House of Lords - Inter-governmental relations in the United Kingdom

Inter-governmental relations in the United Kingdom - Constitution Committee Contents

CHAPTER 2: THE FORMAL STRUCTURES OF INTER-GOVERNMENTAL RELATIONS

19. For the most part, relations between the UK Government and the devolved administrations operate informally on a bilateral basis; this is healthy and is common across nations with multi-level political structures.[24] However, there are formal structures, both bilateral and quadrilateral (that is, including all four administrations), underpinning and facilitating those day-to-day informal working relationships.[25]

The existing structures

20. In the UK, the formal structures underpinning inter-governmental relations are set out in a Memorandum of Understanding (MOU) between the four administrations. The original MOU was written in 1999.[26] Since 2009 it has been reviewed and amended regularly—the most recent edition dating from October 2013.[27] The MOU also sets out key principles that should underlie inter-governmental relations: communication, consultation, co-operation and confidentiality. The document includes some departmental agreements but, on the whole, relations between individual government departments and their counterparts in the devolved administrations are governed by bilateral concordats agreed and published separately by the departments themselves (see Chapter 4).

THE JOINT MINISTERIAL COMMITTEE

21. The MOU establishes a core quadrilateral forum, the Joint Ministerial Committee (JMC). The committee has three levels: plenary, functional and official. Its function is:

· "to consider non-devolved matters which impinge on devolved responsibilities, and devolved matters which impinge on non-devolved responsibilities;

· 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;

· to keep the arrangements for liaison between the UK Government and the devolved administrations under review; and

· to consider disputes between the administrations."[28]

22. The JMC's plenary meetings are held annually, attended by the Prime Minister, the Deputy Prime Minister, the First Ministers of the three devolved administrations, the Deputy First Minister of Northern Ireland, the territorial secretaries of state and relevant other ministers from each administration. Since 2008, they have been hosted by the UK Government in London. The most recent plenary meeting was held on 15 December 2014. A communiqué is published on all four administrations' websites after these meetings, along with an annual report summarising the content of that meeting and any sub-committee meetings (see paragraphs 25-6 below) since the last plenary meeting. Neither document is particularly substantial, a subject we address in more detail in Chapter 5.

23. During the early years of devolution, ad hoc sub-committees could be—and were—formed on different subjects on the domestic agenda, while a European sub-committee met more regularly. In our 2002 report, we recommended that the criteria for determining when a meeting should take place should be published and that the sub-committees should meet at least once a year.[29] The then Government rejected these proposals, noting that the MOU set out that the JMC plenary meets once a year.[30] Shortly thereafter the JMC ceased meeting even on an annual plenary basis—the European sub-committee alone continued to meet.

24. Following the election of a Scottish National Party minority government in May 2007, the new First Minister of Scotland wrote to the Prime Minister and the Secretary of State for Scotland formally requesting the reconvening of the JMC.[31] A plenary meeting took place on 25 June 2008 and subsequent meetings have occurred annually since.

25. The revived JMC currently has two formal sub-committees:

· Domestic (JMC(D))—chaired by the Deputy Prime Minister. It discusses domestic policy issues; these have included child poverty, welfare reforms, inward investment co-ordination and electricity market reforms. The sub-committee met twice in 2009, twice in 2010 and has met annually thereafter.

· European (JMC(E))—chaired by the Foreign Secretary. It meets around five times a year, ahead of European Council meetings, and continued to meet during the hiatus in plenary sessions in 2002-08. Its meetings regularly include 'horizon scanning' and preparation for the European Council meetings, as well as two or three other subjects. For example, in June 2013 it considered broadband infrastructure and small and medium-sizes enterprises policy, and in October 2013 the balance of competencies review and youth unemployment.

26. A third committee is reported on in the JMC annual report but is not technically a JMC sub-committee: the Finance Ministers' Quadrilateral (FMQ). This committee has met eight times since January 2010, but its last reported meeting was in November 2013. Lyndsey White, deputy director at HM Treasury, told us that it was:

Statement of Funding Policy

27. There are also officials-level meetings supporting the JMC; these meetings are not reported in the JMC annual report. Helen MacNamara, director in the Economic and Domestic Affairs Secretariat in the Cabinet Office, told us that the officials meet prior to each plenary JMC meeting to "go through the agenda and make sure we understand the issues and are able to brief our Ministers to have productive discussions. However, informally there is whole range of contact that happens underneath that."[33]

28. The revived post-2008 JMC has a formal mechanism for dispute resolution between the four administrations. The MOU sets out a process by which disputes can be raised and either resolved or escalated; efforts are made to resolve matters at working level, by officials or ministers, but they can be escalated to the JMC itself and, if not resolved, to the annual plenary session.[34] Four disputes have been raised (all in 2010-11), all of which were resolved without recourse to the plenary JMC.[35]

