Public Audit Committee [Draft]

Meeting date: Wednesday, September 17, 2025

Official Report 836KB pdf

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“Flooding in communities: Moving towards flood resilience”

I resume today’s Public Audit Committee meeting by welcoming our guests to discuss the recently produced report by Audit Scotland and the Accounts Commission, “Flooding in communities: Moving towards flood resilience”. I am pleased that we are joined this morning by the Auditor General, Stephen Boyle. Alongside him are Rebecca Seidel, who is a senior manager at Audit Scotland, and Fiona Brannigan, who is an audit manager at Audit Scotland. I am also pleased to welcome Andrew Burns, who is the deputy chair of the Accounts Commission. Good morning.

We have some questions to put to you about the report. Before we do so, I invite the Auditor General to make an opening statement.

Good morning to the committee. I am pleased to present this joint report from the Accounts Commission and Audit Scotland on flooding in communities. Flooding is a growing threat in Scotland, driven by climate change. More than 284,000 properties are at risk—projections indicate that that number will rise to 400,000 by 2080. The impacts of flooding are serious: damaged homes, financial strain and effects on physical and mental health, notably for vulnerable groups in society. Flood resilience means not only protecting people from flooding but helping them to prepare and recover. It requires strong collaboration across public bodies, councils and communities.

In our work, we saw good examples of joint working, but we also noted that progress is being held back at times, with unclear roles and responsibilities, data gaps and weak leadership arrangements. Community engagement also needs improvement. Major flood defence schemes are one part of the solution, but our audit found that costs have tripled from £350 million to more than £1 billion, and fewer schemes are being delivered than were originally intended. We concluded that the current funding model is not fit for purpose and does not adequately manage risks or delays, while future funding remains uncertain. Our report recommends that the Scottish Government and the Convention of Scottish Local Authorities agree on a more robust funding approach.

The national flood resilience strategy, which was published in December 2024, is a welcome shift to a broader set of resilience arrangements. However, it lacks the detail that is needed to ensure timely and effective action. We also recommend that, over the next 12 months, the Scottish Government should establish clear implementation arrangements for the strategy.

I am delighted to be joined by Andrew Burns from the Accounts Commission, along with two of the report’s authors, Rebecca Seidel and Fiona Brannigan. As ever, we will do our utmost to answer the committee’s questions.

Thank you very much indeed. I begin by asking you to elaborate on the direct and indirect impacts on communities of flooding. Could you develop a bit the argument in the report about the unequal effect of flooding on particular groups in society?

I am happy to do that. I will bring in Fiona Brannigan, because she might want to set out more of the detail behind our analysis. As ever, if Andrew Burns wants to come in, I am sure that he will do so.

It might be helpful to direct the committee to exhibit 3 on page 14 of the report, in which we set out some of the impacts of flooding. I will not go through them all, but there are significant impacts on people’s health and financial circumstances, not to mention the risk to physical safety when a flooding event happens while people are living in a property.

On the parameters of the report, we did not analyse individual flood protection schemes or go into the reasons why a flooding event that has happened has been more severe in a particular community in Scotland. We have included some case studies, most notably one that you will find on page 13, which deals with the impacts of storm Babet on Brechin.

I will bring in Fiona Brannigan to elaborate on the unequal impact, which we discuss at various points in the report. Public bodies are making choices about the quality of community engagement, but what is driving those choices? We know that community engagement must improve and that it can influence the decisions that are being made. Fiona may want to touch on that as she develops my response, particularly by looking at which schemes are being prioritised and whether those are inadvertently being driven by factors that can cause inequality. For example, higher property values might be seen as a driver towards more investment.

There is a range of factors, and we make associated recommendations. Principally, public bodies that are developing further implementation approaches should draw more widely on the national standards that are in place for community engagement. We explain some of that towards the end of the report.

I will pause there. Fiona looked closely at that matter as we pulled the report together and I am keen to bring her in.

The impacts have already been covered, and they deeply affect people. Anything that happens within someone’s home can really undermine their lives because their place of security is impacted in a way that can leave them feeling anxious. That may well exacerbate long-term physical or mental health conditions, or trigger new physical or mental health problems. The trauma can last for many years, particularly when we take into account the fact that people may have to leave their homes for a long time if their community has been badly affected, or go back into homes where there is still a lot of clearing up to do and there are issues with damp and mould.

Flooding goes to the very heart of people’s sense of security and community. There are examples of communities starting to break down because people leave and other people might not want to move into the area because of the flood risk. That long-term impact has a broader impact on society.

As we stress in the report, there is the risk of inequalities increasing. Some people are vulnerable, or are more vulnerable than others, to the impacts of flooding, and there can be differences in people’s ability to recover from a flood event. Someone who does not have financial resources might find it much more difficult to move forward. For example, there will always be some expenditure that is not covered by insurance, and some people may not have been able to afford insurance in the first place and will find a flood very impactful indeed. Older people can be far more vulnerable because of health conditions or general frailty, and young children can also be more vulnerable. A range of vulnerability comes into play and can affect progress.

Our report finds that there is not a sufficient focus on those inequalities and vulnerabilities. Although there are some examples of areas of good practice, we did not find that that focus was there in general. As the Auditor General pointed out, the criteria that are used for determining flood schemes may well have had the unintended consequence of providing more protection for more affluent areas, because using the value of properties as the value-for-money criterion skews attention away from areas that might have more residents but where property values are not so high.

In our report, we make the recommendation that more specific attention be focused on inequalities in relation to not only the criteria for funding but the wider activity of community engagement and development of plans, which should take inequalities into account more clearly.

11:00  

That is very clear, thank you. I suppose that the corollary of that is that there has been a skewing of prioritisation to schemes in which higher-value properties are at risk. Is that what you are saying? Do you have evidence of that?

Stakeholders have raised that issue with us and identified that that could have happened, but we are not aware that any analysis has considered whether it has actually happened. One of our recommendations is around data gaps. If public sector bodies feel that that is a particular data gap and that more data would help in the development of funding criteria, for example, we would expect them to prioritise that over the next six months.

I think that Andrew Burns wants to come in on this question, too.

Thanks very much, convener. I would like to amplify—helpfully, I hope—some of the points that Fiona and the Auditor General have made. The Accounts Commission is one of the two sponsors of this piece of work and, although I am relieved to say that I have never been personally affected by a flooding incident, I have learned really quickly through the course of this work and the evidence that Rebecca, Fiona and other colleagues have collated that, in essence, it is a really traumatic experience, regardless of economic position or status. Anything that can be done to alleviate that trauma and make the process of recovery as smooth as possible is to be promoted and encouraged.

To amplify one point that the Auditor General has made, the national standards for community engagement are really crucial. I think that it was back in 2019-20 that Audit Scotland, the Auditor General and the Accounts Commission produced a piece of work on the principles for community empowerment. We enshrined five principles—I am looking at the document on my screen just now—and they are still valid. I really encourage the committee to look at the work that we jointly produced in 2019-20 as well as at the national standards, because they highlight how important it is to involve communities throughout the process to make recovery from the trauma as straightforward and as easy as possible.

The question that is provoked by the evidence that Fiona Brannigan has given to us is, “But which communities?” Some communities will be better organised, more articulate and better resourced—they could possibly have professional legal support—than others. The message that I have taken from the evidence so far is that there needs to be an equalisation. The criteria that are applied might need to reflect need rather than simply property values.

