Our second item of business is to take evidence from the Scottish Government bill team as part of our scrutiny of the Criminal Justice (Scotland) Bill’s financial memorandum. I welcome Elspeth MacDonald, Peter Hope-Jones and Kerry Twyman. I understand that a member of the bill team would like to make a brief opening statement.
Thank you, convener—I will make an opening statement.
I am happy to see whether it comes out in questioning. I might even ask something along those lines myself.
The faculty is correct to point out that the specific savings that are identified in the sections on sheriff and jury reforms will impact on sheriff and jury courts. However, we developed the estimates in close co-working with the Scottish Court Service, which has indicated to us that it is able to accommodate those within existing resources. That is also indicated in the written submission to the committee.
Okay. You will have seen some of the responses that we received from local authorities on the financial memorandum’s estimate of the provisions’ total recurring opportunity costs. West Dunbartonshire Council stated that the figure appears to be
The first thing to say with regard to the responses from local authorities is that the estimates in the financial memorandum were developed, as we have said, through consultation with COSLA and the ADSW. We reached agreements with those bodies as representatives of local authorities more widely. We did not talk with individual local authorities. It is therefore understandable that a small number of local authorities might not completely hold the same view as those bodies. It is worth noting, too, that the local authorities’ responses to the committee are not unanimous in the positions that they present.
Some of the local authorities are quite critical. West Dunbartonshire Council said that no consideration had been given to
The concerns that have come out were not raised with us when we were producing the financial memorandum. As I said, we discussed the impacts, so we stand by the estimates in the memorandum as part of the opportunity costs that have been presented more generally.
I suppose that the difference is that we dealt with COSLA and the Association of Directors of Social Work and calculated the costs on a Scotland-wide basis. The information that we have strongly suggests that there will be no great impact on any particular local authority and that, therefore, the proposals can be absorbed within current allocations of staff. If that were not to be the case, we would want to know that, but that is the best information that we have.
Will you elaborate on some of those?
Could I elaborate on that in writing? It is something that I have just come across.
Thank you for that.
Somewhat unhelpfully, I am also confused, because we consulted in good faith, if you know what I mean. We understand the position to be as we set it out. It is robustly set out in the financial memorandum and we understand what we say to be correct. The submissions have not caused us to move from what has been said already.
In the financial memorandum, we have tried to drill down quite deeply into the impacts of the abolition of corroboration. Quite a lot of detail is set out on that. However, the concern about social work reports was not raised with us when we produced the memorandum, so it is not reflected in it.
Opportunity costs have already been raised. You have an explanation in the financial memorandum of what they are, but I ask you to talk us through that for the public record and so that everybody knows what we are talking about.
The financial memorandum differentiates between financial costs and opportunity costs. We consider opportunity costs to be the impacts on staff time and other existing resources that can be managed through measures such as prioritisation of functions and increased operational efficiency.
I will touch on one specific area before opening up the discussion to colleagues round the table: that of vulnerable adult and child suspects. When the police assess an individual as being vulnerable, the bill requires them to secure the attendance of an appropriate adult as soon as reasonably practicable. The financial memorandum states that that
That is the example that I was thinking about of a local authority making an assumption that something will become statutory that is not statutory now. We have no intention of making that provision statutory although, if the Parliament makes it statutory, we would have to reconsider the matter. The bill as introduced did not make a statutory requirement for appropriate adults to be provided. Therefore, that is not included in the costings of the bill.
You are saying that there is no inevitability or likelihood that that will take place.
It is certainly not the Government’s policy that it should take place, although obviously the bill is now in the hands of the Parliament.
At the core of the estimates on vulnerable adults is an agreement with COSLA that the practice around providing appropriate adults will not change as a result of the bill. They will continue to be offered in the way that they are now, and therefore the costs will be the same. We have also agreed with COSLA that we will carefully monitor how the bill is implemented. We will continue to liaise with COSLA and react if there are, in fact, changes.
Thank you for that. I open up the discussion to colleagues round the table.
The convener raised the question of opportunity costs. Will you say a bit more about that? I understand from your explanation to the convener that you are suggesting that opportunity costs exist where something is going to stop and something else is going to start, so the amount of work just carries on. My understanding was that it is hoped that the legislation will lead to more rape convictions. Does that mean that there will be more people going through the courts and more people in prison?
