Finance Committee, 01 Mar 2005

Meeting date: Tuesday, March 1, 2005

Official Report 247KB pdf

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Smoking, Health and Social Care (Scotland) Bill: Financial Memorandum

The second agenda item is to take further evidence on the Smoking, Health and Social Care (Scotland) Bill. On 8 February we took evidence from the Scottish Licensed Trade Association, the Convention of Scottish Local Authorities and the Scottish NHS Confederation. We also agreed that we would take further evidence on three parts of the bill only: part 1, on the prohibition of smoking—we will concentrate on the cost of enforcement; part 2, on general dental services, general ophthalmic services and personal dental services; and part 3, on pharmaceutical care services.

We have two panels of witnesses from the Executive. The first panel is here to answer questions on the prohibition of smoking. I am sure that Sarah Davidson is pleased to be answering questions on that, rather than on the Holyrood building. I am pleased to see her before the committee again. She is now the head of the Executive's tobacco control division. Another person who has appeared frequently before the Finance Committee is David Palmer, who is now the team leader of the legislation implementation team. Calum Scott is the economic adviser of the analytical services division of the Scottish Executive's Health Department. I thank you all for coming along and I invite Sarah Davidson to make a brief opening statement, after which we will proceed to questions.

As the convener said, the committee is considering the Smoking, Health and Social Care (Scotland) Bill and the accompanying financial memorandum. Since those documents were published in December, the new team that I am heading up has focused on developing the detailed regulations and the associated regulatory impact assessment. The second of those documents looks at the full range of the financial and economic implications of sections 1 to 8 of the bill. Both documents are currently with ministers and should be published shortly. The committee will appreciate the fact that, in advance of publication, we cannot go into the detail of either the regulations or the RIA. However, we will be happy to return to the committee as soon as the documents are published to give the committee an informal and detailed briefing on them.

For the purposes of today's meeting, it is worth saying a couple of things about the approach that we have taken to framing the RIA. As required, in that document we have considered three options: a do-nothing option, a completely smoke-free option and a middle option. In attaching suggested costs and benefits to those, we have continued to adopt a central estimate from the range of possible outcomes that have been suggested by the available evidence. The central estimate represents our most realistic view of what would happen under each option, which continues the approach that was taken by the health economic research unit—HERU—at the University of Aberdeen in its initial review of the international evidence, which is summarised in the financial memorandum.

There are one or two exceptions to that, where we have been more prudent or conservative in our estimates. First, in our estimate of the impact on productivity of a total ban, we have erred on the cautious side; secondly, in our estimate of the impact on the bar sector of a total ban, we have continued to assume a central estimate of zero impact. We have also taken a cautious approach to the morbidity gains that may be achieved in the active smoking population and have assumed a central estimate of zero. All of that will no doubt become clearer when you have the RIA before you, and it might be helpful for us to spend some time with you after its publication so that we can go into some of that.

You will have noted that paragraph 210 of the financial memorandum refers to research that will establish the net present value of the health benefits and the potential costs of the legislation over a long period. You should be aware of the fact that the outcome of that work will be contained in the RIA and will be estimated over a 30-year period.

The one other area of assessment to which I want to refer is the estimates of costs to local authorities. The committee has received a submission from the Convention of Scottish Local Authorities on that, which contains some initial returns from individual councils. As COSLA said in its evidence to you, those estimates will require to be refined in the coming weeks in the light of the published regulations. We have now established a working group with COSLA, involving both officials and elected members, within which we will discuss the resources that are required to enforce the legislation. The outcome of those discussions will be reported to you in due course and will be incorporated into the final version of the RIA later in the year.

My colleagues Calum Scott, from the analytical services division, and David Palmer have been closely involved in the economic appraisal of the policy. The three of us will do our best to answer any questions that you have on the financial memorandum.

Thanks very much. One of COSLA's suggestions was that savings to the NHS resulting from the smoking ban should be transferred to local government to help meet the costs of implementing the ban. Is that feasible? What is the Executive's view of that?

We have not discussed that in detail with COSLA, although it is on the agenda for exploration. If anything comes out of our discussions, we will inform you about that in due course; however, it is not something that we have considered in detail yet.

It strikes me that the proposed smoking ban might trigger a change in alcohol consumption habits and have myriad effects on where people drink, how much they drink, the circumstances, and so on. Has any broader research been conducted on the impact of smoking bans on patterns of alcohol consumption, as opposed to the more restrictive research that has taken place at the University of Aberdeen?

We are not aware of any specific research on that, although there has been anecdotal reporting in recent press coverage and so on. Some research has been done on the extent to which smoking moves from public to domestic settings and we seek to build on that research, which suggests that that move has not happened in places where smoking bans have been imposed. However, that is not the same issue as whether alcohol consumption moves. We know that changes in the cost of alcohol in Ireland have led to off-licence sales being slightly higher than on-licence sales in recent years, but there has not been a full appraisal of that to tease out all the implications.