29. The disputes dealt with by the JMC structure to date are political ones, often involving the allocation of funding. The Supreme Court is the arbiter of legal disputes over the jurisdiction of the devolved legislatures and administrations.[36] So far, no cases have been referred to the Supreme Court by the UK Government relating to the powers of the Scottish Parliament, but cases have been referred relating to the powers of the National Assembly for Wales. The two cases referred by the UK Attorney General confirmed the powers claimed by the Assembly. A third official referral, by the Counsel General for Wales, related to a private member's bill introduced in the Welsh Assembly on which the Court ruled that the Assembly did not have the powers claimed in the bill.[37]

Lessons from other examples of inter-governmental relations

DEVOLVED AND FEDERAL SYSTEMS

30. Professor Nicola McEwen provided the Committee with a summary of the inter-governmental arrangements in four other countries with multi-level structures.[38] She concluded that in "most, if not all, countries, these processes are far more formal and structured than the system which has emerged in the UK"; the UK's inter-governmental relations remain "weakly institutionalised and focused more on communication than coordination". She also drew attention to the varying levels of devolution in different regions across the UK: "I cannot think of another system that is as asymmetrical as the UK. That is always going to be the difficulty. We can take inspiration from other cases, but we will have to find the solutions internally."[39]

31. Professor Alan Page was similarly "wary of off-the-shelf solutions adopted or drawn from other systems … I would be entirely confident about our ability to come up with a bespoke solution that met the needs of the United Kingdom" building on the UK's ongoing experience of inter-governmental relations.[40]

32. The lessons that Professor McEwen felt could be helpfully drawn from overseas examples were that:

· Spill-over in competencies between administrations cannot be avoided;

· Formal inter-governmental mechanisms are more likely to generate co-operation than ad hoc ones, and to allow issues to be dealt with effectively when they arise;

· Formal processes are more effective when they are not hierarchical and all parties "share an equal stake in the proceedings";

· "Formal, regular meetings can strengthen day-to-day informal interaction"; and

· Working groups focused on particular issues can be effective, as well as set-piece ministerial meetings.[41]

THE BRITISH-IRISH COUNCIL

33. Several witnesses referred to features of the British-Irish Council as instructive for potential improvements to the structure of inter-governmental relations in the UK.

34. The Council comprises the governments of the British Isles: the UK and Irish Governments; the devolved Scottish and Welsh Governments and Northern Ireland Executive; and the Governments of the Isle of Man, Jersey and Guernsey. Its purpose is to "exchange information, discuss, consult and use best endeavours to reach agreement on co-operation on matters of mutual interest within the competence of the relevant administrations".[42] In 2012, a permanent secretariat for the Council was established in Edinburgh.[43]

35. Professor Derek Birrell, Professor of Social Administration and Social Policy at the University of Ulster, told us that there are three levels of engagement within the Council: a twice yearly summit; 'sectoral' work involving ministers; and meetings of officials, including visits and seminars.[44] The 12 'work sectors', each led by ministers from one of the eight administrations, address different areas of shared interest: creative industries; collaborative spatial planning; demography; digital inclusion; early years policy; energy; environment; housing; indigenous, minority and lesser-used languages; misuse of substances (drugs and alcohol); social inclusion; and sustainable and accessible transport.[45] They report annually on their work.

36. Professor Birrell felt the Council played a useful role:

37. Scottish Government minister Fiona Hyslop MSP commended the rotation of the chair of the Council among its member administrations.[47] The First Minister of Wales told us that the 'work streams' model used by the Council could be used by the JMC,[48] while Professor Birrell concluded that a permanent secretariat might help the JMC function more effectively.[49]

Improving the formal structures

THE IMPORTANCE OF A FORMAL FRAMEWORK

38. Most observers acknowledged the need for both formal and informal means of inter-governmental communication. Drawing on examples from overseas, Professor McEwen told us that:

39. This Committee warned in 2002 of the risks of reliance on informal mechanisms. We recommended that inter-governmental structures be improved during that period of party congruence in order to ensure that they were working well in advance of a time when different parties came into power in different administrations across the UK.[51]

40. The demise of the JMC plenary after 2002 was seen by many as a measure of the success of the devolution process and of the informal working relations.[52] The JMC started meeting again in plenary form in 2008, but Professor McEwen told us that there was still "an overreliance on informality—on the ad hoc nature of intergovernmental coordination."[53] The Scottish Government told us similarly that "Good inter-governmental machinery should be effective whatever the political make up of the 4 member administrations and should not depend on the goodwill (or otherwise) of individuals."[54]

41. Witnesses told us that a balance was needed, with both formal and informal elements playing important roles. As Ms MacNamara put it, "Too much structure gets in the way, but so does no structure at all. The best relationships work best when you are both able to work informally together and then there is an underpinning structure behind to give that some weight."[55] We agree with that view.