That is a fair assessment, convener. I am sure that members of the committee, through their constituency work, will have seen examples of significant flood prevention proposals raising emotive issues for communities, with some that are in favour and some that are against. The report also touches on some of the unintended consequences—for example, a flood prevention scheme might offer safety to one part of the country but transfer risk to another part. Fiona might want to say a bit more about that.

Based on the work that we undertook, the recommendation is that there be better clarity of roles and responsibilities and better signposting for people. Those are required in particular to support the Government’s ambition to implement a strategy that moves away from the 2009 legislation on flood management arrangements and towards flood resilience. For that to be about not only the role of public bodies, but how individuals and groups in society can better prepare and recover, real improvements will be required in signposting, clarity, and that equalisation of people’s voices. All those elements play an equal part.

Parliament passed the Flood Risk Management (Scotland) Act in 2009. However, in paragraph 23 of the report, you make the point that

“The Scottish Government did not introduce a way to monitor progress in addressing flooding in communities.”

The outstanding question, then, is whether the Scottish Government has introduced ways of monitoring progress in addressing flooding in communities, in the context of the flood resilience strategy. Have lessons been learned? Do you get a sense that more oversight is in place or that there is a monitoring system to ensure that the right decisions are being made and the right priorities followed?

I will bring in Rebecca Seidel, who has considered that part of the report in detail.

You are right. Something of a theme in our reporting is the need for good data, not just in and of itself, but to support decision making, evaluation, monitoring and any changes that policy makers and implementers of those decisions choose to make. We found that there were inconsistencies and data gaps. Your point, which we touch on in paragraph 23, is that, although the 2009 act was high level, it did not include any objectives, indicators or measures with which to monitor progress towards its implementation, notwithstanding that elements of it require periodic updates.

As I said my introductory remarks, I welcome this national flood resilience strategy. It recognises that the circumstances brought upon us by climate change mean that, to be candid, it will not be possible to protect every community from the traumatic impact of flooding. However, the strategy has to be underpinned by good-quality data and an implementation plan.

I am keen to bring in Rebecca to say a bit more about what needs to happen now, beyond that welcome strategy.

On the monitoring of flood defence arrangements across Scotland, we highlight in the report that there is currently no national monitoring of the condition of flood schemes, so there is not really a full understanding of the level of protection that is being offered to communities across Scotland. That links to our recommendation, which the Auditor General has highlighted, that, within six months, the Government, councils, the Scottish Environment Protection Agency and Scottish Water should work together to identify the key gaps in information and data, and that, within 12 months, they should develop an action plan for addressing those gaps.

Linked to the publication of the new strategy, the Scottish Government has provided some funding to SEPA, in the current financial year, to develop a database of the more than 200 flood and coastal defence systems that are in place in Scotland. That is very much seen as a first step in pulling together information in that area, which will provide a much better understanding of the assets that are located across Scotland, the level of protection that they offer and the condition of flood defence schemes. More will need to be done on top of that, but we see that as a positive first step in plugging the data gap.

I invite Colin Beattie to pursue strands around public sector collaboration.

Paragraph 31 on page 19 says:

“There are ambiguities, complexity and gaps in roles and responsibilities”.

That is a fairly sweeping statement. Can you give us more detail on the impact on communities of those ambiguities and gaps?

I am happy to start. Andrew Burns might want to come in, and Fiona Brannigan likewise. I highlight exhibit 6 on page 20, which Rebecca Seidel touched on. A number of organisations have a role and responsibility in flood management and flood resilience arrangements, including the 32 local authorities and public bodies such as Scottish Water and SEPA. The expectation of the 2009 legislation was that those bodies would work together. However, through our audit work, particularly the engagement and feedback that we received from stakeholders, we have seen a lack of clarity at times about who was responsible for a particular part of how the system operates.

Paragraph 32 of the report, which comes with a short sidebar, highlights sustainable urban drainage systems—or SUDS ponds, as they are sometimes referred to—as an example of the lack of clarity about who is responsible. Waterway management issues are also cited in that respect. The question is: where do people go to get the advice or information that they might need? Again, what has come back in our audit work is that the signposting is inconsistent. An answer that you might get in one part of Scotland could be contradicted by another part—or, indeed, by a public body in the same local authority area.

We are clear that in order for this system to work—and I am talking not just about the previous legislation, but about the opportunity afforded by the new strategy—there will need to be effective collaboration. Indeed, the work will need to be done collaboratively, given the overlapping responsibilities; after all, water does not respect public sector body boundaries. It will need to be done more effectively and with more clarity than is currently the case.

However, I am keen to bring in Fiona Brannigan here, and then Andrew Burns.

The legislation took a proactive approach to flood management; it moved from a more reactive approach to places that had previously been flooded to having the intention to do something about the issue. The idea behind the 2009 act was to identify the risk for the future and then take action to address that future risk.

However, as happens with any legislation, not all of the roles and responsibilities were necessarily captured within the act, and there are, as the Auditor General has pointed out, particular gaps around sustainable urban drainage systems. They are particularly significant because, if new housing is developed where there is potential for run-off to cause a greater flood risk in an adjacent community, one intervention is to introduce SUDS, which allow water to be adequately absorbed by the land. However, if such systems are not maintained, the land’s ability to absorb that water is reduced, and there is no clarity on who is responsible for maintaining that SUD system to ensure that the intervention fulfils the purpose that it was designed for. That area potentially requires more work, because there is an ambiguity in that respect.

There are also difficulties when it comes to the responsibilities on individual property owners, because those responsibilities have not been clearly set out. That can lead to a level of anxiety and frustration in communities and among individuals, because they are not quite clear about what they are supposed to be doing, and they might get different answers to that question from different sources.

Also, the legislation contains general requirements on, for example, councils being responsible for clearing waterways. However, stakeholders have told us that, in their experience, different councils might interpret those requirements in different ways, which means that communities in different areas are getting different levels of service. There are also gaps in certain key areas such as coastal monitoring and coastal erosion, with no clear roles and responsibilities in that respect set out in the legislation in the same way that other roles and responsibilities are.

That is why, as the Auditor General has said, we have recommended real collaboration to prioritise any major gaps in information or major ambiguities, to ensure that the whole sector can prioritise the action needs to be taken to address them. We have also put in clear timescales for that to happen.

Now that you have mentioned SUDS, I have to say that it is something that I have never thought about. What maintenance do such systems need?

It depends on the individual system, but I think that, in general terms, if there are areas for absorbing water, maintenance will be needed to ensure that they do not get filled up with other things that prevent that water absorption happening in the way that was intended. Of course, we are not experts on the mechanics of that, but stakeholders who are more directly involved have told us that it is an issue in the sector.

Auditor General, do these ambiguities have to be resolved at Government level, through legislation, or do the different parties simply need to get together and work out between themselves what the parameters are?

11:15  

I think that it is the latter, rather than new legislation being required. We now have a strategy from Government that affords the opportunity for successful implementation of the 2009 act; it talks about the need for better collaboration, encompassing the ambition to move away from flood prevention. There is a shared consensus that, with climate change, implementation of the legislation, 16 years after it was enacted, is not going to be achieved by individual schemes but requires a broader range of approaches.

Underpinning that is the need for clarity around roles and responsibilities—we have touched on a couple of examples already. It requires a clear implementation plan that sets out what is going to happen and how that is going to be monitored.

Andrew Burns might want to talk about this area, and the other point, as councils will have a fundamental role in ensuring that the strategy’s ambitions are realised.

I thank Colin Beattie for the question.