On the costs to local authorities, you say in the financial memorandum that

"it is anticipated that costs of enforcement will diminish over time as the smoking prohibition becomes established and self-enforcing."

This morning, I listened to a news story about the wearing of seatbelts. Many of us might have thought that that was well established but we find that a substantial number of people do not wear seatbelts. In view of that, it might be a bit optimistic to think that the costs will diminish as much as we think.

Local authority bodies such as environmental health and trading standards, which have comparative regulatory functions, are always complaining that they do not have enough resources to get anywhere near enforcing the current legislation. Are we not in danger of being in the same position in relation to the proposed ban on smoking? Central Government says that there will be some costs to local authorities but that those costs "will diminish over time" so it will not give them much more money. That will be yet another problem for local authorities, who already say that they cannot fund the burdens that we place on them.

There are two points to make in relation to that. First, one of the things that we have learned from the Irish experience is that we should not assume that high compliance rates are not directly linked to adequate and visible enforcement in the early months of the implementation of a ban. Adequate resourcing and staffing go hand in hand with the achievement of compliance and there is not much likelihood of our matching Ireland's compliance rates unless there is adequate enforcement. I think that ministers recognise that.

Secondly, as I think you know, ministers have established a smoke-free areas implementation group to consider the issues. That group brings together people from the enforcement side, COSLA, the bar and pub sector and the nightclub sector. There are all sorts of places where the ban will have to be implemented. For the group, the ideal is to reach a point where the enforcement authorities have a good understanding of the challenges that they face in policing the ban and where the difficult areas will be. That will allow them to map out the resources that will be required. Certain ministers have indicated that they will take the outcome of that work seriously in considering the resources that need to be available to police the measure.

We are watching closely what is happening in Ireland. We recognise that we can learn only so much from one year, and although the indications are that the requirement for enforcement might drop off, our minds are not closed on the matter.

I turn to address not resources, but the people who will enforce the ban. If they are new people, is it not rather unlikely that they will somehow drop off after a while? Is there not a pattern when a regulatory regime is established with people to man it, whereby it carries on growing unless something happens to stop it? Like most empires, such bodies tend to build themselves up. If the people who are to enforce the ban are not new people, what existing functions will not be carried out while the smoking ban is enforced? Do you have any ideas about that at the moment?

The short answer is no, but we are opening up that agenda with COSLA. We have had only preliminary discussions so far. We will want to discuss with COSLA the positive opportunities for joint working, particularly in relation to the new licensing regime, which will come in a bit later than the smoking ban. There are definitely opportunities, but we recognise that there is a lot still to be understood, both on COSLA's side and on ours, about the implications of the legislation.

I presume that we are a year away from potential implementation of the ban. The strong evidence that we received from environmental health officers in a previous evidence session was that their age profile is increasing substantially. What do we do about the level of experience that we will lose between now and next year?

What do we do about enforcement? The police—on this and on many other issues linked to legislation that has been introduced by the United Kingdom Parliament—say that this is not a priority for them. I cannot imagine that they will be keen to police the ban and it strikes me that enforcement will rest with local authorities.

How quickly will the implementation group look at that staffing issue? Are we serious about looking at levels of recruitment? We are talking about trying to upskill some folk, but it is already difficult to recruit enforcement officers in other areas of local government. Where will we get the individuals to play the enforcement role? If we are losing that level of expertise among environmental health officers at one end, we might not have the input of new recruits at the other end.

COSLA raised the subject of recruitment with us around Christmas time. Gordon Greenhill, who has given evidence to the committee, is giving some creative thought to ways of encouraging people into the profession, and we are waiting for advice from him about that.

There is an issue about how to get people in at the right level but, as COSLA noted, one does not have to have a fully qualified environmental health officer to provide corroboration or to serve a fixed penalty notice. COSLA and the Executive have to think about whether there is room for being creative—in the best possible sense of the word—in that area.

However, there is no doubt that there are pressures on the environmental health profession. The implementation working groups will look at those issues in the next couple of weeks. We are clear that by the time the bill has cleared its parliamentary stages by the end of the summer, we need to have a good idea about how everything will work.

Will smokers be recruited?

Local authorities will not have much choice about that—as long as recruits do not smoke in enclosed public places, they will be okay.

