Official Report


Finance Committee, 16 Dec 2003

Scottish Parliament
Finance Committee
Tuesday 16 December 2003

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: [The Convener opened the meeting at 10:03]

Local Governance (Scotland) Bill: Financial Memorandum

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The Convener (Des McNulty): : I open the 18th meeting of the Finance Committee in this second parliamentary session by welcoming members of the press and public. As usual, I ask that everyone switch off their pagers and mobile phones. We have received apologies from Ted Brocklebank and Fergus Ewing. Wendy Alexander and Kate Maclean have said that they will be late, but we expect them to arrive at some point.

The first item on the agenda is consideration of the financial memorandum to the Local Governance (Scotland) Bill, which was introduced by Andy Kerr on 21 November. To assist our consideration, we are joined by representatives of the Convention of Scottish Local Authorities: Pat Watters, the president of COSLA; and Anil Gupta, COSLA's policy manager. I welcome both of my former colleagues to the meeting.

Members will have received a briefing paper that has been prepared by the Scottish Parliament information centre, a copy of the bill, the policy memorandum and its explanatory notes, and submissions from COSLA and the National Association of Councillors. First, I ask Pat Watters whether he wants to make an opening statement.

Councillor Pat Watters (Convention of Scottish Local Authorities): : I have brief opening remarks to make. First, I thank the committee for the opportunity to give evidence this morning. Although COSLA—and local government in general—agrees with the bill's overall objective of strengthening local democracy and supports its main provisions for a new system of remuneration for elected members in local government, we have a problem with the proposed changes to the voting system—in particular with the single transferable vote system.

As president of COSLA, I must point out that that view is not held unanimously in the convention; however, it is the view of the vast majority of members. Of our 31 member councils, only five or six do not support retention of the first-past-the-post system. Moreover, there are within those five or six councils varying views on which proportional voting system should be introduced. Indeed, some do not support the introduction of any proportional voting system but still want the electoral system to be changed. That said, I want to re-emphasise that although I speak for the vast majority of members, other members hold different views on the matter.

By and large, COSLA broadly supports the bill's other elements and strongly wants the provisions to be introduced. We believe that no aspect of the bill is without its problems and that each will have its costs and financial considerations. Indeed, our biggest problem will lie in a changeover to an STV system, with its associated costs and the confusion that it would cause to the general public and even to some elected members.

We are happy to back up our evidence by responding to committee members' questions.

The Convener: : Thank you very much. It is clear that the Finance Committee's role does not include consideration of the bill's policy aspects; rather, we are concerned purely with how its financial implications will pan out.

Do you have any comments on the financial memorandum? My initial perception is that it is very thin on specifying any likely cost implications of the bill. Given that COSLA responds routinely to a wide range of legislative proposals, does it have a view on the amount of information in the financial memorandum and on how the memorandum itself compares with the financial memoranda of other bills?

Councillor Watters: : You are absolutely right to say that the memorandum is very sketchy. As with anything else, the devil will be in the detail. Obviously, additional material will be introduced later that will contain such detail. It is difficult to assess the impact of proposals for changing the voting system if we do not know about the arrangements, including when voting will take place, how long the count will take, how many elected members there will be in a particular ward and so on. All those factors will impact on costs, so we will not be able to estimate anything until we know the detail of the proposals.

The Executive reckons that it will take £1.5 million to raise the general public's awareness of the proposed changes. However, we believe that that figure is very conservative. For example, in Northern Ireland, there is still great confusion among voters and a tremendous amount of wasted ballot papers even though they have had proportional representation and an STV system there for something like 30 years. Information on how to use the system has still not got through to the public. That said, people used the system well in the recent elections for the Northern Ireland Assembly, although there was still a high percentage of spoiled ballot papers. Given that experience, it appears that a one-off education campaign would not suffice, and that that £1.5 million will probably have to be spent time after time.

Anil Gupta (Convention of Scottish Local Authorities): : Given that the Scottish Parliament elections are tied to local government elections, we would also probably have to decouple them to ensure that the numbering system had some clarity, which will in itself have considerable on-costs. According to my figures, the Scottish Parliament elections draw down about £8 million to meet the shared costs of running the polling stations, sending out ballot cards and so on. All of that would also need to be found; it is a sizeable chunk of money. I presume that the STV working group will have a view on whether there should be decoupling, but it is not unreasonable to anticipate those sorts of costs.

We also state in our submission that we anticipate that an STV count would take about four times as long as the first-past-the-post count takes. That is based on the experience in Northern Ireland. We compared the first-past-the-post system for elections to Westminster with the STV system, which members will be aware takes between one and a half and two days. That is another considerable on-cost.

Councillor Watters: : There is an additional problem: if the count is spread over a longer time, it is possible to take out the counters and replace them, but management of the system would be extremely difficult because there is not a tremendous number of people who are able to oversee and run such an operation. The organisation of the count over a tight and tense period would be extremely difficult.

The Convener: : You are not saying that changing the electoral system is impossible, but you are saying that it is potentially costly and that it is hard to quantify the costs that are associated with STV. My experience of STV votes has been almost entirely confined to elections for membership of the senate within the university at which I previously worked. Clearly the process is much more sizeable in a local government context.

Councillor Watters: : As you know, nothing is impossible in local government. Members have seen the changes that we have managed to deal with and cope with. There is a tremendous potential on-cost as a result of any change in the electoral system, but more damaging than that would be the confusion among the general public and the lack of participation that would result from that confusion. The number of spoiled ballot papers and wasted ballot papers would disenfranchise many of the electorate and prevent them from exercising their democratic right.

The Convener: : Who would foot the bill? The financial memorandum highlights that issue. Are you saying that the costs that are anticipated in the financial memorandum do not match the amount of money that you think would be required to make the system work effectively? If there is a gap, can you quantify what that might mean for local government services? I presume that what local authorities would have to spend over and above what the Executive gives them would have to be found out of resources that they get for other purposes.

Councillor Watters: : We would expect the Executive to fund fully any change that came forward as a result of legislation that it put through. Even if there was a vast increase in costs as a result of the legislation, we would not expect the public to pay for the change through the services that we deliver; we would expect the Executive to have anticipated the cost of legislative change. You are right that the only thing that would suffer as a result of the funding's not coming forward and local government's having to meet the costs would be the service that we deliver. The general public is not particularly interested in process; they are interested in services. I would find that situation extremely difficult to deal with.

The Convener: : Can you give us any further detail on the gap? The Executive has given its estimate of what the cost would be of implementing the legislation. You seem to be saying that councils would, in order to make it work effectively, potentially require to spend more on administration, on the advertising that would be required to inform the public properly about the system and on other costs that you identify that have not been quantified in the financial memorandum, such as we have it.

Anil Gupta: : I have been unable to get a full picture of the amount that we spent on local awareness campaigning for the previous local government election. However, evidence from three authorities indicates that there was a wide spread in what was spent. If we apply the baseline figures from Fife Council, East Renfrewshire Council and Highland Council to the general population, that produces a spend that ranges throughout Scotland from £60,000 up to well over £0.5 million. We could be cheeky and suggest that there is perhaps a need for a similar fourfold increase in the amount that the Executive suggests—from the £400,000 that was spent at the previous election up to £1.5 million—in its financial memorandum.

It is difficult to give a feel for the spending because there is such a wide range of practice. However, if the electoral system is to be successful, local interventions will be required and those will need to be funded. I am sorry that I cannot say any more at this stage about the range of spending, but it is a considerable range. That is taking into account only issues related to STV; we have not touched on remuneration issues, severance pay and so on.

The Convener: : We will come on to those matters.

Anil Gupta: : We will talk later on about widening access.

The Convener: : I will pursue the point a bit further. Generally speaking, local authority chief executives or senior officers act as returning officers for local government elections and parliamentary elections. Are you aware of any concern among those people, who are independent figures, about the cost implications and the organisational issues from their point of view as opposed to that of elected representatives in local government?

Councillor Watters: : We have regular discussions with the Society of Local Authority Chief Executives and Senior Managers; there are concerns about how they would manage any change to the system. They are not particularly interested in the cost because they will try to manage any system that is introduced. Complications relate to how they would manage the staffing issues that would surround any change to the voting system—chief executives have grave concerns about how they would manage the system.

Anil Gupta: : I have material that the Society of Lawyers and Administrators in Scotland election committee provided to the Local Government and Transport Committee. SOLACE states that it is starting to find difficulty in getting the staff to do what is a fairly small count. To extend the length of time of the count may require additional financial incentives as well as paying staff at a rate that is at least equivalent to the current one. SOLACE is worried about that.

SOLACE is also worried about the training costs. Training for the current system is done in the hour or two before the count starts. For something as complex as STV it would be necessary to pull staff in for a separate training session, so costs would again multiply at quite a rate.

The Convener: : Do you have figures? In a number of local authorities—including some that are covered by my constituency—the local election count is generally done the day after the Scottish Parliament count, so there is already an all-night count followed by a morning count. Can you quantify the amount of time that an STV local government count would take, and its cost?

