Finance and Public Administration Committee [Draft]

Meeting date: Tuesday, March 26, 2024

Official Report 809KB pdf

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Police (Ethics, Conduct and Scrutiny) (Scotland) Bill: Financial Memorandum

Good morning, and welcome to the 12th meeting in 2024 of the Finance and Public Administration Committee. Michael Marra will be joining us remotely.

Before we move to agenda item 1, I record the committee’s thanks to those who took the time to meet us as part of the interparliamentary finance committee forum visit to Portcullis house in London last Thursday. I am sure that I speak on behalf of all members involved when I say how worth while our meetings were with MPs on the Treasury Committee; the chair of the Public Administration and Constitutional Affairs Committee, William Wragg MP; David Gauke; the Office for National Statistics; the Institute for Government; and our Welsh colleagues. We look forward to meeting our Welsh and Northern Irish counterparts again later this year, possibly in Belfast.

Under agenda item 1, we will take evidence from the Scottish Government bill team on the financial memorandum for the Police (Ethics, Conduct and Scrutiny) (Scotland) Bill. We are joined by Scottish Government officials Graham Thomson, the head of legislation and divisional development, and Steven Bunch, the bill team leader. I welcome you both to the meeting.

I invite Graham Thomson to make a brief opening statement.

Good morning, convener. Thank you for having us to provide evidence and to take your questions.

We recognise that there is a difference between the costs that are set out in the financial memorandum and the evidence that the committee has received. I confirm that we are working to revise the financial memorandum, with the intention of publishing a revised version after stage 2.

The cost estimates that are set out in the financial memorandum were informed by extensive discussions with our policing partners, particularly Police Scotland, the Police Investigation and Review Commissioner and the Scottish Police Authority. In addition, through the Scottish police consultative forum, statutory staff associations such as the Scottish Police Federation were able to set out their views. Those discussions were complemented with written evidence and desk-based research that we undertook and through liaison with His Majesty’s Inspectorate of Constabulary in Scotland, the Home Office and the London mayor’s office. That all helped us to sense check the information that we received.

There are three main differences between the financial memorandum and the evidence that the committee has received. The first relates to training costs. As we prepared the financial memorandum, Police Scotland told us that it was likely that it would be able to absorb those costs. However, as you can see, it has now adjusted that position, partly due to the wording of the statutory responsibility that the bill will place on the chief constable and partly as a result of the more robust approach that Police Scotland is taking to assessing the impacts of new legislation across the board. We are working with Police Scotland to fully understand the training requirements and their financial impact, and we will reflect that work in the revised financial memorandum.

The second difference relates to staff costs associated with the anticipated increase in the number of gross misconduct cases. We accept that there will be a need to increase resources in Police Scotland’s professional standards department to support the bill’s provisions, and we intend to capture that in the revised memorandum.

The final difference relates to legal costs for former officers, which are dependent on estimates of the number of additional cases and the average cost to support an individual’s attendance at a hearing. In preparing the financial memorandum, we relied on information that was provided to us by the Scottish Police Federation and Police Scotland, and we recognise that those organisations have now revised those costs. We will reflect that in the updated financial memorandum.

Overall, the information that has been gathered via the call for evidence reflects a greater understanding of the impacts of the bill, and we will draw on that information when updating the financial memorandum after stage 2.

We welcome any questions that the committee might have.

First, I am quite astonished that publication of the updated financial memorandum is planned to happen after stage 2. An updated financial memorandum for any bill should be with us before stage 1. I do not think that what is proposed is appropriate at all, and I hope that work will be done to ensure that what I have suggested happens.

Secondly, I am quite surprised by the fact that the figures that are used in the financial memorandum relate to September 2022, which was 18 months ago. As Police Scotland pointed out in its submission, inflation peaked at 11.2 per cent a month after that point. Even if one does not agree with the costings that Police Scotland has provided, surely steps should have been taken to update the figures long before now.

The bill was introduced in May or June last year. At that stage, we used the information that was provided to us by Police Scotland. We accept what Police Scotland has said about inflation. We accept that inflationary costs and pay have increased for Police Scotland, and we will reflect that. Indeed, we will take advice from the committee about the best time at which to bring back a financial memorandum, and we are working with those policing bodies to update it. We are already in a position to be able to update some of the information, and we will seek to do that at the earliest opportunity. It was our understanding that protocol dictates that that would normally be after stage 2.

If members are to deliberate on the general principles of a bill, it is appropriate that the Finance and Public Administration Committee scrutinise the financial memorandum—an updated financial memorandum—before it goes to the lead committee at stage 1. As far as I am aware, that is how it has always been done and should be done. It certainly should not be done after stage 2.

I understand your point that the bill was introduced in June last year, but it makes me even more bewildered that nine-month-old figures were used when, clearly, everyone knew that inflation was high—especially given that there have been nine months in which to update it since then. We are being presented with a set of figures that do not really mean anything. We could go through it all—I sat ready with all my nice wee yellow-highlighted bits and questions to ask, but you are saying, in effect, that the financial memorandum—all 22 pages of it—is not worth the paper that it is written on at this stage. Is that a fair assessment?

It is fair to say that we will look to update parts of the financial memorandum. I do not accept that it is not worth the paper that it is written on. We will update elements of it in line with the particular sections that we drew out.

