Item 3 is evidence on the financial memorandum on the Health Boards (Membership and Elections) (Scotland) Bill. We were unable to take evidence on the financial memorandum last week because of illness. We agreed last week that at today's meeting we wanted to take evidence from a health board and from electoral registration officers, as well as from Scottish Government officials. Unfortunately, the health boards that we invited were not able to attend. However, I am pleased to say that we have with us Peter Bales and Brian Byrne from the electoral registration committee of the Scottish Assessors Association. I welcome the witnesses to the meeting, thank them for agreeing to come at such short notice and invite them to make a short opening statement.
I really just want to say what the association does. There are 14 Scottish assessors who are electoral registration officers and we have an electoral registration committee. There is a 15th electoral registration officer, who is not an assessor, who also attends the committee. He is from Dundee. Our answers to the questionnaire represent the views of all 15 electoral registration officers.
Do you want to add anything, Mr Bales?
No.
I invite questions from members. Jeremy Purvis and Joe FitzPatrick will take the lead, but all other members are welcome to ask questions—they should simply catch my eye. Jeremy Purvis wishes to go first.
Good afternoon. I hope that the witnesses have had the chance to read some of the local authority submissions that we have received. Their own submission was gratefully received by the committee.
As you said, Clackmannanshire Council's submission is mainly about running the elections. We deal with registration prior to elections. We would say that the costs will be fairly minimal, but they will not be non-existent, given that we will have to try to capture 16-year-olds in time to register.
I was interested that Clackmannanshire Council's submission said:
That is because electoral registration is not really part of the election, so money that is spent on it cannot be reclaimed as an election expense. There will always be some additional expenditure on registration in the run-up to an election or when the rules for an election are changed. Technically, it is not election expenditure, so it cannot be reclaimed that way.
The financial memorandum states quite clearly that the bill will involve no costs for local authorities. Do you have any comments about the costs that it puts forward on preparations for the elections?
One part of the financial memorandum says that there will be no costs, but elsewhere the financial memorandum says that the costs will be minimal. It is more likely that there will be minimal costs than it is that there will be no costs. There will be some costs, but we are not talking about tens of thousands of pounds.
I will move on to postal voting. What would your responsibilities be if, following the pilots, a decision were taken to hold all-postal voting elections? What impact would that have on EROs?
If a simple postal voting system were used that did not involve any personal identifiers, the impact would be minimal. We would provide a list of all the voters and the returning officer, whoever that might be, would arrange for the ballot papers to be issued. If it were decided that a more secure system should be used, the registration officer would have to collect the security information—signature, date of birth and verification that the person was who they said that they were—and then pass it on to the returning officer.
My reading of the bill is that personal identifiers will not be used.
In those circumstances, postal voting is okay.
Our role is not to discuss the politics of whether personal identifiers should be used; it is simply to consider what is in the bill. It is good to hear that the impact on you would be minimal.
On the same subject, from a professional point of view, would you be content to run a postal ballot that did not require the use of personal identifiers?
As I said, we would not run the ballot; we would provide the registration information. That is a fairly simple job for us if there is no security element. It is really a matter for the organisers of the election to decide whether they are happy to have a national park board-type election or whether they want a local government-type election, either for the status of the election or for the security of it.
But should the view be taken that any such election would have to be secure and free from the risk of fraud, there would be a cost associated with the collection of personal identifiers for people who are not currently postal voters.
If the voting were all postal and the election had to be fully secure—like a normal election is—security information would have to be collected from every voter. At the moment, that does not happen.
I understand from some of the submissions that we have received that, at the moment, broadly 85 per cent of electors are not postal voters.
On average, about 15 to 20 per cent of voters are postal voters.
How many people in Scotland are not postal voters? In broad terms, is it just over 3 million?
Yes.
So, if it cost £1 to collect security information for each of those voters to make an all-postal ballot secure, we would be talking about an additional £3 million or so.
Yes. It would cost at least £1 for each voter.
On the basis of your experience of postal votes.
The other thing about collecting personal identifiers is that some people drop off the register because they do not want to give identifiers, for whatever reason. So, if the process were extended to every voter, some people would drop off the register.
For clarity, is the £1 cost per registered voter the average cost of getting security information from people whom you have to chase up several times and from those who respond immediately?