Councillor Watters: : It is difficult to do that; the answer would depend on the size of the constituencies and the number of councillors. The experience in Northern Ireland and in the Republic of Ireland is that the count takes a day and a half to two days. That is how long it takes after they have used the system for some years. It could be that the problems that occurred in Edinburgh in the first Scottish Parliament elections might initially happen throughout Scotland.

Anil Gupta is right: it is important that we get properly trained people to do the count. The difficulty is in the number of people who would have to be trained to make the count work effectively. The current system for local government elections is simple to operate. The count for the Scottish Parliament probably takes twice as long as the count for local government elections, which you are right to say take place the next day. If the local government elections count took place the next day, that would usually be a Friday, so if the count took two or two and half days, that would take us into the Sunday. That would mean that the costs would be extremely high. Any recounts in any seat would mean that the count would go into another day.

Anil Gupta: : One of the problems is that because there are so many variables it is impossible to give any meaningful figures at this stage. If we assume that the bill goes ahead, we expect the STV working group to consider the scenarios and their costings before making a recommendation that we expect to be fully funded, as Councillor Watters said.

The Convener: : Our concern is to bring some of the issues out into the open so that they are properly considered. At present, the local government elections and the Scottish Parliament elections are held on the same day. In most constituencies, the first-past-the-post count for the Scottish Parliament election takes place on the night after the votes were cast—the Thursday night—and the count for the list seats begins on the Friday morning.

In general, the count for local government elections takes place once the list count is completed, which could mean that that count starts at lunch time or in the early afternoon on Friday. If an STV count took significantly longer than a first-past-the-post count for local government, would the counting process stretch into Saturday or even later in some circumstances?

Councillor Watters: : Yes.

Anil Gupta: : One of the bill's first principles is the strengthening of local democracy. Reports from the Electoral Commission suggest that a large number of non-voters would be more likely to vote if polling stations were open on a Sunday. Many variables are involved. If we plumped for that option in the belief that it would increase turnout, additional costs would be incurred.

It is almost certain that keeping the current arrangements for voting on a Thursday would present a huge number of problems. As a result of that and the associated cost, the STV working group may well recommend that a different voting arrangement is appropriate if STV goes ahead.

The Convener: : If counts take place at the weekend, the issue is the cost of paying staff to work on Saturday. If voting were shifted to Sunday and counting took place on Monday and Tuesday, the issue would be the opportunity cost, because most of the council staff involved would not be doing their normal jobs, so local government would shut down until the outcome of the election was clear.

Councillor Watters: : The problem is not just the length of time that a count would take. If we followed current practice and voted on a Thursday, we could not expect people who had stayed up to count until 2 or 3 in the morning to return at 8 am to undertake with any accuracy an extremely complicated count, so we would probably need new people to perform that count with the intensity, and under the scrutiny, that will be necessary for the new system. As a politician, I assure members that I would scrutinise the count closely. If counts did not take place on separate days, we would probably need additional staff to spell people, because the pressure on staff would be immense.

The problem is not just the length of time, but the increased number of staff that would be needed, because it would be unrealistic to expect the same people to undertake the whole task. If a complicated system such as STV were introduced, that would provide a strong argument for decoupling local government and Scottish Parliament elections.

Dr Elaine Murray (Dumfries) (Lab): : I share with the convener some disappointment about the spareness of the financial memorandum, given the great change that the bill would impose on local government. The Executive should have made more effort to provide more realistic costings.

I will recap what the convener said. The experience in Dumfries and Galloway was that the local government election count could not start at the expected time after the Scottish Parliament election count, because the South of Scotland list count had not finished. I foresee considerable financial strain on the system if local government and Scottish Parliament elections continue to be held on the same day, desirable as that might be for voter turnout.

Another consequence of changing to the single transferable vote would be much larger ward areas, in particular in rural areas such as mine. Combining three or four wards on the east side of my constituency would produce a ward of a significant size for three or four councillors who would also have to travel into the regional centre to attend meetings. Do you fear that such ward sizes will add substantially to travel costs and to the costs of holding surgeries, as a result of councillors' being obliged to hold surgeries throughout a fairly large area? Would that have a knock-on effect on local government finances?

Councillor Watters: : That would undoubtedly be the case—extreme problems would arise. In Elaine Murray's area, a large multicouncillor ward might be created, but in the Highland Council area, wards the size of Switzerland would be needed, although they would not be as densely populated as wards in Dumfries and Galloway. If a rural community expected elected members to attend a school board meeting, would all three councillors for the area attend? Who would go? If all the councillors for a ward were elected to serve that community, they should all attend, which would incur costs.

We can take that further by considering the islands. The smaller island communities have every right to expect democratically elected members to turn up at events on their islands such as community council meetings, meetings about planning problems and school board meetings. Would all three councillors for a ward turn up? If a ferry served an island only twice a week, how would the situation be managed? What would be the cost to the local authority or to constituents?

If four members including Elaine Murray were all councillors serving the same ward and Elaine Murray had a problem about which she wrote to me as an officer, to whom would I write back? Would I write back only to Elaine Murray, when the problem concerned someone who was also a constituent of the other three members? Would I also write back to the other three members to ensure that they were aware of the problem in their constituency?

The cost of duplication in the system would be horrendous. Costs would be incurred through travel, and elected members would incur a cost in lost time. If only one member attended a school board meeting, for instance, the result would be a lack of democratic accountability. If STV were introduced, we would have a worse system, not an improved system, and it would be more costly to run.

Dr Murray: : In the Scottish Parliament, regions are represented by many members of different political persuasions. The experience here suggests that such arrangements involve a fair degree of duplication and of people racing after issues to be the first on the bandwagon. I understand where local authorities' fear comes from.

Paragraph 61 of the financial memorandum says:

"The Scottish Executive does not therefore expect there to be significant additional costs to local authorities arising purely from the introduction of STV for local government elections."

I presume that you disagree profoundly with that statement.

Councillor Watters: : The statement in the financial memorandum is naive.

The Convener: : We have identified some issues. Not now, but perhaps in the next two or three weeks, could COSLA give us specific estimates about matters such as the training costs associated with running an STV electoral system and the additional costs of the number of election administrators that will be required? Would COSLA and the chief executives who have to deal with the system be able to undertake an advance planning exercise? That information would be useful.

Councillor Watters: : I will take that on board and I will contact SOLACE. We will try to combine some work and produce a document. The committee will understand that that will be a quick and dirty estimate rather than a factual stab at the task.

The Convener: : Our problem is that, as the statement that Elaine Murray read out shows, we do not have an Executive view on such costs. We need information from COSLA that would allow us to quantify the implications of STV.

The other issue, which is probably more difficult, is not to do with elections but to do with COSLA's administration when issues are raised not by a representative who is the single elected member for a ward—the system with which we are all familiar—but by a representative in a multimember ward. You highlighted transport issues that affect remote and island communities, but issues would also arise in urban areas. Have there been any local government pilot schemes—perhaps based on the experience of the Scottish Parliament's multimember scenario?

Multimember wards will be a profound change for local government. I guess that, although you deal with Scottish Parliament people at the margins, the bulk of queries that local government administrators deal with in their offices will be from councillors. Can you make any estimates based on the dual, or multilayer, problems that will be associated with having to deal with different groups of councillors? Those councillors will not be functionally demarcated. Under the old system of local government, we had functionally demarcated councillors: regional and district councillors had separate roles and functions. We are now talking about a single tier of local government but with multiple councillors, each of whom will be legitimately entitled to be properly informed about any query that affects their ward.

Councillor Watters: : We can obtain detailed information on that issue for you, but I can give you examples now. I am a councillor in South Lanarkshire Council, which is in the Central Scotland constituency. Five directly elected MSPs and seven or eight list MSPs cover the area. Because we run over into the Glasgow constituency, the directly elected MSPs who represent the Rutherglen, Cambuslang and Burnside areas, and all the Glasgow list MSPs, can be involved in South Lanarkshire. The amount of correspondence that we receive from MSPs is horrendous and we continually receive correspondence on the same subject. We receive correspondence that is on business that is purely local authority business and not parliamentary business. The cost of administering that—which is not taken into account—is horrendous. I can give the committee detailed information on that. Ours is a typical example—although perhaps slightly exaggerated because the council area is in both the Central Scotland constituency and the Glasgow constituency, so list MSPs from both constituencies can feed in.

The Convener: : It would be useful to get some mapping of that problem.

Jim Mather (Highlands and Islands) (SNP): : I am keen to get back to general principles. What steps have been taken, or are planned, to learn from the Northern Ireland experience of the practical management of an STV election?

Councillor Watters: : The practical management is a matter not for elected members but for electoral officers, who are the people who run the elections. The Society of Local Authority Chief Executives and Senior Managers is probably taking such steps. I am an elected member, so I would not intend to go over to Northern Ireland to see how the system operates there.

Jim Mather: : So you would expect officers to take steps.

Councillor Watters: : Yes. Can I add that we keep talking about local government in the present or the past tense, but you are looking at the future? We still have the present system.

Anil Gupta: : The Association of Electoral Administrators was in Northern Ireland and I presume that it will report on that and consider the different scenarios. That could fulfil your request for information.