THE CURRENT JOINT MINISTERIAL COMMITTEE

42. Our witnesses were generally critical of the effectiveness of the Joint Ministerial Committee as it currently operates. We heard that the plenary and the domestic sub-committee are venues for "grandstanding"[56] and the airing of grievances.[57]

43. The First Minister of Wales told us that the annual plenary committee:

44. The Rt Hon Peter Robinson MLA, the First Minister of Northern Ireland told us that the meetings worked to a strict timetable and that each item was largely a read-out of the current experience and policy of each administration. This was useful as it allowed administrations to learn from each other's experiences and find out what policies they were pursuing, but it was "very much a tick-box exercise as opposed to really getting things done."[59]

45. The Scottish Government told us that there were only limited opportunities to raise issues of concern in the meetings:

46. Ms MacNamara, whose Cabinet Office team provides the UK's part of the JMC's joint secretariat, firmly rejected the assertion that the JMC was prone to "grandstanding".[61] The Secretary of State for Scotland gave us two answers to the same question: the official answer that "Joint Ministerial Committees and plenary have been, and are, productive and useful" and his own observation that he could see why they would be identified as grandstanding: "They occasionally generate a bit more heat than light." Like others,[62] he stressed that this was inevitable: "when you take a room, fill it with politicians from different parts of the country and from different parties and leave the press at the door, yes, you're going to get a bit a bit of politics happening. That's how it works."[63]

47. The Domestic sub-committee was particularly criticised. In 2010, the then First Minister of Scotland told the House of Commons Scottish Affairs Committee that, as a successful mechanism for co-operation, the sub-committee had "some distance to travel."[64] Five years on, the First Minister of Wales said to us that it "has no real purpose as far as I can see at the moment".[65] Ms Hyslop and the Institute for Government both noted the decreasing frequency of its meetings in recent years. The Institute also stated that "it seems that there is a lack of agreement about the purpose of this format" and recommended its replacement.[66]

48. The European sub-committee is significantly better thought of by politicians, including participants,[67] and by observers. David Melding AM, Chairman of the National Assembly for Wales Constitutional and Legislative Affairs Committee, described it as "a very effective body", possibly because it was run by a single department—the Foreign and Commonwealth Office—with a "culture of dealing with different Governments and people of different views".[68] Professor Alan Page cited it as an example of how things can work well in the current inter-governmental structure, which, he explained, was a result of an "external compulsion, or necessity, by dint of the European agenda to work out what the United Kingdom's position is in advance of meetings at the European level that involve discussion with the devolved Governments."[69]

49. There are still, however, "concerns about the representation of the devolved territories in European matters."[70] The Institute for Government told us that there was a perception in devolved administrations "that their ministers are often listened to but then ignored, which can cause frustration, as can the reluctance of some UK departments to allow devolved ministers to participate in meetings of the EU Council of Ministers".[71] The Smith Commission recommended improving the 'Concordat on the Co-ordination of European Union Policy Issues' (part of the MOU), around the agreement of UK positions and allowing ministers from devolved administrations to represent the UK at the Council of Ministers.[72] The Advocate General for Scotland, the Rt Hon the Lord Wallace of Tankerness, acknowledged this concern but highlighted the extent to which Scottish Ministers did speak at Council meetings; he also noted that there was only limited space in Council meetings, possibly restricting the participation of multiple representatives from the UK as the member state.[73]

50. It is clear that, while some parts of the JMC structure work better than others, in the eyes of the devolved administrations at least the way the JMC system works at present is not satisfactory. The Domestic sub-committee, in particular, does not appear to serve a useful purpose. Throughout this report we make recommendations intended to address these concerns.

51. As more powers are devolved to each region, inter-governmental structures will need to change to accommodate the increased number of areas of policy overlap or congruence. There need to be clear structures within which effective communication can take place to manage the increasingly complicated and extensive interface between different administrations.

52. We do not believe that the increasingly complex devolution settlements can be managed solely in multilateral forums like the current JMC and its sub-committees. Given the increasingly asymmetrical nature of devolution in the UK, bilateral relationships will need to develop to deal with the increasing number of areas where devolved and non-devolved powers intersect.

BILATERAL FORUMS

53. Bilateral relations between the UK Government and devolved administrations have tended to be informal at all levels. However, more formal bilateral forums have been established during this Parliament to manage the transfer of fiscal powers, first to Scotland and more recently to Wales.