I understand that in Ireland a number of licensed premises have set up external buildings to accommodate smokers. That might or might not be possible in some licensed premises, particularly in the west of Scotland, where many licensed premises are part of tenements. For neighbours of such premises, noise from people going in and out of pubs would be even more of a concern than at present. Is there any evidence from Ireland that might assist us to assess the extent of that potential problem? I can see how enforcement will be carried out inside licensed premises, but I am not sure how you will deal with enforcement around the licensed premises. Noise and litter are the two issues that are most likely to be important.

I am not aware of any research in Ireland that deals with enforcement outside licensed premises. However, we will pursue that with our Irish colleagues in the longer term to get a feeling for changes on the ground.

I think that Gordon Greenhill said in his evidence to the committee that there was already legislation in place to allow local authorities to police areas outside pubs. The issue of litter and litter bins ran through the estimated costings that COSLA presented to the committee on that date, although I do not think that it was separately identified. We are thinking about those matters and we need to pull them together in the implementation group and have a hard think about what we need to do to ensure that enforcement is at as high a level as possible on day one.

Being thought about is different from being acted upon. One of my concerns is that I could have constituents—as could other members here—who live in the same block as licensed premises and whose lives might be adversely affected by what we propose. We need to be clear about how the ban will work and, if additional costs are associated with it, we need to be clear about how they can be met.

I rely on Gordon Greenhill's opinion that there is legislation in place for litter and noise nuisance and that we must ensure that that legislation is enforced where there is a problem. I do not know enough about litter and noise in that context and so I cannot give the committee a knowledgeable answer. That said, the framework is in place and we must ensure that it is properly resourced so that litter and noise are not a problem.

I could give you anecdotal evidence that people feel that legislation against noise and litter is not adequately enforced at present. Instead of taking away from the problem, a smoking ban has the potential to add to it. It needs to be addressed in that context.

Do you not agree that you are attacking the problem from the wrong end? The big tobacco companies are making enormous profits of the order of millions of pounds per annum. If you have irrefutable proof that smoking damages health and costs the national health service in Scotland millions of pounds per annum, surely the tobacco companies should have to make some redress for that? Surely you should be able to seek reparation from them? You should sue them until they are put out of business. I have been a smoker for 61 years, so it is not as though I do not know what I am talking about. Although I have managed to control it to a degree, smoking is a vile, filthy habit that kills people. If the evidence that you have is proof positive, surely you should go for the jugular? Instead of putting little impositions on people who are just following a particular hobby, you should get right at the tobacco companies.

That question is probably one for ministers and not for officials.

Surely they could pass it on to ministers and get them to move in the correct direction?

I think that they could, but you should also raise the question with ministers. I will let Sarah Davidson respond if she wishes to do so.

I think that David Palmer is eager to respond.

The point to make is that the issue is not one of taking away the individual's right to smoke, but of protecting other people from smoke. If we were to take away an individual's right to smoke that could be seen as a fundamental infringement of someone's civil liberties. That said, someone's right to smoke should not be allowed to impact on other people. In terms of the damage that smoking does to people, the relationship is one between the individual and the tobacco company. As has been shown in the United States, it is the individual who has to take the tobacco company to court.

Do you accept the evidence that the Scottish Licensed Trade Association provided for an earlier meeting about the substantial disbenefits in terms of jobs and the wider economic impact of the bill?

That evidence certainly took a different slant from what we had seen before. I have seen the Irish figures and the SLTA's view of life and the figures produced by the Central Statistics Office Ireland do not necessarily square up. Anne Ladbrook has written to the committee about some of the evidence that the SLTA produced. Nonetheless, we must take account of that evidence. Clearly, we have to look carefully at the likely economic impact on the licensed trade and the hospitality sector in general. As Sarah Davidson said in her opening statement, the financial memorandum shows that we took a prudent view of the likely impact on the hospitality sector.

Although the research in Aberdeen suggested that pubs and bars would benefit to the tune of £100 million, we took the benefit back down to zero because we thought that that was the prudent thing to do. We want to ensure that we are prudent and cautious about the estimates that we make.

I still have some difficulties getting my head around the role of the environmental health officers and the whole business of enforcement. From an earlier response, I picked up the feeling that it might be appropriate in some circumstances to have fewer fully trained environmental health officers. However, given some of the complexities of enforcing a total ban, particularly in private clubs, it seems that a lot of expertise will be required of environmental health officers in terms of legally gaining access to private clubs. I can see that it might be possible to gain access to public houses and so forth but, as far as I am aware, there are smoking clubs in Edinburgh—clubs that are set up for their members to do nothing else but smoke. How would environmental health officers have either the legal ability or technical knowledge to gain the evidence required in such clubs? I would have thought that that would be a fairly complex job.

