Our next item is a continuation of evidence taking on the Public Services Reform (Scotland) Bill at stage 1. Our first panel of witnesses comprises commentators with a wide range of experience and expertise. We have asked them to give evidence on the bill in the round. I welcome to the committee Jo Armstrong, of the Centre for Public Policy for Regions; Dr Alison Elliot; Richard Parry, reader in social policy at the University of Edinburgh; and Professor Colin Reid, professor of environmental law at the University of Dundee. I invite the panel members to comment on the Scottish Government's wider programme of public services simplification and reform and how they see the bill contributing to it.
This is an aspect of the eternal fascination of all Governments with quangos—those public bodies that are not ministerial departments or part of local government but are in an area in between. Governments always want to change them, bring them into being and bring them to an end, because that is an easy thing to do. It is easy to reorganise; it is much harder to do anything else. All Administrations of all parties aim to reorganise.
That is a good start. Who wants to continue?
I would like to pick up on part 1 of the bill. I was surprised that there was so much enthusiasm for part 1 in the responses on the bill, because it seems to put the cart before the horse in the way that Richard Parry just said. We want simplification for the consumer—for the person who gets the public service. There seems to be a trickle-down theory that if the public bodies landscape is simplified, a simpler experience of public services will be produced at the consumer level. That theory might work, but it will not necessarily do so.
I should declare that I am a member of the Public Transport Users Committee for Scotland, which is one of the public bodies that might be affected by the bill. However, I have no axe to grind about that, and I will speak in a wholly personal capacity.
The bill offers a serious opportunity that possibly was not in the mind's eye of those who developed it. Given the significant budget constraints and concerns that we face, we need to look more closely at delivering significant savings through public sector reform.
We are anxious to get as much of your expertise as possible on the record. I have listened to talk of quangocide for more than four decades but I have yet to see it. In fact, quangos seem to be multiplying—it is as if they are breeding. I throw the discussion open to the committee.
I will start with a question for Jo Armstrong.
I do not. It was an extremely crude estimate that took account of the efficiency savings that Scottish Water delivered in its first four years of operation and applied them across the general Scottish Government budget. I think that significant cuts are coming, but I have not updated the figure in my paper.
My question is one in which the language is important. One person's savings are another person's cuts and another person's efficiencies. I want to know specifically whether you have judged that the same services could be better delivered at a reduced cost, and if you have, whether you have estimated how much could be saved. I am not talking about forced cuts; I am talking about delivering services more efficiently as a result of different practice.
The Scottish Water model shows that it is possible to produce more for less and to improve quality at the same time. There is an example of that being done, and there are generic lessons that can be applied. The extent of those lessons and their applicability across all services needs to be considered on a case-by-case basis.
You have used Scottish Water as an example. You state that people in the public sector
It is sad—it is common sense; it is not rocket science. Given the real-terms budget cuts that we are facing, everybody now has to ask whether they are delivering what the user wants. There is potentially confusion about who the user is. Is it the final user or the intermediary user? I think that it is the final user, and the question is whether what is being delivered is what they want.
There is one thing that bothers me. Some public organisations have been tremendously effective and efficient, whereas others have been forced to be effective through the excellent work that Audit Scotland does. What is inherent in the other organisations? What is stopping all such public organisations improving their performance?
One of my colleagues might wish to cover this, but I will quickly run through it. Scottish Water is still in the public sector, so it was not taking the organisation out of the public sector and putting it into the private sector that made it work. It was not making it into one body that made it work—it went from a multitude of local authorities into three bodies, and then into one before it became the Scottish Water that we now know. That involved each individual stakeholder having clarity about the organisation's roles, with an inability on the part of any individual stakeholder to change the terms of engagement once they had been set down.
Something else is bothering me. Public money appears to be going to shore up some pretty poor organisations. However, instead of curing those organisations, the money goes in, the organisations continue to be poor and the money is not well spent. How can we maximise the efficient investment of money in public organisations?
