By 1 November 2008, those administering authorities who have not already done so must prepare and publish their governance compliance statement. The statement must set out:
- certain of the governance and stewardship arrangements the administering authority has in place for their Fund;
- the extent to which those arrangements comply with the "best practice principles" prescribed by the Department for Communities and Local Government (DCLG); and
- where those arrangements do not so comply, the reasons for non-compliance.
The deadline for preparation and publication has been something of a moveable feast with 1 March 2008 and 1 August 2008 having previously been designated as the due date. However, the LGPS (Miscellaneous) Regulations 2008 confirmed 1 November 2008 as the appropriate deadline.
An administering authority's governance compliance statement must include the following information:
- Whether the administering authority delegates the whole or part of its function to a committee, a sub-committee or an officer of the administering authority.
- If it so delegates:
- The terms, the structure and operational procedures for the delegation;
- The frequency of any committee or sub-committee meetings; and
- Whether the committee or sub-committee includes representatives of employing authorities (including non- LGPS employers) or members, and if so, whether those representatives have voting rights.
- The extent to which a delegation, or the absence of a delegation, complies with guidance given by the DCLG and, to the extent that it does not so comply, the reasons for that non-compliance.
The DCLG set out the suggested "best practice principles", against which an administering authority's arrangements are to be measured, in Version II of its draft statutory guidance in July of this year.
The "best practice principles" contained in Version II do not materially differ from those contained in Version I of the draft guidance published for consultation in 2007. Nevertheless, the DCLG's statutory guidance will not be finalised before 1 November 2008.
Action to be taken by administering authorities
Many administering authorities will have already filed governance compliance statements and within those statements confirmed the extent to which their Fund's stewardship arrangements adhere to the "best practice principles" set out in Version I of the draft statutory guidance originally submitted for consultation by DCLG in 2007 and, to the extent that they do not so comply, the reasons for such non-compliance.
DCLG has confirmed that such administering authorities are not now required to issue updated statements to record adherence to the revised best practice principles as set out in Version II of the draft statutory guidance.
Of course, if such administering authorities make material changes with regard to the delegation of their functions, a revised compliance statement will need to be prepared.
It almost goes without saying that if any administering authorities have not yet prepared and published a governance compliance statement, they should do so as soon as possible. Such statements should be prepared by reference to the best practice principles contained in Version II.
It is unfortunate that DCLG's statutory guidance is not yet available, particularly as the deadline for preparation and publication of the compliance statements was deferred with the intention of enabling administering authorities to complete their statements with reference to the finalised guidance.
However, in practice the absence of final form guidance should not pose administering authorities undue difficulties. The draft guidance is comprehensive and well progressed, and it seems unlikely that the final version will contain any material changes.
Once administering authorities have prepared and published their compliance statement they have a statutory obligation to "keep the statement under review" and to "make such revisions as are appropriate".
Similarly the DCLG has indicated that once the statutory guidance is finalised it will be kept under review and updated to reflect legislative changes and administering authorities' experience in applying the best practice principles.
Despite the "stop start" approach to initial implementation, the governance compliance statement together with the DCLG's guidance should put in place the planks of a robust but evolving stewardship framework for administering authorities.
For further information on the draft principles and guidance, see our earlier alerts from 4 March 2008, 29 October 2007, 7 June 2007. Some of the key dates mentioned in these alerts have subsequently been changed and indeed, the guidance and principles have evolved a little through the consultation process.