Jim Mather: : Will the Electoral Commission be able to produce new ideas or new voting methodologies that might reduce the burden?

Anil Gupta: : COSLA and the Electoral Commission had a meeting just over a month ago to consider different voting and counting methods, such as electronic counting. Electronic counting using a scanning mechanism that tries to read crosses is still undergoing trials and is still not performing terribly well. It requires people to be there as back-up. Moving that technology on to character recognition will probably mean—assuming that the legislation goes through—having a major trial in the United Kingdom for the first time in an election. There will have to be staffing back-up in case the system fails.

Jim Mather: : I am sure that Pat Watters is always welcome north of the Highland line, but that will be especially so after his eloquent description of the cost implications for rural multimember wards. Given the costs to local authorities that have large and sparsely populated wards, should the allocation of funds to such authorities be different as we move forwards into this new era.

Councillor Watters: : As I said earlier, if the bill affects how we run local government, the people who pass it need to take responsibility for paying. If it costs more for Highland Council to run and administer a new system, the Executive should compensate the council. The people who elect the representatives should not be paying for the change in the system that the Executive has foisted on them. Let us remember that the public have not demanded this system.

John Swinburne (Central Scotland) (SSCUP): : Does COSLA agree with me that this seems to be a very poorly thought through solution to a self-imposed political problem of the Lib Dems and Labour? Pilot schemes have been mentioned. Would it not be better to have a pilot scheme in one region at the next election—three years hence—and, if it did not work, to scrap it and come up with a far better scheme?

The Convener: : We should avoid policy issues and focus on the financial issues.

Councillor Watters: : I will try.

John Swinburne: : There are severe financial implications.

Councillor Watters: : I agree with the point behind Mr Swinburne's question: this is a very easy solution to what the parties found to be a difficult problem. If we are to look into electoral systems in the UK as a whole and in Scotland in particular, we should find the best system to cover all our elections. Having different systems for every level of elections in the UK and in Scotland seems to be a very haphazard way of dealing with our democratic responsibility. Any way of taking the time and trouble to examine the effects and costs of any change would be welcome.

I could understand a change based on evidence, in which we knew what we were trying to do and trying to improve. However, saying that we will have STV simply because several hundred people responded to a consultation exercise is not the way to decide how we run a very important section of our elected government.

Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD): : I look forward to COSLA supporting STV for all elections. That would be quite sensible, across the United Kingdom.

Was COSLA consulted before the Executive drew up its financial memorandum for the bill?

Anil Gupta: : Not that I am aware of.

Jeremy Purvis: : Paragraph 61 of the memorandum says that responses to consultation suggested that there could be "additional costs". I suspect that one of those responses was from COSLA. However the paragraph also says:

"no estimate of those costs was offered at this early stage."

You have not offered evidence of the potential additional costs.

Councillor Watters: : There was not enough factual information on which to base any estimates. We do not know that the new system will come in, we do not know the size of the wards, and we do not know whether there will be changes to boundaries. There is a hell of a lot that we do not know. To make mad stabs in the dark would be to do what we criticise the Executive for doing. I believe that the present proposals are a mad stab in the dark.

Jeremy Purvis: : What would be the quick and dirty information that you said you would provide to the committee?

Councillor Watters: : We can consider, for instance, the potential costs of counts, if we assume that the counts would take two to two and a half days, because we know the present cost of counts and can work up from there. However, we will be guessing about the length of time that the counts will take because we do not know that. Recounts, or counts, might take three or four days—who knows?

Jeremy Purvis: : I appreciate that there might be discussion about the length of the counts. At the previous election, the count for my constituency of Tweeddale, Ettrick and Lauderdale took 14 hours. However, the count was incompetent not because of the electoral system, but because of the way in which it was administered. The situation had a knock-on effect for my colleague Elaine Murray, who was waiting for the local authority count to begin.

Has the additional cost of the count for the 1999 election as a result of the introduction of the additional member system been quantified?

Councillor Watters: : The cost probably doubled.

Jeremy Purvis: : Can you provide information on that?

Anil Gupta: : We can ask for information or a guess from SOLACE, but I am not sure how easily available that information will be to it.

Jeremy Purvis: : Given that the new system may result in additional costs because of staff time or training requirements, I would like to know whether comparable costs arose for such requirements in advance of 1999. I am sure that there will be an argument about whether the counters or the returning officers or both need training. That information would be helpful to the committee, if it is available.

Anil Gupta: : A natural source of the information would have been the Electoral Commission, but it did not exist at the time. We will see what we can find out.

Jeremy Purvis: : The provisions on severance pay and the remuneration of councillors might have a much larger cost. Again, little has been quantified, but I presume that COSLA could have worked up several models because we know how many councillors there are and how many could benefit from the new system. A future cost could be extrapolated from that information.

Anil Gupta: : Although we know that 292 councillors left local government at the previous election—which is roughly 24 per cent—we cannot use that figure as a basis for predicting the future, particularly if severance pay will be available. We do not know who would be eligible for such pay. If the system were based on a resettlement grant that was available to any councillor who was not returned for whatever reason, a range of variables would need to be met. However, as far as we understand it, the Scottish Executive proposes a one-off payment for those who choose not to stand again. Much is yet to be decided, so we cannot reasonably propose a set of assumptions that would be endorsed by the working group that is dealing with the issue.

The Convener: : The proposed arrangement is for councillors who choose not to stand again. Would it distort the situation if people who stood unsuccessfully for re-election were to lose out financially? Would that be a problem?

Councillor Watters: : Absolutely. Local government is one elected tier of government. There are three other tiers: one is made up of our representatives here in the Scottish Parliament, the second is made up of those at Westminster and the third is made up of our MEPs in Brussels. Given that those elected members receive a resettlement allowance, why are we treated differently? We are democratically responsible to our constituents in exactly the same way as those other members are. Our constituents vote for us in exactly the same way as they do for those other members. Some might say that we have more responsibility than those other members have. For example, not many elected members take decisions involving vast amounts of money and services to their community.

I do not understand why we are to be treated differently and given a one-off payment. Why is the payment to be a severance payment rather than a resettlement allowance, which is what other elected members get? If your question is whether we should be treated in the same way as other elected members are, my answer is yes.

Dr Murray: : On remuneration, I am slightly surprised by the statement in paragraph 63 in the financial memorandum that

"it is at least theoretically possible that new arrangements could cost particular local authorities less than the current arrangements."

Is that possible? As you know, prior to being an MSP, I was a councillor and I have always felt that councillors are not adequately recompensed for their services. Are there any circumstances under which a local authority might save money under the bill?

Councillor Watters: : Circumstances can be envisaged in which the new system might cost less for local authorities. If councillors were paid less than they are at present and if responsibility payments for elected members with a significant work load were reduced, the costs could, in theory, be cut. That would not be right. You are spot on when you say that councillors are not at present recompensed properly for the work that they carry out.

To reach a figure, the Kerley report took the total current cost and divided it by the number of councillors in Scotland. However, the Minister for Finance and Public Services recently told me that that is not the Scottish Executive's plan. He said that he has not adopted the Kerley proposal because he does not see the situation as a straight mathematical equation of the form: the present cost over the number of councillors equals X. That indicates to me that the Executive is looking for a system that recompenses councillors properly and that takes account of councillors who carry a significant responsibility.

Dr Murray: : Has COSLA had any discussion about an appropriate method of remuneration and pay scale for councillors?

Councillor Watters: : We are happy to take part in the councillors' remuneration progress group that the Executive has set up. Our view is that the pay should be linked to that of other elected representatives—we should be paid a percentage of their pay. We are happy to discuss exactly what the percentage should be.

Jeremy Purvis: : In answer to my earlier question, you said that you could not give figures, but you have just said that COSLA's view is that councillors pay should be a percentage of that of other elected representatives. I presume that you were referring to MSPs. Does COSLA have a view on the outcome?

Councillor Watters: : No. We have not discussed whether we should have 40, 50, 60 or 75 per cent. Our point is that the pay should be linked to that of other elected representatives. We are happy to discuss the issue on the remuneration working group.

The Convener: : The financial memorandum states:

"Local authorities would only therefore have to find any additional costs resulting from the introduction of a new system of basic remuneration for councillors over and above the current costs of councillors' allowances."

In that context, will you clarify what additional funding you expect local authorities to receive?

Councillor Watters: : I repeat that, if the bill results in additional costs, the Scottish Executive must take responsibility for that through funding. If legislative changes have an impact on costs for local government, the Executive must take responsibility for its decisions.

The Convener: : That point seems to be at odds with the financial memorandum, which states something different.

Councillor Watters: : That issue will be debated, and perhaps argued about, somewhere else.

The Convener: : This is the classic role of the Finance Committee. If we assume that councillors will receive 50 per cent of MSPs' pay, is it possible to provide a range of quantification of what the additional costs might be?

Councillor Watters: : To set an artificial figure would be like grabbing a handful of sand and asking how many grains were in it—we do not know. However, if you are offering 50 per cent, convener, I will consider it.

