Part 4: Current governance of the MWCS
4.1 This Part examines the separate issue of the current governance structure of the MWCS, which was considered during the MWCS' quinquennial review in 2007. It has been broadly agreed since that review by both the Scottish Government and the MWCS that this underlying issue would benefit from further consideration with a view to bringing forward changes to the MWCS' current governance arrangements.
What does "governance" mean?
4.2 In terms of what "governance" means for public bodies, Audit Scotland have previously given a helpful explanation of this as being:
"the system by which organisations direct and control their functions and relate to their stakeholders, and incorporates the way in which an organisation manages its business, determines strategy and objectives and goes about achieving those objectives. It is concerned with structures and processes for decision-making, accountability, control and behaviour at the upper levels of the organisation. Three fundamental principles of corporate governance apply equally to all public sector bodies - openness, integrity and accountability. 22"
4.3 The Langlands Commission had published "Good governance standards for public services" in March 2005, identifying six core principles in that regard as being:
- focussing on the organisation's purpose and on outcomes for citizens and users
- performing effectively in clearly defined functions and roles
- promoting values for the whole organisation and demonstrating the values of good governance through behaviour
- taking informed transparent decisions and managing risk
- developing the capacity and capability of the governing body to be effective
- engaging stakeholders and making accountability real.
4.4 HM Treasury 2005 guidelines for public bodies has also promoted the role of boards and non-executives to support accountable officers, but with no intention that they should replace or dilute the personable responsibility of the accountable officer.
MWCS current governance arrangements
4.5 The 2003 Act currently provides for the MWCS to consist of the following members, appointed by Her Majesty on the recommendation of Scottish Ministers:
- a member appointed to be convener;
- one or more medical members; and
- other members who meet such requirements as may be prescribed by Ministers (none are currently prescribed).
4.6 These "members" under the 2003 Act are known as Commissioners, and they may be appointed on a full time or part time basis.
4.7 A different type of Commissioner - ex officio Commissioners - may then separately be appointed by the MWCS, with the 2003 Act providing for the MWCS to appoint a chief officer (who is a member ex officio of the MWCS) as well as such other staff as it considers appropriate. The chief officer of the MWCS, and who is therefore an ex officio Commissioner, is currently its Director, Dr Lyons.
4.8 Translated from legislation into practice, the MWCS currently has Commissioners from a range of backgrounds, including service users. There has been a move away from having full time Commissioners. Instead, Commissioners are now part time, with the remaining former full time Commissioner posts now chief officer posts - that is, staff of the MWCS - and therefore without Commissioner status; this includes the posts of chief medical officer and chief nursing officer.
4.9 The main job of a Commissioner is to visit individuals who are being given care and treatment under mental health or incapacity law. However, the Commissioners also guide, develop and manage the MWCS' work, and this governance role is carried out by all the Commissioners, giving in practice a board of 20 members.
4.10 The Commissioners all also sit on the MWCS board however, which approves its plans and monitors and reports on outcomes.
4.11 Scottish Ministers' role in relation to the MWCS is through the requirements for provision of accounts to, and auditing by, Scottish Ministers. In practice, the Scottish Government Health Directorate as the sponsor directorate monitors MWCS business plans and accounts for Scottish Ministers.
PFMR Review - April 2007
4.12 The Scottish Executive's Review of Public Bodies, Public Bodies: Proposals for Change, June 2001, made a commitment that each public body should be subject to a policy and financial management review at least once every five years. The review of the MWCS started in October 2006. The resulting report by KPMG, published on 19 April 2007, was entitled Performance and Financial Management Review of the Mental Welfare Commission for Scotland.
4.13 Chapter 4 (Governance) of the PFMR Report indicated KPMG's view that the MWCS's current governance, whereby the role of the full Commission and the Board are combined instead of being independent and balancing of each other, is not structured so as to be effective. In particular the Report highlighted that:
"The Full Commission/Board has 23 members consisting of Executives and Part-time Commissioners. This is not conducive to effective governance and there has been consistent feedback from interviewees that the Full Commission/Board functions more as a forum for discussion rather than a decision making body, both because of its size and the mix of attendees. There is also a potential issue in respect of a lack of objectivity or conflict of interest as all Full Commission/Board members currently have responsibilities for delivery of services.".
4.14 It was noted that a change in primary legislation (the 2003 Act) would be required to modernise the MWCS' governance structure to have an independent Board, and its Director (who is also a Commissioner) accountable to the Board.
MWCS Response - August 2007
4.15 In their August 2007 response to the KPMG Report, PFMR Review of MWC - Response from MWC the MWCS noted that any such change to the legislation to achieve the recommended restructuring would be for the Scottish Government to take forward. They further indicated that KPMG's views on governance of the MWCS were also in line with their own earlier proposals to the Scottish Government in that regard.
