Corporate report

Rural Payments Agency framework document

Updated 1 February 2024

© Crown copyright 2024

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Introduction and background

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 Rural Payments Agency (RPA or Agency) 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 RPA and Defra operate. It sets out the RPA’s core responsibilities; describes the governance and accountability framework that applies between the roles of Defra and the RPA; and sets out how the day-to-day relationship works in practice, including in relation to governance and financial matters. The RPA and Defra, as the sponsor department, will ensure that they understand and complement 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.

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

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

1.5 Copies of the document and any subsequent amendments have been placed in the libraries of both Houses of Parliament and made available to members of the public on the Rural Payments Agency - GOV.UK (www.gov.uk).

1.6 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 March 2025.

Objectives – working as Defra Group

2.1. The Defra Group Outcome Delivery Plan 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, act together on a shared agenda in contributing to the single vision of improving and protecting our environment by making air purer, our water cleaner, our land greener and our food more sustainable.

2.2. RPA delivers objectives on behalf of Defra. To achieve this the RPA and Defra will work together in recognition of each other’s roles and areas of expertise, providing an effective environment for the RPA to achieve the outcomes required. The relationship will be one of partnership and trust, thus ensuring that the RPA also supports the strategic aims and objectives of Defra and the wider government. 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 the RPA will be resolved.

2.3 As an executive agency within Defra, together with the Animal and Plant Health Agency (APHA), the Rural Payments Agency is Defra’s primary delivery capability to achieve the Department’s:

  • Priority Outcome 4: Agriculture, food, fisheries, animal welfare and biosecurity - increase the sustainability, productivity and resilience of the agriculture, fishing, food and drink sectors, enhance biosecurity at the border and raise animal welfare standards.

The RPA also plays an important role in delivering functions and activities to meet Ministerial needs under Defra’s remaining priority outcomes, particularly:

  • Priority Outcome 1: Environment – Improve the environment through cleaner air and water, minimised waste, and thriving plants and terrestrial and marine wildlife
  • Priority Outcome 2: Net zero – Reduce greenhouse gas emissions and increase carbon storage in the agricultural, waste, peat and tree planting sectors to help deliver net zero
  • Priority Outcome 3: Floods and resilience – Reduce the likelihood and impact of flooding and coastal erosion on people, businesses, communities and the environment

Classification

3.1. The RPA has been classified as a central government organisation by the ONS/HM Treasury Classifications team.

3.2. It has been administratively classified by the Cabinet Office as an Executive Agency of Defra.

Purposes, aims and duties

Purposes

4.1. The agency was originally established in October 2001. RPA’s responsibilities include making direct aid and rural development payments to farmers in England on behalf of the Secretary of State and undertakes activities on behalf of the devolved administrations. The RPA helps agricultural and rural communities to create a better place to live, we achieve this through:

  • delivering economic growth

  • delivering environmental sustainability

  • supporting agriculture

  • enabling innovation

  • facilitating community activities

4.2. The RPA’s current work involves payments, regulation, trade, livestock information, emergency support and customer service.

The detail includes that:

  • RPA will make payments to farmers and the broader rural community under Basic Payment Scheme, Countryside Stewardship, Environmental Stewardship and Rural Development, is of great importance. RPA will continue to improve our performance for customers until this work reaches its conclusion
  • RPA will have a full role in delivering new schemes as part of the Agricultural Transition Plan, including Sustainable Farming Incentive, Local Nature Recovery, Animal Health & Welfare, Farming Investment Fund. The expansion of schemes to pay farmers and land managers will provide environmental goods whilst ensuring food security and a productive farming and food system
  • through the Environmental Land Management national pilot, RPA will maximise the environmental gains achievable from the funding available and working closely with customers and stakeholders RPA will deliver against the targets in the 25 Year Environment Plan
  • RPA will continue to support livestock information to promote and support world class traceability to ensure the health of the food production sector, safeguarding exports and public health
  • RPA will continue to support the flow of trade through the provision of licences and quotas and will launch and manage a rural grants service that supports customers to improve their productivity through innovation
  • RPA will respond to emergencies as required, using its skills to design, develop and implement sector intervention schemes quickly and effectively
  • manage customer contact including advice where appropriate for a wide range of Defra Group services

4.3. Where permitted by statute, the Government may ask the RPA 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 by the Secretary of State with advice from the Chief Executive of the RPA.

