Public Audit Committee

Meeting date: Thursday, March 30, 2023

Official Report 654KB pdf

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Auditor General for Scotland (Work Programme)

Under agenda item 3, we will take evidence from the Auditor General and his team on their work programme for the next period of time.

I welcome Stephen Boyle, the Auditor General for Scotland, who is joined by Gemma Diamond, director at Audit Scotland, and Mark Taylor, audit director at Audit Scotland.

As usual, we have a series of questions that we would like to put to you, Auditor General. To begin with, also as usual, I ask you to make a short opening statement to get us under way.

Many thanks, convener. I am delighted to be with you again to discuss and consult on my forward work programme.

In preparing the latest version of the work programme, I have, of course, considered the current context of the delivery of public services in Scotland. Challenges that existed before 2020 have, as we have seen, been made worse by the pandemic and the cost of living crisis. Budgets are forecast to tighten further in future years, and there is now, therefore, an urgent need to increase the pace and scale of public sector reform to deliver sustainable public services in the future.

It remains a volatile time, and my work programme needs to respond quickly to emerging issues, risks and challenges. Public audit will focus on supporting public bodies to tackle the biggest social and environmental challenges that they face. That means that my programme needs to be flexible, and I plan to continue to use a range of audit products and approaches to address and report on those matters.

My work programme sets out that I am interested in what and how public services deliver. I turn first to the what. Public services face real short-term challenges in managing demand and budgetary pressures. I will consider how they are managing those challenges and how they are providing sustainable public services, but that should not be to the detriment of long-term sustainable outcomes, improved outcomes and financial balance.

I know that the committee and I share an interest in whether policy ambitions make a difference to users of public services; that will continue to be a core part of my work. Scotland’s public sector is at a crossroads—reform has not yet been delivered on a scale that will ensure that public services remains sustainable in the future. We discussed much of that in respect of the national health service at the committee’s meeting last week.

That is why I will focus on how public bodies enable change, both individually and as part of a wider system. That includes how they are embracing key enablers of change, such as empowering people and communities, preventative spend, reducing inequalities, embracing new digital approaches and improving efficiencies. Public audit has a key role to play in supporting improvement and embedding good practice in our public bodies.

Equalities has been a consistent priority in my work since I took up post, and it will remain so. I intend to ensure that our public audit work reflects the lived experience of members of the public who use and rely on public services.

I will continue to have an interest in climate change, health and social care, public finances and economic growth. I am also interested in how the public sector is managing its workforce so that it has the skills and capacity to deliver the services and the scale of change that are required.

I suspect that today’s discussion is likely to focus largely on my public reporting or performance audit work. However, the committee will be familiar with the fact that, each year, I also prepare reports on the financial audit of public bodies. I discharge that responsibility through section 22 reports on public bodies. They will vary in number, depending on the issues that auditors identify during their annual audit activity.

Through today’s discussion and wider feedback from the Parliament, I want to ensure that my longer-term work programme considers the key areas of interest to members of the Scottish Parliament, and that it focuses on the topics that will add greatest value in supporting effective parliamentary scrutiny. I will use the feedback from this committee and committees across the Parliament to finalise my longer-term priorities and work programme.

As ever, Mark Taylor, Gemma Diamond and I look forward to engaging with you and answering your questions.

Thank you very much indeed. You mentioned the committee’s priorities, so I am bound to ask this. Last week, we published a report on the construction of ferries 801 and 802. In that report, we made some recommendations on work that we thought that it would be useful to be included in your work programme, recognising that we cannot instruct you to do anything. Those recommendations were about the procurement of the vessels and what we thought would be a useful forensic analysis of the money that was paid over to Ferguson Marine Engineering Ltd. Have you had any time to consider that? How do you plan to give that consideration?

Secondly, on a broader point, something that is not explicitly mentioned in the work programme papers that we have seen is the discussion about the business investment framework that was published last year by the Scottish Government. The committee has some ideas about how that could be improved, and we have had some useful discussions in public evidence sessions with you about that, especially around the Scottish Government’s consolidated accounts.

Could you give us some reflections on those points?

I will take those questions in reverse order. You referred to the Scottish Government’s consolidated accounts as being the vehicle through which we have reported on the progress that the Government has made with its investment framework until now. I have not yet made any definitive decisions about further audit work on that. I expect that it will remain the case that, through the audit of the Scottish Government and the now annual section 22 report, I will continue to give an update on matters emerging from the audit, and I will follow up on themes that have arisen in previous years.