I agree that a framework must be established to examine how each of the inclusions in the bill will be policed, for want of a better word. The bill gives environmental health officers the right of entry to private clubs. However, as you rightly say, there are many other issues around how they gain information. Officers would not just walk into a private club in the speculative way in which they would walk into an open licensed premises on the high street. Part of the discussion in the implementation group and in COSLA is about working through that and developing a training package for environmental health officers, so that by the time the legislation goes live all those issues have been resolved and people know what their rights and responsibilities are.

I want to counter any impression that we are suggesting that partially trained people should be doing things for which they have not been trained—that is not the case. The environmental health officers group has made the point that, particularly in outlying areas, there will have to be joint working to deal with a lot of the work. We would look to COSLA and its chief officers for advice on the various grades at which that work could be done and where a fully trained senior environmental health officer might be backed up in his duties by either another appointed officer of the council or someone else who was deemed appropriate. We need to explore those issues with COSLA so that we can understand fully what the costs will be.

You have not turned your back on the Executive funding the training costs; that will not be left entirely to COSLA. Is that right?

We have said that we will discuss that with COSLA.

We have finished our questions on part 1 of the bill. I thank the witnesses for coming along. We will take a couple of minutes to swap over witnesses.

Meeting suspended.

On resuming—

We will now take evidence on parts 2 and 3 of the bill from Roddy Duncan of the tobacco control division who is also the bill team leader; Dr Hamish Wilson, head of the primary care division; Eric Gray, team leader of dental and ophthalmic services in the primary care division; and Chris Naldrett, team leader of the pharmacy issues team in the primary care division, all of the Scottish Executive Health Department. The titles of some of those divisions should be shortened. I invite Roddy Duncan to make a brief opening statement before we proceed to questions.

The Smoking, Health and Social Care (Scotland) Bill is wide in scope and, in addition to the provisions on smoking in public places, comprises a range of measures aimed at improving the delivery of health and social care and continuing the modernisation of the NHS in Scotland. The financial memorandum has outlined the costs associated with the provisions of the bill, the largest of which are those associated with the introduction of free eye and dental examinations for all. Most of the other provisions incur relatively small costs or are cost-neutral in respect of implementation of the bill. My colleagues will be happy to address your questions on parts 2 and 3 of the bill.

I want to ask a basic factual question at the outset. How many extra dentist hours per year will be required to fulfil the measures in the bill?

I cannot give you a straightforward or precise answer to that question. The bill seeks to introduce a new form of oral health assessment. However, as that assessment will be more extensive than the current dental examination, there will be consequences for the man-hours needed to deliver it. We are still working through with the dental profession the details of that oral health assessment and any possible manpower consequences.

At the moment, approximately 70 per cent of adults pay for their examinations and 30 per cent are exempt. Simply making those examinations free to the existing registered population would place no additional requirements on dentists. However, we appreciate existing difficulties with access and if we are trying to encourage more people to attend dental practitioners we will certainly need more dentists. As far as providing current NHS services is concerned, we have estimated that, across Scotland, we are approximately 200 to 250 dentists short. Oral health assessments and dental examinations are part of that overall gap in service that we are trying to fill.

You will appreciate that the committee is faced with some difficulty. As you have rightly pointed out, the bill is trying to introduce an improved form of oral health assessment for people. We know that a significant group of people do not attend the dentist and that a number of people in some areas of Scotland are unable to do so. I presume that, even without the introduction of this oral health assessment, you have a calculation for the current shortfall. To some extent, it could be argued that this new measure will compound rather than alleviate the problem. However, in any case, you are unable to quantify either element, because you have not yet completed your deliberations with the dental profession.

As I have said, an external quantification of the current gap in the number of NHS dentists has come up with a figure of 215. We are already making inroads into that matter. This year, more dentists are coming into the NHS in Scotland.

I should point out that the introduction of the oral health assessment is not the only issue that has to be considered. The modernisation of NHS dental services, which ministers have been considering and to which they will shortly announce their response, is intended to include a package of measures that will attract new dentists into the NHS and encourage some dentists, who might in recent years have moved in a different direction, to return some of their hours to the NHS.

In addition, we are training a larger number of professions that are complementary to dentistry. For example, dental therapists and hygienists can undertake certain treatments that have traditionally been carried out by dentists. Moreover, south of the border, the National Institute of Clinical Excellence has recommended a different way of approaching dental examinations. Instead of the traditional dental examination every six months, NICE has said that the matter should be considered on an individual basis, which means that the interval between examinations could vary between three months and two years. That might in turn release some time in the dental profession that could be devoted to oral health assessments.

You are right to say that the situation is complex. However, our starting point for addressing it is NHS Education for Scotland's well evidenced figure that we are 215 dentists short.