On the general point about collaboration and communication, it is fundamental to get that right at a local level. You asked about the impact when that goes wrong. I would maybe posit the converse and draw the committee’s attention to a supplement to the report that contains 10 case studies, or examples, of things that have gone well.

In particular, I highlight case study 3, on Dumfries and Galloway flood resilience activity. It sounds so simple, but the council employs 12 local ward officers at ward level who act as a liaison between the local community and the myriad other organisations, such as SEPA and the Government, and funding streams that have to make a positive impact once a flooding event occurs. The officers basically act as brokers between the local community and all the other organisations. We highlight that in the supplement as one example of really good practice.

To answer your question, therefore, we can just reverse the situation. Where such good practice does not exist, we can see the barriers—to which Stephen Boyle and others have already referred—that are thrown up in the way of local communities being able to access support quickly, which is crucial once a flooding event has happened.

As colleagues have said, such events are, unfortunately, going to happen more frequently in the future. The type of good practice that we have highlighted allows local communities to access help and support swiftly and smoothly. Without having an arrangement in place such as ward officers, as one example of good practice, it is obvious just how problematic it can be for local communities to recover.

I absolutely echo the Auditor General’s latter point about the crucial need for collaboration and for a clear implementation plan, with a timeline, for the flood resilience strategy that the Scottish Government brought forward last December, which we welcome.

I will move on—I was going to say move on to something new, but it is not new. Paragraph 35 on page 21 talks about the absence of a

“consistent, comprehensive national monitoring system”

and a lack of data and information. We have been talking about that for years, and it has not really been resolved.

Can you tell us a bit more about the data gaps in flood resilience? What, in your view, needs to be changed?

You are right—it has been a recurring theme. Again, I will bring in Fiona Brannigan if she wants to add anything.

We see an opportunity to support the new strategy with a clear implementation plan that encompasses what data is necessary, who is going to provide it, the timeline for that and how it will be used. A strategy is only that—it might hold good for a number of years, but having good-quality data allows decision makers to know whether it is on track and whether any alternative interventions might be necessary along the way; for example, with regard to how effectively flood prevention schemes are performing.

You mentioned paragraph 35. An important component of that text is that there is currently no national information on how Scotland’s flood prevention schemes are performing. Given the scale of the investment has been made—we may come on to talk about this—it feels fundamental that we do not have information to allow us to tell whether a particular scheme is working as intended. As I mentioned in my introductory remarks, the first cycle of major flood prevention schemes will cost £1 billion, and we are on the cusp of the next cycle.

In the climate change context—not to pre-empt any further discussion of it—the Brechin case study was designed as a flood prevention system to alleviate an event that happens as rarely as once every 200 years. After the devastating flood that was caused by storm Babet, that has been reassessed. It now holds good for events that occur once every 50 years, and maybe not even as regularly as that. Knowing that we have the right data to make good decisions is fundamental, and our report makes recommendations to that effect.

We recognise the extremely high level of expertise in the sector, including of organisations such as SEPA—clearly, this is SEPA’s domain. We would expect that when those organisations—SEPA, Scottish Water, the Scottish Government and the councils—come together, they are best equipped to identify the priorities.

In the report, we highlighted specific areas that we identified as key concerns. As the Auditor General said, coastal monitoring is one of them; another is the condition of flood schemes and whether they are performing as originally intended. Because of the information that we have received from stakeholders during the audit, we would expect that those areas would be in that list of priorities. We would expect those organisations to use their expertise to identify the priority order of the concerns and how they should be addressed, and put in place an action plan to do that.

What is the current process for post-implementation evaluation?

Currently, individual councils have a responsibility to assess their individual flood schemes. The level and extent of that was not clear to us during the audit; stakeholders felt that there was inconsistency across different council areas. We did not specifically evaluate that during our audit, but we identified it as an issue. That gap in the national understanding might potentially lead to ambiguity around the issue. As the Auditor General said, if you have that data, you are able to set clear action plans to address the issue—but without the data, you are not in a position to do that.

So, there is no common standard for measuring the success or failure of a flood scheme.

As we understand it, the condition survey is about the condition of the flood scheme as opposed to an arbitrary success or failure. That is not necessarily something that came through during the audit. We would not have sufficient detail on it to be able to respond to the specifics of that.

Does anybody?

Others in the team might want to elaborate on that.

Councils have responsibility for maintenance of the flood defence schemes in their local area, so they may have information on that for their own individual flood schemes. As Fiona Brannigan highlighted, we were not clear on the extent and consistency of that across councils. There is no national collation of that information. In the course of our audit, we could not see the evidence of how it was assessed at the level of an individual flood scheme. That is not to say that the information is not held by councils, but it is not collated anywhere centrally, which may mean that there is a lack of consistency across the piece in terms of how it is approached.

Moving on slightly, what has been done to ensure that public bodies such as SEPA have enough capacity and resources to effectively provide the services and so on to help people who are responding to flood issues?

I am happy to start on that question, and I will bring in colleagues in a moment. We note in paragraph 36 of the report that there are limited financial resources—that is clear. You specifically asked about SEPA, Mr Beattie. In our engagement with SEPA over the course of the audit, it highlighted that, like all public bodies, it has had to prioritise and deprioritise based on the resources that are at its disposal. Therefore, SEPA prioritised the operational flood warning system.

I am not questioning the merits of one choice or another, but you can see why that prioritisation might be necessary, given the threat-to-life arrangements that we have become familiar with. However, that has been at the expense of some of the annual flood map updates. The potential implications of that prioritisation are that councils and other public bodies are missing some of the information that they might need to support their decision making. We recognise that resource constraints and prioritisation are a factor in how public services are delivered.

I will turn to Andrew Burns to draw on some of the commentary that the Accounts Commission has made about the financial pressures that Scotland’s local authorities have been under and what the implications of those might be.

The debate that you have instigated with your question underscores the point that Stephen alluded to in his opening comments. We welcomed the publication of the “National Flood Resilience Strategy” last December. However, I draw the committee’s attention to our fourth recommendation, which is about that strategy. It is a step in the right direction but there is not an implementation plan.

I will quickly allude to some of the things that are in that recommendation, which directly address several of the points that you have just raised. We are urging that the implementation plan should be published within 12 months

“with clear actions, targets, indicators and timescales”,

and that it should clarify

“roles and responsibilities”.

Those things, which is what you were getting at with your question, do not clearly exist at the moment. As the Auditor General said, that absence is not just at the national level but, regrettably, at the local level.

There is no doubt about the pressure that all 32 local authorities are currently under. A clarification of roles and responsibilities and the allocation of funding as part of the implementation plan would make a huge difference in creating certainty regarding what help and assistance is available when a flooding event takes place. As we have all said several times already, flooding events are going to take place, and, sadly, they will take place more frequently. Therefore, it is crucial that the implementation plan with the details that we are asking for is published within the 12 months that we have outlined in the recommendations.

Does SEPA have enough data to be able to effectively carry out its functions? We are talking about information being available at the council level but not necessarily being collated with any uniform methodology or, as it would appear in some cases, not being collated at all. For example, how does SEPA assess the flood risk in areas that have flood management systems in place? How does SEPA square that circle?

I suspect that SEPA may be better placed to answer that question to reassure the committee about its work. We did not carry out an audit of SEPA’s overall arrangements. Rather than being a particular analysis of that, our audit is about the more general need for better data, stronger collaboration between public bodies and consideration of funding arrangements in the future.