Apologies to the committee, first of all, for not having submitted written evidence beforehand—there were various confusions, but I did circulate for the committee's interest a report by the better public services forum, which I chaired in 2006. The forum's perspective was that rather than just examine the economic question—which, of course, we must do to determine how money can be saved—we can also consider the question of how money can be spent better. We focused on how to improve service quality, in our case by involving other organisations, namely the voluntary sector, to a greater extent.
I would be concerned if organisations in the public sector were reorganising all the time, because energies would be being directed at that. All reorganisations involve merging or dividing organisations, implementing redundancies, which is often really hard, and integrating terms and conditions—or doing the opposite. Organisations might direct all their energy into doing those things but not into making key internal changes. A good audit would reveal that, as Audit Scotland does when it considers organisations.
Much of what we are talking about comes down to accountability and stakeholder involvement. Such issues are often built into the constitutions and structures of public bodies, but those are the very things that the bill will give the Government a much freer hand to muck around with.
Richard, you said in your submission that the proposals to establish creative Scotland and separate scrutiny bodies for health and social care
You would expect a public services reform bill to be to do with broader issues and perhaps to contain provisions to get rid of or merge odds and ends, because there will always be public bodies that are not useful—there is no controversy in that regard. However, the Public Services Reform (Scotland) Bill will bring into being, for example, creative Scotland, which was the subject of the Creative Scotland Bill—the bill did not work and it fell, for various reasons. Creative Scotland is a big issue, and has raised all sorts of other issues. That is what happens when one merges organisations. It all seems to be easy and a good idea, but when you try it it turns out to be expensive. All the costs are front loaded in the immediate future, and all the benefits are obtained in the long term and are end loaded.
Alison Elliot spoke about user focus. In your written submission, Professor Reid, you mention your surprise that legal obligations are being used in the bill to introduce user focus. You seem to have some reservations about that.
Yes. It seems to have become the fashion in legislation at Westminster and Holyrood to impose broad general duties on public authorities. One sometimes wonders what the point of that is. It could be dangerous because, to some extent, it could be seen as lessening the magic of the law. The law is meant to be powerful and authorising. It is meant to be about creating rights and getting people to do things rather than being simply a declaratory statement of general policy objectives. There is a role for general statements when they are followed up by something more meaningful, but I am not sure what is intended by simply imposing a general duty for the continuous enhancement of user focus. The bill itself is not clear about what that means; everything will be in guidance from the minister. The legal obligation is that, if the minister writes someone a letter because they are not doing enough, they must reply. That is what it boils down to—that is the specific obligation.
Everyone has mentioned the dangers of leaving policy to secondary legislation and guidance—Richard Parry and Colin Reid in particular. One of the written submissions expresses concern about the use of secondary legislation, particularly when there is a majority Government and things can be steamrollered through. Since the Scottish Parliament came into being in 1999, a lot of legislation has been enacted that has resulted in secondary legislation. Do you have any examples of secondary legislation having been a bad thing and having resulted in things being steamrollered through?
Whether particular measures are good or bad is a very political question. The wider concern is about the broad division of responsibilities, accountability and what will happen in practice. Yes, under the proposal the Parliament will have the power to say no, but there is greater publicity and public engagement through the bill process, as well as extra opportunities for members to take evidence and to reflect on what is happening in the early stages of the debate. Things may also happen more quickly. Yes, there will be a consultation process—there often is—and one of the big changes over the past 20 years has been that, as a result of the availability of the internet, consultation processes are more open and people can see their outcomes. So consultations have the potential to generate more public debate, but it is still very much the case that, although the newspapers give people an idea of what bills are going through Parliament and what issues are being discussed, they do not go into the same detail on subordinate legislation. It is therefore possible for some stakeholders to miss the boat, and the process relies on a much smaller group of parliamentarians realising the significance of the issues and generating support, interest and argument because the issues will not be debated in a wider forum.
Does anyone feel that that has happened over the past 10 years?
An example from Westminster is the Pollution Prevention and Control Act 1999. The act has only seven sections, yet the first set of regulations made under it is more than 90 pages long. All the detail is in the regulations. That general pattern is repeated in all sorts of areas.