Forgive me, but I want to pursue the issue. You said that we are short 215 dentists, but you could not say how many extra dentist hours per year will be needed to implement the bill. I am concerned about that. I bumped into a colleague from the Scottish Commission for the Regulation of Care this morning; I am concerned that the route down which we are going is similar to that which we went down with provision of free personal care; somebody thinks the measure is a good idea, but nobody has modelled the consequences of, or piloted, the proposed legislative provisions. Can you give me a better idea of how many dentist hours might be required, where the dentists will come from, what the costs would be of putting them in place and how the mechanisms that you say would release dentist capacity will work? The financial memorandum contains no hard evidence to support the claims that you make on that.

To clarify, the financial memorandum was constructed on the basis of the existing service because that was the only relevant information that we had. To look ahead to the different set of arrangements that we have discussed, it has been roughly calculated that about 1 million examinations might be substituted by new oral health assessments. At present, approximately 2 million examinations are done under the NHS. Given the change in the frequency of examinations that the measures might produce, given that not everyone will wish to or be able to attend in any one year and given that it will take an average of, say, 20 minutes for an oral health assessment, we might be talking about 300,000 hours of dentist time, which might come down to about 150 dentists. That is a rough approximation of the time that would be required if we were to introduce only oral health assessments.

However, as I said, other factors come into play, such as the opportunity for professions that are allied to dentistry to take over part of the dentist's role—not in carrying out oral health assessments, but in follow-up treatment—which would relieve existing dentists in respect of the time that they currently spend with patients. Also, dentists undertake examinations at present, which is offset against that figure. We need to work back from the gross figure.

You said that you have not completed your discussions with the dental profession about the implications of the introduction of oral health assessments. Have you completed discussions about the work that is to be done by professions that are associated with dentistry? Are people in training and in the pipeline so that they are ready to take up that responsibility?

Yes. We are increasing the number of dental therapists who are trained in Scotland to 45 per annum. Traditionally, no dental therapists were trained in Scotland; it is only recently that we have started such a programme in Scotland. Also, there are several hundred dental hygienists throughout Scotland who could be used more effectively.

Many members struggle with the fact that, when we talk to our constituents, we hear that more and more of them cannot get any dental treatment at all. You talk about more dentists coming into the NHS, which may be true, but all we hear about is dentists who leave the NHS to go to private practice. At the end of the day, the measures might be a publicity own goal. The quid pro quo for offering free dental checks is that people will get them at a frequency that is four times lower than was the case previously—every two years instead of every six months—which may well be medically justified, but I suspect that it will be difficult to convince a sceptical public about that. That is just a comment.

We are 200 to 250 dentists short at the moment and we are going to introduce examinations that may take longer, certainly to start with. I hope that the new system will bring in lots of people who do not have examinations at present, otherwise there would not be much point in the exercise. Presumably—otherwise the exercise would be futile—some of the examinations will result in treatment, which will take up more dental hours. Again, I point out that those dental hours are not available. It does not seem that the costs in the document go any way towards recognising the reality of the situation on the ground.

We totally accept that what is in the financial memorandum is a cost that is based on dental examinations for the existing number of registered patients. We indicated what the cost might be under current circumstances if that number increased by 25 per cent, so we have given some such costs in the financial memorandum. The difficulty that we had at the time was that we had not entered into detailed discussions with the profession about the new form of oral health examination and what that might entail.

In parallel with that, ministers have said that they will shortly respond to the consultation on modernisation of NHS dental services. That response is likely to be to target an increase in the number of dentists and allied dental professionals who we can bring into the service in order to deal with the problem that you described, which relates to the new form of assessment and the consequent treatment.

There is strong evidence from elsewhere that a more extensive oral health examination is a potent prevention measure and that, although it might reveal the need for additional treatment in the short term, it will turn the system around over time and will put in place a more prevention-focused outlook.

There will be a considerable hump before we reach that longer term goal. It strikes me that it would be fair to assume that a large proportion of people who do not get dental examinations at the moment need treatment, but currently seek it only when faced with an emergency. We will strike a big hump if we are successful in encouraging those people to come in for examinations. Having created that expectation and demand, how on earth are we going to meet it?

We will do so by using the increased number of dentists and allied dental professionals.

There are two problems. One is the unidentified cost and the second is the feasibility of delivering the increased number of dentists and dental support staff. I am not sure that you have convinced us on that.

I start by saying that I appreciate Dr Wilson's candour. I hesitate to suggest that it is because you come from a professional background, but you have been candid about the difficulties that might be experienced in fulfilling the bill's legislative obligations. However, in your candour, you have given us something of a constitutional difficulty. What is the purpose of a financial memorandum in a unicameral system? A financial memorandum should fully scope the financial costs that are associated with fulfilling the legislative provisions of any bill. However, your testimony this morning has convinced Parliament's Finance Committee that this financial memorandum does not fulfil the legislative purpose that is laid down for it constitutionally. As we all know, there have previously been examples of inadequate financial memorandums—the one that springs to mind is the one for the Education (Additional Support for Learning) (Scotland) Bill, which made wonderful promises about integrated learning without ensuring that the resources existed to support it. In that case, the financial memorandum did not fully scope the associated financial costs.

