Culture, Tourism, Europe and External Affairs Committee

Meeting date: Thursday, November 1, 2018

Official Report 795KB pdf

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Creative Scotland

Our second item of business is an evidence session with Creative Scotland. I welcome Robert Wilson, the chair of Creative Scotland, and Iain Munro, the acting chief executive of Creative Scotland. Thank you for joining us.

I invite Mr Wilson to make a short opening statement.

Thank you convener, and I thank the committee for inviting us to give evidence and for the opportunity to make some opening remarks.

The committee will have seen our written submission, which provides up-to-date information on a range of topics that have been of interest to the committee during the past year. I hope that the committee found it useful. Iain Munro and I will be happy to answer questions on any of the topics, or on anything else that you would like to talk about during the meeting.

As you know, this has been a challenging year for Creative Scotland, although a great deal has also been achieved. I joined the organisation as chair in February this year. Following the departure of the previous chief executive in July, we appointed Iain Munro as acting chief executive. I would like to recognise everything that he has done in recent months.

Everyone at Creative Scotland is committed to rebuilding trust and confidence in our organisation. We are all working hard to do that, while continuing to deliver with care effective on-going support for the arts, screen and creative industries in Scotland.

We have instigated and delivered some major pieces of work during the past few months that will help us to achieve that. In July, we commissioned an independent evaluation of the previous round of regular funding, the recommendations of which are included in our written submission to the committee. Along with all the other feedback that we received, that will feed into our broader review of our approach to funding. We aim to achieve that next year. We will involve the voices of the people and the organisations that we are here to support.

I have instigated, along with the board and Iain Munro, a process of organisational development, looking at our structures, our processes, our values and our behaviours. We are working with a Dundee-based company called Open Change to help us with that process.

Significantly, in August, we formally launched screen Scotland, the dedicated partnership initiative that will deliver a true step change for screen support in this country, supported by a £20 million budget from the Scottish Government and the National Lottery.

Alongside that, as the newly appointed chair, I have been overwhelmingly impressed by the dedication, expertise, commitment and sheer hard work of our staff in their support for the arts, screen and creative industries every day. In 2017-18, we made more than 1,000 awards, worth a total of £70 million, to artists, creative organisations and projects across Scotland.

All that makes a positive and continued difference to people’s lives in Scotland, and I would like to take this opportunity to thank everyone whose work continues to drive the extraordinary cultural landscape that is Scotland.

I look forward to the discussion.

Thank you, Mr Wilson. I am keen to get a little more detail about your organisational review. Why did you decide to embark on it?

As I said, Creative Scotland has come through a challenging time. When I came in, it was clear that we needed to instigate some fundamental changes. It is an extremely impressive organisation, but there are clearly aspects of it that need to be improved. From what I have seen in organisations in the past, I think that this is a perfect time to examine the organisation to see where the strengths and weaknesses are and to determine how we can improve it and move on in a much stronger way.

Which independent consultant has been appointed to support the organisational review?

It is a Dundee-based company called Open Change. It has a strong track record and works closely with Historic Environment Scotland. We went through a rigorous procurement process and were impressed with the approach that Open Change will take. It will be working with us over the next six months.

You state in your submission of 31 August that you are also reviewing the open project funding. Is the same company involved in that?

That is a separate review. Iain Munro can talk about that.

We are making some internal refinements to the existing funding processes, particularly with regard to the open project fund and the small-scale grants—those under £15,000. That is different from the bigger and fuller funding review that we are planning for all our routes to funding, which will take place over the next few months. That will variously involve not only the staff but the applicant organisations and the sector representatives, who will have a chance to feed into the review and explain their expectations and needs so that we can finalise what a funding model that will be more effective for the future will look like.

That would be a review of both your regular funding and your open project funding—that is, all your funding streams. Does that mean that, potentially, you could change the whole structure of your funding as a result of your review?

We are taking stock of all our routes to funding—regular funding, open project funding and targeted funding, which relates to time-limited strategic funds. It is really important that we understand what the most effective balance of those three types of funding is, as well as the detail of how the processes work.

How do you intend to consult stakeholders in relation to the overall funding review and the organisational review?

We are planning to take a five-step approach to the funding review, which is complementary to the organisational development process. The sector has told us innumerable times that it feels consulted out, so we are first taking stock of all the available information, including the evidence that has been given to the committee in its Creative Scotland regular funding inquiry. We will use the Wavehill evaluation report, which is the independent evaluation of the regular funding process this year, as well as horizon scanning to look at international examples of different funding models. We will assimilate all that information and reflect on it, then we will take the information out for consultation and conversation with the sector in a variety of ways, including through an online process and through group sessions that we are planning for the early part of next year.

That process will give us all the opportunity to understand not only the needs, but what the best models might be. Thereafter, we will refine what we have heard, propose some models and test them with representatives of staff in the sector, before we finalise the model and look towards the implementation period.

We understand that the work is quite broad in its scope, so there will need to be some form of transition between one model and the next. We will need to handle that transition very carefully, and we are sensitive to ensuring that we have a continuous offer that works for people in the sector, while we move to a different, more effective model.

We anticipate that we will still have an overall mix of regular funding, project-based funding and strategically targeted funding, in some way, shape or form. However, as I said earlier, there needs to be a balance across those three areas and an understanding of the dynamic and their complementarity. We will take stock of that, as well as look at the detailed processes.