The stop and start is part of the explanation, and the rest is that we expect this to become business as usual. We expect the police and the courts to be able to deal with the business that arises from the changes, by and large, as normal. We have identified where there are additional costs for which we need to provide extra funding.
You said that it will become business as usual. My understanding is that less serious cases never go to court because the courts are so full. If you bring in more rape cases, will that mean that other cases will fall out of the system?
Sorry, but I do not agree with your original proposition that less serious cases would not proceed.
Do you agree that that is what happens at the moment?
I am saying that I do not agree that that is what happens. It is not for me to answer that, but that is not my understanding of what happens at the moment. We would expect the most serious cases to proceed. We are talking about increased volumes of between 1 and 6 per cent at the serious end, so we do not expect an overwhelming amount of additional casework as a result of the bill. The Crown Office has confirmed that in its evidence.
On the Scottish Prison Service, paragraph 192 on page 70 of the financial memorandum states:
Yes. The Scottish Prison Service has indicated to us that there is capacity in the prison system to accommodate the increase that we have indicated in the short term. The SPS and the Scottish Government undertake regular prison population projections and plan the estate provision on that basis, and we will continue to do so in order to monitor the actual impacts of the bill.
I had understood that at least some prisons are overcrowded and are at more than their expected capacity. Is that not the case? If it is the case, they could not have spare capacity.
It would be for the Scottish Prison Service to comment on that in detail, but my understanding is that there are complexities around the matter and it is not a simple question of counting out the number of empty cells in Scotland. The SPS does analysis of what is manageable. Also, it is a reactive organisation. It does not set the number of people who are in prisons. That is done by judges, and part of the SPS’s job is to cope with changes in demand for prisons. It has assured us that what is proposed is manageable in the short term.
Specifically on rape, I presume that the idea is that, if more people are convicted, that should reduce the crime rate over time and therefore there should be a saving. Has that been built in, or is it too long term?
That has not been reflected directly. It is something that we discussed and obviously it is a policy objective, but it is hard to quantify a specific impact in individual years.
The period of the financial memorandum is too short to take account of that kind of effect although, as Peter Hope-Jones says, it is one of the objectives that we are aiming for.
If I have read the media correctly, some people have questioned whether there will be more convictions, because there will be other hoops to go through instead of corroboration, such as stricter jury numbers. One school of thought is that there will be fewer convictions and therefore that there will be savings. Has there been a risk analysis or probability assessment of that?
In our calculations in the financial memorandum, we used existing conviction rates, simply because that is the best evidence that we have available. However, we worked in other factors. For example, for Lord Carloway’s review, he did some analysis of the types of cases that would go forward for prosecution, and we built that into the model of the additional cases that will proceed.
On the shadow exercises that have been undertaken, the Faculty of Advocates set out that the financial memorandum
The shadow marking exercise was set up by the Crown Office and the police so it would be for them to answer on the detail of exactly what they underwent. However, it should be noted that the Crown Office has provided supplementary written evidence to the committee that provides more detail of exactly what went into that exercise. Since then, it has also set out, in evidence to the Justice Committee, the new prosecution test, which reflects broadly what was done in the shadow marking exercise.
You would refute the suggestion that there is not enough information about those exercises.
In the financial memorandum as published there is not a huge amount of detail. That is a reasonable point. However, what the Crown Office has put out since gives a decent picture of what was undertaken.
So the information is there.
I noticed that in the submission from the Faculty of Advocates. The first thing that I would point out is that the faculty also stated that, overall, the financial memorandum is a reasonable summary of costs. Secondly, it did not give much evidence for why it feels the way you describe. The estimates for corroboration in the financial memorandum were as the result of those detailed shadow marking exercises, which reproduce the process of decision making in actual cases. It was quite a robust way of evidencing the estimates. We feel that the estimates are strong and reliable.
It might be useful at this point for me to provide the detail that I referred to earlier on the process that we went through in reaching what we have in the financial memorandum. We undertook detailed discussions with partners about the implications of the bill for their services. That included looking at what would happen if impacts were at the higher end of ranges and the likelihood of that happening.
That is helpful. The faculty also suggested—the deputy convener made this point, too—that
That is an illustration of exactly what I was talking about earlier. The Faculty of Advocates submission argues that the conviction rate may be higher, and that would impact on the number of convictions and therefore on prisons. However, as we heard, there is an argument that the conviction rate may in fact be lower because a bar is being removed to certain cases going forward, which potentially increases the number of cases. We felt that there was no sufficiently robust evidence either way on which to base a calculation, and that is why we have used the existing figure.
