Explanatory Notes

Part 1: Constitution, proceedings etc

Status

370 Paragraph 1 sets out that the IMA is not to be a Crown body.

Membership

371 Paragraph 2 sets out the membership of the IMA (effectively its decision-making board). Sub-paragraph (1) lists this membership as a chair (a non-executive), a chief executive officer (an executive, who will be an employee of the IMA), and at least two but no more than six other non-executive members and at least one but no more than three other executive members. The Secretary of State is to appoint the non-executive members. The Secretary of State and the non-executive members must ensure, so far as is practicable, that the number of non-executive members exceeds the number of executive members, in order to ensure effective oversight. Sub-paragraph (7) provides that a member may not be a civil servant. Once the chair and at least two other non-executive members have been appointed, all of the appointed non-executive members are to appoint the executive members, who shall be employees of the IMA, but must consult the Secretary of State on the appointment of the chief executive officer.

Interim chief executive

372 Paragraph 3 allows the Secretary of State to appoint a chief executive for an interim period prior to a chief executive being appointed in accordance with paragraph 2(3). Before the membership of the IMA is fully constituted in accordance with paragraph 2(1), the chief executive appointed by the Secretary of State may undertake matters on behalf of the IMA including incurring expenditure, subject to any directions given by the Secretary of State.

Requirements relating to appointment

373 Paragraph 4 defines the desired expertise to be held collectively by the IMA’s members. When making appointments, the Secretary of State and the non-executive members must have regard to the desirability of IMA members having knowledge of conditions in the UK relating to matters in Part 2 of the Withdrawal Agreement (for example social security co-ordination, or the recognition of professional qualifications) and the equivalent Part in the EEA EFTA Separation Agreement, referred to as ‘relevant matters.’

374 Sub-paragraph (2) sets out that the Secretary of State must ensure, as far as is possible, that the IMA membership includes non-executive members with knowledge of the conditions in Scotland, Wales and Northern Ireland respectively, in relation to Part 2 of the Withdrawal Agreement and EEA EFTA Separation Agreement. This is to reflect the fact that the IMA will exercise its functions across all areas of the UK.

375 Sub-paragraph (3) provides that where the IMA exercises functions in relation to Gibraltar, the Secretary of State must ensure, so far as possible, that there is a non-executive member who knows about conditions in Gibraltar in relation to Part 2 of the Withdrawal Agreement and Part 2 of the EEA EFTA Separation Agreement.

376 Sub-paragraph (4) and (5) requires the Secretary of State or non-executive members to be satisfied that an a person does not have a conflict of interest before appointing them. Conflict of interest is defined in sub-paragraph (5) as a person having a financial or other interest which is likely to prejudice their function as a member of the IMA, which might be, for example, a member who sits on another public body that has an interest in the IMA’s work.

Procedure for appointing members with knowledge of conditions in devolved areas etc

377 Paragraph 5 sets out the procedures for appointing the non-executive members under paragraph 4(2) and (3). Sub-paragraph (2) requires the Secretary of State to tell the relevant authority (that is, the relevant devolved administration or Gibraltar Minister specified in sub-paragraph (8)) who they propose to appoint and why.

378 Sub-paragraph (3) states that the Secretary of State must appoint that person if the relevant authority agrees to that appointment within a period of one month from the action set out under sub-paragraph (2), subject to sub-paragraph (4).

379 Sub-paragraph (4) states that if the person is no longer available, or if the Secretary of State and the relevant authority agree that the person should not be appointed following the process set out in sub-paragraph (3) (for example, due to new circumstances that indicate that the appointment may no longer be appropriate), then the Secretary of State must propose to appoint a different person following the the process set out in sub-paragraph (2) and (3) again.

380 Sub-paragraph (5) sets out the process following sub-paragraph (3), in the event that the relevant authority does not agree to the Secretary of State’s proposed appointee. The Secretary of State may either make the appointment without the agreement of the relevant authority (sub-paragraph (5)(a)) or the Secretary of State may propose to appoint a different person (sub-paragraph (5)(b)).

381 Sub-paragraph (6) states that the process set out in sub-paragraphs (2) to (5) is repeated if the Secretary of State proposes to appoint a different person under sub-paragraph (5)(b).