The auditor has not scoped that report yet; they are in the throes of approaching the financial year end. However, it is very likely that that will be the most appropriate vehicle through which to satisfy our shared interest that the framework is effective, that the lessons not just from Ferguson’s but from other investments are being understood, and that the Government’s approach to managing the higher-risk investments that it has undertaken and the outcomes of those investments are clear and transparent, and deliver value for money. I suspect that the audit report will remain the best vehicle for doing that.

Thank you for your reference to the committee’s report on the vessels for the Clyde and Hebrides. I am very clear on the recommendations that the committee has made to me. I am also grateful to you, convener, for referencing, as you did in the first session of this morning’s meeting, the independence of office holders. As Auditor General, I am not directed by the committee; for completeness, I should say that I am not directed by the Government, either.

We are carefully considering the significant recommendations that the committee has made in its report. I will, of course, write back formally to the committee over the next few weeks to set out my intentions. There are some relevant live factors that will, in part, inform my work. One is the on-going investigatory activity that King’s counsel is currently undertaking on behalf of Caledonian Maritime Assets Ltd. We are tracking the progress of that work carefully, and we are also taking a bit of time to consider how we might best respond to the recommendation about forensic analysis, which I know the committee has explored and we have discussed during previous evidence sessions. I will set that out clearly and publicly in writing to the committee.

What I am saying, I suppose, is that none of the recommendations that you made came as any surprise to me, convener. We will set out where we intend to go next.

That is very helpful.

I want to take us on to a matter that you have previously spoken about and informed us of. It is one that not only the current committee but our predecessor committee in the previous parliamentary session identified as being extremely important. We get section 22 reports, for example, which contain recommendations, but because, the following year, a follow-up section 22 report is not produced on that organisation or public body, we lose track of what happens to the recommendations.

Therefore, we would value the ability to have oversight and continuity of interest. I recall that you said that you also saw that as being important, and that you were in discussions with the Scottish Government about establishing some kind of framework that would allow that to become a routine outcome of the audit work that you do and the reports that you present. From memory, December 2022 was mentioned as the date by which you hoped to be finalising that process. Could you bring us up to date with where things are with that framework? Are you taking any other steps to address that issue of being able to follow through on and keep track of recommendations that you and your auditors have made, which is, by common consent, a deficiency?

I will bring in Gemma Diamond, who has led much of our work on tracking not just recommendations, but the wider impact that public audit looks to have through its audit reporting. That applies to section 22 reports and the recommendations that we make in those, but also to the impact of our wider public reporting, such as section 23 reports and other outputs.

Before I hand over to Gemma, who can take the committee through the work that we have been undertaking, I should mention that a fairly well-established process is now in place for section 22 reports whereby, typically, I prepare a follow-up section 22 report where there have been significant issues from one report to the next—indeed, the committee covered much of that ground in its earlier session. If I do not undertake a follow-up section 22 report, I will write to the committee to set out the wider progress that has been made.

The annual audit report, which draws on section 22 reports, is also available publicly. Perhaps that is for a narrower audience. Typically, it is for the public body itself, but it is available through the Parliament’s Business Bulletin. It sets out the progress that an individual body has made. That is quite narrow. Gemma Diamond will set out the follow-up work that we have been doing on the wider impact.

We have been doing a huge amount of work to look at how best to monitor and report on the impact of our recommendations and, as Stephen Boyle mentioned, our audit work as a whole. We have been doing some pilot work to look at how best we can do that, how best we can gather the information, what resources it will take to look at the implementation of those recommendations and how best we can gather feedback. As you know, some of our recommendations go to all public bodies, so we are looking at the best way to gather information, potentially taking a risk-based approach.

10:30  

We have been doing that pilot work to make sure that we can get a framework in place that we know that we can implement and that will give us the information that we need. Through that process, we have been talking to the Scottish Government about its arrangements for following up on recommendations and about how to make sure that our timings work well together to strengthen the system as a whole.

We have been learning a lot of lessons as we have been doing that work. We have been looking back at some of our recommendations and thinking about what we can learn about how best to phrase our recommendations, whether we sometimes have too many recommendations in our performance audit reports and might need to focus down on some key areas, and whether we should look at putting clearer timeframes on our recommendations.

We have already implemented additional internal guidance on how to write effective recommendations and how to put procedures in place to agree action plans with public bodies on those recommendations, so as to give us and the public bodies clarity about exactly when we will come back to follow up recommendations and what evidence we will be looking for.