54. The UK-Scotland Joint Exchequer Committee (JEC) was established while the Scotland Act 2012 was before Parliament. Its first meeting was held on 27 September 2011; it met again in 2012 and 2013, on the latter occasion in Edinburgh. The meetings were attended by HM Treasury Ministers, the Secretary of State for Scotland, the Scottish Government Cabinet Secretary for Finance, Employment and Sustainable Growth and a senior Scottish Cabinet colleague.[74] This forum is generally well-regarded, although the Scottish Government noted difficulties in reaching agreements and recommended the regular attendance of a more senior UK Minister.[75]

55. A similar UK-Wales JEC was created as the Wales Act 2014 neared Royal Assent. Like the Scotland Act 2012, this Act allows for tax-raising powers for the National Assembly for Wales (in this case, only following a referendum approving the additional power). The UK-Wales JEC met on 20 October 2014, attended by HM Treasury Ministers, the Secretary of State for Wales and the Welsh Government Minister for Finance and Government Business.[76]

56. Building on the success of the JEC model, the UK Government recently announced that a "joint Ministerial Working Group on Welfare has been established to provide a forum in which UK Ministers and Scottish Ministers can discuss the operation of the new arrangements—both in advance of legislation being delivered, and also to provide a forum for discussion post Royal Assent."[77] The Group's first meeting took place on 11 February 2015.[78]

Box 2: Complexity and inter-dependency: Welfare powers

The Scottish Parliament is due to receive extensive new powers in relation to welfare, an area where responsibility is presently reserved almost entirely to Westminster. The result will be wide areas of shared competence between the UK and Scottish Governments—for example on Universal Credit, where Scottish Ministers will have powers shared with the UK Secretary of State and subject to the latter's agreement, while some devolved benefits such as the Personal Independence Payment and the Attendance Allowance interact with tax credits and income-related benefits that will continue to be controlled by the UK Government. The boundaries between devolved and reserved matters will be less clear-cut than at present, and the two governments will require mechanisms for joint decision-making where their powers interconnect.

The UK Government estimates that responsibility for "one quarter of all welfare spending outside the state pension" will be devolved. One aim of the Universal Credit system is a more integrated welfare system. Inter-governmental relations will be important to ensure that this goal is not undermined by the devolution of welfare benefits and that, on the other hand, the existence of a unified system is flexible enough to allow for policy differences in Scotland.

Examples of overlapping responsibility, and hence of the need for inter-governmental management, include benefits that automatically qualify the recipient for another benefit, or, alternatively, where certain entitlements cause other services to be reduced where they overlap. Careful management will be needed to ensure that differences introduced in Scotland do not lead either to double benefits or unintended losses for individuals. An example of a cross-border issue given in Scotland in the United Kingdom relates to Carer's Allowance, where the carer lives in one jurisdiction whilst caring for someone in the other jurisdiction. Again, joined-up arrangements will be needed to ensure that care for individuals in need does not suffer from gaps in coverage across jurisdictions.

Source: Scotland in the United Kingdom; written evidence from Professor Nicola McEwen (IGR0010)

57. There are strong arguments for more structured and ongoing use of formal bilateral arrangements. The Smith Commission recommended the setting up of "new bilateral governance arrangements which will be required to oversee the implementation and operation of the tax and welfare powers to be devolved" following its other recommendation.[79] The Scottish Government told us that "Any new structure, such as JMC sub-committees, should be flexible enough to allow bilateral, trilateral and quadrilateral formats, where appropriate."[80]

58. Professor McEwen told us that:

Professor McEwen noted that "One of the things that was striking about both the Smith report and the Silk report was their emphasis on the need for more formal bilateral arrangements",[82] and called for these bodies to be used "on a more permanent basis".[83]

59. The Institute for Government also highlighted the complexity of the tax and welfare proposals for Scotland and the additional joint working that would be required, and called for mechanisms to be created to manage the transition and to "ensure that there is effective administration of the new more complex fiscal framework and the intersection between devolved and reserved welfare policy."[84]

60. The Silk Commission recommended the creation of a broad-ranging Welsh Intergovernmental Committee.[85] Establishing such bilateral forums risks undermining the role of the multilateral forums; formal bilateral bodies should be used for specific areas of shared interest or policy inter-dependency between administrations.

61. There are areas where formal bilateral mechanisms are appropriate, particularly in the areas of tax and welfare where the proposed devolution of powers to the Scottish Parliament significantly increases the complexity of the devolution settlement, as would proposed income tax powers for the National Assembly for Wales.

62. Formal bilateral forums co-ordinating the operation of the complex fiscal devolution settlements should continue the work of the Joint Exchequer Committees and the new UK-Scotland Ministerial Working Group on Welfare. We recommend that these be brought within the auspices of the JMC structure, to ensure that their work is co-ordinated as part of a wider inter-governmental relations strategy.

POLICY CO-OPERATION AND CO-ORDINATION

63. Although much of the day-to-day management of the devolution settlements will need to take place bilaterally, there is scope for greater multilateral policy co-operation between the four administrations in the UK.

64. We were told by witnesses that the JMC made no provision for joint policy-making by participants.[86] The First Minister of Wales told us that, "It certainly is not the case that the current machinery has enabled joint working and joint consideration of policy that affects the whole of the UK to be taken forward."[87]

65. We heard that joint policy-making does occur at the level of officials' interaction, but that it is underused.[88] While the short, high-level JMC plenary or sub-committee JMC meetings may not be the right venue for the collective development of policy, the structure of the JMC could be reformed to promote such policy co-operation, providing high-level ministerial support for inter-governmental work.

