer

17.1 The director 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 RBG Kew. In addition, they should ensure that RBG Kew 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 Managing Public Money. 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, including sensitivities to consider as a result of RBG Kew’s independent charitable status.

Responsibilities for accounting to Parliament and the public

17.2 Responsibilities to Parliament and the public include:

• signing the accounts (in addition to the requisite signature on behalf of the board of trustees) 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 the ALB in accordance with Parliamentary and Health Service Ombudsman’s Principles of Good Complaint Handling are established and made widely known within the ALB and published on the Kew webpage
• acting in accordance with the terms of Managing Public Money and other instructions and guidance issued from time to time by the Department, the 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 documents
  • any delegation letter issued to body as set out in paragraph 21.1
  • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of the ALB, and
  • any separate settlement letter that is issued to the ALB 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 Public Accounts Committee on the ALB’s stewardship of public funds

Responsibilities to Defra

17.3 Responsibilities to Defra include:

• establishing, through dialogue with the department, RBG Kew’s corporate and business plans in light of RBG Kew’s statutory functions and charitable status and the department’s wider strategic aims and agreed priorities
• informing the department of progress in helping to achieve the department’s policy objectives and in demonstrating how resources are being used to achieve those objectives, and
• ensuring that timely forecasts and monitoring information on performance and finance are provided to the department; 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 the department in a timely fashion

Responsibilities to the board

17.4 The director is responsible for:

• advising the board on the discharge of RBG Kew’s 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 RBG Kew’s performance compared with its aim[s] 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
• putting in place mechanisms for the director to have visibility of board activity with sufficient time before board decisions are agreed. The mechanism will enable the director to take action where needed as per below paragraph ‘Managing conflicts’

Managing conflicts

17.5 The director 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.

17.6 If the board, or its chairperson, is minded to instruct its accounting officer to carry out a course inconsistent with their duties as accounting officer then the accounting officer should manage the conflict, namely make his or her reservations clear, preferably in writing. If the board is still minded to proceed, the RBG Kew accounting officer should then:

• ask the accounting officer of the sponsor department to consider intervening to resolve the difference of view, preferably in writing
• if the board’s decision stands, seek its written direction to carry it out, asking the sponsor department to inform the Treasury
• proceed to implement without delay, and
• follow the routine set out in Managing Public Money 3.4 onwards (published May 2021)

18. The board of trustees

Composition of the board

18.1 RBG Kew 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 the RBG Kew, and to deliver the objectives, in accordance with the purposes as set out above, their statutory, regulatory, charity trustee and 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).

18.2 The board will consist of 12 trustees, including a chairperson, that have a balance of skills and experience appropriate to directing the ALB’s business as set out in s.33 of the act. In appointing any trustee, the minister shall have regard to the desirability of the person’s having knowledge or experience of the science of plants or any related subject, management, industrial relations, administration, or any other subject knowledge or experience of which would be of use to the board in exercising their functions, as set out in s.33 of the act.

18.3 RBG Kew trustees are initially appointed for a term not exceeding 5 years by the Responsible Minister, as set out in s.33(5) of the act. They may be reappointed in certain circumstances and subject to satisfactory performance assessment. Such appointments are regulated by the Independent Commissioner for Public Appointments and will comply with the Government’s Code of Governance for Public Appointments. Trustees appointed by the SoS may resign by notice given in writing to the SoS (s.33(6) of the act). RBG Kew and Defra are committed to working in partnership to appoint new trustees on a timely basis and will endeavour to schedule appointment terms to facilitate succession planning over a phased period.

Board committees

18.4 The board may set up such committees as necessary for it to fulfil its functions (s.26 of the act). As is detailed below, at a minimum this should include an Audit and Risk Committee chaired by an independent and appropriately qualified non-executive member of the board.

18.5 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 in line with their duties including as charity trustees. 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.

18.6 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, Principal Accounting Officer 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.

18.7 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 members are not over-burdened when deciding the chairs and membership of committees.

