Agenda item 2 is consideration of “Commonwealth Games 2014 Progress report 2: Planning for the delivery of the XXth Games—Impact report and update on progress”. I welcome the Auditor General for Scotland, Caroline Gardner, and Tricia Meldrum, the portfolio manager of the performance audit group in Audit Scotland. I ask the Auditor General to introduce the report.
The committee has already considered two reports on planning for the 2014 Commonwealth games, first in 2009 and most recently in March 2012. Given the committee’s request for a further update this year on planning for the games, I am pleased to bring the impact report on our 2012 audit to the committee today. It includes an update on progress against the recommendations and on the key risks that we identified in that report. Audit Scotland generally produces impact reports around 12 months after publication of our main reports; they are largely for internal purposes, but we publish them on our website.
Your report seems to be largely—indeed, almost entirely—positive, and progress has been made in some of the areas on which the committee previously expressed concern. I have one straightforward question about the general contingency fund, which the committee has discussed before and which, according to page 8 of the report, has dropped from £71 million to £42 million largely because of the transfer of money from the fund to the security budget. In all fairness, the committee had considered the security budget to be a bit of a risk and, as you have pointed out, it has been significantly increased. However, the contingency fund has dropped a lot as a result. Is a £42 million contingency budget commensurate with the continuing risks that you have identified as we get closer to the games?
As you said, most of the shift relates to transfers to the security budget and the capital contingency budget. In any case, one would broadly expect the contingency to reduce as we get closer to the games and as it gets used in appropriate ways to meet certain costs. I ask Tricia Meldrum to indicate where we expect it to be at this stage.
The organising committee has obviously looked at progress against individual budget lines and has identified certain risks of going overbudget in three or four areas. However, even in the worst-case scenario, the total of those risks is still less than the amount available in the contingency fund. The organising committee and partners have made it clear that they would want to make savings elsewhere before they drew on the contingency budget but, even under the worst-case scenario that they have put together, the potential overspends on individual budget lines would still be affordable under contingency.
Paragraph 29 on page 11 of the report says:
Sure. We are reporting on the results of the most recent CoCom review and its focus on planning. The review certainly did not highlight planning as an area that is of significant concern, but it is one of the areas that the review picked up as needing to be further advanced over the period that we are now entering. Tricia Meldrum can give you more details about the specifics of the review.
CoCom was clear that it wants everything to be really locked down. It wants all the detailed planning to be locked down by the time that it comes back to do its next review in October, so October is the critical point. CoCom’s point is that, because there are so many interdependencies, the planning has to be clear so that progress can be made.
Are you saying that the traffic planning is behind schedule?
It is slightly behind schedule, yes.
Do you feel that the planning will be on schedule when CoCom comes back to do its next review in October?
Yes, that is the expectation.
That is what CoCom is saying. The report mentions some fairly big items, such as
We can tell you that CoCom is confident that it can be corrected.
It is confident.
In the context of saying that “overall progress is good”, CoCom has highlighted transport planning as an area that needs to pick up pace and it has given a clear indication that it expects that to have caught up to schedule by October this year. We will keep a watching brief on that, but we are able to report its findings to you and that is what it believes the picture is just now.
Will we get another report? Will the committee get an update in October, when the next review is done?
We will get a Scottish Government progress report in December.
Okay. We will look for it then.
I agree with the convener that the progress report is positive and it looks as though the project is being well managed. I have just one question, on paragraph 18, which is about private contract security. Of course, we all know about the London Olympics experience in relation to private contract security—it was totally shambolic. That is touched on in the report.
Overall, our sense is that the timing is okay and that there is a lot to do between now and next July. Again, Tricia Meldrum can give you a bit more detail on that.
In discussion with Police Scotland, the partners have highlighted the next three months as being critical for getting all that detailed planning done as well as planning for their security procurement. Again, we expect that to have really moved forward by September or October.
Is it recognised that having more than one provider of security raises certain risks to do with issues such as areas of responsibility and physical presence?
I think that that is recognised. Clearly, there is a trade-off. With the London Olympics, we saw the risk of overreliance on one contractor. That risk can be managed by having a number of contractors, but that requires more co-ordination and clearer communication. The view that we have picked up from the organising committee and from CoCom is that those risks are understood but, as we say in the report, they will remain risks until the games are delivered.
