European and External Relations Committee

Meeting date: Tuesday, October 5, 2010

Official Report 312KB pdf

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International Engagement Inquiry

On the whole, the report from all sections was positive. The only issue raised was about the collection of data and the various ways of collecting it from different agencies. My conclusion is that it is pretty difficult to get an overall picture because of the different methods of collecting and accessing the information. Committee members might raise that point with you but, if not, I will pick it up at the end. I open the meeting up to questions from committee members. Jamie—do you have any questions?

No. I have no questions at this time.

One theme that runs through the report is that all the organisations examined and considered seem to have met their internal output targets, in other words the targets set by the agencies. Comparing them to outside bodies or benchmarking them against other countries seems to be a more difficult task, because we may be comparing apples with plums, given that other people do things slightly differently. The question is whether it is meaningful to say that we have met internal output targets. We would, would we not? If we set the targets, you would expect us to meet them.

I suppose that the issue is the Government’s relationship with those agencies when they discuss what the target should be, whether they set targets that are challenging enough and stretching enough and whether they set them in a realistic way. It is difficult for us to comment on the degree to which the targets are appropriate. That might be something for the Government to give a view on.

Are there any other comments?

We are aware of that limitation and that is why we sought to gather as much benchmarking information as possible, but, as you will have seen, its availability is limited.

I move on to two specific questions. The first is about VisitScotland and the second is about the Scottish Qualifications Authority.

It appears from the report that the Europe campaign, or the campaign to promote Scotland in countries such as France and Germany, was more effective than the campaign to attract visitors specifically from the United States. Does that question the value of Scotland week and the work that is done in that context? If we appear to get a bigger bang for our buck from promoting ourselves in Europe, why are we spending so much money trying to promote ourselves in the United States through Scotland week?

We have presented the results and the returns on investment. At the risk of copping out, that is probably a question that VisitScotland might wish to respond to.

I know that VisitScotland does not want to put all its eggs in one basket. It makes sense to have campaigns targeted at many different markets that are at different stages of maturity. I know that VisitScotland does not want to focus its marketing efforts solely on the countries that generate the largest return, but on those that will create a more sustainable tourism market.

My final, more specific question is about the SQA, which is working particularly in places such as China, where we obviously see a tremendous market. I have been told that, interestingly, no such effort is being concentrated on Taiwan, which is currently sending 15,000 students to British universities. Taiwanese students are being encouraged by other parts of the United Kingdom, but only 500 come to Scottish universities. I am told that one reason for that is that we do not represent ourselves at international educational trade fairs in Taipei and other places in Taiwan. Can you comment on that?

The SQA has a wider international strategy, which, as I said, is reviewed annually. Obviously, the details of that strategy and, in particular, its future plans, are an internal matter for the SQA, because of the commercial confidentiality issues that I have highlighted. When it seeks to generate surplus income, it does not necessarily want its competitors to know where it plans to do that, so there are commercial sensitivities. You are right that, currently, the majority of income is generated in China but it is not generated exclusively in China. I do not have the figures and cannot tell you off the top of my head whether Taiwan features in them, but that is not to say that the SQA does not have plans for those markets.

Inspiration has struck me this time round, so I have some questions, which reflect what the deputy convener said about the report’s seeming to be a positive endorsement of the international activity of the Government and its agencies.

Ted Brocklebank said that much of it was about internal targets being met, but I heard you say that it made use of quite a few external assessments. I will just run through a few achievements and perhaps you could confirm whether they were externally assessed. Is it correct that the assessment that put SDI as sixth out of 210 bodies of its type was undertaken by the World Bank?

Yes.

I presume that that was an external assessment.

Yes.

Was the finding that the Scottish Government’s international development fund had made a real impact and was contributing towards the millennium goals programme in Malawi the result of an external assessment?

That assessment was done by an external contractor for the Scottish Government.

Okay. I presume that Scotland’s being ranked 14th in the nation brands index 2009 was the result of external assessment as well.

That is an external survey that the Government buys into.

I am glad that we got that on the record.

It was interesting that Ms Hudson commented on the fact that it is hard to identify the benefits of international spend because of the cost of collating the necessary data. I do not know whether you will be able to comment on this, but would it be prohibitively costly for the agencies concerned to gather such data? Would they not end up just spending money that they could otherwise use for front-line services?

There is a balance to be struck between spending money on evaluation and spending it on undertaking activities. Individual organisations need to establish how much they want to allocate to evaluation. We have collected the information that is available, but we have been limited by what is available. We have not undertaken our own evaluations as part of the exercise that we have carried out. We have based our information on what is already available, which is dependent on the evaluations that individual organisations have decided to undertake and, as you highlighted, some external assessments.

Thank you.

It is worth bearing it in mind that if effective evaluations are carried out in certain programme areas, money can be saved as a result. In particular, it is recommended that evaluations are undertaken on areas on which there is a large amount of spend, and on new and innovative projects, so that spend can be targeted most effectively.