Duties of the board

18.8 In accordance with the act and charity law, The board is collectively responsible and has non-delegable responsibility for RBG Kew and is specifically responsible for:

• establishing and taking forward the strategic aims and objectives of RBG Kew
• providing effective leadership of RBG Kew within a framework of prudent and effective controls which enables risk to be assessed and managed
• ensuring the financial and human resources are in place for RBG Kew to meet its objectives
• reviewing management performance
• ensuring that the board receives and reviews regular financial and management information concerning the management of RBG Kew
• ensuring that it is kept informed of any changes which are likely to impact on the strategic direction of RBG Kew 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 Principal Accounting Officer via the executive team, sponsorship team or directly
• ensuring that any statutory or administrative requirements for the use of public funds are complied with; 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; and 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:
  • the act
  • charity law
  • this framework document
  • any delegation letter issued to body as set out in paragraph 21.1
  • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of the ALB, and
  • any separate settlement letter that is issued to the ALB from the sponsor department, and
  • 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 director and RBG Kew 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
• appointing with the Responsible Minister’s approval a director and, in consultation with the department, set performance objectives and remuneration terms linked to these objectives for the director which give due weight to the proper management and use and utilisation of public resources, and
• determining all such other things which the board considers ancillary or conducive to the attainment or fulfilment by RBG Kew of its objectives

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

18.10 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 (The Orange Book). The board must set up an Audit and Risk Assurance Committee chaired by an independent and appropriately qualified trustee to provide independent advice and ensure that the department’s Audit and Risk Assurance 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

19. The chair’s role and responsibilities

19.1 The chair is responsible for leading the board in the delivery of its responsibilities in line with its strategies and plans (agreed with Defra - and relevant other government departments - as appropriate). Such responsibility should be exercised in the light of their duties and responsibilities as set out in any appointment letter, the statutory authority and charity law governing RBG Kew, this document and the documents and guidance referred to within this document.

19.2 Communications between RBG Kew’s Board and the Responsible Minister should normally be through the chair.

19.3 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.

19.4 In addition, the chair is responsible for:

• ensuring including by monitoring and engaging with appropriate governance arrangements that RBG Kew’s affairs are conducted with probity

19.5 The chair has the following leadership responsibilities:

• the board’s formulation of RBG Kew’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, and
• representing the views of the board to the general public

19.6 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 annual evaluation and more in-depth assessments of the performance of individual board members when being considered for re-appointment
• that in conducting assessments that the view of relevant stakeholders including employees and the sponsorship team are sought and considered
• it engages with the sponsor department in relation to the sponsor department’s process for board member appointments, facilitating the sponsor department to ensure that the board has a balance of skills appropriate to directing the RBG Kew’s business, and that all board members including the chair continually update their skills, knowledge and familiarity with RBG Kew 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, receives 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 RBG Kew’s needs when board vacancies arise
• there is a board operating framework (for example in the form of 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 and their status as charity trustees

19.7 Defra shall put in place mechanisms for the appraisal and annual evaluation of the performance of the chairperson by or on behalf of the Responsible Minister.

20. Individual board members’ responsibilities

20.1 Individual board members should:

• comply at all times with the Code of Conduct for Board Members of Public Bodies consistent with their status as charity trustees, 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 RBG Kew in line with public and charity law
• 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, including Charity Commission guidance
• support the delivery of the Defra group’s objectives whilst respecting RBG Kew’s independence
• support RBG Kew’s Executive Board in working collaboratively with other parts of the Defra group and broader government, building relationships with other boards and helping to remove barriers to joint working, and
• engage fully and constructively with strategic decision-making led by the executive committee where a decision impacts on RBG Kew’s formal duties and responsibilities

Management and financial responsibilities and controls

21. Delegated authorities

21.1 The ALB’s delegated authorities are set out in the delegation letter This delegation letter may be updated and superseded by later versions which may be issued by the sponsor department in agreement with HM Treasury.

