EXPENDITURE WITHOUT STATUTORY AUTHORITY
Contents:
Scope
Key Points
Background
Procedures
Informing the Parliament
Absence of Powers
Scope
1. This section gives guidance on the procedure to follow where there is no statutory power to undertake an activity giving rise to expenditure authorised by the Scottish Parliament. The guidance is aimed primarily at the constituent parts of the Scottish Administration (including the core Scottish Executive and Executive Agencies) but other bodies funded direct from the Scottish Consolidated Fund should ensure compliance with any relevant provisions and arrange for procedures consistent with the guidance to be put in place.
Key Points
2. To be able to undertake expenditure both of the following are normally required:
3. Officials authorising expenditure or authorising commitments leading to expenditure also require appropriate delegated authority. All 3 elements should be satisfied before commitments or expenditure are authorised.
4. In the absence of statutory powers to undertake the activity giving rise to the particular expenditure, Ministers may possess common law powers to undertake certain activities entailing expenditure. If they do, it would only be proper for them to use these powers, in conjunction with the spending authority in a Budget Act where:
the expenditure is below £1 million a year; or
the expenditure is of a "one-off" nature; or
the use of common law powers is temporary pending the seeking of statutory powers.
5. The Parliament should be informed in all cases where the sole statutory authority for the activity giving rise to the expenditure is the Budget Act.
Background
6. The annual Budget Act does not give the Scottish Administration, or any other body funded direct from the Scottish Consolidated Fund (SCF), the power to undertake any action. It gives authorisation for resources to be used and payments to be made out of the SCF for the purpose of undertaking certain actions for which they should already possess powers. Continuing functions of Government should be defined by specific statute and the rules of propriety are such that common law powers cannot be relied upon for continuing functions unless they are de minimis.
Procedures
7. Business areas undertaking expenditure must satisfy themselves that there is statutory authority for the activity giving rise to the expenditure, and that the expenditure is wholly in line with the relevant enabling statute. It is, of course, particularly important to consider the point in relation to new expenditure initiatives, including those proposed by Ministers, and in making changes to existing expenditure schemes. This should be done early in the consideration process; and if necessary legal advice should be sought.
8. If there is no statutory power, it may still be possible to undertake the activity (provided any necessary resultant expenditure is authorised by Budget Act for the financial year in question) provided:
the Scottish Ministers possess the necessary common law powers; and
the expenditure is not of a continuing nature unless either the sums involved below £1 million a year or Ministers undertake to seek statutory powers at the first available opportunity.
9. Business areas within the Scottish Administration contemplating activities giving rise to expenditure for which there are no statutory powers must:
10. Business areas should seek legal advice on the existence of common law powers. In general, the Scottish Ministers, through the Crown, possess wide common law powers in areas within devolved competence, so far as these are not superseded by statutory powers; but they will have no common law powers in respect of "reserved matters" as set out in the Scotland Act 1998.
Informing the Parliament
11. The Parliament should be informed of reliance on common law powers prior to activity giving rise to expenditure being undertaken. This can be done by suitable notes in the documents accompanying Budget Bills or Amendment Orders, or if this is not possible by the responsible Cabinet Secretary or Minister writing to the Convener of the Finance Committee. The letter should be prepared by the relevant business area in consultation with their portfolio Finance Team.
Absence of Powers
12. Ministers cannot undertake any activities giving rise to expenditure for which there are no powers (and for the avoidance of doubt the Budget Act does not confer powers). If, despite advice that there is no power to undertake the activity, Ministers insist that the expenditure be incurred then written authority to that effect should be sought from Ministers by the Accountable Officer - see the section of the SPFM on Accountability.
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Page Published/ Updated: July 2007