Baseline profit rate and capital servicing rates assurance services

The SSRO is seeking an independent assurance service for three consecutive years in relation to the baseline profit rate and capital servicing rates that it will respectively recommend to the Secretary of State in January 2019, January 2020 and January 2021.

This service will take the form of independent assurance on the execution of the methodology to calculate the rates and will involve: a) Scrutiny of the records of the SSRO's decision process to assess comparator companies in each of the four activity types ('develop and make', 'provide and maintain', 'ancillary services' and 'construction') to ensure they are consistent with the published methodology.

This will require an understanding of transfer pricing principles upon which the methodology is based. b) Verification of whether the SSRO's Microsoft Excel based model calculates the baseline profit rate and capital servicing rates in accordance with paragraph 3.8 and Sections 9 to 11 of the methodology. c) Verification that graphs, charts, and summary tables are linked correctly to the model outputs. d) Submission of the findings for the assurance activities a), b) and c) in the form of written reports to the Regulatory Committee.

The first report will cover preliminary assessment of a).

The final report will cover the final assessment of a), b) and c).