On the question of getting more than one provider, I believe that the proposal is not to have one provider that is responsible overall with subcontractors, but to have two separate providers. Is that correct?
My understanding is that there will be more than one individual provider, given the London experience.
The report is very good. Everybody seems to be working well together and moving forward timeously. I seek clarification on one issue. In appendix 1, on page 15, in relation to the recommendation on costing mitigating actions, you state:
I ask Tricia Meldrum to deal with the detail of that.
That has always been an issue. It is not to do with identifying mitigating actions—Glasgow City Council has done that and the actions are on the council’s risk register. The issue is the costing of mitigating actions. The council said to us right from the start that it was not its policy to cost mitigating actions, so it has not done so in this case. We made a change to make it clear that we were talking about mitigating actions that could have potentially significant financial implications. The council does not know what those could be. In terms of planning, that is a risk management issue.
I am at a bit of a loss as to what that means in practice. Is it possible that, because of the actions of Glasgow City Council, something that could cost money will not be registered? Would that have a knock-on impact on the other partners, or could it result in a delay in something happening in the run-up to the games?
I think that it is more the case that Glasgow City Council would be liable for additional cost, so the issue is more to do with the council’s financial management. If something were to go disastrously wrong, the council might have to spend extra money. It is a given that the venues must be ready and that the city must be ready to deliver the games.
So all the risk in question will lie with the council.
Yes, in terms of the areas for which it is responsible.
I would like to turn to one of the key messages in the report on legacy. The report says:
I do not think that it does, fundamentally. The legacy could be achieved in a number of ways, including from the investment that is being made now in the facilities and in the wider awareness of the games. It is not a given that specific funding will be required. That is just a factual statement.
Indeed. I think that that is logical. Therefore, why does Glasgow City Council have a legacy risk register? The report mentions that in appendix 1.
I ask Tricia Meldrum to pick up that one.
Obviously, the games will take place in Glasgow. As Glasgow is putting a lot of investment into facilities for the games and is providing 20 per cent of the overall public sector funding for the games, it will want specific legacy benefits to come through. There are specific Glasgow issues at stake.
Indeed. You might not have conducted an audit of Glasgow City Council specifically on legacy, but what risks has the council identified?
I think that a fairly high-level risk has been identified of the expected legacy benefits not being delivered. Mitigating actions have been identified and the council has developed legacy plans. It will carry out monitoring and produce progress reports.
Okay, but the legacy risk is not really an auditable risk, is it? I am struggling to see how there can be a financial audit of legacy, given that there are no figures and nothing that we as an audit committee can get our teeth into.
I think that it is an issue that, at this stage, is not auditable, but it certainly should be after the games.
Will the baseline that you describe be financially auditable?
I am not sure what it means to say, simply, “financially auditable”. We are auditing all the funds that are going into the games and we will be able to audit the outcomes and indicators that the partners agree for the legacy. We can pull the two together as the basis for an assessment of the legacy against the spend.
That is entirely fair. I see outcomes until I am blue in the face and a lot of them are written with wonderful rhetoric and waffle, if I may say so, rather than something that we can actually measure. In 10 years’ time, will the Public Audit Committee be able to look at the outcome and say, “Yes, legacy delivered, X, Y and Z”?
Auditors are always wary of saying, “In 10 years’ time, X will happen.” However, our assessment at this stage is that the legacy planning has made good progress and there is clarity about how the partners intend to assess the legacy.
The paragraph in your report on legacy states:
I ask Tricia Meldrum to pick up that question.
Some of the benefits are measurable. In our report last year, we tried to put in examples of the tangible benefits that are already being seen, such as the amount of money that is going to Scotland-based companies through contracts, and the number of apprenticeships and jobs that have been created.
The report states:
No. I think that we were highlighting the risks for organisations, given the economic situation. Organisations have priorities other than the games legacy, so the approach that we have taken has tried to integrate that.
Therefore, the statement was a general economic observation, rather than a specific example of organisations that have not committed.
Yes.
