The Future of the Union, part two: Inter-institutional relations in the UK Contents

2Intergovernmental Relations

10.As the House of Lords Constitution Committee’s 2015 report, Inter-Governmental Relations in the United Kingdom acknowledges, “intergovernmental relations are necessary in a multi-level political system”.12

11.In the United Kingdom, intergovernmental relations (IGR) can be divided into two main spheres: multilateral and bilateral. Bilateral relations are both formal and informal. Intergovernmental relations in the UK, at both a multilateral and bilateral level, also have an international dimension as a result of the bodies established by the Belfast Agreement (more commonly referred to as the Good Friday Agreement): the British-Irish Council and the North-South Ministerial Council. Our inquiry has focused on intergovernmental relations wholly within the United Kingdom and we therefore make no comment on the effectiveness of either the British-Irish Council or of the North-South Ministerial Council.

The Joint Ministerial Committee

12.The formal machinery of UK-wide intergovernmental relations is underpinned by a Memorandum of Understanding (MoU) signed between the UK Government and the Scottish, Northern Irish and Welsh Devolved Administrations. The MoU comprises a series of agreements between these administrations and sets out the principles which underlie relations between them; it is not intended that these agreements should be “legally binding”.13 In addition, there are three separate overarching Concordats which apply “broadly uniform arrangements across Government to the handling of: the co-ordination of EU policy and implementation; financial assistance to industry; and international relations touching on the responsibilities of the devolved administrations”.14

13. The MoU provides for the establishment of the Joint Ministerial Committee (JMC). The JMC consists of UK Government, Scottish, Welsh and Northern Ireland Ministers and is tasked with the following terms of reference:

a)to consider non-devolved matters which impinge on devolved responsibilities, and devolved matters which impinge on non-devolved responsibilities;

b)where the UK Government and the devolved administrations so agree, to consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom;

c)to keep the arrangements for liaison between the UK Government and the devolved administrations under review, and;

d)to consider disputes between the administrations.

14.The JMC either meets in plenary (JMC (P)) or functional formats. Plenary sessions are expected to be held at least once a year, according to the MoU. These meetings consist of the Prime Minister (or a representative) who takes the chair, the First Ministers of Scotland and Wales (both of whom can be accompanied by one of their Ministerial colleagues), the First and Deputy First Minister of Northern Ireland and the Secretaries of State for Scotland, Wales and Northern Ireland. The MoU allows for other Ministers to be invited to attend, “as appropriate when issues relevant to their areas of responsibility are to be discussed”.15 The most recent JMC (P) took place on 24 October 2016.16 A full list of the JMC (P) meetings since 1999 can be found in the appendix of this report.

15.The ‘functional formats’ of the JMC include the JMC Europe (JMC (E)) or JMC Domestic (JMC (D)). The JMC (D) “deals with practical policy matters, where non-devolved policies have an effect on devolved ones or vice-versa.” JMC (E), on the other hand, “meets around four or five times a year, and is concerned with EU business–particularly matters being considered at European Council meetings”.17 As with the plenary format, these functional committees are chaired by the responsible UK Government Minister.18

16.In addition, there is provision, within the MoU, for the JMC to be a dispute resolution device. While the MOU commits the parties to ensure that “all efforts should be made to resolve differences informally”, where bilateral negotiations fail, the parties can refer disputes to the JMC:

Attendance would include ministers from the UK departments and the devolved administrations involved in the dispute, along with the relevant territorial Secretaries of State or their representatives. The senior UK Minister chairing will as far as possible be someone without a direct departmental interest in the issue in dispute. The meeting might take place on the same date as a regular JMC meeting but would be separate from that meeting.

With the support of the Secretariat, the Minister chairing will provide a further opportunity for the parties to set out their positions and will facilitate discussion of shared interests, options for resolving the dispute and criteria for an agreed outcome. The Minister chairing may in advance of the meeting wish to make informal efforts to resolve matters.

The outcome of this meeting will be one of: an agreement resolving the dispute; agreement to a further round of the process at Ministerial level; an agreement that a request should be made for an independent third party report in terms of paragraphs A3.14a–c; agreement that no resolution can be reached; or, exceptionally, a request by any party that the dispute be considered by a JMC Plenary meeting.19

The Chair of the Panel, with the agreement of the parties to the dispute, can commission independent analysis of the issue at hand. In addition, those party to a dispute can request that the JMC in full plenary mode considers the matter. The JMC (P)’s decision is final.

17.In terms of administrative and secretarial support, the JMC is supported by a secretariat consisting of staff from the UK Cabinet Office and the devolved administrations. As the MoU’s annex on the JMC secretariat explains, “the lead role within the Secretariat will fall upon the UK Cabinet Office, including responsibility for servicing meetings and despatching documents as required”.20

18.In December 2014, at the JMC (P), the then Prime Minister and the territorial First Ministers agreed to commission work on a revised Memorandum of Understanding (MoU). As the communiqué from that meeting notes:

Ministers noted that the constitutional landscape has changed fundamentally since the Memorandum of Understanding was agreed between the UK government, Scotland, Wales and Northern Ireland in 2000 and agreed to commission work on a revised Memorandum of Understanding.21

Despite indications in March 2016 that the publication of a revised MoU was imminent, at the time of writing it has yet to be published.