Your submission says that you have spoken to Arts Council England and, I think, the Arts Council of Wales. Have you looked at different models further afield?

The initial scoping work will examine international models. We want to have further conversations with Arts Council England and the Arts Council of Wales, and if there is anything of significant international interest we will, of course, want to have those conservations, too.

Will all that work be wrapped up in a report that will then go out for consultation?

I cannot be absolutely sure of the form that the work will take yet, but there will be some form of documentation that we will be able to use to have conversations with people in a transparent way. It is fundamental that we are able to explain the steps of the journey that we are going on, and that we afford people the opportunity to have the conversation about what is best.

You will be aware that one of the sector’s strong arguments that came out of the committee’s scrutiny was that sectoral organisations are competing with artists for funding. Over and above that, there is a frustration among artists that the current funding system does not leave them as many opportunities as there were with the old system under the Scottish Arts Council, which gave smaller grants to artists. Are you giving that issue a lot of attention in your current work?

We absolutely will be doing so. That relates to my point about the balance of the funding routes and how they work most effectively.

The point about the sector development organisations is absolutely understood. It is worth recognising that sector development organisations were included when we ran the first regular funding process for the 2015 to 2018 portfolio. In decision making, we recognised the tension, which has been described again, between organisations that produce and present work and organisations that relate to sector development in its broadest sense. However, we should recognise that several organisations in the network do both those types of work. In that first round, when everybody was included, we separated out the sector development organisations in the network. However, the numbers are almost identical. We had 123 organisations in the 2015 to 2018 period, which comprised 118 regularly funded organisations and five sector development organisations, to a value of £102 million. This time, we have 121 organisations to the value of £102 million. The numbers are almost identical, but I accept the point about the tension that is in the nature of a competitive process, and the dynamic of that.

10:15  

I am trying to get at a more fundamental point, which we hear time and again in relation to public money. A lot of public money is going to support arts administrators and management, whereas the artists are left to struggle from one small grant to the next, scrabbling around wherever they can. Do you agree that that is the fundamental challenge?

Yes, I absolutely recognise that. I will make two points. One is that most people would recognise the value of sector development organisations overall, but there is that tension with the creators, producers and presenters of the work. Part of the reason why we are currently focused on refinement of the under £15,000 open project fund is to ensure that we are targeting support for individual artists through that single mechanism. We made an announcement yesterday about the latest round of open project funding and there are awards of nearly £1 million in 44 individual grants, the majority of which are to individual artists. It is still a strong component of what we are able to offer.

Also, we should not overlook the fact that funding for regularly funded organisations or through other targeted funds offers opportunities for individual artists to be employed and to produce their work. Our latest statistics from 2016-17 demonstrate that there are something like 4,500 individual artist employment opportunities in the 121 regularly funded organisations that were funded in that period.

You obviously accept that there is discontent and that you need to do more.

Yes.

A number of reviews are on-going, and the committee was prompted earlier this year to undertake an inquiry after concerns were expressed to us about the regular funding decisions. This morning, you have described a number of the reviews that you are undertaking.

Iain Munro is the acting chief executive; is there a timescale for, or have decisions been made about, the appointment of a chief executive? Are you comfortable about continuing your in-depth inquiries without a permanent chief executive in post?

The organisational change review is the bit that I am very much championing. As I said, there is a time in an organisation at which that type of review is crucial. We felt, having discussed it with the board, that we needed to push on with that review. The recruitment process for a new chief executive will probably take six to nine months, and the new person would then have to get their feet fully under the desk.

The board has a lot of confidence in the ability of the acting chief executive to drive this change, but I also set up a small subcommittee of four members of the board to drive the change agenda. It is a deep and far-reaching review that will also have a strong external focus. Part of the reason why Open Change was selected was that it has worked very strongly with external stakeholders to cast a light into our organisation. There was very much a sense that we had to keep the momentum for change moving forward.

It is probably too early for you to comment on the organisational review and the role of Open Change. I am assuming that the organisational review will consider the role of the chief executive and whether there have been any concerns about that—not the individual, but the role. Also, will the statutory status of Creative Scotland be considered by the organisational review?

We have just started the process of the organisational review. Open Change was appointed in October. At this stage, it is too early to describe the full extent of the review, but rest assured that it is seen as an important priority that the strengths of the organisation are clearly enunciated and that, where there have been weaknesses in the past, we try to resolve those and find a way of moving forward as a much more fit and able organisation.

You might argue that the Wavehill review of the 2018 to 2021 funding was not a response to our inquiry, although the timing matched with our inquiry. When is that review due to be concluded? The committee received a number of papers from Creative Scotland that quote the Wavehill review, but we do not have a finalised copy. What is the status of the review?

It is not available yet. In the previous RFO process, we commissioned a similar piece of work. We recognise the significance, importance and value of such work. We commissioned the review in July, with quite an ambitious timescale—it was a seven-week turnaround. It involved consultation with staff and the leadership of the organisation, including the board, as well as with all the individual applicant organisations. On this occasion, 105 of the 184 applicant organisations responded. Some of that was followed up in detailed conversations between the consultants and the individual applicant organisations.