Yes.
With regard to the operation of the pilot schemes, I understood from the 12 September letter from the Cabinet Secretary for Health and Wellbeing that the system of operating the franchise for the pilot schemes could be different from that which would be in place if the elections were rolled out. You have raised concerns about the software systems when it comes to extending the franchise to 16 and 17-year-olds. The simpler system will operate for the pilot schemes. Is it your understanding that the simpler system will be used for the full elections if the pilot schemes are rolled out?
I do not know whether the simpler system will be used for the full elections. If the system that is used is not simple, it will create lots of problems because 14 and 15-year-olds will have to be on the register in advance. For the pilot schemes, the suggestion is that the register should be kept strictly to 16-year-olds, who will apply when they reach the age of 16. It is more reactive than proactive.
We are keen to focus on the cost element of the systems rather than the policy element.
Sorry.
However, I would have thought that there are policy issues around capturing the details of 15-year-olds on a public record.
That would have a financial effect as well. The likely policy would be to protect the names, which would have a cost.
Will the information that you have provided on the upgrading of the software to make it consistent throughout Scotland still apply if the elections—other than the pilots—were rolled out across Scotland and operated under a rolling electoral system for 16 and 17-year-olds?
To get people who are younger than 16 on the register in time would incur the costs that we have suggested.
But if the simpler system were used, there would not be that additional cost when the elections were rolled out.
Minimal changes would be required, but it would depend on the software system. Some software systems would find that easier than others.
I have a final question that follows on from the points that Lewis Macdonald raised about postal ballots. At the moment, are personal identifiers used for those who have registered as postal voters? Both within a pilot area and under the measures in the bill, if identifiers are not to be used, a parallel system will operate for postal voters. If a postal voter registers during an election cycle to be an elector in a health board election, identifiers will not be required and, therefore, will not be captured by EROs. The registration process will have to be duplicated for any local government or national Government election, at which stage personal identifiers will be requested. Is that correct?
As I understand it, if the proposal is to have a fully postal ballot without identifiers, no application will be needed. Every elector on the registration list will get a ballot paper and there will be no identifiers. I am not sure if that is what you mean.
It is. That will work on the basis of an all-postal ballot in perpetuity.
Yes; an all-postal ballot with no security.
Your submission refers to the national park elections as an alternative model to the local government elections. Do you provide the registers for those elections?
Yes.
Are they simple postal registers with no security checks?
Yes.
What is the turnout in national park elections?
I believe that it was around 60 per cent in the Cairngorm area.
But there were no checks on the identity of those who cast postal ballots.
No.
As there are no more questions and no final comments from our witnesses, I thank them for their attendance and their evidence.
Yes.
I will start with a straightforward question. Will the costs to the national health service of delivering the full elections—not just the pilots, which we will come on to in a moment—be met by NHS boards in the areas in which elections will take place, or will central funds be provided to compensate boards for those costs?
In the first instance, the costs of pilots that fall within the current spending review period will be met from central Government additional funding without calling on health boards' allocated resources. If the pilots are then rolled out nationally, the elections will fall within a future spending review period and the costs of those elections will be taken into account then.
What is the procedure for moving from the pilots, about which we have quite good detail, to rolling out the scheme?
We will have the pilot elections, and there will then be a full evaluation. The evaluation report will come before Parliament before any decision is made on a roll out.
Will the report go to the Subordinate Legislation Committee or elsewhere?
It will go to a committee, but the procedure will depend on whether there is a change to the bill; if there is, the affirmative procedure will be used.
I want to return to the question whether health boards will be required to cover the costs or whether the elections will be funded centrally. Mr Hogg said that the matter will be taken into account by ministers in the next funding round. The revised financial memorandum states that the costs will be £16.65 million. Is that correct? Has there been a change since September?
No.
So there is no change. Are you saying that no policy decision has been taken on whether the costs will be added to boards' baselines? I am not clear about that, because your answer was simply that costs will be taken into account.
To an extent, the question whether the funding will be identified separately or will come from within boards' allocations is slightly academic. We are saying that the costs of the elections will need to be included in the sums of money that are given to health boards in their general allocations. The health boards will be the mechanism through which the costs are met, but the Government will have a responsibility for ensuring that the boards are given sufficient funding to meet the costs of the elections as they are rolled out. Clearly, a lot will be learned from the pilots. That is why the proposal is to run pilots first, to have a full independent evaluation and then to consider that before deciding whether and how to roll out fully. There is certainly no attempt not to take into account the full roll-out costs of the elections.
