Standards, Procedures and Public Appointments Committee

Meeting date: Tuesday, September 13, 2011

Official Report 363KB pdf

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“Code of Practice for Ministerial Appointments to Public Bodies in Scotland”

We will now take evidence from Karen Carlton, the Commissioner for Public Appointments in Scotland. I welcome you to this meeting to take us through the “Code of Practice for Ministerial Appointments to Public Bodies in Scotland”. Will you make a brief opening statement before we ask questions?

Good afternoon. I will make a brief statement. I welcome the opportunity to discuss with the committee the new code of practice. A number of myths grew up about the requirements of the previous code. The new version is accompanied by two items that are designed to enhance understanding and implementation of the code's straightforward requirements. First, the front of the code has a diagram depicting the key activities that lead to an open, fair and merit-based ministerial appointments process, as required by the Public Appointments and Public Bodies etc (Scotland) Act 2003. The code requires that each of the circles in the diagram be implemented effectively, and describes the practices required to do so.

Secondly, I have produced a guidance handbook that provides information on the code, how it may be implemented and the options that are open to the Scottish ministers when considering the new flexibility for application and assessment. I have built into the code the flexibility that we need in the ministerial appointments process in order to attract, and to enable the appointment of, a diverse range of talented people. The Scottish Government is responsible for driving improvements to the process, and it is important that the regulatory framework encourages and enables those improvements.

14:30

I have made a number of changes in the new code. It has new principles, focusing on the outcome of an appointment round, on the applicants and on the need to ensure that appointment practices are tailored to the role, to the body and to the people whom the body wishes to attract. The code provides greater flexibility and clarity over the responsibilities of the key players in the process, it ensures that appropriate application and assessment methods are used on every occasion, and it contains a requirement for management information for selection panels, so that panels use appropriate methods in reaching decisions—and that requirement is quite new. The code also contains a requirement that the Scottish ministers carry out a fit-and-proper-person test on the applicant who is to be appointed, and a requirement that the Scottish ministers ensure that skills are maintained on a board and that effective succession planning takes place to support a board in the future.

It is important to acknowledge that the code is not the only factor influencing both the operation and outcome of the public appointments process. The willingness of people to apply, the barriers that some face when they do apply, the reputational risk of serving on a board, and the messages that people receive about the public bodies themselves are all factors that we need to consider when encouraging people to apply.

Finally, the response of this committee when I report Scottish ministers for non-compliance will be very important in driving improvement. You can effect change where I cannot.

Thank you very much for that introduction. I am pleased to see the code of practice and the handbook before the committee today, and I hope that they will lead to changes in respect of the people who come forward and those who end up being appointed to public bodies. It is important that we attract as broad a range of people as possible.

I will make a couple of points before I invite committee members to ask questions. A possible deterrent has been suggested to me. Let us say that someone became a member of a health board after having been for many years a strong advocate of health issues on behalf of other people. If that person, or a member of their family, subsequently had a health problem, the person might feel constrained. Because of their new position on the health board, they would not want to advocate on behalf of themselves or their family in case they were accused of abusing their position. Do you have a view on that type of situation? Have you come across it?

I have not come across that situation but, as I mentioned a few moments ago, people may face significant barriers when they are considering whether to apply. The situation that you mentioned is perhaps just one of a range of barriers that they might consider. What will being on a public body’s board mean to them? What will it mean for the time that they have for other activities—because most people seem to have very busy lives? What might it do to limit their opportunity to work in ways in which they want to work?

As committee members will know, if a person is a member of a board, they are a member of a corporate body. With the other members, they are responsible for delivery of the strategic objectives of that body. It would not be appropriate for a member of the board to be seen to be lobbying in relation to his or her personal circumstances. We talk about board members reflecting the population, but they are not there to represent particular sections of the population. In some cases, that consideration may well prevent some people from moving into board positions. They may have strong views that do not match the views of the chairman of the board, and they may feel that there are other ways in which they can lobby and have their voice heard.

I would appreciate your opinion on another point that has come to my attention. People are being appointed all the time, and some appointments will straddle the old system and the new system. An appointment process that has just started involves Highlands and Islands Airports Ltd. It will be done under the old system, I believe, although the appointment will not be made until well after 1 September, when the new system came in. Was there any logic in allowing a public body to choose to use the old system, rather than the new one?

That is an interesting case. Although it was not required to, HIAL initially chose to work under the new code. However, it then decided not to—possibly because people often find it easier to use practices that they are used to. I do not mean to suggest that HIAL will not be doing things as well as it possibly can, but this is like anything else in life—until people are really familiar with the new, they tend to be comfortable with what they know has worked for them in the past.