21.2 In line with Managing Public Money Annex 2.2 these delegations will be reviewed on an annual basis.

21.3 The ALB shall obtain the department’s and where appropriate HM Treasury’s prior written approval in accordance with MPM before:

• entering into any undertaking to incur any expenditure that falls outside the delegations or which is not provided for in the ALB’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, or
• carrying out policies that go against the principles, rules, guidance and advice in Managing Public Money

22. Spending authority

22.1 Once the budget has been approved by the sponsor department and subject to any restrictions imposed by HM Treasury settlement or delegation letters, the ALB shall have authority to incur expenditure approved in the budget without further reference to the sponsor department, on the following conditions:

• the ALB 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
• the ALB shall comply with Managing Public Money 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
• the ALB shall provide the sponsor department with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require

23. Banking and managing cash

23.1 As agreed by SoS in 2016, RBG Kew has an exemption from the requirement to use the Government Banking Service (GBS) under the operating freedoms as set out in section 10 in this document. Under the terms of that banking freedom, RBG Kew is required to provide the Defra Finance team with monthly forecasts including the amount of cash held in bank accounts. RBG Kew may open non GBS accounts. RBG Kew does not require formal HMT approval to open new commercial accounts, but Defra finance should be informed. RBG Kew should seek guidance from the Government Banking Service to help negotiate value for money banking contracts as required. In the event of any inconsistency between this restatement of the freedom and the terms of the banking freedom itself, the latter prevails.

24. Procurement

24.1 RBG Kew (but not RBG Kew Enterprises Ltd, not being in scope) 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.

24.2 The RBG Kew shall establish its procurement policies and document these in a Procurement Policy and Procedures Manual.

24.3 In procurement cases where the RBG Kew is likely to exceed its delegated authority limit, procurement strategy approval for the specific planned purchase must be sought through the department’s sponsor team.

24.4 Goods, services, and works should be acquired by competition where legally required. Proposals to let single-tender or restricted contracts shall be limited and exceptional.

24.5 Procurement by the RBG Kew 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).

24.6 RBG Kew shall a) comply with all relevant Procurement Policy Notes issued by Cabinet Office and b) subject to resources, co-operate fully with initiatives to improve the availability of procurement data to facilitate the achievement of value for money.

24.7 RBG Kew shall have regard to 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 RGB Kew’s, regardless of commercial approach used and form part of a suite of functional standards that set expectations for management within government.

25. Risk and issue management

25.1 RBG Kew 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 framework consistent with the Defra group risk strategy, in accordance with the Treasury guidance Management of Risk: Principles and Concepts.

25.2 RBG Kew’s director is responsible for managing the RBG Kew’s risks and issues with oversight from RBG Kew’s Board and within its governance structure. On a quarterly basis, RBG Kew should share its strategic risk register with the Defra sponsor team. This is achieved through Defra attendance at Kew’s Audit and Risk Committee by a representative of Defra Finance, and Kew’s quarterly reporting to Defra Risk management group. RBG Kew should inform the sponsor team at an early stage of any risk or issue that may require engagement, or have impact, beyond their own organisation. These risks may be escalated to the relevant director general or to the Defra Executive Committee. When a risk is escalated, ownership of that risk will usually be retained by RBG Kew. Changing or emerging risks and issues should form part of the regular discussions between sponsor teams and ALBs, as part of a shared ‘no surprises’ culture.

25.3 RBG Kew’s Board has a responsibility to ensure that proper internal audit arrangements are established and maintained, and for that purpose should establish an Audit and Risk Committee (ARAC). The committee should be chaired by a trustee of RBG Kew and provide regular reports to the director and the board on its programme, recommendations, and their implementation.

26. Counter fraud and theft

26.1 RBG Kew should adopt and implement policies and practices to safeguard itself against fraud, bribery, corruption, and theft.

26.2 RBG Kew should ensure it complies with the mandatory requirements set out in the Counter Fraud Functional Standard GovS013, except on the occasion where the board have judged that it does not align with Kew’s status as an independent charitable body. In this event the board should direct the AO, as set out in MPM.

26.3 RBG Kew’s Board should champion a fraud aware culture which encourages staff to raise concerns and provide appropriate routes to do so. It should operate in line with the procedures and considerations set out in Managing Public Money Annex 4.9 and with the National Audit Office (NAO) good practice guidance on Fraud and Error. 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.

26.4 RBG Kew should record and report all instances of fraud, bribery and theft annually to Defra and notify the sponsor department of any unusual or major incidents as soon as possible, in line with Defra guidance. RBG Kew should also report detected loss from fraud, bribery, corruption and error, alongside associated recoveries and prevented losses, to the Counter Fraud Hub in Defra (fraudanderror@defra.gov.uk) in line with the agreed government definitions as set out in Counter Fraud Functional Standard.