Box 3: Policy and research co-operation: driver behaviour

Driver behaviour is an area in which the UK and Scottish governments have recently co-operated in research on an issue of common interest. Under the Scotland Act 2012, the power to set alcohol limits for drivers on Scottish roads is devolved, as is the power to set speed limits. Transport Scotland and the UK Department for Transport worked together on research on drink-driving, as well as on other illegal driver behaviour such as failure to wear a seatbelt and the use of mobile phones while driving.

As a result of the research, the Scottish Parliament used their new power under the 2012 Act to reduce the alcohol limit for drivers in Scotland, while the limit in the rest of the UK did not change. There is now a policy difference between Scotland and the rest of the UK, but it is the result of a conscious decision based on the same research produced co-operatively between the two administrations; as a DfT official told us, "we will now see how the two systems pan out and which is the better."

Source: Q 27 (Dr Philip Rycroft) and Q 69 (Graham Pendlebury)

66. Witnesses told us that the British-Irish Council's work sectors (see paragraph 35) could also provide a model for expansion of the JMC. These sectors largely focus on cross-cutting issues rather than departmental policy areas, which suggests a way of developing the JMC and changing the way that it works. Such a development would mean an increase in the number of formal bodies in the JMC structure, but could also facilitate a different way of working: work sectors (led by different members of the Council) explore their subject areas and report back to the Council, in contrast to the 'read-out' style that we heard characterises the plenary JMC.[89]

67. Creating more sub-committees, or something akin to the British-Irish Council's cross-cutting work sectors, could be a positive move for the JMC, allowing greater co-operation on shared concerns at a ministerial level. For example, the JMC(D) could take on a role of commissioning pieces of work on particular subjects, each led by different administrations but carried out jointly by all four administrations, and then act as a forum for discussion at the conclusion of that work. It would be important, however, to ensure that the work of UK equivalents did not simply duplicate the Council's work sectors,[90] particularly given that the four administrations in the JMC make up half of the membership of the British-Irish Council.

68. The Smith Commission argued that the increased devolution of powers to Scotland meant that the JMC had to be "scaled up significantly", and recommended that there should be:

69. Some witnesses were concerned about a possible proliferation of the JMC's committee system. Professor Michael Keating noted that:

70. We recommend that the Cabinet Office, as part of its current review of inter-governmental structures, consider and report on how a revised Joint Ministerial Committee structure might best be used to facilitate joint policy-making and co-ordination. Provision should be made to ensure that policy initiatives can come from the devolved administrations, as well as from the UK Government.

71. The Joint Ministerial Committee should be given the flexibility to create additional sub-committees on policy areas where regular four-way discussions are required, or temporary sub-committees on cross-cutting UK-wide issues that are beyond the scope of bilateral co-operation between devolved administrations and individual UK Government departments.

72. The creation of such sub-committees should not be seen as an end in itself and the continued existence of each sub-committee should be regularly reviewed by the JMC plenary.

DISPUTE RESOLUTION

73. The MOU sets out a formal dispute resolution mechanism within the JMC structure. There have been criticisms of its efficacy, although the system has yet to be fully tested as no disputes have gone all the way to the plenary meeting of the JMC. The Institute for Government and Ms MacNamara both told us that the threat of escalation to the JMC's dispute resolution mechanism was an effective way of forcing a resolution of issues at official and ministerial level.[93] Ms MacNamara suggested that the relative lack of formal disputes was a sign that the informal mechanisms for overcoming disagreements functioned well.[94]

74. The First Minister of Northern Ireland told us the JMC was not "a very impartial court to take our case to" because, in each case "the Cabinet Office will decide whether the Treasury was right." He confirmed that less formal means were usually sought for dispute resolution: the JMC "is not the body that I would take any serious issue to that I wanted to take up with the Government; I would deal directly with the Government."[95] The First Minister of Wales expressed similar views: "The difficulty is that the dispute resolution process that is in place leads back inevitably to the Treasury, which will then take the final decision."[96] Professor Michael Keating told us that the asymmetrical nature of devolution, with the UK Government sometimes acting as the Government of England, made creating a mechanism that did not favour the UK Government very difficult.[97]

75. There have been suggestions that a formal dispute resolution process might allow for some form of arbitration or mediation, but our witnesses were sceptical that this could work. As Professor McEwen noted, "It is … inevitable that politics will come into these disputes, which makes it quite difficult to conceive of a role for an impartial umpire".[98] Ms MacNamara questioned the constitutional status of a third party presiding over the decisions of elected representatives.[99] Professor Alan Page noted that the current mechanism allows for independent advice to be sought, but in the end decisions must be resolved politically. He told us that:

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76. The current dispute resolution procedure under the JMC has yet to be fully tested. We note, however, the concerns expressed by the devolved administrations that in the event of a dispute any decision is ultimately made by the UK Government. We do not believe that any form of external arbitration or mediation would be feasible, given that many disputes are likely to be essentially political in nature, but we recommend that the Cabinet Office, in co-operation with the devolved administrations, consider how the process of dispute resolution might be made more independent of the UK Government.