On a slightly different topic, can you tell us a bit more about what the impact has been on staff in councils and other public bodies who have been working with communities that are at risk of flooding?

11:30  

I am happy to respond to that. The Auditor General referenced the national standards for community engagement, and I drew the committee’s attention to the piece of work that was jointly undertaken in 2019 to 2020 on principles for community empowerment. When those principles or the national standards are followed, such as in Dumfries and Galloway, which I used as an example a few moments ago, the impact is wholly positive. I will not sit here and claim that the evidence shows that everything goes 100 per cent perfectly, but, locally, good communication, collaboration and good use of the national standards and community empowerment principles make a huge difference to how local communities can access data quickly and effectively and recover from flooding events.

I know that we have all said it a few times but, because of climate change, it is a question of when, and not if, those events will happen. They will happen more frequently, so recovery will be increasingly important. That is why local community engagement can have a positive impact when it is done efficiently and effectively and in accordance with the national standards and community empowerment principles.

The Auditor General’s report seems to make it fairly clear that, to some extent, each flood scheme is operating in a silo. There does not seem to be a lot of co-operation or transfer of best practice, although you have shown some examples of good practice in innovation and collaboration work. For example, case study 2 looks at the Tweed Forum and case study 3 refers to work done by the Metropolitan Glasgow Strategic Drainage Partnership. Why have those projects been successful, and why has that success not been reflected in other areas?

You are right to reference those case studies. When we undertake an audit such as this one, we look to draw on examples from across Scotland of good practice, progress that is being made or arrangements that are working well. I will touch on three themes from the case studies, including the importance of relationships between public bodies and communities and embedding some of the principles of community empowerment, which Andrew Burns referred to. The case studies underline the value of joint working and building depth and economies of scale into local initiatives. Lastly, as you have touched on, when something is working well, we should share the principles behind it and the reasons for its success so that that can be applied across the country.

Our work offers assurance to support scrutiny, but another objective of our work is to support improvement, building on some of the opportunities and examples in the report. There are many good examples of cross working across the country, but we hope that implementing the recommendations in our report, particularly on better data and providing clarity on roles and responsibilities, would resolve any ambiguity about where responsibility lies for particular parts of the system.

Are there any mechanisms for sharing best practice?

I will bring in colleagues to talk about some of the groups and governance arrangements that are in place and how the system operates. The implementation plan that supports the national flood resilience strategy will be so important.

There are groups that are operating in the sector that work to support each other on the action that is taken. We have found that there is not necessarily a systematic approach or a formal structure for sharing good practice or reviewing how it could be replicated and scaled up in other areas.

For example, Dumfries and Galloway has a database of persons at risk so that, when a flooding incident happens, the major responders have an understanding of the particularly vulnerable groups. Stakeholders felt that there is the potential for that kind of activity to be replicated nationally, but there is not necessarily any mechanism in place to ensure that that happens.

One reason for that may be that the disjointed nature of organisations themselves affects how they address flooding. There can be a distinction at both national and local level between the actions that must be taken in line with civil contingency legislation and the work that flood teams might be doing or the community engagement work that might happen at council level. One of the recommendations in our report is to look at how services could be joined up for more effective delivery, so that there is an opportunity to put in place formal mechanisms and structures that will enable cross working and the sharing of ideas. That was one of the key things that our audit identified as currently being missing.

The deputy convener, Jamie Greene, has some questions.

I will begin with a general question. The cycle 1 flood schemes were identified 10 years ago. There were 40 schemes in the plan, the cost of delivering which was estimated to be around £350 million at the time. You now estimate that cost to be around £1 billion, which is a lot of money. Is that your estimate of how much it would cost to deliver the 40 schemes if they were to be delivered in full today, or is that the amount that you understand that the Government has now allocated to their completion? It is a lot of money.

Indeed. The growth to £1 billion represents a significant growth in the anticipated cost of delivering the schemes. I can confirm that that is the projected cost of delivering the cycle 1 schemes that are going ahead.

Is it correct that eight of the cycle 1 schemes are not going ahead?

That is correct. The amount of money involved is not insignificant. I draw the committee’s attention to paragraph 60 of the report. Some schemes have been abandoned, and around £30 million of public money has been spent on schemes that will not go ahead. I know that you are focusing on cycle 1, but that is also relevant to cycle 2.

It takes many months, or even years, for schemes to go through planning and preparation, and some of that work is undertaken at risk by local authorities. Our report recommends that there is a need for clarity on the funding arrangements, so that the cycle 2 funding is clear and we do not encounter the risk of further time and public money being spent on schemes that are subsequently abandoned.

We know of communities that have suffered terribly due to flooding and that are still waiting for Government support. We are talking about £30 million of sunk costs. That is a huge amount of money that could have gone some way towards supporting businesses and households that have really struggled in the past few years. What analysis has been done of where that money actually went? Who did it go to?

Rebecca Seidel can say more about the detail behind why schemes did not go ahead.

Somebody has pocketed the cash somewhere along the line, that is for sure, because £30 million does not disappear overnight.

To be clear, we are not alleging that there was any impropriety in relation to those sunk costs.

What about contractors? I cannot get my head around how such a large sum of money has not gone on building flood defences or supporting communities. That is my point.

I understand the point. Perhaps Rebecca can provide a bit of clarity.

Absolutely.

As you recognise, Mr Greene, 40 schemes were initially deemed eligible for funding at the start of cycle 1. Over the past decade, eight of those schemes have fallen by the wayside—they are no longer progressing. The £30 million in sunk costs is the £30 million from the Scottish Government allocation towards major flood schemes. That does not include any additional money that councils may have invested in the schemes. The sunk costs will largely concern the design stage of projects that did not even get to the construction stage. There is a very long lead-in time for those projects, as you can imagine is the case for large infrastructure projects. Projects have a long period of design and redesign before they eventually get the green light and construction begins. A lot of sunk costs will have gone into the early design work for the projects that are not going ahead.

Six of the projects are not going ahead because they did not meet a deadline that was set by the Government and COSLA in 2024, in recognition of the fact that there needed to be some kind of cut-off point so that projects did not remain in development for an eternity. The Government and COSLA had set a deadline for when councils needed to notify them that projects would definitely be going ahead, and six of the projects did not meet that deadline. As for the other two out of the eight, they were deemed no longer to be needed, or the council decided not to proceed with them.

That was helpful clarification. It makes sense that, where very few spades went in the ground, the costs in question were associated with the development, planning and design of the schemes that did not come to fruition. I am sure that local communities will reflect on that.

If the 40 projects that were originally planned had been delivered ahead of significant storm events, would those events have had less impact or could any of the substantial damage that communities faced been avoided had those schemes been in place? Has any analysis been done of that?

I do not think that we considered that as a counterfactual over the course of our audit work. If that is an area that the committee has a particular interest in pursuing, that would probably be a matter for SEPA, Scottish Water or local authorities.

I do not want to labour the point, but the case study in Brechin highlights that, even though the implementation of a scheme might have been completely perfect, with the costs running entirely to budget, it still might not afford the protection that the community required.

That was a significant event. To use the parlance, the scheme was designed for one-in-200-year events, but the event in question was worse than that. We cannot control the weather; I understand that point.

I was concerned by what I read in your report about some of the other funding issues. I was most surprised by what we do not know. Although we know in general terms how much the Scottish Government gives to flooding schemes, I was surprised to learn that that money is simply provided via the general capital grant funding model, and that there is no tracking of which councils get how much and what they do with the money. I was equally surprised to learn that the money is not ring fenced in any way, shape or form. Do you have any specific recommendations to make off the back of your findings?