The Convener: : I am not in a position to offer anything.

Councillor Watters: : If you want me to do that, we can find out what the costs would be, but no one has told us yet what the level will be set at, and it is difficult for us to quantify the costs if we do not know what the initial figure will be. We could have a range of options—5 per cent, 10 per cent, 20 per cent, and 30 per cent, for example—but none of them would be right unless we knew the exact figure. As I said right at the start, the devil will be in the detail, and the detail will not be known until we are told the results of all the consultations.

The Convener: : We have two problems. One is the point that you have just identified, which is that you do not know the exact figures for the remuneration. I understand your difficulty with that, which will need to be the object of discussion between COSLA and the Executive. The more substantive issue is that the Executive says in the financial memorandum that

"Local authorities would … have to find any additional costs resulting from the introduction of a new system of basic remuneration for councillors over and above the current costs of councillors' allowances"

but you say that it is the Executive's responsibility to fund such a system. There is obviously a difference of view, and I want to tease that out.

Councillor Watters: : The Minister for Finance and Public Services was asked specifically whether the remuneration group was tied to the Kerley recommendations, and his answer was that it was not, which was why he had disregarded the Kerley proposals. If the Executive is disregarding those proposals, which were based purely on the finances that are available at present, that indicates to me that it will take responsibility for any increase in costs that results from any change that it might make. If the Executive is saying that it will not take responsibility for any change that it makes, it should not make any change.

The Convener: : There is certainly an issue in that, but I will push you away from remuneration and on to pensions and severance payments—we have talked about whether "severance payments" is the right name, but we will use the name that exists for the minute. The financial memorandum contains no figures for pensions and severance payments; do you have any information on the implications of different assumptions on those proposals?

Councillor Watters: : Those are difficult to estimate, because we have no idea what any package would look like. As Anil Gupta said in answer to an earlier question, at the previous election, there was a 24 per cent change in elected representatives in local government. I do not know how typical that change is, but if it was mirrored in the next election, we could be looking at a change of between 0 and 25 per cent of councillors. However, if the new voting system was introduced, we could be looking at a far higher change. The costs would therefore be dependent on the level of compensation and the number of people who were leaving local government. We have no idea of either of those figures, so we would have to stab at them, and our estimate would be extremely rough.

I am unaware of what the impact of pensions would be. Anil Gupta might have figures on that.

Anil Gupta: : I do not, but I will repeat a point that professional organisations in local government have raised. There is a view that, rather than be dated from the start of the new remuneration arrangements as is proposed, the pensions should be retrospective, which would clearly require that a significant sum of money be put into a pool to fund it, and that such pensions should also count the total time served to allow for councillors having breaks, perhaps for care responsibilities, which would also require a big sum of money that is difficult to quantify at present.

On severance, there is potentially a perverse incentive that would not achieve the aim of strengthening local governance: if we make one-off payments because of the advent of the new electoral arrangements, we might lose even more senior people than we would do if they could stand and still be eligible for severance payments. Does that make sense?

The Convener: : Yes. It might be useful to get one or two facts on the record for background. As I understand it, the current arrangement in local government is that councillors receive no pension, so the introduction of a pension system is proposed, but that system is linked to the introduction of a new remuneration arrangement. Are the implications clear for people who, like you, Pat Watters, have been in local government for a long time?

Councillor Watters: : No, they are not. We are uncertain as to what proposals will come out of the remuneration group. I do not speak from self-interest, although I have been a councillor for quite some time. I did not have any grey hair when I was first elected—in fact, my hair is not grey now; my daughter tells me that it is only a very light black, but she is my only daughter. However, we believe that people who have served a long time in local government are due pensions, because it is wrong for elected members in local government not to be compensated and pensioned. When we elected the Scottish Parliament, one of the first things to be considered was the remuneration package. We did not say, "They're no MPs, so we cannae give them pensions."

Not long ago, I went to the retirement do of a colleague who had been a councillor for 47 years. He walked away from being an elected representative with nothing except a long-service award from the party that he represented in local government for 47 years. When he was first a councillor, there was no payment for councillors. Not only did he suffer as a result of that, but his family suffered, and his pension was affected because of the time that he had to take off work. During those 47 years, he brought up seven kids, lost his wife and still continued to be an elected member, because he believed that it was right to do that, not because of what he was getting out of it, which was nearly nothing as a result of the damage that he had taken over the years.

That cannot be right in any society, and that service must be recognised. That chap served his community for 47 years. There is hardly a building in that community that he did not play a part in securing for the community, and there is hardly a person in the community whom he did not help at some point over the years. He has gone now, but what happened to him should not be the example for the years to come.

The Convener: : I will pursue the other end of the spectrum: trying to recruit people to stand for local government. That is a cross-party issue, because all political parties experience more difficulty in finding people who are willing to stand for local government than they did in past years. That is partly to do with the level of remuneration, partly to do with the changes in the job, partly to do with employers' greater unwillingness to allow councillors the necessary time off work and partly to do with the implications that being in local government has for councillors' other forms of employment. Has the introduction of a new form of remuneration that would safeguard local government and encourage more people, and perhaps a broader range of people, to enter local government been considered rationally in terms of mapping out how that would be done and what it would cost to achieve?

Councillor Watters: : It has not. The provisions in the bill to widen access have support across the board in the Parliament and in councils throughout Scotland, because it is recognised that we need to attract young people into local government. At present, why would they come into local government? Why would someone damage their career to serve in local government? Their present career is not the only issue. They would also have to take time off, and we should remember that a high percentage of the councillors who are elected at present have employment elsewhere. They have to have employment elsewhere to allow them to continue to serve their local communities. By having to take time off, not only do they damage themselves and their future promotion prospects, but any time lost means money lost and, if money is lost, pension entitlement is damaged, so their long-term future is also damaged.

I have had colleagues who have left local government when they should have stayed in it because, when they came to their final year in employment, they could not afford the loss of earnings that would result from staying in local government. It is a sad loss that talented, able people have to leave because of the future problems that serving their community would cause them. If we do not get that right, we will not attract the right people into local government—people who have ability and want to drive things forward. If that is not done right, it will continue to be the people who can find the time who become councillors. I am not saying that those people do not do a good job. They do a good job, but we need to get the situation right in order to attract new blood.

Many people who are councillors have employers who cannot afford to give them time off. It is not the fault of the employer; it is the fault of the system in which we are operating. We need some way of compensating for that. I am not saying that every councillor should be full-time—far from it—but I assure you that not every councillor is part-time. It is either that or I am doing the early shift.

Dr Murray: : I would like to return to pensions. Anil Gupta said that COSLA's position is that the pension should be retrospective. Are you saying that that should be the case for all pensioners who have ever served before, or just for those who are still serving in 2007?

Councillor Watters: : It would have to be for people who are still serving.

Dr Murray: : That means that our mutual colleague who served for 47 years would not benefit, whereas other people who have served shorter periods of time but who happen still to be in office would benefit, so there would still be inequalities. Can you put a figure—even a ballpark figure—on financing the provision of pensions retrospectively rather than commencing with the new regime?

Anil Gupta: : That is the level of detail that the working group would have to go into. It would have to carry out a comprehensive survey of members to find out how long they have been in service. Similar information would also be required if we were to have something approaching a resettlement grant; we would need to know how long elected members had been serving their communities. We cannot give an estimate without the detailed work having taken place.

Jim Mather: : Given the potential severance and pension payments, should steps be taken to avoid an excessive exodus of skilled and experienced councillors from certain local authorities?

Councillor Watters: : That is difficult to manage. It is a bit like local government reorganisation in 1995-96, when we saw a tremendous number of skilled, able people leaving local government because they had the opportunity and the financial ability to do so. We are currently suffering as a result of that, as we have fewer people progressing through councils.

Looking at the present age profile of local government officers, we see that we will hit a real problem with progression planning in about four or five years' time, and we are taking steps now to deal with that. It is difficult to do that for elected members, because they gain experience as time goes on and their ability to deal with committees and issues gets better as they get more experienced. How can we replace that? We need to come up with an extremely good educational programme for people coming into local government, which is another added expense. We probably do not do that at present as well as we should, and we must consider a more intensive programme in future. It would be extremely difficult to say to someone, "No, I'm sorry. You can't retire because we need you." We cannot force people to stand.

Jim Mather: : I understand that, but what you say exposes a backlash against the policy. If the policy is implemented, there is a danger that local authorities could be denuded of really skilled people.

Councillor Watters: : Yes.

Jim Mather: : It strikes me that that could be a self-inflicted wound unless we can do something about it. The private sector has the sanction of saying, "There are only so many people who can take the package and go in this fiscal year." Given that we are talking about a four-year cycle, that could be painful. I am struggling to come up with an answer, as I suspect you are too. Could we face a major diminution in the potency of local government after the policy is implemented?

Councillor Watters: : It would all depend on the number of people who decided to take the package, and that would depend on how attractive the package was. The two things are linked. There is a desire to see new people coming into local government to revitalise it, so people will gain experience as they come through. We need to balance that with the loss of experience of people going out, but it is extremely difficult to say how many that would be, because there are so many variables. There is a desire to see a new, younger element in local government, so that there are vibrant people involved. I came into local government because I had a strong desire to get involved politically. That same strong desire does not exist when people are considering their career prospects and responsibilities. My family were grown up when I entered local government and I did not have a responsibility.

