Finance Committee, 16 Dec 2003

Meeting date: Tuesday, December 16, 2003

Official Report 234KB pdf

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Local Governance (Scotland) Bill: Financial Memorandum

I open the 18th meeting of the Finance Committee in this second parliamentary session by welcoming members of the press and public. As usual, I ask that everyone switch off their pagers and mobile phones. We have received apologies from Ted Brocklebank and Fergus Ewing. Wendy Alexander and Kate Maclean have said that they will be late, but we expect them to arrive at some point.

The first item on the agenda is consideration of the financial memorandum to the Local Governance (Scotland) Bill, which was introduced by Andy Kerr on 21 November. To assist our consideration, we are joined by representatives of the Convention of Scottish Local Authorities: Pat Watters, the president of COSLA; and Anil Gupta, COSLA's policy manager. I welcome both of my former colleagues to the meeting.

Members will have received a briefing paper that has been prepared by the Scottish Parliament information centre, a copy of the bill, the policy memorandum and its explanatory notes, and submissions from COSLA and the National Association of Councillors. First, I ask Pat Watters whether he wants to make an opening statement.

I have brief opening remarks to make. First, I thank the committee for the opportunity to give evidence this morning. Although COSLA—and local government in general—agrees with the bill's overall objective of strengthening local democracy and supports its main provisions for a new system of remuneration for elected members in local government, we have a problem with the proposed changes to the voting system—in particular with the single transferable vote system.

As president of COSLA, I must point out that that view is not held unanimously in the convention; however, it is the view of the vast majority of members. Of our 31 member councils, only five or six do not support retention of the first-past-the-post system. Moreover, there are within those five or six councils varying views on which proportional voting system should be introduced. Indeed, some do not support the introduction of any proportional voting system but still want the electoral system to be changed. That said, I want to re-emphasise that although I speak for the vast majority of members, other members hold different views on the matter.

By and large, COSLA broadly supports the bill's other elements and strongly wants the provisions to be introduced. We believe that no aspect of the bill is without its problems and that each will have its costs and financial considerations. Indeed, our biggest problem will lie in a changeover to an STV system, with its associated costs and the confusion that it would cause to the general public and even to some elected members.

We are happy to back up our evidence by responding to committee members' questions.

Thank you very much. It is clear that the Finance Committee's role does not include consideration of the bill's policy aspects; rather, we are concerned purely with how its financial implications will pan out.

Do you have any comments on the financial memorandum? My initial perception is that it is very thin on specifying any likely cost implications of the bill. Given that COSLA responds routinely to a wide range of legislative proposals, does it have a view on the amount of information in the financial memorandum and on how the memorandum itself compares with the financial memoranda of other bills?

You are absolutely right to say that the memorandum is very sketchy. As with anything else, the devil will be in the detail. Obviously, additional material will be introduced later that will contain such detail. It is difficult to assess the impact of proposals for changing the voting system if we do not know about the arrangements, including when voting will take place, how long the count will take, how many elected members there will be in a particular ward and so on. All those factors will impact on costs, so we will not be able to estimate anything until we know the detail of the proposals.

The Executive reckons that it will take £1.5 million to raise the general public's awareness of the proposed changes. However, we believe that that figure is very conservative. For example, in Northern Ireland, there is still great confusion among voters and a tremendous amount of wasted ballot papers even though they have had proportional representation and an STV system there for something like 30 years. Information on how to use the system has still not got through to the public. That said, people used the system well in the recent elections for the Northern Ireland Assembly, although there was still a high percentage of spoiled ballot papers. Given that experience, it appears that a one-off education campaign would not suffice, and that that £1.5 million will probably have to be spent time after time.

Given that the Scottish Parliament elections are tied to local government elections, we would also probably have to decouple them to ensure that the numbering system had some clarity, which will in itself have considerable on-costs. According to my figures, the Scottish Parliament elections draw down about £8 million to meet the shared costs of running the polling stations, sending out ballot cards and so on. All of that would also need to be found; it is a sizeable chunk of money. I presume that the STV working group will have a view on whether there should be decoupling, but it is not unreasonable to anticipate those sorts of costs.

We also state in our submission that we anticipate that an STV count would take about four times as long as the first-past-the-post count takes. That is based on the experience in Northern Ireland. We compared the first-past-the-post system for elections to Westminster with the STV system, which members will be aware takes between one and a half and two days. That is another considerable on-cost.

There is an additional problem: if the count is spread over a longer time, it is possible to take out the counters and replace them, but management of the system would be extremely difficult because there is not a tremendous number of people who are able to oversee and run such an operation. The organisation of the count over a tight and tense period would be extremely difficult.

You are not saying that changing the electoral system is impossible, but you are saying that it is potentially costly and that it is hard to quantify the costs that are associated with STV. My experience of STV votes has been almost entirely confined to elections for membership of the senate within the university at which I previously worked. Clearly the process is much more sizeable in a local government context.

As you know, nothing is impossible in local government. Members have seen the changes that we have managed to deal with and cope with. There is a tremendous potential on-cost as a result of any change in the electoral system, but more damaging than that would be the confusion among the general public and the lack of participation that would result from that confusion. The number of spoiled ballot papers and wasted ballot papers would disenfranchise many of the electorate and prevent them from exercising their democratic right.

Who would foot the bill? The financial memorandum highlights that issue. Are you saying that the costs that are anticipated in the financial memorandum do not match the amount of money that you think would be required to make the system work effectively? If there is a gap, can you quantify what that might mean for local government services? I presume that what local authorities would have to spend over and above what the Executive gives them would have to be found out of resources that they get for other purposes.