I will bring in Andrew Burns on that. The role of councils is fundamental to the implementation of flood defence schemes. For many years, the Accounts Commission has reported on some of the challenges that local authorities face. We recommend that clear model timescales should be published on the duration of the cycle 2 schemes. Clearly, we are not talking about 12-month-cycle schemes, but we want the arrangements to be more consistent and reliable than those that we currently have. The need for that is evidenced by the scale of the change that took place in cycle 1, with the figure of £350 million, which was initially intended, increasing to more than £1 billion, but with fewer schemes and, therefore, fewer properties being covered.

The question of where the risk lies is a real consideration. Currently, the model transfers much of the risk to local authorities.

11:45  

I absolutely agree—Jamie Greene draws out a crucial point, which I made reference to in response to Colin Beattie’s questions. It is important that an implementation plan, with a timeline, is published for the flood resilience strategy. The publication of the strategy was a welcome development, as I and the Auditor General have said. An implementation plan with clear timelines and clear delineation of which schemes are to be funded, when and how, would go a huge way towards providing clarity to the 32 local authorities, or however many would be impacted by the plan.

At the moment, there is no such clarity; there is uncertainty. In the current climate for all local authorities and the Scottish Government, it is very difficult for them to plan ahead in any meaningful way. A clear implementation plan that gave timelines and specifically identified which schemes funding was being allocated to would be a huge step in the right direction. The recommendations clearly call for that within 12 months.

That is a short timescale.

Auditor General, your report is quite stark in its findings. It states explicitly that money that was supposed to go towards funding flooding schemes was redirected by councils. Was that a Scottish Government decision or a COSLA decision, or did individual councils take decisions to divert money from flooding to, for example, settle local government pay settlements? I think that you alluded to that. In other words, who made the decisions to divert that money away from vital flooding schemes?

Andrew Burns might want to comment on the specifics of that, as might Rebecca Seidel, who looked at the issue in detail.

You mentioned how the funding flows from the Scottish Government to local authorities and whether it is ring fenced. We highlight the fact that there is ambiguity in approaches. Scottish councils face challenging financial positions, so prioritisation has taken place. I do not think that I have specific detail on whether those decisions were taken at committee or council meetings or by officers. If we have that information, we can share it with you. However, the overall point is that the way in which the funding model for flood prevention schemes operates is not delivering what was intended.

I will pass over to Rebecca Seidel.

The allocation of funding for flooding is determined between ministers and COSLA leaders—there are joint discussions on how the funding should be distributed.

On the redirection of money towards the local government pay settlement, my understanding is that that will have been decided by ministers and COSLA leaders. I am not sure about the specifics of when and where that happened, but they are responsible for making those decisions on how the money that is allocated through the general capital grant is then distributed across councils in Scotland.

Understood. I am not passing comment on the decision that was made; I simply want to understand the diligence process by which those decisions are made. I know for sure that, if I lived in a community that had been ravaged by a flood, and a defence scheme should have been there but was not, and I then discovered that the local council had diverted money to cover other shortfalls, I would not be an overly happy resident. I am sure that many people are not happy about that.

I point to exhibit 7 in your report, which is a table. It is clear that the Scottish Government is spending significant amounts of money on the issue of flooding, and that that has increased since 2017. In that year, the figure was £42 million, and councils also spent £42 million on the issue. In 2023-24, which is the last year in the table, that figure had increased to £60 million. However, the same graph shows that councils’ expenditure was nearer £80 million, so there is a delta of nearly £20 million there. How did that come about? Do you know whether that shortfall was made up or covered by councils dipping into other parts of their budgets to fund that difference?

I will briefly say a word or two before passing over to Rebecca and Andrew. That illustrates who carries the risk if the costs of a project go beyond the funding that has been allocated. On a particular scheme, that risk is largely held by the local authority.

I should say that many of the reasons that the committee will have heard in many sessions in recent years for the costs of infrastructure projects growing are repeated in the report—they are set out in paragraph 54. The situation is the same for flood management projects as it is for other large capital projects. Under the existing model, Scotland’s councils will pick up the majority of the additional costs over and above the funding that is given, which will inevitably lead to prioritisation and longer periods of time being taken to implement particular projects.

That is why, when it comes to our key finding and recommendation for the Scottish Government, COSLA and other public bodies, we step back and ask: is there a better way of doing this that can deliver projects with improved value for money, implementation and timescales than we are seeing at the moment?

I am sure that Rebecca Seidel and Andrew Burns will want to say a bit more about that.

I can say a bit more about the figures that sit behind exhibit 7. First, it is important to note that the exhibit does not cover the entire period for which funding has been available or for which councils have been spending money on flooding; it covers just the period for which information on council spending is publicly available. Scottish Government funding started back in 2015-16, and it has been providing £42 million a year through the general capital grant. That money is for all flooding activity, with around £36 million going towards the construction of major flood schemes, and the remainder—about £8.5 million—going on broader flooding activity, which can include flood resilience activity, community engagement on flood activity et cetera. It captures all of that spending, not just the spending on major flood schemes.

As you will see, Government expenditure started to increase in around 2021-22, which was when the Government committed an additional £150 million between 2021 and 2026 in recognition of the increases in expected costs for some major flood schemes. As a result of that, it started to contribute more money to the general capital grant to fund those projects. Since 2023-24, that funding has continued to increase—it increased to around £88 million in 2024-25, and to £96 million in 2025-26. However, we do not have the corresponding information for council spending in those years, as that is not available yet.

As for where the line between Government funding and council funding diverges, the majority of spend is on the major flood schemes, and the split is that 80 per cent of it is Scottish Government funding and 20 per cent of it is the councils’ responsibility. The split is set at the point at which a contract is signed; essentially, once everything has been legally signed and sealed, the Government will contribute 80 per cent of the funding towards that major flood scheme. Councils will be liable for, and expected to pay, any increase in costs, and to pay for the maintenance of the flood schemes once they have been built.

Therefore, some of the divergence that is shown in exhibit 7 comes from councils putting in their share of the funding towards the flood schemes; it also recognises that, given the long period of time that it takes to bring the schemes to fruition, the spend will vary from year to year, depending on the stage that those schemes are at.

That information was helpful. The bigger concern, though—I am playing devil’s advocate here, because I have sympathy with the Government on this—is that if the original costs of cycle 1 have more than trebled to more than £1 billion, and if, as one might presume, cycle 2 is going to come with a huge price tag, where will the Government find the money to implement the cycle 2 schemes? After all, no Government can magic £2 billion out of nowhere. Where is the money going to come from? We have to invest in those schemes, so the Government will have to find that money from somewhere within its overall capital budget. We are talking about huge sums of money. Having seen eight of the previous 40 schemes being dropped, people will be concerned about the next tranche of schemes actually being delivered. When the worst happens, people will feel let down.

I absolutely recognise that, which is why the infrastructure investment pipeline that sets out the Government’s capital programme intentions will be so key in making it clear to public bodies and the public where the prioritisation will be drawn. Resources are limited, and that will be reflected in those priorities.

That takes us back to the flood resilience strategy. The approach is not only about major schemes; the sense is that, although they play an important part in flood resilience, they are part of a much broader strategy. Other public bodies, such as NatureScot, can play a role in relation to land use and natural flood defence arrangements. A wider scheme of options is available over and above the capital projects, which are a challenge to prioritise.