A STATUTORY BASIS FOR INTER-GOVERNMENTAL RELATIONS

77. As noted earlier in this chapter, a certain amount of formal structure is necessary to underpin inter-governmental relations. The JMC framework provides this structure but it has no statutory basis: it exists by virtue of an inter-governmental agreement encapsulated in the MOU. The cessation of meetings of the JMC from 2002 to 2008, despite a requirement under the MOU for annual meetings, demonstrates how easily such agreements can be set aside. Indeed, the MOU states that it "should not be interpreted as a binding agreement."[101] Witnesses from all three devolved administrations supported, to varying degrees, some measure of statutory underpinning.[102] Other witnesses were divided on the balance of the benefits and risks of such a move. Legislation setting inter-governmental relations on a statutory footing would, the First Minister of Wales told us, give the arrangements added "teeth".[103] Part of this would be through additional scrutiny; a statutory underpinning would increase the extent to which the administrations could be held to account for their interactions.[104] It could also include specific measures designed to increase transparency; as Professor Jim Gallagher noted: "there may be benefit in statutory requirements to produce and present information to Parliament about how this system is working."[105]

78. The Scottish Government suggested that a statutory basis could ensure the principles and terms of the MOU would be adhered to. They said that there was currently "no mechanism to enforce" these principles. As an example, they told us of a joint request in December 2011 from the Scottish and Welsh administrations for a JMC plenary meeting which "did not happen despite the fact that under the MOU the UK Government cannot refuse such a request and that the MOU sets out the timescale in which this should happen."[106]

79. As noted in the Introduction, inter-governmental structures and relations should serve to strengthen and stabilise the Union.[107] A statutory articulation of how those relations function—openly debated in Parliament and providing for greater parliamentary accountability—could provide a more solid basis for a stable constitutional settlement than arrangements agreed behind closed doors between executives with no parliamentary involvement.

80. Another benefit, albeit not a reason in and of itself to pass legislation, would be the symbolism of the action. A statutory requirement for each administration to meet the others regularly would signal the importance of inter-governmental relations at the top levels of UK politics.[108] While it seems unlikely at present that there will be a repeat of the disappearance between 2002 and 2008 of the JMC's plenary meetings and its non-EU sub-committees, there may be value in reaffirming the importance of inter-governmental relations through giving its structures a statutory basis.

81. Also of symbolic—as well as practical—importance would be the role of the UK Parliament, and potentially the devolved legislatures, in passing the legislation required. This could, Professor Page told us, make the inter-governmental arrangements something with "popular sanction" rather than "just something dreamt up between Governments". The legislation itself would set out "the expectation of the legislatures of the United Kingdom of the way in which relationships will be conducted."[109]

82. The main arguments given by witnesses against providing a statutory basis for inter-governmental relations are twofold. The first is a potential loss of flexibility. Professor Gallagher told us he could "see no advantage in making these arrangements statutory, as there is a risk of introducing inflexibility into a system subject to change".[110] Similarly, Ms Hyslop told us that a statutory basis—although desirable—should not come at the expense of relations being "prompt and proactive", while the First Minister of Northern Ireland warned of creating 'hoops' that participants had to jump through, slowing down interaction.[111] Graham Pendlebury, Director of Local Transport in the Department for Transport, warned that "the more you formalise it, the more you fossilise the relationship" and that a more formal structure could lead to ministers simply arriving with "prepared positions" rather than having a conversation. He argued that this could actually make for a less open relationship.[112]

83. The second criticism is that it could lead to inter-governmental relations being subject to judicial review.[113] Professor Page told us that the current arrangements were designed to avoid legal commitments and judicial intervention, although he noted that "it has to be questioned whether the deep seated fear that executive effectiveness would somehow be compromised by judicial intervention … is still warranted."[114] Professor Richard Wyn Jones was also optimistic on this front, saying that "the judges have a pretty good record on devolution."[115]

84. The effect of any statutory underpinning of inter-governmental relations depends on the type and extent of that legislation. The more detailed and complex the legislation, the greater the risk of inflexibility. Too vague an underpinning may not have a significant effect and could restrict the capacity of the legislatures to hold their executives to account.

85. There may be a middle ground, however, whereby the framework and core principles are set out in statute, but the detail of the relationships remains flexible to enable administrations and individual departments to react to new developments without feeling encumbered by formal statutory requirements. As Mr Melding put it, the new arrangements should "reduce that element of random variability" of interactions.[116] The First Minister of Northern Ireland told us that, although "it would be difficult to legislate for good relations", it would be possible to legislate for "minimum requirements on the number of occasions each of the bodies and sub-bodies met. You could place a duty on UK departments either to take into account or to consult the devolved regions when they are dealing with matters that have an impact there."[117]

86. The Government should consider whether the framework of inter-governmental relations should be set out in statute. Such a statute could set out the existence and membership of the Joint Ministerial Committee and its core sub-committees, along with the core principles governing relations between administrations. This legislation could provide a basic framework, within which the Memorandum of Understanding and departmental concordats would continue to detail how inter-governmental interactions would function in practice.

