I open the second meeting of the Finance Committee in 2005. I welcome the press and public and remind members to switch off all pagers and mobile phones. We have apologies from Jim Mather and Elaine Murray, who are delayed by the weather. I suspect that Wendy Alexander might be in the same position. I hope that they will be able to join us soon.
We are pleased to contribute to the Finance Committee's review of the financial implications of the Charities and Trustee Investment (Scotland) Bill and I thank the committee for the opportunity to speak to members this morning.
Thank you. In opening our questions, I put to one side the question of the cost to charities, on which you ended your statement, and return to the other comments that you made about light-touch regulation. As you know, I was a member of the Kemp commission in the mid-1990s. The work that we did then, on which Jean McFadden built in her review of charity law, envisaged a much less ornate system of regulation than what the Executive proposes. You seem to echo that in saying that you would prefer a light touch to be taken. Are we in danger of dealing with what is a real but nonetheless limited problem of charities that operate in unacceptable ways by introducing an inappropriate and unduly onerous system for regulation of the overwhelming majority of charities that work effectively?
Our view is that the regulator that the bill proposes has all the right elements and is the right recipe for the regulator that we want. Critically, those elements include a new register that is transparent and publicly accessible.
You commented on the increase in OSCR's budget. Do you believe that there is an imbalance there and that the expansion of the budget is not justified by what you see as OSCR's appropriate functions? Might the increase be an indication of an orientation towards too much bureaucracy?
The SCVO and the rest of the voluntary sector have lacked a detailed understanding of OSCR's plans for itself. We have the supplementary evidence that has been provided this morning and a consultant's report about the resources that OSCR requires. I do not know about committee members, but I find that less than helpful for understanding what OSCR proposes to do. All that has been published is the corporate plan for OSCR 1, which is the interim regulator until the bill is enacted.
If OSCR is to fulfil all the regulatory functions—with which you say you do not disagree—it will require an appropriate budget and appropriate staffing for that. Have you formed a judgment about whether the budget is correct and can be justified by the functions? Does uncertainty remain?
As I just said, without a detailed understanding of what OSCR plans to do to respond to the bill's requirements, it is difficult for anybody external to take a view on whether the figure that it has reached is appropriate. Our sense is that the figure is on the high side. We had always expected the scale of OSCR's operation to be streamlined and OSCR to work with the grain of how the voluntary sector and charities operate in Scotland rather than be a Big Brother-style regulator. The sector must deal with much regulation for a series of reasons to do with the new Scottish Commission for the Regulation of Care, health and safety, employment and all the rest of it. We would like a regulator that helps the sector to work with all those other regulators rather than providing an additional burden.
Are there any lessons to learn from Disclosure Scotland, the requirements that relate to it and the mechanism that Disclosure Scotland uses to police that system of reporting and monitoring?
There are clear lessons to learn. Disclosure Scotland imposes just one of the regulatory burdens that voluntary organisations face. Combined with other burdens, that is causing organisations many problems with concentrating their resources on what they are supposed to do, which is working with people and supporting communities, rather than filling in forms.
Given that the purpose of such regulation is to prevent charitable funds from being used inappropriately, misused or misappropriated and given your perception of whatever problem the bill is intended to address, how much money would it be worth spending on the measures?
It is worth spending the right amount of money in the right ways. Our concern is that the money is being focused on establishing an institution—a regulator—rather than on giving proper consideration to the resources that are required to help individual charity trustees. Many of us in the room may be trustees. People throughout communities in Scotland take on that very responsible job. Such individuals should benefit from the resources that are available through the reform to obtain the advice, training and support that they need to do their job better.
The point that I am trying to get at is that the bill is intended to fix a perceived or potential problem. The resources that are put into that must be proportional to the perceived size of the potential or real problem. I am trying to get a feel for that.
The problem is viewed differently from different perspectives. The immediate cause of the bill's introduction was perceived to be one big scandal, but the sector has campaigned for charity law reform for 10 years. Reform is about not just the big scandals that break but the support and framework that trustees and charities need in order to flourish and do more. That is a big problem that nobody has ever quantified in cash terms. It would not necessarily be helpful to do so.
Did you say that you were not clear about the reasons for the costs and for their projected rise?
The only information that we have is the information that is in front of the committee, which is from a consultant's report.
Table 1.1 in OSCR's evidence to us seems straightforward about how costs reach £2.1 million. After a new regulator has been established, its use is inevitable. As with any ombudsman or anything else, when citizens realise that they have an opportunity to use an independent or regulator voice, they will take it. It is fairly straightforward to build in increased capacity in the next two or three years to allow OSCR to settle. What in the costs in table 1.1 and the projected increase in workload is unreasonable and does not follow the streamlined model? The costs in the table do not necessarily imply a huge organisation.
I understand that those figures do not represent the final expenditure on OSCR and that the budget has increased—in fact, it has almost doubled. We have not seen the information to justify almost doubling expenditure.
You will have seen the evidence from the Scottish Federation of Housing Associations, which does not say that its members will incur major cost. The federation is right to say that its member organisations' income comes from tenants' rents. All of us have housing associations in our areas and want none of their income to be depleted. The SFHA did not highlight a serious concern about the cost on its organisations. Is it not the case that what the bill will require of charities is what they should be doing already? Few charities do not have continuing training or awareness raising, anyway.
We need to be clear about the distinction between the two questions to which the people who gave evidence responded. One aspect is the notional figure of £2,000 as a direct cost to charities. We understand that that is to cover matters such as reprinting stationery to comply with new regulation. Of course such costs will exist, but they are not the important costs. Stationery must be reprinted in due course in any case. Charities entirely expect to absorb such direct costs, which are what the SFHA referred to.
Do you know what the current expenditure is on training and development for trustees and charity workers? Is that information captured?
It is not captured in its entirety. We should be clear that the training that is provided for organisations is specific to the nature of their business. The councils for voluntary services and SCVO deliver the only training that is supplied routinely to charity trustees.
What does that cost?
I can help on the councils for voluntary services. The Executive currently supports the CVS network with £2.5 million per annum. The overall income of the network, which includes contributions from local government, lottery funding and trusts, amounted to about £14 million in 2003-04.
Do you agree that charitable organisations are caught between a rock and a hard place? On the one hand, they try to deliver public accountability for the moneys that they receive and a comprehensive programme of good governance, while on the other hand, the public perception of charities means that people are slightly reluctant to put a pound coin in a can because they do not know what percentage of it will go to the worthy cause to which they are donating. I have read screeds of submissions from various organisations, but no one has yet quantified the ideal figure or percentage in the pound, or a figure below which we can say that a charity is not doing its job. Would that be a good way of measuring charitable organisations' efficiency and delivery of charitable work?