Jim Mather: : If the working group were to strike the right balance between the remuneration of existing working councillors and the severance and pension payments for those who are currently in harness and different terms and conditions for those who will receive a remuneration package, would that make it attractive for people to maintain their connection and keep their skills in action for longer?

Councillor Watters: : If the right balance were struck, yes. We would have to make it less attractive for people to go.

Jim Mather: : I have one further question on remuneration. What changing work pattern would you expect to see in the new, remunerated climate?

Councillor Watters: : After reorganisation, many authorities gave elected members not a contract of employment but a job description, saying how they were to carry out their functions. Much of that was to do with members' relationship with officers and how to deal with them. Some elected members come in and think that they are the elected member and the officer. If that were the case, local government would be a lot cheaper to run, but it is not the case. We are not officers. We have officers because of their specific expertise. I would expect every elected member to have a job description, setting out how they are to carry out their functions and what is expected of them as an elected representative. It would not be right for people to have to accept that before they became elected representatives, because of the voluntary nature of standing, but if people do stand, they have to accept that there are duties and responsibilities. We should expect those to be written down, and people should be expected to carry out the duties in the job description, as a minimum.

Jim Mather: : In a new, better documented, more formal climate, what benefits would accrue to council taxpayers and local government officials?

Councillor Watters: : People would know what is expected of their elected representatives, so they would probably be more willing to demand that of them, although there is no unwillingness at present.

I should say that elected representatives at local government level are no different from elected representatives in the Scottish Parliament or anywhere else. There will be extremely good councillors, dedicated councillors and councillors who carry out their functions adequately. At the other end of the scale, there will be councillors who are just rolling along. With respect, in the Scottish Parliament, too, there will be extremely dedicated and hard-working MSPs, and there will be MSPs who are just rolling along. It is the same in all walks of life, and councillors are no different from people in any other forum in society—there will be extremely good councillors and extremely bad councillors. However, I would expect every councillor to perform a minimum role of representing their electorate in the council chamber. I would expect them to be able to deal with complaints and problems when people come to them and to fight for those whom they have been elected to represent.

The Convener: : I think also that every body of elected representatives has its own Stakhanovite who claims to be doing more than anybody else.

Jeremy Purvis: : The committee will challenge the Executive on the lack of information in the financial memorandum and on the assumptions that are made where information is given. To an extent, the committee has the same problem as we had last week, when COSLA was unable to give us more detailed information on areas on which, in my view, it should have a view.

For example, the witnesses have given evidence to the committee on the pensions system, but that has not been quantified, so we have great difficulty in going back to ministers to challenge them on what the potential could be for that system. The National Association of Councillors has said that it would prefer councillors to have a payment rate of 50 per cent of MSPs' salary, which can be costed, but COSLA has not made such a proposal. Also, I would have thought that COSLA would have information on how the last big change affected local authorities.

I hope that COSLA will be able to provide some of that information in writing. We need more information if we are to challenge ministers on the financial memorandum.

Councillor Watters: : With absolute respect, as you freely admit, the information that is supplied in the bill is extremely sketchy—to the point of being sparse—so it is difficult for us to deal with. Secondary legislation will add the detail, yet you expect local government to do the work. We believe that someone who is passing a bill should know what the effect and the cost of the bill will be.

Jeremy Purvis: : Indeed, Mr Watters—

Councillor Watters: : It is pronounced "waters".

Jeremy Purvis: : Indeed, Mr Watters, those are questions that we will want to ask ministers, but we need help.

Councillor Watters: : I accept that, and we will give you all the help that we can. Do not blame us for inadequacies somewhere else. We are in exactly the same position as you in having vagaries, ifs, buts and maybes to work with. For us to come up with figures and a logical argument for something that we believe is illogical would be impossible.

Jeremy Purvis: : Is it the financial side that is illogical?

Councillor Watters: : The financial side is illogical in the sense that, first, as we have no idea about the level of payment that will be offered to councillors, we cannot quantify what the cost will be. Secondly, we do not know how many people will leave local government, and it is extremely difficult to give a figure for the cost of that, as we do not know all the variables that exist. It is extremely difficult for local government to give the figures. What we know is that costs will increase as a result of the bill and the Executive should bear those because it has introduced the bill.

Jeremy Purvis: : My point is that you have a view on pensions but not on salary.

Councillor Watters: : We are quite clear on salary. We believe that any payment for elected representatives must be linked to what exists at present. No view was taken on MSPs' salary before their election, but it was decided that it would be linked to MPs' salary. We think that councillors' salary should be linked to MSPs' salary in exactly the same way that MSPs' salary was linked to MPs' salary when the Parliament came into being. Initially, the link was not an exact percentage—that was discussed after the Parliament was elected. We believe that the same should happen in respect of councillors' salary. Our salary and severance payment should be linked to the salaries and severance payments of other elected representatives. That is not rocket science; it is what happens at present. The figures have been worked out for MPs, MSPs and MEPs. They are all elected representatives and so are we.

The Convener: : We are going round in circles a wee bit. There is a difference between the evidence that we are hearing this week and what we heard last week. Last week, I thought that the information that we got from the witnesses was not what we had a right to expect in response to a fairly well worked-out financial memorandum. This week, it is probably fair for COSLA to say—as we have said—that the financial memorandum is sketchy. I understand the difficulties that COSLA has in that context.

You have talked about how the job description of a councillor should be linked to existing systems of remuneration with a clear articulation of a councillor's roles and responsibilities. The main change that will take place as a result of the bill will be in the nature of the job that a councillor is expected to do. At present, a councillor in a single-member ward has responsibility for the people who elect him or her. Depending on where the ward is, that may be up to 6,000 voters. The largest wards are in Glasgow, and the numbers vary between local authorities. Inevitably, as we move to a multi-member ward arrangement, the ward size could increase to around 20,000 to 25,000 voters. That is not inconceivable, as the regional wards in the former Strathclyde Regional Council held around 20,000 voters. The nature of the job will change distinctly if a councillor is responsible for all functions and an electorate of 20,000 to 25,000 voters, each of whom can call individually on the councillor's services.

The nature of the job will change with regard to what elected representatives might be required to do and the number of people who will be able to call on their services. Has there been any quantification of that at local government level or consideration of what that might mean for the number of calls that an elected member might receive and how many community meetings a councillor might be expected to attend? From my experience of local government, I know that representing a 6,000-voter ward was very different from representing a 20,000-voter ward, in terms of the number of times a week that I had to be out in the evenings. Wards vary from place to place because of their social composition. Are people being asked to do a manageable job?

Councillor Watters: : I am probably better placed than most to answer that question because, as a regional councillor, I had the biggest electoral ward in the United Kingdom, with an electorate of nearly 25,000 people in Murray/Avondale. In that electoral ward, there were six secondary schools, 17 primary schools, 13 community councils and various other groups, including art groups, all over the place. Did I serve that community well? I served it to the best of my ability and I believe that I was a good councillor. I tried to tackle as many of the problems and to attend as many of the meetings as possible. However, in retrospect, I see that what I did was butterfly. I would attend two community councils a night, and that is not right. I would attend perhaps three meetings in one night, spending half an hour at each of them.

My ward was extremely big and I had to travel from Busby, at one side, to the border of Kilmarnock and Loudoun at the other side. At some point, my ward probably also shared a border with Elaine Murray's constituency. I butterflied on a lot of the issues and that is what would happen in a ward of that size. With three to four elected members in one ward, it would be a silly elected member who thought that he or she could ignore certain parts of the ward. He or she could be assured that his or her colleagues—who might or might not be of the same political persuasion—would not ignore those parts. The level of work would increase tremendously, as councillors would feel that they had to attend everything that had been organised in their ward. If they did so, they would not do anything properly.

The Convener: : I can add to the point that you made about going to three or four meetings a night. I had the same experience when I was an elected member on Strathclyde Regional Council. One attended meetings, not as a party representative, but as the responsible councillor for the area. Much of what one did was to supply people with technical information about how to go about getting grants or to report on what had happened in the council chamber or whatever.

In that context, one was directly accountable. One of the things that interests me about the proposed arrangement is that we could see three or four people coming to meetings, each of whom could have a different party standpoint. Community councils could end up getting a rerun of the political issues in the council chamber, which might not be what they want. Does COSLA have a view on that?

Councillor Watters: : That could certainly be the case. I had six district council colleagues in one ward, not all of whom were of my party persuasion. I had a full range of colleagues: a Conservative colleague in Strathaven; an independent colleague in Busby; a Scottish National Party colleague in East Kilbride; and Labour colleagues, also in East Kilbride. I remember one rip-roaring debate at a community council meeting about the effect that deregulation of buses could have on a rural community. The argument that I made at the time was that deregulation would badly affect the community. Of course, today, it does not have any buses.