Is there a role for others to play? Councils face a lot of pressures, but there are two examples of flood prevention or flood curing systems in my local area: one is a Scottish Water project for a major A road, which costs £2.5 million; the other is funded by Amey, because it involves constructing wall defences on a coastal road. At the end of the day, it is all public money, but it has filtered its way through different agencies.

Do other parts of the public sector have a bigger role to play? Can they get involved in funding some of the flood prevention work so that there is less reliance on pressured local councils?

I am very clear that that would be a policy decision for ministers and for the Parliament in its scrutiny of budget proposals. However, we make it clear in the report that there is a need for stronger collaboration and clarity around roles and responsibilities. That should bridge over into how projects are financed.

Thank you.

I want to follow on from Jamie Greene’s line of questioning and ask you about a specific project that you mention in the report: the Grangemouth flood protection scheme. It is a very good example of what we have talked about, which is how costs have spiralled and responsibilities have changed. In 2015, the cost was estimated to be £108 million; now, it is as much as £672 million, and the scheme is not off the ground yet.

A task force has been set up that involves Falkirk Council, which clearly cannot afford even a fraction of that sum, and the Scottish Government. I will give you some figures that tell you about the scheme’s massive size: it will provide around 17 miles of flood defences, which will involve walls, embankments and floodgates; and it will protect more than 6,000 people, 2,700 homes, 1,200 commercial properties and 14 miles of roads in the surrounding area. What is your understanding of the situation and how the scheme should be progressed?

I am not sure that I have much more to add to what you have outlined, Mr Simpson. As we touched on in the report, ministers and COSLA have taken that scheme out of the overall list of cycle 1 flood defence schemes that they manage, because its scale, complexity and anticipated costs dwarf the remainder of those schemes. A task force has been created, and ministers and COSLA are now considering whether to commit additional funds to the other schemes. I do not have a view on that; it was not part of our work, and, ultimately, how best to progress flood defences in Grangemouth is a policy decision for elected members in Falkirk, along with ministers.

Andrew Burns, do you want come in on that?

12:00  

I do not have any detailed comments to make on that project, because, although we have included some case studies in our report, we have not looked in detail at specific projects.

Paragraph 54 of the report draws out five reasons that stakeholders gave, as part of our evidence gathering, for the escalating project costs. Clearly, those increases have been extremely significant in the case of Grangemouth. The five reasons make sense and ring true, but I do not have a detailed explanation as to why the costs have escalated so significantly in the Grangemouth example. You are right to highlight that, because it forms a large chunk of the £350 million to £1 billion increase in flood defence scheme costs that the Auditor General referred to in his opening comments.

The costs have spiralled because it is taking so long to start the work, and things tend to cost more the longer you wait—and we have been waiting quite a long time for the scheme.

I raised the issue because it is such a major scheme that I think it is of national significance—I do not mean only for Scotland; it is of significance UK wide. It is my view that, due to its significance, including for the economy of Scotland, we could involve the UK Government. The scheme shows the complexities of flood protection and the challenges for Government at all levels.

Yes, undoubtedly. As I think that we set out in the report, climate change has undoubtedly brought about a change in the strategy not just in relation to major flood defences but with regard to broadening out the approach to flood resilience. The report also highlights some of the funding challenges—the value-for-money requirements and how difficult it has been to deliver on those in cycle 1. That is illustrated by the fact that the original sum of £350 million was intended to protect 15,500 properties, but the scale of cost growth means that, by 2025, the scheme is intended to protect 14,000 or so properties at a cost of more than £1 billion, representing a cost per property of £75,000 rather than £22,500.

The funding for that will be a matter and a policy decision for ministers, which is why the infrastructure investment pipeline—whether that is produced later this year or to coincide with the budget in early 2026—will be key to how the major flooding resilience schemes will be prioritised, along with the many other capital requirements that the Scottish Government will want to deliver.

Before I ask you about community engagement, I want to push back a bit on your view about flooding. You will correct me if I am wrong, but what I picked up from what you said is that you think that flooding is driven entirely by climate change. I am not disputing that climate change is a factor, but exhibit 2 in your report sets out various reasons for flooding. There is river flooding, surface water flooding, erosion-enhanced flooding, coastal flooding and groundwater flooding. We have also spoken about housing developments, which can exacerbate the risk of flooding. Therefore, do you accept that, although climate change is a factor, it is not the only thing that can cause flooding?

I accept that flooding existed before it became a recent scientific statement of fact that climate change exists and that flooding events are becoming more regular and more significant. The recommendations that we make in the report, which are based on the evidence that we discovered during our audit, are that public bodies can take many steps to support not just flood management—I have referred to the clarity of the strategy around the legislation—but flood resilience. A clear implementation plan, better data and clarity around funding arrangements will all help to prevent and alleviate flooding, and help communities to recover when they experience flooding.

I will go on to community engagement briefly. We have touched on it a bit. Paragraph 77 on page 33 of your report says:

“Overall, there are major barriers to meaningful engagement for both public bodies and communities. This includes issues and barriers around consultations on major flood schemes”—

we have just spoken about one—

“as well as engagement around broader resilience activity.”

Will you provide some detail on what the “barriers to meaningful engagement” are?

I am happy to do so, but I will shortly pass over to Fiona Brannigan to develop what I say. Exhibit 9 on page 35 of today’s report sets out some of the barriers that were brought up by stakeholders to some of the community resilience actions that can be taken. As Andrew Burns has mentioned, the report finds that steps that need to be taken to ensure effective community engagement and the application of the national standards for community engagement so that there is consistency across Scotland and there is an underpinning framework that is used to support that engagement.

There are major barriers facing communities and those who engage with communities, particularly if we look at it from councils’ point of view. Public bodies are engaging with communities in multiple ways. The key ones to outline are around major flood schemes, but there is also engagement on broader resilience issues and flooding issues that are not necessarily addressed by flood schemes.

In the report, we note that communities can respond differently to attempts to engage. On long-term planning and what the local plans might be to address issues in the long-term, councils can be met with disinterest from communities, particularly if they have not experienced recent flooding. Communities might not necessarily prioritise that and it can make the long-term planning approach more difficult.

Do you have any examples of that disinterest?

This is information that we have received from stakeholders. Multiple stakeholders who work closely with communities have confirmed that the development of local development plans can be a particular issue, for example. Those are not necessarily highlighted and prioritised by communities in the way that public bodies might look for them to be prioritised because of the evidence of the long-term risk.

A crucial factor that we highlight in the report is the long-term element and what the risk is likely to be. The Flood Risk Management (Scotland) Act 2009 switched to long-term planning rather than being reactive. That means that we are talking about communities that have not previously been flooded so they simply do not recognise it as a priority and they might be sceptical about whether there is a risk of flooding in the future. That can be a real barrier to overcome.

We have already looked at how major flood schemes can lead to polarised views in the community and highly emotive discussions, which can create difficulties and barriers for councils. In the report, we have highlighted that council staff can sometimes be on the receiving end of abuse in those circumstances because of heightened emotions and polarised views.

Councils have a lot of issues to deal with, including skills and expertise. It needs to be recognised that engaging with communities is a skill, and a level of expertise is needed in that respect. In our case studies, for example, we point out how the Scottish Flood Forum can support councils to develop engagement activities. There are issues around engagement for councils to consider.