Importantly, we also want to set out the change that we want to see as a result of those recommendations, so that we give the public body accountability over exactly how to implement each recommendation by being clear about the outcome that we seek to achieve by making that recommendation.

As I have said, our pilot work is largely coming to a conclusion. We now have a whole lot of information, and our next step is to consider what information to make available publicly—what information we would report to the committee and what information might be put on our website to make for full transparency for people who are interested in looking at recommendations. We want to do that in a way that makes the narrative really clear, so that it is about not just whether a recommendation has been implemented but what that tells us about the change that has happened in those areas and what it means when we bring all that together.

We want to look at some of the themes of recommendations. Is it the case that some types of recommendation are harder for public bodies to implement than others? What does that mean for our future focus in audit work? We want to make sure that we are clear about not just whether single recommendations have been implemented but what that tells us overall, so that we have a much richer picture of information.

Over the next few months until the end of the summer, we hope to become clearer about the public information that we want to take forward. It is really important work, and we are keen to share it with the committee at the right time.

You alluded to our previous evidence session today, during which we discovered that 22 recommendations had become 26, not because four had been added on but because some of those 22 had been subdivided. Is there typically interaction with a public body in formulating recommendations, or are they imposed on it?

There absolutely is interaction. All reports that go to a public body, whether they are from Audit Scotland through a section 22 or section 23 report, or from auditors that I appoint, go through a clearance process. The body receives a draft report with draft recommendations and has the opportunity to agree on the factual accuracy and reasonableness; the evidence of whether the recommendations have been accepted or otherwise will be in the management response. For each recommendation, the public body will set out what it intends to do, who is responsible for that and what the timescale is. The auditor almost never dictates the timescale—it is for the public body to decide how and when, with the resources at its disposal, it chooses to implement each recommendation.

Yes—it would not be the first time that accountable officers have said, in front of the Public Audit Committee, that they have agreed all the recommendations in full, and then proceeded to give evidence that suggested that they did not. [Laughter.]

Roz McCall has follow-up questions on certain areas but, before I get to her, I invite Willie Coffey to come in.

Auditor General, how can the public be assured that a difference has been made? It is one thing to deliver recommendations—to agree with them, say that you are implementing them and then actually implement them—but how does anyone determine whether performance has improved, or whether a difference has been made in the quality and value of public services? That has been a recurring issue at the Parliament’s audit committees over many years. How do you plan to square that circle—if you can—to show the public that differences have been made? How can we evidence that?

First, I acknowledge that this is not straightforward territory. If it were, we and our predecessors would have done what you describe many years ago. Gemma Diamond will want to come back in on this. I am sure that we all agree that we want better public services, whether that results from public bodies acting by themselves or from an audit process that leads to recommendations with associated implementation and impact.

Sometimes the process is straightforward. If an auditor makes a recommendation and it is implemented and leads to a tangible difference in a public body’s performance, that is great; we can attribute the change in performance to the recommendation. However, more often than not—as you will know, Mr Coffey—many other factors influence a public body’s performance.

I am keen for Gemma Diamond to say a bit more on that. We try to recognise those elements through the evaluation work that we undertake. What drivers, alongside the specifics of an audit recommendation, will influence a public body’s performance? Where is audit making a difference? How can we be clearer and more helpful? It is multifaceted. I am not trying to sit on the fence on this; I am simply reflecting the sheer complexity of the measures and drivers of public body performance.

It is a complex environment. Our audits are often carried out in areas in which there is a lot going on, and there are many different policy ambitions and changes. We often report on situations as they are unfolding. Audit does not involve waiting for something to finish and then looking back; it often happens alongside a number of other things.

With our impact work, we are keen to look at different timeframes in order to understand impacts over time. We have an immediate impact in terms of whether the public body recognises our key messages and accepts the recommendations in our report. Is there a positive acknowledgment of the change that is required? That leads to us following up, after a period of time—normally around 18 months—on those recommendations and looking at the evidence that supports their implementation.

However, we are also keen to look at the longer term; we are still developing that work. How can we work over the longer term so that our input is not simply about an individual report? As the committee will recognise, common themes often come up across our reports. For example, our individual audit reports, and our national performance reports, have long been recommending long-term financial planning. We want to look over the longer term to see whether there is an overall shift in public bodies’ long-term financial planning, not only in respect of individual recommendations. As the committee will appreciate, 18 months is often not long enough for us to know whether a change has made a difference; that may unfold over a much longer period.