When we got into it, we observed that there was an opportunity to get even greater value from that work. As I said, the context and the value of the work was the ability for it to play powerfully into the reviews that we planned to undertake, including the wider funding review that I spoke about. We therefore extended the process with the independent evaluators to give them the opportunity to look even more extensively at the material and the analysis. That stretched into September, and the report was concluded in mid-October.

That is where the recommendations and evidence that we have shared with you come from. However, because we are very sensitive to the fact that it is an important piece of work that covers testing and challenging ground for the organisation—it is a bruising experience, including for staff—we are supporting the staff to take time to understand the report, the issues that it discusses and the recommendations and to get people comfortable with it before we share it in due course. I anticipate that we will be able to share it in the next few weeks.

A number of reviews are on-going. You said that you have recently announced open funding awards. Do you expect the on-going reviews to have any impact on upcoming awards? Are stakeholders clear about the current awards that are available and that they might change, or what the timescales for any changes might be?

We know that we have some communication to do, internally as well as externally, about how the reviews are dovetailing, and we will move forward with that. It is possible to know some of the next steps only once we have gone through a stage, so on-going communication will be important. In the meantime, it is important for people to know and understand that business delivery is on-going and that the opportunities for people to access development and funding support will continue. We will not disrupt the current offer of the three routes to funding. We will continue to deliver those three routes as planned and communicated but, as we move forward to the prospect of new models and, in due course, the actual new models, we will be clear about how we are going to navigate that and we will communicate that clearly so that people can understand how they can access support and what is coming next.

I am sure that you recognise how important that is. One issue that we had over the summer was about the way in which the touring fund was announced, as some people were not aware of the changes and it was announced at the same time as the regular funding. There was confusion around that, so it is important to make things much clearer to people where changes are expected.

Yes. We recognise that a different approach would have been better with the touring fund. However, because we have engaged with the theatre and dance sector and with the Federation of Scottish Theatre proactively and collaboratively, they have helped to shape the touring fund as it was launched in August this year.

That will continue, because we are recruiting independent sector representatives to be part of the panel that makes decisions on those awards. The deadline for applications is next week, and some applications have already come through. That process will continue. In the published guidance, we have committed to reflecting on the experience of that for future iterations of the touring fund and to be informed by the sector in making any necessary adjustments. The sector has had direct input in a helpful way, and I think that that model is a helpful one.

You have talked about funding a great deal. For example, you have mentioned the balance of funding. On page 8 of your submission, there is a table that sets out the distribution of regular, open project and targeted funding by local authority area. I notice that the area that I represent—North Ayrshire—received grants of just over £192,000 in 2016-17, which was only 1 per cent of the £19 million that Glasgow got. Glasgow has four times the population of North Ayrshire, but it gets 100 times the amount of grant. The two largest cities in Scotland, Edinburgh and Glasgow, get 60 per cent of the number of grants and 60 per cent of the total funding—they get more than £40 million out of a total of £66 million.

What will Creative Scotland do to encourage more applications from organisations and groups outwith the big cities to ensure that there is a much more even distribution of funding and to support and stimulate arts groups and individuals in those areas? I think that a disproportionate number of grants will always be awarded to Edinburgh and Glasgow for obvious reasons—they are magnets for people of an artistic bent—but it seems shockingly disproportionate that Glasgow gets 25 times the per capita grant award of North Ayrshire. North Ayrshire is not the only area that is affected—areas such as West Dunbartonshire, Clackmannanshire and Falkirk also seem to have very low levels of applications and awards. What can be done to rebalance that?

I can understand that perspective. We are absolutely committed to ensuring that we can support activity and work by individuals and organisations the length and breadth of Scotland.

I will come to the specifics of that shortly, but as far as the wider context is concerned, there is quite a complex dynamic in place. The work of the regularly funded organisations is captured in terms of the geographic base location of those organisations, but 74 per cent of the 121 of those organisations that we will support in the next three-year period do work that covers the entire geography of Scotland. Therefore, there is a distinction between where they are geographically based—which is important—and where the work and the activity take place.

We also work on national programmes such as the youth music initiative, in which nearly 250,000 schoolchildren and young people from across all 32 local authorities have been involved in the most recent year.

To get to the heart of your question, in addressing what the data and the statistics tell us, one of the most important interventions that we have undertaken in recent years is place partnerships, which involve working hand in hand with local partners and the sector in the local area to build capacity and confidence, to understand what the aspirations and ambitions are, and to look at how we can work together to support that in some way. Place partnerships are not really about project funding, although some of that does take place; they are about understanding from a strategic point of view what big shifts could take place in a local area that will help to build confidence and capacity and deliver the ambition.

We co-invest with local partners in the area over a number of years. The approach to that programme that we took in earlier years is changing in favour of understanding where there is an opportunity to step in to work effectively in an area of lower spend. Previously, we looked at areas in which there was a willingness and a positive opportunity.

We are keen to build our own geographical presence as part of that equation in terms of how we operate across the geography Scotland. Our staff are out and about for a variety of reasons across Scotland, but I think that we can do more of that. We will reflect on that as part of the reviews that we will be undertaking.

10:30  

A lot of the areas that are not getting a lot of funding are fairly deprived, so additional funding will be particularly important to them. In five years from now, will we see a significant difference in the figures?

Yes—absolutely. It is already evident. We have 14 live place partnerships across Scotland and there are more to come. The newest one is in Angus.

Will they cover the whole country?

