The principle of devolution is inherent in the Labour Party's policy-making process. While the National Policy Forum formulates UK-wide policy for the UK manifesto of the Labour Party, the Scottish Policy Forum formulates Scottish policy for the Scottish Parliament manifesto.

At the 1997 Scottish Labour Party annual conference, Scottish Executive Committee (SEC) proposals were agreed that radically change the way policy is formulated within the Scottish Labour Party. These changes were known as Partnership in Power.

Before Partnership in Power, constituency Labour parties (CLPs) and affiliated organisations submitted resolutions every December and amendments to resolutions every February. On the eve of Annual Conference in March, these resolutions and amendments (which regularly numbered up to 200) were condensed into composite motions at delegate meetings. Around 25 to 30 composites were produced during this process and most, but not all, were then debated during conference.

Following the Partnership in Power rule changes, the compositing process has been replaced by discussion and consultation overseen by the National Policy Forum (NPF) and the Scottish Policy Forum (SPF). The NPF and the SPF have elected representatives from all sections or stakeholders in the Labour Party.

The SPF produces detailed policy reports that are discussed, debated and voted upon at Scottish Conference. These reports replace the composites that were previously debated.

The Scottish Policy Forum operates on a two-year programme. At the end of the first year, consultation documents are presented to Scottish Conference. At the end of the second year, the SPF presents policy proposals to conference which may include majority and minority reports with different policy positions. Conference decides in the second year which of the policy proposals to adopt as party policy.

It is important to stress that the Scottish Labour Party annual conference remains the sovereign policy-making body within the Labour Party for the Scottish Parliament manifesto. The SPF submits reports and policy recommendations and party conference votes upon final policy positions.