Memorandum of Understanding (MoU) between the Department for Business, Energy and
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Industrial Strategy (BEIS) and UK Government Investments Limited (UKGI)
Purpose
This MoU sets out the broad terms of engagement between BEIS and UKGI in relation to
the services UKGI provides to BEIS on a range of assets (the Assets) and projects (the
Projects) (the Assets and Projects together, the Activities) for which BEIS Ministers are
accountable. It seeks to ensure that UKGI and BEIS have a clear common understanding
of the basis on which they will work together, including roles and responsibilities,
accountabilities, working relationships and scope of activities. These ways of working are
summarised in the attached principles included as Annex 4.
In addition to this MoU, BEIS and UKGI may agree additional working protocols or
Framework Documents, including the governance, objectives, and timeframe of
engagement, for individual Activities, which documents will take precedence over this MoU
in the event of any conflict.
Both parties are committed to delivering the terms of this MoU but it is not intended to
create legal obligations or to be legally binding. Consequently, it has no legal force, but
rather provides the framework for how the parties will work together at official level and will
be reviewed on a regular basis to ensure it remains fit for purpose.
Background
UKGI is a limited company, wholly-owned by HM Treasury, which provides independent
corporate finance and corporate governance advice to government departments in relation
to identified Projects. UKGI also performs the shareholder role for BEIS Assets.
UKGI approach
UKGI will provide independent advice to BEIS and its Ministers. Any direct engagement
with Assets or Projects will formally be as an agent of BEIS.
UKGI will provide its advice in a manner consistent with the Civil Service's core values of
integrity, honesty, objectivity, and impartiality.
UKGI will have access to sensitive or confidential information in respect of the Activities.
UKGI will treat BEIS’s sensitive or confidential information and the advice it provides to
BEIS with the same degree of confidentiality as that minister might expect of his or her own
officials, in accordance with the Civil Service Code. HMT has acknowledged the
confidentiality obligations to which UKGI is subject. BEIS officials will also treat UKGI's
sensitive or confidential information with the same degree of confidentiality it applies to
BEIS information.
BEIS will have responsibility for developing or formulating policy in relation to the Activities
UKGI consider BEIS’s and wider Government objectives when providing its services.
Accountabilities and responsibilities
The Principal Accounting Officer of the Treasury (HMT PAO) has overall responsibility and
accountability for UKGI, both for its policy direction, and for its wider corporate finance
objectives and activities through the UKGI Accounting Officer, in accordance with Chapter
3 of Managing Public Money (MPM). The HMT PAO, via the UKGI Accounting Officer is
accountable for the assets and liabilities of UKGI being a public entity within its accounting
and budgetary boundary.
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The accountability to Parliament for the Activities in which UKGI is involved will be:
- Ministerial level: BEIS Ministers
~ Principal Accounting Officer level: BEIS Permanent Secretary
- Senior Official level: UKGI/BEIS
At BEIS's request, UKGI senior officials will join BEIS in any investigation or representation
of the Activities including, but not limited to, National Audit Office reports, Public Accounts
Committee hearings, and BEIS Committee hearings.
BEIS Communications will manage formal communications relating to the Activities with
content input from the relevant BEIS team and UKGI as required. UKGI will be permitted
to re-post any formal press releases from BEIS relating to the Activities on its intranet and
external website.
UKGI staff may be appointed to sit on an Asset's board and in such instances a separate
letter of appointment between the UKGI staff member and the Asset shall be agreed. One
purpose of such an appointment will be to enable the Asset's board to benefit from a
broader government perspective and for BEIS to benefit from a timely and nuanced
understanding of the developments in the relevant Asset. UKGI and BEIS acknowledge
that a UKGI staff member appointed to an Asset's board will have duties to both the Asset
and BEIS in the exercise of their appointment. In the cases where conflicts of interest arise,
these will be dealt with on an individual basis.
In rare instances (where required by IPA), UKGI staff will assume the role of Senior
Responsible Officer for individual Projects, in which case a separate letter from BEIS
Permanent Secretary will set out the accountability lines for the specific Project.
UKGI will not be accountable for the Asset's project or programme delivery by virtue of the
shareholder role it performs.
Finance, Legal and Procurement
For the avoidance of doubt BEIS will retain control of, and is beneficially entitled to, all
financial distributions relating to the Activities.
If required, UKGI may assist with the procurement and management of legal and other
professional advice in respect of the Activities. BEIS is responsible for paying consultancy
and advisors’ fees incurred by UKGI in respect of the Activities. Any advice received by
UKGI in this context is BEIS's advice and accordingly UKGI will ensure that it is treated in
a manner that is consistent with its confidential and (in relation to legal advice) legally
privileged status.