We would expect the Executive to fund fully any change that came forward as a result of legislation that it put through. Even if there was a vast increase in costs as a result of the legislation, we would not expect the public to pay for the change through the services that we deliver; we would expect the Executive to have anticipated the cost of legislative change. You are right that the only thing that would suffer as a result of the funding's not coming forward and local government's having to meet the costs would be the service that we deliver. The general public is not particularly interested in process; they are interested in services. I would find that situation extremely difficult to deal with.

Can you give us any further detail on the gap? The Executive has given its estimate of what the cost would be of implementing the legislation. You seem to be saying that councils would, in order to make it work effectively, potentially require to spend more on administration, on the advertising that would be required to inform the public properly about the system and on other costs that you identify that have not been quantified in the financial memorandum, such as we have it.

I have been unable to get a full picture of the amount that we spent on local awareness campaigning for the previous local government election. However, evidence from three authorities indicates that there was a wide spread in what was spent. If we apply the baseline figures from Fife Council, East Renfrewshire Council and Highland Council to the general population, that produces a spend that ranges throughout Scotland from £60,000 up to well over £0.5 million. We could be cheeky and suggest that there is perhaps a need for a similar fourfold increase in the amount that the Executive suggests—from the £400,000 that was spent at the previous election up to £1.5 million—in its financial memorandum.

It is difficult to give a feel for the spending because there is such a wide range of practice. However, if the electoral system is to be successful, local interventions will be required and those will need to be funded. I am sorry that I cannot say any more at this stage about the range of spending, but it is a considerable range. That is taking into account only issues related to STV; we have not touched on remuneration issues, severance pay and so on.

We will come on to those matters.

We will talk later on about widening access.

I will pursue the point a bit further. Generally speaking, local authority chief executives or senior officers act as returning officers for local government elections and parliamentary elections. Are you aware of any concern among those people, who are independent figures, about the cost implications and the organisational issues from their point of view as opposed to that of elected representatives in local government?

We have regular discussions with the Society of Local Authority Chief Executives and Senior Managers; there are concerns about how they would manage any change to the system. They are not particularly interested in the cost because they will try to manage any system that is introduced. Complications relate to how they would manage the staffing issues that would surround any change to the voting system—chief executives have grave concerns about how they would manage the system.

I have material that the Society of Lawyers and Administrators in Scotland election committee provided to the Local Government and Transport Committee. SOLACE states that it is starting to find difficulty in getting the staff to do what is a fairly small count. To extend the length of time of the count may require additional financial incentives as well as paying staff at a rate that is at least equivalent to the current one. SOLACE is worried about that.

SOLACE is also worried about the training costs. Training for the current system is done in the hour or two before the count starts. For something as complex as STV it would be necessary to pull staff in for a separate training session, so costs would again multiply at quite a rate.

Do you have figures? In a number of local authorities—including some that are covered by my constituency—the local election count is generally done the day after the Scottish Parliament count, so there is already an all-night count followed by a morning count. Can you quantify the amount of time that an STV local government count would take, and its cost?

It is difficult to do that; the answer would depend on the size of the constituencies and the number of councillors. The experience in Northern Ireland and in the Republic of Ireland is that the count takes a day and a half to two days. That is how long it takes after they have used the system for some years. It could be that the problems that occurred in Edinburgh in the first Scottish Parliament elections might initially happen throughout Scotland.

Anil Gupta is right: it is important that we get properly trained people to do the count. The difficulty is in the number of people who would have to be trained to make the count work effectively. The current system for local government elections is simple to operate. The count for the Scottish Parliament probably takes twice as long as the count for local government elections, which you are right to say take place the next day. If the local government elections count took place the next day, that would usually be a Friday, so if the count took two or two and half days, that would take us into the Sunday. That would mean that the costs would be extremely high. Any recounts in any seat would mean that the count would go into another day.

One of the problems is that because there are so many variables it is impossible to give any meaningful figures at this stage. If we assume that the bill goes ahead, we expect the STV working group to consider the scenarios and their costings before making a recommendation that we expect to be fully funded, as Councillor Watters said.

Our concern is to bring some of the issues out into the open so that they are properly considered. At present, the local government elections and the Scottish Parliament elections are held on the same day. In most constituencies, the first-past-the-post count for the Scottish Parliament election takes place on the night after the votes were cast—the Thursday night—and the count for the list seats begins on the Friday morning.

In general, the count for local government elections takes place once the list count is completed, which could mean that that count starts at lunch time or in the early afternoon on Friday. If an STV count took significantly longer than a first-past-the-post count for local government, would the counting process stretch into Saturday or even later in some circumstances?

Yes.

One of the bill's first principles is the strengthening of local democracy. Reports from the Electoral Commission suggest that a large number of non-voters would be more likely to vote if polling stations were open on a Sunday. Many variables are involved. If we plumped for that option in the belief that it would increase turnout, additional costs would be incurred.

It is almost certain that keeping the current arrangements for voting on a Thursday would present a huge number of problems. As a result of that and the associated cost, the STV working group may well recommend that a different voting arrangement is appropriate if STV goes ahead.

If counts take place at the weekend, the issue is the cost of paying staff to work on Saturday. If voting were shifted to Sunday and counting took place on Monday and Tuesday, the issue would be the opportunity cost, because most of the council staff involved would not be doing their normal jobs, so local government would shut down until the outcome of the election was clear.

