To ask the Scottish Executive what guidance is given to public sector bodies, including local authorities, with regard to investment appraisal where the use of public funds is being considered or undertaken.
The Scottish Public Finance Manual(SPFM) requires public sector bodies such as the Scottish Parliamentary CorporateBody, the Scottish Executive and relevant bodies sponsored by the Scottish Executive to secure and maintain best value. The characteristics of an organisationwhich secures best value include systematic approaches to risk management, assetmanagement, strategic procurement, and the integration of review and options appraisalinto management arrangements. Public bodies are also reminded that recommendationsshould be based on financial analysis and whole life costs.
Bestvalue is a statutory duty for local authorities by virtue of the Local Governmentin Scotland Act 2003 (the Act) and guidance on best value characteristics has statutorystatus by virtue of the section 2 of the act.
TheSPFM is consistent with and recognises the latest edition of the HM Treasury GreenBook. It also includes specific guidance on appraisal and evaluation and major investment.While the guidance is aimed primarily at constituent parts of the Scottish Administrationit is equally applicable, so far as appropriate, to all other bodies subject tothe requirements of the SPFM. In addition Scottish health boards are required tohave regard to the Scottish Capital Investment Manual, which is relevant to thedevelopment of capital projects.
TheSPFM does not apply formally to Scottish local authorities, although it is availableto them for reference. Like other public bodies they are also encouraged to haveregard to any guidance deemed relevant and appropriate to their circumstances whetheror not it is published by the Scottish Executive.
Theact also requires local authorities to have regard to generally recognised, publishedCodes of Practice in the arrangements they make to secure best value; and, morespecifically, to have regard to codes which are given statutory designation by Scottishministers. Most of these codes are relevant to investment appraisal and include:
ThePrudential Code for Capital Finance in Local Authorities published by CharteredInstitute of Public Finance and Accountancy (CIPFA)
TheCode of Practice for Treasury Management, also published by CIPFA
Following the Public Pound, published jointly by the Accounts Commission for Scotland andthe Convention of Scottish Local Authorities.