You are absolutely right that charities are caught between a rock and a hard place in trying to achieve public accountability and do their job right. Of course they want to invest time and resources in being open to the public so that their supporters and the people whom they serve understand what they do, but they also want to maximise the resources that go to the services that they provide. However, the idea of an ideal figure or percentage, above which an organisation would be seen to be working efficiently or effectively, is not helpful. Given that the percentages of money that organisations need to spend on direct delivery of services and on central services vary radically from organisation to organisation and from year to year depending on the effectiveness of their fundraising, it is simply not possible to come up with an ideal figure.
Will the bill impinge on the amount of charitable work that bodies will be able to do as a result of the costs of accountancy and investigation into whether the moneys that are received are spent properly?
Our point is that the bill and the proposed reforms will not necessarily mean that charities will be hampered or have to divert resources away from the front line. However, OSCR's operation in practice, the implementation of annual returns systems and the collection of information from charities may have such an effect. We want to ensure that the balance is absolutely right and that the new regulator works in sympathy with, or with the grain of, the way in which charities operate rather than providing a new set of issues for them to deal with.
No one has ever answered my question about the ideal amount or percentage in the pound that should go to the cause for which it is intended. What would be the minimum amount below which we could not countenance an organisation being called a charity? Would that be 2p, 10p or 20p in the pound?
Lucy McTernan has already answered that question.
Not to my satisfaction.
No, but she has responded.
The SCVO presentation seems to contain a paradox, in as much as while you broadly welcome OSCR's regulatory function, at another level you are saying that you want a lighter touch. You want a lighter touch, but you also seek more money to make the system work. Do you accept that that is a bit of a paradox?
I do not accept that it is a paradox. Our point is that the devil will be in the detail. The SCVO and the wider voluntary sector support the bill because it has the elements of a new regulatory regime that we require. However, that regime can be delivered in a number of ways and we are trying to discourage the regulator from becoming over-enthusiastic about its needs and in the information requirements that it makes of charities. We want to keep the implementation at the right pitch so that the balance is correct over time. Charities must be actively encouraged and be able to make the most of the new regulatory system rather than find that it inhibits them.
Correct me if I am wrong, but if I understand your figures, you believe that the estimate of £150,000 for training seminars is insufficient and that the minimum that will be required in the first year is £500,000. Is that correct?
That is our suggested figure. The Executive's figure in the financial memorandum seems to be based on the suggestion that 3,000 individuals in Scotland should receive training, but that is not even close to one trustee per charity that operates. The amount is simply insufficient. We need a focus on the number of people who are in that position of great responsibility in the charitable sector, because they will have to adjust to and learn about a new set of regulations and issues in the years to come.
As you are aware, about 67 per cent of charities in Scotland have an annual income of less than £25,000. In those circumstances, is the £2,000 one-off administration charge acceptable for such charities, which make up almost 70 per cent of Scottish charities?
I am aware of the figures on charities' incomes—they are produced by the SCVO. The figure of £2,000 in the financial memorandum is the Executive's estimate of what it would cost to reprint stationery and so on; it is not a proposed fee to be paid to OSCR. Undoubtedly, adjusting to the new system will create an administrative cost for charities but, as I said, that cost would exist over time anyway. As long as the system can be implemented with common sense, charities are prepared to absorb the costs.
Do you mean even the charities that have an income of less than £25,000 a year?
It is unlikely that those small organisations will incur anything like £2,000 in direct costs of that kind.
I want to pick up on Ted Brocklebank's point about the large number of small charities. Do we need the same system of regulation for all charitable organisations or should we use a very light touch with small charities that have limited budgets and reserve more developed systems of regulation for larger charities? Might that be a more appropriate system than the one that is proposed in the bill?
Absolutely. That is how the discussion around OSCR's initial plans for monitoring has gone. We are delighted that OSCR has chosen to issue only a very basic annual return form to organisations that have a small income. We hope that that approach will continue over the piece because it is unhelpful to small organisations to be compared with those that are many times their size. It is a matter of providing different information and of horses for courses. However, the SCVO considers it important for the purposes of transparency and public accountability that every charity that operates in Scotland—at least in the first years of the new regime—should be on the register, unlike in England, where some small organisations do not have to register.
If the process of regulation for smaller charities is a matter of filling in a form and providing basic information about what the charity does, will we need training for every charitable trustee in Scotland? Do we need to estimate cost on the basis of providing such training?
Filling in the form is about providing information, but the bill will change trustees' responsibilities, and the SCVO thinks that it is fundamental that all people in Scotland who operate with those responsibilities understand them. The bill's implementation will also provide a tremendous opportunity to broaden training from strict compliance with the letter of the law to addressing the underlying issues of good governance and good practice in the voluntary sector. The two matters could be combined, which would enable us to broaden the discussion out from what the bill says to include the range of governance issues that could do with being refreshed across the sector, such as how trustees work with their communities, how they respond to the needs of their users and how they spend their money efficiently. That is the broader context in which we would like training on compliance with the bill to be placed.
I should declare an interest. I am a director of two charitable organisations: the Wise Group and the Tron Theatre Company in Glasgow. I have had other roles in and with charitable organisations. In such a role, the issues of greatest concern are one's fiscal responsibilities as a director of a company; they are not really to do with the regulation of a charity. The argument that you are making is not narrowly about the implications of the charity regulation system that is being introduced, but about the position of the directors of charities as directors.
That is very much the point; our argument is about governance overall. The current legislation says that trustees are in management and control. That of course refers to money, organisations' wider resources and assets, staff—if there are any—and volunteers, and, critically, the users of organisations' services. Trustees have responsibilities in all those areas. We are talking about giving trustees a deep understanding of their responsibilities in a way that is not scary—we do not want to frighten people away from such responsibilities—rather than just telling them what forms they need to fill in and what information they have to collect over the year.
Will you comment on the supplementary evidence that we received from Anne Swarbrick, which I think you have seen? In paragraphs 2.1 to 2.7 of her evidence, Anne Swarbrick mentions issues in respect of differences between the proposed Scottish approach and the proposed Westminster approach. She says that the existence of different regimes and tests in Scotland might be a problem for charities that operate across the two jurisdictions. I would be interested to hear your comments on that.
There are two different regimes at the moment, so the reform will not change that. If anything, it will bring the two regimes closer together. We are pleased that a public benefit test will be introduced in England and Wales; the idea was pioneered in Scotland as a more modern approach to the understanding of charity that allows the public to understand what charity means and makes the legal definition of charity reflect more closely how people understand it in general terms. We are pleased that the English and Welsh bill has the same basis; that will bring the two definitional frameworks closer together. There will, of course, continue to be changes, but we do not anticipate that they will be anywhere near as large as some people have suggested.