The problem is not just the length of time that a count would take. If we followed current practice and voted on a Thursday, we could not expect people who had stayed up to count until 2 or 3 in the morning to return at 8 am to undertake with any accuracy an extremely complicated count, so we would probably need new people to perform that count with the intensity, and under the scrutiny, that will be necessary for the new system. As a politician, I assure members that I would scrutinise the count closely. If counts did not take place on separate days, we would probably need additional staff to spell people, because the pressure on staff would be immense.

The problem is not just the length of time, but the increased number of staff that would be needed, because it would be unrealistic to expect the same people to undertake the whole task. If a complicated system such as STV were introduced, that would provide a strong argument for decoupling local government and Scottish Parliament elections.

I share with the convener some disappointment about the spareness of the financial memorandum, given the great change that the bill would impose on local government. The Executive should have made more effort to provide more realistic costings.

I will recap what the convener said. The experience in Dumfries and Galloway was that the local government election count could not start at the expected time after the Scottish Parliament election count, because the South of Scotland list count had not finished. I foresee considerable financial strain on the system if local government and Scottish Parliament elections continue to be held on the same day, desirable as that might be for voter turnout.

Another consequence of changing to the single transferable vote would be much larger ward areas, in particular in rural areas such as mine. Combining three or four wards on the east side of my constituency would produce a ward of a significant size for three or four councillors who would also have to travel into the regional centre to attend meetings. Do you fear that such ward sizes will add substantially to travel costs and to the costs of holding surgeries, as a result of councillors' being obliged to hold surgeries throughout a fairly large area? Would that have a knock-on effect on local government finances?

That would undoubtedly be the case—extreme problems would arise. In Elaine Murray's area, a large multicouncillor ward might be created, but in the Highland Council area, wards the size of Switzerland would be needed, although they would not be as densely populated as wards in Dumfries and Galloway. If a rural community expected elected members to attend a school board meeting, would all three councillors for the area attend? Who would go? If all the councillors for a ward were elected to serve that community, they should all attend, which would incur costs.

We can take that further by considering the islands. The smaller island communities have every right to expect democratically elected members to turn up at events on their islands such as community council meetings, meetings about planning problems and school board meetings. Would all three councillors for a ward turn up? If a ferry served an island only twice a week, how would the situation be managed? What would be the cost to the local authority or to constituents?

If four members including Elaine Murray were all councillors serving the same ward and Elaine Murray had a problem about which she wrote to me as an officer, to whom would I write back? Would I write back only to Elaine Murray, when the problem concerned someone who was also a constituent of the other three members? Would I also write back to the other three members to ensure that they were aware of the problem in their constituency?

The cost of duplication in the system would be horrendous. Costs would be incurred through travel, and elected members would incur a cost in lost time. If only one member attended a school board meeting, for instance, the result would be a lack of democratic accountability. If STV were introduced, we would have a worse system, not an improved system, and it would be more costly to run.

In the Scottish Parliament, regions are represented by many members of different political persuasions. The experience here suggests that such arrangements involve a fair degree of duplication and of people racing after issues to be the first on the bandwagon. I understand where local authorities' fear comes from.

Paragraph 61 of the financial memorandum says:

"The Scottish Executive does not therefore expect there to be significant additional costs to local authorities arising purely from the introduction of STV for local government elections."

I presume that you disagree profoundly with that statement.

The statement in the financial memorandum is naive.

We have identified some issues. Not now, but perhaps in the next two or three weeks, could COSLA give us specific estimates about matters such as the training costs associated with running an STV electoral system and the additional costs of the number of election administrators that will be required? Would COSLA and the chief executives who have to deal with the system be able to undertake an advance planning exercise? That information would be useful.

I will take that on board and I will contact SOLACE. We will try to combine some work and produce a document. The committee will understand that that will be a quick and dirty estimate rather than a factual stab at the task.

Our problem is that, as the statement that Elaine Murray read out shows, we do not have an Executive view on such costs. We need information from COSLA that would allow us to quantify the implications of STV.

The other issue, which is probably more difficult, is not to do with elections but to do with COSLA's administration when issues are raised not by a representative who is the single elected member for a ward—the system with which we are all familiar—but by a representative in a multimember ward. You highlighted transport issues that affect remote and island communities, but issues would also arise in urban areas. Have there been any local government pilot schemes—perhaps based on the experience of the Scottish Parliament's multimember scenario?

Multimember wards will be a profound change for local government. I guess that, although you deal with Scottish Parliament people at the margins, the bulk of queries that local government administrators deal with in their offices will be from councillors. Can you make any estimates based on the dual, or multilayer, problems that will be associated with having to deal with different groups of councillors? Those councillors will not be functionally demarcated. Under the old system of local government, we had functionally demarcated councillors: regional and district councillors had separate roles and functions. We are now talking about a single tier of local government but with multiple councillors, each of whom will be legitimately entitled to be properly informed about any query that affects their ward.

We can obtain detailed information on that issue for you, but I can give you examples now. I am a councillor in South Lanarkshire Council, which is in the Central Scotland constituency. Five directly elected MSPs and seven or eight list MSPs cover the area. Because we run over into the Glasgow constituency, the directly elected MSPs who represent the Rutherglen, Cambuslang and Burnside areas, and all the Glasgow list MSPs, can be involved in South Lanarkshire. The amount of correspondence that we receive from MSPs is horrendous and we continually receive correspondence on the same subject. We receive correspondence that is on business that is purely local authority business and not parliamentary business. The cost of administering that—which is not taken into account—is horrendous. I can give the committee detailed information on that. Ours is a typical example—although perhaps slightly exaggerated because the council area is in both the Central Scotland constituency and the Glasgow constituency, so list MSPs from both constituencies can feed in.