Why has it not been updated before now?

We did not have that updated information until you received it through your call for evidence. Although we have worked closely with Police Scotland, it did not supply that information to us in advance of providing it to you in response to the call for evidence.

Have you no other sources of information? You were clearly aware of it. I thought that there would at least have been an inflationary uplift over the past 18 months, even given your caveat about submissions from Police Scotland and others.

Certain elements are subject to inflationary uplift, and I take your point that, potentially, we could have updated for that at an earlier point, but that is not the case across the whole financial memo.

To be honest, we are reliant on some of the information that we have received—from Police Scotland, in particular, and from other policing bodies—in shaping this. We are reliant on their providing the information either to us or to you through your call for evidence.

Okay, but how did you come to the figures that you have in the financial memorandum before Police Scotland made its submission, given the fact that you say that you are so heavily reliant on what it has provided?

We worked closely with the professional standards department in Police Scotland, and we have done so over a considerable period of time. In my opening statement, I mentioned that Police Scotland takes a different approach to how it assesses financial impact. Prior to our producing the financial memorandum, it concentrated on the impacts on the professional standards department alone. Since then, it has considered the impacts across the organisation. For example, it is considering across the piece the training costs for the introduction of the code of ethics or a duty of candour. It had previously told us that those were absorbable, but it has now adjusted that position. We accept that there is a case to be made for that, and we are working with Police Scotland to understand the full impact.

Police Scotland has said that the bill will cost nearly £5 million more than the figure in the financial memorandum. That is more than three times the figure in the memorandum. Do you think that the figures in Police Scotland’s submission are more accurate than those in the memorandum?

I think that elements of that submission are more accurate. I broke down my opening statement into three parts. The associated legal costs and the staff costs have increased, and we broadly accept what Police Scotland is saying in that regard. There is on-going discussion with Police Scotland about the training elements, largely because the costs that it has set out include opportunity costs, such as officers concentrating on the training as opposed to other tasks, rather than direct costs.

Okay. My colleagues are quite keen to come in, incidentally.

The financial memorandum refers to the £10,000 benchmark for materiality, which

“takes into account the relative cost of changes in proportion to the overall budget of the affected organisations ... and the difficulty in being precise when dealing with smaller estimates.”

However, the approach of presenting costs as material and immaterial and using the £10,000 figure as a benchmark is not the usual approach that is taken with Scottish Government financial memoranda. As the Finance and Public Administration Committee, we are trying to interrogate apples with apples, not apples with pears. Why have you decided to use that approach?

I will let Steve Bunch come in in a second. Generally speaking, we adopted that approach because there was a little bit of uncertainty about some of the costs. We recognise that costs can only ever be best estimates. We accept that we could phrase that in a different way. So, if that is not in line with other financial memoranda, we will seek to specify costs where we can and provide better estimates where we can.

We are talking about things that were considered to be very low amounts. Steve Bunch can potentially provide some examples of that.

Yes, they are very low amounts, but, cumulatively, they can become large amounts and they must come out of somebody’s budget.

The costs include the costs of consultation with stakeholders for the code of ethics. We were not sure exactly what those costs would be at that low level, so we took account of them by assuming them to be £10,000. As Graham Thomson said, we can look to remove that element from the revised memorandum if that is what the committee wishes.

Okay. Paragraph 27 of the financial memorandum says:

“The figures contained within this Financial Memorandum are the Scottish Government’s best estimates of the costs of the provisions of the Bill”.

Clearly, that is not the case, is it?

Sorry, but can you repeat the question?

I will quote paragraph 27 of the financial memorandum. It says:

“The figures contained within this Financial Memorandum are the Scottish Government’s best estimates of the costs of the provisions of the Bill”.

They are not the best estimates, are they? The figures are nowhere near the costs.

The financial memorandum provides the best estimates that we could get from the information that partners gave to us at that time.

Overall, the costs that we considered to be immaterial—we could have described them as absorbable—were included in the overall bill figure.

It is groundhog day for the committee. Paragraph 33 of the memorandum says:

“Many of the Bill’s provisions will require secondary legislation to be fully implemented.”

Why are those provisions not being included in primary legislation?

I will start off with that and will then bring in Steve Bunch. The legislation is an enabling and framework bill, and a number of provisions will be set out in secondary legislation. I accept that there is more that we could potentially do to outline some of the costs, but a key element of conduct regulations—conduct matters are some of the things that will be introduced through secondary legislation—is that we must do that, as set out in legislation, in consultation with the Scottish police consultative forum. The forum comprises statutory staff associations such as the Scottish Police Federation.

Everything that is in the terms and conditions of an officer’s employment is set out in regulations rather than in an employment contract, as it would be with police staff or most other professions. As part of that agreement, there is an acceptance that everything can be done only through the Scottish police consultative forum. In some ways, we have not gone through that process, and the process that we go through with the Scottish police consultative forum may well change what is or is not in that secondary legislation, because that should be done via agreement through that forum.

09:45  

You say in paragraph 33 that

“it is not possible to provide a full assessment of costs or savings until the regulations have been agreed”,

but in table 1 you give a figure of £1,414,474. You put quite precise figures into the table, despite the fact that, as you have admitted, the figures do not bear any real relation to what the costs will be. It seems very odd to be so precise in a document that is so imprecise.