I return to training. I do not think that I got an answer to my question about whether you know how much money is spent on training at the moment. I think that Mr White mentioned the funding that you get through various sources from the public sector. Does that total £14 million or is it £14 million plus the £2.5 million from the Scottish Executive?
The amount totals £14 million. To answer your question, we do not know exactly how much is spent on training. The council for voluntary service network's new core functions cover six different areas, two of which are providing support services and promoting good practice in the sector. Unfortunately, I do not have a breakdown at the moment of how much of the CVSs' overall income is spent directly on training.
I would have thought that such a breakdown would be helpful. Lucy McTernan commented on the third section of your submission, which is headed "Ensuring good governance" and with which I agree entirely. It is interesting that you do not have a base figure for your activities in supporting organisations. If you did, the committee could be more confident that your estimate of, for example, £500,000 for training is more accurate than the Scottish Executive's estimate of £150,000. You are saying that the Executive cannot base its figure on anything because of a lack of evidence, but it could be asked of you where the evidence of your experience is if you do not capture it yourselves.
Our calculations are based on our understanding of the number of charities and trustees in Scotland and our experience of providing basic information and guidance materials through to delivering proper training courses. We would look to roll out a programme that would provide a basic set of information to all trustees in Scotland. We already publish a pamphlet called "In Management and Control", which provides the basic information that any person needs when he or she takes on the responsibility of a trustee. We hope that such information—refreshed in the new context, obviously—would go out to all trustees and would be supplemented by making training courses available in each local council of voluntary services area at least annually.
It is the case that you are not capturing all that information at the moment, is it not? Within your own work, information on training and education is not captured.
It is difficult to put it like that. We have done research throughout the sector to identify what training budgets voluntary organisations have, but beyond the infrastructure bodies—the SCVO and the CVSs—that provide support specifically on governance and charity law, most training budgets are devoted to training on professional practice, such as child care regulations or new information on employment law. We can provide the sector's expenditure on training in general. The figures that Paul White provided on the resources that go through the CVS network are the nearest that you will get to the resources that are invested in supporting charities to be charities. We are saying that that work needs to continue and that it needs to be supplemented, at least for the first few years of the new regime, to take account of the new requirements on trustees and to take the opportunity for a step change in governance of the sector.
In the third section of your submission, you say that you have identified
That is probably fair. Our point is that the investment needs to be made in good governance and on-going training rather than in creation of new information-collection systems.
Would such investment be over and above the £14 million?
We estimate that the annual cost, which would taper off over a number of years, would be £500,000 for development of supplementary new materials and training in light of the new legislation. Our proposal would be both effective and cost-effective as it would not involve starting afresh with a brand new system of training and resources.
Sure. However, is it fair to say that the cost of that would come on top of the £14 million?
Yes. That would allow us to respond to the new legislation.
I want to clarify the response that was given to the earlier question on Anne Swarbrick's submission. Anne Swarbrick claims that the differences in approach to case law between the Scottish bill and the proposed English legislation might have a significant impact on charities. Do you share that view or do you totally disagree with it?
There will be an impact on organisations that operate cross-border, because they will be required to comply with the charitable definitions both north and south of the border. However, relatively few organisations in that category will be affected. We disagree with Anne Swarbrick that the problem is as big as she and others have made out. I think that, in practice, the threats to existing charities are not as they have been portrayed; the vast majority of existing charities will move on to the new register and will fit into the new system quite smoothly. There will be issues only for organisations at the edges that are unable to demonstrate from the word go that they provide a public benefit.
What is Anne Swarbrick worried about that you are less anxious about?
I am afraid that I do not understand the depth of concern that she expressed in her evidence.
The committee finds itself in a bit of a dilemma when the experts disagree. The most worrying aspect of Anne Swarbrick's written evidence is paragraph 2.6, which states:
The committee must focus on cost, but I think that few costs will fall on the charitable sector because of the new definition of charity, which will be based on the concept of public benefit. Some organisations that currently enjoy charitable status will have difficulty in proving their public benefit; those organisations will be affected. However, the number of such organisations over time will become far fewer than people have suggested. The reason why I do not understand Anne Swarbrick's evidence to the committee is that I am not sure that it can be demonstrated—excluding organisations that operate on both sides of the border—that charities in Scotland will incur additional costs compared to charities in England.
I will return to training. I am intrigued that the SCVO thinks that the new training requirements might be in the region of £500,000. Would that involve the SCVO retiring, or replacing, elements of existing training?
No—an expanded and extended programme of training in good governance should be delivered to Scotland's voluntary sector. Such training could be delivered in part by the SCVO, which would be at the centre because of our track record, but more important is that support could be delivered to grass-roots organisations through the national CVS network.
I understand that. However, commercial training organisations have an on-going programme whereby new courses come on stream and old courses die or atrophy. Could the challenge of the new training not be funded within that £14 million budget?
That is a fair question, but we should be clear about the £14 million that the CVS network attracts. Each organisation in the network is independent. In addition to the funding that they receive from the Executive, the organisations make every effort to raise income from a range of other sources. Much of that income, such as lottery money, is project based and requires specific activities to be undertaken in return. Therefore, much of the money is already ring fenced.
If the £500,000 was made available, what would that mean in practical terms? What additional resources would be acquired?
There would be two elements. The SCVO would look to develop an in-depth governance programme that would set the tone at national level for what the sector requires. At local level, we would look to the network of councils for voluntary service to deliver conferences and good-practice events in communities throughout Scotland. More important, once those had taken place, the councils for voluntary service would then be in a position to provide on-going advice and guidance for trustees who find themselves with dilemmas or who are uncertain about the new regulations. That is pretty much where we are coming from.
There is a sense in which the SCVO has a vested interest in the proposal. To paraphrase Mandy Rice-Davies: you would say that, wouldn't you? It strikes me that some organisations, such as housing associations, would not approach the SCVO for such training because they have governance programmes of their own. Some of the bigger charities, such as Wise Group or Barnardo's, are probably capable of delivering such training for themselves. The real issue, I suppose, is which subset of the voluntary sector will require such training from the CVS network. Should such training on governance be provided in addition to, and build on, current provision as you suggested, or should it be provided in the context of a reappraisal of the services that are currently funded and delivered? In a sense, the question is about rebalancing versus additionality.