From a community perspective, there can be major issues with getting access to the right information, and with getting the resources to gain information on alternative options. A community might feel that, to be able to consider what is presented to them, they would like to get independent advice, but not all communities can afford to do that.

If we look beyond flood schemes, there are also issues in which communities might be motivated to taking direct action in their local areas, but some might be better resourced than others to be able to do that. In addition, there is inconsistency across council areas in how public authorities might respond to such action.

There are also wider systemic issues that communities do not necessarily have access to the means to overcome—for example, around the availability of insurance or the ability to access and afford quality flood resilience measures for their homes, and how they can take action if they feel that their local council is not being active enough in addressing the flood risk.

We note in the report that some communities have a sense of abandonment because they recognise the risk and want action to be taken—conversely to those communities that are sceptical—but they do not feel that the action that is taken is sufficient to meet the scale of the risk that they perceive or have experienced. There is not really any formal recourse for them to address that, as opposed to the planning process for major flood schemes.

There are those multiple barriers, which is why we are clear in our recommendations that much more work needs to be done around community engagement activity and to understand how the activity can be resourced and the timelines for its implementation.

That is a comprehensive answer. I am very aware of the time, and I know that Mr Brown is itching to get in, but I have one more question on this subject. When someone is a victim of flooding, they need instant information and help, probably from the council—they want it to step in. Have you uncovered any issues with community engagement, or lack of it, in that respect?

In this report, we did not focus on the emergency response part of the resilience spectrum—we were looking at the broader issues leading up to a flooding event, and the aftermath, rather than the emergency response itself. We felt that that was a topic in itself that would require us to take an in-depth look at it, rather than as part of the whole-system approach that we took with the report. My colleagues might be able to add something further on that.

I would only reiterate that I draw attention to the Dumfries and Galloway example. We are not claiming that that is, or was, 100 per cent perfect, but the implementation of ward officers helped communication at a very local level at a time of crisis, and is far preferable to not having such officers in existence and communities not having that conduit to information that could otherwise be quite difficult for them to find and access.

I now invite Keith Brown to put some questions to the witnesses.

First, I go back to the very start of the discussion, when reference was made—this is in the report, too—to instances in which some communities might be more likely to advance their case more effectively, if I can put it that way, particularly where high-value homes are concerned. The convener was quite passionate when asking about that.

I think that we could all agree that, intuitively, that would make sense, but I am conscious that you said that there was no analysis and no evidence of that, unless I picked that up wrong. You said that the issue came up with stakeholders. Are you able to say which stakeholders raised that?

12:15  

I will start and then come to Fiona Brannigan. That might be a reference to paragraph 51 in the report and to cycle 1 schemes. We are coming to the end of those major flood schemes, and we said in the report that SEPA has a key role in prioritising particular schemes over others. That was part of the flood risk management strategy that goes back to December 2015. Schemes were prioritised in the strategy according to a cost to benefit ratio and criteria that related to the environmental and social impact of flooding.

Although there was a national prioritisation advisory group, we found that there was insufficient data about how the schemes might have been prioritised. That brought the possibility that the cost to benefit ratio would use higher-value properties, with the risk that that creates. If we have more detail on that, we can respond in writing to the committee.

We said that there is a risk in relation to the lack of clarity about how particular criteria were used. Therefore, now that the flood resilience strategy is in place, our recommendation in the report is that the implementation plan should be underpinned by clear criteria, thus avoiding the risk that more vulnerable groups in society do not get the benefit from some of the flood resilience or flood management schemes.

Fiona Brannigan or Rebecca Seidel, do you want to add anything?

I will just add a brief point specifically about the criteria for flood schemes. You asked which stakeholders the issue came up with, Mr Brown. We interviewed colleagues in the Scottish Government, SEPA and five case study council areas. The evidence that we gathered for the audit came from interviews with a wide range of stakeholders who are working in the sector to deliver the schemes across Scotland.

We made a recommendation in the report that the Government and COSLA need to agree their approach on how flood schemes will be funded in the future. As part of that, we want them to clearly set out the criteria for assessing the value for money of those schemes. It would be fair to say that they recognise that the criteria that have been used in the past may no longer be appropriate. Therefore, as part of reviewing the funding model, we are calling on the Government and COSLA to look at the criteria that they will use to assess value for money. We hope that that would avoid unintended consequences—for example, action being advantageous to more affluent areas.

Audit Scotland said that it wants the Government or public bodies to do that and that it wants clarity and more certainty around some of those things. However, it is odd, because there is no evidence or analysis around the issue that would back up that call—that is my concern.

My second question is about schemes. I am thinking about a scheme in Milnathort, which is an area that I used to represent. Just before I was elected, a £5.5 million flood defence was introduced—that was a hard flood defence—but it failed at the first time of asking. Subsequently, the World Wide Fund for Nature did a lot of work upstream, if you like, with farmers, by planting and so on, and we have never had a recurrence of that failure. Has any analysis been done of the efficacy of the different forms of flood defences that are mentioned in the report?

I should say that our recommendations are only recommendations; the committee could choose to take evidence on our report from public bodies, and you will get clarity one way or the other on whether they accept the recommendations. They are not mandated in any respect, and there is an opportunity to comply or to not comply with any of the recommendations that Audit Scotland makes.

The report touches on the role that wider land use plays, which I think is essentially what you were describing. Colleagues might want to come in and say a bit more, but I will take this opportunity—perhaps building on your experience in Milnathort—to point out that it will not just be hard flood defences that contribute to Scotland moving from flood prevention to flood resilience arrangements; a wider suite of options is in place. NatureScot in particular emphasises the role that more natural flood defences, such as planting and forestry arrangements, can play.

Fiona Brannigan can say a bit more about our engagement with those organisations and how that feeds through into our report.

It is an important point—there are multiple approaches, and the efficacy of each approach will depend on the specific nature of the area in question. In our supplement on case studies, we provide an example of a nature-based approach for the River Tweed, looking at the effectiveness and economic value of that approach. We look at how the land around the river is used to slow down the peak flow during a flood, which provides a greater opportunity to ensure that the flood does not have the same effect on communities downstream.

That sense of how the land can be used is recognised in the flood resilience strategy, which includes an intention that land use should be given more prominence, as should things such as blue-green infrastructure. Those things are key in the strategy.

Some issues were raised with us about how the criteria for flood schemes use nature-based approaches, and the difficulties with basing criteria purely on monetary value, because it can be difficult to quantify the benefits of nature-based interventions. Those issues need to be resolved, and in our recommendations we highlight specifically the need to address how such an approach is included in the criteria moving forward.

My remaining questions are about the nature of Audit Scotland reports. I am the new boy on the committee, but I am well aware that the recommendations that Audit Scotland makes are not mandatory—I understand that point. I am equally aware that Audit Scotland is funded by the taxpayer, and it has to be accountable, like other public bodies.

I think that it was Nye Bevan who said that politics is “the language of priorities”. We have mentioned a number of times local authorities and their priorities, and the Scottish Government and its priorities.

It may be because I am new on the committee, but I am picking up on certain words that I am hearing—for example, that Audit Scotland “wants” or “expects” something. However, nobody elects you guys. The people whom we elect to councils, and to the Parliament and the Government, have to take decisions on priorities in pretty constrained circumstances. Is it legitimate, therefore, for Audit Scotland to come in and make those kinds of demands of elected public bodies?

I think that that is one for me. Andrew Burns may want to say a bit about the role of the Accounts Commission, too.

