Economy and Fair Work Committee [Draft]

Meeting date: Wednesday, February 7, 2024

Official Report 738KB pdf

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Subordinate Legislation

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Consumer Scotland Act 2020 (Relevant Public Authorities) Regulations 2024 [Draft]

Under our next item of business, we will take evidence on the draft Consumer Scotland Act 2020 (Relevant Public Authorities) Regulations 2024. I welcome Tom Arthur, the Minister for Community Wealth and Public Finance, who is joined, from the Scottish Government, by Heather Galbraith, a solicitor, and Neal Rafferty, the head of the heat strategy and consumer policy unit.

I invite the minister to make a short opening statement.

Thank you, convener. Good morning, committee. The draft regulations are extremely straightforward, in that they list the public authorities that have to adhere to the consumer duty. As such, this Scottish statutory instrument plays an essential part in confirming to public authorities whether they must adhere to the duty.

The consumer duty and Consumer Scotland go hand in hand. When Consumer Scotland was established, stakeholder feedback identified the need for comprehensive change in how consumers are considered and integrated into policy and decision making. It was that feedback that paved the way for the idea of the consumer duty. The duty will require “relevant public authorities”, as listed in the SSI, to

“have regard to the impact of strategic decisions on consumers in Scotland and the desirability of reducing harm to them.”

The 2020 act states that

“Consumer Scotland may ... issue guidance about the duty”.

Consumer Scotland has, helpfully, agreed to that, as it can see the opportunity that the duty provides. Consumer Scotland will be able not only to highlight good practice by local authorities in that area but to highlight to the Parliament any detriment to consumers.

My officials carried out stakeholder engagement before and during the consultation period as part of the consumer duty for public bodies consultation. Although there was broad support for the duty, concerns were raised that it would be an additional administrative burden, and about the need for clear guidance. In addition, some stakeholders disagreed that the duty should apply to their organisation or body.

In the light of those responses, my officials undertook further engagement, emphasising that the duty was to be applied in a proportionate and targeted way and only to strategic, rather than to daily or operational, decisions. Those further engagements and reassurances have been positively received by the organisations concerned, and they have fully addressed the concerns that were raised.

My officials looked again at the authorities that were named in the consultation, and they decided that the duty should not apply to them all. As a result, some authorities have been removed from the final list.

As minister for public finance, I am well aware of the pressures that the relevant authorities already face, and I am determined to ensure that the duty is not, either in perception or in practice, an unnecessary burden.

The guidance that is being prepared by Consumer Scotland will ensure that public authorities know how to apply the consumer duty to their strategic decisions. Ensuring that the guidance captures all the information that those authorities need will, therefore, be vital. That is why I have agreed to an implementation year to allow Consumer Scotland the necessary time in which to consult and engage with stakeholders on the draft guidance before it is finalised in advance of 1 April 2025.

Consumers are the lifeblood of our economy, and the establishment of Consumer Scotland recognised that simple truth. The legislation that is before the committee today is an essential part of a process that is designed to ensure that public authorities put consumers at the heart of their strategic decision making and thinking. I hope that members will support the draft instrument.

Thank you, minister. Members now have an opportunity to ask questions. First, I will ask about the level of support for the purpose of the consumer duty. The committee wrote to you in advance of this session, minister, and I thank you for the letter that we received. In our letter, we highlighted that

“only 49% of respondents”

had

“supported the duty being applied to the bodies outlined.”

Minister, you recognise in your response the concerns that were raised with regard to workload and the guidance, but your letter does not cover how those concerns will be addressed. You have talked today about the guidance, but one of the issues relates to workload and administration. Are you confident that we can get broader support—more than 50 per cent—for introducing the duty?

I will ask Neal Rafferty to come in, because officials have engaged extensively with public authorities and, as I touched on in my opening remarks, that has gone some way towards addressing the concerns that those authorities expressed.

I reiterate and make it clear that the duty applies to strategic decision making at executive and board level, not to day-to-day operational matters. In addition, Consumer Scotland will prepare guidance. Draft guidance will be published ahead of the commencement of the duty, and Consumer Scotland will undertake a public consultation that will capture the views of the various bodies to which the duty will apply. We are working collaboratively to ensure that the guidance is appropriate.

Neal Rafferty might want to comment on the engagement that has taken place with public authorities to provide reassurance and address concerns.

Mr Rafferty, can you also respond to another point? The minister’s letter says that consultation responses will “be published ... soon”. Can you give us an idea of the timescale for that? When will we have a better understanding of what the consultation responses said?

I will take the second question first. I am happy to say that we published the consultation responses at the end of last week—I apologise for our taking so long to get round to that, but it has now been done.

As the minister said, following the consultation, my team and I have had a number of direct one-to-one and bilateral conversations with many of the bodies that responded, and with some that did not. That included the vast majority of those that had expressed some concerns about what the consumer duty might mean and its relevance to their organisations.

Those conversations have, without exception, put those concerns to bed. People and organisations are now much more aware of what the duty means and does not mean for them and of their ability to use existing processes and assessments to demonstrate compliance with it, so they have a better understanding of why it applies to their organisations.

I think that, were the consultation to be rerun now, the figure that was quoted would be a lot higher, because, although people might not be overjoyed at the thought of the consumer duty, they at least understand it and how they can respond to it in a proportionate way, as the minister described.

Good morning, minister. Who can argue with legislation that is aimed at “reducing harm for consumers”? I do not think that anybody would argue with that.