On which organisations a governance programme should ideally target, you are absolutely right to point out that the bigger players in the sector will be able to keep their own houses in order. We are confident that they will be able to do so. As we discussed earlier, many voluntary organisations are small or small to medium in their scope. We are particularly keen to target our efforts on those organisations.
That has been a useful exchange. Next, we shall take evidence from Executive officials, so some of the issues that you have raised will no doubt be raised with them. Thank you very much for coming along.
Meeting suspended.
On resuming—
I reconvene the meeting. We shall now conclude our formal scrutiny of the bill by taking evidence from Scottish Executive Officials and Executive agency officials. I welcome Richard Arnott, head of the bill team, Quentin Fisher, deputy head of the bill team, and Jane Ryder, chief executive of the Office of the Scottish Charities Regulator. I would like to offer the officials the opportunity to make a brief opening statement, and then we shall proceed to questions.
We are grateful for the opportunity to talk to the committee about the financial implications of the bill. You have introduced us, so I will not do so again.
I would like clarification on one matter. In The Scotsman, the Scottish Council of Independent Schools was quoted as stating that the independent schools sector pays out
As we said in the financial memorandum, there is no direct implication in the bill that schools will lose their charitable status. However, because that has been the subject of much discussion, we thought that it would be useful to include figures that are available. To get those figures, we had discussions with the Scottish Council of Independent Schools. The estimate of the value of charitable status to the independent schools in Scotland that we included in the financial memorandum is between £3 million and £6 million, which is a combination of estimates that various people made, including the SCIS and the SCVO. Since then, we have managed to obtain a little bit more information that might be helpful.
It will be useful to get as much clarity as possible on those issues.
Can Richard Arnott give us an update on the situation with regard to non-departmental public bodies, from which we have received a fair number of submissions? You said that you are considering whether they should either cease to be charities or cease to be non-departmental public bodies.
The position has not really changed on that.
There has not been a decision, has there? That is the point. You said that you are going to decide whether they should either cease to be charities or cease to be non-departmental public bodies.
No, the Executive's position has not changed on that. It has been announced that, as part of the regular review that is undertaken, each charitable NDPB will be considered and a decision will be made on whether it is appropriate for it to continue as an NDPB or whether it would be more appropriate for it to continue as a charity. The Executive has accepted that there is a conflict between the requirements of public bodies policy—which, because of public bodies' accountability to ministers, requires that ministers should be able to control them through powers of direction, which they usually have—and the fact that, in general, charities should be independent bodies. The reviews have not all been completed yet, and only once that has been done will the Executive consider whether additional funding will be required.
I ask you to make this absolutely clear: are you talking about the quinquennial reviews?
Yes, but I understand that they are not called that any more.
I accept the argument, but our job is to estimate the costs of the bill, and all the evidence that we have received suggests that, if the decision is taken not to make NDPBs charities but to have them retain their status as non-departmental public bodies, the potential costs will be enormous—far greater than anything that has been expressed in the financial memorandum. Even the evidence that we have received today from the Royal Botanic Garden Edinburgh, which is based in lots of other places apart from Edinburgh, suggests that the issue is not just tax relief but the effect of donors not giving donations because they would no longer get tax relief on them. First, I suspect that the Executive's sums totally underestimate the potential loss. Secondly, even if the sums are correct, there is no chance on earth of the Executive making up for bodies' loss of funds. Is that a fair comment?
The figures that are used in the financial memorandum were derived from the bodies themselves and their sponsor divisions within the Executive a couple of years back. The figures were checked again last year with the sponsor divisions.
But were those figures simply for tax relief?
Those were the figures for the value of rates. The question that we asked was a broad one and, I confess, the bodies came back with incomplete figures, as it were. Some could not tell us—in fact, most of them declined to tell us—the value of charitable status in terms of donations, which is the issue that you raised. We accept the fact that there would be a potential loss of donations were such a body to lose its charitable status; however, as you can well imagine, it is difficult to put a figure on that. Donations depend on legacies, for example, and are not regular income or turnover. For that reason, such bodies have always been a bit reticent about putting a figure on them.
What is the Executive's view on the matter? Do you view it with equanimity? It strikes me that it would be impossible to proceed on the basis of those bodies losing their charitable status. The financial loss to a number of bodies would be enormous and would not be made up, which would have significant repercussions throughout large parts of Scotland.
The other thing that ministers will have to consider—obviously it is not for officials to consider—is whether it is more important for the bodies to remain charities or for them to remain NDPBs.
Surely it goes further than that and is about whether it is more important that bodies continue to do the job that they are doing and are not totally hamstrung in carrying out that function. The committee must decide that now, in considering the financial memorandum, rather than speculate about a decision that ministers will take at some stage in the future.
This is about the financial implications of applying the principle—the charity test—consistently. The difficulty for NDPBs, and possibly for other organisations that are at the direction of third parties, is not the public benefit test but the requirement for independence of constitution. Although that is not a wholly new requirement—we have had many discussions about it with the Charity Commission—it is not terribly well understood or well articulated at present. One of the themes that came through in the consultation and that is coming through in the debate is the principle that charities should be independent.
Yes. There are some issues there.
That was a helpful intervention. We are trying to assess the financial consequences of the policy position in Scotland. As the bill stands, the clear policy position in Scotland—with the public benefit test that we are using and the independence criterion that has been mentioned—is that quangos will no longer have charitable status. Is that correct? That is the policy position that is set out in the bill.
There might also be an indication of how those costs might be met separately, if they cannot be met through the existing system.
Indeed. We have made a policy decision that is different from the decision that has been made in England, but there are no figures in the financial memorandum for the costs that are associated with that decision.
As Quentin Fisher mentioned, we attempted to find out the value to NDPBs of their being charitable bodies. They were not able to provide us with a value for the donations that might stop. That is unfortunate. They seem to be thinking harder about it now and they are providing some estimates; however, when we made our estimates, they were not able to provide them.
I have a supplementary question. The submission from the Royal Botanic Garden Edinburgh states:
I do not think that that relates to the bill. I have no reason to challenge what the RBGE says. If it is saying that such things are not viable—
It states:
That is because of the implications of tax relief for the organisation and donors.
I accept that we are talking about speculation, but there is a rather helpful list, which includes the Royal Botanic Garden Edinburgh, the National Museums of Scotland, the National Galleries of Scotland and the National Library of Scotland. Perhaps that short list would be a helpful place to start in estimating the sums of money involved and the impact of the differential approach.
A number of other organisations have made the same point in previous submissions.
I share the concerns that others have expressed about the effects on NDPBs and cultural institutions in particular. There is a possibility that, because English law will be different from Scottish law, English cultural institutions will be at an advantage compared with Scottish cultural institutions if the bill is passed.