It is a complex area, but we are keen to set out as clearly as we can what the information tells us in the short term and the medium term, and where possible in the longer term, so that we can use it to direct where our work would add best value, and where we might consider additional support for public bodies to best implement the recommendations.

Do you ever see a day when Audit Scotland will say, “We looked at that organisation and made those recommendations, but it hasn’t made a blind bit of a difference to public performance, outputs or outcomes”? Are there any spectacular examples of improvements? Would you see yourselves getting into that territory so that the public could get that information from you?

I certainly hope to report on examples of the latter, but we will report transparently, regardless of whether there is more work to be done or there is stellar performance. We tried to capture some of that in our written material, but I note that our role in supporting and facilitating improvement in public services does not apply only to the body in question.

We want—and, to be honest, expect—our work to be used widely across public bodies, whether by the bodies themselves, the sectors that they are in or across the public sector. The themes in our recommendations are generally relevant across the piece, whether they are for good governance, financial management, sustainability or other factors.

One point that I should have mentioned earlier concerns the performance of Scotland’s public bodies: how Scotland performs. There is a well-established system in the Scottish public sector, through the national performance framework, for setting out the expectations for how public bodies will deliver. The committee will recall a number of occasions on which Audit Scotland has asked for greater clarity on the connection between intended outcomes and public spending. That overarching system will, I think, help to provide clarity in getting public bodies to understand how their performance should be shaped and where they fit in. Public audit is part of that framework.

As I mentioned, Roz McCall has questions on particular aspects of some of our longer-term areas of interest.

I have a few questions that home in entirely on young children, and on bits and pieces around child and adolescent mental health services.

The draft work programme refers to progress that has been made towards implementing recommendations that were made in earlier reports, such as the 2018 report on “Children and young people’s mental health”; the 2020 report on “Scotland’s City Regions and Growth Deals”; and the 2021 report on “Improving Outcomes for Young People through Education”. Can you give a brief update on that progress?

Of course. Through our proposals, we seek to signal our interest in areas in which we have tangible plans for further work. Alongside those, we are tracking and monitoring other areas that will shape further work in years to come.

I will bring in my colleagues in a moment; Mark Taylor might be best placed to say more about the city deals work, and Gemma Diamond can comment on any of the other areas.

The 2021 report on educational outcomes was one of the first reports that I brought to the committee as Auditor General. It examined the Government’s progress in closing the poverty-related attainment gap in Scotland. Our overall judgment was that there was regional variation across Scotland, but there had been limited progress in delivering on the Government’s overall objective.

We know, and we have seen, that there has already been significant investment through Scottish attainment challenge funding. We are currently monitoring that, with a view to picking the right time to undertake further work on the ambition to close the attainment gap. There is always a judgment to be made as to when audit can go back in effectively. We do not want to do it too soon, but equally we do not want it to be so late that policy has been implemented and the next thing moved on to. We are tracking that issue as part of our work programme, and in the next iteration of the programme we can probably be more definitive about when we intend to go further.

Before I hand over to Mark Taylor and Gemma Diamond, I will cover the mental health aspect. I have a joint piece of work with the Accounts Commission currently in progress on adult mental health services in Scotland. We intend to publish it in September; it will set out the totality and effectiveness of arrangements to deliver adult mental health services. When the Accounts Commission and I commissioned that work from Audit Scotland, our intent was to review adult services, because we had looked at children and adolescent mental health services relatively recently, with a view—as with the educational attainment gap—to following up relatively soon. We are currently tracking that; opportunities will become more definitive as progress on the Government’s policy intent in those areas becomes clearer.

I will say something quickly on city deals. We are following up the recommendations that we made in the previous city deals report. That is part of the impact work that Gemma Diamond talked about; she might want to add a bit more detail on that.

A broader point, which is reflected in the materials before the committee, concerns how often we think about such things. We often think about how an audit fits with what is planned and how it develops. On city deals, there is an opportunity not only to look back at the deals, the mechanisms in and around their construction and the wider growth deals outwith cities, but to think about how that might fit with work that we do on the economy in the future and how we link all that through.

Often, when we think about the programme, we think about not only specific pieces of audit work, but how they built up through time to give you exactly the broad picture for which you are asking: a picture of how things change through time and link in through the wider system.

