Transparency data

Board minutes: 26 January 2021

Published 31 March 2021

Minutes of the 36th Board Meeting

Meeting held remotely

Tuesday 26 January 2021 14:00 to 17:10

Board members present:	Others present:
George Jenkins (Chairman)	Andy Brittain (MOD Representative)
Peter Freeman	Colin Hill
David Johnston	Mike Wetherell
Marta Phillips	Malcolm Botting
Neil Swift	Colin Sharples (item 4)
David Galpin	Nick Ratcliffe (item 4)
Matthew Rees

1. Welcome, apologies, announcements and declarations of interest

1.1. The Chairman welcomed members to the 36th meeting of the Board.

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

1.3. Board members were asked to declare any relevant interests. Executive members and attendees declared their interest regarding the item on the Executive Committee structure.

1.4. Apologies for the meeting had been received from Mary Davies. The Chairman announced that Mary Davies had informed him of her intention to resign as a non-executive Board member. The Chairman noted the Board’s gratitude for Mary’s significant contribution to the work of the SSRO since her appointment in September 2017 and it was agreed that the Chairman would write to her formally on behalf of the Board.

1.5. It was Matthew Rees’ last Board meeting and the Chairman thanked him for the work he had done for the organisation, stating that he had made a significant contribution to developing the systems that the SSRO used.

2. Minutes of 35th meeting of the Board, 15 December 2020, and action tracker

2.1. The Chairman introduced the minutes of the Board meeting held on 15 December 2020. Two actions were recorded from the meeting and were marked as complete.

• The SSRO would consider whether to recommend to the Secretary of State that it should be given a general advisory role around single source procurement before finalising its recommendations in June 2021.
• The non-executive Board members met on 22 December to consider the Executive Committee structure and agree the way forward. It subsequently agreed the recommendations in a paper circulated under Standing Order 5 of the Corporate Governance Framework.

2.2. The minutes of the 35th meeting of the Board were approved as a correct record.

3. Chief Executive’s Report

3.1. Neil Swift, Chief Executive, presented his report to the Board. The report provided an overview of stakeholder engagement, including the Chairman’s recent meeting with the Minister for Defence Procurement. The Chairman provided an overview of the issues discussed at the meeting, which had included the Secretary of State’s review of legislation.

3.2. DG Finance had written to the Chief Executive on 13 January 2021 regarding the SSRO’s budget for 2021/22, which would be capped at the same amount as 2020/21. The Board discussed the consequences of this settlement. These included that DefCARS’ external development costs would be constrained; that the timing of work around the future of DefCARS would need to be reviewed; and that the establishment of an expert panel would potentially be put on hold until funding was identified internally on a recurrent basis. It was noted that the SSRO was contractually bound to an increase in accommodation, IT support costs and other inflationary pressures. The Chief Executive would respond to DG Finance’s letter, recognising the constraints placed across all aspects of the MOD, its enabling organisations and the wider public sector. The views expressed by Board members would be incorporated into the draft before it was finalised. Action: Neil Swift.

3.3. The Board discussed the implementation of recommendations from the Tailored Review. Discussions had taken place within the MOD about the timing of the transfer of sponsorship arrangements from the SSAT to DSOP. The SSAT had written to the SSRO about its intention to review the Framework Document, working with the SSRO and DSOP. In discussion the Board’s view was that it would be preferable to review the Framework Document following the transfer of sponsorship. Andy Brittain agreed to represent the Board’s views within the MOD. Action: Andy Brittain.

3.4. The SSRO continued to remind staff of the support available while they worked from home, recognising that several had to care for others while working.

3.5. The Government Internal Audit Agency had been engaged to undertake the annual review of the SSRO Board’s effectiveness. Individual meetings between GIAA and the Chairman, non-executive members, the MOD Representative and executive members would take place shortly, with a Board evaluation questionnaire circulated for completion in the near future.

The Board

• noted the information provided in the report; and
• agreed that references in the Corporate Governance Framework to the Director of Regulation and Economics and the Director of Legal and Policy should be amended to state “Chief Operating Officer”.

4. Corporate Plan

4.1. David Galpin, Director of Legal and Policy, introduced a report presenting the draft 2021-2024 Corporate Plan. The Board had considered the SSRO’s priorities from the previous Corporate Plan and agreed that they remained relevant and that several multi-year projects (for example Overheads and Amendments and Variance) should continue to run for at least the first two years of 2021-2024. The new Plan retained key elements of the 2020-2023 Plan, including the vision for 2025, the corporate values and more aspirational longer-term objectives. The Plan also clarified that the SSRO might have to reprioritise activities to respond to the government’s planned Integrated Review, the Defence and Security Industrial Strategy, potential reform of procurement rules following the UK’s exit from the EU and the planned review of legislation. The SSRO would monitor these developments and respond flexibly and appropriately to relevant changes.

4.2. The key performance indicators, which comprised a mix of output and outcome metrics, had been refined and developed. Some of the performance data in the Plan would be updated every other year in line with the continued plans for a biennial Stakeholder Survey; other KPIs would be updated more frequently based on data availability. Some KPI targets in the draft Plan had been revised upwards, including the Objective 4 targets relating to the proportion of contract reports submitted that were complete and compliant at the first attempt.

4.3. The corporate budget for 2021-22 included in the Plan reflected the priorities of the Plan and the related assumptions, risks and issues. It was in line with the settlement for the SSRO set out in DG Finance’s letter of 13 January 2021.