I should declare an interest: in my previous life, I was the director of the Scottish Museums Council, which is the organisation for the non-national museums and galleries. I will have to check this, but my recollection is that it is possible for the Government to allocate to any recipient; it does not have to allocate to the National Museums of Scotland or the National Galleries of Scotland. However, there are criteria relating to security, insurance, the importance of the collection to which the item is being allocated, I think, and so on. I would have to check that to be absolutely sure about it.
You say that each NDPB will be reviewed. Previously, there was what was known as the quinquennial review, but it stopped happening every five years, which I presume is why the name was dumped.
The reviews and their consequences for NDPBs and their charitable status are not waiting for the bill. They were kicked off at the end of 2002. Indeed, six NDPBs have already ceased to be NDPBs so that they can retain their charitable status. Each of those is quite different in nature and they each have different financial arrangements. Each organisation has to be judged on a case-by-case basis so that decisions can be made.
From my limited experience of winding down NDPBs and institutions such as the Royal Commission on the Ancient and Historical Monuments of Scotland, I know that the position is far more complicated than initially meets the eye.
Could Quentin Fisher let us know—not necessarily now—which six NDPBs have changed status and why they did that? Was the decision related to charitable status or were other factors at play? That information would be helpful to us.
I should plead previous on the issue, because of my ministerial role, although I was on the side of the angels then.
I have applied my mind to the problem, but I have not come up with a solution. If I had, I would be more than happy to share it with you. There is a role for discussion with the Cultural Commission and we have noted that. However, the timing—the timetable for the bill's progress and the Cultural Commission's intended timetable—is awry.
What are the barriers? Someone such as you who has the right experience must have some idea of the possible solutions. Have you woken up one morning and thought, "I've got a solution," but found that, by noon, someone has decided that it cannot be done? I felt that I had that problem when I had my portfolio.
In discussions with others, I have had certain ideas, which the NDPBs have explored. None of the options is satisfactory because of the sums at issue. Because of my previous role, I have huge sympathy with organisations. My personal view is that it would be ironic if we were to find ourselves in a position in which the NDPBs were most at risk while other categories of organisation could at least pass the initial charity test, even if they were open to challenge in other areas. I am not sure that that was ever the policy intention of the bill.
I want to follow up on the last response that I got from Mr Arnott. Would it be possible for us to have copies of the letter that you wrote to the various NDPBs a few years ago and to find out what their responses were?
Yes, I am sure that we could provide that. That would probably have been dealt with through the NDPBs' sponsor divisions in the Executive.
That would be helpful. Even if NDPBs responded fully on what they thought would be the result of the loss of charitable status, they will not have dealt with the issue that is mentioned in paragraph 4.3 in the submission from the Royal Botanic Garden Edinburgh—namely, the fact that such bodies' counterpart organisations south of the border will not lose charitable status. That is a significant issue. The RBGE makes the point that because the major capital projects that those English organisations are running will continue to attract charitable donations, many donors who might previously have supported the projects of the relevant Scottish body will turn to the English organisations instead. The NDPBs would never have thought of raising that issue in their submissions. I am suggesting that even those organisations that answered your question fully would have underestimated the potential loss.
You might well be right. At that time, they would not have predicted the changes, but I am not sure that that is something that we would expect to consider as part of our examination of the bill's financial implications.
There is a financial implication for those bodies.
It is not necessarily an implication of the bill; it is an implication of existing charity legislation.
It is the result of a displacement effect—in other words, it is an indirect rather than a direct financial consequence.
The issue is crucial, so I will let in another few members. My understanding is that the Communities Committee will take evidence from a number of NDPBs this week. Our committee might like to send a representative along to that meeting.
I might or might not be expressing the concerns of other members, but my feeling is that the bill is a very big hammer to crack a relatively small nut. That view has only grown as I have listened to the evidence this morning.
I am surprised, because I thought that the consultation paper that the Executive issued on the draft bill in June last year made clear the potential implications and set out the Executive's position on public bodies and the conflict with charitable status. I would need to check, but I imagine that the RBGE was one of the bodies that responded to that consultation.
Did you go directly to the NDPBs? Who did you approach to ask for the financial information?
When the original statement was made in 2002, I believe that the Executive went to the NDPBs' sponsor divisions, which in turn went to the bodies themselves.
You believe that that was the case. Does that seem adequate? I am not sure that it does.
In 2004, we consulted the sector and ensured that each of the affected non-departmental public bodies received copies of the consultation. I am pretty sure that we got responses from all of them.
As things stand, we are saying that our great cultural institutions, such as the art galleries and the Royal Botanic Garden Edinburgh could be put at a very significant competitive disadvantage compared to similar bodies south of the border, such as the Royal Botanic Gardens at Kew, the British Museum, the National Gallery and the British Library. As a result of the proposals that we are discussing, all those great philanthropic national bodies will have a competitive advantage over the Royal Botanic Garden Edinburgh and other bodies in Scotland.
That could be the case, if ministers decide that they should continue to be NDPBs.
The solution might create other problems, though. If the bodies were to become independent, there would presumably be an issue of control and accountability. The problems replicate themselves and the solutions might generate other problems.
Obviously, the solutions would have to be considered in their widest sense.
What analysis and investigation was made to quantify the extent of the existing financial problem prior to setting up the legislation? How much money was being pilfered out of the charities compared to what it is costing to implement this legislation? Are we, as Ted Brocklebank suggests, using a sledgehammer to crack a nut?
I will introduce the answer to that question before handing over to Jane Ryder, who has figures for individual cases.
The two catalysts for the bill were the Breast Cancer Research (Scotland) and Moonbeams Children's Cancer Charity cases in 2003. The indicative figures that we have been able to pull out show that, over five years, the two organisations raised just under £17 million between them and used just over £2 million on direct charitable expenditure. At the point at which the Scottish Charities Office intervened against the charities, a sum of not less than £14 million was not expended. That is an extremely significant sum.
I want to follow that by asking about the anticipated costs in future years. Table 4.3 in your submission is helpful, as it shows the anticipated cost up until 2009-10, when it is expected to be more than double the current expenditure. Can you give us some more detail on the figures? The table shows a cost of £453,000 in 2006-07 for charitable status and further costs of £245,000 and £381,000 for registration and monitoring, respectively. The cost against the heading of "Charitable status" will go up to £500,000 by 2009-10—what does that heading refer to?
That heading covers the processing of new applications for charitable status. At the moment, the Inland Revenue receives in the order of 1,300 new applications a year. The heading also covers the rolling programme of the review of charitable status, which we will institute. Section 30 requires us to remove a charity from the register if it does not meet the charity test, which is a provision that we will introduce over time. A lot of work in the initial stages is associated with the development of the guidance for the charity test, with putting in place everything that we need to assess new applications immediately and with phasing in the programme.