On that point, my understanding is that those decisions would be for the next spending review.
That is correct. The bill will commit expenditure to the pilots and nothing else. The pilots will run for a two-year period. The earliest date on which pilots could commence is 2010. A report would then be laid before Parliament, at the earliest during 2012. Therefore, the earliest date at which full roll-out could happen would be following 2012, so that is at least one, if not two, spending review periods away. The bill sets an end date by which the pilots must be rolled out if they are to be rolled out, otherwise the whole scheme falls.
You will appreciate that the issue is not academic. I will not put words into your mouth but, in answer to my question, you indicated that additional resource will be provided to health boards to ensure that they are compensated properly for the costs of running the elections. However, in answer to Mr FitzPatrick, you said that that is for the next spending review period, on which you cannot give any more information. There is no policy information in the financial memorandum about the on-going costs to the NHS, whether or not the cost is to the boards. The financial memorandum simply sets out the overall cost to the NHS in Scotland; it does not say whether boards will receive the exact amount of money to cover the operation of elections in their areas. That is not an academic point; it is a real point about the operation and costs of local health board elections. However, you have indicated that a policy position has been taken that the boards would be centrally recompensed, which is helpful. I ask you to comment on whether that is accurate.
I think that that is correct. My difficulty is that I do not know what health boards' general allocations will be in future years—not just in future budgets, but in future spending reviews. However, the costs of running the elections, if they are rolled out, would need to be fully and explicitly taken into account in the setting of health boards' budgets for future years.
I am grateful to you for putting that on the record. The committee will try to cross-reference what you have said with the information that the cabinet secretary has given us, because I could not find that point in that information.
Yes, that is right.
Submissions from some local authorities, including Clackmannanshire Council, refer to the possibility of hidden subsidies. Is the cost of the time of the returning officers and their staff taken into consideration in the financial memorandum?
Yes, the costs of the elections will be fully reimbursed by the Scottish Government.
That is helpful. Where are the costs for the pilots and for any on-going elections factored into the tables that appear in the 12 September letter from the cabinet secretary?
They are included in two areas. The baseline cost is taken from a number of Electoral Commission studies on local government elections in England. The counting machines line is an average cost that was taken from the 2007 local government elections in Scotland. Within that, provision is made for returning officers.
That is helpful. If my understanding is correct, the £1.21 million baseline cost is based on a 60 per cent turnout and a cost of £2.60 per single transferable vote. It would be difficult to have a read-across on that from south of the border, where STV is not used. The financial memorandum does not state that the baseline cost takes into account charges for the time of local authority chief executives, who will be required to operate and manage the elections and to act as returning officers.
The baseline cost figure includes stationery, the provision of ballot papers, postal costs, the provision of assistance points for people who wish to use them, the opening of the postal votes and a post-election survey to see how people managed with the postal vote.
I also asked about the situation in the event of a roll-out of the elections.
If the 14 returning officers chose to request the personal fee, the cost would be in the region of £50,000.
What about the costs of returning officers' staff?
That is included in the Electoral Commission figures and in the counting machines line.
James Kelly has waited very patiently to ask a question.
I apologise if I sound pedantic, but I just want to be clear about the funding of the elections, on which I am a bit confused. It has been made clear that the pilot elections will be funded centrally and, in the event of roll-out being agreed, the costs will be incurred in a future spending review. In that future spending review, will the elections still be funded centrally by the Scottish Government, or will the costs be allocated against health board budgets, or has that decision still to be taken?
The pilots could be run in 2010 at the earliest, which means that they fall within the current spending review period. It is therefore necessary to identify the pilot costs separately in addition to the allocations that already exist for health boards as part of the 2007 spending review outcome. We have not done that, because we do not yet have health board budgets for future years, but the funding for the elections would flow through the health boards' allocations as part of future spending reviews. The Government would then take that into account in setting the amount of money to be given to health boards in their general allocations.