I am an office-holder of the Parliament, so I am appointed by the Parliament to provide it with assurance on public spending, which amounts to around £60 billion. I do that in two ways. First, by appointing the auditors of public bodies to audit how well public money is spent and determine whether that spend is compliant with the requirements of the budget; and, secondly, by taking a wider approach through value-for-money reviews. That is all set out in the Public Finance and Accountability (Scotland) Act 2000.

We have absolutely no powers of intervention. As you say, Mr Brown, our work is to support assurance and improvement. Our recommendations can be accepted and implemented, partially implemented or completely ignored. That is absolutely the right of public bodies, ministers and local authorities.

We are accountable—Audit Scotland’s work and our budget proposals are overseen by the Scottish Commission for Public Audit, which Mr Beattie chairs, and our work is reported publicly, both to this committee and on Audit Scotland’s website.

Of course, we welcome feedback. Like any organisation, we do not always get it right. If that is the case, we are keen to hear, either in today’s discussion or through further engagement, any specifics for how we can improve. We have clear criteria for not just members of the Scottish Parliament but members of the public who wish to engage with us, and we are delighted to receive any feedback.

I completely get the point that you are making, Keith. As you, and possibly other colleagues, know, I have spent a lot of time—18 years—on the other side of the table from the Accounts Commission and Audit Scotland, as a councillor, so I understand the pressures completely. I know that the pressures that the Scottish Government and local government in particular are facing have only got worse since I left.

I agree that the bunting does not go out, and there is not a celebration, when the Accounts Commission goes into a local council to audit the books—that is an absolute truth, is it not? However, I will make an important point. We have just conducted a consultation on our work programme for the next few years and we have had very significant feedback on that, which will be reflected at the commission’s meeting in November. Almost universally, the feedback has been positive.

I am not going to say that there has been no criticism—there has been some—but the feedback has been overwhelmingly positive. While there may not be a celebration of audit and its purpose, the findings of the Accounts Commission whenever one of the 32 local authorities comes before us are invariably followed up—they are listened to and respected, and they make an impact in the real world.

That is not to deny that our recommendations create pressure in an already pressured environment. Nevertheless, the overall response that we receive is constructive and positive, and while—as I have said—there is not a celebration, there is a responsiveness to the commission’s findings. We have overwhelmingly received that response in the feedback on our work programme. I think that I am right in saying that that feedback, and what goes before the commission, will be public in November.

I hope that that helps.

Yes. I would just say that I am aware of some councils that have been so incensed by the Accounts Commission’s work that they have threatened not to pay the fees for it; I know that that is a very problematic thing to happen. They feel that the burden of scrutiny, which relates to the question whether it is proper audit scrutiny, is now becoming very onerous.

I got involved in local government in the early 1990s, so my experience probably pre-dates yours, Andrew. Since that time, the range of things that the Accounts Commission and the auditors, and Audit Scotland, look at has grown hugely. For example, I have seen comments on the quality of politicians in different local authorities. Even in the report that we are discussing today, I note the wide range of commentary that goes beyond the two areas—which, I agree with the Auditor General, are crucial and important—of value for money and ensuring that money is being spent properly and legitimately.

The report before us mentions, for example—Andrew, you mentioned it, too—the need for a line of sight and some longer-term certainty on strategies. However, there seems to be no acknowledgement of the nature of the funding that goes to the Scottish Government, by which I mean the certainty of funding. The position now is certainly more uncertain than I can ever remember it being. Even this year, we are going to have to present a budget to the Parliament before we know what the settlement is from Westminster, and there is chopping and changing from year to year.

You now comment in your reports on a range of different things, but I question whether sufficient regard is given to the wider environment. I acknowledge that you have mentioned the very constrained environment in which local authorities are working. However, in general, whether it is the on-going effects of the financial crisis in 2008; the constrained public sector budgets—I will not say “austerity”—that we have seen for 15 years now, since 2010; or the effects of the pandemic, there seems to be no recognition of those constraints. To me, it would be of more value, if you want to go into those other areas and comment on what Governments, public bodies or councillors should do, to hear those constraints being acknowledged.

I am happy to hear that. I recognise the significant financial challenges that the Scottish Government faces, and I think that we reflect that in almost all our reporting. We reflect that the Scottish Government has to make very difficult choices, and we are clear on the funding environment and the history behind that, including the events to which you refer, Mr Brown.

I make the committee aware that we are currently completing a piece of work on fiscal sustainability and taxes that will be particularly relevant to the circumstances that you describe. I reassure you that we are very clear on the environment in which the Scottish Government is working, and we will consider how we reflect that in our reports.

12:30  

My final, very specific, question goes back to an exchange with Jamie Greene. It is about the nature of the local government funding settlement. Once upon a time, somebody said that only two people in Scotland properly understood the formula behind it—it is a bit like the Schleswig-Holstein question. You talked about how difficult you were finding it to track money that was allocated by the Government to councils for flooding. I do not want to put words in your mouth, so, if I am getting this wrong, please say so. There was mention of ring fencing. I assume that you would not support ring fencing as much as you would support there being more clarity about what money was being allocated and for what purpose.

Andrew Burns will be better placed to answer that but, to be absolutely clear, how funding is allocated and what requirements the Scottish Government has on whether an allocation is ring fenced or otherwise are policy decisions; they are not for auditors to comment on.

There is a very important boundary for auditors. It is our role to consider how well a policy has been implemented, not to assess the merit of a particular policy, whether it is about structures or funding allocations, but we are aware of the wider environment. We note the Verity house agreement and the intentions around the placement of ring fencing and the strong views on that. We are very conscious of the particular boundaries that exist, Mr Brown.

To amplify what Stephen Boyle said, at Accounts Commission level, Jo Armstrong as chair and myself and other members have been very supportive of the development of the Verity house agreement and the principles behind it, because it could provide the clarity that we have variously discussed throughout this evidence session.

We have urged the Government and COSLA to come forward with the fiscal framework. As the committee probably knows, it is close to fruition, but it is not in the public domain yet. Without stepping over the boundaries that Stephen Boyle rightly identifies, the Accounts Commission has been clear that the Verity house agreement is a step in the right direction, as was the publication of the flood resilience strategy last December, but we are keen to see the production and final publication of a fiscal framework to provide the clarity that is often lacking. That causes problems for all levels of government, not just local but national. A clear line of sight over where funding is coming from and how long it will last would be welcomed by the Accounts Commission.

Without straying into a series of other debates, there is a possibility that we might end up with a three-year settlement from the UK Government this year, which would hopefully feed through to the Scottish Government, local authorities and the voluntary sector. We discussed that yesterday at the Local Government, Housing and Planning Committee. From our perspective, that would be a positive step in the right direction.

Just to clarify, if those things happen in the way that you hope that they will happen, is it your position that the uncertainty, vagueness or opacity around how, for example, flooding money is distributed among local authorities would be made clearer?

I would not like to say that one would automatically follow the other, but what I outlined in my previous response would provide the global certainty that would be required for local authorities and Governments to plan more effectively, and would allow them to look at the recommendations in the report on delineating an implementation plan and giving it a timeline. It would make it easier for them to do that. That is the argument that I am making.

Thank you. We have exhausted our questions, and we are up against the clock, so I want to draw this morning’s proceedings to a close. In so doing, I thank Fiona Brannigan, Rebecca Seidel, Andrew Burns and the Auditor General for their evidence this morning and for fielding our questions.

In accordance with our earlier decision, we now move into private session.

12:34 Meeting continued in private until 12:50.