It would be useful to get some mapping of that problem.

I am keen to get back to general principles. What steps have been taken, or are planned, to learn from the Northern Ireland experience of the practical management of an STV election?

The practical management is a matter not for elected members but for electoral officers, who are the people who run the elections. The Society of Local Authority Chief Executives and Senior Managers is probably taking such steps. I am an elected member, so I would not intend to go over to Northern Ireland to see how the system operates there.

So you would expect officers to take steps.

Yes. Can I add that we keep talking about local government in the present or the past tense, but you are looking at the future? We still have the present system.

The Association of Electoral Administrators was in Northern Ireland and I presume that it will report on that and consider the different scenarios. That could fulfil your request for information.

Will the Electoral Commission be able to produce new ideas or new voting methodologies that might reduce the burden?

COSLA and the Electoral Commission had a meeting just over a month ago to consider different voting and counting methods, such as electronic counting. Electronic counting using a scanning mechanism that tries to read crosses is still undergoing trials and is still not performing terribly well. It requires people to be there as back-up. Moving that technology on to character recognition will probably mean—assuming that the legislation goes through—having a major trial in the United Kingdom for the first time in an election. There will have to be staffing back-up in case the system fails.

I am sure that Pat Watters is always welcome north of the Highland line, but that will be especially so after his eloquent description of the cost implications for rural multimember wards. Given the costs to local authorities that have large and sparsely populated wards, should the allocation of funds to such authorities be different as we move forwards into this new era.

As I said earlier, if the bill affects how we run local government, the people who pass it need to take responsibility for paying. If it costs more for Highland Council to run and administer a new system, the Executive should compensate the council. The people who elect the representatives should not be paying for the change in the system that the Executive has foisted on them. Let us remember that the public have not demanded this system.

Does COSLA agree with me that this seems to be a very poorly thought through solution to a self-imposed political problem of the Lib Dems and Labour? Pilot schemes have been mentioned. Would it not be better to have a pilot scheme in one region at the next election—three years hence—and, if it did not work, to scrap it and come up with a far better scheme?

We should avoid policy issues and focus on the financial issues.

I will try.

There are severe financial implications.

I agree with the point behind Mr Swinburne's question: this is a very easy solution to what the parties found to be a difficult problem. If we are to look into electoral systems in the UK as a whole and in Scotland in particular, we should find the best system to cover all our elections. Having different systems for every level of elections in the UK and in Scotland seems to be a very haphazard way of dealing with our democratic responsibility. Any way of taking the time and trouble to examine the effects and costs of any change would be welcome.

I could understand a change based on evidence, in which we knew what we were trying to do and trying to improve. However, saying that we will have STV simply because several hundred people responded to a consultation exercise is not the way to decide how we run a very important section of our elected government.

I look forward to COSLA supporting STV for all elections. That would be quite sensible, across the United Kingdom.

Was COSLA consulted before the Executive drew up its financial memorandum for the bill?

Not that I am aware of.

Paragraph 61 of the memorandum says that responses to consultation suggested that there could be "additional costs". I suspect that one of those responses was from COSLA. However the paragraph also says:

"no estimate of those costs was offered at this early stage."

You have not offered evidence of the potential additional costs.

There was not enough factual information on which to base any estimates. We do not know that the new system will come in, we do not know the size of the wards, and we do not know whether there will be changes to boundaries. There is a hell of a lot that we do not know. To make mad stabs in the dark would be to do what we criticise the Executive for doing. I believe that the present proposals are a mad stab in the dark.

What would be the quick and dirty information that you said you would provide to the committee?

We can consider, for instance, the potential costs of counts, if we assume that the counts would take two to two and a half days, because we know the present cost of counts and can work up from there. However, we will be guessing about the length of time that the counts will take because we do not know that. Recounts, or counts, might take three or four days—who knows?

I appreciate that there might be discussion about the length of the counts. At the previous election, the count for my constituency of Tweeddale, Ettrick and Lauderdale took 14 hours. However, the count was incompetent not because of the electoral system, but because of the way in which it was administered. The situation had a knock-on effect for my colleague Elaine Murray, who was waiting for the local authority count to begin.

Has the additional cost of the count for the 1999 election as a result of the introduction of the additional member system been quantified?

The cost probably doubled.

Can you provide information on that?

We can ask for information or a guess from SOLACE, but I am not sure how easily available that information will be to it.

Given that the new system may result in additional costs because of staff time or training requirements, I would like to know whether comparable costs arose for such requirements in advance of 1999. I am sure that there will be an argument about whether the counters or the returning officers or both need training. That information would be helpful to the committee, if it is available.

A natural source of the information would have been the Electoral Commission, but it did not exist at the time. We will see what we can find out.

The provisions on severance pay and the remuneration of councillors might have a much larger cost. Again, little has been quantified, but I presume that COSLA could have worked up several models because we know how many councillors there are and how many could benefit from the new system. A future cost could be extrapolated from that information.

Although we know that 292 councillors left local government at the previous election—which is roughly 24 per cent—we cannot use that figure as a basis for predicting the future, particularly if severance pay will be available. We do not know who would be eligible for such pay. If the system were based on a resettlement grant that was available to any councillor who was not returned for whatever reason, a range of variables would need to be met. However, as far as we understand it, the Scottish Executive proposes a one-off payment for those who choose not to stand again. Much is yet to be decided, so we cannot reasonably propose a set of assumptions that would be endorsed by the working group that is dealing with the issue.