You asked about the cut-off, and you may remember that the code was launched on 1 April, with the period up to 1 September left for people to be trained in its implementation, to understand the changes and to prepare for them, so that management information was available from 1 September.

If someone has started an appointment round in July or August, it is difficult to say to them, when 1 September comes round, that they have to change their practices. The new code is significantly different. It does not talk about application forms or interviews, and it represents quite a different approach to public appointments. It would not be helpful for someone to have started under one code and then, all of a sudden, be expected to change horses in midstream. A decision was therefore taken to allow time for training before the start of the new code. Anything from 1 September onwards is under the new code.

Members have questions; our deputy convener, Helen Eadie, will start.

My question relates to training and workshops. Whenever a new policy is introduced, the challenge is to get it implemented and not just to let it gather dust on the shelves. One of your aims in the preparatory work for the code has been to enable government officials, the chairs of regulated public bodies and your own assessors to become familiar with it. To that end, a number of workshops have been held. Have they been successful? How prepared are the relevant participants for appointment rounds under the new code?

It would probably be worth dividing the participants into discrete groups. The assessors—who represent my office during the appointment round to ensure that the code is complied with—had a lot of training from me and my team and they are familiar with the new code. We do not just tell them what the new code requires, but have all sorts of case studies that depict what might happen during the round in which the assessors have to respond. They have also had significant support in understanding the new role. It is not just the code that is changing—it is also the whole regulatory framework surrounding it. I am as confident as a person can ever be at the start of a new regime that people understand what is required and have had plenty of opportunities to go through the code with me and my team. They have also been involved in pulling together the handbook.

We have held a number of workshops for chairs of public bodies, and we still have a couple to go. The chairs have been very interested in participating, and I have been encouraged by their responses. They regard the change as an opportunity to attract a wider range of people and to get away from what we all acknowledge has sometimes been a bureaucratic approach. That approach has been relaxed over the past few years; the days of the 12-page application form have gone. Even under the previous code, I have been encouraged by what has been happening with the application process. We now have a new broom, and people realise that we have an opportunity to make progress.

However, I have expressed concern to the Government about the preparedness of the senior civil servants who will be chairing appointment rounds. By 1 September, only eight senior civil servants had attended the workshops. When I brought that to the Government’s attention, it too expressed concern and it has been in touch again to encourage a lot more senior civil servants to come forward. However, I am not entirely sure that the priority that I would, of course, like to be placed on the public appointments process is always the priority that senior civil servants place on it. So I have some concerns about how prepared they are and I hope that the handbook will be helpful. I also hope that, in the early days, those who are knowledgeable will be the people who chair the rounds and help to spread the knowledge throughout their colleagues in the senior civil service.

That is very illuminating; thank you.

Do you think that it would be helpful if senior civil servants who have not done the requisite training were advised that they should not chair boards until they have done so? It does not seem to be wise to allow people who do not have good knowledge of the new code to be taking part until they do.

It might be dangerous to have a blanket instruction to say, “You will not participate until whenever.” We should bear it in mind that some senior civil servants have been very active in public appointments for a long time and were very able under the previous code. Their having read the code and handbook might be all they need to do to convert previous into current practices. However, the code allows for the situation that you have described. It requires that panel members demonstrate competence at the start of the round and it defines competence, which will be assessed at the planning meeting. If there is any doubt about whether people are competent—either are able to assess effectively or are knowledgeable about the code—I will be informed and I will not let that round continue.

Thank you.

In evidence that you gave to the committee during the previous session, you said that the public appointments system was an overly long process. Are there strengths in the new code that deal with that issue?

The very fact that there can be such a wide range of application methods means that some of the time involved with the traditional application form, with four weeks allowed for the form to be completed, could be removed from the process. You will see that the handbook allows for the possibility of having structured telephone interviews or inviting expressions of interest and then going straight to interview. That would shorten the initial stage.

The other part of the process, which is all-round assessment of applicants, will depend on the methods chosen and those will depend on the role. The convener mentioned health boards a little while ago. If someone is chairing a health board that has a budget of £2.5 billion, the panel might decide that it is important for applicants to go through a full assessment centre, which could take a day or two days. On the other hand, someone applying for a place on an advisory committee for which specialist knowledge is required might just have to have a meeting with people who can test their specialist knowledge.

That was a long answer to the question. Yes, the code can help to improve the process. It is also worth mentioning that I have seen an improvement in the time that it takes to make a decision, which is an element at the end of the process that I used to monitor quite strictly. My annual report shows some encouraging information about that. When the process is over, people are being told more quickly. That long period at the end of the process, which at one time was as long as four months, has been reduced significantly.

Do you expect that trend to continue with the new code coming in and best practice being used?

