Good afternoon and welcome to the Finance Committee's seventh meeting in 2009 in the third session of the Scottish Parliament. I ask everyone to turn off mobile phones and pagers.
Among the key recommendations made in the independent review of the 2007 elections was that local government elections should not be held on the same day as elections to the Parliament. The Scottish Government consulted on whether the elections should be decoupled and, if so, how such a separation might be achieved. The responses that we received overwhelmingly supported the separation of elections and the Government's preferred option of moving local government elections to the mid-point in the term of the Scottish Parliament. The bill seeks to give effect to that recommendation by extending to five years the next two local government terms of office. Afterwards, terms of office will revert to four years.
Thank you. I point out that, although James Kelly and I have been designated to lead on this bill, other members are welcome to intervene. All they need to do is catch my eye.
First, I want to drill down into some of the financial obligations that the bill will place on local authorities. In setting out in the financial memorandum the two options that you have just highlighted, you have netted off a sum of £1.9 million that you say was an allocation that local authorities have already received to cover elections. Are you saying that, in the current spending review period, £1.9 million has been allocated to local authority budgets for elections?
That is the assumption on which we have based these figures. If we decided not to decouple the elections and simply repeated the 2007 election process the next time around, the costs would be as set out in paragraph 22 of the memorandum. The memorandum also explains the different contributions that were made by local authorities and the Scotland Office with regard to fees and charges.
I understand all that. However, that £1.9 million was made available to local authority budgets for the 2007 elections, which were held in the previous spending review period. I am not clear whether that £1.9 million remains in the budget during the current spending review period, when there will be European and United Kingdom Parliament elections but not elections for the Scottish Parliament or local government.
That is the information that we have. We went to COSLA and the electoral administrators for these figures, and they are satisfied with them.
The information that you have suggests that £1.9 million has been allocated in this spending review period.
Yes.
Depending on which option applies, local authorities will incur additional costs of either £4.5 million or £5 million come 2012. What discussions have you had with local authorities on the allocation of funding to meet those costs? Is there an understanding that additional resources will be made available to local authorities to fund these requirements?
The discussions on the future allocation of money have not yet taken place, but in the memorandum we acknowledge the additional pressures that will arise. Those pressures will be taken into account at the right time in the discussions on the next spending review and future budgets. The discussions that we have had so far have been with local authorities, returning officers and other people in the electoral profession to ensure that we have identified the correct additional costs. Future discussions about allocation will come in the context of the next spending review.
The figures are based on 2007 prices, but the elections are not to be held until 2012, which is five years down the line. Would it not have been prudent to reflect in your forecasting the costs at 2012 levels?
In thinking about the inflation rate between now and 2012, I speak as a non-economist. We tried to get an agreed basis for the figures at 2007 prices. I am sure that, when the time comes to have the discussions that I mentioned, both sides in the negotiations will have figures for the inflation rate and will take that into account.
Bearing in mind that there will be a five-year gap between the two sets of elections, do you accept that inflation will occur during that time and that the figures that are provided in the financial memorandum will be materially different from the actual costs in 2012?
Yes—I imagine that the appropriate calculation will have to be done to uplift the figures. As I said, we tried to identify the components of the total figure. Any uplift that is required can be taken into account at the correct time.
You calculate that the additional cost will be £156,000 per local authority area. Has any thought been given to how money will be allocated to individual authorities, bearing in mind the big differences between them in size and geography?
Not at this stage. We included that figure, which is an average, as an illustration. The size of the electorate in the various local authorities varies considerably, so that will need to be taken into consideration. The figure is there for illustrative purposes.
The voter turnout in 2012 could be lower, because only one set of elections is being held and, traditionally, turnout in local authority elections is lower than that in parliamentary elections. Was that factor taken into account in working out the costs?
No, not in itself. When the time comes, we hope to run an effective information campaign to increase voter turnout. The costs are based on the potential electorate and vote and on the actual cost in 2007 of matters such as hiring halls and transporting ballot papers. We have not knocked down or lifted up the figures based on a guess of what the turnout might be in 2012.
If the turnout is lower—say about 35 per cent compared with 50 per cent—will the costs decrease?
I do not think so, because the bulk of the costs will arise from fees for information officers and counting clerks, staff training, the renting of polling stations and the transporting of ballot boxes. Those costs are likely to be constant.