The proposed arrangement is for councillors who choose not to stand again. Would it distort the situation if people who stood unsuccessfully for re-election were to lose out financially? Would that be a problem?

Absolutely. Local government is one elected tier of government. There are three other tiers: one is made up of our representatives here in the Scottish Parliament, the second is made up of those at Westminster and the third is made up of our MEPs in Brussels. Given that those elected members receive a resettlement allowance, why are we treated differently? We are democratically responsible to our constituents in exactly the same way as those other members are. Our constituents vote for us in exactly the same way as they do for those other members. Some might say that we have more responsibility than those other members have. For example, not many elected members take decisions involving vast amounts of money and services to their community.

I do not understand why we are to be treated differently and given a one-off payment. Why is the payment to be a severance payment rather than a resettlement allowance, which is what other elected members get? If your question is whether we should be treated in the same way as other elected members are, my answer is yes.

On remuneration, I am slightly surprised by the statement in paragraph 63 in the financial memorandum that

"it is at least theoretically possible that new arrangements could cost particular local authorities less than the current arrangements."

Is that possible? As you know, prior to being an MSP, I was a councillor and I have always felt that councillors are not adequately recompensed for their services. Are there any circumstances under which a local authority might save money under the bill?

Circumstances can be envisaged in which the new system might cost less for local authorities. If councillors were paid less than they are at present and if responsibility payments for elected members with a significant work load were reduced, the costs could, in theory, be cut. That would not be right. You are spot on when you say that councillors are not at present recompensed properly for the work that they carry out.

To reach a figure, the Kerley report took the total current cost and divided it by the number of councillors in Scotland. However, the Minister for Finance and Public Services recently told me that that is not the Scottish Executive's plan. He said that he has not adopted the Kerley proposal because he does not see the situation as a straight mathematical equation of the form: the present cost over the number of councillors equals X. That indicates to me that the Executive is looking for a system that recompenses councillors properly and that takes account of councillors who carry a significant responsibility.

Has COSLA had any discussion about an appropriate method of remuneration and pay scale for councillors?

We are happy to take part in the councillors' remuneration progress group that the Executive has set up. Our view is that the pay should be linked to that of other elected representatives—we should be paid a percentage of their pay. We are happy to discuss exactly what the percentage should be.

In answer to my earlier question, you said that you could not give figures, but you have just said that COSLA's view is that councillors pay should be a percentage of that of other elected representatives. I presume that you were referring to MSPs. Does COSLA have a view on the outcome?

No. We have not discussed whether we should have 40, 50, 60 or 75 per cent. Our point is that the pay should be linked to that of other elected representatives. We are happy to discuss the issue on the remuneration working group.

The financial memorandum states:

"Local authorities would only therefore have to find any additional costs resulting from the introduction of a new system of basic remuneration for councillors over and above the current costs of councillors' allowances."

In that context, will you clarify what additional funding you expect local authorities to receive?

I repeat that, if the bill results in additional costs, the Scottish Executive must take responsibility for that through funding. If legislative changes have an impact on costs for local government, the Executive must take responsibility for its decisions.

That point seems to be at odds with the financial memorandum, which states something different.

That issue will be debated, and perhaps argued about, somewhere else.

This is the classic role of the Finance Committee. If we assume that councillors will receive 50 per cent of MSPs' pay, is it possible to provide a range of quantification of what the additional costs might be?

To set an artificial figure would be like grabbing a handful of sand and asking how many grains were in it—we do not know. However, if you are offering 50 per cent, convener, I will consider it.

I am not in a position to offer anything.

If you want me to do that, we can find out what the costs would be, but no one has told us yet what the level will be set at, and it is difficult for us to quantify the costs if we do not know what the initial figure will be. We could have a range of options—5 per cent, 10 per cent, 20 per cent, and 30 per cent, for example—but none of them would be right unless we knew the exact figure. As I said right at the start, the devil will be in the detail, and the detail will not be known until we are told the results of all the consultations.

We have two problems. One is the point that you have just identified, which is that you do not know the exact figures for the remuneration. I understand your difficulty with that, which will need to be the object of discussion between COSLA and the Executive. The more substantive issue is that the Executive says in the financial memorandum that

"Local authorities would … have to find any additional costs resulting from the introduction of a new system of basic remuneration for councillors over and above the current costs of councillors' allowances"

but you say that it is the Executive's responsibility to fund such a system. There is obviously a difference of view, and I want to tease that out.

The Minister for Finance and Public Services was asked specifically whether the remuneration group was tied to the Kerley recommendations, and his answer was that it was not, which was why he had disregarded the Kerley proposals. If the Executive is disregarding those proposals, which were based purely on the finances that are available at present, that indicates to me that it will take responsibility for any increase in costs that results from any change that it might make. If the Executive is saying that it will not take responsibility for any change that it makes, it should not make any change.

There is certainly an issue in that, but I will push you away from remuneration and on to pensions and severance payments—we have talked about whether "severance payments" is the right name, but we will use the name that exists for the minute. The financial memorandum contains no figures for pensions and severance payments; do you have any information on the implications of different assumptions on those proposals?

Those are difficult to estimate, because we have no idea what any package would look like. As Anil Gupta said in answer to an earlier question, at the previous election, there was a 24 per cent change in elected representatives in local government. I do not know how typical that change is, but if it was mirrored in the next election, we could be looking at a change of between 0 and 25 per cent of councillors. However, if the new voting system was introduced, we could be looking at a far higher change. The costs would therefore be dependent on the level of compensation and the number of people who were leaving local government. We have no idea of either of those figures, so we would have to stab at them, and our estimate would be extremely rough.

