Item 2 is evidence on the relocation of public sector jobs. We have been receiving six-monthly progress reports since we completed our inquiry into relocation in 2004. Members will also be aware that, since our most recent report in June last year, Audit Scotland has produced its report on the policy. The Audit Committee is undertaking an inquiry on the basis of the Audit Scotland report, so the focus of our discussion should be the documents that we have before us and the issues that have arisen since our meeting in June.
Since I spoke to the committee in June, there have been significant developments in relocation and in the committee. Today is the last time this session that I will report to the committee on relocation.
As you know, the committee has been concerned since the early days about the process for initiating relocation reviews: a review is triggered by a reorganisation or a lease break. We felt that that militated against the taking of a strategic approach. Are there plans to change the trigger? Many public sector jobs that are eligible for relocation remain unreviewed because there has been no reorganisation and no lease break.
Last time I appeared before the committee, I mentioned that we were appraising all the property in Scotland that the Executive and other organisations own. We have data for the Executive but not for other organisations. Collecting such data will give us a wide view of the rental levels and ownership arrangements for buildings right across the public sector. That process will give us further opportunities to examine where co-locations or triggers for relocations might arise. That appraisal is significant and it is well under way. I hope that it will be concluded in the not-too-distant future and give us the opportunity to look into this issue again.
A timetable for that would be helpful. You are in the process of creating a database of properties available for relocation, but what incentive will there be for a manager to initiate a relocation review?
Best-value and efficient government initiatives in local government will provide managers with opportunities to consider co-location and shared services.
I note that future evaluations of the benefit of relocations will take place five years down the line. Have lessons been learned from efficient government initiatives? We have information on gross costs, but not on the costs of achieving savings. There is no baseline. Is an attempt being made to establish a baseline so that we can monitor staff turnover and staff absenteeism in relocated departments, and customer satisfaction?
The member raises an important point. The evaluation has thrown up weaknesses. Trying to establish baseline costs is much easier with standalone organisations, for which such costs were collected anyway. Doing so with organisations that have emerged from being part of the Executive has been more difficult. The figures were audited, but they were not broken down into the costs for each particular part of the overall organisation. From now on, that will be done as a matter of course. There will be a baseline so that we can say, "Here is what the running costs were before relocation, and here is what they will be after."
Are there any plans to involve the receiving local authority in the process? Will the local authorities that receive the relocated jobs carry out an evaluation of the impact?
We have tried to discern that from local authorities and enterprise companies. Our point was not that it would be five years before we measured the impact. If you consider the Experian report, which is quoted in the evaluation document, you will see that the limited evaluation work that has been done suggests that it is only after five years that we can start to measure the benefits to the communities to which there has been relocation. We should remember that we are at the forefront of relocation—in some ways, Scotland blazed the trail for the policy. We are at very early stages, and some of the evaluation and benefits that we are hearing about cannot be completely bottomed out through measurement. That is the next stage of an evaluation further down the line.
There is a slight contradiction in that, although we have a question mark over the full future impact and benefits of relocation to the receiving end, you have carried out an initial assessment of the impact on Edinburgh and are confidently tabling the statement that there has been no negative impact. How can you be sure of that when it is too early to assess the impact on the receiving area?
What we did in the evaluation was look at the number of jobs created in Edinburgh and the impact on its economy. From 2000 to 2004, the Edinburgh economy created 40,000 new jobs. Judging by the quotations from the City of Edinburgh Council, the key issue seems to have been finding people to fill the jobs. The Edinburgh economy is doing extremely well compared with the rest of Scotland. It was easy enough to measure whether there had been an overall impact on the Edinburgh economy; it is much harder to evaluate the impact of jobs on other economies, but we are committed to doing it.
I hope that you understand the contradiction. If you can evaluate the impact of taking jobs out of and bringing new jobs into Edinburgh, it should be equally straightforward to evaluate the impact of moving jobs into Glasgow. It is just one side of the transaction.