10:45  

Our follow-up work on the city deals report was part of our pilot for the impact work that I just spoke about. The team went back and looked at how the recommendations had been taken forward to inform the changing landscape and determine what lessons could be learned for the current context from how those recommendations had been applied. We will publish a short briefing on that in June.

Through our impact work, we will pull together themes as a whole, in order to be transparent, and will make the information available publicly. Where information arising from our impact work might be helpful for other public bodies, we will make that publicly available. The city deals briefing is an example of that. For our work on education outcomes, there will be a short blog relating to specific points where we think that there is a public interest and a narrative to tell.

The committee will see some of that follow-up work, in the form of a full section 23 report, as part of a series of pieces of work or through individual, smaller products, to bring those issues to light.

I will go back to something that you said, Mr Boyle, regarding transitions to adult mental health. The previous Auditor General for Scotland made comments about things that were taking place with the Royal hospital for children and young people, the department of clinical neurosciences and the child and adolescent mental health service in NHS Lothian. Can you give me any update on that?

I am fairly clear that we have not included those matters in the scope of the report that is due to be published. I do not have an up-to-date position, and I suspect that none of us has. We can go back and engage with the auditors of NHS Lothian for an updated position and come back to the committee in writing.

Okay. I will bring my questions back to the slides that were provided for the work programme rather than go off piste.

I notice that work on early learning and childcare is in the pipeline. Are you able to give the committee some information about the scope of that work at this early stage? Will you be looking at childcare from the view of a care-experienced child as well?

The audit on early learning and childcare is in progress and coming to a conclusion. The Accounts Commission, Audit Scotland and I have an on-going interest in the Government’s progress on delivering the 1,140 hours of nursery provision for children. The publication of that report is upcoming. We anticipate that that will be before the summer recess. We will engage with the clerks on when the briefing for that will take place, and we will set out the findings of that report in detail for the committee soon.

The committee will recall that one of the significant intentions behind delivering the 1,140 hours and the expansion of that care, especially to two-year-old children, was to provide parents and carers with more economic opportunity and opportunity to build family income. The Government’s own evaluation of that aspect of the policy implementation will not take place yet. That is reasonable; it was the intention that that would come at a later stage. Our report will cover whether the policy has been rolled out, how it has been applied across Scotland, and whether the centres are now available. We will set that out for the committee.

There is an equalities component of that work. On whether it has covered care-experienced people specifically, that is wrapped up in the wider consideration.

When we have previously outlined our areas of interest to the committee, we have included care-experienced young people as a potential area for a stand-alone piece of work in the future. That remains a potential area for us to consider, but we have not scoped out a particular piece of work. We are, of course, tracking and monitoring the Promise work and how that is being taken forward. We have not yet signalled our intent to do any specific audit work in that area, but we are monitoring it closely.

We turn to questions from our deputy convener.

When we discussed your strategic priorities and work programme in September 2021, we raised the possibility of using section 22 reports to highlight good practice across the public sector where appropriate. Do you have the scope to do that—if you hope to do that—if and when the occasion arises?

Yes, I have the scope to do that. I will always weigh up the merits of highlighting the performance of a particular public body through a section 22 report or other vehicles. Equally, the work that we are doing on impact is a route for giving profile to areas in which public services are delivering well.

As I mentioned earlier, we absolutely recognise—and, indeed, embrace—our responsibilities to promote good practice, but we do that through a range of vehicles such as formal public reporting, round-table meetings, and contributions at speaking events.

Having said all that, it is fair to say that the majority of section 22 reports that the committee considers cover situations in which there is a matter of concern. I expect that the balance will remain in areas in which there are weaknesses that need to be addressed. I should say that section 22 reports bring impact for both the public body concerned and the wider sector, including other public bodies. My approach therefore involves weighing up which particular vehicle is most appropriate to discharge my public audit interest and that of the committee.

The best example of where there has been a more balanced opportunity is the Scottish Government section 22 report, which is now part of the annual architecture of public audit reporting because of its systemic importance. Given the scale of public spending that goes through the Scottish Government’s consolidated accounts, in my judgment and that of my predecessors, it is appropriate that an annual section 22 report is prepared to support public scrutiny and transparency.

There are other organisations in that frame, which I am considering how best to report on publicly. If I may draw attention to one that is mentioned in my submission, under the Police and Fire Reform (Scotland) Act 2012, the Auditor General has the ability to undertake best value work on police and fire services. Until now, neither I nor my predecessor considered that that was a timely thing to do.