Poorly regarded and ineffective? The Joint Ministerial Committee

19.Despite the existence of the JMC, there has been, according to Professor McEwen, a “prevailing preference, it seems for informality in intergovernmental relations”.22 Indeed, between 2002 and 2008 the JMC did not meet in plenary format, with intergovernmental relations instead relying upon the internal relationships within the Labour Party that, up until 2007 was in power in Westminster, Holyrood and Cardiff Bay. 23

20.It is therefore not entirely surprising that as the Bingham Centre for the Rule of Law noted in its 2015 report, A Constitutional Crossroads: Ways Forward for the United Kingdom, “every review of devolution has concluded that the centre needs to be reformed to take account of the implications of devolution and, in particular, that the UK’s intergovernmental machinery is not fit for purpose”.24 According to the Bingham Centre’s report, this has been the view of Select Committees in both Houses of Parliament, as well as the Commission on Scottish Devolution (the Calman Commission), the Commission on Devolution in Wales (the Silk Commission) and the Smith Commission.25

21.The House of Commons Justice Committee in its 2009 report, Devolution: a decade on, for example, drew attention to the absence of IGR arrangements that would allow coordination of action, the promotion of common interests and the effective management of consequential effects of decisions that are taken in the respective territories of the UK as a key weakness of the current devolution settlement.26 Similarly, in 2015, the Lords Constitution Committee reported that the JMC’s operation was “not well regarded—at least in the eyes of the devolved administrations”, describing the plenary meetings as “ineffective while its Domestic sub-committee does not appear to serve a useful purpose”.27

22.Professor Tierney, Professor of Constitutional Theory at Edinburgh University noted that a lot of the complaints the Constitution Committee received during its inquiry into IGR came from the devolved territories with regard to the JMC (P) format.28 According to Professor Tierney, these complaints ranged from issues coming onto the agenda very late, so that the devolved administrations “were not getting cognisance of what was likely to be discussed” to the JMC operating much more as a retelling of UK governmental policy “rather than a full discussion of how things ought to operate”.29 According to Professor McEwen, the devolved governments have expressed frustrations about the lack of time to have substantive discussions in JMC meetings.30 Professor Tierney noted that these concerns also extended, to a certain extent, to the subcommittees of the JMC, though he contended that their internal workings appeared to operate on a “better, less partisan level”. 31

23.In his evidence to PACAC, the First Minister of Wales, the Rt Hon Carwyn Jones AM, claimed that the use of existing intergovernmental machinery had undergone a particular decline in the previous two years (2013–2015):

The JMC domestic group has not met for some time now. It was the case that that group would meet quarterly. JMC plenary is due to meet annually, though that has not met for 15 months now.32

In addition, the First Minister told PACAC that there was “no real machinery for a regular Heads of Government meeting”, with intergovernmental relations often conducted on the basis of “bilateral discussion between the UK and Scotland in one room, as it were, us in another room and Northern Ireland in another room.”33

24.The Scottish Government’s evidence was generally more positive, albeit not wholly uncritical, about the effectiveness of the JMC machinery. While describing the formal institutional level of IGR as “quite formulaic and quite predictable”, the Permanent Secretary to the Scottish Government, Leslie Evans, did not agree with the idea that the JMC was ceremonial in nature.34 Instead, Ms Evans depicted the JMC as an important part, both symbolically and practically, of a “whole range of intergovernmental relationships”.35 Furthermore, while Mr Swinney highlighted an example, relating to a discussion on the UK Government’s fiscal policies, where the JMC had been rather formulaic, he also pointed to a case regarding the London Olympics and Barnett consequentials “as an example of how an issue raised in the JMC in a particular fashion on a particular day led to an acceptance” from the UK Government that an issue raised by the devolved administrations should be satisfactorily resolved.36 According to Mr Swinney, on certain, “more strategic questions”, the JMC can be formulaic, but “on some of the practicalities you can maybe make a bit of headway”.37

25.The Joint Ministerial Council should be at the heart of the UK’s intergovernmental relations, playing an important coordinating role and facilitating effective government. With devolution of power to Edinburgh, Cardiff and Belfast having increased, and following the outcome of the EU referendum, having an effective mechanism for intergovernmental cooperation and discussion for all four UK administrations is more important than ever before. Unfortunately, however, it is clear that the JMC, while not without its merits, is not, as it is currently organised, set up to cope with this increasingly significant responsibility.

26.If it is to be fully effective, the JMC needs to enjoy the confidence of all four Governments. It is clear from the evidence received that the Scottish and Welsh Governments have had different experiences of both the JMC specifically and, of intergovernmental relations more generally. While this arguably reflects the respective importance attached by the UK Government to the different devolved administrations, it is crucial that a multilateral forum such as the JMC engages with, and treats, the three devolved administrations with respect and as valued partners.