Eventually, they will cover the whole country. We have done 16 so far: two have completed and, of the 14 that are live, two are about to complete. We will continue to build on that. Eventually, we will have covered the whole of the geography of Scotland. I am absolutely confident that the picture will improve.

In the committee’s inquiry into regular funding, it has been pointed out that the place partnerships, which have been in place for some time, were supposed to build capacity in different parts of Scotland so that regular funding would go to organisations in those parts of Scotland. However, that did not happen in the last round. I am pleased to hear you say that you believe that it will happen in the future.

Yes—we are committed to ensuring that we afford every opportunity. In whatever form regular funding takes in the future, that will be reflected on as part of the process.

When you have £2 million for the Fruitmarket Gallery in Edinburgh and nothing in Ayrshire, that is a problem, is it not?

Only if you look at it through that one lens of a singular route to funding. However, I accept the point that of course there is much more to be done to ensure that we see funding and investment across the whole of Scotland.

I have two brief requests for reassurance. The first is around the issues that we had with factual inaccuracies in the 2018 to 2021 regular funding period. In the last evidence session that we had on this issue, when I asked Ben Thomson, who was the interim chair of Creative Scotland, a question on that, he said:

“The board was unaware of any factual inaccuracies.”—[Official Report, Culture, Tourism, Europe and External Relations Committee, 22 February 2018; c 13.]

I have since been informed by Fire Exit that that was not the case; individual board members were emailed and otherwise informed about factual inaccuracies. I am not asking you to respond to Mr Thomson’s statement. I am asking for reassurance that the issues with factual inaccuracies and the issue of organisations feeling that they were unable to have those inaccuracies addressed are being taken into consideration in your current process.

I can give you that assurance. We take the feedback seriously and some of the issue is reflected in the Wavehill RFO evaluation. Just to be absolutely clear—we put this in our written evidence at the end of August—that exchange in the previous committee evidence session was at a certain moment in time. Subsequently, we have had eight formal complaint process investigations that have looked at all the detail. In two instances, we found that there were matters of significance within the complaints, which we have communicated fully back to the complaining organisations.

We have not had any direct follow-up or challenge in response to that, but in all those instances of complaint, those organisations were recommended for support anyway. However, we accept that it is really important that the quality of the work that we do is transparent and accountable and can be explained to people so that they have full trust and confidence in the processes that we run, although they might not always agree with the outcome and the decision.

That is reassuring. I will pick up on one thing that you mentioned there—that the organisations that raised those issues did in the end receive funding. Fire Exit also mentioned that, three years earlier, in the previous round, it raised concerns about factual inaccuracies and was told, in essence, not to worry because it was getting its funding. That is not a good reason to cease worrying about factual inaccuracies in the reports. I am sure that, in the end, Fire Exit and others were delighted to receive their funding, but that does not resolve the issues of stress, anxiety and everything that went with the process. It needs to be addressed.

The second point on which I want reassurance is about the review’s recommendations for the five stages of the regular funding process, one of which said:

“Future guidance documentation for applicants should consider outlining expectations of what constitutes acceptable conduct following any announcement of funding awards.”

Given the negative public statements that were made by a number of applicants off the back of the previous process, I want your reassurance that the purpose of that recommendation is not to restrict applicants’ ability to conduct discourse in the public realm if they feel that that is necessary.

We would, of course, never inhibit that. We are on a journey towards greater trust and confidence in the work that we do and a greater sense of transparency and accountability so that it can stand up to scrutiny. As a public organisation, that must be at the heart of our work. I give you assurance on that.

It is an independent evaluation and I want to be clear that those are the independent findings and recommendations from the analysis work that Wavehill undertook.

It is important to record that it has been a time of anxiety, frustration and anger—I see, hear and understand that. It is also worth recognising that it has been a bruising experience for the staff of Creative Scotland, who, as you heard earlier from Robert Wilson, are committed to what they do, and do it with diligence and care.

We have had instances of what I would consider to be unacceptable behaviour for anybody in any form of public life, which has strayed into individual staff members of Creative Scotland being abused in an open and public environment—not even in a closed setting, which in itself would be a problem.

We have a set of standards for the way in which we operate and we want to ensure that that is reciprocated by the sector in terms of trust, confidence and mutual respect. Although we might not always agree, the business of Creative Scotland is delivered by people. Discussion, debate and dialogue—and, sometimes, disagreement—is at the heart of it, and it is built on people and relationships. I want to make sure that we have mutually respectful relationships.

The recommendations in relation to protecting Creative Scotland staff during future processes are particularly welcome, and the committee is interested in how they are fleshed out in the future.

Good morning, gentlemen. I will pick up on Kenneth Gibson’s point.

I am proud to represent the constituency of Cowdenbeath, and I would be very keen to see nascent cultural activities being encouraged and facilitated in some areas. I will look closely at future developments in that regard, because it is important that we recognise that, right around Scotland, people are desperate to participate in and contribute to the cultural side of life. That should be encouraged in every way.

It is a pity that the Wavehill report was not available in the public domain in advance of your coming to the committee today, because we could perhaps have had a more meaningful discussion on the specifics in the report, which we have not really been able to get a handle on thus far. There will doubtless be a further opportunity when the report is finally published.

I appreciate that there are on-going reviews and so forth. On issues such as the funding situation that pertained earlier this year, which was not ideal, to say the least, what top-line lessons have already been learned by Creative Scotland, absent the conclusions of those reviews?

