Chamber and committees

The constraints under which the Scottish Government operates in this area limit what we can request Scottish public bodies or businesses to do. We cannot lawfully impose a blanket ban on companies based solely on the fact that they are on the Office of the United Nations High Commissioner for Human Rights database (“UN Database”). Specifically with regard to public contracts, any action we take must be compliant with national UK and international law such as the WTO Agreement on Government Procurement, of which Israel, like the UK, is a signatory.

What we can do – and have done for the original UN Database - is instruct public bodies to take the UN Database into account in their case by case due diligence. The Scottish Government wrote to Scottish Public Bodies at the time of the publication of the original UN Database, instructing them to take it into account when carrying out their routine human rights due diligence and asking them to provide information on any relationships they had with companies on the Database. The then Minister for Business, Trade, Tourism and Enterprise subsequently wrote to identified companies in June 2022, asking what they were doing to cease the specific activities which had led to their inclusion on the Database.

Following the publication of the revised Database, the Scottish Government has been assessing the options available to it. The revised Database did not add any new companies, and none of the small number of companies identified by Public Bodies through the previous exercise were removed.

Prior to the UK General Election, it was expected that the already tight legal constraints affecting the Scottish Government and Public Bodies in this area would increase, due to the then UK Government’s Economic Activity of Public Bodies (Overseas Matters) (EAPB) Bill.

However, a definitive view could not be taken at that time as the Bill was still subject to amendment. The Bill subsequently fell following the announcement of the General Election. The Bill falling, however, does not change the fact that the Scottish Government is still very constrained in what action we can take, and we are currently considering next steps.

I refer the member to the answer to question S6W-28974 on 19 September 2024. All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/written-questions-and-answers.

The Scottish Government’s response to FOI 202200290245, on 24 March 2022, sets out the responses from, and any potential issues identified by, the Public Bodies who responded to Scottish Government correspondence asking them to consider the Office of the United Nations High Commissioner for Human Rights Database of companies involved in certain activities relating to settlements in the Occupied Palestinian Territory (“UN Database”) in carrying out their human rights due diligence.

The Scottish Government’s response to FOI 202200334471, issued on 9 February 2023, provides the correspondence between the Scottish Government and all companies identified as having a relationship with a Scottish public body, in relation to what they were doing to cease the activities that had led to their inclusion in the UN Database.

I refer the member to the answer to question S6W-28974 on 19 September 2024. All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/written-questions-and-answers.

The Scottish Government’s (SG) definition of fraud is found within the Scottish Public Finance Manual (SPFM), under the section titled ‘Fraud’. The term ‘fraud’ is used to describe a wide variety of dishonest behaviour such as deception, forgery, false representation, and concealment of material facts. It is usually used to describe the act of depriving a person of something by deceit, which may involve the misuse of funds or other resources, or the supply of false information. Computer fraud covers the use of information technology equipment to manipulate programs or data dishonestly (e.g. by altering, substituting or destroying records, or creating spurious records), or where the use of an IT system was a material factor in the perpetration of a fraud.

The Scottish Government does not use a separate definition for ‘corruption’, as it is covered by its description of fraud. The general definition of ‘corruption’ describes actions that are fraudulent and carried out by those in a position of authority or control, often involving bribery. The SG has a definition for ‘bribery’, also contained with the SPFM, which aligns to the legal definition as contained within the Bribery Act 2010.

The Scottish Government Integrity Group permanent membership, as per its Terms of Reference, is as follows:

• The Head of Counter Fraud Profession (Chair)
• Strategic Lead, Risk, Control & Assurance Division
• Propriety and Ethics
• The Head of Finance Programme Management
• The Chief Information Security Officer
• A nominated HR representative
• A nominated Scottish Government Legal Directorate (SGLD) advisor
• A nominated Internal Audit representative.

The strategy, Protecting Public Resources in Scotland, is due to be updated with the 2024-25 objectives for planned continual improvement in Counter Fraud within Scottish Government and the public sector. The strategy remains extant in its current form. Current collaboration and engagement includes the following stakeholders/partners:

• The Public Sector Fraud Authority – UK Government
• The International Public Sector Fraud Forum
• The Government Counter Fraud Network – Scotland
• The Commonwealth Fraud Prevention Centre
• Audit Scotland
• NHS Counter Fraud Service
• Social Security Scotland Fraud & Error Resolution Unit

During the wider engagement for Protecting Public Resources in Scotland in 2015, the following stakeholders were involved and endorsed the strategy:

• Crown Office & Procurator Fiscal Service
• Student Awards Agency Scotland
• Audit Scotland
• The Department for Work and Pensions
• NHS National Services Scotland
• NHS Counter Fraud Services
• COSLA
• Serious Organised Crime Task Force
• Police Scotland
• Scottish Business Resilience Centre
• Scottish Public Pensions Agency
• Scottish Local Authority Investigators Group
• Scottish Local Authorities Chief Internal Auditors Group
• Revenue Scotland

As part of the planned update to the strategy, the Scottish Government will again engage with a broad stakeholder group to ensure that the strategy reflects the wider public sector and current counter fraud strategy and best practice.

The creation of the Counter Fraud Service (CFS) and the introduction of the Counter Fraud Toolkit is a significant step forward in the Scottish Government’s (SG) management of the risks to public resources posed by fraud and corruption. Both the CFS and toolkit exist within a broader range of policies, processes, guidance and support within SG that are concerned with the identification and mitigation of fraud and corruption risks. The CFS routinely collaborates with colleagues across SG and wider public bodies in this, including Internal Audit, Risk Control & Assurance Division, Security Division and Procurement on fraud and corruption risk management, and the response to incidents of alleged fraud that occur.

This approach aligns with current best practice in public sector counter fraud, and the CFS is engaged with external partners and colleagues from the UK Government Public Sector Fraud Authority, the International Public Sector Fraud Forum, Audit Scotland and the Scottish Public Sector Counter Fraud Network. This facilitates the sharing of expertise and current counter fraud practice, as well as horizon scanning on future risks of fraud and corruption, providing assurance on the management of fraud and corruption risk and the protection of public resources.

The key measures to identify and mitigate the risk of corruption in the management of public resources are found in the SG’s Scottish Public Finance Manual (SPFM), and within the SG’s polices and Civil Service Code.

Requirements within the SPFM cover the appropriate standards for the handling of all elements of public finances in terms of payments made, received, and in how they are documented and authorised. All SG organisations are required to demonstrate their adherence to the SPFM standards on an annual basis.

SG employees are required to adhere to employment policies, including adherence to the Civil Service Code, which requires all civil servants to always act with due regard to core principles relating to honesty, integrity, and fairness, and to uphold its standards whilst carrying out any function of government business.

The Integrity Group brings together expertise from across SG from areas such as Propriety & Ethics, Cyber Security, Counter Fraud, Legal and People Services. The group is focussed on providing advice and leadership to the SG on cross-cutting issues related to managing the risk of corruption and breaches of the Civil Service Code.