4.4. The SSRO would consult on the document, issuing the draft to the MOD, ADS and all defence contractor members of the Operational Working Group on 1 February for their feedback over a period of four weeks. The final version of the Plan would be presented to the Board for approval on 25 March and published on 31 March 2021 in time for the start of the new financial year.

4.5. In discussion, Board members requested that an initial introduction or foreword should be incorporated into the draft to recognise the changed circumstances that the SSRO was operating in as a result of the ongoing pandemic and economic environment. While the changed environment was referenced at several points throughout the existing draft the Board agreed that the Plan would benefit from an introduction drawing such points together and signalling that the SSRO would flex its method of delivery in response. Action: David Galpin.

The Board:

• agreed the draft Corporate Plan set out in Appendix 2 for consultation with key stakeholders;
• authorised the Chairman, after consultation with the Chief Executive, to agree minor changes to the draft Corporate Plan before OWG circulation on 1 February;
• agreed that a four-week consultation period should be allowed for feedback; and
• approved the 2021/22 budget set out in Table 1.

5. Staff survey

5.1. Mike Wetherell, Interim Director of Corporate Resources, introduced a report setting out the findings of the staff engagement survey conducted in November 2020. The survey had shown significant improvements in areas such as leadership and learning and development, but the results for some themes such as engagement, my manager and inclusion and fair treatment had declined. The SSRO had achieved comparable or better results than the Civil Service benchmark in all areas with the exception of “employee engagement”.

5.2. The SSRO was seeking to learn from successes elsewhere. It was believed that the work being undertaken in response to the previous staff survey would have a positive impact on future results, as would the future ways of working project that was scheduled to commence in the near future.

5.3. The Board considered whether the calculation of the staff engagement KPI should be revised so that it was in line with the Civil Service’s methodology for calculating the measure. In discussion, Board members were not in favour of doing so because it would prevent comparisons from being made with earlier years, unless all previous results were re-calculated.

5.4. Board members asked how the results had been shared with staff, and it was noted that the full results (including free text comments) had been shared with all staff and that the survey had been discussed at an all-staff call and in a subsequent workshop.

The Board: * noted the results of the 2021 staff engagement survey; and * agreed the staff engagement KPI score for inclusion in the SSRO’s 2020/21 Annual Report and Accounts.

6. Executive Committee structure

6.1. The Chairman invited executive members and attendees of the Board to leave the meeting for this item. The non-executive Board members, the Chief Executive and Head of Governance remained in the meeting.

6.2. Neil Swift introduced a report that set out the proposed process for putting into effect the Board’s decision that the two executive director roles (Director of Legal and Policy and Director of Regulation and Economics) should be merged to revert to a single role of Chief Operating Officer. The paper set out the intended approach for recruiting to the Chief Operating Officer role, with the Chairman and a recruitment panel given delegated authority to appoint. The appointment would be on an internal basis, with the panel assessing identified eligible candidates for assimilation to the role using criteria set out in the report and approved by the Board.

6.3. Subject to a successful appointment, there would be a staff consultation on any changes underneath the Executive Committee level to recognise and reinforce the resilience and regime expertise that existed at this level.

6.4. The Board discussed the process for the appointment, engagement with staff about the appointment, the opportunities that the role would present throughout the organisation and the level of salary for the role. It was noted that the non-executive Board members appointed the executive members of the Board. Membership of the Board is subject to consent from the Secretary of State.

6.5. The Board suggested changes to the essential and desirable criteria in the draft job description and an amendment to clarify that the COO would deputise for the Chief Executive during their absence. A message would also be sent to all staff to inform them of the agreed process. Action: Neil Swift.

6.6. The Board recognised the importance of developing and following a robust and appropriate process for the appointment, and the Chief Executive confirmed that employment law advice had been sought in developing the process set out in the report. The Board agreed the process, noting that the issue would return to the Board for further consideration should the panel be unable to make an appointment.

The Board:

• agreed the job description, person specification and pay level for the Chief Operating Officer role;
• agreed the recruitment approach and process;
• delegated to the Chairman and a recruitment panel the approval to appoint a person to the Chief Operating Officer role; and
• noted plans for the subsequent engagement and consultation with the team on a review of posts underneath the Executive Committee level.

7. Corporate Performance Report

7.1. Neil Swift, Chief Executive, introduced the Corporate Performance Report, which provided an update on how the SSRO was delivering against its corporate priorities as set out in the Corporate Plan. All Directors then discussed issues arising within their work areas.

The Board reviewed and commented on the Corporate Performance Report.

8. Update from Regulatory Committee meeting of 21 January 2021

8.1. Peter Freeman presented an update from the meeting of the Regulatory Committee on 21 January 2021. The Committee’s business had included the consideration and approval of the baseline profit rate that the SSRO would recommend to the Secretary of State for application in 2021/22. The Committee had also discussed the review of legislation and the 2021 Annual Compliance Report.

8.2. The Chairman noted that, following the Regulatory Committee’s approval of the baseline profit rate, he had written to the Secretary of State to recommend the rate, attaching substantial background information with the recommendation.

8.3. [REDACTED]

The Board noted the update.

9. Future agendas and any other business

9.1. The Chairman introduced the two-page document showing the business of all Board and sub-committee meetings for the next year. The next meeting would take place on 25 March 2021 at 2:00pm.