We are at the forefront of relocation. The best advice that we are receiving from Experian, which has done the work, is that it takes a little longer to measure the impact on the receiving area. We should take some comfort that all local authorities and local enterprise companies—and, indeed, the majority of MSPs—are keen to have job relocations to their areas. I have heard no local enterprise company or council say that it is a bad idea that will not bring any benefits. I am sure that we will be able to capture the data further down the line.
Every local enterprise company may want relocation to its patch, but the Finance Committee is trying to investigate the net impact on, and the value for money for, the whole of Scotland.
It is not a snapshot. We have taken information on the number of jobs created between 2000 and 2004—the latest figures—and looked at evaluations of the job market. The evidence that Edinburgh has continued to thrive despite the transfer of jobs to other areas of Scotland is conclusive.
Surely the question should be what the impact of that job transfer has been. Would Edinburgh have thrived more or less without a transfer? Simply saying that the Edinburgh economy is thriving does not tell us anything about the impact of the transfer of the 4,000 jobs.
With respect, I think that it does. If relocation had had a negative impact on Edinburgh, we would not have seen the number of jobs created rise as dramatically as it has. Anyone looking at the situation from the outside would see that although 4,000 jobs have been transferred, 40,000 new ones have been created over a shorter period. Many areas in Scotland would be delighted with that performance from their local economy, and I am sure that some members of the committee represent them.
Looking at the policy and where the various relocations have taken place, I wonder whether the criteria are correct. I know that you have indicated time and again that we need five years before we can judge the policy, but you are continuing with it. Most relocations are going to deprived areas, but few are going to rural areas. Do the criteria require nudging?
The criteria are balanced—50 per cent depends on the social and economic needs of areas and 50 per cent depends on business efficiency and benefits to the organisation in question. A substantial number of jobs have gone to Glasgow. Given the figures for deprivation, poverty and the other problems that Glasgow faces, one would expect a significant number to go there—because of how the priorities and policy are laid out.
You said that most of the jobs went to deprived areas and that it was not surprising that so many went to Glasgow, but a number of those bodies have gone to addresses that have either G1 or G2 postcodes, which are city-centre locations. How does that square with your objectives?
The decisions on the ETLLD and Transport Scotland were influenced by strong business case reasons about the ability to do business, as well as socioeconomic factors. Indeed, the ETLLD was relocated before the introduction of the policy objective of balancing the socioeconomic and business priorities. That was an early decision that involved good business reasons why the department should go to Meridian Court. There were strong business reasons in relation to Transport Scotland, too, given that it has taken on the role of running the railways and that there was a lot of expertise in the area in the Strathclyde Passenger Transport Executive. There was a strong business case as well as a socioeconomic argument as to why Transport Scotland should go there.
Yes, but my point is that although the policy has been sold as one that will benefit deprived areas, there is no discernible evidence or pattern to demonstrate that that is the case, given that bodies have been located in the centre of conurbations.
In part, the issue is about the business case and whether suitable buildings exist. If I recall correctly, the sportscotland relocation involves a new build by Glasgow City Council, to ensure that it goes to the appropriate place. There are other reasons why Glasgow has been picked for relocations—the reasons are both business related and socioeconomic.
The draft report says that all local enterprise companies in Scotland have been affected by relocation, but in the case of Tayside, part of which I represent, all the relocations have been to the city of Dundee. Not one job has been located in the counties of Angus or Perth and Kinross, part of which I represent. From the forward plan, there seems to be absolutely no prospect of anything going in that direction in the period that lies ahead. The point has been raised repeatedly by me, by local authorities and by the local enterprise company. Are you prepared to reconsider the arguments for relocations to those two counties, which have predominantly low-wage economies? Perth and Kinross has the lowest wage economy in Scotland, which I would say is one of the strongest arguments for relocation.