We are keen to avoid a future Auditor General for Scotland saying that this financial memorandum was inadequate and that the Finance Committee, whose job it is to scrutinise the adequacy of the financial memorandum, was remiss in its duties.

In fairness, I do not expect you to provide an answer now. However, the committee is inviting you to go back to consider whether the financial memorandum fulfils its constitutional purpose of itemising fully the financial resources that will be required to implement the provisions in the bill. Perhaps you will then write to the committee to say whether the Executive considers that the financial memorandum is adequate, or whether it wants to take advantage of the recently created provision that allows the Executive to submit an alternative financial memorandum that would more accurately meet the constitutional obligation to scope fully the resources that are required to fulfil the bill's provisions. It would be prudent for all of us, given the committee's scrutiny function and the officials' responsibilities in relation to the purpose of the financial memorandum, if you were to reflect on the document's adequacy and perhaps to take advantage of the opportunity to resubmit it.

We can certainly consider that.

There might be a bigger issue than has so far been raised, because the British Dental Association suggests that there needs to be "a threefold increase"—to £520 million—in the funding of NHS general dental services. The profession's view is that very large sums of money are required. We might respond, "They would say that, wouldn't they?" However, such a huge gulf between the costings of the professional body and those of the Executive does not give the Finance Committee great comfort that what is suggested can be managed within the envelope of resources that has been set out.

An issue that we face is that ministers have not yet announced their overall response to the consultation on modernising NHS dental services in Scotland and the resources that will be attached to that response, which might in part address the points that members have made.

It is fair to point out that the BDA based its estimate of additional costs on consideration of the situation in a particular area in Scotland. The BDA considered the differential between the arrangements for the salaried service and those for the independent contractor service and then extrapolated figures for the whole of Scotland. We do not necessarily accept that that was a reasonable basis on which to determine the resources that are needed for NHS dentistry throughout Scotland. However, as I said, ministers will very shortly announce their response to the consultation and the resources that will be attached to that—we might ally that point with Ms Alexander's comments.

You say that the BDA based its argument on what is happening in one area of Scotland. An equivalent piloting or mapping process from the Executive might have given us a greater evidence base on which to make a judgment. However, the Executive does not provide either basis for analysis.

We are moving beyond the issue of free dental checks to the broader issue of dental services. The resources that will potentially be attached to the ministerial announcement will be targeted at specific areas in the way that you suggest. I should add that the intention has been to introduce oral health assessments initially for older people, which might offer the kind of piloting experience that you describe. However, the system has not yet been introduced.

I am keen to build on the dialogue about planning the resources. I would derive a lot more comfort from the situation if I had a clearer idea of the current demand in relation to the various roles in dentistry and, beyond that, a clear understanding of the future additional demand that is envisaged so that we could consider the total resource that will be required in the context of what is available, the current shortfall and the additional resources that would be provided. If we had a clear picture of the situation, particularly if figures were given for each NHS board area, I would be enormously comforted.

As a representative of the Highlands and Islands, I have grave concerns about the implications of the bill, especially when we start to scratch the surface of latent demand and, once that demand has come through, of the additional remedial work that may need to be done for many people.

Again, the issue that you raise will be addressed partly by the ministerial response to the consultation. I am sorry that I am not able to give more information at present.

I understand that. However, the implication that we are launching measures in the dark without concrete figures is a material worry. I am keen to put that on the record.

We will seek to address the issue in the response that you have invited us to make.

Is legislation necessary to do any of the things that you are suggesting in part 2 of the bill? Could those measures have been wrapped up in a more general modernisation programme for dentistry? I am not sure whether the bill is a convenient peg on which to hang the measures. Technically, do any of the provisions in part 2 require to be legislated for in this context?

The clear advice that we have received from solicitors is that we should take powers to implement the partnership agreement commitment to free dental and eye checks for all. That provision requires to be made in legislation.

Surely the introduction of free dental and eye checks for all is a matter of money; legislation is not required to make it possible.

The advice that we have received is that primary legislation is needed if we want to introduce free checks for everyone.

If the advice from solicitors is that legislative provision is required, concomitant with that the financial memorandum must cost fully the financial implications of the provision. It is not possible to say, "We will separate it out and deal with it in our programme for modernising dentistry." Our job is to ensure that the financial memorandum covers fully the costs that are associated with any proposed legislative changes. I accept that the argument could go either way. However, because advice has been received from solicitors, we are unable to pick and choose the coverage of the financial memorandum. No doubt it will be easier to reflect the costs of the provision in the financial memorandum after the statement on dentistry has been made.