I understand that explanation but, with regard to charitable status and the other categories, on the basis of the number of applications that you say that the Inland Revenue receives at the moment, it seems that you would be looking at £400 per registration—that is very much a ball-park figure—with any associated queries on the back of that and perhaps monitoring and investigations. You are not building in any efficiencies. You are not saying that you will become more efficient over the first five years of your life. Do you anticipate that greater numbers will come through, which will produce efficiencies?
It is precisely that—greater numbers will come through. The figures also cover dealing with the new regime for Scottish charitable incorporated organisations and a fairly extensive consent regime. The overall figures also absorb a five-tier system of appeals, under which we will have to conduct an internal review on request, after which cases can go up to the appeals panel and then on up to the court in—hopefully—very much decreasing numbers. Nevertheless, there are considerable costs involved in that.
The figures for guidance show an increase as well. I am not sure whether it is an inflationary increase. It is understandable that there will be start-up costs in order to make known the new requirements, but why is there a continuing substantial cost for guidance?
There will be a continuing need for guidance as new issues arise and new charities come on stream. The point was made in earlier submissions about OSCR striking the appropriate balance in providing general guidance. I stress that it is not OSCR's intention to offer tailored training, but it is appropriate that OSCR offer general guidance on compliance issues and on the issues of practice that come out of our monitoring and investigations, so that the sector learns from cumulative experience and individual decisions.
One suggestion for an alternative approach was that rather than putting the burden on OSCR, the nature of charity audit could be respecified and a specialist requirement could be placed on the auditing profession. Do you have any comments on that?
There is currently a specialist requirement.
But it could be extended.
Yes. Yesterday, I had a brief discussion with the ICAS executive director of regulation and compliance about how we might approach the issue. We have not sought any additional assurances from auditors, but we want to work with ICAS and other auditors and examiners to ensure that there is a joint understanding in guidance, and possibly examine the introduction of specialist accreditation by ICAS, which is a matter for ICAS.
On the figures for investigations, given that the convener rightly said that directors of charities have to observe the rules of the Inland Revenue, are you not adding an additional investigation and performing a role that the Inland Revenue would perform anyway, especially if there is non-reporting of financial activities? That is currently investigated under Inland Revenue rules, and it, not OSCR, would investigate.
Investigations would be into compliance with a whole range of the bill's requirements, including on issues of misconduct, and not purely with financial requirements. The Inland Revenue has a very limited investigatory function. The current function of the Inland Revenue to grant status is passing across to OSCR.
If you have a very light-touch reporting mechanism, which we understand will be the case, £400,000 to investigate basic annual returns seems rather a lot.
Perhaps I had not properly explained that. There is a light touch for two thirds of the charities—the small charities that will be providing us with an annual return and their accounts, which we can examine—and a more extensive questionnaire for other charities, which will give us information on fundraising ratios and dealings with trustees, for example, because governance issues are critically important, and we can then drill down to those. We do not anticipate for a moment that we will be investigating a substantial number of the proportion of the 30,000 charities, but the sum quoted is not a great amount. When channelled into investigations, pure and simple, it is little more than the Scottish Charities Office had prior to the establishment of OSCR, but we have a range of other functions and ways of assisting and facilitating charities to comply. There is a balance to be struck. The bill gives OSCR extensive powers of investigation and sanction but, as Richard Arnott has indicated, we envisage using those powers only in a very small number of cases. The balance of our activity following investigation will be to facilitate the charities to comply, not to take extreme intervention powers.
Given that that is the case, I would like to look at the headings in table 1.1. Forgive me if I am comparing apples with pears, but does table 1.1 not show the existing figures? I am looking at the reason why we are extrapolating up to more than double that by 2009-10. According to table 4.3, investigation is probably the most considerable part of the work after the registering of new charities. What would be the equivalent under the existing figures, given that you have just said that it is continuing existing practice? Does that come under the £295,000 for operating costs, or are the headings not comparable?
I am sorry, but I—
Table 1.1.
Table 1.1 is the existing—
I beg your pardon.
You have said that the investigative role is extending what is currently the practice. Where in table 1.1 is the current budget that you originally set down for investigations?
I think that it is incorporated within salaries, training and recruitment, and specialist legal and agency support. That is—
Do you have that table in the same format as table 4.3?
No, we do not. Sorry. That table—
Are you able to do that?
With some considerable difficulty, I think, because—
Why?
Only because table 1.1 reflects the situation in December 2003, when OSCR was set up as an executive agency. The European Foundation for Quality Management modelling has been done by us in the course of 2004 on the basis of our first six to nine months' experience.
Right, okay. If meeting that request is impossible, or if it is possible but only with considerable expense, you must nevertheless have given a case to the minister for an increased budget. Did the minister not say—
We presented it not so much as a case for the increased budget but as a full analysis of what we need in light of the legislation, which allowed us so say what the difference was, rather than starting with a baseline and working upwards.
On a slightly different issue, Anne Swarbrick raised the concern that when charities appeal to the appeals panel, they will not be able to recoup the cost of the appeal for such things as legal advice, even if they are successful. They will therefore have to stand those costs from the public donations that are given for the purposes of the charity. Do you want to comment on that? Could any consideration be given to helping a successful charity to meet the costs of an appeal?
The best way to answer that may be to explain our thinking. We have been aiming to set up an independent regulator that effectively acts in the public interest. For a charity or a body to apply to OSCR and be registered, it must meet the costs of applying. The idea of having an appeals panel was to provide some independent check or quick and simple second opinion on OSCR's decisions. We would hope that the panel will be able to provide quick opinions. It is intended to offer a lower, quicker and easier test than going to court, which is what would have to happen otherwise.
Can you give us a rough estimate of the costs to an organisation of an appeal?
We did an estimate. If we take out of the budget that we have set for the appeals panel the running costs or baseline of £80,000 per annum, that would come to about £1,300 per case. That is the cost over and above staffing costs and so on.
To clarify, that is the cost of the appeal panel.
Yes—not the cost to the organisation.
You were asking about what the cost would be to a charity that was appealing. In theory, the cost to the charity would be that of writing a letter saying that it wished to appeal and to ask for a second opinion.
We recognise that, in reality, some charities will wish to take legal advice and have legal representation present. That would cost them, although there is of course no requirement for them to have that. As Richard Arnott says, representatives of the charity can simply write a letter and then turn up on the day and argue their case.