UKGI does not provide legal advice or manage any legal claims relating to the Asset on
behalf of BEIS nor will it provide procurement or other assurance advice or expertise in
respect of any other aspect of the Activities (except for procurements of professional
external advisers which it undertakes for BEIS itself).
From time to time, it may be appropriate to transfer responsibilities relating to BEIS Assets
either from or to UKGI, Such transfers may have resource implications which must be
discussed and agreed between UKGI and the relevant Director General, subject to a
materiality threshold of one FTE staff member.
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Working relationships
BEIS and UKGI agree to work together as one team to ensure the delivery of the objectives
set for the Activities. The parties shall endeavour to make the working arrangements
function as efficiently, openly and collaboratively as possible.
UKGI may, where appropriate, advise BEIS Permanent Secretary, BEIS Ministers and the
BEIS Secretary of State directly in relation to the Activities. UKGI will ensure that the
relevant BEIS officials for each of the Activities are sighted on all such direct advice before
it goes up and copied into the final advice. Where UKGI provides advice to BEIS which
BEIS does not wish to follow, this will be recorded in the relevant submissions or internal
notes/briefings as appropriate.
UKGI will work directly with the Assets or Projects acting as an agent on behalf of BEIS,
and UKGI will be the main point of day to day contact between BEIS and the Assets or
Projects.
BEIS will ensure that UKGI are invited to all meetings relevant to the Activities and will
provide UKGI with the information UKGI requires to perform its role in relation to the
Activities. BEIS will ensure that appropriately senior officials attend relevant governance
meetings in relation to the Activities
UKGI will provide BEIS with regular reporting and information in relation to the Activities as
mutually agreed. UKGI Shareholder teams will meet regularly with the relevant BEIS
Directors General accountable for the Assets to update them and discuss key issues,
including matters due for discussion at Assets’ board meetings.
UKGI will ensure that all its documents are filed on UKGI's systems in such a way as to
ensure business continuity at the end of any arrangement.
UKGI and BEIS will periodically review UKGI's engagement with BEIS. Both parties will
jointly:
- Monitor progress against objectives for the Activities;
- Identify areas where further UKGI support is required or where an existing
arrangement is no longer required;
- Plan and prioritise future objectives for the Activities; and
- Provide timely and high quality feedback on the relationship.
Dispute Resolution
Where a dispute arises over any aspect relating to the Activities the matter will be referred for
resolution to BEIS and UKGI officials. If the matter is not resolved to the satisfaction of both
parties, within a reasonable period, either party may refer the matter for consideration and
resolution by the BEIS PAO and UKGI AO.
8.1
Scope of services
Projects: Where agreed between the parties, UKGI will provide the following (non-
exhaustive) types of corporate finance and/or corporate governance services in relation to
identified Projects:
- Preparing and executing BEIS corporate asset sales;
- Advising BEIS on major financial interventions into corporate structures;
- Advising BEIS on major negotiations with corporates; and
- Advice on Projects/Assets involving a complex commercial or governance
transformation.
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8.2
Current projects are listed in Annex 1 and require regular process update meetings with
the relevant BEIS DG. New requests for support on BEIS projects will be agreed via email
with the relevant DG in accordance with paragraph 8.3 below.
Assets: The UKGI shareholder role consists of the activities set out below. In relation to
these activities, UKGI will provide advice to the relevant ministers and Principal Accounting
Officer, in consultation with BEIS officials.
Establish and maintain appropriate and effective corporate governance foundations which
govern the department-asset relationship
work with BEIS and the Assets to establish and maintain appropriate corporate
governance documents and systems, through up to date and fit for purpose governance
documents, including Framework Documents, Articles of Association where relevant, board
Terms of Reference, chair letter.
Promote effective objectives, business planning and performance against business plan
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assess and challenge from an owner's perspective the Assets’ Business Plans, the clarity
of the objectives, the quality of the Business Plan and the financial, and where relevant
commercial, strength underpinning it, and its effectiveness as a tool for the Assets.
monitor and challenge the Assets and their boards as to the performance against their
Business Plan or equivalent document, in terms of how the Asset is performing as an
organisation (as opposed to monitoring the success of the policy delivery itself).
if there is a UKGI shareholder representative on the board, challenge the Asset's Business
Cases, and other HMG approvals outside the Asset's executive delegations, through that
NED position on the Asset board only (this will be limited to the degree of challenge that
any non-executive board member can provide. UKGI is not responsible for formally
reviewing such business cases, providing advice to the department and ministers, or
obtaining HMG approval for Business Cases, unless explicitly agreed otherwise).