27. Staff

Broad responsibilities for staff

27.1 Within the act and applicable arrangements approved by the Responsible Minister and the Treasury the ALB will have responsibility for the recruitment, retention and motivation of its staff (Schedule 1 part IV of the act). 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 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 the ALB 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 the ALB’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 code of conduct for staff is in place based on the Cabinet Office’s Model Code for Staff of Executive Non-departmental Public Bodies

Staff costs

27.2 Subject to its delegated authorities, RGB Kew 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

27.3 Staff of RBG Kew (but not RBG Kew Enterprises Limited) are public servants (but not civil servants) with a duty to serve the public well. The ALB’s staff are subject to levels of remuneration and terms and conditions of service (including pensions) as the board may determine with the approval of the sponsor department (and HM Treasury) as per Schedule 1 part IV of the act. Subject to the operating freedoms at 9.1. RBG Kew must seek agreement from Defra and HMT to amend these terms and conditions.

27.4 The board may pay the trustees such reasonable allowances in respect of expenses or loss of remuneration as the SoS may determine with Treasury approval (Schedule 1 Part IV of the act s.37).

27.5 Staff terms and conditions should be set out in an Employee Handbook.

27.6 The ALB shall abide by public sector pay controls, including the relevant approvals process dependent on the organisations classification as detailed in the Senior Pay Guidance and the public sector pay and terms guidance.

27.7 The ALB shall operate a performance-related pay scheme that shall form part of the annual aggregate pay budget approved by the department or the general pay structure approved by the department and HM Treasury (whichever is applicable), where relevant with due regard to the senior pay guidance.

27.8 The travel expenses of board members shall be tied to the rates allowed to senior staff of the ALB or departmental rates (whichever is applicable). Reasonable actual costs shall be reimbursed.

Pensions, redundancy and compensation

27.9 Compensation scheme rules and pension scheme rules should reflect legislative and HM Treasury guidance requirements regarding exit payments.

27.10 Staff may opt out of the occupational pension scheme provided by the ALB, but that employers’ contribution to any personal pension arrangement, including stakeholder pension, shall normally be limited to the national insurance rebate level. RBG Kew has the freedom (see paragraph 10) to opt of out the Principal Civil Service Pension Scheme.

27.11 Any proposal by the ALB to pay any redundancy or compensation for loss of office, requires the prior approval of the department in line with MPM proposals on severance must comply with the rules in Chapter 4 of Managing Public Money.

Business plans financial reporting and management information

28. Corporate and business plans

28.1 By March RBG Kew shall submit annually to the sponsor department a draft of the corporate plan covering three years ahead. The plan shall reflect the ALB’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). In developing the plan the ALB shall consider and as appropriate demonstrate how the ALB contributes to the achievement of the department’s medium-term plan and priorities and aligned performance metrics and milestones.

28.2 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, the high-level objectives and activities set out in the corporate and business plans should be published by the ALB as part of its Annual Report in line with its reporting obligations and separately be made available to staff.

28.3 The following matters should be included in the plans:

• key outcomes and sub-outcomes associated key performance indicators (with targets where appropriate) for the forward years, and the strategy for achieving those objectives
• 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, and
• other matters as agreed between the department and the ALB

29. Budgeting procedures

29.1 Each year, in the light of decisions by the department on the updated Defra draft corporate plan, the department will send to the ALB before the start of the financial year:

• Defra recognises the value of a multi-year settlement for RBG Kew and will endeavour to achieve this
• a formal statement of the settlement and 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, and
• a statement of any planned change in policies affecting the ALB

29.2 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.

29.3 During the financial year the ALB will provide financial reporting data to the department in accordance with agreed processes. This will include monthly out-turn data, contributions to periodic reviews on budget risks and opportunities, and other commissions as appropriate.

30. Grant-in-aid and any ring-fenced grants

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

30.2 The grant-in-aid will normally be paid in monthly instalments on the basis of written applications showing evidence of need. RBG Kew 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 the ALB. 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, the department 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.