I am keen for jobs to be spread throughout Scotland. Of the 32 local authorities, 25 have appeared on shortlists and 19 have received locations or relocations of new or existing posts under the policy. A significant number—the majority—of councils in Scotland have had the benefit of relocation or have been on shortlists. Some councils have not appeared on shortlists, but that is partly down to the criteria that are used. Four primary factors are involved in final decisions on location: a low ranking on socioeconomic factors; a lack of suitable accommodation, which is sometimes a problem; a lack of suitable transport connections; and other business efficiency factors. We may well have to revisit the issues if it is felt that the policy is not spreading the jobs throughout Scotland. The member has raised the issue consistently with me and I am willing to consider it again.
I welcome the relocation of sportscotland to G31, which is a more interesting postal district than G2 could ever be in the city of Glasgow. Obviously, that move is predicated on the return of the present coalition or a majority for the Labour Party, as the main Opposition party is reluctant to relocate sportscotland to new headquarters in Glasgow. That will be an interesting constituency debate come the election.
The points that you raise with regard to areas being able to prepare and the issues about travel to work are important. In reporting to the committee, I have heard on several occasions that we might want to take a more strategic look at the issues. I am sure that, in the forthcoming months, geographical targeting might be included in the debate, too. That is certainly an issue for the debate that will take place when the next Administration comes into power.
On that note, I encourage committee members collectively to stick to the strategic high ground that the committee has occupied for the first three and a half years of this session of Parliament. That is another way of saying that we are not keeping to our rather impressive timekeeping schedule of the recent past. I plead with the few members who have yet to ask questions to keep them brief.
A bit of Christmas levity should be allowed, convener.
Charity.
The minister acknowledged that relocation has implications for staff, particularly union representatives, but implied that the policy is working well because staff who have not relocated have been absorbed into other parts of the civil service and support has been provided. If that is the case, why has the Public and Commercial Services Union called for a moratorium on relocations? Does that not indicate a certain amount of unhappiness among the staff who are represented by the union?
I understand the concerns that unions such as PCS have on the issue. A relocation review is a time of uncertainty for any organisation and its staff. The people who work for the organisation will have concerns about the matter, but the key issue is to ensure that staff are kept fully informed of what is happening and what the options might be if a decision is taken to relocate.
It is not only the staff who will be relocating who will be uncertain—staff who choose not to relocate will also be uncertain. The final sentences of paragraph 3.27 of the report on the Executive's relocation policy state:
Obviously, such staff have been satisfied that they have received an alternative offer to stay in Edinburgh. I presume that they have been happy to take up that option. It is correct to survey staff who have transferred so that we can find out about their experiences and try to improve how we deal with staff issues in future relocations. That is a key issue.
Do you agree that there is a major concern about staff who choose not to relocate, for family or other reasons, and that the Scottish Executive should monitor the impact of relocations on them?
I am not aware of that issue having been raised by individuals who have chosen to stay in Edinburgh or by the unions. However, if there is an issue, I am sure that we will receive representations on it. If we do, we will consider the matter.
I am sure that representations will be forthcoming.
The Government of the day will have to deal with such matters; things will depend on its policies. The current Administration has made a commitment to absorb, but I cannot predict what the next Administration will decide or its financial and fiscal position. All that I can say is that members of staff who wished to stay in Edinburgh have been absorbed; I cannot make a commitment about what will happen in the future or on behalf of another Administration.
But there is a current commitment to absorb staff.
Yes.
The costs of relocations have been controversial. Scottish Natural Heritage is the example that one would expect to be used in that context. In the autumn budget revision, £16 million was transferred to SNH to help to fund relocation costs. I presume that costs were building up for a while.
I am sorry, but will you—
In the autumn budget revision in October, I think, £16 million—
Are you referring to the money that was transferred to purchase the building?
Yes. Money was transferred from Scottish Water. I am sure that you were not aware that that money would be needed when the decision to relocate SNH was taken. When did it become clear that such costs would be involved?