I appreciate that it is pretty difficult to know what the conviction rate may be in future. The deputy convener also referred to the Scottish Prison Service position in response to the financial memorandum. For absolute clarity, can you confirm that it is not expressing any concerns about capacity issues in prisons or about the costs involved in the bill and that such concerns have not been presented to you?
There are wider conversations about prison capacity. Prison numbers are projected to increase by about 200 places per year in any case. That does not specifically incorporate the predictions in the financial memorandum, but it does reflect an expectation that there will be legal changes and that those changes are liable to lean more towards stronger prison sentences. It is also worth noting that we should consider the increases in prisoner numbers in the wider context of such things as community payback orders as a more robust and flexible community sentence, the presumption against imposing short prison sentences of three months or less, and the range of policy initiatives designed to reduce reoffending, such as the reduce reoffending change fund. There is a wider picture about prisoner numbers, obviously, and the bill feeds into that wider conversation.
I suppose the point is that the Scottish Prison Service is not knocking the Government’s door down saying that there is a financial problem as a result of the bill.
Not as a result of the bill. It has said that, in the short term, the estimates set out in the financial memorandum are manageable within capacity.
Thank you.
Is the average cost of a community sentence £2,400?
I believe that that is the figure that we use in our calculations. Let me just check that—it is set out in the financial memorandum. If you repeat the question, I will confirm the figure.
Is the average cost of a community sentence £2,400?
We have used the figure of £225,000.
Sorry?
We have used the figure of £225,000.
For a community sentence?
Oh no—I am sorry—the figure that I cited was for secure accommodation.
Perhaps you could get back to the committee with that information.
Yes. We will get back to you on that.
Let us assume that the cost is of that magnitude. You assume that there will be an increase in the number of community sentences. You have a low estimate of 120, a best estimate of 480 and a high estimate of 1,140. If we work to your best estimate of 480 additional community sentences a year, on what basis do you assume that there will be no additional costs on local authorities with that number of additional cases?
The costs associated with community sentences are different from those associated with prisons in that they are mostly about the staff time involved in the supervision of the sentences. It is worth noting that the 480 additional cases modelled in the financial memorandum are, at around 2.8 per cent of the total figure of 16,916, a relatively small percentage increase.
What percentage increase in community sentences would be needed for there to be an additional cost to local authorities?
I am not sure that I can answer that specifically. However, aside from the bill, there is increasing emphasis on community sentences in the justice system.
We do not have the calculations to hand. On staff time, were we talking about an extra couple of hours a week, the expectation would be that current staff could absorb that; were we talking about a large enough increase in cases to require additional staff to be recruited, there would be a financial cost. In the discussions with COSLA on the issue, it was not considered that there would be a high enough impact, based on these numbers, to require the recruitment of additional staff members.
In that case, what percentage increase is needed before new staff are required? You are saying that you have not done those calculations.
In the discussions that were had, the feeling was that the potential increase was not anywhere near enough for there to be a cost. Even when we looked at the figures at the high end of the range and divided the cases across all the various authorities in Scotland, the numbers did not come out high enough for there to be an absolute need to recruit additional staff. It was felt that the potential additional cases could be managed by current staff levels.
In evidence presented to the committee, West Dunbartonshire Council, which the convener mentioned, has said that there would be additional costs; Falkirk Council has said that there would be increased staffing costs; Fife Council has questioned your assumptions; and Renfrewshire Council has said that it would be very difficult to absorb the costs. The message that we are getting from local authorities is that there will be increased costs, but you are saying that there will not. I am simply trying to work out the percentage increase in sentences before additional costs are incurred. We are getting a very different message from what you have presented to us.
Only a minority of local authorities have written in on this issue and it should be noted that, although they have picked up a number of small issues, Fife and South Lanarkshire said in their submissions that, overall, the financial memorandum gives a reasonable estimation of the costs and they broadly accept it. As I have said, the agreement was made with COSLA as the representative body.
It might be helpful if we respond by letter on the various issues that local authorities have highlighted so that we can reassure you on each and every one.
That is going to be a big letter, right enough.
Yes, but my point is that, in some cases, assumptions have been made that do not apply and, in others, we can provide the committee with specific answers. We would look to do that rather than not answer your question now.