The revised Memorandum of Understanding

27.As noted above, in December 2014, at the JMC Plenary JMC (P), the Prime Minister and the territorial First Ministers agreed to commission work on a revised Memorandum of Understanding (MoU). As the communiqué from that meeting notes:

Ministers noted that the constitutional landscape has changed fundamentally since the Memorandum of Understanding was agreed between the UK government, Scotland, Wales and Northern Ireland in 2000 and agreed to commission work on a revised Memorandum of Understanding”38

28.Despite indications in March 2016 that publication was imminent, a revised MoU has yet to be published. At the most recent JMC (P), on 24 October 2016, all four administrations agreed to revisit the issue as a result of the changed political landscape since the UK’s decision to leave the European Union in June 2016. The four administrations did, however, agree that the JMC (P) should meet more regularly and to create a new Joint Ministerial Committee on EU Negotiations (JMC (EN)) as a means of furthering multilateral engagement between the devolved administrations and the UK Government on the subject of the UK’s withdrawal from the European Union.39

Informal and bilateral IGR

29.Despite the existence of multilateral, formal machinery in the form of the JMC, bilateralism and informality have, according to Professors McEwen and Tierney, been key features of intergovernmental relations post-devolution.40 The most vivid demonstration of this was in the years 2002 to 2008 when the JMC largely fell into abeyance, with the Labour Party, then in office in London, Cardiff and Edinburgh from 1999–2007, acting instead as the main conduit for intergovernmental relations, bypassing the formal machinery of Government..41 While there has since been a resumption of the JMC as a formal mechanism of intergovernmental relations, “an awful lot of work” still takes places outside of this formal machinery, with a “prevailing preference, it seems, for informality in intergovernmental relations”.42

30.The continued reliance on informality and bilateralism, and the perceived weakness and failings of the JMC, has repeatedly raised concerns about the sustainability of the current model of intergovernmental relations in the UK. For example, Alan Trench has previously argued that the “lightly institutionalised and largely informal” nature of the UK’s intergovernmental relations has resulted in a reliance on a “sizable dollop of goodwill”.43

31.It its 2015 report, Inter-Governmental Relations in the United Kingdom, the House of Lords Constitution Committee noted that over the past five years more formalised bilateral forums have been established in the context of further devolution to Scotland, Northern Ireland and Wales.44 In 2011, for example, a Joint Ministerial Working Group on Rebalancing the Northern Ireland Economy was established between the UK Government and Northern Ireland Executive on the devolution of Corporation Tax rate setting powers to the Northern Ireland Assembly.45 This followed the Treasury’s March 2011 consultation paper Rebalancing the Northern Ireland economy.46 This Working Group concluded its work in October 2012.47

32.A UK-Scottish Government Joint Exchequer Committee (JEC) was established in 2011 as a means of managing the devolution of fiscal powers to the Scottish Parliament provided for in the Scotland Act 2012.48 The UK- Scottish JEC has most recently been focused on implementing the more extensive fiscal devolution contained in the Scotland Act 2016 and in negotiating the fiscal framework that underpins this devolution. A UK-Welsh JEC was also established to accommodate the devolution of fiscal powers to the National Assembly for Wales provided by the Wales Act 2014.

33.Most recently, a joint Ministerial Working Group on Welfare was established in 2015 to manage the partial devolution of welfare responsibilities to the Scottish Parliament and Scottish Government that result from the Scotland Act 2016. 49 The Joint Ministerial Working Group is co-chaired by an UK Government and a Scottish Government Minister and has the following terms of reference:

“As far as possible” discussion within the Joint Ministerial Working Group should be “open, transparent and accessible, with the aim of keeping stakeholders fully informed of progress”, while at the same time “recognising the confidentiality of some aspects of the negotiations”.50 In its 2015 report on intergovernmental relations, the House of Lords Constitution Committee recommended that the work of the Joint Ministerial Working Group on Welfare and the Joint Exchequer Committee should be brought “within the auspices of the JMC structure, to ensure that their work is co-ordinated as part of a wider intergovernmental relations strategy”. 51

Informality and bilateralism: an effective model of intergovernmental relations?

34.Professor Tierney’s evidence suggested a certain synchronicity between the bilateralism and informality of IGR and those of the UK’s constitution more generally:

The devolution model is an asymmetrical one, so different powers have been given to the different regions, therefore bilateralism has made a certain sense. We have an unwritten constitution, so informality is well practiced in the British Constitution.52

There appears, therefore, to be a degree of complementarity between the way in which IGR operates, post-devolution, and the contours of the UK’s territorial constitution.

35.This may not in itself, however, be indicative of a successful model of intergovernmental relations and, indeed, the First Minister of Wales claimed that the level of formalised bilateral machinery between the UK and Welsh Governments is “fairly non-existent”.53 Instead, the Welsh Government’s relations with the UK Government appear to rely on a more informal set of frequent bilateral meetings with the Secretary of State for Wales.54 The First Minister also claimed that there “is no real machinery for a regular Heads of Government meeting” and noted that while he meets the Secretary of State for Wales “probably on a monthly basis” he only meets with the Prime Minister, on average, “once a year”.55 Though the First Minister said that contact with the Wales Office was “welcome”, for example, in relation to the Wales Bill, there nonetheless needed to be contact on a Head of Government to Head of Government basis.56

36.Indeed, Heads of Government relations became a key theme of the First Minister’s evidence to PACAC. In addition to having few meetings with the Prime Minister, he also suggested that there have been “more than one occasion when letters have not been responded to or been responded to very late, sometimes many months down the line”.57 He cited the example of correspondence to the Prime Minister on the subject of the Wilson doctrine (the convention whereby MPs’ correspondence should not be intercepted by the intelligence services), “asking for assurances that Assembly Members (AMs) would receive the same treatment as Members of Parliament”. According to the First Minister, he never received an answer to this correspondence. 58