At stage 1 of the review process, all the possible locations are considered. Those locations are then narrowed down to potential locations—of which there could be between three and six—for stage 2; an attempt is then made to bottom out the costs. The results of that process are fed to ministers so that they can make a final decision. I think that the decisions on every relocation apart from that involving SNH have been made on a best-value basis.
I accept that SNH is at one end of the scale.
Thankfully, one-off costs are consistent. There can be variations, but we are starting to see a pattern.
I presume that SNH's costs have been considered more carefully than other organisations' costs have been, as it is at one end of the spectrum and stands out.
The costs have been carefully considered. I am sure that the Audit Committee will spend a significant amount of time considering them and the ministerial direction that was required to allow the relocation to go ahead. The accountable officer for the project said that he was concerned about the costs per job that were involved.
I understand what you are saying, but I am puzzled. If costs were closely scrutinised and an amount was significant enough to be included in a budget revision, there must have been a significant period of time before the revision in which proposals were reviewed and challenged and alternatives were considered. However, you said in September that there had been no call on funding for SNH. That was obviously true at the time, but did you know then that there would be a call on funding in the budget revision a month later?
There was a transfer within the department. There were significant internal discussions, and discussions with SNH, on whether leasing a building or outright purchase of a new building would be the correct option. Once the economic case had been considered, it was decided that purchasing a new building would be the correct way to proceed. There was no draw on money from the centre to finance the process—it was financed from departmental expenditure. The committee received evidence relating to the transfer of money from one budget in the department to another budget to finance a one-off cost. The correct decision was taken because we wanted to take the best-value option, which was outright purchase. As no plans existed in the department to spend certain capital, it was right to transfer that capital to meet those costs, rather than draw money from the centre. Leaving aside the small units initiative, there has been no funding from the centre for any of the relocations that have taken place to date—everything has been funded through departmental budgets.
I have a question about Registers of Scotland, but first I want to take you to task on a table entitled "Location and Relocation: Completed Moves", which is contained in an annex to the relocation report. The table indicates that Forest Enterprise Scotland relocated 20 posts to Inverness and Dumfries. In fact, only two posts went to Inverness; the rest stayed where they were. That is not really a completed move—people simply stayed where they were.
I am certainly keen for that to happen—I encourage my colleagues constantly to make proposals for small units to be freed off and moved to some of our more rural areas.
I take it that the wholesale relocation of Registers of Scotland is no longer an option.
That was rejected at stage 1; the result of the stage 2 review was that we decided not to act on relocation. As a result of the efficient government programme, Registers of Scotland has been re-engineering its business. It is undergoing a huge re-engineering of how it goes about its business, which will involve a significant reduction in the number of staff that it will need in the future. It was felt that until the organisation had come to firm conclusions about how its plan would progress, we should leave relocation on hold and ask for it to be built into the change programme. Significant change is going on in that organisation and relocation has to be part of that change, rather than sitting on top of it. That was the danger in going ahead with partial relocation.
Have you any idea about the timescale? I spoke to people from the Public and Commercial Services Union last week and they said that relocation has been hanging over people for a long time, which affects staff morale. There is also a feeling that people have not been consulted about the proposed relocation. Can you reassure staff that they will be involved in any consultation, so that they can at least see on the horizon when the decision will be made?
I hope that Registers of Scotland will consult its staff fully. I will be happy to look at any concerns that are raised. I emphasise, however, that the current change programme does not take away the uncertainty that hangs over staff. It is a significant piece of work and, as I understand it, Registers of Scotland will come to a final view some time next year about how the organisation will look into the future.
The six-monthly reviews since 2004 have kept us in step with a policy that has evolved significantly over that period. The challenge to us as we look forward is how the relocation policy will be reviewed fully and strategically. Perhaps clerks and officials will touch base in that area so that our legacy paper contains thoughts about how the policy will be properly reviewed in the future; such review might take a different form from that which it has taken over the past couple of years.
Meeting suspended.
On resuming—
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Legacy Paper