On that point, if you do not expect turnout to be down, why do you say that you will need 50 per cent fewer polling clerks and 15 per cent fewer polling stations?
We took advice on that from returning officers. The reason for those reductions is not to do with reduced turnout, but rather because it will be simpler to manage polling stations when only one election is being run. As I understand it, at the 2007 election, most returning officers in polling stations hired two polling clerks—one to supervise the Scottish Parliament election and one to supervise the local government election. The issue is more to do with administration and management. That is the information that we received from returning officers.
I find that astonishing. I did not think that one clerk at the polling station was dealing with the Scottish Parliament election and another was dealing with the local government election. I can think of several polling stations in my constituency in which, if there is only one polling clerk, and you have reduced the number of polling stations, there will be queues out the door, and chaos.
Our information has come from the people who ran and managed the 2007 elections. The information that we have produced is at the lower end of the scale. If returning officers decide not to reduce the numbers of polling clerks or polling booths—
Costs will go up.
The costs will be at the higher end of the scale, yes.
I want to ask about the method of counting. The financial memorandum says that the method is not specified in the bill, and that is why the costs of the method do not come into the financial memorandum. However, the method is relevant to issues of decoupling.
No, it did not pay the whole cost.
What was the total cost?
The cost was just short of £8 million. The Scottish Government paid for the development stage, which came to £1.25 million, and then for half of the final costs, with the Scotland Office paying the other half.
If e-counting is used in the next election, the cost will have to be added to your estimate of £5 million for the running of the election.
The cost of e-counting will depend on the result of the tendering process for an e-counting system that we will initiate before the election. However, you are right to say that the cost will be additional.
Evidence that we have heard from councils suggests that we are in a bit of a no-man's land. It is clear that e-counting will be used for local government elections; although it is understandable that the law will not specify the counting method, it is pretty inconceivable that e-counting will not be used for STV elections. Councils are therefore concerned that they may have to find £13 million to cover the cost. That is a substantial amount of money, and the Government has yet to give a commitment that it will provide any additional funds.
As you say, it is highly likely that e-counting will be used, although we would have to ensure that the system was adequate and had been tested thoroughly. We have recently started discussions with COSLA and the electoral management board for Scotland about the early stages of the development of the specification for the system. In the financial memorandum, we say that costs and funding will have to be discussed by the Scottish Government and COSLA in future. There are no figures in the memorandum at the moment.
Electronic counting will not be used for the 2011 Scottish Parliament elections, so it might be that the local government elections in the following year will cost three times as much.
I am sorry, but I am not sure that I follow that.
I think that you said that the UK Government has said that electronic counting will not be used for the next Scottish Parliament elections.
That is correct.
Therefore, because it will include the cost of e-counting, the overall cost of the 2012 local government elections could be three times as much as that of the Scottish Parliament elections.
We do not yet have a figure for the cost of e-counting. However, whatever it is, it will have to be added to the cost of decoupling.
Is it correct that ministers have not yet made a policy decision that the cost of e-counting will be covered by the Scottish Government? Falkirk Council and North Lanarkshire Council expressed concerns about that.
No definite decision has yet been taken on e-counting. That is correct.
You said that it is highly likely that e-counting will be used. When will the decision be taken and what is the timetable?
We have approximately three and a half years before the next local government elections—subject, of course, to the passing of the decoupling bill. We have started discussions with COSLA and the electoral management board for Scotland on a timetable and are looking to put in place an e-counting contract a year and a half or two years before any election takes place to allow time for thorough testing and training. The timetable is between now and 18 months before the 2012 elections.
My question follows on from the point that Jeremy Purvis made on e-counting and the decision whether it will be used in the next local government elections. Given the UK Government's decision that e-counting will not be used in the next Scottish Parliament elections, surely the whole cost of e-counting will fall on the next council elections whether or not we decouple elections. The cost of e-counting is irrelevant to decoupling, as the cost will exist whether we do not decouple and have the council elections in 2011 or decouple and have them in 2012.
That is correct. Whatever happens, the single transferable vote system will be used in the local government elections. We will have to meet the cost in any case.