I am interested in the total sums concerned. You mentioned total donations of £240 million and total costs of £10 million. Is that the annual cost?
Yes.
If we take that publicly funded administrative cost of the bill—£10 million—and add that to gift aid as a percentage of total donated income, it begins to look as though the public purse is giving its support to quite a marked extent. Given the probable impact following the passing of the bill, with the loss of the NDPBs, it strikes me that we might find a higher percentage of the total income coming from the taxpayer. Have you mapped that out? Have you examined that and compared what will happen and what is happening in Scotland with what is happening in the rest of the United Kingdom and in other small European countries, to see whether that is reasonable?
You mention the rest of the UK. To make a comparison between what we are proposing to do and set up and what is happening in England, the Charity Commission for England and Wales has existed for quite a while now and, when I last looked, £30 million was its—
And 600 staff.
Yes—it has 600 staff, which is more than here. Granted, the Charity Commission has a bigger remit and a bigger constituency, and has to deal with more charities. That is certainly proportionate and relative to the existing regulatory structure in England and Wales.
I hear the words, but I would like to see the numbers mapped out so that we can make a genuine benchmark comparison. At the moment, we are heading into the dark in a number of areas. However, working out the exact total cost would be a simple exercise. You have that figure. How much is the gift aid? You have that figure. How much are the total donations that are delivered to charities in Scotland? We can compare that with elsewhere, so that we can see whether we are paying over the odds in managing the charitable sector in Scotland. Is that not possible?
Sorry, but I want to be clear about this. Are we talking about the cost of regulation rather than the cost of the benefit to the sector?
I am talking about the totality of the matter. In essence, the public purse is paying for the cost of the administration and of the gift aid that would otherwise remain with the Treasury. As a result, would it not be reasonable for us to be given those data to benchmark what is happening in Scotland with what is happening elsewhere?
I am sorry—I have become confused. The £240 million per year that is donated to charities in Scotland is not just gift aid.
I understand that.
I believe that although the figure includes some gift aid, that does not represent a very large proportion.
But, again, we are dealing with anecdote. I am looking for some hard figures.
I am not sure that we are able to produce any harder figures.
I suppose that Jim Mather's question centres on the amount that the taxpayer pays to support the charitable sector, after taking into account all the different categories of contribution including the underpinning of administrative costs, relief through gift aid or any other associated costs. I believe that he is also seeking a breakdown of proportionate issues at a UK and Scottish level and is wondering whether there are any useful comparators elsewhere in Europe.
There might also be what might be called set-off figures that show the amount that charities contribute back through national insurance and so on. Of course, some of those aspects relate to their status as businesses rather than as charities, which makes things difficult to disentangle. This is not an entirely one-way street.
I am asking for a simple subset of the figures to find out whether we can clarify things.
Yes. I hope that in seeking to move to the European Foundation for Quality Management model we will make the reporting system more open and transparent than it would have been if we had maintained the position from which we started in December 2003 and simply provided indicative figures. In trying to make an extrapolation back to those initial figures, we must bear it in mind that the functions in 2003-04 are different to those that are set out in the EFQM model for OSCR 2. As a result, the issue is a bit like comparing apples with pears.
Sure, but that approach leads to discontinuity in the transitional year and does not allow us even to compare apples with apples, never mind pears with pears.
That is correct. I should point out that those categories are standard for that model. Indeed, I have a 68-page resource impact assessment that sets out the matter in much greater detail, if members would like to see it.
One of the major issues relates to the fact that other organisations, particularly those in business, tend to ensure that the overhead figure is stable or diminishing. Your forecast indicates that that figure will increase pretty much at the same rate as the direct cost. Why is that?
We have indicated some of our assumptions with regard to inflation on salary settlements and information technology replacement—that is probably a separate issue, but we have included it anyway. Our assumption of 3 per cent inflation on salary settlements is about half the normal assumption for Scottish Executive matters, which means that the figures include some efficiencies.
But I have calculated that your overheads amount to 43 per cent of total cost, which is about twice the published rate for organisations such as Scottish Enterprise and Highlands and Islands Enterprise.
It is not entirely correct to classify all those costs as overheads. For instance, the appeals process comes under leadership and governance. I have sympathy with the sector, which talks about dual regulation. There are substantial costs for OSCR in complying with the requirement to be a non-ministerial department; it must comply not only with the legislation, but with the Executive's requirements. Therefore, the overheads are not purely the tangible ones; some of them are operational issues.
I offer the witnesses the opportunity to respond to Lucy McTernan's earlier argument about training costs. It is clear that there is a substantial gap between the £150,000 to which the financial memorandum refers and the £500,000 that the SCVO indicates as a more realistic first-year cost. The SCVO argues that there should be a tapering process in subsequent years.
The figure in the financial memorandum relates to the Scottish Executive and to the costs to the Administration, as opposed to the costs to the charities or to the sector itself. The figure of £150,000 was based on experience of a previous exercise in relation to the Protection of Children (Scotland) Act 2003, in which a section of the sector was trained to go and train others.
Have you got any out-turn statistics for how your estimates worked through that process? That would be an interesting test.
It would be. We did not conduct the exercise and were not directly involved in it. The exercise was conducted by the sector, but we could certainly ask about it.
There has been much discussion about guidance for improved governance, good practice and compliance with the regulations. In considering the financial memorandum, we wanted to stick with the training that would be required to ensure that people complied with the regulations. That is where we feel that OSCR's main role lies. It should be for OSCR, as the regulator, to provide the guidance for what is needed to comply with the regulations. I understand fully that the sector may well wish to take that guidance further and to approve the good practice operations of the voluntary sector in general, but I do not think that the cost of doing that should be attributed to the bill. However, that does not mean that I disagree that it is required.
There is a level of truth in that that picks up on my earlier comment about the different kinds of responsibilities on charity trustees. However, it seems to me that there is an issue about your introducing a new system that, undoubtedly, will have training costs for charitable organisations that must be taken into account. You made a specific estimate of the light-touch figures versus the figures from the charities that were subjected to greater reporting requirements. Can you be a bit clearer about the criteria that are being operated to separate out the sheep and the goats and whether you have identified specific training costs for different levels of regulation?
That is an operational matter for OSCR, which we are beginning to scope out. The monitoring pilot and extensive consultation provided us with a sample from which we could identify where the greatest problems would arise and what the appropriate response to them might be. In some cases, the appropriate response will be to work with specialist advisers such as ICAS members; in others, it will be to work with the SCVO and other intermediaries.
Forgive me, but that is really quite imprecise. The committee has been asked to comment on a bill, but the cost of training people to meet the bill's regulatory requirements is unspecified. You have said, "We could do this and we could do that" and "We might need this and we might need that", but you have not been able to separate out what exactly will be required and what that is likely to cost. That is an issue.