John Swinburne: : I see no difficulty whatever in councillors representing the people who elected them. I am a list MSP for Central Scotland. I was elected by 8 per cent of the population right across the board in the region. The Scottish Parliament's system of proportional representation system gave a voice to 8 per cent of people in the Central Scotland region who were disfranchised by the previous system—the people who were voted in before had no particular interest in pensioners.

Councillor Watters: : I understand the argument. However, I have now stood in seven elections and every time I have been elected, I have represented my whole community—not only the people who voted for me but everybody in the community, even the people who did not vote. When people come to see me at a surgery or when I go to community council meetings, I do not question people on whether they voted for another party or even at all. I am elected to represent the whole of my community and not part of it.

The Convener: : Okay. On behalf of the committee, I thank you for your evidence, which has been very useful to us. As we indicated, we will speak to the Executive in due course. I wonder whether we might want to invite the returning officers with an invitation to SOLACE. It would be helpful if you could liaise with them on the additional written information that COSLA is to give us. It might be useful for us to take advice from the returning officers if we can fit an evidence-taking session into our schedule. I suspend the meeting for five minutes.

: Meeting suspended.

: On resuming—


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Scottish Natural Heritage (Relocation of Headquarters) (PE670)

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The Convener: : The next item on the agenda is an update on our reporters' investigation into the Executive's relocation policy. Members will remember that when we accepted the referral of petition PE670, on the relocation of Scottish Natural Heritage, we appointed Fergus Ewing and Elaine Murray to act as reporters on behalf of the committee. As Fergus Ewing is not present today, I am looking to Elaine Murray to give us an update on where we are.

Dr Murray: : I am pleased to be able to give the committee some idea of what we have been doing so far. If members had thought that we had not been doing anything, they will see from the thickness of my relocations file that a fair amount of paperwork has been generated.

We selected a number of civil service and non-departmental public bodies that were relocated either because of a lease break or because a new organisation had come into being and for which a location outside Edinburgh was considered. We wrote to all those organisations to ask for details of the consultation that each of them had with the Executive prior to moving and to find out what information they received on the reasons for relocation and the final location choice. We asked about whether there was provision for staff to provide feedback to management before they had to move and, if so, what feedback was received, how many staff moved and whether any unexpected issues arose out of the relocation, such as the loss of experienced staff. We also wrote to the Executive for its position on those matters.

We received a number of different responses. I am sometimes cynical when the Scottish National Party suggests that we consider countries such as Ireland and Finland but, in this case, Fergus Ewing's suggestion that we consider the Irish experience has proved extremely interesting and valuable. We have managed to get some detail about the different system of relocation that operates in Ireland and it might well be interesting to explore with ministers whether they examined that system and whether they feel that we could learn anything from it.

One of the messages that I am getting from my study of the responses from the various agencies is that there has obviously been a bit of an evolution in the relocation policy during the past four years. Although there seems to have been a development of criteria that have been used to establish a ranking order, there is still a certain lack of transparency about the way in which decisions have been made.

For example, the decision to relocate the Scottish Executive inquiry reporters unit to Falkirk, which seems to have been fairly acceptable to staff, was made because that was the cheapest option. When it was decided that the Scottish Public Pensions Agency would move to Galashiels, which is in Jeremy Purvis's constituency, there was a fair amount of opposition from staff, because Galashiels is further away from Edinburgh, but there was a fairly strong business case for moving to that locality. In that case, the rather curious judgment was made that Rosyth, which was the favoured option, was a suburb of Edinburgh. I am sure that that did not go down well with our colleagues in Fife.

We should explore with ministers what must be the most anomalous relocation case—that of Scottish Natural Heritage. In the initial analysis on transport criteria, Inverness finished joint 24th on the list—I was disappointed that the proposed location in my constituency finished even lower down the list, in spite of our aspirations. The consultants went on to consider the status quo, two locations near Edinburgh, two mid-point locations and a distant location. They assessed the cases for the existing site, a regeneration area in Edinburgh and further sites in West Lothian, Perth, Stirling and Inverness. Inverness was rejected at that point, on the ground of cost, and the consultants suggested that West Lothian, Stirling and Perth were the options to run with. The SNH board favoured a regeneration area in Edinburgh and then either Perth or Stirling. There is a lack of transparency about how the final decision to relocate to Inverness was made, although we must accept that the minister who is currently responsible—Tavish Scott, the Deputy Minister for Finance and Public Services—was not a minister when the decision was made, so it might be difficult for him to reflect on that.

However, it is important that the mechanism under which the decision was made and the reasons behind the decision are made public, particularly given the staff's strength of feeling and the extent of their unhappiness. It is clear that SNH was already a highly devolved organisation with significant branches in many areas of the country. Although staff were consulted on their views, those views were recorded and then, it appears, ignored. It is dangerous if a consultation exercise is performed and it appears that the views of the people who were consulted are ignored.

We should certainly discuss that with ministers and seek to ensure that any future relocation decisions are more transparent. We need to strike the right balance. As well as having criteria, we need to do what the Irish do, which is to identify where we want civil service posts to go, to try to find the best people to go there and, at the same time, to retain sufficient numbers of jobs in the centre to accommodate those staff who do not want to relocate and who genuinely find that difficult.

The Convener: : Thank you for that comprehensive report. Tavish Scott has confirmed that he will attend our meeting on 13 January to be questioned on relocation. It is intended that the reporters will have completed a short report based on their work so far in time for that meeting.

There are two further points to make. If there is more work that SPICe can do that the reporters and clerks would consider helpful in preparing questions, we should feed in issues to the reporters this week so that they can pass them on to SPICe. That would allow us to get most use out of our session on 13 January.

I also emphasise Elaine Murray's final point, which is really about a proactive relocation policy. It is all very well to rake over the coals of past decisions—there is obviously a requirement for us to do that—but I hope that the committee will be constructive in identifying how we might best go about developing a sensible relocation policy. There should be appropriate balance in the way in which we question Tavish Scott, so that the meeting is not purely an interrogation about the way that things have been done in the past. We have to be more proactive than that. I hope that the report from Elaine Murray and Fergus Ewing and the other information will help us to strike the correct balance between a positive engagement and a review of what has been done. I see members nodding that they agree that that should be the thrust of how we proceed.

Jim Mather: : I am keen to factor in the proactivity that you were talking about. Everything that you said sounded absolutely rational and logical. In last week's budget statement Gordon Brown specifically mentioned transferring 20,000 civil-service jobs out of London and the south-east. Those jobs might not go to Edinburgh because of its congestion, but more than 8.6 per cent of them should come to Scotland, with a disproportionate number going to the sparsely populated parts of Scotland. We should do anything that we can to elicit more information on that and take a proactive role in galvanising the loins of the enterprise agencies.

Dr Murray: : We considered the policy in Scotland and Ireland. It might be worth seeking further information on the UK relocation policy.

The Convener: : That would be useful.

Ms Wendy Alexander (Paisley North) (Lab): : On the Irish point, the centrepiece of Charlie McCreevy's most recent budget—in the middle of November—was decentralisation. That is immensely useful in relation to our questioning of Tavish Scott, because it will not be aspirational; we will be able to say, "Here is another small nation close by that has grasped the nettle in the last month." It would be really useful if SPICe, through the reporters, could consider what tangible commitments were made in the November budget in Ireland and the process that the Irish Government will adopt in relation to the same issues that we are considering.

Dr Murray: : A copy of Charlie McCreevy's speech is available.

Ms Alexander: : Great.

The Convener: : That will be useful.

Jim Mather: : I stress the pro-rata nature of the situation. Ireland has a population of 3.6 million or 3.7 million and it is transferring 10,000 jobs, which is a lot.

The Convener: : It would be useful to get a forward projection from the Executive of its anticipated relocations. One of the problems is that the Executive seems to be identifying relocations on an opportunistic basis, rather than on a planned basis. We might want to explore that issue. We might want to ask the Executive to produce a plan on how big it thinks its relocations will be.

John Swinburne: : It might be simpler if the Executive made relocations on a proportional basis: a proportion of people who were willing to go would get relocated and, with natural wastage, over a period of time more and more people would eventually join them. The human impact of dropping the guillotine and moving a whole department is serious.

Dr Murray: : In Ireland there seems to be a mechanism by which people can stay where they are if they find it difficult to move and other people can volunteer to fill their places, although that is more difficult in agencies with specialist staff. We have to consider whether it is necessary to relocate every single agency, irrespective of the impact on staff and the potential loss of those staff. Should we be considering a match, in the way that the Irish do?

John Swinburne: : In this day and age we should be able to do something along those lines more easily.

Jim Mather: : At the moment a trigger point is a change in the lease. A change in the use of technology might also be a trigger. When departments progress to using new technology, people often consider taking early retirement or moving on to avoid the trauma of relocation, which creates an opportunity for younger people to come in. The sparsely populated areas of Scotland are probably exporting more than 80 per cent of their graduates. The chance of going back to one's home territory with a decent job would be attractive to lots of people and it might solve some of the recruitment problems that elements of local government and national Government face.