Do you have any information on the likely savings or is it speculative at this stage?

No. The nature of any inefficiencies that are identified depends on the project. The identification of areas of spend that are not directly linked to the desired outcomes varies from project to project. There is a wide range.

You do not have any specific examples.

Do you mean specific examples of money saved?

You are suggesting that money could be saved; I presume that you have looked at potential savings and that you have a model for that. Is it speculative at this stage?

It is agreed that the whole point of an evaluation is to understand whether resources have been targeted effectively. In that sense, I do not have any specific examples.

Before I bring in Patricia Ferguson, I have a question about target setting. It has been clarified that targets are set and that we perform very well in various areas. You spoke about money being saved or gained as a result of evaluation. Is it not a fact that it has been reported that for every £1 that SDI spends, £11 is generated for the Scottish economy?

Yes; that figure relates to inward investment.

I just wonder why that information was not included in your report, given that we are talking about possible economic benefits.

It is included in the report—it is included in table 3 on page 12.

Thank you very much. I just wanted to clarify that.

Good morning. I think that I am right in saying that VisitBritain also has a responsibility to market Scotland as part of the UK in some of the destinations that have been mentioned, particularly the US. Have you had the opportunity to look at whether what is being done has added value or whether there might be some unhelpful crossover, given what we are all trying to achieve?

11:00

I must admit that that was beyond the scope of what we looked at. We did look briefly at some of the returns on investment that VisitBritain got from its campaigns. However, its methodology for measuring that is different to VisitScotland’s, so we were not able to benchmark it. That was as far as we got in looking specifically at VisitBritain.

This might well have been outwith the scope of what you were trying to do in the report, too. When you were looking at the international development side, did you consider the sustainability of projects and their impact? I am very conscious that one of the stated aims is that the projects that are assisted should be sustainable in the longer term.

The main piece of evidence that was available on the international development fund was the report on the Malawi programme. The report looked at 32 of the 39 projects and it identified that those projects were sustainable. Beyond that, we did not look at that aspect in further detail.

I want to jump back to VisitScotland. The value of leisure and sports tourism is commented on. Was there—or will there be—further consideration of the value that comes from the work that EventScotland does in that regard?

Our focus was on VisitScotland and its campaigns. We had to really focus on the key organisations that account for the majority of funding.

Good morning, and thank you for the comprehensive report. I refer to figure 9 and figure 11 in the report. I realise that those are VisitBritain statistics. I presume that this must be something to do with the retail prices index. The narrative next to the graph at figure 9 states:

“Between 2005 and 2009 there has been a 13% increase in visitor spend.”

However, the graph does not show that; it shows an almost standstill position. Can you clarify that? Has it been adjusted for RPI purposes?

We do not have the raw data to hand, so we would need to get back to you on that point.

It is quite confusing.

I want to explore further the point that Patricia Ferguson made. VisitBritain works with VisitScotland. Page 17 of the report shows that the United Kingdom rates highly in the nation brands index—it is number 4 and Scotland is number 14. Is there any way of extrapolating what good Scotland gets out of VisitBritain, or is that beyond the scope of your work?

It is certainly difficult to link the campaign work of the tourism agencies to the nation brands index. There is the caveat that the index does not measure the performance of Government policy, but is presumably a contributing factor. One of the indicators is people’s perception of tourism, so undoubtedly there will be a link, but it is a bit difficult to say what the link is.

That is fine, thanks. If you can get back to me on figure 9 and figure 11, that would be helpful, because they look a bit odd.

Absolutely.

I know that much of this is probably an inexact science because of substantial variations in how we gather information and compare that to information from international competitors. On page 4 of annex B, you state:

“Audit Scotland has not undertaken any value for money audit relating purely to SDI.”

Would such an audit be of substantial worth in enabling us to assess fully some of the issues that you have identified in the report?

We were asked only to comment on whether Audit Scotland had undertaken such a study. It is for Audit Scotland to define its forward work programme.

Would such a study be of benefit? Would it clarify some of the issues that your report highlights? I know that that is work for another body, but would it have been useful for you as members of the FS unit?

SDI provided some particularly good information from its recent policy evaluation, which was undertaken in May 2010. Of the four organisations that we examined, it has some of the best evaluation information. The policy evaluation gives a lot of pointers about areas for improvement. An audit might not add much value at this stage.

I refer you to page 16 of annex C, which touches on points that Patricia Ferguson and Jim Hume identified and provides an explanation for the reduction in spending on international marketing. That is not your responsibility, but none of us who argued for a stream change in the structure of VisitScotland presumed that international marketing would be squeezed to pay for the activities of area tourist boards. It is a long time since I was involved in the area, but no such proposal ever came across my desk.

I am concerned about the development, because other profiling suggests that we need to market more aggressively, especially in Europe. The report provides evidence of the returns that we are getting on our money. The American market is more problematic because of what has happened in international politics over the past few years, which has affected how secure people feel about travelling beyond US borders. However, the reduction in spending on international marketing is a worry for members.