Powers and duties

5.1. The RPA’s powers and duties originate from requests given by the Secretary of State. The Agency’s statutory role as a Paying Agency was transferred into domestic legislation under R1306/2013 as amended by SI 2019/763 (The Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019).

5.2. Being a Paying Agency means that the RPA is responsible on behalf of Defra for the management and control of expenditure on agricultural support, which includes a system of internal control, which provides sufficient guarantees that payments are legal and regular, and properly accounted for.

Aims

6.1. The RPAs strategic aims are helping agricultural and rural communities to create a better place to live. The RPA’s core objectives in delivering this strategy are:

  • to contribute to a successful delivery of Agricultural Transition, meeting both customer expectations and policy needs
  • reinforcing the RPAs reputation for delivery environmental outcomes through a quality service
  • being an exemplar of the Civil Service’s Operational Delivery Profession working in practice

6.2. The RPA will deliver its strategic aims in the context of the Defra Group Outcome Delivery Plan outcomes.

6.3. The RPA has 4 strategic drivers, which were agreed by the Executive Team and the Agency Management Board in October 2021. These are:

  • exemplar delivery – future-proofing the RPA as the delivery agent for Defra Group by demonstrating value for money through efficient and high-quality service
  • reputation – being recognised by customers, Defra Group, Ministers and wider stakeholders as the exemplar for customer service across government
  • enabling greater scheme uptake for Defra Group by understanding customer needs and delivering positive customer interactions
  • employee satisfaction – providing a workplace recognised as a great place to work that enables a career in exemplar customer service

Governance and accountability

7.1. The RPA 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.

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

  • comply with the principles and provisions of the Corporate Governance in Central Government Departments Code of Good Practice (as amended and updated from time to time) to the extent appropriate and in line with their statutory duties or specify and explain any non-compliance in its annual report
  • comply with 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, counter fraud and grants
  • consider, the codes of good practice and guidance set out in Appendix A of this framework document, as they apply to Arms’ Length Bodies

7.3. In line with Managing Public Money Annex 3.1 the RPA will provide an account of corporate governance in its annual governance statement including the Board’s assessment of its compliance with the Code with explanations of any material departures. To the extent that the RPA does intend to materially depart from the Code, the Sponsor (Director General – FBT) should be notified in advance and their agreement sought to this approach.

7.4. The Defra internal audit service has a right of access to all documents, including where the service is contracted out. As the RPA makes payments, its Internal Audit service requires agreements with other internal audit services in the Defra Group that audit the paying agency’s extended functions that they deliver.

7.5. The Defra Group operate an integrated corporate services model that provides Finance, HR, Digital, Data and Technology Services, Communications, Estates, Facilities Management, Procurement and Commercial services. This integration will reduce duplication and cost and improve the capability and performance of corporate services in order to better support the wider programme of change across the group.

7.6. Group Heads of Function roles have been established in Defra with full accountability for delivery of the integrated provision. All corporate services that the RPA takes from the Defra Group will be managed by Defra, with group Heads of Function responsible for the delivery of an effective quality of service. The scope of which is to be agreed with the RPA to ensure that the service adds value to the RPA Agency.

7.7. Partnership working arrangements are in place between the RPA and Defra Group Corporate Services to ensure that the appropriate information is shared on business requirements. This will enable delivery to be appropriately planned and prioritised, thereby continuing to enable and support the delivery of wider business objectives and of statutory duties. The formal governance between RPA and Corporate Services is through the Group Corporate Services Board.