The long list of public bodies in schedule 3 to the bill includes big, high-profile organisations that were brought into being by primary legislation and, in all other political dispensations, would be altered only by primary legislation. The fact that everything is in that list reinforces the catch-all nature of the bill.
That leads on well to my next question. I have a particular concern about the fact that bodies such as commissioners appointed by the Parliament are included in schedule 3 under part 2. I am looking for expert opinion on that. How can it be that the Parliament as a legal entity is responsible for certain bodies, such as the commissioners, but the Government of the day is given order-making powers and powers of direction over them? Does the fact that the legislation goes through the Parliament give that process legality or would the Parliament have to hand over responsibility separately from that? I am trying to get that clear in my mind.
The Parliament would be handing over the responsibility and the powers through the bill.
Would that be enough? What if the Parliament voted through the bill but the Scottish Parliamentary Corporate Body, as the Parliament's legal entity, was not happy with transferring those powers and refused to do it?
As far as I am aware, what the Parliament as a legislature says would take priority, but I am sure that some of the experts sitting in the public gallery who have time to think about it may come up with a fuller answer shortly.
In that case, I will hold that thought until the next panel of witnesses.
I will not add much to what Colin Reid said. People who read the list in schedule 3 will ask why those bodies are listed. I suppose that their internal organisation needs to follow the principles of efficiency, effectiveness and economy. Perhaps you could consider some hold on how they organise themselves internally. However, I would have thought that it was obviously not right to be able to change or direct that group of bodies by order.
Thank you.
Jo Armstrong has extolled the virtues of Scottish Water in front of the committee before and I have taken her to task on it before, so she will not be surprised that I come back to her claim that
I will leave Scottish Water's salary bill to the side because that must be debated by its paymasters and it is not for me to opine whether it is right, wrong or indifferent.
But the opposite of that approach is penalising
I reckon that the chairman of Scottish Water went as a consequence of not delivering what ministers and the Water Industry Commission for Scotland wanted. I could be wrong, but I am pretty sure that the chairman decided that that was the appropriate action at that point.
Earlier, you talked about this being a good time to introduce the bill, although the landscape has changed. We have received written evidence that says that, in the current climate, the Government should not be doing this at all. You seem to be arguing the complete opposite and, although you might not agree with everything in the bill, you probably want a public sector reform bill, just with a different stamp. Is that correct?
Yes. The financial environment in which public services will be delivered in the next five to 10 years will be radically different from the financial environment in the past 10 years. Saying that the current regulatory framework is fit for purpose for that new landscape would beggar belief. Some people argue that it is not fit for purpose now, so how can it possibly be fit for purpose when we are changing how we do things?
Would it surprise you to learn that when Mr Neilson, the bill team leader, was in front of the committee, he told us that the bill is not a cost-saving exercise but is rather about more efficient public services? The financial memorandum shows that, in relative terms, the savings will be minuscule in light of the upheaval that will be caused.
The savings could be significant. If the bill is not about cost savings, that is a lost opportunity. Given that serious financial constraints are coming, we could use the bill as an opportunity to make savings, improve the quality and delivery of services, and deliver more for people who will be marginalised as costs and budgets get smaller.
The Scottish Government has set a 2 per cent efficiency target; the United Kingdom Government would like a 5 per cent target. From what you know about how the public sector works, do you think that 5 per cent efficiency savings are achievable in the current Scottish Government set-up?
I am unable to say whether those savings are achievable, but I think that efficiency savings are achievable. I have seen significant savings in Scottish Water. It is not about salami slicing current activities; rather, it is about saying that we are delivering and operating differently to deliver significant savings. It is not about people saying that they will keep on paring away and salami slicing costs until people do not get a service.
In your submission, you say:
Those two numbers were reached from two totally different angles and require quite different views of what we are trying to achieve. If you simply take the 8 per cent per annum savings that Scottish Water delivered, that is equivalent to £2.25 billion-worth of additional funding available for public services in Scotland. If we accept that the world out there is for £2.5 billion-worth of reductions in the next five years, that is a compelling reason for considering the lessons from Scottish Water and using the bill as an opportunity to reshape how services are delivered.
Does Dr Elliot have a view on the comment that the bill is not a cost-saving exercise?