I am unaware of what the impact of pensions would be. Anil Gupta might have figures on that.

I do not, but I will repeat a point that professional organisations in local government have raised. There is a view that, rather than be dated from the start of the new remuneration arrangements as is proposed, the pensions should be retrospective, which would clearly require that a significant sum of money be put into a pool to fund it, and that such pensions should also count the total time served to allow for councillors having breaks, perhaps for care responsibilities, which would also require a big sum of money that is difficult to quantify at present.

On severance, there is potentially a perverse incentive that would not achieve the aim of strengthening local governance: if we make one-off payments because of the advent of the new electoral arrangements, we might lose even more senior people than we would do if they could stand and still be eligible for severance payments. Does that make sense?

Yes. It might be useful to get one or two facts on the record for background. As I understand it, the current arrangement in local government is that councillors receive no pension, so the introduction of a pension system is proposed, but that system is linked to the introduction of a new remuneration arrangement. Are the implications clear for people who, like you, Pat Watters, have been in local government for a long time?

No, they are not. We are uncertain as to what proposals will come out of the remuneration group. I do not speak from self-interest, although I have been a councillor for quite some time. I did not have any grey hair when I was first elected—in fact, my hair is not grey now; my daughter tells me that it is only a very light black, but she is my only daughter. However, we believe that people who have served a long time in local government are due pensions, because it is wrong for elected members in local government not to be compensated and pensioned. When we elected the Scottish Parliament, one of the first things to be considered was the remuneration package. We did not say, "They're no MPs, so we cannae give them pensions."

Not long ago, I went to the retirement do of a colleague who had been a councillor for 47 years. He walked away from being an elected representative with nothing except a long-service award from the party that he represented in local government for 47 years. When he was first a councillor, there was no payment for councillors. Not only did he suffer as a result of that, but his family suffered, and his pension was affected because of the time that he had to take off work. During those 47 years, he brought up seven kids, lost his wife and still continued to be an elected member, because he believed that it was right to do that, not because of what he was getting out of it, which was nearly nothing as a result of the damage that he had taken over the years.

That cannot be right in any society, and that service must be recognised. That chap served his community for 47 years. There is hardly a building in that community that he did not play a part in securing for the community, and there is hardly a person in the community whom he did not help at some point over the years. He has gone now, but what happened to him should not be the example for the years to come.

I will pursue the other end of the spectrum: trying to recruit people to stand for local government. That is a cross-party issue, because all political parties experience more difficulty in finding people who are willing to stand for local government than they did in past years. That is partly to do with the level of remuneration, partly to do with the changes in the job, partly to do with employers' greater unwillingness to allow councillors the necessary time off work and partly to do with the implications that being in local government has for councillors' other forms of employment. Has the introduction of a new form of remuneration that would safeguard local government and encourage more people, and perhaps a broader range of people, to enter local government been considered rationally in terms of mapping out how that would be done and what it would cost to achieve?

It has not. The provisions in the bill to widen access have support across the board in the Parliament and in councils throughout Scotland, because it is recognised that we need to attract young people into local government. At present, why would they come into local government? Why would someone damage their career to serve in local government? Their present career is not the only issue. They would also have to take time off, and we should remember that a high percentage of the councillors who are elected at present have employment elsewhere. They have to have employment elsewhere to allow them to continue to serve their local communities. By having to take time off, not only do they damage themselves and their future promotion prospects, but any time lost means money lost and, if money is lost, pension entitlement is damaged, so their long-term future is also damaged.

I have had colleagues who have left local government when they should have stayed in it because, when they came to their final year in employment, they could not afford the loss of earnings that would result from staying in local government. It is a sad loss that talented, able people have to leave because of the future problems that serving their community would cause them. If we do not get that right, we will not attract the right people into local government—people who have ability and want to drive things forward. If that is not done right, it will continue to be the people who can find the time who become councillors. I am not saying that those people do not do a good job. They do a good job, but we need to get the situation right in order to attract new blood.

Many people who are councillors have employers who cannot afford to give them time off. It is not the fault of the employer; it is the fault of the system in which we are operating. We need some way of compensating for that. I am not saying that every councillor should be full-time—far from it—but I assure you that not every councillor is part-time. It is either that or I am doing the early shift.

I would like to return to pensions. Anil Gupta said that COSLA's position is that the pension should be retrospective. Are you saying that that should be the case for all pensioners who have ever served before, or just for those who are still serving in 2007?

It would have to be for people who are still serving.

That means that our mutual colleague who served for 47 years would not benefit, whereas other people who have served shorter periods of time but who happen still to be in office would benefit, so there would still be inequalities. Can you put a figure—even a ballpark figure—on financing the provision of pensions retrospectively rather than commencing with the new regime?

That is the level of detail that the working group would have to go into. It would have to carry out a comprehensive survey of members to find out how long they have been in service. Similar information would also be required if we were to have something approaching a resettlement grant; we would need to know how long elected members had been serving their communities. We cannot give an estimate without the detailed work having taken place.

Given the potential severance and pension payments, should steps be taken to avoid an excessive exodus of skilled and experienced councillors from certain local authorities?

That is difficult to manage. It is a bit like local government reorganisation in 1995-96, when we saw a tremendous number of skilled, able people leaving local government because they had the opportunity and the financial ability to do so. We are currently suffering as a result of that, as we have fewer people progressing through councils.