Role of the department

The Responsible Minister

8.1. The Secretary of State is accountable for the RPA on all matters concerning the RPA in Parliament. This function can be delegated to the relevant minister based on current ministerial portfolios, which may alter over time.

8.2. The Secretary of State or delegated Minister sets the direction for the RPA.

8.3. Through the exercise of these powers the Secretary of State or delegated Minister:

  • is responsible for the policy framework within which the RPA operates
  • provides guidance and direction to ensure the strategic aims and objectives of the RPA are consistent with those of the department and government
  • approves the RPA’s strategy and associated documents
  • has a power of appointment in relation to the appointment of the RPA Chair. This appointment is not regulated by the Commissioner for Public Appointments but will follow the principles set out in the Governance Code on Public Appointment
  • may review the performance of the Chair on a regular basis
  • has a power of appointment in relation to non-executive on the board. These appointments are not regulated by the Commissioner for Public Appointments but the process will follow the principles set out in the Governance Code on Public Appointments
  • has a power of appointment or approval in relation to the appointment of the RPA Chief Executive

Appointment

8.4. The Chief Executive of the RPA is appointed by the Food, Biosecurity and Trade (FBT) Director General in consultation with the Minister of State.

Appointments to the Board

8.5. The Chairperson is appointed by the Secretary of State who may delegate this function to the Minister of State. This appointment is not regulated by the Commissioner for Public Appointments but the process will follow the principles set out in the Governance Code on Public Appointments.

8.6. Non-executive Members are appointed by the Secretary of State who may delegate this function to the Minister of State. These appointments are not regulated by the Commissioner for Public Appointments but the process will follow the principles set out in the Governance Code on Public Appointments.

8.7. 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.

The Principal Accounting Officer (PAO)

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

9.2. The Principal Accounting Officer (PAO) of Defra designates the Chief Executive as the RPA’s Accounting Officer and ensures that they are fully aware of their responsibilities. The PAO issues a letter appointing the Accounting Officer, setting out their responsibilities and delegated authorities.

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

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

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

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

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

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

The role of the Sponsorship team

10.1. The Chief Executive of the RPA reports into the Director General for Food, Biosecurity and Trade (FBT), who is the primary contact for the RPA. They are the main source of advice to the Responsible Minister on the discharge of his or her responsibilities in respect of the RPA. They also support the PAO on his or her responsibilities toward the RPA.

10.2. The Director General will liaise regularly with the Chief Executive to review performance against plans, achievement against targets and expenditure against its Delegated Expenditure Limit and Annually Managed Expenditure allocations. The Director General will also take the opportunity to explain wider policy developments that might have an impact on the RPA.

10.3. The sponsorship team will advise the PAO when necessary on matters related to section 9.5.

10.4. Defra applies the best practice standards in the Cabinet Office 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 ofseveral 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.

Resolution of disputes between the RPA and Department

11.1. Any disputes between the Department and the RPA will be resolved in as timely a manner as possible by the FBT Director General. 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

12.1. Where a request for information is received by either party under the Freedom of Information Act 2000, Environmental Information Regulations 2004 (EIR), the UK GDPR (General Data Protection Regulation) or the Data Protection Act 2018, the party receiving the request will consult with the other party prior to any disclosure of information that may affect the other party’s responsibilities.

13.1 The RPA will provide a quarterly update, for those areas within its responsibility not covered by Corporate Services, to the Sponsor on the existence of any active litigation and any threatened or reasonably anticipated litigation. The parties acknowledge the importance of ensuring that legal risks are communicated appropriately to the Sponsor in a timely manner.