The Convener: : That does not apply only to sparsely populated areas. I am sure that those of us who represent areas to the west of Glasgow would argue that although those areas are not particularly sparsely populated, they suffer from lack of employment and the export of young upwardly mobile people.

I think that we have formulated how we want to proceed. It looks as though our reporter system is working effectively in getting information. I hope that we can move towards an outcome as quickly as possible, because people want responses to both this issue and the water issue, which are quite sensitive issues. We have grasped the nettle and need to deliver an outcome.

Budget Process

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The Convener: : The third item on the agenda is consideration of a fairly crisp paper from the clerk and the committee's budget adviser on the budget process.

Ms Alexander: : Given that the paper is crisp, I shall try to make my points crisp.

At point 4 in the paper there are five questions. The first is:

"Do members wish to investigate any aspect of the budget prior to the publication of the AER?"

In that three-month period I would like us to consider performance monitoring, which we keep coming back to. We have made great progress in persuading the Executive to try to split the budget into considering performance and new plans. It would be helpful if we could get a bit of understanding of how it intends to carry that out. I really liked the fact that we had witnesses who took a broad perspective and looked across the whole of the budget in the same way that the committee is charged with doing. We should at least maintain that approach and perhaps even augment it next year.

The important question is 4(d), which asks:

"Do members wish to commission research to inform the Spending Review?"

Everybody is aware that it is anticipated that the spending review will be quite tight. We have identified that it is impossible to know what the trends in current and capital spend are north of the border in the past five years in comparison to broad trends south of the border. That is the one issue that could really help us to inform the spending review. We should try to commission work to get a handle on capital spend versus current spend over the past five years, whether our approach is broadly comparable to that south of the border or whether we have drifted away towards too much current spend just because in the first year of devolution everybody wanted sweeties for all.

Question 4(e) is:

"Should the Committee be asking the Subject Committees to appraise key trends and issues within their functional responsibilities prior to the Spending Review?

That comes back to the other big issue that we identified: we should tell subject committees that they should be asking for long-term trend data in their portfolio areas. We know that that information is not available but, sod it, we have been asking for it for six months. It is not for us to do the Executive's job; it has to provide like-for-like data, subject by subject over 10 years. We should push things along by making it clear to committees that we have hitherto failed to come up with 10-year-trend data in the areas that they look after and we really feel that if they want to steward their own budget areas appropriately, they should be asking for the information.

I agree whole-heartedly with points 5 and 6, which suggest that we should have a conference on what we should cover.

The Convener: : I have two or three points to make. I presume that members are agreeable to having a conference. Work has been going on to set that in train, so it would be fine if we could get that agreed.

The issue of subject committees is one that we have to handle a wee bit carefully. There is a sense building up in the subject committees that the Finance Committee might be pulling them too hard in directions that they might not want to devote their time to. Although, in principle, it is a good idea that each subject committee should appraise the key trends and issues in its functional responsibilities prior to the spending review, I suspect, based on past evidence, that we will get a somewhat chequered response from various subject committees. Before we issue instructions to subject committees, we have to be a bit clearer about the direction that we are going in to ensure that the parameters of the spending review can be a bit more clearly established. That might be the point at which we engage the subject committees a bit more strategically. To be blunt, there might be areas in which, if the subject committee is willing, we will have to do the work rather than the subject committee. I am suggesting that we take more of a mix-and-match approach rather than a directive approach.

We should consider value-for-money studies on a cross-cutting basis. The Executive is likely to carry those out if it follows Westminster's pattern. If that work is on-going, it might provide a mechanism that we would want to engage in and, perhaps, influence. For example, some of the issues that have been raised about data, benchmarking and so on are relevant in that regard. We should link in with that process and seek to shape it as best we can.

Dr Murray: : Like Wendy Alexander, I have put a big tick beside paragraph 4(d). The spending review decisions are as important, if not more important, than the annual budget. It would be helpful to have a better handle on how those decisions are made. In past years, such decisions have been to do with how additional money will be allocated and which projects will win. However, as Wendy said, at some point we might find ourselves in a situation in which the sunsetting of certain projects is being considered. In such a situation, it would be useful if the committee had more information on how the decisions are made, what it is most desirable to promote and what each department feels that it can do without if times get tough.

Like the convener, I felt that the process of appraising key trends might be more part of our job rather than the subject committees' job. I do not know whether the subject committees are as committed to that process as we are. Given the short time scale involved, I would not want to be too critical of the committees, but the responses that we received were varied. Some people had answered the questions that we asked and some had not. Possibly, that reflects the priorities of the committees and the way in which they handle their portfolios. We might have to push the process further ourselves.

I also concur with the convener's suggestion on value-for-money studies. That is the mechanism by which it might be possible to release money from some budget areas to ensure that areas that the Executive has identified as priorities are funded.

The Convener: : Ensuring that money is spent better is one of our objectives.

Jeremy Purvis: : On the performance assessments, if we have only a half-day conference we will be giving ourselves quite a heavy schedule. It is a detailed piece of work and I am sure that even simply examining the performance assessments in the area of health could take a substantial amount of our time. We got a snapshot of that this morning, when we were talking to our witnesses. We should give that some more thought, especially as regards the relationship between the Executive and local authorities.

On paragraph 4(b), I think that, by and large, the range of witnesses that we have had has been good. However, I would prefer that we were able to take more evidence from those who are at the coalface rather than take evidence from their representatives. That is a lot harder to organise, of course, and might mean that we have to go to speak to people at a local level. For example, we could go to a social work department or a general practitioner's practice. In effect, those people are the budget holders and make decisions at a level that directly affects people. In relation to the filter-down effect of the budget, I think that that approach would be helpful.

Jim Mather: : All the points in paragraph 4 of this tight and succinct paper are good questions to ask and all relate to the points that are made in paragraph 5. It reinforces the great Peter Drucker quote:

"If you can't measure it, you can't manage it".

The greater grasp we have of data, the better. In relation to the 10-year time line, the clarity and completeness of data are utterly crucial. That will allow us to link the data to outcome trends and trajectory.

Regarding the range of witnesses, it is possible for this committee to bring in witnesses who might put more pressure on the Executive to produce the 10-year data. If we had John Curtice, Alf Young and Bill Jamieson before us, we would get the attention from the media and the Scottish Executive that this committee deserves.

Professor Arthur Midwinter (Adviser): : I am conscious of the point that has been made about the dangers of turf wars between the Finance Committee and the subject committees, but I would like to take some time to respond to the points that have been made.

Wendy Alexander's suggestion relating to capital trends is a good one and would be manageable within the timetable. It would be helpful to get a steer as to whether the committee wants to go ahead with that.

The Convener: : I see that members are nodding.

Professor Midwinter: : That is fine.

I suspect that we could deal in our conference with the issue of how decisions are made by the Executive. Are members looking for research on how those decisions are made?

Dr Murray: : I would like the Executive to explain the process.

Professor Midwinter: : I get access to the papers that the Executive sends out to the departments on the information that it is seeking. I do not think that we should commission a research paper on that.

Dr Murray: : No, but I think that we should ask the Executive directly how such decisions have been taken and how decisions would be taken in relation to any cuts that might have to be made.

Professor Midwinter: : On the targets and performance assessment and monitoring, there are about 20 strategic targets that I would regard as the province of this committee and there are about 100 other targets, some of which are relevant only to individual subject committees. I would like this committee to examine those 20 targets. We do not need to do any further work on that and an in-house paper could be produced for the committee to consider before the spending review process starts.

From the discussions that we have had with the Executive, we can be sure that the Executive will produce information about performance against those targets for March. In advance of that, it would be useful to have a conceptual discussion about whether those are the right targets for what we are trying to measure. Is the committee happy with that?

The Convener: : I sense general agreement.

Professor Midwinter: : For the past two years, SPICe papers have been produced for each committee on the background trends of the most recent two to three years in the relevant budget areas. I do not think that committees can play their proper role in the budget process if they do not have some sort of steer as to what has happened in recent years.

I realise that this committee would have to take a view on whether the committees should be formally asked to do that work. However, there is no point asking them in April; if we are going to ask the committees to do something, we should ask them soon. Perhaps Ross Burnside will say something about the SPICe view on the matter. Some thought that we had given the committees a heavy task, but most of them produced papers at the start of the past two budget processes that showed trends from recent years. However, they did not go back as far as the committee would have liked.

Ross Burnside (Scottish Parliament Information Centre): : It is definitely possible from our point of view. Some of the clerks have budget advisers to assist with the task. The issue is whether we want to ask for 10 or five years' worth of data because, as the committee is aware, we do not have that.

Professor Midwinter: : The message is that, technically, it would be possible without any great effort for us to produce some data about changing shares of the budget.

Ms Alexander: : I seek the committee's advice on what seems to be a fundamental principle. It is not our job to come up with how much the Executive spends. The committee's view, which is reflected in the budget report, is that it is a dereliction of duty for the Executive not to tell the Scottish people how much it has spent in each of its major subject areas over a reasonable time horizon, since the arrival of the Parliament.