The committee will recall that its predecessor committee received many section 22 reports on the Scottish Police Authority. It is welcome that those have subsided over the past few years as that organisation has become more stable and is delivering its responsibilities. Nonetheless, it still spends millions of pounds of public money each year in delivering a unique public service. Therefore, together with the inspectors of constabulary and fire and rescue services, I am beginning discussions about how and when we might have an opportunity to review how those parts of public services are being delivered. I draw that to the committee’s attention not because I have any expectation that there are material issues of concern there, but because how public money is spent and how such services are delivered are matters of public interest.

That takes me on to my next couple of questions, which are on policing. Will the work that is planned on policing include a comprehensive review of governance, as recommended by the Public Audit and Post-legislative Scrutiny Committee in its legacy paper?

I recall that matter well. Perhaps that is the only area in which I have diverged from the interests of the committee in my work programme. I reached the view that what I understood to be the stability with the Scottish policing governance round table meant that I did not consider that to be the best time to undertake that work.

I should say that I had in my mind that, at a future date, the best value powers might be an appropriate vehicle for considering policing arrangements, including governance in the round. The quality and effectiveness of governance are central to the consideration of best value, and a review of governance in the round would be part of that. I would not want to prepare the scope of that while I am speaking to you now, but it is safe to say that high-level governance would be part of that. However, I do not think that it would extend to specifics such as the legacy of the challenges that policing was going through four or five years ago.

Can you provide an update on the Scottish Government’s Scottish policing governance round table, which was established to consider the governance of policing in Scotland? We understand that the most recent set of minutes that is available online is for the 15 March 2021 meeting.

I will do my best to recall where that has got to, but it might be that the Government is best placed to advise the committee of its intentions. I will correct this if I am wrong, but it is my understanding that that body has concluded its work and no further meetings are planned.

Thank you very much. I am conscious of the time, so I encourage members and witnesses to make their questions and answers as concise as possible. I turn to Colin Beattie to ask a couple of questions about digital exclusion.

Before I ask those questions, I want to briefly refer back to the convener’s remarks about the ferries at the beginning of the session. As you know, I have raised the possibility of an investigation on a number of occasions in the past months. I am pleased to hear that you are going to take a serious look at the committee’s recommendations and come back to us on them.

There is no pressure here, but I would find it extremely difficult to understand it if a decision was made not to carry out some sort of scrutiny, because tens of millions of pounds of public money have been involved, and people have the right to know where that money has gone. It is over to you on that decision. As I said, there is no pressure.

I do not expect a response to that.

I am happy to respond and to state for the record that we are considering the committee’s recommendations very carefully, especially on that point. I know about your and the committee’s long-standing interest in the funding that went to Ferguson Marine Engineering Ltd and how that money was used. Mark Taylor might want to say a word or two about that. We are giving careful thought to how we might build that into an audit response. I certainly will respond to the committee formally before long.

I absolutely endorse what the Auditor General said. We are looking very carefully at the issue, and part of that involves looking at the practicalities. We understand what the situation is at the broad level, and I anticipate that we will do some early work to see what the art of the possible is to help to inform the Auditor General’s decision.

You may tell me if I am wrong, but I understand that the Auditor General has already arranged that the paperwork that is sitting at Ferguson’s has been secured, although it is not in great shape.

That is correct, Mr Beattie. The security of those records has been confirmed. I do not have an up-to-date position, but the most recent briefing that I had was that they were not collated in a way that was readily accessible and useful at this stage. That will be part of any subsequent process.

11:00  

I will move quickly to my questions on digital exclusion, which is an important issue in my constituency. About five years ago, the Office of Communications told me that 34 per cent of adults in my constituency did not have access to the internet or smartphones, which was an extraordinarily high amount. I hope that that has improved since then, although I do not have a figure.

It is really important that that be looked at. You state that you are taking a human rights-based approach to digital exclusion. What does that mean?

I will say a wee bit about the general intent and ask Gemma Diamond to speak more specifically about the scope of the work and its human rights-based nature.

In my introductory remarks, I mentioned our long-standing interest in the issues of equality and equity in relation to public services. The area of digital services is not entirely new territory for us: it is some two-and-a-half years since we published a briefing paper on the R100—reaching 100 per cent—broadband roll-out arrangements in Scotland.

In this audit, we look across the breadth of public services, using the strength of the Scottish public audit model, which is based on my work and that of the Accounts Commission, to look at how services are being delivered, how that is changing, what the intent is and how well people are being consulted and communicated with.