13.2 In respect of each substantial piece of litigation involving the RPA, 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. SRPA governance and structure

The Chief Executive

Responsibilities of the RPA’s Chief Executive as Accounting Officer

14.1. The Chief Executive as Accounting Officer is personally responsible for safeguarding the public funds for which they have charge; for ensuring propriety, regularity, value for money and feasibility in the handling of those public funds; and for the day-to-day operations and management of the RPA. In addition, they should ensure that the RPA 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 those listed below and also those that are set in the Accounting Officer appointment letter issued by the Principal Accounting Officer of the Sponsor Department.

The Chief Executive’s Responsibilities for accounting to Parliament and the Public

14.2. 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 the RPA in accordance with Parliamentary and Health Service Ombudsman’s Principles of Good Complaint Handling are established and made widely known within the RPA and published Complaints procedure, Rural Payments Agency
  • 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 document
    • any delegation letter issued to body as set out in paragraph 18.1
    • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of the RPA
    • any separate settlement letter that is issued to the RPA from the sponsor department
    • ensuring that 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 RPA’s stewardship of public funds

Responsibilities to Defra

14.3. Responsibilities to Defra include:

  • establishing, in agreement with the department, the RPA’s corporate and business plans aligned with 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
  • 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 (The Agency Management Board)

14.4. The Chief Executive is responsible for:

  • advising the Agency Management Board on the discharge of its 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 the RPA’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

14.5. The Chief Executive should follow the advice and direction of the Agency Management Board, except in very exceptional circumstances with a clear cut and transparent rationale for not doing so.

14.6. If the Agency Management Board, or its chairperson, is contemplating a course of action involving a transaction which 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 Accounting Officer should reject that course of action and ensure that the Agency Management Board have a full opportunity to discuss the rationale for that rejection.

14.7. Such conflicts should be brought to the attention of the Principal Accounting Officer and the Responsible Minister as soon as possible.

14.8. Furthermore and if agreed with the responsible Minister, the Accounting Officer must write a letter of justification to the Chair of the RPA Agency Management 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.

14.9. If the Responsible Minister agrees with the proposed course of action of the Board it may be appropriate for the Minister to direct the Principal Accounting Officer in the manner as set out in Managing Public Money paragraph 3.4 onwards.

The Board

Composition of the Board

15.1. RPA will have a Management Board (known as the Agency Management 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 Management Board shall be to provide strategic challenge to the RPA, and provide advice and guidance in how to achieve its objectives, in accordance with the purposes as set out above, and their responsibilities under this Framework Document. Detailed responsibilities of the Management Board shall be set out in the Management Board terms of reference. Remuneration of the Management Board will be disclosed in line with the guidance in the Government Financial Reporting manual (FReM).

15.2. The Management Board will consist of a Chairperson, together with the Chief Executive and two executive members that have a balance of skills and experience appropriate to directing the RPA’s business. For the RPA there should be members who have experience of its business, finance and corporate risks. The board will also be attended by corporate service colleagues from HR. This will include an executive and an appropriately qualified finance director as described in Annex A 4.1 of Managing Public Money. The Management Board should include a majority of independent non-executive members to ensure that executive members are supported and constructively challenged in their role. Executive members may be supported by other members of RPA and our Corporate Services colleagues.

Board Committees

15.3. The Management 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 Assurance Committee chaired by an independent and appropriately qualified non-executive member of the Board.

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

15.5. Where there is disagreement between the relevant committee and the Management 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.

15.6. 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

15.7. The Management Board is specifically responsible for:

  • establishing and taking forward the strategic aims and objectives of the RPA consistent with its overall strategic direction and within the policy and resources framework determined by the Secretary of State
  • providing effective leadership of the RPA within a framework of prudent and effective controls which enables risk to be assessed and managed
  • ensuring that the board receives and reviews regular financial and management information concerning the management of the RPA
  • ensuring that it is kept informed of any changes which are likely to impact on the strategic direction of the RPA 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:
  • this framework document
  • any delegation letter issued to body as set out in paragraph 18.1
  • any elements of any settlement letter issued to the sponsor department that is relevant to the operation of the RPA
  • any separate settlement letter that is issued to the RPA 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 Chief Executive and RPA 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
  • putting in place mechanisms for independent appraisal and annual evaluation of the performance of the Chairperson by the independent non-executives, taking into account the views of relevant stakeholders. The outcome of that evaluation should be made available to the Responsible Minister
  • determining all such other things which the Board considers ancillary or conducive to the attainment or fulfilment by the RPA of its Objectives.