We have already touched on some of the themes this morning. Trust and confidence come in many different ways. The lessons to be learned are about greater engagement and transparency, and having clearer descriptions of what we do, why we do it and how we work.

All of those will be important conversations as part of the reviews that we have with people. Given the breadth of its brief, I think that the organisation is at risk of tying itself in knots trying to be all things to all people all of the time. A greater sense of clarity about who we are here for, what we are here for and how we do it is part of what the reviews will help us to deliver.

Part of the equation—it is very unsatisfying from our point of view—is that, although the Scottish Government and the cabinet secretary are supportive and understand the importance of culture, our overall budgets are limited, and that will always be the case. For example, open project funding fluctuates between a third and a quarter of all the applications that come forward; we could support many more. Regular funding is also an interesting case in point, because we had 184 applicant organisations and 160 of them were recommended for support, to the value of £140 million. The 121 organisations that we ended up funding could have been supported at their level of request for £123 million.

Our overall budget comprises two component parts—it is roughly two thirds grant-in-aid and one third national lottery income. The grant-in-aid part of it represents 0.2 per cent of the overall Scottish Government budget. We know that we could see an absolute transformational step change with just a wee bit more money in the equation. That is in the context of the landscape in which cultural organisations and individual artists and practitioners are operating, because that landscape is contracting. There are pressures on public funding and on trust and foundation funding, private giving and philanthropy, and it throws into even sharper relief the expectation that Creative Scotland will be able to compensate for that in some way, shape or form.

One the one hand, the overall budgets that we have at our disposal are part of that equation in terms of how we can be clearer about our priorities and how we operate. On the other, we must never step back from championing and advocating for further resources, from whatever source, in order to enhance opportunities for people to present their work.

I remember that colleagues were very pleased indeed by the tremendous budget settlement that the cabinet secretary, Fiona Hyslop, managed to secure this year, and other portfolios were probably looking on with some jealousy. Obviously, further budgetary discussions will take place on resources, and I guess that one always has to be confident about the allocation of public money—taxpayers’ money—and about its being well spent. That brings us back to your organisational review, ensuring that you do everything that you can to ensure that any public money that you get will be properly spent and that you will discharge your obligations to the public at large. Will the specific remit of the review be in the public domain, so that the public can understand exactly what the review is tasked to do?

We acknowledged earlier, in response to Claire Baker’s question, that communications will be an important aspect of the reviews. We want to be clear about what the reviews are, how they are intended to operate, their timescales and the on-going progress against them. They are complementary and they dovetail, and I can appreciate that that is quite a complex equation to understand if you are not in the heart of it, as we are, so we will ensure that we are producing as effective communications as possible.

How will you communicate the progress of the reviews and the outcomes to the committee?

We will be happy to give the committee further written updates on progress as we move through the next few months and into next year.

If you could, that would be good. I am sorry, Ms Ewing.

That is okay, convener. I believe that Mr Munro was about to deal with another question.

10:45  

With regard to the budget, I have said that we absolutely applaud the Scottish Government and the cabinet secretary for their support, and we still very much welcome the settlement, part of which is about dealing with the drop in and challenges with national lottery income.

Budgets will always be constrained, and we know that so much more quality and ambition could be supported if enhanced resources were to be available. We would want to continue to advocate for those. The regular funding of 121 organisations takes up about 85 per cent of our grant-in-aid budget; because that one funding stream comprises quite a significant component of available resources, it not only limits what is possible with the remainder of the grant-in-aid but puts an emphasis on our national lottery income stream, which makes up about a third of a budget. That income continues to be under challenge. It is stabilising at the moment, but it has dropped nearly a quarter in the past four years. The cabinet secretary and the Scottish Government were able to address the national lottery issue, but the challenge remains very live for us, and we are working very hard with the wider national lottery family, by which I mean all the distributors across the UK, the national lottery operator, Camelot, the Department for Digital, Culture, Media and Sport and the Gambling Commission, to ensure that the importance and value of the national lottery to the life of the nation are pre-eminent and that those good causes are converted to ticket sales, which will then flow back into the distribution of the funding available to us.

Thank you.

You have acknowledged the challenges and difficulties that you have faced, highlighted the issue of confidence and given us an insight into how you are trying to manage that situation. The dialogue that you are having with us and the transparency and openness that you are demonstrating this morning show how you are trying to secure and increase confidence.

However, your communication needs to be robust, given the reputational damage that you must have suffered in the sector and in the public eye as a result of the whole situation. The policies and procedures that you want to enhance might alleviate things, but in the long term, you will have to rebuild confidence.

We have talked about the budget and resources being available, and like everyone else, you are having to do more with fewer resources than you want. How will you prioritise in order to rebuild your reputation?

Having acknowledged all that, as we have done, we should also recognise that, as Robert Wilson mentioned in his opening remarks, the organisation is not fundamentally broken. It continues to support, enable and deliver many positive things, and we have many positive relationships with individuals, organisations, partners and stakeholders. As I think I mentioned earlier, at the heart of all this are our human relationships with people. They are fundamental. We have very many positive relationships, and if we can continue to ensure that we are connected with people across the geography of Scotland and that we hear not only their concerns but their ambitions—and, on the odd occasion, their positive feedback—that will inform our work, our priorities and how we explain and account for ourselves. It will also help us to refine our processes in order to ensure that we are continuously learning and improving.