At the end of the day, the question whether the bill will save costs must be considered in the light of whether what is being done is right and is an improvement.
I do not want to put words in Jo Armstrong's mouth, but were you suggesting that changes in how public services are delivered can release savings in the order of those that Scottish Water was able to release, which would be broadly equivalent to your organisation's estimate of the reduction in the devolved budget? Can the public sector be reformed while continuing to deliver the front-line services that are currently delivered, in other words without any diminution of services?
In my study for the David Hume Institute I considered three sectors and tried to apply the lessons from Scottish Water's experience to ascertain whether there was applicability and the possibility of improving productivity, releasing funding and improving quality. It was about doing more for less, or doing the same thing better for the same amount of money. There were compelling reasons why there were opportunities to deliver significant productivity improvements in each of the three sectors, if a different approach was taken.
I am delighted to hear that. A report from the care commission indicates what good value voluntary sector organisations are in the area of care services. I am involved with the task group that has been set up by the Government, the Convention of Scottish Local Authorities, the Scottish Council for Voluntary Organisations and the Society of Local Authority Chief Executives and Senior Managers to examine the local authority-voluntary sector interface. Community planning partnerships will now look at commissioning. We have pushed hard for intelligent commissioning that will from the start consider what services are required. The hope is that, through that mechanism, there will be more opportunity for a wider definition of what services should be provided.
I have been listening intently to the discussion. You have been describing a much wider strategic reform of public services. I would sign up to such a reform but, with all respect to you, the bill does not provide for that. The scale of what you have described would entail a complete rewrite of the bill. Are you suggesting that the bill is not worth proceeding with because it is timid and, although it merges some organisations, does not bring about the wider strategic reform of public services that we should be seeking? That is what I am hearing.
I would not say that the bill is not worth proceeding with, but it is a wasted opportunity. Despite its title, the bill is not about reforming public services. Another agenda is being developed that looks at a different way of providing services that has a lot going for it. I do not know whether legislation is required to implement that change in the current set-up or whether it can be brought about through policy. The other processes that I have described are continuing and changes are being made at local level.
We have picked up that the approach is to arrive at a target for the number of bodies to be removed. The bill contributes to meeting that target but, as either Richard Parry or Professor Reid said earlier, it is essentially a numbers game, rather than a strategic review.
The number of public bodies should be the outcome of a different process, not an aim at the beginning.
I must now draw this session to a close. Would members of the panel like to make any last-minute comments?
I emphasise the point that was made earlier about there being a one-size-fits-all approach. The bodies that are listed in schedule 3 are very diverse. The list includes two judicial bodies, the Judicial Appointments Board for Scotland, bodies that are structurally different, some that have been set up recently and have parliamentary links, and others that have the function of scrutinising and auditing elements of government. It seems remarkable that they should all be treated in the same way.
It would be reasonable to tidy up some bodies by order, but it is unreasonable to have a list of all the public bodies in Scotland. The bill as drafted provides for much wider powers than were available previously. You may wish to ask ministers whether the powers are needed and, if so, for what purposes. In the absence of answers to those questions, the bill remains a catch-all piece of legislation that gives people in government the powers that they might like to have in an ideal world.
Meeting suspended.
On resuming—
The members of our next panel of witnesses are all experts on public and administrative law and have been asked to comment specifically on the order-making powers in part 2 of the Public Services Reform (Scotland) Bill. I welcome Professor Chris Himsworth, professor of administrative law at the University of Edinburgh; Iain Jamieson; Aileen McHarg, senior lecturer in public law at the University of Glasgow; and Professor Alan Page, professor of public law at the University of Dundee.
The obvious answer is that primary legislation should be about important matters of principle, and subordinate legislation should be about picking up the detail. The concern about part 2 of the bill is that it ignores that dividing line, which means that subordinate legislation will end up being used as a vehicle for dealing with matters that should properly be discussed, considered and decided on by the Parliament.
Ever since I was at university, I have longed to say, "Discuss." Who wishes to contribute?