I take your point about the precise nature of the financial memorandum. As part of the work that we are undertaking to look again at the financial memorandum, we are likely to provide a bit more evidence in range form where we are not able to be as precise.

I have one more question before I open it up to colleagues around the table. When can we expect an updated financial memorandum with more accurate costings?

As I said at the beginning of the meeting, we intended to provide that after stage 2, because that was our understanding of when—

But that would be unacceptable to the committee, so when can we have it?

We can work to a shorter timescale. We know that the Criminal Justice Committee is undertaking its stage 1 work prior to the summer recess, and we can work to that timetable.

I will now open it up to colleagues. The first to ask questions will be Liz Smith, followed by Michelle Thomson.

Good morning. Mr Thomson, the problem that this committee has, which the convener has rightly pointed to, is that we are asked to scrutinise the numbers that have to go behind a bill. This is the fourth bill in recent months about which we have had concerns because the accuracy of the numbers does not suit the scrutiny that we have to provide. Do you accept that, when a bill team makes a presentation to Parliament, it is essential that the financial memorandum that goes with the bill is understood and clearly set out before we get to any legislative process? Do you accept that as a bill team?

As a point of principle, it is absolutely our intention as a bill team to make sure that the information that is presented is as accurate as possible.

Why did you originally consider it appropriate not to provide us with an updated financial memorandum until after stage 2? Where is the logic in that?

It was a misunderstanding on my part. I think that we understood that protocol dictated that it would not happen until that point. I point out again that it was not until we received your call for evidence that we had the information to enable us to update the memorandum.

It is a long-standing convention of this Parliament—rightly so, as the convener has set out—that the financial memorandum must be presented in time for the legislative process. That is not after stage 2. If that is a misunderstanding, we have to correct that very quickly.

I suggest that there is also a wider problem here. We have to ensure that any legislation that we pass in this Parliament is fit for purpose and is good law. Whether parties vote in favour of or against the bill is not the main point. The main point is whether the financial memorandum is factually correct and whether the evidence supports it. At the moment, it is very difficult for us to understand why a bill team thought that it was appropriate to come with the numbers after stage 2, which is after the committee stage as well as the stage 1 debate in Parliament. Do you accept that we are right to have those concerns?

I absolutely accept that. It is my intention to bring forward a revised financial memorandum as soon as it is possible or practical to do so. What I said in my opening statement about stage 2 was not born out of anything other than what I understood the protocol to be. If that is not the case, as you are clearly setting out, we will work to bring back a revised financial memorandum as soon as we possibly can.

That would be very helpful.

I want to pursue a related issue. I do not know how many framework bills we have in the Parliament just now, but there are a lot. My understanding is that, from a Scottish Government perspective, one of the reasons for framework bills is to try to ensure that there is as much discussion as possible between the Government and relevant stakeholders to co-design—I think that that is the term that the Scottish Government uses. In other words, we have a better chance of getting good legislation if the stakeholders have had really good input into it. That is my understanding, and I think that that is the committee’s understanding. The problem is that the co-design process goes on beyond the publication of the financial memorandum, as you have just shown us, and beyond the initial stages of the legislation. Do you accept that that is also a problem, as it means that, if the process of suggestions coming in about the bill is still on-going, we will be unable to decide what the costs will be?

I accept the premise of what you are saying. It is clearly in the interests of Parliament to have all the relevant information in front of it. That is why a financial memorandum is presented along with the bill’s provisions. I accept that, in this case, we now have information that allows us to update the financial memorandum. The earlier we can do that to help to support parliamentarians in their work, the better.

From a practical angle, I understand that the Criminal Justice Committee is taking stage 1 evidence on the bill just now. Is that correct?

It plans to start its stage 1 evidence sessions after the Easter recess.

Do you know how long the stage 1 process will be?

We understand that that committee is planning sessions that will run up until the end of May. However, we do not know for certain at the moment whether that will allow stage 1 to be fully completed by the summer recess or whether it will extend to after the summer recess.

It would be very helpful if we could get details on when we might expect the revised financial memorandum, convener.

Indeed.

Thank you very much.

Good morning to the witnesses, and thank you for attending the meeting.

I want to pick up on that last point and reiterate what my colleague Liz Smith and the convener have said. It is absolutely necessary that we have an updated financial memorandum before the conclusion of stage 1, and certainly before the production of any report. That is because the satisfaction of the Finance and Public Administration Committee critically depends on the numbers being within certain ranges and as accurate as they can be. I add my voice to that. That is very important.

As well as the finance side, we have responsibility for public administration. I must admit that I am quite surprised at how we have ended up where we are in respect of organisational culture. My colleague Liz Smith set the backdrop. We have seen an increasing number of framework bills. Such bills carry significant risks to the public purse in that a lot of the costs are put past the stage at which the numbers bods—that is, us—are able to look at them in detail. From a public purse point of view, they represent a significant risk of a waste of money. What conversations are going on in your area about the risks against the backdrop of chronic shortages in public sector funding? What are the risks that are actively being considered of using framework bills?

There are lots of elements in the bill. It is not just an enabling or framework bill. There are the code of ethics, the duty of candour and section 4. There are a lot of elements on the face of the bill.