The reviews are taking quite comprehensive stock of the situation in a wide range of areas in order to reset the organisation. However, we are not working from a blank sheet of paper, and I would not want it to be overlooked that we are doing some very positive things. People lie at the heart of this, and engaging them in discussion, debate and dialogue is very important to us.

The wealth of talent in the sector is continuing to grow, and people are continuing to expand their ambitions and abilities as they communicate all their creativity across the sector. You have a big role within that to promote people and ensure that the ones who are trying to move forward get the opportunity to do so. That includes providing funding that they might require to ensure that they have the opportunity to expand their horizons.

You touched on partnership working. That is crucial to ensuring that you will have the success that you are trying to achieve. However, as we have already seen, there are locations across the country that are stifled in terms of that discussion because they do not have the opportunities and wherewithal for that to happen. You have the opportunity to ensure that you break down some of those barriers and give those people the chance to develop and see their ambitions realised. That is a very difficult thing to achieve in a short space of time.

How will those issues be fed into the reviews that you are undertaking, so that the committee, the general public and the wider sector can see that there is progression for the organisation?

What is important about what you have said is the fact that our relationships with people are not only about funding; they are also about development, advocacy and influence. There is a lot of expectation on Creative Scotland, as a national body. However, I am keen that the organisation moves forward in partnership with individuals in the sector, rather than having some sort of parental relationship to them. I want the relationship to be much more a peer-to-peer relationship. The place partnerships demonstrate that we are working together with the relevant people and partners in a respectful way that empowers people and organisations in local areas.

That also gives us opportunities to understand where we might be able to provide development support through the expertise and knowledge that we hold or, if it is appropriate, to provide investment in the form of funding. Further, as well as working in partnership with people in a local area, that enables us to talk to people who might not be on the same page with regard to the value to their areas of culture and creativity and the contribution that they can make, so that everyone can advocate for an area shoulder-to shoulder.

The youth are important. We are doing a huge thing with the time to shine strategy and our national youth advisory group. We are trying to really engage young people from the age of 16 upwards. To touch on a point that was made earlier, I note that if you can get the youth involved at an early age, you have great transformational potential. That is an important part of what we are doing.

I appreciate that you have said that you will keep the committee informed about your reviews, but it would be useful for you to write to the committee to tell us what the sequence and timetables of the various reviews are. We have the Wavehill review of RFO first, then there is the organisational review, the review into the open project funding and the wider review into all the funding streams. It would be useful if we could see the target dates for all those.

I am happy to take that away as an action. I can try to simplify the approach just now, though.

There are three strands. One is our strategic review, which is about our purpose and priorities: who and what are we here for? The second is our funding model review, which concerns all of our routes to funding. The third is the organisational development review, which concerns culture, values and behaviours, and systems structures and processes.

Is the open project funding review part of the funding model review?

That will feed into the review. That is a good example of an issue in which we already see opportunities before we conduct that wider review involving conversations with the sector—

I am sorry to interrupt, but is that a separate piece of work?

Yes. It is complementary. It is stuff that we can act on now.

Will you write to the committee with a list of all the pieces of work that you are currently undertaking and the timetables for them, so that the committee can scrutinise them?

Yes. We will be happy to do that.

I know that Tavish Scott wants to speak about the screen sector, but do you also have more general questions, Tavish?

Yes.

Okay. Perhaps you could ask all your questions now.

Okay.

I think that Mr Munro will nearly spend more time writing to the committee than he will doing all the reviews.

I want to reflect on the funding process last year. When you are awarding money to arts bodies, some do not get it, so there are winners and losers. As we know, last year, the losers quite understandably kicked up about that—it was inevitable and fair that they would do so. They got in touch with MSPs, who raised the issue in Parliament, including at First Minister’s question time—the whole works. Then, no doubt, you got a heavy call from the cabinet secretary and you had civil servants phoning you up from the sponsoring department saying that there was lots of parliamentary pressure to change your position.

My question is about the robustness of your review of funding. How will you ensure that, when the same situation arises in the future, as it inevitably will, the organisation can say that the process was absolutely transparent and clear and you have absolute confidence that you have made the right decisions in allocating funds to certain organisations and not to others? You need to be able to say to the cabinet secretary, “Please do not second-guess us.” Is that what you are trying to achieve through the review that you have described to my colleagues?

Yes, absolutely. I assure you that there is a lot of interest and scrutiny from the Scottish Government and, as you would expect, we have regular meetings. Our sponsor relationship with the Scottish Government is a very supportive one. The cabinet secretary has been clear that she is not interfering, but she wants to ensure that our organisation can stand up in a transparent and accountable way to inevitable scrutiny of the processes that we run. We are endeavouring to get a much stronger position on that, in which there is full trust and confidence in the processes in the eyes of applicant organisations and the sector more widely.

I presume that, when you have done your review and the Government is comfortable with it—I take all the convener’s points about writing to the committee and ensuring that it is consulted—you will look to the cabinet secretary and the Government to say, “This is our body, and it is responsible for making funding allocations to arts bodies, so we expect it to get on with that and we trust it to do so.”

Yes, and that is entirely appropriate and right for us, as an independent non-departmental public body.

I am sure that you have shared your thinking about the reviews with the Government and have had those discussions. I take it that the Government already accepts the principle that it is not its job to interfere with your operational decisions on funding.

