Schedule 1: The Office for Environmental Protection
- This Schedule sets out further information on the composition of the OEP, established as a statutory corporation and due to be classified as a Non-Departmental Public Body (NDPB), and prescribes how it is to operate. The provisions in this schedule relate to ministerial oversight; the body’s operational independence from the government; and the need for transparency and accountability in the body’s exercise of its statutory powers and functions.
Membership
- Paragraph 1 covers the membership of the Board that governs the OEP. The provisions in this paragraph aim to ensure a balance between ministerial accountability and independence in making appointments to the body, and between non-executive and executive involvement in the governance of the body.
- Sub-paragraph (1) provides that the new body will consist of a non-executive Chair and between two and five other non-executive members, and a Chief Executive (who is to be the Accounting Officer of the body and therefore responsible for accounting for the body’s use of public funds) and between one and three other executive members. The make-up of the Board will ensure a balance of non-executive and executive members. Setting the maximum size of the Board at ten members enables the body to have a strategic focus while ensuring that the required expertise can be fully represented across the Board.
- Sub-paragraph (3) requires the Secretary of State and the OEP to ensure, so far as practicable, that the number of non-executive members is at all times greater than the number of executive members, in order to ensure effective strategic oversight and ministerial accountability.
Appointment of non-executive members
- Paragraph 2 provides for the appointment process of the non-executive members of the board. Provisions in this paragraph aim to ensure a balance between ministerial accountability and having regard to the OEP’s independence in making appointments to the body.
- Sub-paragraph (1) provides for the non-executive members (including the Chair) to be appointed by the Secretary of State. This is usual practice for appointments to NDPBs, including other bodies which hold the government to account such as the Equality and Human Rights Commission .The appointments process will be in accordance with the Governance Code for Public Appointments
. The Code will ensure that members are appointed through a fair and open process. The regulation of appointments against the requirements of this Code is carried out by the Commissioner for Public Appointments.
- Sub-paragraph (2) places a duty on the Secretary of State to consult the Chair before appointing the other non-executive members. This ensures that the Chair is involved in the decision. Sub-paragraph (3) places a duty on the Secretary of State to have regard to the desirability of specific expertise being met across all non-executive members of the OEP (including the Chair), when nominating and appointing the non-executive members. This is intended to ensure that the OEP’s non-executive members collectively have the expertise required for effective strategic oversight of its statutory functions. Non-executive directors will need to meet a range of essential criteria as part of the public appointments process.
- Sub-paragraph (4) clarifies that non-executive members may not also be employees of the OEP, by virtue of their non-executive status. This enables them to hold the executive members to account.
Appointment of executive members
- Paragraph 3 provides for the appointment of the executive members of the board.
- Sub-paragraph (1) sets out that the chief executive will be appointed by the non-executive members of the OEP, other than the first chief executive who will be appointed by the Chair. This provision is to ensure that the first CEO appointment can be made ahead of other non-executives being appointed, in order to assist with the set up activities of the OEP.
- Sub-paragraph (2) provides for the other executive members to be appointed by the OEP.
- Sub-paragraph (3) requires that the Secretary of State be consulted on the appointment of the Chief Executive, since the Chief Executive is to be the Accounting Officer of the OEP.
- Sub-paragraph (4) clarifies that executive members are employees of the OEP. The body will be expected to follow the guidance for good practice for corporate governance for public bodies.
Interim chief executive
- Paragraph 4 allows the Secretary of State to appoint a Chief Executive for an interim period prior to the first permanent Chief Executive being appointed by the Chair in accordance with paragraph 3(1). Before the board of the OEP has enough members to hold a meeting that is quorate in accordance with paragraph 11(2), the interim Chief Executive appointed by the Secretary of State may undertake matters on behalf of the OEP including incurring expenditure, subject to any directions given by the Secretary of State. Paragraph 4(4) specifies that the interim Chief Executive can be a current civil servant and is not required to be an employee of the OEP. This provision is intended to allow the interim Chief Executive to be recruited from the largest possible pool of candidates across the private and public sectors, ensuring that the right person is selected for the role.
Terms of membership
- Paragraph 5 sets out the basis on which members (both non-executive and executive) can be appointed to, and removed from, the OEP. Appointments will be made in accordance with the Governance Code for Public Appointments.
- Sub-paragraph (2) specifies that civil servants may not be appointed as members of the OEP, as a non-Crown entity.
- Sub-paragraph (3) requires that non-executive members be appointed for a fixed term of no more than five years.
- Sub-paragraph (4) requires the Secretary of State to have regard to the desirability of securing that the appointments of non-executive members expire at different times in order to ensure strategic continuity and to spread the administrative workload of appointing and inducting new board members.
- Sub-paragraph (5) provides that non-executive members may be re-appointed once they reach the end of their term of office.
- Sub-paragraph (6) explains the terms for termination of a non-executive member’s appointment. Sub-paragraph (6)(c) explains the conditions under which the Secretary of State may remove a non-executive member from office.
Remuneration of non-executive members
- Paragraph 6 places a duty on the OEP to pay its non-executive members any remuneration, allowances and compensation (for example, in the event of being removed from office) as determined by the Secretary of State in consultation with the Chair.
- This will be in accordance with the Corporate Governance Code for Central Departments 2017
, which requires non-executive members of public bodies to comply with the guidance for approval of senior pay issued by HM Treasury
. This reflects the fact that non-executive members are public appointments by the Secretary of State (paragraph 1(2)), and helps to maintain the relative independence of the non-executive members within the OEP, as the OEP does not make decisions on their remuneration arrangements.