I agree with Professor Page. Any discussion of the balance of powers of legislation should start from the position that legislatures make the law and, on the whole, executives do not, except when there is good reason to give executives the power to make and change the law.
A very democratic balance here.
I endorse what the previous two speakers have said. On the balance of legislation, I would have thought that the central issue is the scope of public functions that must be dealt with by primary rather than secondary legislation. One concern that I have about the section 10 power is that it is simply not clear whether it is about rearranging the deckchairs or adding new deckchairs. It seems to me that there is some scope for augmentation of public functions, and it is clear that there is scope for deletion of public functions. That does not strike me as a matter for secondary legislation.
I entirely agree with the previous speakers but I have two other points.
We are entering very important territory here.
This point was put to a previous panel. The witnesses will be aware that the Parliament has reviewed the bodies and commissioners that it has established by statute. The Cabinet Secretary for Finance and Sustainable Growth told the Parliament in December 2008:
Not at all. I also wish to answer a question that was asked previously, about why some of the bodies are parliamentary bodies whereas others are ministerial or executive bodies. The answer is that it is an accident of history—indeed, the phrase "historical accident" crops up in the policy memorandum that is attached to the bill. It goes back to the establishment of the Scottish Information Commissioner in the Parliament's first session. The anticipated difficulty that faced the coalition Government was that MSPs such as Phil Gallie might ask how the appointed person could be independent and ensure that the Government was providing information while the Government was paying for him. How on earth could that work? Surely he would not be independent.
I cannot get this question right in my head. How can the Government just take over directions and order-making powers? Is it enough that Parliament agrees and puts the provisions into legislation? Does the Parliament, as a legal entity, have some right beyond that?
I am not sure about Parliament as a legal entity. If the Government asks for a power and the Parliament accedes to it, that is it.
Is that it?
But the Parliament might well say, "Hang on a minute, this runs counter to everything that we've been talking about."
But the Parliament, as a body, cannot—
I will put just the tiniest gloss on that. It goes back to a phrase that you used in an earlier question, Ms Fabiani, on legality. One might cast the debate in terms of constitutional propriety or legitimacy or appropriateness—that is the sort of language that Alan Page has been using when expressing his reservations about what is going on in the bill. I share those reservations absolutely.
I will add a further gloss to that. What Chris Himsworth has said is absolutely right, except that subordinate legislation has always been subject to more stringent scrutiny by the courts. Of course, UK primary legislation is not subject to scrutiny by the courts, whereas Scottish Parliament legislation is—although the hints that we have had so far suggest that it is fairly hands-off scrutiny.
Although I said earlier that it is for the Parliament to decide what powers it delegates to the Government, I agree that one of the considerations that the Parliament should have in mind is whether it is appropriate to delegate a power.
With width comes vagueness.
The power is extremely vague, and there are hardly any limitations on it. Professor Page has analysed the three preconditions, and even they are not much of a restriction on ministers.
Have the witnesses read the submission from the National Galleries of Scotland? They can be forgiven for not having done so. The submission says:
I know nothing about the legislative framework within which the National Galleries of Scotland operates but I would think that the power is wide enough to deal with awkward public bodies by abolishing them, merging them or altering the scope of their functions. The only real restrictions are the rather vague substantive preconditions that we have talked about and the procedural control that the Parliament can provide, which is far more important than the substantive preconditions. The question is whether that procedural control is strong enough to pick up every potentially abusive use of the power. I am doubtful about whether it is.
I, too, know nothing about the specific powers, but I refer the committee to Professor Page's submission, in which he says that the bill's intention seems to be that, as long as the bodies' objectives and purposes remain unchanged, everything is up for grabs. The Scottish ministers can remove functions, change functions and so on; indeed, they can do what they like.
Although it is suggested that its very existence is all the protection that an organisation needs, the National Galleries of Scotland is concerned that in its case exhibiting a very controversial work of art, sculpture or even part of a chess set might fall within the scope of ministers, which in effect would change the whole essence of the collection.
From my reading of it, the bill does not even require the National Galleries of Scotland to continue to exist, as long as some body continues to fulfil its purposes. If a set of trustees in the National Galleries of Scotland is being awkward, ministers can solve the problem by abolishing the body, setting up a new organisation and appointing some new people who they think will be more congenial and amenable to their point of view. That sounds a bit Machiavellian, but it seems to me to be possible.