Promote strong corporate capability
Vv.
through the UKGI shareholder team, as well as the UKGI shareholder representative on the
Asset's board, promote the strength of the Asset’s governance systems which support
organisational performance, by providing high level challenge to the Asset (and its board)
on:
a. governance framework compliance — defined as the Asset's view on its compliance
with its governance framework (as set out in its Framework Document, delegated
authorities, and any other specified governance documents), and
b. the adequacy and strength of the Asset's reporting to the department on these
ISSUBS.
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Promote effective leadership (high quality boards and senior management)
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promote the effectiveness of the Asset’s leadership, specifically through:
a. promoting high quality and diverse boards, challenging the board's capability and
effectiveness, and monitoring the Asset’s succession planning
b. promoting the implementation of effective board composition, recruitment,
remuneration and appointment processes
c. acting as the shareholder non-executive director on the Asset’s board
d. giving a view on the Asset's board level executive capability in relation to its
responsibilities, and remuneration
Promote effective relationships between BEIS and the Assets
VIL
support effective relationships between BEIS and the Assets, including through:
a. (UKGI) building effective relationships with the Asset's board and senior
management
b. promoting effective interfaces and communications between the department and
the Asset, including through regular shareholder meetings
c. maintaining an effective regular meeting “rhythm” with the Asset chair, board and
executive to ensure appropriate flow of information (management information)
between the Asset, UKGI and BEIS, including effective reporting to BEIS
Supporting and supplementing the activities above by providing a Shareholder NED on
the Asset's board
VIL
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act as government shareholder representative on the Asset's board, through:
a. providing an appropriate board member to carry out the non-executive director role
effectively, drawing on the support and analysis from the UKGI shareholder team
b. attending the ALB’s board committees as appropriate, but usually Remuneration
Committee, Audit and Risk Committee, and Nominations Committee
c. acting as an interlocutor between the department and the Asset's board
d. providing a view to the department on the strength of the Asset's board
As at the date of entry into this MoU, the Activities in relation to which UKGI will provide its
services to BEIS are set out in Annex 1. The profile of work UKGI undertakes for BEIS
may alter over time, and accordingly the parties agree to update this MOU regularly.
Amendments to the Annex identifying ongoing Activities may be effected by an exchange
of emails between the parties.
Data protection
In respect of any personal data shared with UKGI for the purpose of it performing its
obligations under this memorandum, the Parties acknowledge that UKGI is the processor,
and BEIS the controller. UKGI will only process personal data in accordance with BEIS's
written instructions from time to time (which may be specific instructions or standing
instructions of general application), unless such processing is required by any law to which
UKGI is subject, in which case UKGI shall (to the extent permitted by law) inform BEIS of
that legal requirement before carrying out the processing.
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9.2
9.3
The parties agree that the processing of personal data to the extent required for UKGI to
provide services to BEIS in respect of the Activities listed in Annex 1, as amended from
time to time, shall be considered a standing instruction of general application.
For the purposes of this paragraph, personal data, processor and controller shall each have
the meaning given to them in the prevailing data protection legislation, including, but not
limited to, the General Data Protection Regulation.
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. Signed by
Sarah Harrison, Director General Corporate Services
for and on behalf of The Secretary of State for the BEIS. :
Date: ...9/12/19
Signed by
Justin Manson
for and on behalf of UK Government Investments Limited
Date: fA 24
Annex 1
Activities as at January 2020
Assets
British Business Bank
Land Registry
National Nuclear Laboratory
Nuclear decommissioning authority
Nuclear Liabilities Fund (no UKGI NED — see Annex 2)
Ordnance Survey
Post Office Ltd
UK Green Infrastructure platform
Urenco (excluding decommissioning fund — see Annex 3)
Projects
BisCo
Deep Sea Mining Working Group
New Nuclear*
Special Situations
Inward Mergers and Acquisitions
* UKGI will advise BEIS on their analysis of delivery approaches for low carbon energy projects.
Primarily this will involve advising on the financeability of a regulated asset base model for new
nuclear, including input into the structuring, market engagement, and developer engagement
workstreams (among others). Where UKGI has relevant expertise, the team will in addition
provide some ‘light touch’ advice on other financing approaches for nuclear (e.g. government-
led) and approaches to financing other low carbon technologies, such as carbon capture and
storage.
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