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

31. Annual report and accounts

31.1 The RBG Kew must publish an annual report of its activities together with its audited accounts after the end of each financial year in accordance with the act (Schedule 1, para. 39-40). RBG Kew shall provide the department its finalised (audited) accounts in line with the agreed timetable each year in order for the accounts to be consolidated within the Defra group accounts. A draft of the report should be submitted to the department two weeks before the proposed publication date. The accounts should be prepared in accordance with the relevant statutes and the Statement of Recommended Practice (SORP) Accounting by Charities, the annual report and accounts should also comply with specific accounts direction issued by the department as well as the Treasury’s Financial Reporting Manual (FReM) to the extent to which these do not conflict with the SORP, and provide additional disclosures required by the FReM where these go beyond the SORP.

31.2 The annual report must:

• cover any corporate, subsidiary or joint ventures under its control
• comply with the FreM to the extent not conflicting with the SORP 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

31.3 Information on performance against key financial targets is included within the annual report and subject to the auditor’s consistency opinion. In accordance with the act, the report and accounts shall be laid in Parliament and made available on the RBG Kew’s website, in accordance with the applicable guidance, including the FReM.

32. Reporting performance to the department

32.1 The ALB 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.

32.2 The ALB 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 and the achievement of key objectives regularly, through the established regular meeting arrangements.

32.3 While responsibility for management of performance lies with the relevant delivery organisation and the sponsor team, the RBG Kew’s performance shall be formally reviewed by the department periodically, at a frequency dependent on the extent of RBG Kew’s scope of responsibilities and its contributions to the Defra Outcome Delivery Plan. ALBs will be expected to share their corporate performance reports with the department on a quarterly basis through the established regular meeting arrangements.

32.4 The Responsible Minister will meet the chair at least once a year and the schedule of meetings will be agreed on an annual basis between RBG Kew and the sponsor team.

32.5 The Principal Accounting Officer will meet the director at least once a year.

33. Information sharing

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

33.2 The ALB shall provide the sponsor department with such information about its operations, performance, individual projects or other expenditure as the sponsor department may reasonably require to enable it to fulfil its responsibilities as sponsor department

33.3 The department and HM Treasury may request the sharing of data held by the ALB in such a manner as set out in central guidance consistent with RBG Kew’s charitable status 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.

33.4 As a minimum, the ALB shall provide the department with information monthly that will enable the department satisfactorily to monitor:

• the ALB’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 (subject to the Operating Freedoms which RBG Kew has) or required in order to meet any condition as set out in any settlement letter

Audit

34. Internal audit

34.1 RBG Kew shall:

• establish and maintain arrangements for internal audit
• ensure that any arrangements for internal audit are in accordance with the Public Sector Internal Audit Standards as adopted by HM Treasury
• in the event that the body has its own internal audit service ensure the sponsor department is satisfied with the competence and qualifications of the Head of Internal Audit and the requirements for approving appointments in accordance with PSIAS
• 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
• forward the audit strategy, periodic audit plans and annual audit report, including RBG Kew’s Head of Internal Audit opinion on risk management, control and governance as soon as possible to the sponsor department; and
• keep records of and prepare and forward to the department an annual report on fraud and theft suffered by RBG Kew and notify the sponsor department of any unusual or major incidents as soon as possible
• will share with the sponsor department, via the Defra Finance representative, 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 the RBG Kew
• to assist with the provision of assurance to the PAO, RBG Kew will ensure that the agenda, papers and minutes of all Audit and Risk Committee meetings are shared with the relevant Defra finance representative. At its discretion, RBG Kew may also extend an invitation to Defra’s GIAS and other Defra Finance representatives to attend its Audit and Risk Committee meeting

35. External audit

35.1 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. The C&AG’s role in relation to RBG Kew is set out in s.39 of Schedule I, Part IV of the act and in MPM.

35.2 In the event that RBG Kew has set up and controls subsidiary companies, the RBG Kew 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. RBG Kew shall discuss with the sponsor department the procedures for appointing the C&AG as auditor of the companies.

35.3 The C&AG:

• will consult the department and the ALB on whom – the National Audit Office or a commercial auditor – shall undertake the audit(s) on his 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 RBG Kew
• 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 the RBG Kew
• 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

35.4 The C&AG may carry out examinations into the economy, efficiency and effectiveness with which the ALB 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, the ALB 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.

Reviews and winding up arrangements

36. Review of ALB’s status

36.1 As with all non-departmental public bodies, RBG Kew will be subject to a periodic comprehensive review. The specific timing of that review will be determined by the sponsoring department in consultation with the organisation.