THE FINANCE MINISTERS' QUADRILATERAL

87. Like the JMC(E), which is also led by a single department, the Finance Ministers' Quadrilateral is relatively well-regarded. Professor Jim Gallagher told us that the FMQ was an element of inter-governmental relations that has "real business to do".[118] The First Minister of Northern Ireland told us that, as a former participant, he had always found the FMQ "to be a useful body. There was much more interaction at those meetings than you would get at a JMC … You certainly have a much better opportunity to raise issues and deal with particular problems."[119]

88. It has been suggested that the FMQ should be included in the JMC structure. Indeed, the annual reports of the JMC already include a list of the agenda items covered at each meeting of the FMQ.[120] The Calman Commission recommended that it be subsumed as a JMC (Finance) sub-committee,[121] a change the then Government rejected on the slightly disingenuous grounds that "there is no compelling case for an additional forum".[122] The Institute for Government echoed the Calman Commission's recommendation.[123]

89. As it appears to function well in its current form, we see no particular reason why the FMQ should not continue to operate as a separate body. Given its importance, however, it needs to be more transparent and accountable. Should the JMC structure be underpinned by a statutory framework, we would expect the FMQ to follow suit. Whether or not it becomes a sub-committee of the Joint Ministerial Committee, the FMQ should be included as a permanent fixture in any statute setting out the framework of inter-governmental relations, with the added exposure to scrutiny that this should bring.

INDEPENDENT ADVICE ON FUNDING THE DEVOLVED ADMINISTRATIONS

90. Professor Keating told us that finance and welfare were areas where "inter-governmental relations really are critical,"[124] and noted that "Federal states with resource-sharing will usually have some intergovernmental forum for discussing this, often with an independent body to advise on facts and figures. In the UK, the Barnett Formula is entirely at the discretion of the centre."[125] He felt such a body should be established in the UK given the increasing devolution of fiscal, tax and welfare policy:

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91. We recommend that the Government consider tasking an independent body to provide the statistics and evidence on which to base decisions about the allocation of funding to the devolved administrations.

An imbalanced relationship?

92. Witnesses told us there was a prevailing view that the JMC structure—and inter-governmental relations more generally—were dominated by the UK Government to the detriment of the devolved administrations. Professor Alan Page told us that:

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93. The First Minister of Wales told us bluntly that:

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94. Scottish Government minister Fiona Hyslop MSP highlighted the fact "that the time and the agenda are quite often controlled by the chair, who is always a UK Government Minister".[129] The Scottish Government also told us that while any administration might remove an item from the agenda, this was mainly done by the UK Government: "The UK Government in recent years has sometimes chosen not to expose topics to discussion at JMC until their policy position—and often draft legislation—has been finalised. This of course means that the views of the [devolved administrations] cannot readily be taken into account."[130]

95. The devolved administrations, the First Minister of Northern Ireland told us, felt that they were "being brought in as opposed to being a full part of any structure."[131]

96. Ms MacNamara rejected the claim that the UK Government dominates the JMC agenda. She told us that "In order to put the agenda together for any JMC meeting, officials will meet and discuss and come up with ideas and talk about what might be appropriate … All JMC agendas are agreed by all Ministers, so we as officials put joint advice to Ministers and then it is the Ministers together who decide the agenda items."[132] Whatever the mechanism used to compile the agenda, there is clearly a perception among academics and the devolved administrations that JMC meetings are dominated by the UK Government. Professor Nicola McEwen told us that, with the increasingly complex devolution settlements, unless "joint working can be conducted on the basis of equality of status and mutual respect, the complexities and interdependencies are likely to create new sources of tension and dissatisfaction, and lead to growing pressure for a further revision of the devolution settlement".[133]

97. We note the Scottish Government's concern, previously quoted (see paragraph 45), about the limited time made available for JMC meetings. The First Minister of Northern Ireland also told us that meetings were run on a tight timetable: "You have a starting time and a finishing time and you get the impression that some people want to get on to the next meeting and that it is more something that they feel compelled to do."[134]

EQUAL PARTICIPANTS

98. Professor Derek Birrell told us that the revival of the JMC in 2008 aimed, in part, to "confer parity of esteem on the devolved governments."[135] This principle must take account, however, of the difference in constitutional status between, on the one hand, the three devolved administrations which have acquired their varied levels of devolved power from the sovereign UK Parliament and, on the other, the UK Government which stems from and is responsible to that Parliament.[136]

99. Officials from HM Treasury and the Department for Environment, Food and Rural Affairs (Defra) told us that their colleagues' relationships with devolved administrations depended to some degree on the extent of devolution in their policy areas.[137] John Robbs, director of Marine and Fisheries at Defra, said that department's interaction with the devolved administrations could be divided into "two broad categories":

· "One is EU and national business, which of course is reserved in the case of Defra" but with "a wide-ranging agenda in which the devolved administrations have a very strong interest. On those dossiers, where we are negotiating, Defra is the lead UK department but with full and detailed involvement with the devolved administrations."