I hope so. The new code makes explicit—as the previous code intended to do—how many people we propose to a minister as appointable. I have tried hard to remove some of the old terminology, including the phrases “above the line” and “below the line”, with which you will be familiar. If 20 people were interviewed and 12 were considered to be “above the line”, the code expected the best of those 12 to go forward, but that did not always happen and the minister might just have been presented with some lengthy submissions with a lot of information about people. The new code makes it explicit that only the most able will go forward, and far fewer people—the ones who, without doubt, are the most meritorious—are going forward. That will help the decision-making process, too.

14:45

That is interesting. Section C of the code sets out the appointment plan. For the record, I will say that that involves selection panel members agreeing the role description and the person specification, and then agreeing

“the publicity, application and assessment methods to be used”

and

“a timetable specifying key dates within the round.”

Is that a key aspect of the new code? Is it crucial that you get the appointment plan process right, and if you do get it right, do you expect a quick, high-quality process?

The current code requires an appointment timetable; the description in the new code is more explicit. I have said for some time that it is important to manage expectations, so that applicants know what to expect. I hope that the fact that we talk clearly in section C about when the minister will make a decision, which is new, will help the speed of the process.

It will also bring certainty to the process and the structure, which is welcome. Thank you.

Perhaps my previous code was not as explicit in certain areas as it might have been. I issued guidance to the Scottish ministers to make clear my interpretation, but the process is now set out in black and white and is absolutely clear. There is no doubt that what is required is a professional process, with appropriate methods to target the most able and to give the ministers the most meritorious candidates for their appointment decision.

I am sure that people who are involved in the process will find the guidance handbook that you have produced very helpful at the outset. As the process starts to bed in and people become familiar with the new code, do you envisage reviewing the handbook? How often do you intend to review it?

I am not sure yet how often the handbook will be reviewed, because that will depend on how effective it proves in practice, but the answer to your first question is yes, I absolutely envisage reviewing the handbook. The reason why the code and the guidance are separate is that the code is a statutory document, so I must go out to consultation any time I need to make a change to it, whereas the guidance is designed to improve the process and by its very nature will keep improving.

The current plan is that we will not print the guidance until after the first three appointment rounds, so that if feedback from the rounds in the early days suggests that something is missing that needs to be included or something is not as clear as it could be, I can address the matter. The handbook will then be printed in a format that allows people to download, print and replace pages as and when amendments are made. The frequency of review will depend largely on how used the handbook is and what feedback I get. I expect that it will be reviewed annually, at a minimum, to ensure that we are keeping up to date with the changes in the process and encouraging more changes.

Your office has carried out regular audits of appointments, which have been overseen by an assessor. I note that the most recent audit was published in 2009. I assume that there has been no audit in the interim period because you have been busy working on the new code of practice. Are there plans for an audit to be carried out in future? What aspects of the new code will be covered in such an audit?

The main reason for audit, as you know, is to help to improve a process. I saw no value in spending time and money auditing a process that was about to be phased out—that is the reason for there being no audit last year. We will audit; my view is that we need a year with the new code before we can audit how effectively it is being used. The areas that will be subject to audit will primarily be those that are changing. We will consider not the principles—it is hard to audit principles—but the practices around the application and assessment methods.

One area that I am particularly interested in is how well management information is used. I have alerted the Government to the fact that I am a little concerned about how the interpretation of management information is conducted. When a round is deemed successful but I view the progress of applicants through the round and note that all those from underrepresented groups disappear before they become appointable, I question just how effective the management information is in informing decisions and helping to improve the process. That is one area that I would like to look at in the near future.

Thank you.

Welcome to the committee, commissioner. I want to touch on the assessment of risk at each round. You have set out in the new code that an assessment of risk should be conducted for each round, which will be classed as low, medium or high risk. That rating then determines at what point the assessor becomes involved in the process. Will you set out for us in more detail the considerations that will underpin the level of risk that is assigned to each appointment round and how you see the risk framework evolving as experience of the process develops?

To answer the second question first, I hope that the experience will be that many more rounds fall into the lower-risk category as the Government and chairs of public bodies become more skilled in the application of the public appointments process.

I can send the committee full details of the factors that we take into account in the risk framework. Like many such frameworks in the public sector, it is based on the likelihood of a particular activity happening and its impact if it does happen. On impact, we list the factors, which are linked to the size, scope and budget of the public body and the remuneration of its chair. On likelihood, we look at what has happened when the body has made appointments before, whether the panel members have been involved in any training, and the contextual issues. As members know, the rapid changes in the public sector mean that, even if a round worked well the last time, there may be different factors that affect a body that we need to take into account.