4.16 In terms of how such a Board might be constituted, the MWCS indicated their initial views that there should be a distinction between Board Members with a corporate governance role and Commissioners who undertake operational work, but thought that further discussions would be necessary with the Scottish Government. It was also noted that the KPMG Report did not include any proposals as regards the role and involvement of either part-time Commissioners or service users in relation to future governance of the MWCS.
Comparison with governance models for other NDPBs
4.17 As noted above, it is the current structure of the dual governance role undertaken by all of the full and part time commissioners, who together total 20 board members, in addition to their visitation role, that gives rise to less effective governance. The structure has become unwieldy, takes up a considerable resource in meetings and makes it difficult for individual members to be clear that they are discharging their governance responsibilities effectively.
4.18 The KPMG Report proposed the creation of a board to provide management and governance to the organisation. However, there is then a wider question of what form such a board would take in any such future structure, what role the Commissioners would play, and how the two would interact. It is interesting therefore to consider how other NDPBs governance is structured:
The Care Commission
4.19 The Care Commission regulates the quality of care services in Scotland by having statutory responsibility for: registering them; inspecting them; investigating complaints about them; and enforcing care standards (via powers to enforce changes or even close a care service).
4.20 In terms of its structure, the Care Commission is constituted under the Regulation of Care (Scotland) Act 2001, with the Act providing for it to consist of a convenor and other members appointed by Scottish Ministers; the Act also requires Scottish Ministers to ensure that at least two of those members are persons who either: use, or have used, care services; or care for such persons. The Commission may then appoint as employees such persons (other than its convenor or members) as it considers appropriate, with one of its staff to be a chief officer who is responsible to the Commission for the general exercise of its functions.
4.21 Translated from legislation into practice:
- the "Commission" is reformulated as a non-executive Board, all of which board members are appointed by Scottish Ministers. The Board currently has twelve members (chaired by a Convenor), with three places reserved for people who represent care service users and carers. The Board sets the strategic direction for the Commission, taking account of the legislation and policy guidance from Scottish Ministers;
- it has around 580 staff, including Care Commission Officers and unlike the MWCS it is they, rather than the members of the Commission / Board who lead and carry out the inspection of services. From the staff there is also formed an Executive Management Team, led by a Chief Executive and supported by 10 further Directors (Director of Strategic Development; Director of Corporate Services; Director of Healthcare Regulation; Director of Children's Services Regulation; Director of Adult Services Regulation and five Regional Managers), which has the role of managing the Board;
- the Care Commission also separately has service users and carers involved in their work in designing and inspecting services through their Lay Assessors Scheme:
- the Lay Assessor Scheme lets people with a personal experience of using care services - members of the public who use a care service, have used a care service in the past or care for someone such as a family member or friend - get involved in the inspection process;
- using their own experiences to help them, they join inspectors to talk to people using the care service, and family carers, to get their views of services - their own background means that they are well placed to communicate with people who have the same or similar experiences. They can also use their own experiences to add value to the inspection.
4.22 Scottish Water was established under the Water Industry (Scotland) Act 2002, as the successor to the previous three regional water authorities. It is a public water company.
4.23 In terms of its structure, the Act requires that Scottish Water is to consist of a board Scottish Water is to consist of a board comprising: at least five but not more than eight non-executive members; together with at least three but not more than five executive members. Further requirement as to those members are that:
- the Chief Executive is to be one of its executive members, whilst the other executive members are to be appointed by Scottish Water, with approval of Scottish Ministers, from amongst its staff
- the number of non-executive members must always exceed the number of executive members by at least two
- the non-executive members are to be appointed by the Scottish Ministers from amongst persons who appear to them to have knowledge or experience relevant to the functions of Scottish Water; and
- one of the non-executive members must be a person appearing to the Scottish Ministers to have special knowledge of the interests of the employees of Scottish Water.
4.24 Scottish Ministers have specific statutory powers under the 2002 Act to direct Scottish Waters as to its governance. Under those powers Ministers must give Scottish Water directions as to the exercise of its powers and otherwise as to how its affairs are to be managed and conducted.
4.25 Translated from legislation into practice:
- its Board has 13 members, 5 of whom are executive members (its Chief Executive and four of its 7 Directors), whilst 8 are non-executive members;
- its Management Team is led by a Chief Executive and supported by 7 further Directors, which has the role of managing the Board;
4.26 Scottish Ministers most recently issued Directions to Scottish Water in April 2009, with section 1 of those Directions focusing on corporate governance of Scottish Water, in particular its corporate governance and procedures, its business plan and retail plan, its general powers and delegated limits and its reporting requirements, surplus funds and subsidies.
4.27 In terms of the future structure of the MWCS and its better governance might best be achieved, views are sought in Part 6 of this paper on the wider question of what form any board would take in any such future structure, what role the Commissioners would play, and how the two would interact.