It is entirely possible. I was thinking that myself.
I stress that, although the power is extremely wide, if the Parliament thinks that it serves a useful purpose in reforming the public sector—if that is, indeed, the bill's intention—the Parliament might well decide that someone has to look at how the public sector should be reformed. If it cannot do the work itself, what else can it do but delegate at least some aspect of the power to Government? However, someone has to look after the public sector. The job cannot be left to Audit Scotland, because it carries out a different kind of scrutiny.
The combination of unlimited power and politicians puts the fear of death in me.
I suspect that Aileen McHarg knows more about that issue than any of us, but the fact is that, after much discussion and debate, the power in the 2006 act was narrowed down to a provision that people were reasonably happy with.
As I was on the train this morning, it occurred to me that, to the Scottish Government, the section 13 power is a bit like the statement handbag that anyone who aspires to be taken seriously as a celebrity needs. It does not have to be pretty or functional, but it must be big. The Scottish Government has decided that if it wants to be taken seriously, it must have a really serious regulatory reform power. It is as if it is saying, "Whitehall's got the power, so we'll have it too—oh, and we'll add in this section 10 power while we're at it."
I am happy to say that I do not even know what a statement handbag is, although I have been glad of the instruction.
If that is the case, what checks and balances would you recommend?
I just would not do it in the first place. That is the problem. In my submission, I have taken a blunt approach; indeed, I suppose that you could call it a stage 1 rather than stage 2 approach. If it is agreed at stage 1 that something that is broadly along the lines of sections 10 and 13 should proceed, what sort of supervision and control over the powers is put in place will remain in the Parliament's hands, as Iain Jamieson said—the committee has had a little from me and more from my colleagues on how the approach might be improved. The notion of super-affirmative resolution procedures—as we have loosely referred to them—goes down that track. I am sure that it would not be beyond the wit of committee members and in due course the Parliament to think of further controls.
Are the witnesses in general agreement?
I agree. It does not seem that a strong case for the powers has been made. As far as I am aware, the powers that the Scottish ministers have under the Deregulation and Contracting Out Act 1994 have not been used at all, so the issue is not that ministers have tried to use the powers and found them wanting. Ministers have not used existing powers, so why do they need better powers?
In my submission, I said that the power in section 10 is so broad as to make me think that it was designed as an opening bid. Members should not disappoint ministers by accepting their opening bid.
I entirely agree, but I will add one point. I think that the powers that are conferred by section 13 could well be subsumed in the power that is conferred by section 10(1). I suspect that the reason for the inclusion of section 13 was that all the procedural provisions that attach to the section 13 power derive from the UK act. The Scottish ministers want the power in section 10(1)—the power to improve public service—and they have attached all the provisions that are precedented in the UK act but for a different purpose.
A real joy of being a member of this committee is that we have the opportunity to listen to experts. We have just heard Chris Himsworth, professor of administrative law at the University of Edinburgh, Aileen McHarg, senior lecturer in public law at the University of Glasgow's school of law, Alan Page, professor of public law at the University of Dundee and Mr Jamieson, who was adviser to the Subordinate Legislation Committee, say that the bill is basically a load of nonsense that should be sent back to ministers so that they can reflect on it. I hope that someone somewhere is taking note of that.
The member has put words into the witnesses' mouths. Do they want to respond?
Our comments were limited to part 2. We did not say anything about the rest of the bill.
That is an important point. Someone talked about timidity. No one has said that part 2 is timid; part 2 is un-timid and goes too far.
We have no more questions for the panel. Does anyone want to make a final comment?
I pointed out in my submission that the power to promote better regulation—the power to require bodies to observe certain regulatory principles—is in the 2006 act but is not reflected in the bill, which is not really about better regulation. If the Government is serious about improving the delivery of public service, that is the model that should be adopted, rather than the model in the bill.
I thank the witnesses for the depth of expertise in their contribution to the meeting.
Meeting continued in private until 16:23.