We believe that the measures in the rest of part 2 are required under primary legislation to deliver some of the changes that ministers are considering under the modernising agenda. Much that can be done in dental services does not require primary legislation. Many of the responses to the consultation on modernising NHS dental services made proposals that we can implement through changes either to secondary legislation or to the way in which dental practitioners are paid. Those changes can be made through directions, rather than primary legislation.

The information on provision of general dental services refers to new arrangements that have still to be agreed with the profession. Our experience of new arrangements in the health service, such as the consultant contract and the arrangements for out-of-hours working by GPs, is that none of them has been implemented at no cost; all have been implemented at vast cost. However, we are assuming that the new arrangements that the bill will introduce will be entirely cost neutral. Can you put your hand on your heart and say that that will be the case?

The specific costs that are allied to changes under the heading of "provision of General Dental Services" can be regarded as neutral. They do not in themselves require additional expenditure. I am sorry to keep coming back to the impending ministerial announcement on modernising NHS dental services, but the measures that ministers are considering in relation to improving NHS dental services throughout Scotland will have a cost, although those measures will be much broader than the specific measures that have been included in the bill. As I have already said, a number of measures can be introduced in NHS dentistry in Scotland that do not require primary legislation but will have a cost.

Perhaps I am picking this up wrongly, but the financial memorandum states:

"the new arrangements would be nationally agreed".

Agreed with whom?

They would be agreed with the British Dental Association on behalf of the profession.

We are talking about changes in the system of "fees, capitation and allowances".

That is correct.

Is there any other trade organisation that, when asked to consider a change in its arrangements, will not wish to come out of that change with more money in its pockets? That has not been the case in other sections of the medical profession.

That has been made quite clear in the evidence that the British Dental Association has given to the committee. There is a process of negotiation, which is continuing.

Higher expenditure will, I presume, be a result.

Potentially, yes. If the proposals are agreed by the Scottish ministers, they will provide the funding for them.

Is not that a consequence of the bill?

No, it is not a direct consequence of the bill.

So, is it an indirect consequence of the bill?

That is probably not a question for the officials. Having listened to this evidence, it strikes me that it might have been better if the ministerial announcement had been made by now, so that we could be clear about the overall framework. We would then have been able to consider the legislation in that context. There seems to be a cart-before-the-horse element to the way in which the process has developed. Perhaps the issues that we have raised need to be conveyed back to the minister.

A further question arises from the experience of the general medical services contract and the process for hospital consultants. In those cases, negotiation took place at United Kingdom level. By the minister's own admission, that did not necessarily lead to the best outcome as far as the Scottish context was concerned. Are we to have a repetition of that with the negotiations involving the British Dental Association that you mentioned?

The negotiations on the position in Scotland are being conducted purely for Scotland. The desired changes to dental services in England have already been announced, and those changes will be implemented south of the border with effect from April 2006.

Can we quantify what the English changes would mean in a Scottish context and then identify the potential implications of having separate Scottish arrangements?

There are no direct implications for Scotland from the English changes.

I will switch briefly to pharmaceutical care services, referring to paragraphs 234 and 235 of the financial memorandum. Paragraph 234 contains additional costs of £500,000 for health boards as a result of the new arrangements. However, I am not clear about the costs under paragraph 235. As far as I understand it, it refers to health boards filling gaps in the current provision under the current pharmacy arrangements. Would such costs also be funded by the health boards from their existing budgets, or would Government funding be available?

The expectation is that those costs would come out of health boards' existing allocations or their uplifted allocations. It is a bit of a chicken-and-egg situation for us: until the boards take up the duty to identify need and plan the required resources, we cannot quantify the figure.

The £500,000 that is mentioned in paragraph 234 is not a huge sum in the context of the health service budget, but we are talking about individual health boards, some of which are struggling to stay solvent. Most break even only with difficulty. Is it really sensible to tell boards, "Here's some extra responsibilities. Fund them out of your existing budgets"?

You need to consider the arrangements in the round. In modernising pharmacies, we are trying to introduce a different way of working.

That is not to say that all services will add cost, because there are different ways to do the same job—I think the expression is "doing it smarter". Economies of scale could arise from the new set-up. I will echo a comment by Dr Wilson. We are about a year away from the contract's implementation—it is still being negotiated—but if resource implications are identified when that happens, we will take them to ministers and address them.

I return to Ms Alexander's comments about the financial memorandum's purpose. Will the bill force health boards to spend money or will expenditure be optional?

Health boards will have a duty to identify and provide the necessary services.