Absolutely. The Government fully respects and honours that. However, as I said, it is appropriate for the Government to want to ensure that, as a non-departmental public body that expends public funding, we do that transparently and from a position of trust and confidence.

Good morning, gentlemen. I have a couple of questions on screen Scotland. I first want to put on the record that its website is very effective and easy to navigate. Obviously, there have been criticisms in the past, but the website will be a useful tool for opening up Scotland for further activity.

Last week, we had a debate in Parliament on our report on the screen sector. An issue that arose continually while we were doing our inquiry and prior to that was the need for a film studio—not a temporary facility or a building that has just been converted, but purpose-built and in an attractive studio location. Obviously, the issue regarding the Pentlands studio is on-going. Can you provide further information on where we are with new investment coming to Scotland via some type of studio?

You will have seen from our written evidence that we were pleased to have secured from the cabinet secretary, on behalf of the Scottish Government, agreement in principle to the business case that we submitted in June. To be clear, that business case is a comprehensive technical document that we were required to produce in accordance with the HM Treasury green book appraisal, which requires the business case to take a structured approach to cover areas of strategy, finance, economics, risk and so on.

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Since then, as part of the approval, we were asked to undertake further technical work, which we did during the summer. In parallel with that, we have been gearing up to go live with the proposition that has been approved in principle by the Scottish Government.

It is hard to say any more about the detail because we are at a very delicate stage in commercial negotiations with the prospective landlord. It would be premature and potentially prejudicial to give more detail. However, I can assure you that we recognise the central importance of that work in transforming the opportunities for the industry as part of the five-year plan that screen Scotland is working on with its partners. It is one of the central priorities for us and a key focus of our work.

We have never, in previous iterations of work on studio infrastructure, reached a point as advanced as where we are now. You will remember that in 2014-15 we ran, with Scottish Enterprise, a tender process that was not site-specific. It also took place in a completely different environment and context.

The technical position of the studio case is advanced. I highlight the fact that the conditions under which we are about to embark on a tender process to name a site and location, and to attract a private sector operator to be the operational partner to deliver the studio in partnership with the public sector, are in the context of screen Scotland having enhanced funding, screen commission and location services, screen skills and expertise, relationships with the sector and so on. The conditions are right and it is a priority for us to ensure that we now get over the line, which we have not been able to do before. We are close to doing that.

Will there be one studio or could multiple studios be designed and built across the country?

We are focused on a specific proposition, but that will sit among other studio offers. There is agreement that Scotland can sustain more than one studio operation. We are focused on a single proposition, but that is complementary to Wardpark, the Pyramids and, indeed, Pentland. They are considering their position.

Beyond those, there are temporary facilities that some productions find more favourable. The central proposition that we are working on—a permanent studio with a private operator—is significant in respect of ensuring that we have long-term stability at the heart of the infrastructure for Scotland.

I have raised the issue of locations before; I raised it just last week. No doubt screen Scotland will consider somewhere like Glasgow or Edinburgh as the primary location for a new studio. I can understand why, because they have the catchment and offerings of the bigger city. However, there is also a world outside of the cities and, as I said last week in the chamber, Inverclyde would welcome some kind of offer. It already has the space and a pool of creative talent and skills. I would like you to consider that.

We could all make a pitch for our own areas, Mr McMillan. I am sure that Creative Scotland will take that point on board.

I want to know a bit more about the studio proposals. I understand that you are in negotiations at the moment, so it might be a sensitive issue. You have said that a private operator would come in to run the facility, but I am still unclear about whether the facility would be purpose built and who would pay for the infrastructure and the building of the facility. Are you looking to private sources for that money as well?

I have to be careful with regard to my ability to fully answer that question at this point. With regard to what I can say now, the issue of state aid has been raised many times, and there are two key steps that will enable us to address and manage it. The first is to run an actual tender process. The business of market failure is a key state aid consideration. The process of the tender will, in itself, help to address the state aid issue and ensure that the public sector is not alone in delivering the studio.

The second component part is the fact that the tender will seek a private sector interest and operator to partner with the public sector to deliver the studio in capital and physical terms and then go on to operate it. The nature of the partnership and the proportions of public and private sector involvement will depend on the response to that tender.

What is important for state aid purposes is the combination of the two issues: the tender itself, and the securing of private sector interest and investment alongside the public sector.

In due course, once we have gone through the tender and named the site location and can secure that preferred operator, we can work on the negotiated deal with an understanding of the nature of the arrangement with regard to the public and private sectors and the governance arrangements that will sit alongside that.

That is helpful, thank you.

During our inquiry, concerns were raised about the fact that the role of screen Scotland’s new executive director would not involve screen exclusively. You have given a commitment that the role will initially involve screen, but I am not sure what the future plans for that are.

I give the committee an absolute assurance that Isabel Davis, who is firmly in post now and is firmly focused on screen, will continue in that role for the foreseeable future. We will take stock of that issue as part of the organisational development review, which will also look at structures, and we want to ensure that her focus remains on screen. We will continue to reflect on the additional element of the job description that was part of the recruitment process, but I want to absolutely assure you that Isabel Davis is here to lead screen Scotland. I do not see any change to that focus for the foreseeable future. We will reflect further on that to ensure that that is absolutely clear.