We have put together a suggested framework, which already lists bodies as high, medium and low risk, and we have agreed that with the Scottish Government. At the start of each round, we will review that list and say, for example, “This body is currently medium risk. Is there anything contextual that we need to consider that might change that?” At the planning meeting, which my assessors will always attend, there will be the opportunity to change the risk banding as the round is planned, the timetable is drawn up, and the person spec and role description are created. If issues arise in that work, the band can be reviewed—and I would say that it is more likely to be increased than decreased in the early stages.

It is a dynamic framework and, over time, as practices are embedded, I hope to see less involvement by the assessors in monitoring every single stage and more final agreement that the code has been complied with.

Can you clarify that you will take account of the credibility and established track record of an organisation’s performance in assessing risks? Organisations will have a risk matrix to complete. If you subsequently determine that they have been unrealistic, will you take that into account in determining whether an assessor becomes involved?

Which risk matrix?

You mentioned earlier the use of likelihood and impact in assessing a risk, with a score that determines whether the risk is classified as low, medium and high. That is what I would call a risk matrix.

Absolutely. I asked because bodies have a variety of risk matrices for different activities, but we would not look at the body’s risk matrix on, for example, a capital expenditure plan. I would simply look at where they are, what factors have put them there, and how appropriate the risk rating is. That is reviewed at the start of every appointment round for the body.

That is helpful. Thank you.

Page 8 of the code of practice lists the Scottish ministers’ responsibilities. One of the responsibilities is to

“make clear their stance on the holding of multiple public appointments.”

Do you have any views on the issue?

That is one of the really difficult subjects. If the Public Appointments and Public Bodies etc (Scotland) Act 2003 and the code require that the person who is by far the most meritorious is appointed, how can we question it if someone who is clearly skilled as a board member or chair has a second or third appointment? Unless we attract many more applicants, the basis of appointment activity—getting the right person for the body at a point in time—will occasionally mean that the people who come forward, who have a track record and can furnish their application with lots of relevant evidence from what they have done on other boards, are likely to move forward to appointment stage.

I am not sure whether, apart from increasing the diversity of applicants, there is anything more that can be done about that. If two applicants of identical merit were presented to the minister, current equality legislation would allow the minister to take diversity into account when making his or her appointment. It does not require the minister to do that; it allows them to do that.

The job that we all have, which is linked to something that the deputy convener said earlier about getting many more people involved in civic Scotland, is to get more, new and different people into and progressing through the system. Interestingly, there has been an encouraging increase in applications from women and people who declare a disability. There is movement, but we are not seeing that movement reflected at every stage of the process. I have therefore recommended to the Government that it looks at the different stages of the process and other potential barriers, such as in the wording of a person spec or the form of tests used. That is why, if the bodies rely on effective management information, they will know that a certain type of assessment method perhaps suits the people who are from the public sector and already sitting on boards. If we want a more diverse group of people to get through to the next stage it will be useful to consider different assessment methods.

I certainly hope that the new system will bring in a lot more people, which will bring in much more choice. In theory, the methods should ensure that we get different people coming through. I presume that an appointment panel could always look at the workload of an individual. Even though someone may be skilled, able and experienced, if they are taking on too many responsibilities they will not be able to devote the necessary time or effort to a particular appointment.

I remember serving as chief executive of an organisation where one of the non-executive directors had 12 non-executive director posts across the public and private sectors. I have highlighted and discussed that kind of situation with people. However, how can you tell someone that they are not able to commit the time if they reassure you and provide evidence that they are?

The process is based on merit and honest responses from applicants. I have three jobs, and I do not hear anyone complaining about the way that I am doing them. The others are voluntary, but they are significant roles. Some people can accommodate more work than others.

It is an important point. I have pressed the Scottish ministers on their stance on multiple appointments, and their response is always that appointment is on merit. As long as we have that system in Scotland—and I am not saying that we should not—those people who demonstrate merit will continue to come forward.

As I think I explained once before when we discussed this issue, there is a phenomenon across all recruitment, not just public appointments, that individuals recruit in their own image. We want people whom we believe we can trust and rely on. If I am a chair of a public body, I want board members who will deliver, because my reputation is on the line if they do not. We are trying not simply to improve the public appointments process but to make a massive culture shift in Scotland. That is why more people than just me need to work on the issue.

Absolutely. There is no doubt that there is lots of talent out there, including a lot of people who do not put themselves forward for all sorts of reasons, and I hope that the new code and all the rest of it will make a difference. I suppose that the proof of the pudding will be in the eating a year or two down the road, when we see what has happened. Thank you for appearing before us today and for answering our questions so ably.

15:00 Meeting continued in private until 16:46.