Looking at the present age profile of local government officers, we see that we will hit a real problem with progression planning in about four or five years' time, and we are taking steps now to deal with that. It is difficult to do that for elected members, because they gain experience as time goes on and their ability to deal with committees and issues gets better as they get more experienced. How can we replace that? We need to come up with an extremely good educational programme for people coming into local government, which is another added expense. We probably do not do that at present as well as we should, and we must consider a more intensive programme in future. It would be extremely difficult to say to someone, "No, I'm sorry. You can't retire because we need you." We cannot force people to stand.

I understand that, but what you say exposes a backlash against the policy. If the policy is implemented, there is a danger that local authorities could be denuded of really skilled people.

Yes.

It strikes me that that could be a self-inflicted wound unless we can do something about it. The private sector has the sanction of saying, "There are only so many people who can take the package and go in this fiscal year." Given that we are talking about a four-year cycle, that could be painful. I am struggling to come up with an answer, as I suspect you are too. Could we face a major diminution in the potency of local government after the policy is implemented?

It would all depend on the number of people who decided to take the package, and that would depend on how attractive the package was. The two things are linked. There is a desire to see new people coming into local government to revitalise it, so people will gain experience as they come through. We need to balance that with the loss of experience of people going out, but it is extremely difficult to say how many that would be, because there are so many variables. There is a desire to see a new, younger element in local government, so that there are vibrant people involved. I came into local government because I had a strong desire to get involved politically. That same strong desire does not exist when people are considering their career prospects and responsibilities. My family were grown up when I entered local government and I did not have a responsibility.

If the working group were to strike the right balance between the remuneration of existing working councillors and the severance and pension payments for those who are currently in harness and different terms and conditions for those who will receive a remuneration package, would that make it attractive for people to maintain their connection and keep their skills in action for longer?

If the right balance were struck, yes. We would have to make it less attractive for people to go.

I have one further question on remuneration. What changing work pattern would you expect to see in the new, remunerated climate?

After reorganisation, many authorities gave elected members not a contract of employment but a job description, saying how they were to carry out their functions. Much of that was to do with members' relationship with officers and how to deal with them. Some elected members come in and think that they are the elected member and the officer. If that were the case, local government would be a lot cheaper to run, but it is not the case. We are not officers. We have officers because of their specific expertise. I would expect every elected member to have a job description, setting out how they are to carry out their functions and what is expected of them as an elected representative. It would not be right for people to have to accept that before they became elected representatives, because of the voluntary nature of standing, but if people do stand, they have to accept that there are duties and responsibilities. We should expect those to be written down, and people should be expected to carry out the duties in the job description, as a minimum.

In a new, better documented, more formal climate, what benefits would accrue to council taxpayers and local government officials?

People would know what is expected of their elected representatives, so they would probably be more willing to demand that of them, although there is no unwillingness at present.

I should say that elected representatives at local government level are no different from elected representatives in the Scottish Parliament or anywhere else. There will be extremely good councillors, dedicated councillors and councillors who carry out their functions adequately. At the other end of the scale, there will be councillors who are just rolling along. With respect, in the Scottish Parliament, too, there will be extremely dedicated and hard-working MSPs, and there will be MSPs who are just rolling along. It is the same in all walks of life, and councillors are no different from people in any other forum in society—there will be extremely good councillors and extremely bad councillors. However, I would expect every councillor to perform a minimum role of representing their electorate in the council chamber. I would expect them to be able to deal with complaints and problems when people come to them and to fight for those whom they have been elected to represent.

I think also that every body of elected representatives has its own Stakhanovite who claims to be doing more than anybody else.

The committee will challenge the Executive on the lack of information in the financial memorandum and on the assumptions that are made where information is given. To an extent, the committee has the same problem as we had last week, when COSLA was unable to give us more detailed information on areas on which, in my view, it should have a view.

For example, the witnesses have given evidence to the committee on the pensions system, but that has not been quantified, so we have great difficulty in going back to ministers to challenge them on what the potential could be for that system. The National Association of Councillors has said that it would prefer councillors to have a payment rate of 50 per cent of MSPs' salary, which can be costed, but COSLA has not made such a proposal. Also, I would have thought that COSLA would have information on how the last big change affected local authorities.

I hope that COSLA will be able to provide some of that information in writing. We need more information if we are to challenge ministers on the financial memorandum.

With absolute respect, as you freely admit, the information that is supplied in the bill is extremely sketchy—to the point of being sparse—so it is difficult for us to deal with. Secondary legislation will add the detail, yet you expect local government to do the work. We believe that someone who is passing a bill should know what the effect and the cost of the bill will be.

Indeed, Mr Watters—

It is pronounced "waters".

Indeed, Mr Watters, those are questions that we will want to ask ministers, but we need help.

I accept that, and we will give you all the help that we can. Do not blame us for inadequacies somewhere else. We are in exactly the same position as you in having vagaries, ifs, buts and maybes to work with. For us to come up with figures and a logical argument for something that we believe is illogical would be impossible.

Is it the financial side that is illogical?

The financial side is illogical in the sense that, first, as we have no idea about the level of payment that will be offered to councillors, we cannot quantify what the cost will be. Secondly, we do not know how many people will leave local government, and it is extremely difficult to give a figure for the cost of that, as we do not know all the variables that exist. It is extremely difficult for local government to give the figures. What we know is that costs will increase as a result of the bill and the Executive should bear those because it has introduced the bill.

My point is that you have a view on pensions but not on salary.