My specific point is that, as a direct consequence of the co-design process, there is a risk of overspending, of inefficiency in spending and of sunk costs. That is against a backdrop of significant public sector cuts. Understanding that, and any understanding of how money operates in such programmes, goes against the use of framework bills, because those bills bring significant risks. Within your hierarchy and your understanding of what is going on in the Scottish Government, what active discussions have you had about the risk that adopting that approach might lead to inefficient spending?

It is safe to say that value for money and the impact on the public purse are threads that go right through what we are doing in policy making at the moment.

Having said that, and unless Steve Bunch tells me otherwise, we have not had any personal discussions about the impact of framework, as opposed to detailed, legislation. Working with our legal colleagues, we felt that having a framework bill was the best way to implement the intention of the legislation, but we did not consider the impact of framework legislation in general when bringing forward this bill. I may be able to provide the committee with an answer in writing in due course.

It is not part of the standard process, but it sounds to me as if you are saying that quite a number of departments inside the Scottish Government have not got the message about the chronic shortage of public funds. It sounds as if people might get round to thinking about that at some point. In all honesty, if that were me, I would be developing a detailed assessment of the financial risk of using a framework bill for this sort of legislation and would be disclosing all of that.

You may be picking up from the committee that this all plays into confidence. If, in your preparations for today’s meeting, you and others in your directorate looked back at the committee’s deliberations on a number of bills, you would quickly and easily have gleaned that we have concerns about framework bills, which would have prepared you adequately for that question. It is a significant concern.

A lot of points about the FM itself have already been picked up. After I heard your opening comment, I realised that all the questions that I had were, in effect, moot.

Can you explore a bit more how on earth we got here? I notice and acknowledge that you have clearly had conversations with Police Scotland, the Scottish Police Federation and so on. I am interested in understanding the nature of those conversations, given that they suddenly had no meaning when we got to giving evidence. What happened and why are we where we are?

As I said, we have been working closely with Police Scotland. Police Scotland was able to understand the full impact of the legislation when the bill was introduced in June last year. One of the higher costs is the training cost for the code of ethics and duty of candour, which we were told would be absorbed within the general training of officers.

Does that mean that the police thought that it could be absorbed based on conversations that had taken place by that point? Why did the available information lead them to that decision? Logically, that can only be because a lack in the information that was given to them led to a lack of understanding and because, as they gained more understanding, they were able to update their figures. That goes back to the point that my colleague Liz Smith is making, which is that people are making up numbers without having any clue about what the legislation actually intends.

Yes. At the heart of that matter, there is a statutory duty on the chief constable to ensure that all officers have done the training, and that is where a training package will have to be developed.

So that statutory responsibility was not known about prior to that. The fact that there was a statutory responsibility that brought associated costs was not known at the point of the original conversations. Is that what you are saying?

10:00  

We were able to explain the policy and say what we were including in the bill, but that key point was unknown to Police Scotland at the time.

Police Scotland set out in its response to your committee that it did not know that that was the case until it saw the exact wording of the bill. We cannot say exactly how the bill will be worded before it comes to Parliament, but we can have proper conversations with Police Scotland and anyone else about the policy intention.

I also said that Police Scotland is adopting a different approach when it comes to assessment of training and IT costs across the board and their impact on the organisation. Between the time that it provided information to us and when it provided information in response to the call for evidence, it has put in place more robust processes. Partly as a result of the pressures that it is facing as a result of the constraints on public finances, Police Scotland feels that it needs to be better at explaining and setting out exactly the impacts on the organisation, to ensure that that informs the asks that it makes of the Scottish Government when it comes to budget discussions.

My last wee comment, which I suspect is probably moot, is about ranges. I will look at a range and the scale of the range will add to my confidence. In other words, if a range is significant, that makes me less confident. A range is entirely acceptable because we realise that we are talking about estimates rather than final figures. I noticed that the estimated upper cost of the bill’s provisions was 2.7 times more than the lower figure. Do you anticipate, or is it your intention that the ranges will be more acceptable in the updated financial memorandum that will come back before the end of stage 1?

At this point, before we finalise the wording, it is almost as if the range is one of the end points of where we get to. I cannot commit one way or the other, but I take your point. We will try to minimise the range as much as we possibly can.

I have a couple of quick questions. First, on process, you mentioned your understanding of protocol. The protocol for the initial publication and lodging of an FM is quite clear, but Liz Smith was right in the language that she used about the convention that has built up around that. My understanding is that, when it comes to the revision of FMs, we generally rely more on convention. Are you aware of or were you provided with an internal Scottish Government protocol on how to revise an FM and what Parliament would require from that, including timescales?

There is a bill handbook that sets out the process. Often, a financial memorandum will be revised after stage 2 if there are any amendments, so we assumed that that would be the point at which we would be able to revise the financial memorandum. However, we can look at the bill handbook and see whether there is guidance there. I am sure that there will be guidance on how to revise the financial memorandum or to update it in line with the guidance that is already there for the initial financial memorandum.

To back that up, we will certainly take back the information and evidence that the committee has provided to us today and look to feed that back to those who are responsible for the overall bill handbook and see whether it can be updated accordingly. It is a living document, so it gets updated regularly.