37.Interestingly, the First Minister of Wales’ depiction of IGR differed significantly to the evidence provided to PACAC by the Deputy First Minister of Scotland, John Swinney MSP. Mr Swinney told us that the regularity of IGR has improved over the period of time that the SNP has been in office (since 2007) and, contrary to the First Minister of Wales’ claim that there has been a particular decline in the IGR machinery in the last two years, he did not think he could “point to a deterioration in the quality of interaction with the Governments in that way”.59 With regards to correspondence between the Scottish Government and Downing Street, Mr Swinney again differed from the First Minister of Wales, stating that “generally I would not say that correspondence goes unheeded”.60 This difference in experience could be explained by the differing, and asymmetrical, settlements for Wales and Scotland as well as a reflection on the size and capacity of the devolved administrations.

38.Furthermore, in contrast to the “fairly non-existent” level of bilateral IGR mechanisms between the UK and Welsh Governments,61 evidence from the Scottish Government indicated a well-developed network of informal and formal bilateral relations with the UK Government. On the more formalised level, these relations include the Joint Exchequer Committee and the Joint Ministerial Working Group, while less formal bilaterals include the “thousands of interactions a week” at official level between the two Governments.62

39.One of the most prominent examples of bilateral relations between the Scottish and UK Governments was the fiscal framework agreed in February 2016.63 This agreement enabled the Scottish Parliament to pass a legislative consent motion in favour of the Scotland Act 2016, paving the way for the devolution of significant fiscal levers and the devolution of certain areas of welfare policy. The fiscal framework and the scope of fiscal devolution to the Scottish devolved institutions will be the subject of a future inquiry by PACAC. While he had reservations as to certain aspects of the negotiations, Mr Swinney described the framework as a “practical and pragmatic way of implementing the Smith commission agreements [on no detriment as a result of fiscal and welfare devolution]”.64 In his evidence, the Secretary of State for Scotland, the Rt Hon David Mundell MP, informed PACAC that he and Mr Swinney had had a “very good conversation” in which they reflected on the Scotland Act and “both acknowledged that we had worked very well together in order to achieve that [the passage of the Act and agreement of a fiscal framework]”.65

40.The ability to reach constructive agreement appears to be indicative of the way in which the Joint Exchequer Committee (JEC) works for the Scottish and UK Governments. In contrast to the JMC, the JEC aims, according to Mr Swinney, “to operate by agreement” with the “presumption that we are obliged to get to some form of agreement”.66 Reflecting on his experience of negotiating block grant adjustments with the UK Government for the, in revenue terms, smaller taxes that had been devolved in the Scotland Act 2012, Mr Swinney noted that in both instances “we got to points of agreement about that [block grant adjustments] with which I am perfectly satisfied”.67 In terms of the fiscal framework negotiations, this presumption to agree was further magnified by the requirement in the Smith Commission report that a framework be agreed. This, Mr Swinney acknowledged, “obviously put a particular discipline on getting to an acceptable conclusion for both parties”.68

41.Bilateralism is a prominent aspect of intergovernmental relations in the UK. With substantial new fiscal and welfare responsibilities flowing to the Scottish devolved institutions, this will only grow in importance in the future. We are therefore heartened at the evidence of constructive cooperation between the Scottish and UK Governments in relation to both the Scotland Act 2016 and the fiscal framework which will underpin the practical operation of this important constitutional legislation. The UK Government must maintain and strengthen this practical and pragmatic approach to intergovernmental relations. This is essential if the full potential of the new powers contained in the Scotland Act 2016, particularly those in areas where competency is shared between the two Governments, are to be realised. It will be all the more important as an underpinning to the discussions about exiting the European Union which are currently taking place.

42.However, the starkly different evidence provided by the Scottish and Welsh Governments does suggest that intergovernmental relations in the UK are still overly dependent on factors such as the respective influence of the different administrations. Although PACAC is aware of reports that the UK Government has, at times, been unreceptive to concerns expressed by the Scottish Government, the Scottish Government appears to have experienced a more effective and responsive relationship with Whitehall than can be said of the Welsh Government. It is to be expected that the UK Government will have to, at times, prioritise certain relationships. However, the UK Government must do all it can to promote goodwill and to develop a system of effective intergovernmental relations which ensures that devolved administrations with less nominal influence are treated with respect, so that meetings and discussions are trusting and sincere, and that the matters being decided are substantive rather than tokenistic.

43.In the following section we outline a series of recommendations aimed at fostering a stronger sense of shared purpose and collaboration in intergovernmental relations in the UK, at both a multilateral and bilateral level.