In that case, we need to be clear about the costs.

The £500,000 is for support staffing in health boards. As for additional service costs, the planning process that health boards will be required to follow will identify gaps. We cannot quantify those gaps at present because that planning process has not taken place. That is the chicken-and-egg situation again.

In general, it is recognised that we have a good network of community pharmacies throughout Scotland. That was reflected in the debates in Parliament when the Office of Fair Trading pharmacy services report was produced. I think that members want that network to be protected. We consider the planning arrangements against that background. We have a network that is generally regarded as being good, so we do not expect to find huge service gaps.

I thank the witnesses for giving evidence. The committee expects to consider a draft report on 15 March.

Could the clerks examine the scope of financial memorandums before that meeting? The information could by all means be shared with the Executive. Increasingly, the question whether a financial memorandum covers all of a bill's provisions comes into play. It would be helpful to have circulated to the committee information on the purpose of financial memorandums, but it would also be helpful if clerks and subsequently conveners were to discuss the matter.

I worry that we will create a future backlog for the Audit Committee if our consideration is anything less than rigorous. By signing off a financial memorandum, we collude in it or signal our satisfaction that it is comprehensive. This is not the first time that we have not felt wholly comfortable about that signing off.

It is fair to say that the matter is further complicated by the opportunity for the Executive to provide revised financial memoranda. We welcome revised financial memoranda, because without them, how would we have an accurate picture? However, we want to ensure that the parliamentary process does not simply allow for a variety of financial memoranda as they suit the Executive when, for example, it might be better to have heard the dentistry statement first, as has been said. We do not want to fall into a pattern of events in which the true financial memorandum does not materialise until later in proceedings, which would undermine our scrutiny function.

Those generic considerations are rising up the agenda. Perhaps the clerks and the convener could examine them and report on their observations in due course, later in the spring. As I said, we are on the boundary of not fulfilling an obligation to the Audit Committee, albeit through no fault of our own.

I agree. One of the problems is that in a sense we have made stipulations to the Executive about what we expect in financial memoranda. As we have seen today, the Executive does not always live up to what is required either by our stipulations or by standing orders. We will have to deal with the issue in the context of our report on the bill. The matter is further complicated by the fact that we are waiting for a regulatory impact assessment on the smoking side of the bill.

I take the general point, which is an important one. Over the past two years the committee has done a considerable volume of work on the financial memoranda and it has flagged up the issues that have arisen. We must ensure that when bills come in, and in particular when they have substantial financial implications, those implications are properly mapped out. We may have to call a halt at some point and say that a bill can go no further until the financial issues are put in place. We perhaps need to have that dialogue with the Executive.

I agree whole-heartedly, but I think that prior to that we need to do a bit of work with the parliamentary authorities. You raised a fascinating point when you suggested that there might be no need for a legislative provision and that it could be argued that the matter falls outside legislation. However, the Executive officials said that the Executive solicitor told them that the provision has to be in the bill and the financial consequences follow from that.

It seems to me that to ensure that we fulfil our scrutiny function we are required to be clear about what a financial memorandum should do and also to have a protocol with the Executive and its solicitors about the scoping and coverage of financial memoranda. This is an interesting one-off case, but I am anxious that the parliamentary authorities examine the implications of allowing a revised financial memorandum to be submitted. The parliamentary authorities must consider at what stage in the process such financial memoranda are submitted and, if they are subsequently published, whether there is any guarantee that they come to the committee for due process to ensure that they are comprehensive. I am not sure that there are as yet any rules that govern when and how a revised financial memorandum is published and scrutinised.

Susan Duffy can perhaps answer the point about a revised financial memorandum.

Changes that were made to standing orders at the start of the year allow for a revised financial memorandum to be brought forward if an amendment is agreed at stage 2 that alters significantly the financial implications of a bill. That provision has now been placed in standing orders. The committee has agreed that where that occurs it will endeavour to take evidence, as we did on the Water Services etc (Scotland) Bill. In standing orders, that is the only point at which the Executive is obliged to bring forward a revised financial memorandum.

Clearly, the issue that we have on this bill is nothing to do with an amendment at stage 2. We just think that there is a risk that the financial memorandum is inadequate to cover the provisions in the bill. Am I right in saying that in these circumstances the only thing that we can do is reject it? It appears that we may not have an appropriate mechanism for dealing with a situation that we see with increasing regularity, which is that the financial memorandum is not adequate. I do not want to be in the position that the only club that is available to us is to halt the whole process. It seems to me that there is a desperate need for a set of protocols and procedures when we feel that the scoping coverage of the financial memorandum is inadequate for the legislative provisions.

We have had the discussion before, but perhaps we can have it again in stronger terms in order to achieve a better resolution than we have had up until now.