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

15.9. The Management 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 non-executive member 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 Management 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

16.1. The Chair is responsible for leading the board in the delivery of its responsibilities in line with the agreed RPA Strategic Plan and associated documents. Such responsibility should be exercised in the light of their duties and responsibilities as set out in the Chairperson’s contract of employment, any appointment letter, this document and the documents and guidance referred to within this document.

16.2. Communications between the RPA Agency Management Board and the Responsible Minister should normally be through the Chair.

16.3. 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.

16.4. In addition, the Chair is responsible for:

  • ensuring, including by monitoring and engaging with appropriate governance arrangements. that the RPA’s affairs are conducted with probity
  • ensuring that policies and actions support the Responsible Minister’s (and where relevant other Ministers) wider strategic policies and where appropriate, these policies and actions should be clearly communicated and disseminated throughout the RPA
  • ensuring 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

16.5 The Chair also has an obligation to ensure that:

  • that in conducting assessments that the view of relevant stakeholders including employees and the sponsorship team are sought and considered
  • 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 the RPA’s needs when board vacancies arise
  • 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

17.1 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 the RPA
  • 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

Management and financial responsibilities and controls

Delegated authorities

18.1. The RPA’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.

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

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

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

18.4. The RPA or the department will not without consultation engage in making any change of policy or practice which knowingly has wider financial implications that might prove repercussive, or which might significantly affect the future level of resources required.

Spending authority

19.1. Once the budget has been approved by the sponsor department and subject to any restrictions imposed by statute or delegation letters, the RPA shall have authority to incur expenditure approved in the budget without further reference to the sponsor department, on the following conditions:

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

Banking and managing cash

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

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

20.3. Commercial accounts where approved should be operated in line with the principles as set out in Managing Public Money.

20.4. The Accounting Officer is responsible for ensuring RPA has a Banking Policy as set out in Managing Public Money and ensuring that policy is complied with.

Procurement

21.1. The RPA through Defra Group Commercial shall ensure that its procurement policies are aligned with and comply with any relevant UK or other international procurement rules and in particular the Public Contracts Regulations 2015.

21.2. The RPA shall establish its procurement policies and document these in a Procurement Policy and Procedures Manual held centrally by Defra Group Commercial (DgC).

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

21.4. Goods, services, and works should be acquired by competition. Proposals to let single-tender or restricted contracts shall be limited and exceptional, and a quarterly report explaining those exceptions should be sent to the Department.

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

21.6. The RPA shall a) engage fully with Department and Government wide procurement initiatives that seek to achieve VfM from collaborative projects, b) comply with all relevant Procurement Policy Notes issued by Cabinet Office and c) co-operate fully with initiatives to improve the availability of procurement data to facilitate the achievement of VfM.

21.7. The RPA will comply with the Commercial and Grants Functional Standards. These standards apply to the planning, delivery, and management of government commercial activity, including management of grants in all departments and arm’s length bodies, regardless of commercial approach used and form part of a suite of functional standards that set expectations for management within government.

Risk and issue management

22.1. The RPA 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 governance and develop a risk management strategy consistent with the Defra group risk strategy, in accordance with the Treasury guidance Management of Risk: Principles and Concepts.