The way forward: towards a meaningful system of intergovernmental relations

The Joint Ministerial Committee

44.Our evidence sessions in Scotland and Wales demonstrated a clear desire from those devolved administrations to be fully engaged in an effective and meaningful system of intergovernmental relations. John Swinney’s evidence indicated that the main reform the Scottish Government seeks to the existing system of intergovernmental relations is the ability to raise and address issues of concern and to reach points of agreement.69 In evidence to the House of Lords Constitution Committee during its inquiry into intergovernmental relations in 2015, the Scottish Government noted that while some capacity exists for issues of concern to be raised, the practical effect of this has been reduced by the timetabling of JMC meetings:

In theory, the ‘current issues’ section which remains a standing item on the agenda of meetings in both Plenary and Domestic format provides the opportunity for each administration to raise issues of concern. In practice, lack of time can make this opportunity less useful, since the UK Government is generally unwilling or unable to schedule more than 60–90 minutes for each meeting and there is often no time … left for ‘current issues’. Providing additional time might also provide the opportunity for proper discussion rather than simply [a] statement of contrary positions.70

45.In his evidence to PACAC, the First Minister of Wales, Rt Hon Carwyn Jones AM, bemoaned the lack of opportunities for the devolved administrations to discuss issues of importance with the Prime Minister on a Heads of Government basis and noted that while the JMC (P) enables the devolved administrations to communicate their views to the UK government, it is “not a collaborative body”.71 The First Minister also highlighted that with the JMC’s domestic sub-committee having not met “for some time”, Heads of Government meetings are now confined to JMC plenaries.72

46.Professor Stephen Tierney noted that the Lords Constitution Committee had heard a number of complaints from the devolved administrations , namely that

… issues were coming on to the agenda very late, they were not getting full cognisance of what was likely to be discussed, that the JMC often operated much more as a relating of UK governmental policy rather than a full discussion of how things ought to operate.73

In terms of potential solutions to these complaints, Professor Tierney suggested that the devolved administrations could be given a greater say in setting the agenda for meetings “so that the operation of both plenary and subcommittee is a much more iterative discussion of process rather than an information giving-one”.74

47.The sense of purpose and agenda for the JMC was also raised by Professor McEwen. Reflecting that “if you are going to ask very busy people to make time for these forums, ideally they would be given a task”, she noted that at present the JMC is not a decision making body. Professor McEwen suggested that maybe such a role should be part of the JMC’s work or that the JMC could be timetabled so as to more closely align with substantive political events e.g. in advance of the budget or spending reviews. Drawing attention to the experience of the JMC (E), “the one format of the JMC that has worked relatively well”, she claimed that its relative success was linked to the sub-committee’s meetings being timetabled “to discuss upcoming meetings of the European Council”, resulting in there being “something to discuss and something meaningful to get agreement or at least consultation on”.75

48.There is longstanding criticism of the ineffectiveness of the existing JMC. It is clear that while the JMC plenary (JMC (P)) offers scope for the different devolved administrations to air their views to the UK Government, this potential is limited. The failure of the JMC Domestic committee has rendered the JMC (P) the sole forum for Heads of Government meetings. At best, these plenaries take place annually and the tight timetables for plenary meetings mean that there is little opportunity for issues of concern to be discussed in detail and undermine the ability of the JMC to be a vehicle for constructive engagement and collaboration.

49.In the absence of new Heads of Government meetings or the revitalisation of the JMC Domestic, the format of JMC plenaries needs some reform. While it is not realistic to expect plenaries to end up with points of agreement on all issues, plenaries should enable the devolved administrations to raise, and discuss in satisfactory depth, issues of concern. This would add a greater sense of purpose, and value, to the JMC. The continuing discussions on the new Memorandum of Understanding should therefore look at international examples of IGR best practice.

50.PACAC recommends that the ongoing review into the MoU should examine the idea of evolving the JMC (P) into an annual Heads of Government Summit, analogous to meetings of the Council of the European Union. Under this model, responsibility for hosting the JMC would rotate among the four administrations, with the host Government given the responsibility for setting the agenda for the plenaries. The four Heads of Government would meet in this consultative body and the communiqué should, wherever possible, be agreed unanimously. This would provide the devolved administrations with greater opportunity for involvement, and responsibility, in the JMC.

51.Adopting a ‘summit’ approach could facilitate an extension of the length of time spent on JMC/Heads of Government business. For example, they could include informal as well as formal meetings, to facilitate greater interaction and, hopefully, to strengthen trust and relationships between the people who make up the different administrations. Rotating the responsibility for hosting, and setting the agenda would help meet the demands of the devolved administrations and would provide a greater guarantee that the interests of all four of the Governments are heard and better understood.

Formalising bilateralism

52.As discussed in paragraphs 29–33, bilateralism and informality have been two of the defining features of intergovernmental relations since devolution. As devolution has progressed, bilateralism had arguably become even more significant with the creation of Joint Exchequer Committees (JEC) in Scotland and Wales and Joint Ministerial Working Groups on Rebalancing the Northern Ireland Economy and on Welfare, in Scotland. This preference for bilateral and informal approaches has been described as having a “certain sense” due to the uncodified nature of the British constitution and the asymmetric nature of the different devolution dispensations.76 In light of the deepening of these asymmetries, as well as the growth of concurrent powers, e.g. in tax and welfare policy as a result of the Scotland Act 2016, it was suggested to PACAC that there may be a need “to look at formalising some of the bilateral arrangements that have emerged in recent years”.77

53.Professor McEwen, for example, spoke of the possibility of extending the remit of the Scottish-UK Joint Exchequer Committee (JEC) beyond the transitional period after the Scotland Act 2016 powers, so that the JEC could become a “forum where those matters [the interdependencies in tax policy after the Scotland Act 2016] could be discussed in a private forum”, and thus reducing the scope for “gaming within the system” whereby the different Governments seek to make policy decisions with a detrimental effect on one another.78 Similarly, it was uncertain whether the Joint Ministerial Group on Welfare would be functional after the transition of devolved responsibilities to Holyrood, despite the fact that devolution would result in ongoing interdependencies.79 In light of the new welfare responsibilities that have been devolved to the Scottish Parliament and Government and the fact that social security is a transferred matter in Northern Ireland, Professor McEwen suggested that there “is a case to be made to suggest that the JMC might have a welfare focus brought within it”.80