Apologies—I was not being discourteous. I was not texting; I was trying to get a briefing paper from yesterday’s debate in Parliament on the Commonwealth games sporting legacy, because I thought that there were figures that might cross-reference with our committee work.
The starting point is that, as the report says, it is not a formal audit report such as those that normally come before the committee. We have taken the impact report that we produce for our internal use after each report that we publish and added to it information that we gathered from the CoCom review and other sources, so that, as requested last year, we could give the committee an update. After the games, we plan to pull all that together so that we can give the committee a broad picture that will answer both your question and Mr Scott’s. That is why the picture looks as it does at the moment—it is the nature of the work.
There is no specific budget for legacy within the budget that we are looking at, which is the budget for delivery. The legacy work is integrated into the broader national priorities and outcomes for Scotland. Obviously, some things have been related to legacy. The approach throughout has been to integrate where possible and to try to have a national strategy that relates to legacy where it can.
I find that helpful, because it shows that there is a delivery plan and a budget in place, and that there are legacy ambitions and aspirations that come with that—I shall come back to the question of the baseline. Separately from that, there is other Government money, local authority money and lottery money, which should be working in partnership with the 2014 delivery vehicle to get legacy. The issue is how those two elements knit together.
Yes. As you say, the progress report looks at the original games budget, how it has changed and how it is being managed towards July next year. Once the games have taken place, we will produce a report to look at the outturn against the original budget and to look at the bigger picture in terms of the objectives that were set for the games from the other funding streams that come into play. We will pick that up later, but for now the focus is on the budget that is in place to deliver the games, given the once-in-a-lifetime importance of getting that right.
Presumably, you are saying that the funds might be branded as part of the legacy, but they are not linked in any formal way to the delivery of the games. Is that right?
That is exactly right.
So they do not form part of the audit that you have done. It does not mean that they are not a good thing.
Absolutely, convener, but the recommendations refer to being better aligned with local authorities across the country in their attempts to deliver legacy. Those local authorities, together with the third sector and the voluntary sector, are bidding for all those other pots of cash. If they have to be better aligned and integrated with other pots of cash that you are not auditing, at some point, you will have to work to see how the two are knitting together, although you will not be auditing the individual spend. I am just trying to be clear about what you will or will not do.
At this stage, our focus is very much on the games delivery budget. We all know that the importance of getting that right is very high indeed, and our focus is on ensuring that the risks are managed towards next July. We will return to the legacy issue later and will look at the other funding streams that are available for it, and at the extent to which the legacy that those streams achieve is matched to the plan for the games and the wider impact on Scotland.
I need to be careful that I do not lurch back on to the territory of the Health and Sport Committee, of which I am a member and which is also looking at the legacy and other aspects of the games, so it can seem a bit like groundhog day on this committee.
All that we can say is that we will be looking at the baseline measures that the Government, the partners and the local authorities across Scotland say that they want to achieve. It is not our role to say, “This is the legacy that the games should have”, but it is our role to note that people were bidding for the money on the basis that they would increase participation rates and to ask what happened in practice and how much it cost. We will start with the measures and indicators that people said that they wanted to monitor and then look at the changes that have taken place.
I recall Shona Robison MSP saying that the Government was still firming up the precise baseline measures and indicators. Is it also your understanding that those are not quite there yet, or have they now been established?
The Government has issued an evaluation framework that lays out in quite a lot of detail what the indicators will be for the different legacy ambitions and where the information will come from. Some of that information already exists, such as information on the percentage of people who do physical exercise, so there will be baselines from whenever the surveys of that were done. However, some of the information will be new and will need to be collected. A couple of weeks ago, there were survey results on the views of residents of the east end of Glasgow on the games legacy, which gives the partners a baseline against which they can monitor progress. The framework is based on the four legacy ambitions—flourishing, active, connected and sustainable—and it goes into a reasonable level of detail on the specific indicators under each of those headings.
I am a little clearer about that. I am back on Public Audit Committee territory now. The things that you mentioned are the aspirational outcomes that we all want to see as part of the legacy. Agreeing the baselines tends to involve saying, “Okay, show me the data,” doing a trawl of every swimming club, athletics club or other sports club via the national governing bodies, assessing the data and agreeing the criteria. I am trying to establish whether that is still in flux. I am interested not so much in what we want to measure but in the brass tacks of how we are going to measure it.