I do not think that the regulator can do that. The regulator's remit, as it were, goes only so far before we get into issues about what each individual charity needs and how that can be addressed.
The answer to the convener's earlier question must be that we fill that gap by discussing with the charities and umbrella organisations such as the SCVO what is required as the bill develops.
To an extent, our role is to specify the cost of the bill before it is implemented. You have acknowledged that substantial hidden costs are associated with the bill and that you will need to have further discussions on those costs with the various agencies that might be expected to deliver the aims of the bill.
It is more a case of our needing to have discussions with the support agencies to which we already provide significant financial support. We need to discuss with them what that support should be used for and whether some of it should be used to support the implementation of the bill.
Mr Arnott will be familiar with the table that follows paragraph 4.3 in OSCR's written submission. Does he agree that it is odd that OSCR's anticipated cost for providing information and guidance is way more than double the suggested cost for the 20,000 charities that are to receive that training? Should the cost to the public agencies of producing guidance be more than double what it has been estimated it will cost the charities themselves?
No. If I have understood the question correctly, the cost to which you refer is the cost to OSCR of providing information to charities and to the public. If OSCR provides the guidance, the charities should not have to pay for training as well.
Given that those costs will not necessarily be absorbed by the charities, should not the financial memorandum have captured the costs to the public purse of providing that training?
It should have done so only if one considers that providing information to people assists in their training.
You have just said that it does.
It does—sorry, I am getting myself confused. It is important that OSCR provides the sector with information on what OSCR requires and on the lessons that can be learned from OSCR's investigations. I am not sure that there is a direct cost to the sector in absorbing that information. I think that what I am saying is that part of the sector's training costs will be provided by OSCR providing information. I agree with you on that.
We will stop the evidence-taking session at that point. I thank the witnesses for coming along and responding to our questions.
Meeting suspended.
On resuming—
I remind members that, because we are still meeting in public, it is probably not appropriate to discuss some of the detail of what our draft recommendations might be.
I suggest that we go into private session for five minutes or so. That would let members speak frankly about how much the matter is in our domain or in that of another committee. One of the difficulties seems to be in deciding how much the issue is ours and how much it is other committees'. To avoid trespassing on the work of other committees, there might be merit in spending five minutes in private on that.
If members agree, I am happy for us to move into private session. Do members agree?
Not entirely. It is fairly clear that we discuss in public, on an agenda, whether we are going to discuss anything in private. It was not published on the agenda that we would be going into private session and I am not sure that that would be fair to witnesses that we have had. I am quite happy to put my comments on record. We have done that when we have previously discussed the remits of committees.
There are two points to be made. Jeremy Purvis's general point is correct; however, Wendy Alexander's point is also correct. Some of the issues that have emerged from the evidence that we have taken are policy rather than finance issues. It would perhaps be risky for us to get too heavily involved in the policy issues. My suggestion is that we seek to engage with the Communities Committee to highlight the concerns that have been expressed today and perhaps appoint a member of this committee to attend the Communities Committee meeting at which it deals with NDPB issues, so that the points that have arisen today can be raised at that meeting. That would be done separately from the consideration of our report. There is a Communities Committee meeting tomorrow at 9.30. According to the proper relationship between committees, those issues should really be dealt with by that committee, with us feeding into its considerations rather than trying to draw any preliminary conclusions here. That is my suggestion, and members seem to be in agreement with that.
What we now need is a committee member to volunteer for that.
Jeremy Purvis and I will be catching the number 2 tram tomorrow morning. That rules us out.
Some of us will be attending the Education Committee meeting tomorrow morning.
We get a wee bit jumpy when another member comes to our committee, although I am absolutely not against a member going to the Communities Committee. I was going to suggest a clerk-to-clerk letter, but in view of the time, it should be a clerk-to-clerk e-mail that makes two points. The first is that the bill designates NDPBs in Scotland as not being charities, but the financial memorandum does not touch on the impact on those bodies and the sum of money that is involved, either in grant giving to them or in individual charitable donations. Other members may have other points.
So we want an English solution to a Scottish problem. Can you live with that?
We should flag up to the Communities Committee the policy's financial implications and pass the matter over to that committee.
If we cannot send a member, Wendy Alexander is right that we should get something specific down on paper. Given the timescale, we need to do that immediately. Susan Duffy is comfortable that she can express Wendy Alexander's points.
Others may have other points, but the two that I mentioned seem to be the big ones.
We must ensure that the point about NDPBs is flagged up clearly to the appropriate committee. That does not mean that we cannot deal with it, but it would ensure that the issue is dealt with in the proper context.
Unfortunately, three committee members are on the Education Committee, so it is difficult for us to go along tomorrow morning. Is the Communities Committee taking evidence only from NDPBs tomorrow? The issue is not just about NDPBs. We might want to send a member to a later meeting with Executive officials and ministers to talk about the policy decision to take a different policy stance in Scotland from that in England. It might be worth while having a member of this committee available to attend when the minister gives evidence to the Communities Committee.
There are four panels of witnesses at the Communities Committee tomorrow, one of which is made up of representatives of NDPBs. As always, our report is scheduled to be with the Communities Committee before the minister gives evidence. We will produce our considered judgment so that it feeds into the Communities Committee's scrutiny of ministers. I hope that that answers the point.
It depends on how significant our concerns are. If they are sufficiently significant, it might be appropriate for a Finance Committee member to be at that meeting.
The best bet at this stage is to highlight our concerns as Wendy Alexander suggested. We should let the lead committee take evidence and then consider the issue. It might take a fortnight before the committee considers a draft report, but we will have the opportunity to consider our conclusions and feed them into the process.
I have one final point. In our e-mail we could also ask the lead committee to press the minister on whether the Executive will quantify the sums of money that may be involved in the differential approach. There is a wee bit of a lapse of time before the Communities Committee takes evidence from the minister, but it would be ideal if the inquiry to the minister did not come from us, but from the lead committee.
The Communities Committee's meeting with the minister will be after that committee gets our report anyway, so we can put the point in our report.
Yes, but we are trying to get a change of heart in advance, rather than afterwards.
Yes, but the meeting will be after we report.
All right. The question is whether it is appropriate for us at this stage to seek clarification of the unquantified costs and whether we should do that now at our own hand, based on what we have heard, whether we do it to inform our report or whether we ask the lead committee to consider the issue.
The easiest thing is for us to ask for the information. If the response comes in time, it can be included in our report. Are members content with that as a route forward?
Meeting continued in private until 12:28.