That would be useful and it would probably be worth while for the committee to engage directly with ministers on the handbook. My understanding is that the handbook is not specific enough in these circumstances and there is a clear need for revision.

I sympathise with you in that, ultimately, you are significantly dependent on the information that is provided by Police Scotland. It is unavoidable, because it is not like there are third-party sources for the kind of information that you need. Am I correct in my understanding of what you said, which is that the first time that you were aware of Police Scotland’s changed position was when the evidence that was submitted to us was published, because Police Scotland did not proactively contact you? When Police Scotland received our call for evidence, I presume that staff realised that what they were going to submit was significantly different from what they originally provided to you. Did they proactively contact you to let you know, or did you find out when our evidence was published?

We engage on a really regular basis with Police Scotland’s professional standards department, which is the department that is most affected by the provisions in the bill. It is the lead department in Police Scotland for that.

It is safe to say that, as a result of the changes in Police Scotland, it is looking at the impacts of bill provisions across the organisation much more holistically. We did not hold the previous direct conversations with Police Scotland until it had managed to do that across the organisation and come up with the totality of what it presented in response to the call for evidence. I will let Steven Bunch come in on the specifics of the conversations that we had.

Police Scotland had intimated that the costs would likely be higher when the evidence was published but, until it was published, that was not really the official position that had been agreed. We realised the difference only when the evidence was published.

I realise that this will sound as though I am repeating the question. Police Scotland did not provide that revision to you directly. The first time that you saw it written down as a new set of figures was when we published the evidence that was provided to us.

Yes, that is correct.

Convener, I think that we need to take that up with Police Scotland, because I cannot understand why it would not provide that information. There are issues here with the Government process, but I am a bit disturbed that the police would know that they were making a significant revision yet not provide that information to the Government.

We will obviously deliberate in private session on where we go from here as a committee. If that is your questioning finished, I will move to John Mason, who will be followed by Michael Marra.

I slightly disagree with the convener, because I agree with the idea of materiality and rounding things to £10,000 or so. That is much more realistic, and it is quite normal in accounting practice.

It is about consistency across financial memorandums.

It is a good example and others should follow it. The idea of having very precise figures—going down to £134 or £474—is just unrealistic, frankly. Some of the figures are clearly rounded—the SPA potential costs of £259,000, for example. The committee might disagree with me, but I think that that is the right way to do it. When it comes to a figure with £134 at the end, I would just drop the £134, because there is no way that anyone can be that accurate when they are making such forecasts. That is just my comment by way of support.

In paragraph 30 on page 9, for different organisations, you compare £10,000 materiality as a percentage of their annual budgets, which comes in at 0.001 per cent and suchlike. Would it be better to show the materiality as a percentage of the actual costs of the bill, which would be something like 2 per cent in some cases? Would that be more helpful?

That is an interesting way of looking at it. We were looking to capture the costs as a percentage of the overall budget to show that it seemed to be quite absorbable and not material to the consideration of the bill.

Yes. Given that we are looking at the bill, I suppose that, for me, what makes a figure material is how it compares with what is in the bill rather than with the whole budget. I just throw that in as a point of consideration, because the percentages that are shown in paragraph 30 are tiny. They would still be small enough if they were compared with the bill. I throw that in by way of comment.

The convener touched on the cumulative effect of having a number of issues that are under £10,000 that, together, would come to more than £10,000. Would it be possible to have a line in paragraph 33, where you show the different costs, for “sundry” or “miscellaneous”, or are you not comfortable having a figure for that?

If you look at table 3 on page 12 of the financial memorandum, that is where we start to set out what we think are the immaterial costs, including those that might transfer to another body or that will be absorbed.

One of which, at least, is an immaterial saving, is that right? It sets off some of the others.

Yes, that is right.

I have a couple of questions on some of the assumptions and details. I do not quite understand the point that, if somebody has retired or has otherwise left the service, the costs might be higher in their case than the costs for somebody who is still in the police service. Will you explain what happens there?

Right now, if there are allegations of gross misconduct and an officer resigns or retires—I am talking about gross misconduct, not where there is any criminality—the hearing would stop. Therefore, there would not be an outcome. In the bill, we are looking to ensure that an outcome is achieved, so that either it is not gross misconduct or it is gross misconduct. If it is gross misconduct, the person would be put on the barred list. Until that outcome has been reached, the person would be on the advisory list.

How do the costs vary because of that? Would the cost for Police Scotland or for the individual officer be different and would the costs be handled differently, depending on whether the person is in the service or has left?

The costs include the investigatory costs. If an officer resigns, the investigatory costs and the costs of the hearing would stop, whereas if the hearing was to continue, the police might need to still investigate, and they would incur the costs of the hearing as well. Those two costs would be part of the costs for former officers.

I am not sure that I understand or that I am explaining myself very well. In Police Scotland’s evidence, it says:

“The legal costs involved in defending such challenges vary but will always be significant. An example of the level of costs that can be incurred was provided”,

and it goes on. Police Scotland seems to suggest that the costs would be different. If an officer had left, they might want their own legal representation, whereas they would not if they were still in the police.

I think that what is being referred to are the legal costs associated with that. At the moment, if someone resigns or retires, no further action can be taken. We are looking to ensure that further action can be taken or considered. At the moment, there are no legal costs arising from that. Police Scotland, rightly, points out—as did the SPF in its evidence—that someone will have to now meet those legal costs, which are a direct result of the introduction of the legislation, and we accept that.