The committee has heard many examples of how quickly public services changed during the pandemic. We heard of the NHS using NearMe for consultations with general practitioners and there are other examples.

To go back to my introductory comments, we are looking at what that actually means for the public. We often hear the public body perspective, but how are the public receiving those changes to services? Gemma might want to develop this part of my answer. We need to think about whether people’s rights are being protected and whether, when public bodies change the nature of service delivery and embrace some of the positives and efficiencies that we would expect to find in public sector reform, they are still enshrining the fundamental need for people to access services in a way that does not exacerbate some of the digital exclusion that you know of in your own constituency.

We have an interest in equalities and in broadening that out into seeing how best we can embed human rights in our audit approach. We recognise certain areas in which we can take a really different approach to the audit. We wanted to start this audit with the people and work our way backwards through the service, rather than taking a top-down approach of looking at policy and how that is implemented.

Digital exclusion is a really complex area, as there is intersectionality and lots of different things happening to exclude people from public services. This is not just about the technology: there is a breadth of other issues, including wider poverty, that we want to understand. We hope to involve service users in the audit, using their perspective to shine a different light on what public services are doing and how they are coming together with other services, such as third sector organisations, to support people who are digitally excluded. We are taking quite a different approach to auditing. That is not new territory for us—we have done a lot of service user engagement before—but this is about really embedding that within an audit and using it as our lens for the audit process.

There are two aspects to that. You talked about R100. Some people are excluded because the physical service has not been made available to them, which has an impact on them, their business and so on. However, there are also those who choose not to engage and not to be part of the digital world. There is a surprising number of such people, as I have found at first hand. If they make that choice, is that a human rights issue? Probably not: it is their choice. Some people may not wish to engage, because of age or any other reason. How do you separate out the genuine human rights issue, in order to target those who are most in need of digital inclusion?

You are right. Both those factors are relevant. I will bring Mark Taylor in on that in a moment.

It is important to respect the choices that individuals make about how they access services. We have all seen the way in which not just public services but the wider services that the public use have changed. We only need to look at how the number of banks on streets across the country has changed. The extent to which those changes were planned and the public were engaged in those changes is not a matter for us, but when public bodies make that scale of change, it matters that people are clear that it is happening. Community empowerment legislation is also a relevant factor.

I am meeting colleagues tomorrow to begin to consider the scope of that work so that people’s rights are respected. It is fair to say that we can expect how public services will be delivered to change fundamentally during this decade. People’s rights and their ability to access those services need to be fair and equitable, regardless of their household income or where they choose to live in Scotland. We want to evaluate that and make high-quality recommendations on the back of that evaluation.

The physical stuff such as infrastructure, broadband connections and availability of devices is a big part of this audit work. As the Auditor General says, we are very much at the scoping stage.

What is also clearly in our sights that relates to that question are the skills that people need in order to use something, and their confidence—an important word—to do so. It is one thing to have a device in your hand, but it is another thing to have the skills and confidence to use it. That is also in our sights as part of the audit work.

I guess that there is always a desire to quantify and put a figure or number on exclusion. There seems to be lots of different wrinkles in that. How will you tease those out and ensure that, when you put a number on something, you are putting it on the right thing?

I refer you back to Gemma Diamond’s answer. It was appropriate to start with the public for this piece of work. You are describing the nuance between somebody who is digitally excluded by choice and somebody who is excluded by the design of others. We are clear that we need to capture that as part of the judgments that we make about how public services are being delivered and what that means for individuals across Scotland. We are well sighted on that, Mr Beattie, and we will build it into our scope.

My second question is about estates management. As you know, over the years we have looked at figures from colleges and the NHS in particular where there have been maintenance backlogs that have been categorised from urgent to less so. You are going to be doing some work on this. Are you going to pick out the college sector and NHS for it and give us some sort of a feel for where they are going—are they improving or are they going down? There is a lot of money involved in those sectors and we need to understand the issues.

I agree; a huge amount of public money is tied up in public assets, and money still needs to be spent to maintain the public sector estate. I am drawing on last year’s resource spending review. One of the components of public sector reform that the Scottish Government has set out is the intention to review how public sector services are delivered across the vast array of publicly-owned buildings and assets that exists in Scotland. It has also been signalled that that model will change over the decade.