We are quite clear on salary. We believe that any payment for elected representatives must be linked to what exists at present. No view was taken on MSPs' salary before their election, but it was decided that it would be linked to MPs' salary. We think that councillors' salary should be linked to MSPs' salary in exactly the same way that MSPs' salary was linked to MPs' salary when the Parliament came into being. Initially, the link was not an exact percentage—that was discussed after the Parliament was elected. We believe that the same should happen in respect of councillors' salary. Our salary and severance payment should be linked to the salaries and severance payments of other elected representatives. That is not rocket science; it is what happens at present. The figures have been worked out for MPs, MSPs and MEPs. They are all elected representatives and so are we.

We are going round in circles a wee bit. There is a difference between the evidence that we are hearing this week and what we heard last week. Last week, I thought that the information that we got from the witnesses was not what we had a right to expect in response to a fairly well worked-out financial memorandum. This week, it is probably fair for COSLA to say—as we have said—that the financial memorandum is sketchy. I understand the difficulties that COSLA has in that context.

You have talked about how the job description of a councillor should be linked to existing systems of remuneration with a clear articulation of a councillor's roles and responsibilities. The main change that will take place as a result of the bill will be in the nature of the job that a councillor is expected to do. At present, a councillor in a single-member ward has responsibility for the people who elect him or her. Depending on where the ward is, that may be up to 6,000 voters. The largest wards are in Glasgow, and the numbers vary between local authorities. Inevitably, as we move to a multi-member ward arrangement, the ward size could increase to around 20,000 to 25,000 voters. That is not inconceivable, as the regional wards in the former Strathclyde Regional Council held around 20,000 voters. The nature of the job will change distinctly if a councillor is responsible for all functions and an electorate of 20,000 to 25,000 voters, each of whom can call individually on the councillor's services.

The nature of the job will change with regard to what elected representatives might be required to do and the number of people who will be able to call on their services. Has there been any quantification of that at local government level or consideration of what that might mean for the number of calls that an elected member might receive and how many community meetings a councillor might be expected to attend? From my experience of local government, I know that representing a 6,000-voter ward was very different from representing a 20,000-voter ward, in terms of the number of times a week that I had to be out in the evenings. Wards vary from place to place because of their social composition. Are people being asked to do a manageable job?

I am probably better placed than most to answer that question because, as a regional councillor, I had the biggest electoral ward in the United Kingdom, with an electorate of nearly 25,000 people in Murray/Avondale. In that electoral ward, there were six secondary schools, 17 primary schools, 13 community councils and various other groups, including art groups, all over the place. Did I serve that community well? I served it to the best of my ability and I believe that I was a good councillor. I tried to tackle as many of the problems and to attend as many of the meetings as possible. However, in retrospect, I see that what I did was butterfly. I would attend two community councils a night, and that is not right. I would attend perhaps three meetings in one night, spending half an hour at each of them.

My ward was extremely big and I had to travel from Busby, at one side, to the border of Kilmarnock and Loudoun at the other side. At some point, my ward probably also shared a border with Elaine Murray's constituency. I butterflied on a lot of the issues and that is what would happen in a ward of that size. With three to four elected members in one ward, it would be a silly elected member who thought that he or she could ignore certain parts of the ward. He or she could be assured that his or her colleagues—who might or might not be of the same political persuasion—would not ignore those parts. The level of work would increase tremendously, as councillors would feel that they had to attend everything that had been organised in their ward. If they did so, they would not do anything properly.

I can add to the point that you made about going to three or four meetings a night. I had the same experience when I was an elected member on Strathclyde Regional Council. One attended meetings, not as a party representative, but as the responsible councillor for the area. Much of what one did was to supply people with technical information about how to go about getting grants or to report on what had happened in the council chamber or whatever.

In that context, one was directly accountable. One of the things that interests me about the proposed arrangement is that we could see three or four people coming to meetings, each of whom could have a different party standpoint. Community councils could end up getting a rerun of the political issues in the council chamber, which might not be what they want. Does COSLA have a view on that?

That could certainly be the case. I had six district council colleagues in one ward, not all of whom were of my party persuasion. I had a full range of colleagues: a Conservative colleague in Strathaven; an independent colleague in Busby; a Scottish National Party colleague in East Kilbride; and Labour colleagues, also in East Kilbride. I remember one rip-roaring debate at a community council meeting about the effect that deregulation of buses could have on a rural community. The argument that I made at the time was that deregulation would badly affect the community. Of course, today, it does not have any buses.

I see no difficulty whatever in councillors representing the people who elected them. I am a list MSP for Central Scotland. I was elected by 8 per cent of the population right across the board in the region. The Scottish Parliament's system of proportional representation system gave a voice to 8 per cent of people in the Central Scotland region who were disfranchised by the previous system—the people who were voted in before had no particular interest in pensioners.

I understand the argument. However, I have now stood in seven elections and every time I have been elected, I have represented my whole community—not only the people who voted for me but everybody in the community, even the people who did not vote. When people come to see me at a surgery or when I go to community council meetings, I do not question people on whether they voted for another party or even at all. I am elected to represent the whole of my community and not part of it.

Okay. On behalf of the committee, I thank you for your evidence, which has been very useful to us. As we indicated, we will speak to the Executive in due course. I wonder whether we might want to invite the returning officers with an invitation to SOLACE. It would be helpful if you could liaise with them on the additional written information that COSLA is to give us. It might be useful for us to take advice from the returning officers if we can fit an evidence-taking session into our schedule. I suspend the meeting for five minutes.

Meeting suspended.

On resuming—