The framework has been worked out and it says where the information will come from, be it from published information that is already available or from surveys that have to be done and new information that has to be collected. The Scottish Government is working through that. Glasgow has been developing its own specific legacy framework, and the legacy ambitions there are slightly different. They track across, but they are labelled slightly differently. Glasgow’s framework is going through the final approval processes.
It is a good report. We almost have to seek out things to scrutinise to make sure that we do our job properly.
Commendably restrained.
Yes, convener. I consider myself discreetly chastised.
We have not seen a sporting event on anything like this scale in Scotland, so I am not sure that there is such a thing as normal practice. We certainly believe that costing mitigation actions would be good practice, which is why we recommended that back in 2012. It is for Glasgow City Council to make its own decision, but we believe that, in the interest of properly managing risks and dealing with mitigating actions and the potential costs that are associated with them, it would be good to include the costs in the register.
The organising committee has done that for the overall risk register, and at the last review the Commonwealth Games Federation recognised that as being good practice in terms of knowing what the potential financial implications could be.
I will take a steer from the convener and leave it at that.
In fairness, you could perhaps pursue that point in our next session, when we will look at the Accounts Commission report that covers internal audit across local authorities. That might be a time to follow it up.
Perfect.
Can I come in—in a very restrained manner—convener? Tricia Meldrum said that the overall risk register takes everything into account, but it cannot do that if it does not have the information from Glasgow City Council.
The overall risk register contains risks that apply across all the partners. There are some things that would just be risks for individual partners, but the partners are looking at things that would apply across the piece.
Thank you for that.
I am interested in the comments on strategic working on page 14 of the report. I note that the 2011 report stated that, although the overall governance was pretty well okay, the management structure underlying it was a bit fractured. The new report states:
A big point that came through from the Commonwealth Games Federation review was that we are now moving into a different situation and the arrangements that were fit for purpose at the planning phase are not necessarily the same that will be fit for purpose in the delivery phase, in which things are much busier, many more decisions have to be made rapidly, and many more people, contractors and agencies are involved.
How difficult has that been? Were there any problems in refocusing or reducing the groups? Were there any identifiable problems in how the structures had to be changed through the weeks and months?
We have not done a detailed audit at this time, but the partners did not say that the changes had caused any particular difficulties. They said that they have tried to adopt a fairly flexible approach so that, when particular pieces of work finish, for example, groups are disbanded and any outstanding issues pass on to another appropriate group. Therefore, there is flexibility. The partners have tried to take on board the issue of tightening up the terms of reference for delegated authorities.
I simply wonder whether any practical stuff could be learned from a project of this size for any future project, and whether we could do something that might prevent friction at the crossover points.
I want to ask about the ticketing strategy, which is mentioned in the report. I am pleased to see that the prices range from £25 or less for two thirds of the tickets and that there are half-price tickets for under-16s and over-60s.
I am sorry, but I do not know about that.
We are not aware of that. We can certainly find that out in our contact with the partners and come back to you on it, but we do not know about that at this stage.
That will probably be of interest to the committee, because the London experience was that the online system almost crashed when everybody tried to get tickets on the first day. That will not happen with the Commonwealth games, as I understand that the booking period is more spread out.
We hope that that will not happen.
I am keen to find out about the distribution and access arrangements.
A person will not have to be online within the first hour to get tickets. The process will be quite different.
It is important that the public are made aware of that. However, I am also interested in whether the tickets will be made available locally or whether 100 per cent of them will be available online.
We will have a discussion later in private about how we will take things forward. It might be possible to pursue that issue.
Super.
There is a focus on using public transport and integrating it with games ticketing. I think that one of the plans is that, when people get a ticket for an event, they will be given free public transport to get to it. Again, exactly how that will work and things to encourage the use of public transport are part of the detailed planning that needs to be worked through.
Thank you for resisting the temptation to tell us again about your relatively recent visits to Hampden, Mr Coffey.
I am willing to ask a supplementary.
I think that you will find that I have been there more recently than you have, although with less success.
I will welcome you all to my constituency the next time you want to visit Hampden. Let me know your plans.
Thanks very much, Mr Dornan.