I was glad to hear what you said about the proposal being much further advanced than previous proposals. It is fair to say that, since the issue hit the Sunday Herald a couple of weeks ago, and since you talked to the committee about the issue, which was before that, there has been a lot of enthusiasm from industry, as well as words of welcome, but there has also been a lot of cynicism, because a number of people feel that we have been here before and nothing has materialised.

Once you are at the point at which you can go public with the specific proposal, what are your plans for industry consultation? I do not mean consultation with those who will submit bids in the tender process; I mean consultation with those in the wider industry who obviously have a key stake in seeing a successful site come to fruition.

Are you asking specifically about the studio?

Yes.

The process itself will procure the preferred operator and will, as I said to Claire Baker, absolutely bottom out the arrangements and so on. That is a key moment. Once the operator is known, it will be able to engage directly to understand the needs and expectations of the wider sector, and we can help to facilitate that.

A lot of information is already known, and a lot of the ambition and the expectations around what the sector is looking for are already known and understood. However, I absolutely understand the point that is being made. It has to be clear that the approach will help to address the needs of the indigenous sector in Scotland, in particular, to ensure that it has relevance and that there is an appropriate offer to it. Of course, there is also the work that we do to promote incoming productions from beyond Scotland.

Is your role in the process partly to ensure that the engagement between the potential operator and the wider industry happens? Do you see your role as not just recommending that engagement, but ensuring that it happens?

Yes. We will facilitate that process. However, in reality, that will be hard until we know who the operator is. We will not set that as a requirement or criterion in the tender per se, but it will be important for us to have a conversation about that with the operator in due course to ensure that it takes place.

What is the timescale for announcing the operator?

That will come on the back of the tender. We will be able to go live with the tender as soon as we are able to finish the negotiation with the preferred landlord on the proposed location.

Do you have a timescale?

That is principally in the hands of the negotiation, but I hope that it will happen some time in the next few weeks. The tender process will be live for a number of weeks and will conclude in the new year if the timescale plays out.

Realistically, when could we see our film studio?

In 2019-20.

Okay. That is great.

I want to wrap up another couple of issues that relate to the screen unit. You are aware that the committee has a very strong view that we should have a stand-alone screen agency. We will continue to monitor the progress in that regard and to make that case. However, we have a number of other concerns about where we currently are with the screen unit. I want to run a couple of them past you.

How will you tailor business development support? Obviously, you collaborate with Scottish Enterprise on that. What are the timescales in that regard, and what business development support will be recruited?

In our inquiry, data gathering relating to the screen sector was said to be not as robust as it could be. As a result of the evidence that we took, we were particularly concerned that there should be dedicated data gathering for the screen unit, which should not be part of the overall data gathering in Creative Scotland.

Okay. I will deal with business development support first.

Beyond the general business offer that is made, on behalf of all the partners, on the single front-door website to which Stuart McMillan referred, there are two key specific targeted business development support initiatives that are run in partnership with Scottish Enterprise. The focus project is about support for production companies across a range of skills and expertise, and the digital economy expansion programme—DEEP—is about individual producers. DEEP is a partnership with the BBC and Channel 4 to connect producers with production opportunities and the commissioning of work, for example. In many regards, those initiatives are pilots, and they will be evaluated in due course. The focus project is a two-year pilot and the DEEP project is a three-year pilot, and both are scalable. They are targeted, live and specific business development opportunities, and so far they are proving positive for those who engage with them.

More widely, we are recruiting business development specialists in the screen Scotland team. Those are among the phase 3 jobs that we are now embarking on. Those specialists will be the fulcrum of business development support across the partnership—that is being discussed more widely across all five partners.

The business gateway is also involved, in terms of the offer across all 32 local authorities. That is not just about screen; it is also about the wider creative industries. Some 84,000 people and 15,000 businesses are employed in the creative industries in Scotland. Such support is for all of them as well as screen, but screen will benefit from the wider partnership conversations.

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We are looking at how we can strengthen our own skills and expertise in the organisation to complement those targeted programmes while we continue to look at the wider partnership with the business gateway, to strengthen its offer and ensure that it delivers effectively for creative businesses.

We will be happy to keep you up to date on progress on that because, fundamentally, it is one of the planks in the five-year plan for screen Scotland that we have set out. We will communicate on that in due course.

As I have said, there are already measures in place that people can access.

Our clock is ticking. Will you briefly update us on the data?

There is a very short answer to that question. A specialist has been recruited into the organisation to enhance our knowledge and research team. That specialist will help to shape the next steps on how we improve the data hub proposition that was in the business case for the screen Scotland five-year plan. Again, we will be happy to report back on—

But you do not have a dedicated screen data specialist.

Yes—that is the person whom we have just recruited.

They are dedicated to screen.

Yes.

And they will progress the hub. We will have a hub for screen.

Yes—in some way, shape or form. We need to see, with the partners, the specialist’s reflections on the form of that work. However, the enhancement of data capture, gathering and analysis and playing that back out are important strands of the work that we are doing.

I think that the expectation in the sector is that there will be a dedicated hub for screen.

I am aware that in today’s session we have not had the time to dig into a very long inquiry and a weighty report. The committee has expressed a desire to continue to monitor progress on screen, and I do not doubt that we will speak to you again about the sector in the future.

Thank you very much for coming to give evidence this morning.

11:17 Meeting continued in private until 11:30.