I accept the point that not every increase in cases will lead to additional costs, but I find it very difficult to accept that there will be no additional costs whatever. No doubt some of the costs can be absorbed, but the evidence that we have received is that not all of them can be, and I merely ask you to reflect on how you have reached your conclusion that none of the additional cases will lead to additional costs. I find that surprising, but I will leave the matter there.
I am happy to respond and clarify the position for you.
Thank you.
You do not need to respond on the assumed costs of community sentencing, because the figures can be found in table 29 of the financial memorandum.
I have only a short question. We have seen evidence of the disparities in the figures that are being cited and read the concerns of local authorities. In its submission, Falkirk Council has stated that, because of the concern about what might be described as the wide margin of error between the financial memorandum and the local authorities’ assessments of the impact of the legislation,
Yes. We will certainly be monitoring the bill’s impact and maintaining communication with the key bodies.
I find this financial memorandum interesting for two reasons. First, many of the debates on costings are inextricably bound up with the bill’s fundamentally controversial aspects, a good example of which is corroboration. There is an inherent uncertainty about all of this, but I suspect that people have reached their particular conclusions because of their position on the policy rather than anything else. I will certainly follow the matter with great interest.
I have already explained what opportunity costs are. There is an element of efficiency saving but, as far as the police are concerned, the fact is that, if the bill is passed, 17,234 police officers who are doing their job one way just now will have to do their job differently and the main costs of that will fall on the front-line officers.
That might be closer to the normal meaning of opportunity cost, but it raises the question of what will not be done that is currently being done. Central to the concept of an opportunity cost is the idea that you cannot do certain good activity because you are now doing something else. However, that does not seem to have been acknowledged in the narrative around opportunity costs in the financial memorandum. Indeed, you seem to be almost redefining language in a way that I find slightly puzzling.
The police costs form one of the largest opportunity costs in the bill; as paragraph 128 of the financial memorandum makes clear, the figure for that is £9.8 million, the bulk of which relates entirely to training. In that case, the term “opportunity costs” might, as you suggest, not mean substituting something for something else; instead, because we have moved the implementation date from 2014-15—a year in which, according to the police, the additional training would have required backfilling and overtime, with all the real financial costs that that would have carried—to 2015-16, the police have indicated that they will be able to spread the training across the year in a way that ensures that it can be accommodated in normal police time and will not require any backfilling or overtime. It would therefore have been very misleading to have classed that as a financial cost; the training, the figure for which is £8 million, will be carried out during normal police time.
The prisons example is probably the best one because it has the highest cost—I think that the figure is £22 million as a result of increased prison places. It is hard to imagine how we can have a lot more prisoners at no real cost.
It comes down to the use of the average figure of £37,000 per year for a prisoner place. This is where the opportunity cost concept comes into its own, because putting one more prisoner into the prison estate will not necessarily cost £37,000. That figure takes into account the costs of and depreciation in the estate, and putting in one more prisoner will not require the building of a whole new prison. We have used the figure of £37,000, but that is the average cost of a prisoner across the estate. The cost of putting an extra 200 or 300 people in prison per year will not be £37,000 each; it will be the amount that it costs to feed those extra prisoners and the various direct costs that are attributable to their being in prison.
Even those are financial costs rather than opportunity costs. You might assume that staffing levels are related to the number of prisoners in some way, too.
The indication that we have had from prisons is that the costs of an extra 200-odd prisoners are already largely included in what have been put forward as the annual prison running costs. The prison running costs include some flexibility for prisoner numbers going up or down on an annual basis. That is why, in previous years, prisons have had underspends during the year. Running costs have been slightly lower than had been anticipated because prisoner numbers have been slightly lower. That happened last year, in 2012-13.
I may not have looked at enough financial memorandums to know, but that seems an interesting concept to introduce into the world of financial memorandums. It could be used in any financial memorandum to disguise financial costs. I am not accusing you of doing that—I would have to look into the issue more—but it could always be argued that the costs involved are not real costs because they can all be absorbed. Do you know what I mean?
Yes. That is why we have been careful to agree the opportunity costs with our partners. When they have felt that there would be an additional financial cost, our partners have been vocal. As I outlined, there are specific areas in which the police have said that the bill will result in additional financial costs, and those have been captured in the financial memorandum. The same goes for the Scottish Legal Aid Board.
I have a supplementary question on the issue that has just been asked about. Mention has been made of paragraph 128, which refers to
It would be for the individual agencies to comment in detail on what they would and would not do, but we have had conversations about detailed implementation plans. That process is continuing, but the outcome will depend slightly on the final form of the bill and other factors. We are talking about the financial year 2015-16, which is quite far ahead to be thinking about training and workload issues.