22.2. The RPA Chief Executive is responsible for managing the RPA’s risks and issues with oversight from the RPA’s Agency Management Board and Audit and Risk Assurance Committee within its governance structure. On a quarterly basis, the RPA should share its strategic risk register with the relevant Director General’s governance arrangements, primarily in RPA’s case, this is through the FBT Committee. The RPA should reflect 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 the RPA. Changing or emerging risks and issues should form part of the regular discussions between sponsor teams and RPA, as part of a shared ‘no surprises’ culture.

22.3. The RPA’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 Assurance Committee (ARAC). The committee should be chaired by a non-executive member of the RPA and provide regular reports to the chief executive and the board on its programme, recommendations, and their implementation.

Counter fraud and theft

23.1. RPA should adopt and implement policies and practices to safeguard itself against fraud, bribery, corruption, and theft.

23.2. RPA should ensure it complies with requirements set out in the Counter Fraud Functional Standard GovS013. The RPA 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 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.

23.3. RPA 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. RPA 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.

RPA staff

Broad responsibilities for staff

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

  • the rules for recruitment and management of staff create an inclusive culture in which diversity is fully valued; appointment and advancement is based on merit: there is no discrimination on grounds of gender, marital status, sexual orientation, race, colour, ethnic or national origin, religion, disability, community background or age
  • the 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 RPA 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 RPA’s objectives; including access and engagement with the relevant Professions
  • 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

Staff costs

24.2. Subject to its delegated authorities, the RPA 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

24.3. The RPA’s staff are subject to levels of remuneration and terms and conditions of service (including pensions) within the general pay structure approved by the sponsor department and the Treasury. The RPA has no delegated power to amend these terms and conditions.

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

24.5. Staff terms and conditions are set out on Defra’s intranet ‘Your Employee Offer’.

24.6. The RPA 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.

24.7. The travel expenses of board members shall be tied to the rates allowed to staff of the RPA. Reasonable actual costs shall be reimbursed.

Pensions, redundancy and compensation

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

24.9. RPA staff will normally be eligible for membership of an appropriate Civil Service pension.

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

Business plans, financial reporting and management information

Corporate and business plans

25.1. By each April plans and objectives shall be agreed between the Senior Sponsor, Director General of FBT and the CEO of RPA. These will reflect the RPAs 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). These are reflected in the Outcome Delivery Plan which shall demonstrate how FBT contributes to the department’s medium-term plan and priorities and aligned performance metrics and milestones.

25.2. The Outcome Delivery Plan, which also serves as the Defra group business plan, sets out the priorities, success measures and resource allocations to deliver the strategic objectives. It includes more detailed sections for priority outcomes where delivery bodies and director areas must include their priorities, indicators, risks and outcomes. DGs, Directors and CEOs report on delivery of their plans through the performance reporting framework, and report on maintaining forecasted financial positions within budget limits. The plans should be developed as appropriate through joint working between sponsorship teams, policy and delivery teams to ensure coherence. They should reflect allocations and priorities which have been agreed by Defra Executive Committee, the board and approval by ministers.

25.3. The Director General of FBT and the CEO of RPA will agree 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.

25.4. The following matters should be agreed:

  • 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
  • the matters as agreed between the department and the RPA

Budgeting procedures

26.1. Each year, in the light of agreed decisions between the Director General of FBT and the CEO of RPA, the department will send to the RPA by 1 April:

  • 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 the RPA

26.2. The approved priorities will take account both of approved funding provision 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.

26.3. During the financial year the RPA 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.

Annual report and accounts

27.1. The RPA Agency Management Board must publish an annual report of its activities together with its audited accounts after the end of each financial year. The RPA shall provide the department its finalised (audited) accounts by 31 July each year in order for the accounts to be consolidated within Defra’s Annual Report and 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 specific accounts direction issued by the department as well as the Treasury’s Financial Reporting Manual (FReM).

27.2. The annual report must:

  • cover any corporate, subsidiary or joint ventures under its control
  • comply with the FreM
  • outline main activities and performance during the previous financial year and set out in summary form forward plans

27.3. 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 RPA’s website, in accordance with the guidance in the FReM.