I draw the officials' attention to the evidence that a number of health boards have submitted. I will quote NHS Grampian's submission, as that board covers the area that I represent, but its comments reflect those that a number of other boards have made. It states:
It is not fair if the suggestion is that health boards would get the same amount of money as they would have got if we had not pursued the elections.
Have you discussed with health boards how the pilots will be funded, and how the potential roll-out of elections will be funded?
Health boards were involved in our consultation, within which the funding of elections was discussed. It was clear at that point that they wanted separate arrangements to be made, and that is what we will do for the pilots.
Can you explain why you—or ministers—have not accepted that argument for any future roll-out?
Perhaps I can comment on that. We have not "not accepted" that argument—it is simply that the bill only commits expenditure for the pilots, so we have addressed the issue in relation to the pilots now, within the current spending review period.
Does the Scottish Government believe that it has adequately addressed the points that health boards have raised with it? Have you discussed with health boards the evidence that they have submitted?
We are certainly well aware of the view that the costs to health boards of running elections should be provided in addition to the funding for front-line services that boards would have received anyway. That view has been clearly expressed and understood in the Scottish Government.
Do you share the disappointment of, I suspect, a number of committee members at the fact that health boards have not been able to attend this meeting to express their views directly?
It would be wrong of me to comment on the actions of other parties.
Have you discussed with health boards their attendance at this meeting?
We have not discussed the health boards' attendance at this meeting.
To be fair to the health boards, we decided only last week to invite them. We cannot fairly criticise them for not being able to turn up today, although it would have been helpful if at least one of them could have done so.
I will answer the first question and ask my colleague Robert Kirkwood to answer the second.
So it is assumed that that 20 per cent will be representative of the wider population.
Indeed. In practice, the costs could be less or more than that depending on which boards are chosen. I will give a couple of worked examples, sticking with the model of one predominantly rural board and one predominantly urban board. At the lower end of the spectrum, if we took moderately sized health boards such as Fife and Dumfries and Galloway, the total cost of the pilots would be just over £2 million rather than £2.86 million. On the other hand, if we took two of the largest boards in each category—say, Lothian and Highland—the cost would rise to just over £3.5 million. In either case, the cost would be fully met by the Scottish Government, but I want to be clear about the assumptions that underpin the costs in the financial memorandum.
You said that the cost could vary from just over £2 million to just over £3 million depending on which two boards are picked for the pilots. Is there a cap on how much you are prepared to spend on the pilots?
Ministers have not set a cap, but in practice there would be one if we chose the two largest boards because that would produce a ceiling for the maximum amount of money that could be spent. Given ministers' preference for a representative sample, it is highly unlikely that the maximum will be spent.
I am anxious to avoid a bidding war around the table.
My second question was about the possible bulging of the costs.
I draw members' attention to proposed new paragraph 66 of the financial memorandum, which shows that the costs will be fairly front loaded. The bulk of the costs will be met in year 1, but there will be recurring costs for members' remuneration in years 2, 3 and 4.
For clarification, and to pick up what my colleague Lewis Macdonald said, have you spoken directly to the boards that sent in evidence to reassure them about the costs that they said they were facing?
No—we have not spoken to the boards since they submitted evidence.
Do you recognise as accurate the figures in their evidence?
We recognise the figures, but we have an issue with some of them. NHS Highland might have misinterpreted some figures.
Which ones?
NHS Highland's submission refers to 20 elected members. We proposed two pilot board areas with 10 elected members each, rather than 20 elected members in one pilot board area. NHS Highland's extrapolation of costs is therefore a bit out.
To ensure that I fully understand, are you saying that there is no chance of any money being taken from front-line services to pay for direct elections to health boards?
If elections were fully rolled out, the costs of running them throughout Scotland would be taken into account in the sums of money that are given to health boards as part of their general allocations.
You say that the costs will be taken into account, but that is not exactly what I asked. The evidence to the committee from various health boards is that if they have to pay to run the elections, the money will have to come from front-line services. Can you give boards a guarantee that they will not have to take money from front-line services to pay for directly elected health boards?
An absolute guarantee exists for the pilots, because they fall in the current expenditure period.