Staffing and remuneration
- Paragraph 7 gives the OEP the power to appoint and make other arrangements for staff as it determines; and to pay its staff any remuneration and allowances as it determines. This will also be done in accordance with the public sector pay and terms guidance
. This arrangement gives the OEP independence in how it recruits and pays its staff, without approval from Ministers. Sub-paragraph (2) provides for the Chair to determine the terms of the CEO when making the first appointment.
- Sub-paragraph (4) places a duty on the OEP to make pensions arrangements for its members and staff with the approval of the Secretary of State.
- Sub-paragraphs (5) and (6) ensure that the OEP is able to take part in the Civil Service Pension Scheme for its employees.
Powers
- Paragraph 8 gives the OEP the power to do anything it thinks appropriate for carrying out its functions without interference or approval from Ministers, except for accepting gifts of money, land or other property, or forming, participating in forming, or investing in, a company, partnership, joint venture or other similar form of organisation. This provides the OEP with sufficient independence from the government when carrying out its functions.
Committees
- Paragraph 9 gives the OEP the power to establish committees to, for example, provide advice or carry out an OEP function. These may include people who are neither board members nor employees. Such committee members may be paid but may not have a vote on the committee. This will allow the body to gain access to additional specialised expertise to support any of the functions or strategic direction of the body.
Delegation to members, committees and employees
- Paragraph 10 gives the OEP the power to delegate any of its functions other than the approval of key documents, reports and advice to Ministers, and key decisions related to the enforcement function. Functions other than these may be delegated to a member, employee or committee, in accordance with a delegation policy that it will determine. This provides the body with adequate independence to delegate functions without interference from Ministers and ensures that decisions can be taken at the most appropriate level.
Procedure
- Paragraph 11 gives the OEP the power to determine its own procedures, such as arrangements for decision making (other than the meeting quorum set out in sub-paragraph (2)), as part of ensuring its operational independence from the government. Sub-paragraph (3) provides that proceedings will not be made invalid by a vacancy in the membership or the incorrect appointment of any member for example due to conflicts of interest. This ensures that processes and decision-making are not disrupted by situations that may not be within the OEP’s control.
Funding
- Paragraph 12 places a duty on the Secretary of State to fund the OEP sufficiently to perform its functions, and gives the Secretary of State the power to provide further financial assistance to the body, for example by way of grants to be used for a specific purpose related to operational delivery or achievement of functions. Funding will be provided to the OEP in the form of grant in aid, which will be set out as a separate line in the overall estimate of the Department for Environment, Food and Rural Affairs to ensure adequate transparency.
Annual report
- Paragraph 13 places a duty on the OEP to prepare an annual report as soon as possible at the end of each financial year; to arrange for the report to be laid before Parliament; and to publish it. This provides transparency on the performance of the body against its key statutory functions and its strategic plan, helping to ensure accountability for the exercise of its powers and its use of public funds.
Annual accounts
- Paragraph 14 is intended to ensure independent oversight, transparency and ministerial accountability for use of public funds.
- Sub-paragraphs (1) to (3) place a duty on the OEP (and the Chief Executive as Accounting Officer) to keep proper accounting records and prepare an annual statement of accounts. The latter includes an assessment of whether the OEP received sufficient funds to carry out its statutory functions in the relevant financial year. This provision is intended to provide further transparency around the funding of the OEP and ensure it is funded sufficiently to carry out its functions.
- Sub-paragraph (4) places a duty on the body to send these accounts as soon as reasonably practicable after the end of the relevant financial year to the Secretary of State and the Comptroller and Auditor General. Sub-paragraph (5) requires The Comptroller and Auditor General to certify and report on the accounts, and send the certified statement and report to the Secretary of State and the OEP. Sub-paragraph (6) mandates that the OEP must then arrange to lay these documents before Parliament.
Meaning of "financial year"
- Paragraph 15 defines "financial year" as the year ending 31 March.
Status
- Paragraph 16 clarifies that the OEP is not part of the Crown, unlike government departments. This is customary for NDPBs, and is intended to ensure that the body can act independently of the government and is capable of properly enforcing against the government. The body will be staffed by public servants rather than civil servants.
Independence of the OEP
- Paragraph 17 places a duty on Ministers to have regard to the need to protect the OEP’s independence when carrying out functions in relation to the OEP.
Disqualification from membership of legislatures
- Paragraph 18 subjects OEP members to the House of Commons Disqualification Act 1975, which restricts membership of the House of Commons to certain categories of people. Consequently, people who are members of the OEP board will be disqualified from becoming members of the House of Commons until they cease to be members of the OEP. This is customary for members of certain bodies, including NDPBs. Paragraph 19 subjects OEP members to the equivalent legal obligation in Northern Ireland, the Northern Ireland Assembly Disqualification Act 1975.
Public records
- Paragraph 20 subjects the OEP to the Public Records Act 1958, which governs public records in the UK.
Freedom of information
- Paragraph 21 subjects the OEP to the Freedom of Information Act 2000, which governs the public’s access to information held by public authorities.
Investigation by the Parliamentary Commissioner
- Paragraph 22 requires the OEP to comply with the Parliamentary Commissioner Act 1967, under which the Parliamentary Ombudsman can investigate public authorities’ administrative actions.
Public sector equality duty
- Paragraph 23 provides for the OEP to be subject to the Equality Act 2010. The OEP will be subject to the public sector equality duty, which requires public bodies and others carrying out public functions to have due regard to the need to eliminate discrimination, to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not.