That is connected to your earlier question about digital services. If working habits change for people who are employed in the public sector, along with the habits of the public in how they access services, we can reasonably assume that the public sector estate, which needs to be maintained properly, will not exist at the scale that we currently operate in the years to come. That transition has to be managed carefully so that, if we are to have a smaller footprint of public bodies, it is done in a way that respects community empowerment, gives opportunities to communities and maximises the return to the public sector when assets are disposed of.

I agree with you absolutely that the backlog of maintenance—you mentioned colleges and we talked about the matter last week in the NHS context—is a result of the temptation to prioritise investment in new buildings and assets without maintaining the estate that exists.

We have not scoped out our work in any great detail yet but those are the factors that we are actively considering.

I am glad that you used the term “public sector” because, although I focused on colleges and the NHS, issues around which have come before us in big numbers, there is the wider public sector. Is there anything on your radar that would pull everything together so that we could see the whole public sector liability in that regard? That is probably ambitious.

As you know, we have called for many years now for whole-of-Scotland public sector accounts that, as a very helpful starting point, would set out what Scotland owns and the respective liabilities. It is seven years since a clear commitment was made to produce that but we do not have it yet. Through our work and the committee’s scrutiny, we hope to see progress on that.

I have a supplementary question on the digital exclusion work that you are going to do, Auditor General. I am pleased to hear that that is going ahead. Will it extend to examining the models of interaction that can often cause exclusion to widen? For example, when people try to get information from or interact with their energy supplier online, they often talk to a software bot rather than to people. It is difficult to negotiate your way through that kind of stuff. Will you spend any time considering the models of engagement that, in my opinion, widen exclusion?

I am pleased that you mentioned that. I am happy to take it away for our scoping work, which we are in the throes of.

I recognise that we are all different in how we want to interact with public services. I read something recently that said that many people prefer to deal with a chatbot as opposed to picking up the phone or speaking to somebody face to face. Public sector services must, at the right cost and efficiency, tailor their services so that they avoid the thing that we are looking to evaluate, which is people being digitally excluded against their free will. We look to make progress on the future proofing of services, so I am glad that you mentioned that point and we will factor it in.

The final area that we want to cover before we finish up is the sponsorship of public bodies, which has been the subject of some discussion and evidence gathering at the committee over the past couple of years, in relation to concerns that we had about the Crofting Commission and more broadly.

The Scottish Government gave an undertaking last spring, I think, to have a review and we took evidence in the autumn of last year but it seems as though it is a continuing concern. At one point, you said that there might be an opportunity for a fundamental audit of the sponsorship arrangements. In the context of the work programme discussion, can you tell us where you are on that? It seems to be a recurring theme and we would like progress to be made on it.

11:15  

I share your wish, convener, that progress be made on that. I listened carefully to the permanent secretary when he gave evidence to the committee a couple of months ago about the progress that had been made against the consultants’ recommendations. Alongside that is the judgment that I made in the section 22 report that there are still risks to the Government’s successful implementation of the recommendations for more effective sponsorship.

When it comes to the vehicle, I am not being definitive just yet, but it is most likely that, for the time being, I will do it through the Scottish Government section 22 report. If progress continues to be made, which I hope it will, we will take stock at that point as to whether a more fundamental evaluation is required of the sponsorship and governance arrangements for the Scottish Government bodies. I will take a bit of time over the rest of the year, convener, just to see the progress that the Government makes.

Okay. It is fair to say—and some would argue—that the project Neptune outcomes will address that. We started with the ferries and will finish with the ferries. There was some concern about the sponsorship role of Transport Scotland and how that all fits together, so it is not just historical—we as a Public Audit Committee have contemporary concerns about how sponsorship arrangements are working in practice.

Yes, that is true and I share those concerns, especially given some of the recent examples. I will also look at the judgments that the Finance and Public Administration Committee will make as part of its review of how Government in Scotland is working. That will provide very helpful insight, which I will draw on and consider as part of our future work.

I agree with that.

Thank you all very much indeed for your evidence this morning. I am sorry that we have been a bit short of time. Perhaps we should have allocated a bit more time. The discussion of your work programme is important for us, because it is a first step in a path that is ahead of you, of engaging with other committees of the Parliament so as to be informed about what would be the most useful areas of work for you to concentrate on and to pick up some of their empirical insights on the policy areas that they have dealt with over the past year and those that they are looking forward to dealing with in the future.

Again, I thank the Auditor General, Gemma Diamond and Mark Taylor for giving evidence, and I move the committee into private session.

11:17 Meeting continued in private until 11:35.