Some of my questions have been put, but I have one on decoupling. The second cost option in the financial memorandum suggests that savings in 2012 could be derived from reducing the number of polling clerks by 50 per cent and the number of polling stations by 15 per cent from the numbers for the 2007 elections. What is the rationale behind those estimates?
Polling clerks are employed by local authority returning officers to supervise elections. If only one election is to be held on the day, the returning officers' advice is that the process will be simpler from a management point of view, so fewer polling clerks will be needed.
Halving the number of polling clerks and reducing the number of polling stations will result in savings, but surely many practical problems still need to be overcome. Halving the number of polling clerks might save £330,000, but there is also the danger that it could lead to disputes. I am thinking of the need for corroboration and whether one polling clerk could handle emergencies. The proposal raises practical problems.
Yes. I am sorry if I may have misled the committee in my previous answer. I did not mean to suggest that a polling station would be manned by one person, simply that a station could be managed by one person.
There will be no single-manned polling stations.
No.
I would hope not.
This is a question of the definition of "polling station". In this instance, a polling station is an area within a polling place. The proposal refers not to schools where a polling place is set up but to areas within polling places. For example, where two or three rooms have been used at a polling place, the number might be reduced to two, rather than the number of polling places being reduced.
Thank you for that clarification.
My question is on the provision of electoral data at polling station level. Has any assessment been done of the costs that are involved?
I do not have the figures to hand. However, the information is available under the e-counting system that was put in place for the last election. The figures have been aggregated to ward level. The way in which votes are counted means that they can easily be counted on the basis of individual polling stations, so the information is available. We will specify to the successful e-counting contractor how the information should be disseminated after the count. It is not that we will be collecting new information—it is simply a question of how that information will be presented. Rather than putting together numbers of polling stations to give an area or a ward figure, that information will be available at the level of individual polling stations.
Therefore, those costs are not reflected in the financial memorandum but will be incorporated in the discussions on the e-counting contract.
Yes, that is right. We will not be asking a successful contractor to collect different information—we will simply be adding a specification on how the information is explained after the election result has been announced.
Aberdeen City Council expressed concern over whether those provisions will still apply if there is a manual count. I was involved in a council by-election in my constituency about this time last year in which the equipment was faulty. The problem was resolved, but if that had not been possible, we would have had to proceed with a manual count. Will the bill dictate that the provision of such data will still be made if there is a manual count?
That is the intention. As a by-election involves about 2,000 or 3,000 votes, it would be possible to present that information. It would be more of a management issue on the night, with regard to how the votes are counted. I was at the by-election in your constituency last year when the system did not quite work as planned. The idea is that e-counting is necessary for a full-scale election—it would not be possible to do that manually. Your question does not really equate to that situation but, as you said, for by-elections it would definitely be possible to present the information if the count was done manually.
Are there cost implications involved in presenting that information if there has been a manual count?
I would not have thought so. The returning officer would set up different procedural systems on the night to count the votes in a slightly different way, so it would be a question of how the staff are organised and where the different piles of ballot papers are placed. It is a procedural rather than a cost issue.
I accept that the cost implications might not be vast, but it would surely take longer, so there must be some cost implications?
Again, that could be the case.
Although the costs of the e-counting contract for 2012 do not arise as a direct result of the bill, and are not dealt with in the financial memorandum, we have received written evidence from Dundee City Council that refers to the cost of purchasing "special ballot boxes" for the 2007 elections, which were paid for under the e-counting contract. The council suggests that
We have seen the council's response, and we agree with the figures and the rationale. We will take into account the need to provide ballot boxes for e-counting. As I understand it, the way in which the scanners were set up in the last election meant that ballot papers could not be folded. The traditional ballot boxes could not be used, so new ballot boxes had to be provided, which is something that we would put in the e-counting contract specifications for the next set of elections.
I note that there have been five responses to the committee's consultation. Can you remember how many responses there were to the Government's consultation, and what the general level of support was for the legislation?
Yes. The additional costs have been acknowledged in the financial memorandum and the process. The evidence that the financial memorandum gives can be used in future discussions at the appropriate time, as has been said.
There are no further questions. Do you wish to make a final statement?
No, thank you. That is fine.
I thank Mr Sadler and Mr Sinclair for attending the meeting and their contributions. The committee will produce a report for the lead committee.