37. Arrangements in the event that the ALB is wound up.

37.1 The sponsor department shall put in place arrangements to ensure the orderly winding up of the ALB, having regard to trust and charity law. In particular it should ensure that the assets and liabilities of the ALB 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 insofar as compatible with charity law.) To this end, the department shall:

• have regard to Cabinet Office guidance on winding up of ALBs and to charity and trust law
• ensure that procedures are in place in the ALB 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 the ALB’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 the department inherits the role, responsibilities, assets and liabilities, the sponsor department’s AO should sign

37.2 The ALB shall provide the department with full details of all agreements where the ALB 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 the ALB.

Signatures

Signed: Edward Barker

Date: 22/06/2022

(On behalf of Defra)

Signed: Richard Deverell

Date: 22/06/2022

(On behalf of RGB Kew)

Annex A

Annex A –background note on legal framework for Kew

RBG Kew is governed by a complex set of rules relating to its powers, functions, and accounting. It is therefore not simple to align requirements imposed by the combination of the act, charity law and the public law framework including the SoS duty to account to Parliament and the MPM guidance. Likewise the powers of control, rights and obligations of the SoS in relation to RBG Kew derive from different sources. So we need to consider the various ‘hats’ that Defra wears. Key elements of the framework are:

National Heritage Act 1983

This is the backbone legislation which establishes RBG Kew and confers powers on it. RBG Kew (as a statutory body) has power to do only those things that are stated in the act or which are necessary for the discharge of its functions. Neither the board nor ministers should do anything that might frustrate the purpose of the act.

The act explicitly establishes RBG Kew as a separate body corporate that operates at arms-length from Government. It is independent from the Crown as other NDPBs are (and see notes below about charity law).

However, in respect of some functions and activities the act confers on the SoS certain powers of ‘direction’ or of making certain provisions subject to their ‘consent’ and in some cases Treasury ‘approval’.

Kew Gardens (Leases) Act 2019: provides the Secretary of State’s powers in relation to the management of the Royal Botanic Gardens, Kew, include the power to grant a lease in respect of land for a period of up to 150 years.

Public law framework

The act forms the principal public law framework governing RBG Kew.

This is supplemented by the financial and accounting controls which flow from RBG Kew being classified as a NDPB.

The director of RBG Kew is the AO and so individually accountable for the efficient expenditure of public money in accordance with MPM. However, MPM 3.8 recognises that there are sensitivities about the role of the AO in an ALB such as RBG Kew which is governed by an independent board.

The SoS is accountable to Parliament for the public money spent by RBG Kew as an NDPB and so has an interest in establishing mechanisms that provide them with appropriate assurance as to the exercise of RBG Kew’s functions and the management of risks. s.39-40 of Schedule 1, Part IV of the act establish the foundations for this.

The accountability of the trustees, the AO and the SoS for the public money spent by RBG Kew includes all grant-in-aid, income self-generated by RBG Kew and charitable 23 donations etc (that is, our total expenditure, not just taxpayer funds). In so doing they follow the MPM guidance.

Charity law framework

RBG Kew is an exempt charity subject to charity law. Charity law imposes another tier of regulatory framework on RBG Kew and the trustees. The Charities Act 2011 (replacing earlier legislation) explicitly lists RBG Kew as an exempt charity for which its principal regulator for charity law purposes is the SoS.

As principal regulator the SoS has a duty to take reasonable steps to ensure that RBG Kew is complying with its duties under charity law, and has a relationship with the Charity Commission as set out in the Defra-Charity Commission Memorandum of Understanding.

For a body to be a charity, it must exist for its charitable purpose for the public benefit only and therefore must demonstrate independence from any forces that might seek to prevent it from doing that. See Annex 2 for Charity Commission ‘The Independence of Charities from the State – RR7’.

As explained in RR7, where a governmental authority has been given powers under a charity’s governing document, for example the act, it is bound to exercise those powers solely in the interests of the charity, and therefore the SoS cannot exercise that power for its own benefit.

RR7 recognises that funding authorities have a responsibility to protect the interests of taxpayers and service users, and have a legitimate interest in monitoring the proper use of funds granted. However those measures should be reasonable and proportionate to those legitimate interests and not overstep the line such that the charity is no longer independent in the way that it operates.

