Memorandum of Understanding (MoU) between the Department for Business, Energy and
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3.1
3.2
3.3
3.4
Industrial Strategy (BEIS) and UK Government Investments Li
ited (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 5.
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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4.2
4.3
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5.1
5.2
5.3
6.1
6.2
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
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 Assets 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 Assets 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 MPA), 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).
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
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6.3
6.4
6.5
6.6
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7.
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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 and 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. UKG! 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
8.2
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.
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
I. 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
Il. assess and challenge from an owners 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.
Ill. 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).
IV. if there is a UKGI shareholder representative on the board, challenge the Assefs Business
Cases, and other HMG approvals outside the Assets 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
V. 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
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 Assets reporting to the department on these
issues.
Promote effective leadership (high quality boards and senior management)
a. promoting high quality and diverse boards, challenging the boards 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 Assets board
d. giving a view on the Asset's board level executive capability in relation to its
responsibilities, and remuneration
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Promote effective relationships between BEIS and the Assets
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
8.3
9.1
9.2
9.3
act as government shareholder representative on the Assets 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. being a member of the Asset's Remuneration Committee, Audit and Risk
Committee, Nominations Committee,
c. acting as an interlocutor between the department and the Assets board
d. providing a view to the department on the strength of the Assets 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.
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
for and on behalf of The Secretary of State for the BEIS
1D. (Eee EEE EEESSEEEESEESSEOSESEEOSSOESOSSOSOOSS®
Signed by
for and on behalf of UK Government Investments Limited
1D) SEES EES ESSSSSSSSSSSOSSOSSEOSESOSSOOSOSSOOSS
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Annex 1
Activities as at October 2019
Assets
British Business Bank
Electricity Settlements Company (NED only role — see Annex 2)
Land Registry
Low Carbon Contracts Company (NED only role — see Annex 2)
National Nuclear Laboratory
Nuclear decommissioning authority
Nuclear Liabilities Fund (no UKGI NED)
Ordnance Survey
Post Office Ltd
UK Green Infrastructure platform
Urenco (excluding decommissioning fund)
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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Annex 2 - DRAFT subject to team confirmation
Assets for which UKGI provides a NED only
With respect to LCCC and ESC, as at the date of execution of this MoU UKGI does not perform
the shareholder role set out in paragraph 8.2 above (whether in conjunction with BEIS or
otherwise). Instead UKGI employees are appointed as non-executive directors (NEDs) on the
board of each company. Their duties as NEDs are as set out in the Companies Act. In addition,
these NEDs will assist BEIS by:
* Meeting with BEIS officials (expected to include the relevant BEIS shareholder team,
and Policy and Client teams where applicable), and BEIS Ministers when appropriate,
to discuss relevant Departmental/Ministerial interests so that the NEDs will have an up
to date understanding of these;
* Participating in other discussions with BEIS officials as required on matters of interest
relating to the companies;
* Providing insights into the views of BEIS with respect to the companies at the relevant
board meetings to the extent required to aid the companies decision making; and
= Where appropriate, helping to resolve any issues as “honest broker” between the
relevant BEIS team and the companies.
These NEDs are not responsible for managing other forms of communication, information flows
or updates between the companies and the relevant BEIS teams
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Annex 3
Nuclear Liabilities Fund
{updated NLF MoU detailing UKGI role to be appended]
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Annex 4
Urenco
{Letter to BEIS re Urenco role to be appended]
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Annex 5
BEIS and UKGI principles - embedding effective ways of working
1. BEIS Director Generals are accountable for the Partner Organisations in their business
areas. When they work on BEIS assets/projects, UKGI teams report to BEIS Director
Generals. [Source: BEIS organogram]
2. Leadership teams in UKGI and BEIS are committed to the BEIS-UKGI relationship—
monitoring progress against agreed objectives, sharing good practice and honest
feedback, and periodically reviewing the effectiveness of our engagement including the
MoU.
3. UKGI will provide independent advice to BEIS and its ministers in a manner consistent
with the Civil Service's core values. When UKGI works directly with BEIS
assets/projects, it will be acting as an agent of BEIS and the main point of day-to-day
contact.
4. UKGl and BEIS officials will work as one team, engaging efficiently and in a spirit of
openness and collaboration. Teams may develop tailored governance arrangements
and ways of working for specific assets/projects.
5. BEIS will have responsibility for policy development in relation to its assets/projects.
UKGI will consider BEIS and wider Government objectives in providing its services.
When UKGI provides direct advice to the BEIS Permanent Secretary, SoS and
Ministers, BEIS officials will be sighted in advance and copied.
6. UKGl and BEIS will treat each other's sensitive or confidential information with the
same confidentiality a BEIS Minister might expect of their officials. HMT acknowledges
these obligations on UKGI.