So does the SPF cover the costs for existing officers but not the costs for officers who have left?

Yes.

Is there a difference in the costs involved for higher ranks and for lower ranks?

We have put into the financial memorandum, based on the information that was provided, an overall cost—both legal costs and an average cost, irrespective of rank. It is safe to say that a wide range of legal costs could be incurred as a result, ranging from zero up to £170,000. We have to go for an average, otherwise we would end up in a situation where we are providing a very wide range of costs. I take on board Michelle Thomson’s point that we want to try to minimise doing that.

I also point out that the bill does not say that the officers need to have that legal representation; it is just in case they want to have legal representation, which they might want in a gross misconduct case.

Right. The SPF makes the point that,

“it seems grossly unfair that those in higher ranks who are also higher earners are having their financial costs paid ... yet the federated ranking officers are having to pay for their defence either personally or through their professional subscriptions.”

Is there an inconsistency there?

10:15  

At present, the SPF usually picks up the tab for all, as a result of their membership—

At any level?

No—for the federated ranks. There are other representative organisations for senior officers—assistant chief constable and above—such as the Association of Scottish Police Superintendents and the Scottish Chief Police Officers Staff Association. As a result, the legal costs for those ranks are sometimes picked up by Police Scotland. That is because the membership of the SPF is 97 per cent of the ranks, so it generates more in funds to allow for spending on legal costs, whereas that is not possible at the more senior levels.

That is interesting.

Finally, paragraph 107 of the financial memorandum, on page 23, talks about the PIRC making

“recommendations to the Chief Constable”.

That is under the heading “Unknown indirect costs”, so there is a lot of uncertainty in that respect. It would depend on what those costs were. The memorandum goes on to state:

“If there is a cost in implementing the recommendation then this indirect cost cannot be quantified.”

Can you give any examples of that? What might the PIRC recommend? Is it just that the variations are so wide that you cannot put a figure on it?

Yes. The bill aims to strengthen scrutiny of the police by enhancing the PIRC’s role. When the PIRC makes recommendations to the chief constable, in order to ensure that we are not interfering with the chief constable’s operational independence, they will have to respond. They might respond by saying that a particular recommendation is something that, due to resourcing or an operation, they would not want to implement. Nonetheless, the PIRC will make those recommendations, they will be in the public domain and the chief constable will have to respond.

We are not able to foresee what the PIRC would see in its review of Police Scotland’s activities, and therefore what it would recommend.

I do not know what kind of thing the PIRC would recommend, but let us say that it was some piece of equipment such as a camera or new cars—whatever it might be. Is it just totally unpredictable as to what the PIRC might recommend?

Yes. It could be a new piece of equipment or a new training regime, or something else. It is pretty unknown. The chief constable would then take that on board, in the context of thinking about resources at the time.

Right. So, even in a revised financial memorandum, that aspect would stay the same—it would still be unpredictable.

Yes, it would still be unpredictable.

Do you accept the costs as presented in the evidence from Police Scotland?

As I set out in my opening statement, for two of the three key elements, we accept the costs. Those are the additional staff costs that are associated with the anticipated increase for gross misconduct cases, and the legal costs for former officers. We are still in active negotiations with Police Scotland in relation to the training costs that are associated with the introduction of the code of ethics and a duty of candour.

Is there anything else in the evidence that we have received that you will take on board when you are trying to revise the financial memorandum?

We will take account of the inflation costs and the reference to the pay increases. In essence, that feeds into the staff costs that I outlined earlier. We recognise that there have been pay increases since the original figures were provided.

As has been referred to, the committee has had a lot of back and forth with the Government on financial memorandums of late. I am looking for clarity from you. Do you accept that this financial memorandum is not fit for purpose as it stands?

I accept that it is in need of revision and that the information that is contained in it is not up to date. We accept the vast majority of what is in the evidence that has been provided by Police Scotland and others.

The evidence indicates that the costs will be up to three and a half times higher than those that you have presented so far. As my colleagues have set out, it is important that we do not move to stage 1 consideration given that it is so vastly out of kilter and does not have the right evidence base. Do you accept all of that?

I accept that it is of benefit to Parliament overall to make sure that we update the financial memorandum as soon as possible, in line with what I said earlier.

Knowing that you were going to come here today and tell us that, did you consider writing to the committee and saying that the information in the financial memorandum is wrong and that you would revise it and come back at a later date?

We did not, because we did not understand that that is what you would be looking for. As we have said, irrespective of whether the financial memorandum is correct or not, our understanding was that we should come back with a revised financial memo after stage 2. That is clearly not the case, based on what we have heard today, so I accept that we need to do something different.

We have heard a little bit about the handbook. This is not a direct criticism of your work in the area, but you will have got the strong message that this is the fourth time that the committee has been in a similar position. Who does the training on the preparation of financial memorandums in the Scottish Government?

It is, erm—

The parliamentary liaison unit.

Sorry—I could not remember the full name; I could only remember the acronym. The parliamentary liaison unit in the Scottish Government is responsible for providing on-going training, and it holds regular sessions with members of bill teams on a wide variety of things related to the introduction of bills, including a specific one on financial memoranda.