Funding relationship

s29 of the act is the statutory basis on which the SoS has the power to grant fund RBG Kew. The SoS can impose conditions on such payment. However any such conditions must, as a matter of public law and charity law, be reasonable, proportionate and consistent with RBG Kew’s statutory functions and powers under the act, and not have the effect of undermining RBG Kew’s status under charity law.

Subject to those caveats, the SoS can attach conditions to the funding and set out the framework within which RBG Kew receives grant-in-aid. As such within the context of the funding relationship Defra can set out what it expects RBG Kew to achieve, in terms of its delivery of objectives, in return for the public funding.

The key point here though is that it is through this funding relationship that Defra can set out what it wants RBG Kew to achieve – it is not through any more general right of control.

But as noted above, the accountability of the board of trustees, the AO and the SoS for the public money spent by RBG Kew includes all grant-in-aid, income self-generated by RBG Kew and charitable donations etc (that is, total expenditure, not just taxpayer funds), and assets/capital considerations.

Annex B

RBG Kew shall comply with the following general guidance documents and instructions where this is consistent with RBG Kew’s statutory and charitable status:

• this framework document

• Managing Public Money (MPM)

• Government Financial Reporting Manual (FReM)

• Regularity, Propriety and Value for Money

• Civil Service Management Code

• Corporate Governance in Central Government Departments: Code of Good Practice (and separate guidance note)

• partnerships between departments and arm’s length bodies: Code of Good Practice

• Code of Conduct for Board Members of Public Bodies

• Public Bodies: A Guide for Departments

• Governance Code for Public Appointments

• Orange Book: Management of Risk - Principles and Concepts

• Public Sector Internal Audit Standards

• Audit and Risk Assurance Committee Handbook

• HM Treasury Guidance on Tackling Fraud

• Managing the Risk of Fraud: A guide for managers

• The Parliamentary and Health Service Ombudsman’s Principles of Good Administration

• relevant Freedom of Information Act guidance and instructions (Ministry of Justice)

• relevant Dear Accounting Officer letters

• Consolidation Officer Memorandum, and relevant DCO letters

• relevant guidance and instructions issued by HM Treasury in respect of Whole of Government Accounts

• relevant instructions and guidance issued by the central departments

• specific instructions and guidance issued by the sponsor department

• recommendations made by the Public Accounts Committee, or by other Parliamentary authority, that have been accepted by the Government and relevant to the ALB

• Defra-Charity Commission Memorandum of Understanding

Charity law framework

• National Heritage Act 1983

• Charities Act 2011

Charity Commission & NCVO guidance

• Charity Commissions guidance: The Essential Trustee: What you need to know, May 2018

• The Charity Commission guidance ‘The Independence of Charities from the State’ (RR7)

• FRS102 Statement of Recommended Practice, Accounting and Reporting by Charities (SORP)

• The Charity Governance Code 2020

Annex C

Annex C – RBG Kew Enterprises Ltd and HMT’s managing public money governance at RBG Kew

Our board of trustees is collectively responsible and has ultimate non-delegable responsibility for RBG Kew. In accordance with the National Heritage Act 1983 and charity law, the board should ensure that effective arrangements are in place to provide assurance on risk management, governance, remuneration and internal control.

The board of trustees meet formally quarterly to enable it to discharge its responsibilities, and the relevance of HMT’s MPM is noted at paragraph 2 of the board’s terms of reference: The board of trustees works within the framework defined by the act and the Management Statement and Financial Memorandum agreed between the board of trustees and the Department for Environment, Food and Rural Affairs (‘Defra’). As such the board works within the framework of HMT’s Managing Public Money.

The terms of reference acknowledge the role of the director as accounting officer (paragraph 5) and note that the director is invited to attend all meetings (paragraph 18).

The board also establishes committees which are led by non-executives which provides assurance that RBG Kew is run effectively and efficiently, handles funds with probity and has appropriate internal controls in place. The principal committees with oversight of (‘Enterprises’) activities are Finance and Resources Committee and Audit and Risk Committee.