We have received a communication from the Minister for Culture and External Affairs about some issues. Has the minister communicated to you her concerns about the accuracy of some information in the report? It would be useful for us to know what she has said.

We have seen the minister’s letter.

I am asking whether you have received another letter.

We have not been provided with specific details of the Government’s concerns. I understand that they relate to the presentation of data on costs of the international offices.

Clearly, the issue of office costs is all about other comparisons, what is fed in and what can be met centrally from other departmental budgets. As representatives of the SS unit—I meant to say the FS unit, although SS might be more appropriate—do you think that you can produce reasonable comparisons between Scotland and the other devolved Administrations, so that we can see what value we are getting from the Beijing, Brussels and Washington offices?

We are happy to look at the information that the Government provides and to see how far we can go towards producing like-for-like comparisons. I hope that we can do that.

The committee includes two ex-culture ministers from the previous Government, Frank McAveety and Patricia Ferguson. Rightly, they are scrutinising everything in the briefing. Frank McAveety mentioned the Brussels and USA offices. There is some contention about the accuracy of the figures for those. How many sections did you have to change when the Government said that the figures were not quite right?

We had to change the whole report. We sent copies of the relevant sections to the various organisations concerned, and to the Government in relation to its section. We had some useful discussions—in some cases robust discussions—about the content of the report. We have tried, as far as possible, to take on board the comments, views and suggestions of the organisations that provided the information. There has been quite a bit of revision from our initial drafts, but that is what we would normally expect in producing a briefing.

Committee members who get a report want to know about its accuracy. You have said that you went back to look at the figures that you received from the other agencies and amended your report accordingly, with just a few outstanding issues, and I believe that we will receive a letter from the minister pertaining to that. Is that correct?

Yes—I understand that we will get something later this week. I have not been told what the inaccuracies are specifically, but as the clerk has indicated, the Government is broadly satisfied with the text. The only related point is about the presentation of the data on the costs of the offices and the need to ensure that we are comparing like with like.

I wanted to clarify that point, as members have asked about it.

The next issue follows on from what Jim Hume said, and relates to benchmarking and figures 9 to 11 in the report. I know that there has been fluctuation in monetary terms, given the economic downturn and the changes in exchange rates. On trends in visitor spend in figure 9, the level is actually up. In figure 11, the “Change in international tourist spend” for Scotland is down compared with the other countries, however. As far as benchmarking is concerned, the trend in visitors coming to Scotland is shown in a positive light. When you are writing to Jim Hume to clarify the issues, perhaps the committee could also get a copy of that letter. The data in figures 9, 10 and 11 do not seem to match up. Perhaps you can explain.

International tourism spend as shown in figure 11, which is according to the international passenger survey, increased by 13.4 per cent between 2005 and 2009. I am happy to clarify that it did, in fact, increase. If we compare the figure for Scotland with those for other parts of the UK, it is a bigger increase than for Wales, and it is at a pretty similar level to that of England excluding London—but it is slightly below the figure for the UK as a whole.

It is probably just the way I am reading the figures, but a layman looking at figure 10 will see that

“Scotland has performed relatively well when compared to other UK regions, with a 6.3% increase in international visits, relative to 1.8% in Wales, 0.3% in England and an overall decrease across the UK.”

I would like those points to be clarified. Jim Hume raised the issue first—perhaps you could write a letter on the matter.

I am interested in figure 9 in particular. It says at the side:

“Between 2005 and 2009 there has been a 13% increase in visitor spend.”

There appears to be almost no difference at all looking at the bar chart, however.

I am grateful to Jamie Hepburn for identifying examples of external assessment when it came to considering our performance vis-à-vis other people’s.

The financial scrutiny unit’s assessment gives a comparison relating to SDI. The briefing states:

“SDI’s ‘gross value added to cost’ ratio and cost per job are slightly less favourable than those of the English Regional Development Agencies”.

Can you explain some more of the background behind that? Why do we seem to perform less well than some of those comparable English regional agencies?

11:15

The figures for the regional development agencies came from a study by the Department for Business, Enterprise and Regulatory Reform. I personally would not wish to draw any conclusions from those differences until I had done a thorough analysis of the methodologies that were used. The differences in the methodologies of calculation between the England study and the Scotland study are too wide for us to draw immediate conclusions at this stage.

Perhaps I misheard you, Simon, but when you were talking about the change in international visit numbers were you referring to passenger numbers, or did I not catch that correctly?

Figure 10 refers to international visit numbers, and figure 11 refers to international tourist spend.

You are referring to passenger numbers. The data are drawn from an international passenger survey and they are then grossed up to provide estimates of the overall numbers of visitors coming to the country.

So, it is not just the numbers of passengers who happen to fly into a country. They have to be planning to stay there.

Yes.

Right—that clarifies that.

There are no further questions. Thank you very much for coming along and giving us your evidence. We will have the opportunity to consider it as part of our further inquiries.