Reporting performance to the department

28.1. The RPA 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.

28.2. The RPA will inform the sponsor department of any changes that make achievement of objectives more or less difficult. It will report financial and non-financial performance, including performance in helping to deliver Ministers’ policies, and the achievement of key objectives regularly.

28.3. While responsibility for management of performance lies with the relevant delivery organisation and the sponsor team, the RPA performance will be formally reviewed by the department periodically, at a frequency dependent on the extent of the RPA scope of responsibilities and its contributions to the Defra Outcome Delivery Plan. RPA will be expected to share their corporate performance reports with the department on a quarterly basis.

28.4. The Responsible Minister will meet the Chief Executive at least once a year and the schedule of meetings will be agreed on an annual basis between the RPA and the sponsor team.

28.5. The Principal Accounting officer will meet the Chief Executive at least once a year.

Information sharing

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

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

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

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

  • the RPA’s cash management
  • its draw-down of grant-in-aid
  • forecast outturn by resource headings
  • the 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

Audit

Internal audit

30.1. RPA will:

  • establish and maintain arrangements for internal audit
  • ensure that any arrangements for internal audit are in accordance with the Public Sector Internal Audit Standards (PSIAS) 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, or be represented on Defra’s Audit Committee
  • forward the audit strategy, periodic audit plans and annual audit report, including the RPA Head of Internal Audit opinion on risk management, control and governance as soon as possible to the sponsor department
  • keep records of and prepare and forward to the department an annual report on fraud and theft suffered by the RPA and notify the sponsor department of any unusual or major incidents as soon as possible
  • will share with the sponsor department any significant issues with the RPA financial systems (that impact the Department) identified during the audit process and the Annual Audit Opinion Report

External audit

31.1. The Controller & Auditor General (C&AG) audits the RPA’s annual accounts and lays them before parliament, together with his report.

31.2. In the event that the RPA has set up and controls subsidiary companies, the RPA 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. The RPA will discuss with the sponsor department the procedures for appointing the C&AG as auditor of the companies.

31.3. The C&AG:

  • will consult the department and the RPA on whom - the NAO or a commercial auditor - will 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 the RPA
  • 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 RPA
  • will consider requests from departments and other relevant bodies to provide Regulatory Compliance Reports and other similar reports at the commencement of the audit. Consistent with the C&AG’s independent status, the provision of such reports is entirely at the C&AG’s discretion

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

31.5. EU regulations continue to apply to EU-funded expenditure under the terms of the EU/UK Withdrawal Agreement. The UK Certification Body (NAO) will conduct annual certification audits of EAFRD (European Agricultural Fund for Rural Development) accounts and EAGF (European agricultural guarantee fund) debts, which will be the subject of financial clearance by the Commission. It will also audit the 2014 to 20 RDPE closure accounts in 2024. The Commission (DG AGRI) will undertake conformity clearance audits of specific areas of EU-funded scheme expenditure, which may give rise to disallowance, and where relevant may require action plans. The UK Co-ordinating Body will continue to liaise with the Commission in respect of these matters on behalf of all the UK Paying Agencies.

Reviews and winding up arrangements

Review of the RPA’s status

32.1. The RPA’s Framework Document will be reviewed every 3 years. The date of the next review will be in 2025.

Arrangements in the event that the RPA is wound up

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

  • have regard to Cabinet Office guidance on winding up of ALBs
  • ensure that procedures are in place in the RPA 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 RPA’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

33.2 The RPA will provide the department with full details of all agreements where the RPA 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 RPA.

Signatures

Signed:
Sally Randall
(On behalf of Defra)

Signed:
Paul Caldwell
(On behalf of the RPA)

Annex A

The RPA will comply with the following general guidance documents and instructions:

Corporate governance

Financial management and reporting

Management of risk

Commercial management

Public appointments

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

Staff and remuneration

General

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