Mr Kirkwood asked us to look at paragraph 66 of the amended financial memorandum, which we are doing. It says:
The expenditure would be made by health boards from their allocations. The bill gives boards a power to make those payments. What is not in the scope of the financial memorandum or of the discussion is the size of health board budgets in many years' time, when the roll-out might happen. Even estimating the costs at that time will depend largely on what is rolled out, which will be informed by the evaluation and the experience of the pilots.
I am concerned about the questions that officials are being asked—there are questions that they can and cannot answer. If the committee has concerns, it can make them known in the report.
I understand that. I was trying to clarify what is in the financial memorandum. I want that to be crystal clear. The financial memorandum says:
The decision would be for future spending reviews and budgets.
So the decision has not yet been taken. Is that correct?
By definition, that must be the case, because those budgets do not yet exist, whereas the budgets for the pilots do exist.
I am sorry—
The official has given the answer. If members have concerns, they can put them in the report.
One difficulty is that the spending that we are discussing would take place not only after the current spending review period, but—potentially—after a general election. The ministers and the Parliament that decide on the roll-out could be different.
Indeed.
Obviously, I would expect far more SNP members.
We are in danger of having a debate around the table, whereas we are here to seek information.
Further to the question of funding—not for the roll-out, which, as has been said, may be some time off, if it goes ahead, but for the pilot schemes—Mr Hogg has said that there is an absolute guarantee that the pilot schemes will be funded in full. However, Mr Kirkwood disagrees with the figures that have been presented by NHS Highland on the basis that he thinks that they overstate the likely costs. On what basis will you agree with health boards and the electoral registration officers what the costs will be?
Once the specific health boards have been identified, we will work closely with them over the period leading up to and beyond the pilots to establish how the elections will be held and what costs will be incurred. For some of the cost elements, there will be a direct correlation between the size of the board and the cost that is generated.
Do you intend to provide a global sum within which you expect boards to meet the costs? Or will you take an itemised approach involving so many hours of officers' time plus so much additional expense? What will your general approach be?
The approach has yet to be finalised.
It appears that the £16.65 million that has been identified includes a substantial portion of remuneration and expenses for those people who are elected to boards. Do you accept, for example, NHS Highland's view that the travel and subsistence costs of elected members in a large rural area will be different from those of elected members in urban areas? If so, which of those do you reflect in your global sum?
We recognise the differences between all health boards and the requirements of their members. The figure that we cite in the financial memorandum is a working figure that we can extrapolate to boards. It is taken from an average board, given the fact that we do not yet know which boards will be used for the pilots.
The figure could end up being quite a lot more or less, depending on which boards are used for the pilots.
Yes.
Does it include the election expenses of those who seek to be elected?
Election expenses have perhaps also been misunderstood. We have proposed a cap of £250 on what someone seeking election could spend. That is not £250 that would be given to someone who sought to be elected, to pay for their election expenses.
They or an organisation would pay for their expenses; the Government would not.
That is correct. The £250 is purely a cap on what someone could spend.
We have had quite a long session and I remind the committee that we still have a major item on the agenda. I will give the final question to James Kelly.
The financial memorandum sets baseline costs of £1.21 million. Mr Hogg earlier alluded to the fact that the costs could vary, depending on the areas that were selected for the pilot elections. Do you not think that the financial memorandum should have reflected that by giving upper and lower limits for the baseline costs?
We can certainly provide further worked examples in writing if that would be helpful to the committee.
Yes, that would be helpful.
Do you have any final comments?
Just one point of detail that refers back to an earlier question pertaining to cost. Part of the £1.21 million is the cost of £2.60 per vote. We specifically chose to base our costings on the five English pilots because they used STV, whereas other, more local examples did not. The English pilots were a more reliable basis on which to calculate the costs.
Thank you for that clarification.
Will that apply to the rolled out elections, or is that the case only for the pilots?
That decision has been taken for the pilots and there has been no change to that for the roll-out. Were there to be a change from the pilots to the roll-out, the matter would return to Parliament under affirmative procedure. There would need to be a second parliamentary approval for that at that time.
So, the estimated costs of the roll-out in the table and the amended financial memorandum do not include the cost of seeking personal identifiers for postal voters.
That is correct. The figure of £16.65 million does not include the cost of using personal identifiers.
I thank Robert Kirkwood and Kenneth Hogg for their attendance and for their expertise, which has been of great assistance to the committee.
Meeting continued in private until 17:02.
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