Although it is nice for SPICe to help out, the centrepiece of our budget document is the fact that we are coming up to a tight spending review, five years into the Parliament. We know that we have tough choices to make and we want the Executive to produce data, as every other country does, on how much it spends in real terms in different areas. That is the responsibility of the Executive; it is not the responsibility of SPICe. In that sense, we are saying to the committees that we hope that they will have the data available.

We have failed so far to convince the Executive that this is an important part of an open and transparent budget process. The Executive must be made aware of that. The reason why the Executive is floundering around, as did all the people who came to speak to us at Lanark, is that it does not have the data in an accessible form. I foresee us writing to the subject committees on the matter as a way of ensuring that we will not be the only committee that says, "This information would be helpful." Whatever information SPICe provides is extra, but as part of our trying to restructure the process, tomorrow's debate will allow us to say that we think the information would be helpful, particularly in the run-up to the fourth and tightest spending review that we have faced during the past eight years.

The Convener: : We need to explain what the Finance Committee is doing—the framework that we are trying to put in place and the way in which we are going about that. We must then try to empower the committees, not just in the framework, but with the information that they are likely to have. We must not set the committees impossible tasks, because that will turn people off. We need to get guidance to the committees that they see as meaningful, so that they can make a difference and influence the decision-making process in their area and, potentially through this committee, across other areas. That is what we are trying to achieve. I do not have a problem with what Wendy Alexander suggests as part of the background, but we must also get SPICe to give the committees what it can.

Professor Midwinter: : That is fine. So you will send a message and I will carry on with SPICe to give the committees an independent steer on recent trends.

Dr Murray: : I back up what Wendy Alexander said. Her point is the same as the point about wanting to know how the Executive arrives at decisions on the projects that it will prioritise or those that it will sunset. To scrutinise the work of the Executive, the Finance Committee needs to know what money is being spent over a certain period and how decisions are taken against that background, in terms of either promoting certain areas or sacrificing certain areas if times get hard. It is not just a matter of research; we have the right to ask the Executive for that information so that we can scrutinise its decisions. We require a direct dialogue with the Executive. However, if the subject committees can help us, we should elicit their help.

The Convener: : That is right. We have to take up the leadership role, but we also have to involve the committees and empower them to contribute to the process.

Professor Midwinter: : Ross Burnside and I are close to completing a paper that links spending with outputs since 1999 only—that is the period for which Executive data is in the public domain. We have consistent spending data that we will get to the committee in the new year.

We should not overlook the time series data in "Government Expenditure and Revenue in Scotland 2001-2002", which are fascinating this year, because they go back to 1997. The report provides outturn data on spending instead of estimates. I would like to write a supplementary note on that for the committee, because although the report includes UK as well as Scottish Executive spending, it shows big changes in priorities. There has been significant change over the five-year period.

The Convener: : That would be helpful.

Ms Alexander: : I seek clarification from the convener, the clerks or Professor Midwinter. Usually, when a committee produces a report, the Executive is obliged to respond in eight weeks. How will the Executive respond to our budget report and in what time scale? There is no point in our standing up in the debate tomorrow and accusing the Executive of not responding, if we are still to find out the mechanism by which it will respond to our recommendations. How pessimistic or optimistic are you? The answer to that question might influence what a number of members say in the debate tomorrow.

Susan Duffy (Clerk): : As far as we are aware, the Executive will respond to our report in its entirety within the eight weeks as set down. It is anticipated that we will get a co-ordinated response, but if there are any issues in subject committee reports that are specifically for the subject minister, the Executive will respond separately on those matters.

Ms Alexander: : When other committees have a debate in the chamber, the debate usually takes place after the committee has taken receipt of the Executive response. We are in an awkward position tomorrow, in that we are obliged to debate a report in Parliament before we have the Executive response. I understand why the situation has arisen, but have I understood the procedure?

Susan Duffy: : That can be the case, depending on when the committee asks to have committee time in the chamber for a debate. Sometimes a response has been received from the Executive, but it depends on when the committee has asked for time in the chamber.

The Convener: : Tomorrow's debate is on our report and I anticipate that when members of this committee speak, they will act as advocates of the particular elements of the report that excite them the most. However, I am sure that there will be a party dimension to the speeches.

There will be a further debate on the budget at stage 3 in February, as has been the case in the past. I presume that the final debate on the budget will be after we have received the formal response from the Executive, so tomorrow is not our only day in court; we will have a further day.

Professor Midwinter: : The fact that the Executive will provide a single, co-ordinated response this year is progress on last year, when we did not get the response in time. We had to ask for the response and it was not produced in a corporate way. Some decisions that were left for the spending review had been taken, but we had no record of the outcomes. I regard as good progress the message that we have had this week from Executive officials that they will produce a single, definitive response to the recommendations in our report and that ministers will deal directly with subject committee issues only.

Ms Alexander: : Thank you.

Professor Midwinter: : Before we finish, I have a question about the conference. Are members thinking of a conference or a round-table meeting? A conference is a major event with 100 or 200 people, whereas at a round-table meeting, one could get more input from a range of experts rather than have a grand audience. I am not sure from previous discussions at whom the conference is aimed.

Ms Alexander: : I was going to suggest that we left it until April, because March is a bit tight. There would be merit in having the conference in the three months following the annual expenditure review. I think that the terms of the debate depend on whether the Executive accepts our report. As soon as we take receipt of the Executive's response to our budget paper, I would like the committee to have a discussion. If the Executive accepts our recommendations, that will be great progress and we can cheerlead the conference. If the Executive does not accept any of the report, however, we might need more work to put the pressure on. I propose that we think about lagging the conference a wee bit and that we revisit the matter when we take receipt of the response and see whether the Executive has bought the argument that Peter Wood and Donald MacRae put forward.

The Convener: : Are members happy to adjust the format and timing of the conference according to the Executive's response, as Wendy Alexander suggested? Would that be a problem from the clerks' point of view?

Susan Duffy: : If the committee wanted to have a major conference, we would have to consider the logistics in terms of timetabling and the time that it would take to organise such a conference.

The Convener: : If there were costs associated with holding such a conference, I presume that we would have to submit a bid to the Conveners Group. We could do that at the group's January meeting in a way that would allow us to adjust the conference format according to the circumstances, as Wendy suggested. Another possibility would be having a morning conference and an afternoon round table; a combined mechanism might be appropriate. We should leave ourselves enough scope to allow for the various possibilities.

Professor Midwinter: : A final point for clarification is Jim Mather's point about the range of witnesses. We need a steer on that. John Curtice is an election specialist rather than a budget specialist, so he is not an appropriate witness for our purposes. We have tried to get Alf Young involved, but he said that he might have to comment on the budget, so there would be a conflict of interest for him if he were to contribute to our discussions. I ask members to give some thought to whom the witnesses might be. It would be helpful to get a steer so that we do not come up with a list with which members will not be happy. It would be helpful to have a list of names and time to contact them.

The Convener: : There is also an issue about themes. Alf Young talked in his column in The Herald—last Thursday, I think—about how we spend money, which is an important set of issues for the Finance Committee. It might be useful to have him as a witness to talk specifically about the issues that he raised.

Ms Alexander: : Can the clerks circulate copies of that article, as I did not read The Herald last week?

Susan Duffy: : Yes.

Jeremy Purvis: : I still have a concern that we will see a larger proportion of witnesses who are what we would term experts in their field. I am not decrying our using such experts, because they contribute hugely to the committee's work and they prepare us very well. However, I believe that there should also be an opportunity—which would be quite novel—for some members of the Finance Committee to get involved at the local level with which our constituents deal and which is the end result of the budget process. Many of our constituents' experiences will be of not having the services delivered that we all want delivered. Rather than focus too much at the top end, perhaps committee reporters or others should get out and about in local authority areas. I believe that that would be valuable.

Professor Midwinter: : We need guidance from the convener on that issue. When Jeremy Purvis made his point, I wrote down, "The private world of academia—topocrats and technocrats". We tend to get at committee meetings what I call topocrats—the chief executives and the directors of finance. The technocrats, such as the social work director who was referred to, tend to go to the appropriate subject committee. I have a reservation about Jeremy's point, because I feel that we might be crossing into turf-war territory. We must be careful not to be seen to be giving an "in" to particular lobby groups or interest associations. If members wanted to invite witnesses from social work, they would have to invite witnesses from housing, education and other areas to ensure that the committee was perceived as equitable. However, chief executives and directors of finance are regarded as having a grander overview, which is in line with the Finance Committee's role.

The Convener: : Could we reflect on that as we go forward?

Professor Midwinter: : Yes.

The Convener: : Perhaps the process for our detailed scrutiny does not need to be hard and fast at this point. However, we need to establish the broad parameters.

Are members reasonably clear about that? The different strands that members have raised will be recorded in the Official Report. The clerks will try to gather the strands and turn them into a series of decisions or steps that we would want to take forward. We can circulate the result round the committee with the message that this is what seems to have come out of our discussion. I believe that there is consensus in the committee on how we want to go forward. If members and Arthur Midwinter are happy with the direction in which we are going, that is fine.

We now go into private session for the final agenda item.

: Meeting continued in private until 12.30.