382 Sub-paragraph (7) states that the Secretary of State must publish a written statement explaining the decision to proceed with a proposed appointment without the agreement of the relevant authority under sub-paragraph (5)(a).

383 Sub-paragraph (8) defines a relevant authority for the purposes of sub-paragraphs (1) to (7).

Non-executive members: terms of appointment and tenure etc

384 Paragraph 6 provides that a person holds and vacates office as a member of the IMA in accordance with the terms and conditions of the person's appointment. Terms and conditions will be set out in the person’s appointment letter, unless provided for in legislation.

385 Sub-paragraph (2) requires the Secretary of State to set the terms and conditions for non-executive appointments, subject to the provisions contained in the Schedule.

386 Sub-paragraphs (3) and (4) set the term limits for board members of the IMA. The chair will be appointed for a period of up to five years with any other non-executive member to be appointed for up to four years.

387 Sub-paragraph (5) provides that non-executive members may resign by giving written notice to the Secretary of State.

388 Sub-paragraph (6) gives the Secretary of State the power to remove a non-executive member of the IMA on the grounds specified in sub-paragraph (7). Before doing so, the Secretary of State is under a duty to consult the other non-executive members.

389 Sub-paragraph (7) sets out the grounds upon which non-executive members of the IMA may be removed from office under sub-paragraph (6). These are:

a. absence from meetings for a continuous period of more than six months without the IMA’s permission;

b. if the member has a conflict of interest preventing the member from carrying out the functions of the office;

c. if the member has been convicted of a criminal offence;

d. if the Secretary of State is of the opinion that the member is unable, unwilling or unfit to carry out the functions of the office; and

e. on any other grounds set out in the member’s terms of appointment.

Remuneration of non-executive members

390 Paragraph 7 provides for the Secretary of State to determine the remuneration, allowances and gratuities to be paid to non-executive members of the IMA. Sub-paragraphs (3) and (4) provide that the IMA must make a payment to a non-executive member as the Secretary of State may determine where the term of the non-executive member has not expired, they cease to hold office, and the Secretary of State thinks there are special circumstances that make it right for that member to receive compensation.

Staffing of the IMA

391 Paragraph 8 sets out that the IMA may appoint employees and arrange for its staffing. Terms and conditions of employment, remuneration and paying of pensions, allowance and gratuities are to be determined by the IMA with the approval of the Secretary of State (except for in the case of a chief executive appointed by the Secretary of State, where these determinations are made by the Secretary of State), as set out in (2) to (4). Sub-paragraph (4) sets out that the IMA must pay or make provisions for payments of pensions, allowances and gratuities to be made, as agreed and approved by the Secretary of State (or, in the case of a chief executive appointed by the Secretary of State, as determined by the Secretary of State). Sub-paragraphs (5) and (6) ensure that the IMA is able to take part in superannuation schemes for its employees.

392 Sub-paragraph (7) provides that the terms and conditions, remuneration and payment of allowances and expenses under sub-paragraphs (2) to (4) in relation to executive members of the IMA are to be determined by the non-executive members with the approval of the Secretary of State.

Procedure

393 The IMA, as an independent authority, is permitted by paragraph 9 to determine its own procedures and decide how it will operate. This is subject to a number of conditions set out in this paragraph. These conditions are;

a. the establishment and maintenance of a register of members’ interests;

b. the publication of entries recorded in the register; and

c. the quorum for a meeting of the IMA being half the number of the members appointed for the time being, with the majority of those present being non-executive members.

394 Sub-paragraph (5) provides that the IMA must establish procedures for dealing with conflicts of interests of its members.

395 Sub-paragraph (6) states that the aforementioned arrangements must oblige each member to declare all financial interests and personal interests relevant to exercise of an IMA function and to withdraw from the exercise of an affected function unless the IMA is satisfied that the interest will not affect its exercise. Sub-paragraph (7) states that the validity of any proceedings of the IMA or of its committees or subcommittees is not affected by any vacancy or defective appointment.