I do not know that it is. Is all that not included in the forward financial projections in the financial memorandum?
What precisely are you referring to?
You said that 2015-16 was quite far ahead. Surely we have to think about such things when we look at the long-term cost implications in the financial memorandum.
Absolutely, but we might not have to look at the exact detail of which training courses police officers will or will not go on.
Surely you have to do that as part of the process of looking at the overall costs. When it comes to the financial memorandum and the bill, you must know what you will be paying for.
I am sorry—I do not mean to suggest that we have not modelled what training will be required for the bill. That is set out as an opportunity cost, and it will need to be balanced against other training priorities.
I want to go back to some things that have not been covered during the session. The total recurring costs are a very precise £6.587 million per annum, but I note that non-recurring costs are £2.703 million and £1.648 million in 2015-16 and 2016-17, respectively. Do you envisage any further non-recurring costs, or will it all be resolved within two years, after which the costs will, in effect, be zero?
The non-recurring costs to which you refer are primarily police capital costs for additional interview rooms. Those costs are modelled on the basis of what was put to us as the plan for meeting the requirements of the bill. The position around police premises is slightly more complicated now that we have a single police force, and all sorts of rationalisation is being done around that. Those figures are based on what the police told us.
Thank you for that.
Yes. A cost is quoted for the Crown Office. It raised that with us as a specific issue for its team that deals with appeals, which saw an increase in workload as a result of the Criminal Procedure (Legal Assistance, Detention and Appeals) (Scotland) Act 2010. It anticipates that there will be another increase in workload for that team. However, the issue was not raised with us by any of the other agencies, so we felt that it would be specific to the work of that team and we have not looked at it in other areas.
You do not think that there should be any costs in the financial memorandum to reflect that.
It would not be standard for the financial memorandum to say that there will be more appeals because we are changing the law. That does not apply to all financial memoranda of this type. However, we felt that it was worth reflecting that in the financial memorandum simply because the Crown Office raised a specific issue about that particular team and was able to provide evidence.
Gavin Brown wants to come in.
My question is on a separate point.
That is okay. You have the floor.
Table 3 of the financial memorandum, which is on page 39 of the document that I have in front of me, has a heading that refers to opportunity costs. For the SPS, the opportunity costs for 2015-16 are £6.85 million, becoming £14.6 million for 2016-17 and then going up to £18.65 million and £22.75 million. Do the opportunity costs for the SPS continue along that trajectory over time? I take on board the fact that there is not a direct cost every time that there is an extra prisoner. However, if the opportunity costs are on that trajectory, they must, at some point, become real financial costs and they cannot then be classed as opportunity costs.
I can see how the table is slightly misleading. The figure for 2018-19 is for the bill’s full impact, and we expect the figure to be at that level from then onwards. The figures are staggered in that way because they are modelling prison sentences that might be several years long. In the first year there would be additional sentences, whereas in the second year there would be additional sentences but also people continuing to serve the sentences that were brought in in the first year. That is why the figures ramp up to a particular level, which we expect to be the long-term level.
Would there be no prison sentences of longer than three years? You say that the figure will get to £22.75 million and never go higher than that, but what if some prison sentences were considerably longer than three years? Surely the figure would then go up.
I think that the figure was reached using an average prison sentence of eight years; therefore, it will take four years to reach the average level. After four years, people will start to leave prison who went into it as a result of the bill, and our analysts suggested that that is where the figures will start to level out. It is not an exact science, so there might be some variation, but that is the picture that our analysts developed.
Okay. That was a digression from what we were talking about—I apologise for that.
We did not have sufficiently robust evidence to suggest that there would be an increase in the number of appeals across the board. The team in the Crown Office raised a particular issue about its workload and that is what we reflected.
Should that be looked at a wee bit further?
We can have conversations with other agencies and get back to you, if that would be helpful.
Thank you very much.
The exercise that was undertaken was absolutely robust and thorough. Perhaps the description of it in the financial memorandum was not as detailed as it might have been, but the additional information that the Crown Office has now presented gives a good picture of the thorough investigation that occurred.
Okay. Thank you.
I thank the committee for its thorough scrutiny. We will provide the other information that was asked for that we could not provide off the cuff.
Thank you very much for responding to our questions. We look forward to receiving further information in writing.