So you are not given any standard ways of presenting financial memorandums. As colleagues have picked up, we are looking at wildly different ways of presenting what should be the same thing. The convener has pointed out that we cannot be in the position of comparing apples and pears. We have a little disagreement between Mr Mason and the convener about how the figures are presented and whether they are material or immaterial, but is there no standardised process that you are presented with to say how you should present the figures?

There is a standardised process. We thought that it would be helpful to introduce the concept of materiality but, obviously, it is for the committee to decide whether that is helpful.

So you did not adhere to the standardised process.

We very much did, in the rest of the financial memorandum, but we introduced that aspect of materiality, which is not something that I have seen before.

To back that up, I recognise that, in our attempt to provide something that we thought would be helpful, we have not succeeded. I certainly take your point about consistency, if that is the most important thing for the committee and for Parliament in general. I take on board the point about adhering strictly to the template form and the advice in the handbook.

Consistency is important and certainly useful, but accuracy is clearly the most important thing, and we do not have that in this process.

Colleagues have addressed the issue of the number of framework bills that we are receiving. Who in the process is saying to bill teams and other civil servants that we should be producing framework bills?

That is decided on a case-by-case basis. It is not a policy intention or an intention by ministers or officials to introduce framework bills. We take into account the individual circumstances of what we want to achieve. In this case, we made decisions in consultation with our legal colleagues in the Scottish Government legal directorate and the parliamentary counsel office to develop what we were trying to do.

There has been a very marked increase in the number of framework bills that the Parliament is considering, including major pieces of legislation such as the National Care Service (Scotland) Bill and the bill before us now, the Police (Ethics, Conduct and Scrutiny) (Scotland) Bill. We are seeing them all the time now. I am a relatively new member of the Parliament, having been elected in 2021, but my understanding is that, in years past, such bills were incredibly rare, if not completely unheard of, yet we are now seeing them at the committee almost every month. Is it a fashion that is running through the civil service?

We can take away the point that you are making as officials, but there is potentially a question there for ministers, too. From an officials’ point of view, there is no deliberate intention to do that, certainly not within the constructs of the Police (Ethics, Conduct and Scrutiny) (Scotland) Bill, and I have certainly not heard anything about whether we should use more or fewer framework bills.

So, there has been no reflection, in your discussions in the civil service, as to the clear problems that such bills are presenting, including the financial accounting, which we are presented as a committee, or as to the general ability of the public and the Parliament to scrutinise the legislation effectively. Has that not been reflected on in the civil service?

It may well have been reflected on in the civil service, but we are not party to those discussions, and I can only go from my personal experience.

From the bill side—okay.

I will not repeat all the points that have been made regarding framework bills, but I certainly support colleagues on those.

I want to ask about the timelines. You suggested that Police Scotland was not aware of the full financial implications of the bill until the bill was presented. You suggested that, despite working closely with Police Scotland, its official position did not change until the evidence was presented to us, as far as you can see. In that interim period—since June last year, when the bill was introduced—what concerns has Police Scotland raised with you about the costs, and what figures did it put on any potential increase to costs?

Police Scotland has had to assess the bill and work out what the costs are. When we were engaging with it, Police Scotland said that it thought the costs would probably be higher than what it had told us prior to the bill’s introduction.

When did it say that?

That was raised when we met at the Scottish police consultative forum.

When was that? I am trying to get an idea of the timeline and of how long it has taken to get to this position.

September 2023.

So, in September 2023, Police Scotland raised concerns over the costs. Did it give you a figure at that point, or did you go back to Police Scotland and ask it to revise the costs and provide you with updated parameters, in effect?

No. We did not know the figure until it was published as evidence to the committee.

Did you ask Police Scotland for updated costs?

We were discussing that, but I do not think that it was able to say precisely, and I do not know whether it would know the figure until it was agreed as an official stance.

I want to specify something, going back to my previous point that we are interacting directly with the professional standards department. Since the introduction of the financial memorandum, from the discussions at the Scottish police consultative forum through to what it has provided to the committee in response to the call for evidence, Police Scotland has developed a corporate position, which needs to be signed off by its executive team as an official position. It is my understanding that it has taken Police Scotland time to arrive at that corporate position, where it can set out the overall impact on the organisation.

10:30  

While that has been happening, you have been progressing with your work on the bill. What concerns does that raise with you? Were you aware that Police Scotland would present new costs?

We were aware that it would give evidence to the committee.

Did you have no idea at any point that the £5 million potential cost would be presented? Did that come as a complete surprise to you?

The exact figures were a surprise to us. We had anticipated that some increase would be presented, but we did not know the exact figures.

It just seems odd to me that you were aware that costs were being revised; you did not know what those costs would be; ultimately, they came in at three and a bit times what they had been; but at no point do you seem to have been concerned about how that might impact on the progress of the bill or on the committee’s ability to scrutinise it.

The costs will go up hugely, for a key player. Do you think that you have done enough in relation to keeping in touch with, liaising with or requesting that information from Police Scotland?

At that point in time—when the bill was introduced—the information was the best that we could get from Police Scotland. Police Scotland has now revised that information and we will use that better information, which was given to the committee, to revise the financial memorandum.

As I said, you were not aware of it. Will that change how you may look at such things in the future?