Discharge of functions

396 Paragraph 10 sets out who is permitted to exercise the functions of the IMA. The IMA can authorise its employees, members or committees to do anything the IMA may do, apart from approving an annual report as set out in paragraph 31 (which is a function reserved to the IMA’s board). A committee of the IMA under sub-paragraph (2) can authorise a sub-committee, a committee member, a member of the IMA or an employee of the IMA to exercise a function the relevant committee is authorised to carry out. This ability to delegate is intended to ensure operational effectiveness.

397 Sub-paragraph (3) provides that a committee and a sub-committee may include IMA employees who are not members of it.

Seal and evidence

398 Paragraph 11 sets out how the IMA’s seal is to be authenticated, and how it should be treated once authenticated. This provision is needed to clarify how documents produced by the IMA can be verified as being official communications, and how these documents should be treated.

399 The IMA’s seal is authenticated through the signature of the chief executive of the IMA or another person authorised by the IMA for that purpose. Any document that purports to be executed under the IMA’s seal or signed on its behalf is to be received in evidence and taken to be so unless the contrary is shown.

400 Sub-paragraph (3) provides that paragraph 11 does not apply in relation to any document signed in accordance with the law of Scotland.

Funding

401 Paragraph 12 provides that the Secretary of State must make such payments to the IMA as they consider appropriate for the IMA to be able to perform its functions. This is the mechanism through which the IMA receives its annual budget and means its budget will be supplied by the relevant Government department and accounted for to Parliament as part of that department’s spending.

Operational Independence

402 Paragraph 13 provides that, when exercising their functions in respect of the IMA, the Secretary of State must have regard to the need to protect the IMA’s operational independence and ability to make impartial assessments.

Accounts and audit

403 Paragraph 14 provides that the IMA must keep proper accounts and records and must prepare a statement of accounts for each financial year. It must comply with directions from the Secretary of State on how the statement of accounts should be prepared.

404 Sub-paragraph (3) places a duty on the IMA to send a copy of each statement of accounts to the Secretary of State and the Comptroller and Auditor General by the end of August next following the financial year to which the statement relates.

405 Sub-paragraph (4) sets out the duties of the Comptroller and Auditor General in relation to these accounts, which are to examine, certify, and report on each annual statement of accounts. They must also lay a copy of the statement and the report on the statement before Parliament within four months from when the Comptroller and Auditor General receives the statement.

406 Sub-paragraph (5) defines the term ‘financial year’ for the purposes of the Schedule as commencing on the day the membership of the IMA is first constituted (in accordance with paragraph 2(1)) and ending on the next 31 March after that day if that results in the first financial year being a period of six months or more; or, otherwise, the second 31 March and each successive period of 12 months thereafter.

Annual plan

407 Paragraph 15 places a duty on the IMA to prepare an annual plan for each financial year on how it intends to perform its functions, with the flexibility to revise the plan. The IMA must submit the annual plan or any revision to the Secretary of State.

408 Sub-paragraph (3) provides that the first annual plan must be submitted within three months from the date the membership of the IMA is first constituted (in accordance with paragraph 2(1)). The plan must relate to the remainder of the financial year in which the IMA is established.

409 Sub-paragraph (4) obliges the IMA to submit subsequent annual plans no later than one month before the beginning of the financial year to which the annual plan relates.

Public records

410 Paragraph 16 ensures that the administrative records of the IMA will be public records.

Investigation by the Parliamentary Commissioner

411 Paragraph 17 ensures that the IMA will be subject to investigation by the Parliamentary Commissioner (the Parliamentary Ombudsman).

House of Commons disqualification

412 Paragraph 18 ensures that members of the IMA are disqualified from membership of the House of Commons.

Northern Ireland Assembly disqualification

413 Paragraph 19 ensures that members of the IMA are disqualified from membership of the Northern Ireland Assembly. Similar provision will be made in relation to the Scottish Parliament and the Welsh Assembly via the appropriate secondary legislation, in line with the relevant provisions of the Scotland Act 1998 and Government of Wales Act 2006.

Freedom of information

414 Paragraph 20 ensures that the IMA will be subject to the Freedom of Information Act.

Public sector equality duty

415 Paragraph 21 ensures that the IMA will be subject to the public sector equality duty under the Equality Act 2010. Similar provision will be made in relation to Northern Ireland via the appropriate secondary legislation, in line with the relevant provisions of the Northern Ireland Act 1998.

 

Prepared 19th December 2019