54.It is instructive that following the Scotland Act 2012 there was a period of about two years when the Scottish-UK JEC did not meet, prior to its revival in the context of the additional tax and borrowing powers that are devolved by the Scotland Act 2016.81 Furthermore, while a Welsh-UK JEC was established following the devolution of minor taxes in the Wales Act 2014, the First Minister of Wales described the level of bilateral contact between the two administrations as “fairly non-existent”. 82

55.Bilateralism and informality have been a defining feature of intergovernmental relations in the UK post-devolution and while these tendencies may reflect the asymmetry of the different devolution settlements and the uncodified nature of the UK Constitution, the deepening asymmetry and growth of concurrent policy responsibilities requires a more rigorous and formal approach to bilateral intergovernmental relations. PACAC recommends that the revised Memorandum of Understanding should recognise the Scottish and Welsh Joint Exchequer Committees as permanent standing bodies in recognition of the interdependencies that will continue to mark tax policy in the future. Similar provision should be made for the Joint Ministerial Working Group on Welfare.

56.Since all of the devolved legislatures are now responsible for some aspects of tax policy and Holyrood and Stormont both have welfare responsibilities, the four administrations should establish new sub-committees of the Joint Ministerial Committee focused on tax, welfare and the financial settlements between the four Governments of the UK. This would allow areas of mutual concern among the four administrations to be discussed, models of best practice in these areas to be more effectively shared and would be another step towards the establishment of a more purposeful and policy relevant model of intergovernmental relations. To support this, there should be a formal mechanism for representatives of Departments of State and their counterparts in the devolved administrations to meet at least once a year, to discuss policy matters. Additionally, within each Department of State there should be a minister acting as a designated contact point for the devolved administrations.

Intergovernmental relations and the UK’s withdrawal from the EU

57.The subject of intergovernmental relations in the UK has become particularly salient in light of the vote to leave the European Union in June 2016. Immediately after the referendum result, on the 24 June 2016, the then Prime Minister, the Rt Hon David Cameron indicated that the negotiations to leave the EU would involve the “full engagement” of the devolved administrations.83 Later, on 27 June, Mr Cameron re-emphasized this commitment and added that the UK Government would also consult with Gibraltar, the Crown dependencies, overseas territories, “and all regional centres of power including the London Assembly”. He added that “officials will be working intensively together over the coming weeks to bring our devolved Administrations into the process for determining the decisions that need to be taken” and noted that work had already begun on working through the challenges relating to the common border area between Northern Ireland and the Republic of Ireland. 84 Since her appointment as Prime Minister, the Rt Hon Theresa May MP has reaffirmed this pledge to fully engage the devolved administrations to ensure a UK-wide approach to these negotiations.85

58.As mentioned in paragraph 27, during the most recent JMC (P) meeting, the four UK administrations agreed to establish a new Joint Ministerial Committee on EU Negotiations: JMC (EN). According to the communiqué released after the meeting, the JMC (EN) will be given the following terms of reference:

Working together in EU Negotiations.

Through the JMC (EN) the governments will work collaboratively to:

It was also agreed that a work programme and meeting schedule for JMC (EN) would be prepared for discussion at its first meeting in November.87 In addition to these points of agreement, it has also been reported that the UK Government has offered the devolved administrations a ‘hotline’ with the Secretary of State for Exiting the European Union, the Rt Hon David Davis MP.

59.There was frustration expressed about the lack of clarity from the UK Government about how it intends the UK to leave the European Union. The First Minister of Scotland, the Rt Hon Nicola Sturgeon MSP, for example, said that large parts of the plenary were “hugely frustrating” with participants leaving the meeting knowing “no more about the UK Government’s approach to the EU negotiations now than we did when we went into the meeting”. With regards to the JMC (EN), Ms Sturgeon noted that a “significant amount of work” would need to be undertaken “to make sure that the engagement we have is meaningful”.88

60.While welcoming the UK Government’s agreement of more frequent JMC meetings and for the devolved administrations to play a “meaningful role in developing the future work programme relating to Brexit”, the First Minister of Wales, the Rt Hon Carwyn Jones AM, also highlighted the “huge uncertainty about what success will look like from the UK Government”. Such uncertainty, according to Mr Jones “makes it difficult for the devolved administrations to positively influence the process”.89

61.In a joint statement following the JMC (P), the First and Deputy First Ministers of Northern Ireland, Rt Hon Arlene Foster MLA and Martin McGuiness MLA stated that they were “heartened at the widespread support for our position that we are facing unique circumstances in this unfolding situation” (Northern Ireland is the only constituent nation of the UK to share a land border with an EU state).90 Noting that commitments had been made by the UK Government “on the priority being attached” to Northern Ireland’s unique situation, the First and Deputy First Ministers called for these words to be “translated into action with a meaningful and clearly established role in negotiations”, arguing that there must be “no democratic deficit when it comes to our region’s voice being heard and its interests defended”.91

62.The decision to leave the European Union raises a number of key questions with direct consequences for the devolved administrations and their involvement in the process. These questions range from the nature of the consent that will be sought from the devolved legislatures for the ‘Great Repeal Bill’, through to the policy and resource implications, for all four administrations, of the return of competencies from the European Union, particularly those in the fields of fisheries and agriculture.