It is safe to say that that is in our collective interest, and we are working with Police Scotland across a full range of the legislation that it has an interest in to consider the impacts on it as an organisation.

Police Scotland accepts that it needs to do better as an organisation in assessing financial impact and engaging with the parliamentary process in doing so. That includes working with bill teams such as ours in advance of the introduction of a bill, and before stage 1 consideration.

I have to accept the feedback that you have all provided today and I recognise that we have not fully understood the exact process and the benefit of producing information in suitable enough time to allow you to give proper consideration to that.

I will ask a quick question. When was a decision made to update the FM?

It was made once we had received that response to the call for evidence and in preparation for today.

Will you remind me when that was?

It was within the past few weeks.

Okay, so it is a relatively new decision. You have the figures for the updated costs from Police Scotland. You say that you are discussing those with Police Scotland. Is there concern that the figures that it has presented as evidence could increase even more?

Now that Police Scotland is able to see the exact wording of the bill, those figures should be more accurate.

I do not anticipate their increasing based on what is in the bill at the moment. Obviously, that is subject to the parliamentary process and the bill could be amended, but—based on what is in the bill at the moment, what Police Scotland has produced for the committee, and the conversations that we had with it just last week—we do not anticipate things changing from Police Scotland’s perspective.

I am trying to think of anything that might increase, such as pay. Should another pay deal be agreed and negotiated with the police, that would have an impact. However, that is not imminent.

Thank you.

Michelle Thomson has a brief supplementary question.

I want to pick up on the point about the training that you get from the parliamentary liaison unit. How long does that training last?

Off the top of my head, there are eight separate sessions, I think, of an hour each, once a year, for bill teams to come together. In reality, while we have been preparing for the bill, we have had the ability to attend two of those sessions.

To be clear, how many of the bill team who have had an input into the FM have attended the entirety of that training?

The bill team would have attended the entirety of the training.

Does any other project management training take place or is it just all in-house, as you have articulated?

For Scottish Government officials?

Yes.

For bill management and supporting bill processes, the training programme is the one that is supported by the parliamentary liaison unit.

How many FMs have you both, and, indeed, the wider bill team, developed? What is the typical experience? Is it part and parcel of what you do, or is this your first encounter?

I have contributed to two or three financial memorandums before now, but this is Steve’s first one.

How many FMs have you undertaken for framework bills?

I do not think that I have been involved in what I would classify as a framework bill—anything can be a framework bill, depending on how you define it.

Is the effectiveness of the FM—the question of how much an FM hits the mark—included in your annual review? I mean for bill teams generally, not you specifically.

We will be reflecting on that point in relation to future financial memorandums, to ensure that the committee is presented with the best information.

It is absolutely fair to say that we will take what you have told us today back to our colleagues in the wider Scottish Government and work on how we could do better.

Thank you very much. That has concluded questions from the committee, but I have one or two more.

You seem to have more or less accepted Police Scotland’s figures now that it has provided them. What level of interrogation of those figures has the bill team undertaken?

Without going back over what I have already said, we are interrogating training costs, because there is a need to establish stand-alone individual training packages and there are different needs for probationers who come into the police service. Probationers get a better amount of training at the moment than the officers and staff who have been in the organisation for longer, so we need to drill down into that issue and work with Police Scotland to understand it.

The difference in staff costs, in some ways, is prima facie. It is reflective of the fact that there are increased costs around staffing, which is quite a significant part of Police Scotland’s overall budget.

We did some sense-checking of the information that we had received by speaking to the Home Office and the London mayor’s office for policing and crime, which is responsible for the Met.

There are also plans for introducing secondary legislation that could reduce costs through things such as accelerated hearings when the evidence is incontrovertible. We are looking at that issue in the round with regard to the bill and secondary legislation.

I have to say, though, that I am frankly astonished that it seems that it was only when the committee’s call for evidence went out that you realised that there was a need to review the figures, and yet we still ended up with figures from September 2022.

We talked about the process document—the bill handbook—being a living document. However, surely, a financial memorandum should be a living document up until it is presented to the committee in an updated form. If you know that the figures are inaccurate, the fact that you come here with something that bears no resemblance to the actual figures shows a real misunderstanding of the role of the committee, the processes of the Parliament and, indeed, the timescale in which scrutiny has to take place. Do you accept that?

Based on what you and other members of the committee have told us today, I accept that we had personally misunderstood the role and timing of producing a revised financial memo. We will take on board what you have said, and we will do as much as we can to get the revised FM back into Parliament as quickly as possible.

Ultimately, this is taxpayers’ money, so there is a duty to ensure that the figures are accurate. We do not want a situation in which a bill goes through and the figures are, for example, chronically underestimated—as appears to have happened in this case—and then that money has to come out of front-line policing services, for example. That is what we could be talking about if the issue is not looked at, which is why we are taking it so seriously. It is important that we get this right.

Speaking on behalf of the whole committee, we look forward to getting a revised financial memorandum prior to the completion of stage 1 evidence, for us to be able to scrutinise it in order to inform the lead committee.

I thank you, gentlemen, for your evidence this morning and look forward to seeing you again before too long.

We will take a five-minute break to allow for a change of witnesses.

10:41 Meeting suspended.  

10:47 On resuming—