Nevertheless, my issue with the consumer duty relates to consideration of the benefit to consumers of “reducing harm”. How would you define that in relation to a public authority? For example, I am aware of a couple of mental health organisations in the third sector that are having to close their doors because local councils have withdrawn funding. That will definitely not reduce harm. Community programmes in sport, music and art are closing—all those things are being curtailed. That is not reducing harm. Local public procurement of food for schools and hospitals is being squeezed. That is not reducing harm.

I therefore have two concerns. First, how do you define “reducing harm”? Secondly, how would you enforce that aspect of the duty. You could not go to a council and say, “You can’t shut that service just because of budget constraints, because that will cause harm.” How will you define what that means?

That is an important question. On the point about enforcement, competence with regard to consumer policies is split—advice and advocacy are devolved, but enforcement is reserved, so we do not have the means to legislate for enforcement around consumer issues.

The question of how individual public bodies interpret and respond to the legislation is important. That is why we have taken an approach that not only focuses on the strategic level but is not overly prescriptive. We recognise that, given the broad and diverse landscape of public bodies, the way in which they will be able to apply, take on board and have regard to the duty will vary depending on the particular functions and duties that they discharge. That is why it is important to provide flexibility for public authorities to “have regard to” the duty in a way that is consistent with their functions and responsibilities.

Reporting will be one of the requirements, but that can be incorporated into the existing reporting that local authorities do—for example, through an annual report. Alongside that, there will be the guidance that is developed by Consumer Scotland. As a non-ministerial office and statutory body, Consumer Scotland has a statutory responsibility to provide coherence and strategic leadership in the consumer landscape in Scotland. Consumer Scotland, which is directly accountable to the Parliament, has an important role to play in that regard.

In recognition of the limitations on what we can do around enforcement, we want to work constructively in a collaborative process, and Consumer Scotland has an important leadership role to play in that respect. Nevertheless, we recognise that the way in which public bodies “have regard to” the duty will vary between bodies, reflecting their specific duties and functions.

Good morning, minister. I want to follow up on Mr Whittle’s point. First, I recognise that we are looking only at an instrument that specifies a list of public authorities, rather than at the substance of the 2020 act. However, I struggle with the issue of what the practical impact of the regulations will be. Can you give us an example of something that a public authority is not currently doing but that it will do in the future once the regulations are in place?

I cannot give a direct example. Public bodies might currently be doing things that have a positive impact, but they might not necessarily recognise or identify that. The duty will introduce the requirement

“to have regard to consumer interests”

in strategic decision making—again, I note that that refers to decisions at executive and board level. That will certainly be of assistance to Consumer Scotland, given its strategic leadership role, but it will also help public bodies in considering their future work, when issues of detriment might arise. As I referred to in my response to Mr Whittle, the way in which that manifests could vary, given the diverse range of public bodies across Scotland.

The duty will provide a significant opportunity for learning. It will support Consumer Scotland’s work, particularly its strategic role, and it will support the Parliament in its scrutiny of Consumer Scotland and the wider devolved consumer policy landscape.

I do not know whether Neal Rafferty wants to add to that or to reflect on the engagement with public authorities about how they might apply the duty.

We have spoken to some authorities that have said that the duty will not result in their doing or thinking about things in which they are not already engaged, so, in that sense, it is about taking a belt-and-braces approach.

However, that will not be the case for other organisations, for which the consumer duty will inspire a bit more thought and reflection on how some of the strategic decisions that have been taken might risk consumer detriment. The duty might inspire a bit more thinking along those lines. That is one of the things that will be drawn out in both the guidance and the practice, as the duty is implemented.

That is helpful. It seems to me that public bodies should be doing that already, so, in effect, the regulations simply put into law something that should already be happening in practice.

I have one more specific question. I noticed that Transport Scotland is excluded from the list of bodies that are covered by the duty. What is the reason for that?

I am slightly thrown by that.

Is that with regard to—

Regional transport partnerships.

I think that we covered that in our letter to the committee. Local authorities, which are part of regional transport partnerships, will be covered by the duty.

Transport Scotland is listed under the “Executive Agencies” heading, but the regional transport partnerships have been excluded.

Yes, sorry—that was the point of confusion. As Transport Scotland and local authorities will both be subject to the duty, it was felt that that was sufficient. I do not know whether Neal Rafferty wants to add any further commentary.

No—the link to local authorities is the reason why the regional transport partnerships were excluded.

Yes.

Are there any others? I suppose that those are the only organisations that would be in that type of arrangement. If the consumer duty is about strategic direction, how will the regional transport partnerships’ strategic direction be influenced by the duty, given that they are one step removed from local authorities?

Given the role of Transport Scotland and local authorities as delivery partners, they would, in their work and strategic decision making, have to have regard to the consumer duty. In effect, it avoids duplication.

As there are no other questions from members, we move to item 3, which is formal consideration of the motion to approve the instrument. As a reminder, I note that only members and the minister can take part in this item. I invite the minister to make any additional comments that he wishes to make and to move the motion.

Motion moved,

That the Economy and Fair Work Committee recommends that the Consumer Scotland Act 2020 (Relevant Public Authorities) Regulations 2024 [draft] be approved.—[Tom Arthur]

Motion agreed to.

A short factual report of the committee’s decision will be prepared and published. I thank the minister and his officials for joining us.

I suspend the meeting briefly to allow for a change of witnesses.

09:46 Meeting suspended.  

09:48 On resuming—