The purpose of the Finance and Resources Committee is to examine and provide strategic advice on the financial, people and culture, IT and estates plans and affairs of RBG Kew and to provide assurance to the board of trustees. Its main responsibility is to review significant financial matters on behalf of the board and make recommendations to the board for further consideration. The committee’s remit also includes reviewing resources (people, financial health and infrastructure) to ensure that RBG Kew has the means to implement its Corporate Strategy, as agreed by the board. This includes reviewing Kew’s operational plan, financial plans including funding arrangements, annual budgets and in-year financial results. RBG Kew’s planning and budget framework brings together all aspects of RBG Kew business, and as such, Enterprises is integrated within the annual planning round.

Paragraph 2 of the terms of reference of Audit and Risk Committee sets its constitution in terms of MPM: HMT’s Managing Public Money requires that an arms-length public body has an audit committee to provide assurance on its risk management, governance and internal control.

The committee’s purpose is set out at paragraph 4: The Audit and Risk Committee supports the board and the director (as accounting officer) by reviewing the comprehensiveness of assurances in meeting the board and accounting officer’s assurance needs, and reviewing the reliability and integrity of these assurances.

The Board of Enterprises meets 3 times a year and reviews Enterprises’ performance, agrees budgets and strategy and review risks. MPM requires accounting officers of public bodies to have adequate oversight of subsidiaries. This is facilitated by Article 15 (of Enterprises Articles of Association) which provides that the accounting officer of RBG Kew from time to time is an ex officio Director of Enterprises. The accounting officer’s position on the Board of Enterprises gives him visibility to and a level of oversight of Enterprises, and thus the opportunity to raise any concerns as AO. Otherwise, the right to appoint directors to the board is reserved to RBG Kew as sole member, further enabling the RBG Kew trustees to have adequate control and oversight as required by charity law. Other directors include executive board directors (with commercial, fundraising and finance responsibilities), the Head of Commercial Activities and non-executives. RBG Kew Enterprises Ltd is a separate legal entity from RBG Kew, and is accountable to its only shareholder, RBG Kew. RBG Kew trustees must act in the best interests of the charity and the RBG Kew accounting officer must act in the best interests of the taxpayer. For these reasons, the overriding presumption is that RBG Kew will not support Enterprises, except where it is in the best interest of both the charity and the taxpayer. RBG Kew would inform, prior to any final decision, the Defra PAO in such an instance. To date RBG Kew has not subsidised any losses of Enterprises.

The controls by which this is achieved include:

a) A budget specifically for Enterprises which shows a profit – approved by the board of directors (who are appointed by RBG Kew and include the accounting officer).

b) Monitoring of financial performance during the year including forecasts to ensure the budget is achieved; reviewed by management and directors.

c) Service level agreements to ensure all costs to RBG Kew are recovered from Enterprises and a profit is generated. Enterprises budgets and accounts are consolidated with RBG Kew’s accounts and will be scrutinised by both the Finance and Resources Committee and the board of trustees. This provides a mechanism for the RBG Kew Board to retain oversight of the risks of losses in Enterprises and make decisions about how that situation should be managed.

d) Wholly owned subsidiaries established under charity law (such as Enterprises) are only established to allow non-primary purpose trading, and are a vehicle for protecting the assets of the charity from costs associated with non-mission related activity.

e) Where there is a justification that allows them to continue to exercise their duty to charity beneficiaries, trustees can agree that charity assets/funds can be used by subsidiaries (which is to say that they must protect the interests of the charity and its beneficiaries and therefore any use by the subsidiary must not be to the detriment of that).

f) These charity law requirements strongly replicate the requirements under MPM for trustees, as the board of a public body, to ensure that taxpayers are protected from expenditure that does not deliver value for money to the public.

g) In broad terms, charity trustees must always put the interests of the parent charity first. ‘This will sometimes mean liquidating, or selling, a failing trading subsidiary. If trustees keep a failing trading subsidiary going at the charity’s expense, they may be personally liable for consequential losses to the charity’ (para 4.16 of CC35);

h) Indirect investment by the parent charity such as allowing the use of staff time and office equipment is allowed, it being recognised that this is an important means of support to a trading subsidiary. However the charity must charge the subsidiary, at fair value, for such services and use of facilities (para 4,22 CC35). Accordingly RBG Kew does not seek to subsidise Enterprises and charges, at cost, for such services and use of facilities made available.