63.PACAC welcomes the UK Government’s commitment to engage the devolved institutions throughout the process of negotiating the UK’s withdrawal from the EU and the agreement, at the last JMC (P), of a new Joint Ministerial Committee on the EU negotiations. The onus for facilitating constructive dialogue between the devolved administrations, while negotiating the process of leaving the EU, is on the UK Government. It is, therefore, vital that the UK Government’s commitment to engage with the devolved administrations is meaningful and is not simply a tool to allay the concerns of the Scottish and Welsh Governments and the Northern Ireland Executive.

64.PACAC welcomes the opportunity provided by the decision, taken at the most recent JMC (P), to defer consideration of a revised Memorandum of Understanding, in light of the changing political and constitutional landscape since the EU referendum.

65. There now exists an ideal opportunity for the formal machinery of intergovernmental relations in the UK to be imbued with a sense of purpose, with a revitalised and reformed JMC. While PACAC supports the decision to establish a new Joint Ministerial Committee on EU negotiations, this should not preclude further consideration by the four administrations as to how the JMC and its sub-committees can be best structured so as to assist the UK Government to develop a truly UK-wide approach in a range of areas where all four administrations have policy interests in the outcome of the negotiations to leave the EU.

66.PACAC sees merit, for example, in the idea of creating agriculture and fisheries and economic affairs sub-committees. Such committees could either be formal sub-committees, under the general coordination of JMC (EN) and JMC (P), or could be meetings of the JMC (EN) in a functional, sector-specific, format (in a fashion similar to Council of Ministers meetings at the EU level). Additionally, the JMC secretariat’s capacity should be enhanced so that the JMC (EN) can call upon the advice and support of ‘shared’ technical staff, with expertise in key policy areas.

67.However, it is important to have realistic expectations about the limits of IGR machinery. The response to the recent JMC (P) has indicated that the JMC cannot, by itself, be expected to resolve issues which remain politically contentious between the four administrations. Instead, the effectiveness of any model of IGR rests on the ability of the four administrations to collectively develop an atmosphere of trust and goodwill. In order to develop such an atmosphere of trust and goodwill, the UK Government must show a genuine receptiveness to the concerns and suggestions put forward by the devolved administrations.

Transparency and scrutiny of intergovernmental relations

68.Professor Tierney noted the lack of transparency in the current system of intergovernmental relations.92 He suggested that this hampers good decision making within the JMC, first, “because they [the four administrations] do not have to be concerned about what the public find out about” and, second, does not facilitate parliamentary scrutiny of IGR.93 Professor McEwen claimed that a study conducted by herself and academic colleagues could not “find a case where there was less parliamentary scrutiny of intergovernmental issues formally than there is [in] the UK”.94

69.The absence of scrutiny of IGR became particularly prominent in the context of the recent fiscal framework negotiations between the Scottish and UK Governments. The limited level of information provided by the two Governments to their respective Parliaments was criticised by the House of Lords Constitution Committee in its report on what was then the Scotland Bill.95 The Constitution Committee warned that the absence of a fiscal framework during the Bill’s legislative stages had meant it was “impossible for the House [of Lords] to assess whether or not the Bill will cause detriment to all or part of the United Kingdom” and would cause “significant difficulties” for the House of Lords in its scrutiny of the Bill.96 Indeed, in his evidence to PACAC, the Scottish Deputy First Minister and one of the lead negotiators, John Swinney MSP, freely conceded that the negotiations had resulted in an “unsatisfactory” level of information being shared with the respective Parliaments.97

70.In 2015, the Scottish Parliament’s Devolution (Further Powers) Committee’s report Changing Relationships: Parliamentary Scrutiny of Intergovernmental Relations recommended that IGR in the UK should be based on the principles of transparency and accountability.98 Furthermore, the Committee called for a written concordat between the Scottish Government and Scottish Parliament to facilitate the latter’s scrutiny of IGR, providing the Parliament with a forward programme of planned IGR talks and meetings and with detailed minutes of those meetings.99

71.On 10 March 2016, a written agreement was reached between the Scottish Parliament and the Scottish Government on parliamentary scrutiny of intergovernmental relations. This Agreement established three principles that would govern the relationship between the Scottish Parliament and Government with regard to intergovernmental relations, namely transparency, accountability and respect for the confidentiality of discussions between Governments.100

72.The agreement covers the participation of Scottish Ministers “in formal, intergovernmental structures. This means, in practice, discussions and agreements of, or linked to, the Joint Ministerial Committee (in all its functioning formats); the Finance Ministers’ Quadrilaterals; the Joint Exchequer Committee; the Joint Ministerial Group on Welfare; and other standing or ad hoc multilateral and bilateral inter-ministerial forums of similar standing as may be established”.101

73.The Scottish Government agrees to provide to the relevant committee of the Scottish Parliament, as far as is practicable, “advance written notice at least one month prior to scheduled relevant meetings, or in the case of meetings with less than one month’s notice, as soon as possible after meetings are scheduled”. This advance notice will include “agenda items and a broad outline of key issues to be discussed, with recognition that agenda items, from time to time, may be marked as “private” in recognition of the need for confidentiality”.102