· The second "is domestic business, where responsibilities are devolved. However, that does not mean to say that we stop talking to each other. …. We ensure that we take account of knock-on effects on each other, so we do not cause each other problems."[138]

100. In reserved policy areas, therefore, the UK Government retains responsibility but consults and discusses with devolved administrations. In fully devolved policy areas, the four administrations are all responsible within their jurisdictions (the UK Government acting for England) and so their interactions are different,[139] focussing more on sharing experiences and best practice and taking account of possible spill-over effects of policies. This means that in areas with extensive devolution the four administrations are acting as equal partners, while in others the UK Government is ultimately responsible for decisions, and other administrations may be seeking to influence policy decisions that affect the devolved regions.[140] Inter-governmental mechanisms need to be flexible enough to cater for both types of interaction.

101. We recognise, therefore, that the UK Government plays a dual role in inter-governmental relations, where it is both the ultimate authority on some issues and more like an equal participant in others. Given this role, the UK Government should continue to chair JMC meetings. However, to mitigate the perception of UK Government dominance the hosting of the JMC plenary and sub-committee meetings should be shared on a rotating basis, like the British-Irish Council's plenary meetings—and, indeed, as was the case for the first three JMC plenary meetings in 2000-02.

MUTUAL RESPECT

102. The Secretary of State for Scotland and the Advocate General for Scotland argued that equality of status was less important than mutual respect.[141] This echoed the view of the Calman Commission which recommended that "In all circumstances there should be mutual respect between the Parliaments and the Governments, and this should be the guiding principle in their relations." The Silk Commission made a similar recommendation.[142] We concur: mutual respect is a vital element of good inter-governmental relations.

103. This mutual respect, of course, applies to all administrations in their attitudes towards one another. But if inter-governmental relations are to be a stabilising force for the Union, there must also be respect for the respective roles of the different administrations.

104. The First Minister of Northern Ireland told us that he had witnessed the JMC becoming more adversarial in recent years with a change in the self-perception of the Scottish Government: "To some extent, there are two devolved institutions, which recognise that they are devolved institutions, and one devolved institution that believes that it is a sovereign state and has the standing of the Government".[143] Similarly the Secretary of State for Scotland suggested that a desire for secession led the current Scottish Government to use inter-governmental mechanisms to attempt to undermine the Union.[144] Such behaviour goes against the spirit of mutual respect. The need for better understanding and co-operation in this strained relationship was also highlighted for us by Professor Michael Keating in relation to constitutional debates on Scottish devolution: "The yes side in the referendum campaign has to accept that they lost and therefore say, 'Let us join in a realistic settlement for what Scotland can do within the United Kingdom'. On the no side there has to be willingness to recognise that there is going to be a compromise."[145]

105. Although different administrations may hold different views about the future shape of the UK, all governments share an interest in ensuring that the current system of inter-governmental relations operates as effectively and fairly as possible.

24 Constitution Committee, Devolution, para 23; written evidence from Professor Nicola McEwen (IGR0010) Back

25 Written evidence from the Institute for Government (IGR0011) Back

26 Lord Chancellor, Memorandum of understanding and supplementary agreements between the United Kingdom Government, Scottish Ministers and the Cabinet of the National Assembly for Wales, Cm 4444, October 1999; the first MOU to include the Northern Ireland Executive was the second iteration, dated July 2000,Cm 4806. Back

27 Cabinet Office, Devolution: Memorandum of Understanding and Supplementary Agreements between the United Kingdom Government, the Scottish Ministers, the Welsh Ministers, and the Northern Ireland Executive Committee, October 2013 (hereafter Memorandum of Understanding): https://www.gov.uk/government/ uploads/system/uploads/attachment_data/file/316157/MoU_between_the_UK_and_the_Devolved_Administrations.pdf [accessed 17 March 2015] Back

28 Memorandum of Understanding, para 24 Back

29 Constitution Committee, Devolution, para 33. Back

30 Office of the Deputy Prime Minister, Devolution: inter-institutional relations in the United Kingdom. Government response to the House of Lords Select Committee on the Constitution second report of session 2002/03 (HL Paper 28), paras 3-5. Back

31 Justice Committee, Devolution, para 111. Back

32 Q70 Back

33 Q29 Back

34 See Memorandum of Understanding, section A3 Back

35 JMC annual reports 2010-11, 2011-12 and 2012-13, available through Welsh Government, Joint Ministerial Committee: http://gov.wales/about/organisationexplained/intergovernmental/jmcpubs1/ ?lang=en [accessed 23 March 2015]; Q31 (Helen MacNamara) Back