74.In addition, after each intergovernmental meeting “within the scope of the written agreement”, the Scottish Government will provide the relevant Scottish Parliament committee with a written summary of the issues discussed at the meeting within two weeks, if possible, or otherwise as soon as is practicable. This written summary will include:

… any joint statement released after the meeting, information pertaining to who attended the meeting, when the meeting took place, and where appropriate, subject to the need to respect confidentiality, an indication of key issues and of the content of discussions and an outline of the positions advanced by the Scottish Government.103

Furthermore, the Scottish Government also agreed to provide to the relevant committee “the text of any multilateral or bilateral intergovernmental agreements, memorandums of understanding or other resolutions within the scope of this Agreement” and “to maintain a record of all relevant formal intergovernmental agreements, concordats, resolutions and memorandums that the Scottish Government has entered into”, including making these documents available on the Scottish Government’s website. In addition, the Scottish Government will produce, and submit to the relevant Scottish Parliament Committee, an Annual Report on intergovernmental relations.104

75.The existing level of transparency regarding intergovernmental relations is insufficient and, as demonstrated by the example of the fiscal framework negotiations, has acted as a barrier to effective parliamentary scrutiny of both intergovernmental discussions and, as in that example, significant reform to the UK’s constitutional arrangements.

76.In light of the development of devolution of powers to Edinburgh, Cardiff Bay and Stormont, and the growth of concurrent responsibilities shared between the UK Government and the different devolved administrations, as well as the impact of the UK’s exit from the European Union, intergovernmental relations will only grow in significance in future years. PACAC therefore welcomes the written agreement between the Scottish Government and Parliament, which offers the prospect of a more open and accountable model of intergovernmental relations and a model of best practice from which the Welsh Government and the Northern Ireland Executive, and Westminster and Whitehall can learn.

77.PACAC therefore recommends that the UK Government agrees to provide the House of Commons and House of Lords with similar transparency to that found between the Scottish Government and Parliament.

78.PACAC and the House of Lords Constitution Committee should have advanced written notice, and written summaries, of intergovernmental meetings. This commitment should replicate the lines of the agreement reached between the Scottish Government and Scottish Parliament. This agreement should be guaranteed by making reference to minimum standards of transparency that future Governments will be expected to meet.

12 House of Lords Constitution Committee, Inter-governmental relations in the United Kingdom, 11th Report of Session 2014–15, HL Paper 146, para 1.

17 A. Trench, Intergovernmental Relations and Better Devolution, UK’s Changing Union, December 2014, p.8.

24 Bingham Centre for the Rule of Law, A Constitutional Crossroads: Ways Forward for the United Kingdom, 2015, p.9.

25 See, for example: Commission on Devolution in Scotland, Serving Scotland Better: Scotland and the United Kingdom in the 21st Century, Final Report, June 2009; Commission on Devolution in Wales, Empowerment and Responsibility: Legislative Powers to Strengthen Wales, March 2014; The Smith Commission, Report of the Smith Commission for further devolution of powers to the Scottish Parliament, 27 November 2014.

26 House of Commons Justice Committee, Devolution; a decade on, Fifth Report of Session 2008–09, HC 529–I, para. 105.

27 House of Lords Constitution Committee, Inter-governmental relations in the United Kingdom, 11th Report of Session 2014–15, HL Paper 146, p.5.

28 Professor Tierney is a legal advisor to the House of Lords Constitution Committee and spoke to PACAC in a personal capacity.

33 Qq74, 78

43 A. Trench, Intergovernmental Relations and Better Devolution, UK’s Changing Union, December 2014, p.7.

44 House of Lords Constitution Committee, Inter-governmental relations in the United Kingdom, 11th Report of Session 2014–15, HL Paper 146, para 53.

46 HM Treasury, Rebalancing the Northern Ireland economy, March 2011.

48 House of Lords Constitution Committee, Inter-governmental relations in the United Kingdom, 11th Report of Session 2014–15, HL Paper 146, para. 54.

51 House of Lords Constitution Committee, Inter-governmental relations in the United Kingdom, 11th Report of Session 2014–15, HL Paper 146, para. 62.

70 Written evidence from the Scottish Government, House of Lords Constitution Committee, Inter-governmental relations in the United Kingdom, 11th Report of Session 2014–15, HL Paper 146, para. 45.

83 HM Government. EU referendum outcome: PM statement, 24 June 2016.

88 Scottish Government, Joint Ministerial Committee on EU referendum, 24 October 2016.

95 House of Lords Select Committee on the Constitution, Scotland Bill, 6th Report of Session 2015–16, 23 November 2015.

96 House of Lords Select Committee on the Constitution, Scotland Bill, 6th Report of Session 2015–16, 23 November 2015, paras. 14, 16.

98 Scottish Parliament Devolution (Further Powers) Committee, Changing Relationships: Parliamentary Scrutiny of Intergovernmental Relations, 5th Report (Session 4), 8 October 2015, para. 60.

99 Scottish Parliament Devolution (Further Powers) Committee, Changing Relationships: Parliamentary Scrutiny of Intergovernmental Relations, 5th Report (Session 4), 8 October 2015, para. 64.

6 December 2016